World Food Day Greeted By Devastating Losses And Inflation
Jeffrey C. Borneman | October 16, 2014
Today is World Food Day and the UN warns of widespread famine in Africa as Ebola drives communities from their farms.
The newest iPhone or Ford truck means nothing to someone who cannot afford to eat. As dire as the disease of Ebola may be, the loss of billions of dollars of Food and agriculture investment for the African region (and world) may be worse. Food may be listed last in the MDEF™ investment categories but it is certainly the most important. Historically the world population has been plagued by Food-insecurity and only recently have Americans been granted the luxury to take it for granted.
AP reports that Kanayo Nwanze, president of the U.N. International Fund for Agricultural Development, said Monday 'that up to 40 percent of farms have been abandoned in the worst-affected areas of Sierra Leone and there are already food shortages in Senegal and other countries in West Africa because regional trade has been disrupted. He said preliminary reports suggest that trade volume in these markets is half of what it was at this time last year."
World Food costs have risen sharply this year as the World Bank acknowledged this past May (here). Since then, the drought in the US, mismanagement of economies in South America and elsewhere coupled with the rising cost of fuel (Inflation), has only added to the woes of the world's poor.
In Lofa County, the worst affected rural county in Liberia, the price of food and other commodities increased from 30 to 75 percent, just in August.
News24 quotes Liberia agriculture minister Florence Chenoweth saying, "Billions of dollars of outside agricultural investment is gone as farming has been decimated," adding, "The nation had attracted $17.6bn of foreign investment of which $7bn was for agricultural development but those investors have left."
Statements such as: "The world is mobilizing and we need to reach the smallest villages in the most remote locations," made by Denise Brown, the U.N. World Food Program's regional director for West Africa, is indicative of how dire the situation has become in a short time. Brown estimates the WFP will "need to reach 1.3 million people in need in hardest-hit Liberia, Sierra Leone and Guinea (areas)."
Investors should be keen to hear Kanayo Nwanze wise assessment: "When there's a crisis in Timbuktu it doesn't stay in Timbuktu anymore. Nowadays it reverberates in Paris, London, Berlin, and Washington."
If you want to know more about how the MDEF™ Investing strategy is positioned in this, or other geopolitical possibilities, please contact us directly.