Wednesday, June 1, 2011

Hedge funds accused of gambling with lives of the poorest as food prices soar

 

Climate change, changing diets, rising food prices and a growing global population have pushed food security to the top of the international agenda. But why is food getting more expensive? Who really controls the global food trade? And can we feed our growing population? Each of the nine geographical areas highlighted illustrates one aspect of the food crisis

Cocoa beans being dried

 

 

Fermented cocoa beans being dried. Cocoa prices have risen 150% in 18 months – but farmers have not necessarily benefited. Photograph: Alamy

Financial speculators have come under renewed fire from anti-poverty campaigners for their bets on food prices, blamed for raising the costs of goods such as coffee and chocolate and threatening the livelihoods of farmers in developing countries.

The World Development Movement (WDM) will issue a damning report today on the growing role of hedge funds and banks in the commodities markets in recent years, during which time cocoa prices have more than doubled, energy prices have soared and coffee has fluctuated dramatically.

The charity's demands for the British financial watchdog to follow the US in cracking down on such speculation comes against a backdrop of cocoa prices jumping to a 33-year high as it emerged that a London hedge fund had snapped up a large part of the world's stock of beans. On Friday, traders say, Armajaro took delivery of 240,100 tonnes of cocoa – the biggest from London's Liffe exchange in 14 years and equal to about 7% of annual global production, according to the Financial Times.

A 150% rise in cocoa prices over the past 18 months has forced many chocolate-makers to raise their prices and often to use less cocoa.

The WDM's Great Hunger Lottery report says "risky and secretive" financial bets on food prices have exacerbated the effect of poor harvests in recent years. It argues that volatility in food prices has made it harder for producers to plan what to grow, pushed up prices for British consumers and in poorer countries risks sparking civil unrest, like the food riots seen in Mexico and Haiti in 2008.

Global food crisis: China land deal causes unease in Argentina

A Chinese agribusiness firm is to buy a large swath of land in Patagonia. Critics fear it will bring heavy agrochemical use and ecological degradation, and strain the region's water resources

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MDG : China land grabbing in Argentina : patagonian steppe near Bariloche city , Rio Negro state

Patagonian steppe: a summer day near Bariloche in Rio Negro state, Argentina. Photograph: Marcos Radicella/Getty Creative

The attraction to the Chinese of access to an area of land in Patagonia larger than Cornwall is obvious. As China's economy grows and its population becomes more urbanised, diets are changing rapidly. People are eating more industrially produced meat and dairy products, and buying more processed foods.

Soya is the feedstock for this revolution, but demand for it can no longer be met within China. So the Chinese state-owned agribusiness company Beidahuang has joined the global scramble for land and water that has accelerated since food prices spiked in 2008.

Last year it was confirmed that the company had signed an agreement, with the government of Patagonia's Río Negro province, which provides the framework for it to acquire up to 320,000 hectares (790,000 acres) of privately owned farmland, along with irrigation rights and a concession on the San Antonio port.

Details of the deal, alleged to have been kept quiet, have been emerging in recent weeks as Chinese technicians have started work.

Beidahuang has also reported a 2008 deal on 200,000 ha in the Philippines, and says it plans to buy palm oil plantations and grain terminals this year as it pursues the Chinese government's policy of securing food supply lines from abroad.

Beidahuang, based in the north-eastern province of Heilongjiang, is the leading soya producer in China and one of the country's five largest soya processors. It also raises more than 600,000 cows, 1.3m pigs and more than 6m chickens at any one time.

The company believes its expertise in large-scale farming can be transferred to Argentina, according to Juan Manuel Accatino, the region's deputy secretary for agriculture in Río Negro, who was close to the deal. The arrangement made good economic sense, Accatino said. "We can foresee global shortages of land, water and energy, and Río Negro can offer all three."

Argentinian environmental groups and constitutional experts are outraged. Eduardo Barcesat is a top constitutional lawyer who has been helping the federal government of the Argentinian president, Cristina Kirchner, draft legislation that would restrict foreign ownership of Argentinian land. The laws would also provide, for the first time, a full register of all landholding so that authorities can keep track of who owns what.

"Chinese and Indian people have been coming to Argentina over the last five years and would be happy to buy all our land, whatever the price. American businesses have been buying access to our water," Barcesat said. "We need our own people to eat well first, and after that we can feed the rest of the world. We want more small and middle-sized owners, we don't like the excessive concentration, and we want farmers who will be careful with the land, not exploit it."

