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Food Emergency: On the Front Line with the U.N.'s Josette Sheeran


The global food crisis roiling the developing world seems to grow more ominous and heartbreaking by the day, with 100 million to 130 million people at greater risk than they were eight months ago. Food-related violence has broken out in more than a dozen countries, according to The Washington Post. And U.N. Secretary-General Ban Ki-moon is forming a global task force to address the crisis that includes the World Bank, IMF, and WTO. In the U.S., rising food prices have some state officials such as Texas Governor Rick Perry calling for a partial waiver of federal mandates that require ethanol in gasoline. At the center of the food crisis is Josette Sheeran, executive director of the U.N.'s Rome-based World Food Programme, the globe's largest humanitarian agency.

MARIA BARTIROMO

How would you characterize the food shortage around the world?

JOSETTE SHEERAN

We're seeing what I have called a perfect storm of factors that have driven up food prices at a rapid rate, especially since last June. For example, in Asia, rice prices have doubled over the past couple of months. On local markets, such as those in countries facing food shortages in Africa and elsewhere, local staples are two or three times as costly. For people making less than a dollar a day, this can be a catastrophe.

How did the crisis reach these proportions?

I think it's a number of factors, including increasing demand in a lot of the growing countries, such as China, coupled with very high energy prices that make it much more expensive to produce food but also make it more attractive to use food as a fuel source. And we've had some bad weather such as the loss of the wheat crop in Australia due to drought and the loss of many crops in West Africa due to floods. It may be the first time in history that we're witnessing the globalization of a humanitarian crisis.

A lot of people say: "This is not based on fundamentals, it's speculation in the markets." Do you disagree?

I think what you're seeing now are additional factors coming into play, such as some panic buying, some hoarding, nations closing their markets, and some speculation.

For the situation to have reached the crisis point that it has, some people might say there was a breakdown in the monitoring process by the U.N. Has there been?

You know, we've been talking for a number of years about the vulnerability of some areas of production. There have been, of course, many warnings about the impact of climate change on production. But we have been saying for the past year that we were really worried these factors would come together to hit the world's bottom billion very, very hard.

How much is the rush to biofuels to blame?

There's a real debate as to whether we should be using corn to produce energy. In a way, this current challenge is hopefully a wake-up call to the world about how interconnected all these factors are. The world's poorest people need access to affordable energy so that they can plow, plant food, and collect crops. They also need access to adequate amounts of food. We've got to look at these factors in relationship to each other. You can't isolate one and try to solve it.

So what we are urging is that the experts in energy, biofuels, food production, and climate change come together and really look at the interplay of these markets and how we can ensure that the world's most vulnerable are not left desperate. We are witnessing the new face of hunger, where there is food on the markets but where hundreds of millions of people simply can't afford it. It's not only a hunger challenge but a nutrition challenge. Sometimes people have food, but if it's black flour or mud cakes, there's no nutrition there. And this new face of hunger is more urban than before.

Which food shortage is most critical?

Different populations rely on different staples. But just to emphasize the level of vulnerability here, we have seen in Burundi, where less than 50% of the population can meet its daily food requirements, that the biggest demand is for something called farine noir. It's black flour and moldy cassava that is milled and sold to the poorest of the poor. Even the price of that has risen threefold in the past eight weeks. With rice, there's adequate supply, but not many countries are selling right now, and so we're seeing rice prices soar. In early March the World Food Programme was purchasing rice at $460 a metric ton, Last week, it was $980 a metric ton.

Where are the people that are being affected most right now?

Any country that has a significant portion of people living on less than a dollar a day. That includes many African nations. A number of countries such as Bangladesh, which lost 300,000 hectares of food production due to the cyclones, are under severe stress. This humanitarian crisis really knows no borders.

Is there a role for business to help address this crisis?

We have reached out to our business partners to both become educated on how we can understand these markets better and how we can increase the efficiency of our response. Last year we increased by 30% our local purchase of food, so that helps some poor farmers to have surer income. After the floods in Mozambique, for example, 80% of the people we fed were fed with food purchased locally. And we've got a number of businesspeople helping with that. In addition, with the Bill & Melinda Gates Foundation and the Howard G. Buffett Foundation, we'll launch a major effort to look at how we purchase food in the developing world to help poor farmers. I was just in Kenya and Ethiopia, and one would expect poor farmers would be planting a lot more to take advantage of the higher prices. But the farmers I met are doing the opposite—planting less because costs of such things as fertilizer have risen so high. So we are talking to the business community about what kind of mechanisms can help these farmers.

Maria Bartiromo is the anchor of CNBC's Closing Bell .

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