The World Bank this week issued a statement saying that increasing food prices have driven an estimated 44 million people into poverty in low- and middle-income countries since June 2010. This staggering increase in global poverty levels has serious economic, social, and political implications. Many experts and media outlets worldwide have linked rising food prices to riots in Algeria, the ousting of President Zine El Abidine Ben Ali in Tunisia, and the recent riots in Egypt which led to the historic resignation of President Hosni Mubarak.
Such a rise in global poverty can be attributed in part to sharp spikes in the prices of several commodities, including wheat and maize. Questions remain, however, as to what has caused commodities prices to rise so drastically. Adverse weather events, such as recent droughts in Australia and China, undoubtedly play a part. Additionally, growing demand for meat in the developing world and an increased use of grain for biofuels have in turn been blamed. Other experts believe that the rise in prices is largely man-made, driven by speculation in the global food market and panic reactions, such as export restrictions, imposed by governments.
As the debate rages on, one thing is clear – unraveling the causes of increased commodities prices is essential if we are to prevent a global food security crisis.
Listen as Senior IFPRI Research Fellow David Orden discusses what is behind rising commodities prices on the Diane Rehm show.