At first sight the business resembles a thriving pottery. In a dusty courtyard women mould clay and water into hundreds of little platters and lay them out to harden under the Caribbean sun.

The craftsmanship is rough and the finished products are uneven. But customers do not object. This is Cité Soleil, Haiti's most notorious slum, and these platters are not to hold food. They are food.

Brittle and gritty - and as revolting as they sound - these are "mud cakes". For years they have been consumed by impoverished pregnant women seeking calcium, a risky and medically unproven supplement, but now the cakes have become a staple for entire families.

It is not for the taste and nutrition - smidgins of salt and margarine do not disguise what is essentially dirt, and the Guardian can testify that the aftertaste lingers - but because they are the cheapest and increasingly only way to fill bellies.

"It stops the hunger," said Marie-Carmelle Baptiste, 35, a producer, eyeing up her stock laid out in rows. She did not embroider their appeal. "You eat them when you have to."

These days many people have to. The global food and fuel crisis has hit Haiti harder than perhaps any other country, pushing a population mired in extreme poverty towards starvation and revolt. Hunger burns are called "swallowing Clorox", a brand of bleach.

The UN's Food and Agriculture Organisation predicts Haiti's food import bill will leap 80% this year, the fastest in the world. Food riots toppled the prime minister and left five dead in April. Emergency subsidies curbed prices and bought calm but the cash-strapped government is gradually lifting them. Fresh unrest is expected.

According to the UN, two-thirds of Haitians live on less than 50p a day and half are undernourished. "Food is available but people cannot afford to buy it. If the situation gets worse we could have starvation in the next six to 12 months," said Prospery Raymond, country director of the UK-based aid agency Christian Aid.

Until recently this Caribbean nation, which vies with Afghanistan for appalling human development statistics, had been showing signs of recovery: political stability, new roads and infrastructure, less gang warfare. "We had been going in the right direction and this crisis threatens that," said Eloune Doreus, the vice-president of parliament.

As desperation rises so does production of mud cakes, an unofficial misery index. Now even bakers are struggling. Trucked in from a clay-rich area outside the capital, Port-au-Prince, the mud is costlier but cakes still sell for 1.3p each, about the only item immune from inflation. "We need to raise our prices but it's their last resort and people won't tolerate it," lamented Baptiste, the Cité Soleil baker.

Vendors of other foods who have increased prices have been left with unsold stock. In the Policard slum, a jumble of broken concrete clinging to a mountainside, the Ducasse family tripled the price of its fritters because of surging flour prices. "Our sales have fallen by half," said Jean Ducasse, 49, poking at his tray of shrivelled wares.

The signs of crisis are everywhere. Aid agency feeding centres reported that the numbers seeking help have tripled. At a centre in the Fort Mercredi slum rail-thin women cradled infants with yellowing hair, a symptom of malnutrition. "Now we're having to feed the mothers as well as the babies," said Antonine Saint-Quitte, a nurse.

In rural areas the situation seems even worse, prompting a continued drift to the slums and their mirage of opportunities. Lillian Guerrick, 56, a subsistence farmer near Cap Haitien, yanked her seven grandchildren from school because there was barely money for food let alone fees. "I've no choice," she said, a touch defensive, amid wizened corn stalks.

Anecdotal evidence suggests school attendance nationwide has dropped and that those who do make it to class are sometimes too hungry to concentrate. "I use jokes to try to stimulate my students, to wake them up," said Smirnoff Eugene, 25, a Port-au-Prince teacher.

Border crossings to the Dominican Republic are jammed with throngs of merchants hunting lower prices in their relatively prosperous neighbour.

"Beep beep, out of the way!" yelled one teenage boy, sweating, veins throbbing, as he heaved a wheelbarrow impossibly overloaded with onions through a crowd at Ouanaminthe's border bridge.

Haiti's woes stem from global economic trends of higher oil and food prices, plus reduced remittances from migrant relatives affected by the US downturn. What makes the country especially vulnerable, however, is its almost total reliance on food imports.

Domestic agriculture is a disaster. The slashing and burning of forests for farming and charcoal has degraded the soil and chronic under-investment has rendered rural infrastructure at best rickety, at worst non-existent.

The woes were compounded by a decision in the 1980s to lift tariffs, when international prices were lower, and flood the country with cheap imported rice and vegetables. Consumers gained and the IMF applauded but domestic farmers went bankrupt and the Artibonite valley, the country's breadbasket, atrophied.

Now that imports are rocketing in price the government has vowed to rebuild the withered agriculture but that is a herculean task given scant resources, degraded soil and land ownership disputes.

There is a hopeful precedent. A growing franchise of localised dairies known as Let Agogo (Creole for Unlimited Milk) has organised small farmers to transport and market milk, generating jobs and income and cutting Haiti's £20m annual milk import bill.

President René Préval has hailed the scheme as a model but Michel Chancy, a driving force of Veterimed, a non-governmental organisation which backs the dairies, was wary. "For 20 years politicians have been talking about reviving agriculture but didn't actually do anything. If this food crisis forces them to act then it is a big opportunity." That was a big if, he said.

Walk along a beach in the morning and you find Haitians gazing at the azure ocean horizon, dreaming of escape. They are fiercely proud of their history in overthrowing slavery and colonialism but these days the US, the Bahamas, the Dominican Republic - anywhere but home - seems the best option.

The only thing stopping an exodus are US coastguard patrols, said Herman Janvier, 30, a fishermen on Cap Haitian, a smuggling point. "People want out of here. It's like we're almost dead people."

The last time Janvier tried to flee he was intercepted and interned at Guantánamo Bay. "I offered to join the American army. I offered to clean their base. They said no. So I am back here, on a boat with no motor, doing what I can to survive."