Exponential increases in food prices in recent times have created enormous challenges to governments, national and international organizations, and aid agencies everywhere in the world. The World Bank has estimated that the rising food prices could push an additional 100 million people into poverty, thereby undermining the current efforts geared towards poverty reduction.

Increasing demand, decreasing supply, and the rising oil prices, which are in turn affected by numerous other factors, have been some reasons for the rise in food prices. Demand for cereal grains has been rising not only as a result of population growth, but also because of the growing middle class population in countries like China and India. Growing incomes have resulted in more demand for cereal grains directly and also more meat and dairy, which in turn has raised the demand for more grains as feed for the livestock. Another more important reason for the rise in demand for food crops is the development of bio-fuels, which have attracted a great deal of attention in recent times.

On the supply front, according to a publication by the International Center for Trade and Sustainable Development (ICTSD), droughts in Australia and Turkey and bad weather in Ukraine and parts of North America have resulted in less agricultural production which has caused food prices to rise. A more important, but often overlooked reason for the decrease in the supply of farm commodities against rising demand is that the subsidies that the developed countries have been providing to their agriculture sector have dampened world prices of those products and made the products of developing countries uncompetitive. This has had a tremendous impact in agricultural production in developing countries. In the absence of competitiveness and any other gains to be derived from agriculture, the developing countries have had less incentive to invest in agricultural infrastructure, agricultural research and development, and the like. As a result, agriculture production in these countries continually declined disrupting supply.

Then, who should take the blame of rising food prices? If we look at the demand side, we see that the demand has been rising in one part because of rising incomes in few developing countries, and on the other, because of the development of bio-fuels by the developed countries. On the supply side, drought and bad weather conditions are not something which are under human control, but less supply resulting from less production in developing countries owing to the agricultural policies of the developed countries definitely deserves attention.

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OK: hands up anyone who hasn’t read it. Ah … that’s a much more manageable number.

The book is a modern classic. It starts with the expulsion of an angst ridden boy from a private school for lack of academic application, and ends with his vow to work harder at his next school.

In between there’s a tale of anxiety, angst and alienation, all of which is finally overcome by the protagonist’s realisation that he is not an island but part of an interdependent network of people who rely upon one another to make their dreams come true.

Biofuels are going through a similar process of adolescent maturity. Once lauded as the answer to oil they fell from grace spectacularly after the World Bank estimated that biofuels have increased food prices by up to 75%.

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To think that there are more complex responses to issues around climate change than attempting to talk to politicians to show more commitment to socio-political strategies that would negate on poverty reduction and environmental stability for all is a step in the right direction.

But the poor of the world remain as vulnerable as ever and the figures keep rising for those in developing countries that have no access to electricity, or to cooking and heating fuels – a challenge that severely hinders economic growth and poverty reduction.

The question, however, remains: how will all this affect the poor, especially in the developing nations? Well, if we sit back and do nothing by burying our heads in the sand pretending nothing is happening, the poorest countries of the world will suffer the earliest and most because of their geographical location, low incomes, and their heavy reliance on climate-sensitive sectors such as agriculture.

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As I reported last week, Europe’s EPA advised suspending the EU’s biofuel targets until a comprehensive environmental analysis could be completed. Barbara Helfferich, spokeswoman for EU Environment Commissioner Stavros Dimas, said no way is that going to happen:

“You can’t change a political objective without risking a debate on all the other objectives,” meaning that changing biofuels targets could lead to questioning the entire climate change package.

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Zoellick called it a “perfect storm of things coming together…” and listed 7 different issues contributing to the increasing cost of food, which led to rioting in Haiti and Egypt last week, along with a general strike in Burkina Faso:

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