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Panic as global food crisis reaches America

— Photo: AFP

Precious commodity: Residents with subsidised rice in Manila recently. President Gloria Arroyo has declared war on hoarders and is using the military to move supplies of subsidised rice.

New York/Caracas: The global food crisis reached the U.S. on Wednesday as big retailers began rationing sales of rice in response to bulk purchases by customers alarmed by rocketing prices of staple foods.

Wal-Mart’s cash and carry division, Sam’s Club, announced it would sell a maximum of four bags of rice a person to prevent supplies from running short. Its decision followed sporadic caps placed on purchases of rice and flour by some store managers at a rival bulk chain, Costco, in parts of California.

The world price of rice has risen by 68 per cent since the start of 2008, but in some U.S. shops the price has doubled in weeks.

Retail experts said there was little evidence of panic hoarding by the public but that restaurants and smaller retailers were buying up stocks at wholesalers in the expectation that the cost would go even higher. Shops said Filipino residents in the U.S. were also making large purchases to send to relatives in the Philippines, where a shortage of supplies is causing concern.

“What you’re seeing is people who buy in larger quantities, who have a restaurant or a corner store, stocking up because of media reports that prices could go higher,” said Dave Heylen, a spokesman for the California Grocers Association.

The price of staple foods has been rising at an accelerating rate across the world, driven by what the U.N. has called a “perfect storm” of rising demand from developing countries such as China and India, the impact of climate change and policy responses by governments.

Since the beginning of the year, rice-producing countries including China, India, Vietnam, and Egypt have imposed limits on exports to keep domestic prices down. This week, a World Bank official predicted that Thailand, the world’s largest rice exporter, might follow in restricting shipments.

E.U. Trade Commissioner Peter Mandelson on Wednesday called on the WTO to put pressure on food-producing countries to maintain exports. “If we restrict trade, we’re simply going to add food scarcity to the already large problems of food shortages that exist in different countries,” he told Reuters.

Jacques Diouf, director of the U.N.’s Food and Agriculture Organisation, said the crisis had been building for decades. “The situation we are in is the result of inappropriate policies over the past 20 years,” he told journalists in Paris, pointing to a halving of aid to agriculture in developing countries between 1990 and 2000, while the industrialised world maintained generous farm subsidies.

Venezuela’s President Hugo Chavez on Wednesday announced a $100 million “food security fund,” at a regional summit to agree on policy as the crisis spreads instability across Latin America and the Caribbean.

Looting and riots in Haiti left at least six dead and forced the resignation of the Prime Minister this month, leaving the hemisphere’s poorest country tense and edgy. In Guyana, an 80 per cent rise in the price of rice and a 50 per cent increase in the cost of chicken triggered protests and a strike by sugarcane workers. The government promised to issue seeds and urged people to cultivate idle land. — ©Guardian Newspapers Limited, 2008

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