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Josette Sheeran (Anthony Jenkins/The Globe and Mail)
Josette Sheeran (Anthony Jenkins/The Globe and Mail)

The Lunch

Josette Sheeran wages the ultimate food fight Add to ...

Josette Sheeran is in her element at media events. The executive director of the United Nations World Food Program (WFP), a former journalist, plays to the audience expertly, delivering succinct, powerful messages she knows will be quoted.

I watched her in action a couple of years ago at a press conference in Rome, the hometown of the WFP and two other UN food agencies. Global food markets were on the verge of chaos and riots had broken out in dozens of poverty-stricken countries. The UN officials on the podium struggled to define the crisis in simple terms.

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Then came Ms. Sheeran, as cool and precise as ever. People who are hungry, she said, do one of three things: "They revolt, they migrate or they die."

The seven words graphically summed up the potential horror, and there was an ulterior motive behind the message - money. The doubling of food prices during the crisis had halved the WFP's emergency food-buying power on the markets. Unless the shortfall was replaced in a hurry, millions who count on the WFP, the world's biggest humanitarian food agency, faced starvation. The organization, which was formed by the United Nations in 1961, feeds about 90 million people who arechronically malnourished or in danger of starving in 70 countries around the world.

The extra funding arrived and Canada was at the forefront of the effort to keep the pallets of grain and nutrition bars rolling out of the cargo doors of WFP trucks and aircraft from Burkina Faso to Mozambique. "It was the biggest humanitarian ramp-up in our history," Ms. Sheeran says. "Canada doubled their support to us. The King of Saudi Arabia wrote us two $250-million (U.S.) cheques. The crisis stretched the WFP to its absolute limit but the world stood together to prevent this from becoming a full-blown disaster." In 2007, total government donations came to $2.7-billion. The next year, they exceeded $5-billion. (Canada's contribution has climbed to $285-million from $161-million in 2007.)

The food crisis may be over, but WFP is not declaring victory. Food commodities are back to record or near-record highs, thanks to a variety of factors, among them extreme weather events, rising demand and the diversion of agricultural land to biofuels. And as the world's population grows, a spike in global food prices in the past year - wheat is up almost 40 per cent while corn has shot up 87 per cent - continues to fuel unrest in North Africa and the Middle East.

If all this were not worrisome enough, horrendous price volatility is making a mess of the agency's budgets. "Prices are spiking and falling and you can't budget," she says. "That volatility is very hard for us to manage. We have no buffer. Every 10 per cent rise in food prices costs us another $200-million."

For that reason, the WFP wants to do something it has never done in its 50 years: It will become perhaps the world's biggest commodities hedger - a program that is part of Ms. Sheeran's effort to take lessons from the business world to make the agency more efficient and effective. The WFP, which buys more than $1-billion worth of grains a year, currently buys all of its food commodities on the spot market, whose volatility is hard to manage. If prices spike, it loses buying power, meaning millions of hungry people may not receive the emergency food supplies they need. For the first time, WFP is exploring ways to protect its buying power through hedging programs. The World Bank is its adviser on this effort.

Bred to serve

We are having dinner in the heart of historic Rome, at one of Ms. Sheeran's favourite places. It's called Renato e Luisa, a former tavern that serves traditional Roman fare with a creative twist.

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