Research from the International Land Coalition, and Oxfam Novib, the Netherlands affiliate of Oxfam International, has identified more than 1,200 international land deals covering more than 80m hectares since 2000 – the vast majority of them after 2007. More than 60% of the land targeted was in Africa.

The Río Negro region is famous for its fruit orchards, which produce 70% of the country's apples and pears, exports eaten in northern Europe when the fruit season in that continent ends.

Environmentalists in Río Negro say the Chinese arrival will mean heavy use of agrochemicals, ecological degradation and severe strain on the region's water resources. Some of the land in question is virgin forest that would be deforested.

Dams have already cut the flow of the Negro river, they say, and Chinese plans to invest $20m (£12m) immediately to build irrigation infrastructure would strain resources further. The campaigners say that since soya cultivation is highly mechanised it will prompt unemployment in the area, as it has elsewhere in the country where many rural communities have seen an increase in deep poverty as jobs are lost.

Elvio Mendioroz, president of Uñopatún, an agro-ecoclogical group that opposes the Chinese deal, said the agreement had been kept secret. "China has run out of land to feed its people, and is suffering drought and soil erosion, so they come here.

"But it will create the same problems for us. There has been no consultation, yet it's already signed."

Accatino thinks the deal has been misunderstood. Río Negro's provincial government was merely acting as a facilitator for the Chinese, he said, who would have to negotiate with the private owners of land to buy sections. The port concession, reported as being for 50 years, would depend on an evaluation of its feasibility.

Accatino said: "We will take into account the environmental concern about further expansion of soya and dependency of this monoculture. We would never endanger the Negro river."

Azerbaijan: Oxfam food report

Gulnara and her family use the wood oven for both heating and preparing food. Gulnara lives in Kelenterli village. Her family owns about 1 hectare of land. She is married to Tayyub, and has three children, Farhad, 17, Lamiya, 14, and Gulmira, 12. 'We buy meat once every three weeks on average. About 70% of our income is spent on food, the rest on educating my kids, transport and heating. If the food prices were lower, I could afford to send my elder daughter to college or university as she is so keen to continue her education, but with these prices, it is hardly possible for us,' says Tayyub

Azerbaijan: Oxfam food report

Barda fruit and veg market. Many people can't afford to come here to buy fresh fruit and vegetables any more due to rising food prices. 'Before the prices shot up, we used to buy 20kg of potato, now we have to buy 15kg, which means we have to cut down on nutrition. Recent price increases are much higher than previous ones: flour used to cost 14 AZN last year, now it is 22 AZN. We have cut down on other food items, and increased bread consumption,' says Shakir Hasanov. 'I would say most of my income is spent just on food. My biggest fear is that I won't be able to afford to buy food for my family and there will be hunger. Also I'm scared that we'll have long queues for food items as we had during the war'

Azerbaijan: Oxfam food report

A car loaded with flour on a main road in Barda. In the countryside, many men have no permanent jobs and turn their hands to different kinds of work to earn a living. The prices of basic food items (such as bread and eggs) have increased considerably (by 17% and 20% respectively). On the other hand, the farm gate price of farmers’ products has decreased. It hits many poor and smallholder families in the rural regions, where agriculture is the only source of income

Azerbaijan: Oxfam food report

Street vendors selling fresh meat by the side of the Barda-Dordyol road. Open-air butchers' shops do not meet sanitary requirements and are seasonal. Meat prices have increased dramatically in less than a year, 36% for mutton and 13% for beef

Azerbaijan: Oxfam food report

Sevinj Ismayilov's husband, Tahir, was born in Boyehmedli village of Agdam in 1963. He is now an internally displaced person after the Nagorno-Karabakh war. Since May 1992, he has been living in a small bungalow with his family: wife Sevinj, 42, and children – Nurane, 16, Ragsane, eight, Ilahe, seven, and Namig, three. Tahir is unemployed, his wife is a housewife. ‘We buy wood to heat our house, now wood is too expensive, so though the weather is still cold at this time of the year, we have already stopped the heating. With no heating, no income and higher food prices, life is getting so hard for our family,' says Tahir. 'Price increases are more frequent these days and more considerable. No one is thinking of the poor, it is impossible for the poor to survive in these conditions'

