April 14th, 2008

By Bill Sullivan

While most Americans remain fixated on sagging real estate prices and rising gasoline expenses, much of the rest of the planet wrestles with a more pressing concern: The skyrocketing price of food, and the social and political upheaval it is creating in many poorer countries.

“While many are worrying about filling their gas tanks, many others around the world are struggling to fill their stomachs, and it is getting more and more difficult every day,” World Bank President Robert Zoellick said late last week. He chided wealthier nations for devoting crop land to biofuel production and issued a call for industrialized nations to step up contributions to the $500 million World Food Program.

The plea comes in the wake of a sudden surge in prices for staples. Rice has jumped about 75 percent in two months, leading to riots in Haiti, Indonesia, the Philippines and Cameroon. In Egypt, bread is so scarce that it sometimes is sold behind a barricaded wall, according to a National Public Radio report. The food price index of the Food and Agriculture Organization of the United Nations, based on export prices for 60 internationally traded foodstuffs, climbed 37 percent last year, on top of a 14 percent increase in 2006.

Fuel and food issues are hardly unrelated. Rising energy prices have made staples more expensive to deliver. At the same time, demand for ethanol has created shortages and driven up the price of corn. According to Zoellick, the move toward ethanol and other biofuels is a “significant contributor” to the spiking cost of food, while financial speculators and increased overall demand from emerging nations have helped create “a perfect storm.”