The World Food Day is celebrated by the world each year on 16 October, which coincides with the anniversary of the foundation of the United Nations Food and Agriculture Organization FAO on 16 October 1945.
The World Food Day aims at raising awareness of efforts to combat hunger around the world. This year's World Food Day theme is: Food Prices - From Crisis to Stability, which is chosen to shed light on food prices upswings, which pushed millions of people around the world into extreme poverty, and address actions be done to mitigate impacts on the most vulnerable population.
The food prices issue is of crucial importance, as it is associated with the basic needs of consumers regardless of their different levels. The impact of this price rise reflects heavily on low-income as well as fixed-income groups, due to the high relative weight of food expenses in the structure of expenditure for those categories, in addition to the relative stability of income in the face of rapid changes in prices. Therefore, international organizations concerned with food related issues constantly monitor and observe food prices and its availability.
Governments are also keen to follow up monthly prices of consumer goods, particularly food commodities in order to spot changes in the price levels. Some organizations, link between employees annual wage increase, and the rate of inflation, since the measurement of the rate of inflation is a necessary factor which helps in the formulation of policies and economic plans; and is also a criteria for assessing the investment climate in any country.
The year 2010 compared to 2009 has seen significant rise in world prices of food commodities, as the FAO Food Price Index registered an increase of 17.2 per cent. This was attributed to the hikes in the price indices of meat by 13.7 per cent, dairy products by 40.6 per cent, cereals by 4.4 per cent, oils by 27.8 per cent and sugar by 16.6 per cent. All these increases impacted the prices of domestic goods in the Emirate of Abu Dhabi, as a result of relying mainly on imports for the provision of food commodities. The Statistics Centre - Abu Dhabi pointed out that food and non-alcoholic beverages contributed by 36.8 per cent to the rate of inflation in 2010 which registered 3.1 per cent is mainly due to the rise in prices of this category by 6.9 per cent, and the relative weight of the category which constitutes 16.1 per cent of the structure of consumer spending.
However, this category contributed nearly by 69.1 per cent to reducing the rate of inflation which registered 0.8 per cent in 2009.
The import bill of the Emirate of Abu Dhabi food commodities increased from AED 6.3 billion in 2009 to AED 6.6 billion in 2010, up 4.8 per cent.
The trend of rising global food prices have continued more in January 2011, compared to January 2010, as the FAO Food Price Index recorded a growth of 28.3 per cent, as a result of the rise in price indices of meat by 18.1 per cent, dairy products by 9.5 per cent, cereals 43.7 per cent by, edible oils by 64.5 per cent and sugar by 11.9 per cent. These hikes impacted prices in the Emirate of Abu Dhabi of about 94 food groups which represent nearly 66per cent of 143 food group. The average rate of increase in prices of these commodity groups ranged between 0.2 per cent and 148.8 per cent.
The effects of hiking food prices, according to the World Bank report on Food Prices Control, resulted in an augmenting extreme poverty by adding about 44 million people in low and middle-income countries, during the period June 2010 to February 2011.
Facing rising food prices requires first identifying causes, in order to determine the appropriate mechanisms for dealing with such causes. There are a range of factors that contributed to the rise in food prices, which exceeded the level that attained during the food crisis in 2008. Price level is governed by supply and demand, in addition to an array of other factors. Increases in demand and inelasticity issues could partially be addressed through rationalization of consumption, and building up strategic stocks of food, as a tool for absorbing price shocks.The support of local agricultural production also contributes to increasing supply, reducing custom duties on food imports and eventually lowering of prices. Government monitoring and control measures, together with active involvement of consumer protection organizations, play an important role in controlling prices and preventing monopolistic practices.
On the other hand, there are many factors that affect prices that are difficult to locally deal with; such as bad weather, the natural disasters affecting crops, the emergence of new uses of agricultural commodities at the expense of the human food requirements, the growing demand for bio-fuels, the banning of the export in some countries, the spread of epidemics and radiation pollution which may affect agricultural crops.
The linkage between food markets and oil markets is another reason for the rise in food prices, as oil products enter as components in the production of food commodities. The rise of oil prices increases demand for bio-fuel, which consequently raises food prices. The fluctuations in prices and quantities of food have led many countries to increase their food stocks, which as well contributed significantly to the increase in demand for food.
Mechanisms of government and consumers to reduce food prices: There are several mechanisms that can be taken into consideration by governments and consumers to reduce prices, or reduce their impact on quality of life.
Governments can implement some or all of the following mechanisms, to mitigate the high prices: Reduction of customs duties on imports.
Controlling or banning of exports.
Stabilizing prices through the releasing of large quantities of stock commodity.
Raising prices of crops when buying from farmers, to encourage farming.
Adopting policies to encourage agricultural investment locally and abroad.
Adopting policies to support and introduce modern technologies to increase agricultural productivity.
Supporting basic commodities by cash or in-kind subsidies.
Stabilizing commodities prices through (forced pricing).
Determining profit margins as a percentage of the cost of commodities.
Revocation of food agencies to combat monopoly.
Activating the role of cooperative societies and agricultural marketing centers to sell at prices based on low profit margins Reducing the circulation of goods to sell the product to the consumers directly.
Promoting agricultural industrialization, to reduce waste, and to secure an abundance of goods and commodities throughout the year.
Raising consumers' awareness to rationalize consumption and spending.