Azerbaijan: Oxfam food report

In the Dordyol area, which is predominantly settled by internally displaced people (IDPs) from Agdam, Ismail, 53, and his son, Eldar, 27, are shopowners. ‘We had to face too many obstacles before opening this small shop. There is no financial aid or credits for IDPs, since we are not considered as residents of Barda, so we had to borrow money at higher interest from other people. Many people in the area do not have money to pay for food. Being an IDP myself I understand them and very often get payments only at the end of the month or even a couple of months later. But, of course, I cannot do it all the time, since I run the risk of going bankrupt. At this point, I have more outstanding debts than my income,’ says Ismail

Azerbaijan: Oxfam food report

Nigar Mammadova, 51, shows chicken feed. Nigar and her family fled Gulluja village in April 1994. Her late husband stayed in Agdam to protect the city, and the rest of the family left hastily by truck under fire. The next day, Nigar heard her husband had died. She is a single mother of two. Nigar and her children lived in a tent in Ereb, an IDP settlement, for 12 years. Now she is living in Dordyol IDP settlement in a house provided by the government in 2006. She works as a teacher at a local IDP school for eight hours a week, and receives a very small salary. 'The income I receive from teaching is not enough even for our heating costs, let alone food. My son and I have to do several different jobs to pay to feed our family. We do not have animals as their feed is very expensive, its price went up by 80% in one year, so I had to reduce my poultry to 10. But keeping hens is necessary for my grandson - at least we don't pay for eggs and meat'

Azerbaijan: Oxfam food report

Four women, Shukufa Mammadova, Sevda Gguliyeva, Zargul Abilova and Latafat Aslanova baking bread by train carriages and bungalows near Dordyol/Kocherli train station. Around 70 IDP families live in bungalows around Dordyol settlement. These bungalows have existed since 1993, when there were over 2,000 people living in these conditions. The number has substantially decreased. But no official statistics exist. There is no drinking water, gas or sanitation in these shacks. They bake bread together every other day

Azerbaijan: Oxfam food report

Yeman Mammadova and Mahammad Mammadov. Mahammad is sleeping out under the winter sun, while Shukufa is washing salad at the settlement near Dordyol/Kocherli train station

Azerbaijan: Oxfam food report

Gasimbeyli village in Barda is one of the villages where Oxfam has rehabilitated sub-artesian wells. For many years the well was out of order and the village population did not have the funds to repair it. According to Siyavush Aliyev from the local water users union, there are over 1,000 people in this village – about 70% benefit from the well. 'I do not have a permanent job, as there is a problem with employment in the village. My only income is farming. I cultivate mainly carrots, also tomatoes, radish, peppers, potatoes and beans in my garden area,' says Gara

Azerbaijan: Oxfam food report

Nuride Mammadova, from Kelenterly, lives with her family of five, including her husband, Talib Abdullayev, 53, their son, Seymur, 22, and their daughters, Nargiz, 18, and Gunel, 15. Nuride and Talat have been living in their current house since 1987, when they married. Their son Seymur was diagnosed with autism when he was a child. The family's income is 80 AZN a month. 'The main problems are unaffordable basic food products and lack of gas supply. For the last couple of years the price for food products has been increasing substantially, it's impossible to buy even basic food products with our income to keep a family,' says Nuride

Azerbaijan: Oxfam food report

Rosa Abbasova displays the cheese she has just made at her home in Kenterli village. Kelenterli is 10km from Barda town and is a relatively large village. Most of the people in the village are living in poverty, with low incomes and agricultural productivity and limited market access

Azerbaijan: Oxfam food report

Mirza Bakhishov, 47, and his family pose with a week's worth of food outside their home in Shahveller village. Mirza, 47, was born and bred in this village, in this house. He has been engaged in agriculture and animal husbandry all his life. He and his wife, Zarkhara, 37, and two sons, Khasay, 18 and Elchin, 15, own a small amount of land. Zarkhara produces 1 hectare of alfalfa, which he uses for his animals. He also cultivates a small area of cotton and wheat on the other hectare as well as parsley in his garden. He has two cows, two buffaloes, a calf, a donkey, some sheep, six ducks and two chickens. 'Our small cattle and poultry is everything for us. All our income and livelihood depends on them. The main problems for us are agricultural water and irrigation of our crops'

Azerbaijan: Oxfam food report

Disused petrol pumps outside what used to be the main site of an old Soviet bus station in Barda

Trading in death: Rapacious bankers are making fortunes by forcing up the price of food and leaving millions to starve

The women crouch in the dust, hacking into the hard African dirt.

