Land of the hungry

"THE SHARP increase in food prices is especially bad news for the estimated 12 percent of Americans who live in "food-insecure" households--some 36 million poor and working class people, half of them children, who already may go without food on any particular day.

In November, the annual report from the USDA (which no longer uses the term "hungry" in an effort, say critics, to diminish the scope of the hunger problem in America) found that the number of people in its "very low food security" category--households in which "the food intake of some household members was reduced and their normal eating patterns were disrupted"--rose in 2005 to 10.8 million.

In fact, across the globe, there is an overabundance of food. According to World Hunger Notes, world agriculture produces 17 percent more calories per person today than it did 30 years ago, despite a 70 percent population increase. This is enough to provide everyone in the world with a diet of at least 2,720 per person per day (some estimates put the number even higher, at 3,500 calories).

Instead, prices are fixed--and grain, dairy and other foods are left to rot or are purposely destroyed--to keep profits high.

But not everyone sees rising food prices as a bad thing. For some, it's an opportunity.

Last year, for example, Deutsche Bank started the $1.6 billion "DWS Global Agribusiness Fund" specifically to make money off "agflation." Bill Barbour, an investment manager for the fund, crowed to Australia's The Age that DWS has raised $14 million from local investors in less than a year, and that units in the fund have risen four times faster than other investments. "Higher food prices are inevitable all over the world; we're in a sweet spot," he said.

As the investment Web site ThisIsMoney.co.uk commented, "While [rising prices] may be bad news for shoppers, it could signal a profitable harvest for investors." (thanks Rania)