Hand to Mouth

While wealthy countries worry about a spreading credit crisis, the world's poor have a more basic concern: food. The overall cost of staples like corn, wheat and soybeans has jumped by more than 50 percent since last June. Riots related to food prices have broken out in many countries, including Egypt, Indonesia and Haiti. Josette Sheeran, the executive director of the United Nations World Food Programme, has referred to a "perfect storm" of conditions driving prices up: surging demand for agricultural products as an alternative fuel source, the growing food needs of developing countries like China and India, higher transportation costs, droughts and floods. But for the first time, Sheeran says, the WFP is making an emergency appeal based purely on adverse market forces. In March Sheeran appealed for an extra $500 million from donors to help cover rising costs. Then, within weeks of making the plea, food prices jumped another 20 percent. Sheeran, an American who previously served as Under Secretary for Economic, Energy and Agricultural Affairs in the U.S. State Department, spoke to NEWSWEEK's Jeffrey Bartholet. Excerpts:
 
NEWSWEEK: You issued an appeal in March to fill a $500 million shortfall. What has been the response?
Josette Sheeran: All these food prices had gone into an aggressive pattern starting in June, after years of climbing up. So in February we felt we needed to stop and say, "What's the [financing] gap?" We established the $500 million figure. Since then the gap has grown another 20 percent.

So you're up to $600 million?
Or $700 million, depending on where things are on a particular day.

Has anybody ponied up?
Yes, I think we're going to see some major support throughout the world. And we've already had some contributions, which are extremely helpful and significant for what they symbolize. Brazil has contributed to help Haiti; we had a very nice contribution from Spain. But the United States, Europe, Japan, Canada, Australia—we're looking at what [their donations] will look like. We've had a very serious, roll-up-our-sleeves reception from everyone to try to help us do this.

What is the primary factor driving this surge in prices?
The number one factor I look at is the price of oil. It may seem a strange thing, as I'm in the hunger field, but I wake up every morning and start in the back of the paper and I look at the price of oil, because if the price of oil stays high or goes higher, I know that the energy buyers in food markets will be buying food as an energy input at a very expensive price. That is the world we are in now that is new.

Are you saying that because people are buying ethanol—
The demand for food as an input into energy production, whether it's biodiesel or bioethanol or any of these, is a global phenomenon. And it affects everything from palm oil to cassava to everything else … There isn't much marginal room in the global food supply system. We've been consuming more food than we produce for the last three years.

"We" meaning the world?
Yes, we the world. Now, there's a point at which it doesn't economically make sense to buy food as an energy input. It's pretty low; it's apparently when oil hits about $70 a barrel. So anything above that makes food a very viable energy production input.

So the people here in the United States who are putting corn-fed stoves in their homes or running cars on ethanol—perhaps thinking they're saving the planet, preventing global warming and so forth—are they in fact contributing to global hunger?
Right now I have a concern about the actual amount of food available for food supplies. And use of food as a fuel source is helping drive up prices and putting people in the hunger category.