They are looking for food. This is Chad, West Africa.

Sedoisa, a 71-year-old grandmother, sifts through the soil, searching an anthill for grains.

On the brink: There are fears that the current situation in West Africa will develop into a famine

On the brink: There are fears that the current situation in West Africa will develop into a famine

Bringing a wrinkled hand to her mouth, she gestures that she is looking for something to eat. It is 7am. Along with a team of 'termitieres', she searches all day long.

The villagers, among them heavily pregnant women and small children, are looking for the nest containing the queen ant. This is the prize, where the worker ants have stored their hoard.

If they find it, the villagers will raid the ants' small stock of grain, collected from the barren, windswept plain.

On good days, the termitires might find 2.5kg of precious food. It is hard work, and each day the number of women searching increases.

The country stands on the brink of famine.

The rains have failed, and - crucially, imported food is too expensive for Chad's people to buy. In neighbouring Niger, the situation is even worse.

Trading in life and death? Workers on the floor of the New York Stock Exchange have become used to buying and selling food deritvatives

Trading in life and death? Workers on the floor of the New York Stock Exchange have become used to buying and selling food derivatives

One woman describes the crisis. She says: 'Soon the day will come when there will no longer be enough anthills for everyone.'

The people of West Africa are starving. Almost 10 million people in the region are facing a food crisis.

Why?

In order to answer that question, we need to visit Manhattan's financial district - although no one is starving there.

At 200 West Street, another type of anthill exists. It is the gleaming New York headquarters of Goldman Sachs investment bank.

The £1.5 billion 43-storey building, which opened this year, houses 11,000 staff - who reaped a staggering $20.2 billion in bonuses in 2007.

Market leaders: Goldman Sachs have led the way in food derivatives

Market leaders: Goldman Sachs have led the way in food derivatives

Just as in the African anthill, there is a strict hierarchy in this house of Mammon.

Vice-presidents sit at shared workbenches. Managing directors get windowless offices. The 300 elite partners get a room with a view.

High above are the executive suites, with panoramic vistas of New York Harbour. Here, Goldman's Masters of the Universe - each worth many millions of pounds - set the bank's strategy.

As it became clear there were problems in the U.S. mortgage market, this band of select bankers decided to switch a large number of Goldman Sachs's investments to other commodities - namely rice, wheat, corn, cattle, coffee and cocoa.

Such investments had been going on for some time, but this marked a major shift towards them.

Goldman Sachs was not alone. Other investment houses such as Merrill Lynch, Deutsche Bank and Lehman Brothers followed a similar strategy.

Indeed, it was recently reported that British financier Anthony Ward, dubbed ChocFinger, has amassed 214,000 tons of cocoa beans, worth £658 million.

Some suspect he wants to exert a stranglehold over the market and force prices higher. Admittedly, cocoa beans are not a basic foodstuff, but it does illustrate how one individual or corporation can affect the market.

Either way, the investment houses' momentous decision to move into food investments has had tragic consequences. The strategy has caused world food prices to soar, leading to riots, famine and many deaths.

At the end of 2006, food prices across the world started to rise sharply.

Within a year, the price of wheat had shot up by 80 per cent, maize by 90 per cent, rice by 320 per cent.

Around the world, 200 million people - mostly children - who relied on cheaply imported foodstuffs sank into malnutrition or starvation. There were riots in more than 30 countries. The crisis continues today.

'A herd of market traders, speculators and financial bandits have turned wild and constructed a world of inequality and horror'

And indirectly, through a pension, shares or other investment, it could be your money which is being used to make others go hungry.

Jean Ziegler, former UN chief food expert, says this speculation has led to 'silent mass murder'.

He warns: 'We have a herd of market traders, speculators and financial bandits who have turned wild and constructed a world of inequality and horror.

'We have to put a stop to this.'

And yesterday, the World Development Movement spoke out against this trend.

Its director, Deborah Doane, said: 'Investment banks like Goldman Sachs are making huge profits by gambling on the price of everyday foods.

'Nobody benefits from this kind of reckless gambling except a few City wheeler-dealers.

'British consumers suffer because it pushes up inflation, British companies suffer because of unpredictable oil and raw material prices, and the world's poorest people suffer because basic foods become unaffordable.'

Just how did this happen?

