2007–2008 world food price crisis
Encyclopedia
World food prices increased dramatically in 2007 and the 1st and 2nd quarter of 2008 creating a global crisis
and causing political and economical instability and social unrest in both poor and developed nations. Systemic causes for the worldwide increases in food prices continue to be the subject of debate. After peaking in the second quarter of 2008 prices fell dramatically during the Late-2000s recession but have increased during 2009 and 2010, peaking again in early 2011 at a level sightly higher than the level reached in 2008. However a repeat of the crisis of 2008 is not anticipated due to ample stockpiles.
Initial causes of the late 2006 price spikes included droughts in grain-producing nations and rising oil prices. Oil price increases also caused general escalations in the costs of fertilizer
s, food transportation, and industrial agriculture
. Root causes may be the increasing use of biofuel
s in developed countries
(see also food vs fuel
), and an increasing demand for a more varied diet across the expanding middle-class populations of Asia.
These factors, coupled with falling world-food stockpiles all contributed to the worldwide rise in food prices.
by 125% and soybeans by 107%. In late April 2008 rice
prices hit 24 cents (U.S.) per U.S. pound
, more than doubling the price in just seven months.
Although some commentators have argued that this food crisis stems from unprecedented global
population growth
, others point out that world population growth rates have dropped dramatically since the 1980s, and grain availability has continued to outpace population. However, despite production gains made in the last decade, world food demand outpaces any production increases.
According to Joachim von Braun, of the IFPRI, total food production increases only about 1 to 2 percent per year, while total world population increases approximately 4%. Aggregate cereal grain food production, per capita, had risen yearly from the 1960s to the 1980s but has been in decline
since. However, this does not take into account any non-food uses of grain production.
World population
has grown from 1.6 billion in 1900 to an estimated 6.8 billion http://www.census.gov/ipc/www/popclockworld.html.
, stated in 2008 that the gradual change in diet among newly prosperous populations is the most important factor underpinning the rise in global food prices. Where food utilization has increased, it has largely been in processed ("value added
") foods, sold in developing and developed nations. Total grain utilization growth since 2006 (up three percent, over the 2000–2006 per annum average of two percent) has been greatest in non-food usage, especially in feed and biofuels.
One kilogram of beef requires seven kilograms of feed grain. These reports, therefore, conclude that usage in industrial, feed, and input intensive foods, not population growth among poor consumers of simple grains, has contributed to the price increases.
Although the vast majority of the population in Asia remains rural and poor, the growth of the middle class
in the region has been dramatic. For comparison, in 1990, the middle class grew by 9.7 percent in India and 8.6 percent in China, but by 2007 the growth rate was nearly 30 percent and 70 percent respectively. The corresponding increase in Asian affluence also brought with it a change in lifestyle and eating habits, particularly a demand for greater variety, leading to increased competition with western nations for already strained agricultural resources. This demand exacerbates dramatic increases in commodity
prices such as oil.
Another issue with rising affluence in India and China was reducing the 'shock absorber' of poor people who are forced to reduce their resource consumption when food prices rise. This reduced price elasticity and caused a sharp rise in food prices during some shortages. In the media, China is often mentioned as one of the main reasons for the increase in world food prices. However, China has to a large extent been able to meet its own demand for food, and even exports its surpluses in the world market.
s (in some instances doubling the price within the six months before April, 2008), the majority of which require petroleum
or natural gas
to manufacture. Although the main fossil fuel input for fertilizer comes from natural gas
to generate hydrogen for the Haber–Bosch process (see: Ammonia production
), natural gas has its own supply problems similar to those for oil. Because natural gas can substitute for petroleum in some uses (for example, natural gas liquids and electricity generation
), increasing prices for petroleum lead to increasing prices for natural gas, and thus for fertilizer.
Costs for fertilizer raw materials other than oil, such as potash
, have themselves been increasing as increased production of staples increases demand. This is causing a boom (with associated volatility) in agriculture stocks.
The major IFPRI Report launched in February 2011 stated that the causes of the 2008 global food crisis were similar to that of the 1972-74 food crisis, in that the oil price and energy price was the major driver, as well as the shock to cereal demand (from biofuels this time), low interest rates, devaluation of the dollar, declining stocks, and some adverse weather conditions. Unfortunately the IFPRI states that such shocks are likely to recur with several shocks in the future; compounded by a long history of neglecting agricultural investments.
Financial speculation in commodity futures following the collapse of the financial derivatives markets has contributed to the crisis due to a "commodities super-cycle." Financial speculators seeking quick returns have removed trillions of dollars from equities and mortgage bonds, some of which has been invested into food and raw materials. That American commodities speculation could have a worldwide effect on food prices is reflected in the globalization of food production. It represents the concentration of wealth
throughout the world, which Frances Moore Lappé
equates to a weakening in fundamental democracy. In a recent article for The Nation
, she suggests that there is no food shortage but that "as long as food is merely a commodity in societies that don't protect people's right to participate in the market, and as long as farming is left vulnerable to consolidated power off the farm, many will go hungry, farmers among them—no matter how big the harvests."
in the wheat market, which disturbed the normal relationship between Supply and Demand
and price levels. He argues that the result was a 'contango
' wheat market on the Chicago Mercantile Exchange, which caused prices of wheat to rise much higher than normal, defeating the purpose of the exchanges (price stabilization) in the first place.
