Food Crisis Due to Greed, Says Development Bank

Sharp price hikes for essential food and fuel have triggered riots and protests in poor countries across the world.

The global food price crisis is largely due to greed and market speculation rather than food shortages, the head of Southern Africa's development bank said on Tuesday.

"These increases in food prices are not the consequence of food shortages, it's the consequence of human greed that is putting at risk the lives of millions of men, women and children," Jay Naidoo told Reuters.

"There are companies that are making super profits on this issue," he added, blaming the rising cost of food on speculation on commodities markets and the impact of surging prices of oil.

Governments and world bodies should take concerted action to control surging food prices, he said on the sidelines of a conference on malnutrition in Brussels.

Sharp price hikes for essential food and fuel have triggered riots and protests in poor countries across the world, sparking a crisis that threatens millions of poor with hunger, especially in Africa.

Asked how the rising prices could be controlled, Naidoo said it was a very complex issue that needed the involvement of the World Food Organisation, U.N. agencies and governments "to agree a consensus on how food prices...are going to be managed."

The root causes of the more than 40 percent rise in food prices in the last year are disputed, with experts quoting strong demand by Asian emerging markets, adverse climate in some producer countries and increased use of biofuels.

The Development Bank of Southern Africa finances development projects including on road, water and telecoms infrastructure, but does not work directly on agriculture, said Naidoo. It spent 3.7 billion rand ($491.4 million) in 2006/7.

Naidoo, a former South African telecommunications minister, said the food price crisis would have "devastating" effects in southern African countries already weighed down by problems.

"We already suffer the consequences of HIV/AIDS epidemic combined with malaria surge ... the food price crisis is going to exacerbate the problems that we face," he said.

At the same conference, Paulus Verschuren, Senior Director Partnership Development at Unilever, said major corporations, governments and civil society needed to work together to end the food prices increases.

"We cannot afford bringing products to markets in developing countries which are significantly more expensive than it is today," Verschuren told Reuters.

Naidoo and Verschuren are both members of the Global Alliance for Improved Nutrition group, which gathers companies and international organisations.

The group, which says it has spent $40 million in projects to fight malnutrition since it was created in 2002, on Tuesday called for pledges for a new fund to fight malnutrition, with the aim of collecting $800 million.