The real cost: A Save the Children worker measures a child's arm. The charity has estimated that more than eight million children are starving because of the global economic crisis

The real cost: A Save the Children worker measures a child's arm. The charity has estimated that more than eight million children are starving because of the global economic crisis

To answer that question, we have to go back to the early 1990s.

Until then, farmers had been able to protect themselves against risk by selling their crops to traders in advance at a fixed price, known as 'futures' trading'.

If the sun shines, growth is abundant and the crop is good, the farmer might make less than he would have done selling on the open market at harvest time.

But if the summer is disappointing, he will do better than he could have - cushioning himself against failure.

When this process was tightly regulated, and only those companies with a direct interest in the field could get involved, it worked.

Then the big investment banks turned their interest to agriculture, and decided they wanted to trade in futures.

'This isn't just any commodity. It is food, and people need to eat'

Goldman Sachs and others lobbied for the rules to be changed. Eventually, the regulations were abolished.

Suddenly, the simple risk-management deals with farmers were turned into 'derivatives' - or contracts - that could be bought and sold among traders who had nothing to do with farming.

A market in speculation on the price of food was born.

Put simply, a derivative is a financial contract with a value which is linked to the expected future price movements of the asset it is linked to - such as wheat or rice.

This meant that Farmer Jones could agree to sell his crop in advance to a trader for £10,000 as he had done every spring previously.

But under the new rules, the contract could be sold on at ever-inflated prices to speculators who believed the value of the crop - and therefore the derivative - would go up.

Goldman Sachs - nicknamed 'the Vampire Squid' for its overweening influence on financial markets - could buy a £10,000 contract and sell it on for £20,000 to Deutsche Bank, who would sell it on for £30,000 to Merrill Lynch - and so on.

And so, the highly-paid analysts from these banks began turning food into a 'concept' - something to be traded and transformed into complicated mathematical formulae.

Get the message: A protester makes his feelings known outside Goldman Sachs headquarters in the financial district of New York

Get the message: A protester makes his feelings known outside Goldman Sachs headquarters in the financial district of New York

These were transformed into the Goldman Sachs Commodity Index.

An influential academic paper published in 2005 showed that huge profits could be made in commodities, rivaling the returns from traditional stocks, shares and bonds.

Investment banks needed fertile new ground for growth, of course because they had left scorched earth behind in their previous areas of interest.

The mortgage market had collapsed, and money managers had to find new places to invest. Commodities became the latest hot thing in investment banking circles.

In 2003, commodity index holdings amounted to $13 billion. By 2008, $317 billion had poured into the funds investing in this area.

The bank's money was not at risk, of course.

Putting food on the table: Goldman Sachs chief Lloyd Blankfein awarded himself a record bonus at the height of the food derivatives boom

Putting food on the table: Goldman Sachs chief Lloyd Blankfein awarded himself a record bonus at the height of the food derivatives boom

It was investing in a price index - little more than gambling - using other people's money: the savings accounts, pension funds and life insurance policies of the general public.

Soon, the prices of foods being traded on this index went up. The banks' investors were, of course, delighted.

Take the case of wheat. American grain prices had long been set by the Minneapolis Grain Exchange.

For more than a century, prices had steadily declined. Then, in 2005 - as banks became involved in trading it, the price of wheat began to rise. So did the cost of rice, corn, soy, oats and cooking oil.

In the case of grain, between 2006 and 2008, the price of Chicago soft red winter wheat shot up from $3 a bushel to $11 a bushel.

In 2008, U.S. wheat giant Cargill announced an 86 per cent jump in profits, thanks to commodity trading.

The more prices went up, the more traders wanted to trade.

There were a few voices of sanity.

One old-fashioned grain seller said: 'This isn't just any commodity. It is food, and people need to eat.'

There were huge profits to be made, however. It is no coincidence that Goldman Sachs chief Lloyd Blankfein rewarded himself with the highest payouts in Wall Street history in these years.

He gave himself $53 million in 2006, and $68 million in 2007. Quite simply, making money is the foremost principle at Goldman Sachs.

The global speculative frenzy over food prices sparked riots and helped drive the number of people going hungry in the world to more than a billion.

The price of basic foodstuffs rose by 80 per cent between 2005 and 2008.

Poor countries import large quantities of rice, wheat and maize. Now, they could not afford them.

