The new economics of hunger

Prices for some crops -- such as wheat -- have already begun to descend off their highs. As farmers rush to plant more wheat now that profit prospects have climbed, analysts predict that prices may come down as much as 30 percent in the coming months. But that would still leave a year-over-year price hike of 45 percent. Few believe prices will go back to where they were in early 2006, suggesting that the world must cope with a new reality of more expensive food.

People worldwide are coping in different ways. For the 1 billion living on less than a dollar a day, it is a matter of survival. In a mud hut on the Sahara's edge, Manthita Sou, a 43-year-old widow in the Mauritanian desert village of Maghleg, is confronting wheat prices that are up 67 percent on local markets in the past year. Her solution: stop eating bread. Instead, she has downgraded to cheaper foods, such as sorghum, a dark grain widely consumed by the world's poorest people. But sorghum has jumped 20 percent in the past 12 months. Living on the 50 cents a day she earns weaving textiles to support a family of three, her answer has been to cut out breakfast, drink tea for lunch and ration a small serving of soupy sorghum meal for family dinners. "I don't know how long we can survive like this," she said.

Countries that have driven food demand in recent years are now grappling with the cost of their own success -- rising prices. Although China has tried to calm its people by announcing reserve grain holdings of 30 to 40 percent of annual production, a number that had been a state secret, anxiety is still running high. In the southern province of Guangdong, there are reports of grain hoarding; and in Hong Kong, consumers have stripped store shelves of bags of rice.

Liu Yinhua, a retired factory worker who lives in the port city of Ningbo on China's east coast, said her family of three still eats the same things, including pork ribs, fish and vegetables. But they are eating less of it.

"Almost everything is more expensive now, even normal green vegetables," said Liu, 53. "The level of our quality of life is definitely reduced."

In India, the government recently scrapped all import duties on cooking oils and banned exports of non-basmati rice. As in many parts of the developing world, the impact in India is being felt the most among the urban poor who have fled rural life to live in teeming slums. At a dusty and nearly empty market in one New Delhi neighborhood this week, shopkeeper Manjeet Singh, 52, said people at the market have started hoarding because of fear that rice and oil will run out.

"If one doesn't have enough to fill one's own stomach, then what's the use of an economic boom in exports?" he said, looking sluggish in the scorching afternoon sun. He said his customers were asking for cheaper goods, like groundnut oil instead of soybean oil.

Even wealthy nations are being forced to adjust to a new normal. In Japan, a country with a distinct cultural aversion to cheaper, genetically modified grains, manufacturers are risking public backlash by importing them for use in processed foods for the first time. Inflation in the 15-country zone that uses the euro -- which includes France, Germany, Spain and Italy -- hit 3.6 percent in March, the highest rate since the currency was adopted almost a decade ago and well above the European Central Bank's target of 2.0 percent. Food and oil prices were mostly to blame.

In the United States, experts say consumers are scaling down on quality and scaling up on quantity if it means a better unit price. In the meat aisles of major grocery stores, said Phil Lempert, a supermarket analyst, steaks are giving way to chopped beef and people used to buying fresh blueberries are moving to frozen. Some are even trying to grow their own vegetables.

"A bigger pinch than ever before," said Pat Carroll, a retiree in Congress Heights. "I don't ever remember paying $3 for a loaf of bread."

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