Before living abroad in the developing world I had struggled to understand what it meant not to be able to afford enough food.
I knew of the the World Bank’s extreme poverty line, which is defined as living with an average daily consumption under $1.25. I’d assumed that $1.25 would go much further in a developing country than it would here, but I learnt quickly that it doesn’t.
The World Bank’s extreme poverty statistics are calculated using purchasing power parity. This means that economists consider a basket of goods such as rice and beans that are consumed by people everywhere and then compare the costs of such goods around the world. This method allows the World Bank to account for the differences in costs of goods and services in different parts of the world.
I was shocked to discover in my first trip to a developing country, $1.25 is enough to buy only about two bowls of rice with a few vegetables. The limited food options available to those in extreme poverty make them more vulnerable to increased food prices and instability.
On 24 September 2011 several world leaders met to discuss strategies that could be developed to address the recent famine in the Horn of Africa. Discussions led to the emergence of The Charter to End Extreme Hunger, which provides a succinct list of strategies that, if implemented, will bring real solutions.
This charter has been endorsed by Kenyan Prime Minister Raila Odinga, UN OCHA head Valerie Amos, Norweigan Minister of the Environment and International Development Erik Solheim, UNISDR head Margareta Wahlstrom, and UK Secretary of State for International Development Andrew Mitchell.
One area of focus in the charter is to ensure that everyone can afford to buy food. To achieve this goal the Charter commits to “scaling up strategic and emergency food reserves at local, national and regional level, ensuring the governance of these reserves is accountable to the people they are intended to serve.”
Out of fear of corruption and market distortions, food reserves were eliminated or scaled back at the beginning of the millennium. But, it backfired in a big way.
Food prices rose 83% during the food crisis in 2007-08 and the lack of food reserves left millions of people in extreme poverty without enough food. Having emergency food reserves protects against shocks like droughts, fires, and natural disasters. ActionAid explains that maintaining food reserves can prevent famines and that such preventive measures are more cost effective then addressing the outcomes of widespread hunger.
Countries like Bangladesh, Indonesia, China, and India have used their food reserves to prevent famine. For example, Bangladesh increased its public food stock in 2008 to spur domestic production, and has occasionally released some of its public stocks at rates below market value to check back against inflated prices and increasing malnutrition.
The Charter to End Extreme Hunger also commits to “tackle the causes of high and volatile food prices by taking action to end biofuel mandates and limiting governments’ use of food export bans.” Taking food export bans as an example, they’re under fire because they cause instability in markets, and drive pries up. In 2010 Russia experienced a heat wave that had dramatic effects on Russian grain production. Russian exporters recognised that the heat wave would increase the price of grain internationally and imposed an export ban that reserved Russian grain for local consumption. Oxfam explains that export bans did not decrease food prices in Russia and that it led to price spikes and food instability.
The Charter to End Extreme Hunger is an ambitious and important call to action. Establishing food reserves and eliminating export bans, two components of the section of the Charter, will help developing countries to protect themselves against dangerous price fluctuations, and ensure that we never again are confronted by a famine of the sort we’re seeing in East Africa at the moment.