The 2008 harvest of grain turned out to be the most bountiful the world had ever seen, so much so that even as hundreds of millions starved worldwide, huge stocks of grain were sold for animal feed.

Livestock owners could afford the wheat, but poor people could not.

Shockingly, people were starving not because there was not enough food but because the banks' profiteering had made food unaffordable.

Merchants also began to hoard food - greedy for the profits that could be made. There were reports of rice traders in India holding onto huge stocks in the hope that prices would rise still further.

Then, something happened. Frederick Kaufman, who wrote The Food Bubble, How Wall Street Starved Millions And Got Away With It, says: 'Like all speculative bubbles, the food bubble popped.'

Values fell. Food prices began to go down only slowly, but remain higher than they were.

Kaufman says that whereas grain traders of old had a vested interest in creating a stable market, Goldman Sachs and others wanted only to make money at any cost - and they did.

The World Development Movement recently published a paper, Speculation In Food Commodity Markets.

It explains what happened, saying: 'Financial investors do not mind how they make money, as long as they make it.

'After the credit crisis started in August 2007, prices for shares, commercial property and financial derivatives stopped going inexorably upwards.

'But commodity prices were doing so and they piled into them. Some of the fastest moving prices were for corn, wheat and rice.'

The report adds: 'In the first two months of 2008, more and more money was diverted into commodity funds, and prices shot up faster than ever.

'In March 2008, the banks cut back their loans because of their own financial difficulties - and commodity prices fell back by up to 20 per cent in two weeks.

'Then the U.S. launched the first of its schemes to save the banks' finances, and the credits flowed and commodity prices took off once more.'

It concludes: 'When those loans finance grain price speculation, we find that ordinary people's savings are used (without their knowledge) to make poorer people go hungry.

'It is such speculation that turned a food price problem into a world crisis.'

In 2009, commodity prices began to escalate again.

Back in West Africa, the poor reap the fall-out from this crisis. Oxfam warns that the region stands on the very brink of a devastating famine.

Oxfam' s food policy adviser, Chris Leather, told the Mail: 'West Africa is suffering a very real crisis. This came about because of a lack of rain, but another factor is speculation on commodities.

'This has pushed world food prices up, and it is the poorest and most vulnerable in the world who suffer most. We are very concerned by the situation.'

Jean Ziegler of the UN says: 'In a world overflowing with riches, it is an outrageous scandal that more than one billion people suffer from hunger and malnutrition and that every year over six million children die of starvation and related causes.'

It seems that the big shots of Goldman Sachs feel very little outrage, however.

They have weathered a series of storms in recent months, including being charged with a £650 million fraud in the U.S.

Emails from executives boasted they were making 'serious money' while millions of homeowners were plunged into misery by the housing crash.

Famously known as 'the haves and the have-yachts' for their amazing bonus-fuelled lifestyles, executives have seen a series of record profits since inventing the Goldman Sachs Commodity Index.

Indeed, 2009 was the most profitable year in the bank's history.

Do they care if Africa starves? It appears not.

Read more: http://www.dailymail.co.uk/news/article-1296068/Trading-death-Rapacious-bankers-making-fortunes-forcing-price-food-leaving-millions-starve.html#ixzz1Onby2ubV

The worst drought in the Horn of Africa has sparked a severe food crisis and high malnutrition rates, with parts of Kenya and Somalia experiencing pre-famine conditions, the United Nations has said. More than 10 million people are now affected in drought-stricken areas of Djibouti, Ethiopia, Kenya, Somalia and Uganda and the situation is deteriorating.

Faduma Sakow Abdullahiand her five children tried to escape starvation in Somalia by journeying to a Kenyan refugee camp. Only one day before they reached their destination, her 4-year-old daughter and 5-year-old son died of exhaustion and hunger. At first the 29-year-old widow thought the two were merely sleeping when they wouldn’t get up after a brief rest. She had to leave their bodies under a tree, unburied, so she could push on with her baby, 2-year-old and 3-year-old. She saw more than 20 other children dead or unconscious abandoned on the roadside. Eventually a passing car rescued the rest of her family from what could have been death.

“I never thought I would live to see this horror,” she said, tears rolling down her cheeks as she described the 37-day trek to Dadaab, the world’s largest refugee camp.

Tens of thousands of Somalis have watched their land dry up after years without rain. Then the livestock died. Finally all the food ran out. Now they are making the perilous journey over parched earth to refugee camps in Kenya and Ethiopia, regions that also have been hit hard by drought.

