Saturday, December 6, 2008

Financial crisis worsens food crisis

"The problem is playing out across the globe: food prices rose by 24 percent in 2007, pushing 75 million more people into chronic hunger, estimates the United Nations' Food and Agricultural Organization (FAO). In 2008, food prices surged again by 51 percent, meaning that millions more are likely to join the 923 million people already suffering from malnutrition. World food prices have come down by a modest 6 percent since September, the FAO estimates, but that can't reverse the damage already wreaking its way across the globe.

The financial crisis is now adding its own plague of threats.

Here in Cambodia, rice millers tend to borrow money from banks to pay farmers and to mill their rice. As banks seize up credit due to global recession fears, some mills are having trouble paying farmers, explains Mr. Koma.

Farmers in turn, after borrowing heavily for fertilizer, are operating at a loss.

For farmers elsewhere in the world, the financial crisis is creating a similarly sobering equation: it costs more money for them to grow, but they receive a lower price for their products at market – making growing food a risky venture." (Thanks D.)

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