Food Prices

With food security remaining a critical issue for both developed and developing countries, the Meeting of G20 Agriculture Ministers met on June 22-23 to discuss food price volatility and improved sustainable agricultural policies. The Action Plan developed at the meeting highlights greater sustainable productivity, better market information, more open trade, comprehensive rural development and agricultural policies, and sustained investment in agricultural development.

Download the full report.

The Asian Development Bank released a report this week suggesting that rising world food prices could drive 64 million people into poverty in the region and reduce economic growth by as much as 1.5 percentage points. Surging oil prices, declining grain stocks, increased demand for biofuels, and production shortfalls due to negative climatic events have all combined to increase both domestic and international food prices. This rise in the cost of food presents a serious challenge to the region's economic recovery and growth.

The economic, political, social, and nutritional impacts of food price volatility and price spikes are clear. In the 2007-08 food price crisis, 33 countries saw violent riots and social unrest as a result of rising food prices; in 2011, increasing food prices have been at least partially blamed for political turnover in Tunisia and Egypt, as well as riots in several other countries.

Global policymakers were faced with a stark reality when food prices rose for the eighth consecutive month in February. In addition to affecting global markets, such increases can have complex and widely varied impacts on agricultural markets at the country level. A new policy analysis tool from the Food Security Portal can help to estimate and analyze these domestic impacts.

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.