Captured: East Africa Drought

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Recently-arrived Somali refugees wait to fill jerry cans with water at a newly-installed tank in Iffou 2, an area earmarked for refugee camp expansion, but yet to be approved by the Kenyan government, outside Dadaab, Kenya, Monday, July 11, 2011. U.N. refugee chief Antonio Guterres said Sunday that drought-ridden Somalia is the "worst humanitarian disaster" in the world, after meeting with refugees who endured unspeakable hardship to reach the world's largest refugee camp in Dadaab, Kenya. (AP Photo/Rebecca Blackwell) #

Captured: East Africa Drought

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Members of the family of Rage Mohamed are overtaken by wind-blown dust as they build a makeshift shelter around a thorny acacia tree, on the outskirts of Dagahaley Camp, outside Dadaab, Kenya, Sunday, July 10, 2011. It took the 15-person family five days to make the journey from their drought-stricken home in Somalia. They spent two nights sleeping in the open air under the tree prior to receiving tarps on Sunday. U.N. refugee chief Antonio Guterres said Sunday that drought-ridden Somalia is the "worst humanitarian disaster" in the world after meeting with refugees who endured unspeakable hardship to reach the world's largest refugee camp in Dadaab, Kenya. (AP Photo/Rebecca Blackwell) #

Captured: East Africa Drought

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A young Somali girl who fled violence and drought in Somalia stands in line among adults outside a food distribution point in Dadaab refugee camp in northeastern Kenya on July 5, 2011. Dadaab, a complex of three settlements, is the world's largest refugee camp. Built to house 90,000 people and home to more than four times that number, it was already well over its maximum capacity before an influx of 30,000 refugees in the month of June. Upon arrival, the refugees find themselves tackling a chaotic system that sees new arrivals go days, even weeks, without food aid. "It still takes too much time for refugees to get proper assistance," Antoine Froidevaux, MSF's field coordinator in Dadaab told AFP. "The answer in terms of humanitarian aid is not satisfactory at all at the moment." ROBERTO SCHMIDT/AFP/Getty Images #

Captured: East Africa Drought

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A Somali woman waiting amongst scores of other refugees, all hoping to receive their ration cards despite a processing backlog, pleads with an organizer in Dagahaley Camp, outside Dadaab, Kenya, Monday, July 11, 2011. U.N. refugee chief Antonio Guterres said Sunday that drought-ridden Somalia is the "worst humanitarian disaster" in the world, after meeting with refugees who endured unspeakable hardship to reach the world's largest refugee camp in Dadaab, Kenya. (AP Photo/Rebecca Blackwell) #

Captured: East Africa Drought

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A Somali man who fled violence and drought in Somalia with his family sits on the ground outside a food distribution point in the Dadaab refugee camp. ROBERTO SCHMIDT/AFP/Getty Images #

Captured: East Africa Drought

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One-year-old, Habibo Bashir, rests on a bed at a Doctors Without Borders hospital where he is being treated for severe malnutrition, in Dagahaley Camp, outside Dadaab, Kenya, Monday, July 11, 2011. U.N. refugee chief Antonio Guterres said Sunday that drought-ridden Somalia is the "worst humanitarian disaster" in the world, after meeting with refugees who endured unspeakable hardship to reach the world's largest refugee camp in Dadaab, Kenya. (AP Photo/Rebecca Blackwell) #

Captured: East Africa Drought

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A refugee holds her child in her arms as she and others like her mass outside a food distribution point in Dadaab in the hope of getting access to much needed aid at the worlds biggest refugee camp in the world on July 4, 2011. With a population of 370,000, Dadaab is the world's largest refugee camp even though it was built for just 90,000. With serious drought in the Horn of Africa, thousands of Somalis have arrived in recent weeks in search of food and water. AFP PHOTO/Roberto SCHMIDT #

Captured: East Africa Drought

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A Somali refugee drags a sack with food aid given to her at a food distribution point at the Dadaab refugee camp. ROBERTO SCHMIDT/AFP/Getty Images #

Captured: East Africa Drought

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Refugees newly arrived from Somalia line up to receive food rations at a receiving center in Dagahaley Camp, outside Dadaab, Kenya. The United Nations High Commissioner for Refugees estimates 1300 new refugees fleeing drought and hunger in Somalia are arriving daily in the Dadaab area. (AP Photo/Rebecca Blackwell) #

