In Rome Friday, Secretary of State Hillary Rodham Clinton warned that global shortages of food and spiraling prices threaten widespread destabilization and urged immediate action to forestall a repeat of the 2007 and 2008 crisis that led to riots in dozens of countries around the developing world. Clinton told a meeting of the U.N.'s Food and Agriculture Organization that urgent steps are needed to hold down costs and boost agricultural production as food prices continue to rise. She said the consequences of inaction would be grave.
"We must act now cooperatively and collaboratively to blunt the impact of rising food prices," Clinton said, speaking to about 400 international delegates at the FAO.
Clinton warned that some countries adopted unwise policies such as export bans during the 2007-2008 food crises, which only made matters worse by driving up prices, encouraging hoarding and panic buying and discouraging farmers from producing more. She pointed out Thailand, Vietnam and India who curbed rice exports to protect domestic supply, leading to record high prices. And when Russia imposed an export ban after severe drought damaged harvests, wheat prices shot up.
"Rising food prices can have a positive effect if they send a signal to farmers to grow and sell more. But that can only happen if there is transparency in markets and stocks, so signals about prices and food supply are accurately received," Clinton said. "We need to do all we can together to find the best ways for markets to work more efficiently and deliver results."
The FAO has been holding regional meetings around the globe calling for governments to work towards that goal by avoiding export bans and other policies that can make problems worse. According to FAO director-general Jacques Diouf a series of studies about improving management of risks that occur with volatility of food prices.