Drought 2012: U.N. Now Warning of Looming Food Price 'Catastrophe

Droughts in the U.S. have forced the U.S. Agriculture Department to slash its forecast for the nation’s corn crops to only 10.8 billion bushels, the lowest amount since 2006, TheBlaze reported last month.

“If that estimate holds, the federal government says it will be enough to meet the world’s needs and avoid shortages, but experts say food prices will almost certainly climb as corn is an ingredient in many products,” the AP reported.

These droughts, other global environmental events, and the food shortages they have caused have U.N. officials scared enough to warn that the world may soon face a food price "catastrophe."

"We need to act urgently to make sure that these price shocks do not turn into a catastrophe hurting tens of millions over the coming months," the Food and Agriculture Organization of the United Nations FAO, the International Fund for Agricultural  Development, and the World Food Programme said in a statement yesterday.

"We need to remain vigilant and prepare for the worst in the short run, while working on sustainable solutions for the long haul," the statement adds.

The agencies claim poor and food import-dependent countries would be hit hardest by spikes in raw food commodities. They also argue world leaders need to take immediate action, including investing "much more in agriculture and social protection, including programmes that help poor people to access food that has become unaffordable in their local markets."

"Until we find the way to shock-proof and climate-proof our food system, the danger will remain. In the short term, this has costs, not only for those directly impacted, but also for the international community at large," the statement reads.

“For instance, the World Food Programme (WFP) estimates that every 10 per cent increase in the price of its food basket means it has to find an extra $200 million a year for food assistance,” it adds.

The statement also says countries should avoid "panic buying" and export restrictions.

But here’s where some of their concrete solutions come in [emphasis added]:

Lastly, we also need to review and adjust where applicable policies currently in place that encourage alternative uses of grains. For example, adjusting biofuel mandates when global markets come under pressure and food supplies are endangered has been recommended by a group of international organizations including FAO, IFAD, the International Monetary Fund, the Organisation for Economic Co-operation and Development, the UN Conference on Trade and Development, WFP, the World Bank and the World Trade Organization. That recommendation, made to the 2011 G20 summit in Paris, still stands today.

The recommendation to ease up on biofuel mandates isn’t exclusive to European leaders. In fact, that argument is taking place in Washington right now.

As mentioned previously on TheBlaze, one of the greatest threats the droughts and food shortages pose is the burden it will put on the cost of bringing goods to market. This is a threat not just to American consumers, but to consumers worldwide. Mandates requiring that fuel be mixed with a crop that has suffered greatly from the droughts will only drive that cost up.

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(H/T: Business Insider). Front page photo courtesy the AP. This story has been updated.