Global food crisis looms

Across the United States - and around the globe -- from farms to factories prices are on the rise.

On Tuesday the US Labor Department reported overall producer prices rose 1.1 percent in March. Energy costs shot up 2.9 percent, with food moving up a sharp 1.2 percent..

As prices soar, the World Bank has warned of a global food crisis that could bring social disruptions. The Caribbean nation of Haiti has already seen its government fall after people unable to pay for food took to the streets in protest.

Food riots have also erupted elsewhere in Latin America and in Africa.

Even US Secretary of State, Condoleezza Rice was questioned about food and fuel costs.

SOUNDBITE: US Secretary of State, Condoleezza Rice, saying (English):

"We clearly have twin problems. We have an energy and a food problem. There are some relationships between them."

While some observers see food costs rising as corn and sugar farmers turn to ethanol. Rice says that is only part of the problem.

SOUNDBITE: US Secretary of State, Condoleezza Rice, saying (English):

"We also think a significant part of the food problem relates not from biofuels but from simply the costs of energy in terms of fertilizer and in terms of transportation costs for food and that that is in part maybe an even larger part of spiking the food crisis that we have."

Economists point to many factors. There is increasing demand from China as well as India, and the fact that Australia has been hit with the worst drought in 100 years.

And there is the questions of incentives, like subsidies in the US for farmers to grow corn for ethanol.

Daniel Weiss of the Center for American Progress.

SOUNDBITE: Daniel Weiss of the Center for American Progress, saying (English):

"If you are a farmer now, it is very tempting to shift your growing corn from feed and move t towards fuel, so we have to reduce some the economic incentive to do that by redirecting subsidies that we have for ethanol ...they really are not necessary when oil is over one hundred dollars a barrel."

The US Congress has granted ethanol producers a 51 cent tax credit for each gallon of ethanol produced through 2010.

For American consumers, there is not much relief in sight.

SOUNDBITE: Daniel Weiss of the Center for American Progress, saying (English):

"There is no question that high oil prices have put real pressure on American families budget, both paying more for gas, more money for electricity and more money for food...all of these things are going (continue)(increase) the middle class squeeze that is already under way."

Outside the US, the fear is high rising prices could lead to increasing malnutrition in Central America and the Caribbean.

Deborah Lutterbeck, Reuters

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1. To come into view as a massive, distorted, or indistinct image: "I faced the icons that loomed through the veil of incense" Fergus M. Bordewich. See Synonyms at appear.

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n.

A distorted, threatening appearance of something, as through fog or darkness.
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drought (drout) also drouth (drouth)

n.

1. A long period of abnormally low rainfall, especially one that adversely affects growing or living conditions.

2. A prolonged dearth or shortage.

squeeze v. squeezed, squeez·ing, squeez·es

v.tr.

1. To press hard on or together; compress.

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