The role of consumers is to rationalize consumption and refrain from buying high-priced goods for a period of time, if the product is unnecessary, to search for alternative goods, and to inform government authorities of any unjustified high prices.The rationalization of consumption can best be achieved by rational use and consumption of goods without extravagance or waste. Perhaps the lack of consumer awareness of the impact of extravagance and waste on individuals and the community may further and augment such irrational practice. Would consumers throw rice in the garbage, if they knew that the amount of water used to grow one kilogram of rice amounts to nearly 883 (1?-liter bottles of water)! Not mentioning the cost of imports and the fact that some countries suffer from famine.
The purchasing of unneeded goods leads to increase demand for goods and raises prices, which burden poor and low-income groups, at a time when commodities may expire without being used. This practice reduces the amount of savings and affects investment.
The UAE Government has exerted great efforts in dealing with soaring world prices, and worked to reducing their impact on domestic prices, by monitoring of market, following up consumer complaints, exempting most food imports and commodities from duties, distribution of subsidized goods, encouraging the agricultural sector, supporting renewable energy alternatives to reduce demand for bio-fuels, promoting agro-industries, in addition to the initiatives launched by the Ministry of Economy to stabilize prices of food commodities in coordination main distribution outlets in the State; and other initiatives and programs for raising consumers' awareness of rationalization of consumption and spending and the community programs to save food.
In the context of economic diversification for achieving the goals of Abu Dhabi Economic Vision 2030, food industries have seen steady growth during the past years, as a result of the efforts made by the government for the development of the industrial sector and the infrastructure. More than 150 industrial food plants were established in the State to add a strong drive to production capacity of food manufacturing in the region.
The food industry accounted for nearly 46 per cent of the total volume of investments in the non-oil industrial sector in UAE.
There is no doubt that economic cooperation agreements between the UAE and many of the leading countries in the agricultural field, have had a significant role in furthering exchange of experience, and technology for the benefit of all parties. The opening of the United Nations Food and Agriculture Organization Sub-regional Office for Gulf Cooperation Council (GCC) and Yemen in Abu Dhabi provides expertise and technical support in areas of food and agriculture.
The UAE plays an imperative role in promoting international efforts to stave off the famine that threatens millions of people in the Horn of Africa, based on the directives of His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the UAE, and His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President Prime Minister and Ruler of Dubai, and the support of His Highness Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces, and H. H. Sheikh Hamdan bin Zayed Al Nahyan, Ruler's Representative in the Western Region Chairman of the Red Crescent.
The Ministry of Economy and the Ministry of Water and Environment, in cooperation with the Arab Federation for Food Industries IR Company, announced the adoption of an ambitious initiative to support food security in the Arab world, and deal with the issue of famine in the Horn of Africa. The initiative aims at taking advantage of the Second Arab Food Industries Forum, which will be held on the 4th January 2012, to address the issue of famine in the Horn of Africa, through the development of radical and effective solutions to stimulate the development of food production and transfer of knowledge; and also to encourage innovation and adoption of the latest technology in order to raise the level of food production.
The Department of Economic Development in the Emirate of Abu Dhabi had brought up the problem of rising world food prices this year for discussion, through its initiative during the celebration of the Gulf Consumer Protection Day, in the seminar entitled (Rising Food Prices . The Challenges and Confrontation Mechanism) organized in March 2011. The seminar was attended by the Ministry of Economy, Statistics Centre - Abu Dhabi, the Consumer Cooperative Union, the Emirates Society for Consumer Protection and a number of food distribution companies in Abu Dhabi.
The gathering discussed the reasons for the increase in prices of local food commodities in the light of the soaring global prices, and aimed at developing solutions to reduce the spiraling local prices to ease the burdens of rising cost of living, by the joint effective efforts of all concerned authorities in this regard.
The Seminar stressed the importance of implementing more programs and plans aimed at raising consumers' awareness to reduce spending and rationalize consumption, as appropriate means to stabilize prices.
The seminar recommended building up of Strategic Food Stocks and Reserves, and highlighted the need to periodically review wages and salaries in the light of increasing inflation rates.
Recommendations included studying the possibility of exempting all food imports from customs duties, distribution of subsidized goods to individuals rather than to families, encouraging agro-processing, investment and production. The need to update the Household Income and Expenditure Survey was stressed, in order to keep pace with the growing change in consumption patterns, in addition to the need to publish a bulletin for strategic commodities indicators to enlighten and inform consumers.
In addition to its other various executive responsibilities, the Department of Economic Development in Abu Dhabi coordinates with the Ministry of Economy to control prices and effect consumer protection, through the implementation of a set of policies and procedures.
In order to strengthen its role in consumer protection, the Department of Economic Development intends to establish a Center for Consumer Protection, within its new organizational structure. The Center is designed to promote market mechanisms, monitor markets movement, activate competition, receive complaints from agencies and trademark owners and maintain justice and protection for all parties.
There is no doubt that consumer protection associations play a significant role in serving the society and consumers, providing protection for consumers by raising their awareness of their rights, receiving complaints and grievances, and followed up with concerned authorities.
Along with the celebration of the World Food Day, comes the importance of the call for concerted efforts to achieve stability in price levels, increase food production through the expansion of agricultural investment and raising agricultural productivity, giving more importance to food industries, managing to reduce waste, providing food throughout the year, tightening control over markets, calling on food producers to refrain from damaging produce to keep prices high and to donate these products to the poor and hungry people around the world, who do not constitute any considerable demand, which may directly affect the level of prices, as they lack purchasing power.
The World Food Day also aims at inviting consumers to reduce consumption to support price stability, and calls for abandoning the production of bio-fuels at the expense of reducing food products, in view of the alternatives provided by the renewable energy.