Captured: East Africa Drought

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Somali refugees wait in line to recieve aid at a food distribution point at Dadaab refugee camp. ROBERTO SCHMIDT/AFP/Getty Images) #

Captured: East Africa Drought

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A Somali man accesses a water point at the Dadaab refugee camp on July 4, 2011. With a population of 370,000, Dadaab is the world's largest refugee camp even though it was built for just 90,000. ROBERTO SCHMIDT/AFP/Getty Images #

Captured: East Africa Drought

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A Somali girl being treated for severe malnutrition pushes away a cup as a woman tries to feed her at a hospital operated by the International Rescue Commission. (AP Photo/Rebecca Blackwell) #

Captured: East Africa Drought

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A Somali refugee waits to receive a food ration for her and her family at a food distribution point. ROBERTO SCHMIDT/AFP/Getty Images #

Captured: East Africa Drought

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Somali refugees sit in the yard of their makeshift shelter, fenced in with thorny branches, in Iffou 2, an area earmarked for refugee camp expansion, but yet to be approved by the Kenyan government, outside Dadaab, Kenya, Monday, July 11, 2011. U.N. refugee chief Antonio Guterres said Sunday that drought-ridden Somalia is the "worst humanitarian disaster" in the world, after meeting with refugees who endured unspeakable hardship to reach the world's largest refugee camp in Dadaab, Kenya. (AP Photo/Rebecca Blackwell) #

Captured: East Africa Drought

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A Somali woman walks past the frame for a sparsely-covered makeshift shelter in Iffou 2, an area earmarked for refugee camp expansion. (AP Photo/Rebecca Blackwell) #

Captured: East Africa Drought

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A carcass of an animal lies on an empty road, near Lagbogal, 56 kilometers from Wajir town, Wednesday, July 6, 2011. The worst drought in the Horn of Africa has sparked a severe food crisis and high malnutrition rates, with parts of Kenya and Somalia experiencing pre-famine conditions, the United Nations has said. More than 10 million people are now affected in drought-stricken areas of Djibouti, Ethiopia, Kenya, Somalia and Uganda and the situation is deteriorating, (AP Photo/ Sayyid Azim) #

Captured: East Africa Drought

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Sixty-year-old Suban Osman sits with two of her malnourished grand children at a clinic run by Doctors Without Borders (MSF) at the Dadaab refugee camp on July 4, 2011. ROBERTO SCHMIDT/AFP/Getty Images #

Captured: East Africa Drought

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Two-year-old, Aden Salaad, looks up toward his mother, unseen, as she bathes him in a tub at a Doctors Without Borders hospital, where Aden is receiving treatment for malnutrition, in Dagahaley Camp, outside Dadaab, Kenya. (AP Photo/Rebecca Blackwell) #

Captured: East Africa Drought

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A Somali boy uses a wheelbarrow to carry two jerry cans filled with water to a tent that he and his family call home at the worlds biggest refugee camp. ROBERTO SCHMIDT/AFP/Getty Images #

Captured: East Africa Drought

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Two-year-old Shiniyo looks while bundled in her mothers arms while they stay at a clinic run by Doctors Without Borders. ROBERTO SCHMIDT/AFP/Getty Images #

Captured: East Africa Drought

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A Kenyan doctor looks at the IV drip on a child suffering from severe malnutrition at a clinic run by Medecins Sans Frontieres (MSF) at the Dadaab refugee camp on July 4, 2011. With a population of 370,000, Dadaab is the world's largest refugee camp even though it was built for just 90,000. According to Doctors Without Borders, the number of people seeking refugee keeps swelling and Dadaab will house 450,000 refugees by the end of the year, or twice the population of Geneva. With serious drought in the Horn of Africa, thousands of Somalis have arrived in recent weeks in search of food and water. ROBERTO SCHMIDT/AFP/Getty Images #

Captured: East Africa Drought

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Children walk down a dusty street in Dadaab refugee camp on July 4, 2011. Fatimah who fled violence in Somalia with her family one year ago says that she does not venture outside the camp to look for firewood because it is too dangerous. With a population of 370,000, Dadaab is the world's largest refugee camp even though it was built for just 90,000. With serious drought in the Horn of Africa, thousands of Somalis have arrived in recent weeks in search of food and water. ROBERTO SCHMIDT/AFP/Getty Images #

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