The silent crisis

Between 2007 and 2008, global food prices increased by an average of 43%, according to the International Monetary Fund. During this period, food most commonly consumed by those in developing countries – including wheat, soybeans, corn and rice – saw the greatest price rises globally, with wheat prices increasing by a staggering 146%. Data from a recent United Nations Food and Agriculture Organisation (UNFAO) report (released 15 June 2010) now suggests that global food prices could potentially increase by a further 40% in the coming decade as the global population continues to soar.

Worst hit by the price rises will be those in developing countries, specifically the poor, contributing to the ongoing food crisis in 31 countries worldwide, including India, Indonesia, the Philippines and 20 African nations. At the household level, increasing food prices have the greatest effect on underprivileged and food-insecure populations. According to the International Food Policy Research Institute, these households spend 50% or more of their income on basic food commodities.

Consider the implications for the 2.7 billion people who the World Bank report live on US$2 a day or less. According to the UN Human Development Reports from 2007 and 2009, that’s 75.6% of Indian people, 54% of Indonesian people and 45% of the Filipino people spending at least half of their income on food – a huge proportion when your daily income is only US$2. When food prices go up, people living in poverty are forced to use more of their daily income on food, leaving less for other necessities such as school fees, healthcare or proper shelter. Alternatively, they are forced to purchase less food, and with the United Nations estimating one billion go to bed hungry every night, malnutrition is often an inevitable result.

The impact of the crisis can be seen in the reality that a child dies from hunger every five seconds (according to the UNFAO). In the countries where Opportunity International Australia operates, the need is clear. The World Health Organization states that “about 49% of the world’s underweight children, 34% of the world’s stunted children and 46% of the world’s wasted children live in India.” Similarly, the World Food Programme asserts that the nutritional status of children under five in Indonesia has steadily declined since 2003, while in the Philippines, approximately 30% of children under five are stunted as a direct result of hunger and malnutrition.

Feeding people in crisis is undoubtedly a crucial priority, and while aid can have a significant impact, it is increasingly apparent that this help needs to be supplemented with a long-term solution to prepare those in greatest need for the predicted inflation in food prices. Microfinance can help provide families in developing countries with hope for a more secure and sustainable future. Loans as small as $100 help families start or grow a small business and create a sustainable income, improving their ability to cope with price fluctuations.

If you would like to help those facing the hunger crisis help themselves by starting a small business, please click here to provide a small loan to someone in need today.

Sources: IMF, International Food Policy Research Institute, United Nations