Oxfam warns food prices to soar due to climate change

Staple food prices may double within the next two decades due to climate change and an increase in extreme weather including droughts and hurricanes, the anti-poverty group Oxfam said Wednesday. Oxfam warned current climate change research isn't taking into account extreme weather events, which it warned could also temporarily send up prices by a similar amount. "While prices could double by 2030, the modelling suggests that one or more extreme events in a single year could bring about price spikes of comparable magnitude to two decades of projected long-run price increases," said Oxfam. Based on new research that includes the impact of extreme weather, like the drought and heat wave like that struck the United States this summer, Oxfam estimated the world market export price of maize in 2030 could be 177 percent higher than in 2010. For wheat the price increase is seen at 120 percent and for processed rice 107 percent, according to modelling based on research commissioned by Oxfam from the Institute of Development Studies at Britain's University of Sussex. The impact of climate change -- increased temperatures and changing rainfall patterns -- is estimated to account for only a third to half of the price impact. Instead it is extreme weather that is expected to have the greater long-term impact on staple food prices. "As the 2012 drought in the United States shows, extreme weather means extreme food prices," said Oxfam. Global food prices soared 10 percent in July due to the US drought, the World Bank has said, with maize prices jumping by 25 percent and set to rise further. The UN's climate science panel, which forecasts temperatures will rise 2.5 to five degrees Celsius over this century, has said that man-made climate change has boosted the frequency or intensity of heat waves, and that such extreme weather events are virtually certain to increase in the future. Oxfam warned that food price spikes due to extreme weather have an even greater impact on the poor. "Short-term price surges can have significantly worse consequences for vulnerable people than gradual price increases, to which they can adjust more easily," Oxfam warned. "But it is the combination of long-term climate impacts and short-term shocks that are likely to be especially devastating," it added. With many people in developing countries spending as much as 75 percent of their income on food, Oxfam said price surges have a quick impact on undernourishment. Moreover, many people are forced to sell off productive assets and incur debt, causing longer-term economic impacts and eroding people's capacity to recover from one crisis to the next. Oxfam also said farmers in developing countries had difficulties in taking advantage of the price rises as they lacked access to credit and inputs to expand production. Price volatility makes it even harder for them to invest as without access to financial markets they bear the risk of short-term drops in prices, it added. Oxfam called for immediate action to cut greenhouse gas emissions behind rising temperatures and for developed countries to step up funding for adapting to climate change.