The daily global news continues to be inundated with stories of rising food prices, and accompanying rises in poverty and hunger. Recent droughts in China have been added to the list of factors driving food prices, specifically commodity prices, up around the world. Policymakers are now faced with decisions regarding the appropriate response to these increases.
The World Bank has released its Food Price Watch for February, citing estimates that suggest an additional 44 million people may have fallen into poverty in low- and middle-income
countries due to the rise in food prices since June 2010. The overall global rise in food prices has been driven by increases in the prices of wheat, maize, sugar, and fats and oils. (Track the rise in global commodities prices and futures prices with agricultural commodities tools )
With all the news of floods in Australia decimating the country’s wheat crop and adverse weather in the US cutting corn and soybean harvests, commodities prices across the globe are again seeing drastic increases, raising fears that we may be witnessing a return of widespread food insecurity and subsequent political and economic turmoil. Moreover, the FAO’s recent statement that global food prices reached a record high in December 2010 has sparked the memory of the crisis in 2007–08 and turned global attention back to the issue of food security.
As global food prices continue to surge, individuals and families in the developing world may be facing a new food reality. Fluctuations in the price of staple commodities may benefit some households’ welfare (producers) while hurting others (consumers). Understanding how price increases affect the developing world on a household level can pose a major challenge to global policymakers as they strive to respond to global and national food crises.
The dramatic surge in food prices in 2007–2008 seriously threatened the world’s poor, who struggle to buy food even under normal circumstances, and led to protests and riots in the developing world. The FAO’s recent statement that global food prices reached a record high in December 2010 has sparked the memory of this crisis and turned global attention back to the issue of food security.
The dramatic surge in food prices in 2007–2008 seriously threatened the world’s poor, who struggle to buy food even under normal circumstances, and led to protests and riots in the developing world. The crisis eventually receded, providing some measure of relief for citizens in the countries that were most affected by the price surge; yet the FAO’s recent statement that global food prices reached a record high in December 2010 has raised the specter of another crisis.
How is a country affected by changes in the global prices of its export and import commodities?
What is the change in short-run prices when a country’s food supply is increased?
Answering such questions can pose a major challenge to global policymakers as they strive to respond to global and national food crises. It is essential that policymakers and researchers have access to the latest food security research and policy tools in order to strengthen national and global capacity to respond effectively to food policy challenges.
Global food prices have a range of effects, both positive and negative, on agricultural markets, food prices, and food security in the developing world. Having access to reliable food price information is critical for policymakers, food policy experts, and researchers to be able to respond quickly to dynamic developments in the global food system.
Feeding a growing world population, likely to reach 9 billion by 2050, poses an unprecedented challenge to human ingenuity. How to satisfy the demand for food by the some 8 billion people who will live in the developing world is a particularly pressing food security question. Even in the best of circumstances, sustainably satisfying the increased demand for crops and livestock by these people will be an enormous challenge. The negative consequences of climate change on food production make meeting these food requirements even more daunting.
Apparent similarities between today’s rising wheat prices and the food-price crisis of 2007-2008 are just that: apparent, not real. Suggestions to the contrary serve to drive up prices and hurt poor people, who spend much or most of their incomes on food. They need neither jittery markets nor ad hoc protectionism, which has exacerbated past food crises.