In a June 2010 article in The Economist
, the argument is made that Index-tracking funds (of which Goldman Sachs Commodity Index was one) did not cause the bubble. It describes a report by the Organisation for Economic Co-operation and Development
that used data from the Commodity Futures Trading Commission
to make the case. For example the report points out that even commodities without futures markets also saw price rises during the period. The counter-argument to this view is that the commodities without futures markets saw their prices rise as a consequence of the rising prices of commodities with futures markets: the World Development Movement states there is strong evidence that the rising price of wheat caused the price of rice to subsequently rise as well.
of the Third World Network
, point out that many developing nations have gone from being food independent to being net food importing economies since the 1970s and 1980s International Monetary Fund
(and later the World Trade Organisation's Agreement on Agriculture
) free market economics directives to debtor nations. In opening developing countries to developed world food imports subsidised by Western governments, developing nations have become dependent upon food imports that are cheaper than what local smallholders agriculture produces, even in the poorest regions of the world.
While developed countries pressured the developing world to abolish subsidies in the interest of trade liberalization, rich countries largely kept subsidies in place for their own farmers. In recent years United States government subsidies have been added to push production toward biofuel rather than food and vegetables
.
in particular) for making first-generation biofuels. An estimated 100 million tons of grain per year are being redirected from food to fuel. (Total worldwide grain production for 2007 was just over 2000 million tonnes.) As farmers devoted larger parts of their crops to fuel production than in previous years, land and resources available for food production were reduced correspondingly.
This has resulted in less food available for human consumption, especially in developing
and least developed countries
, where a family's daily allowances for food purchases are extremely limited. The crisis can be seen, in a sense, to dichotomize rich and poor nations
, since, for example, filling a tank of an average car with biofuel
, amounts to as much maize
(Africa's principal food staple) as an African person consumes in an entire year.
Brazil
, the world's second largest producer of ethanol after the U.S., is considered to have the world's first sustainable biofuels economy and its government claims Brazil's sugar cane based ethanol industry has not contributed to the 2008 food crises. A World Bank
policy research working paper released in July 2008 concluded that "...large increases in biofuels production in the United States and Europe are the main reason behind the steep rise in global food prices", and also stated that "Brazil's sugar-based ethanol did not push food prices appreciably higher". An economic assessment published in July 2008 by the OECD disagrees with the World Bank report regarding the negative effects of subsidies and trade restrictions, finding that the effect of biofuels on food prices are much smaller.
A report released by Oxfam
in June 2008 criticized biofuel policies of rich countries and concluded that, of all biofuels available in the market, Brazilian sugarcane ethanol is "far from perfect" but it is the most favorable biofuel in the world in term of cost and GHG
balance. The report discusses some existing problems and potential risks and asks the Brazilian government for caution to avoid jeopardizing its environmental and social sustainability. The report also says that: "Rich countries spent up to $15 billion last year supporting biofuels while blocking cheaper Brazilian ethanol, which is far less damaging for global food security
." (See Ethanol fuel in Brazil
)
German Chancellor Angela Merkel
said the rise in food prices is due to poor agricultural policies and changing eating habits in developing nations, not biofuels as some critics claim. On April 29, 2008, U.S. President George W. Bush
declared during a press conference that "85 percent of the world's food prices are caused by weather, increased demand and energy prices", and recognized that "15 percent has been caused by ethanol". On July 4, 2008, The Guardian
reported that a leaked World Bank
report estimated the rise in food prices caused by biofuels to be 75%. This report was officially released in July 2008.
Since reaching record high prices in June 2008, corn prices fell 50% by October 2008, declining sharply together with other commodities, including oil. As ethanol production from corn has continue at the same levels, some have argued this trend shows the belief that the increased demand for corn to produce ethanol was mistaken. "Analysts, including some in the ethanol sector, say ethanol demand adds about 75 cents to $1.00 per bushel to the price of corn, as a rule of thumb. Other analysts say it adds around 20 percent, or just under 80 cents per bushel at current prices. Those estimates hint that $4 per bushel corn might be priced at only $3 without demand for ethanol fuel." These industry sources consider that a speculative bubble in the commodity markets
holding positions in corn futures
was the main driver behind the observed hike in corn prices affecting food supply.
Second- and third-generation biofuels (such as cellulosic ethanol
and algae fuel
, respectively) may someday ease the competition with food crops, as can grow on marginal lands unsuited for food crops, but these advanced biofuels require further development of farming practices and refining technology; in contrast, ethanol from maize uses mature technology
and the maize crop can be shifted between food and fuel use quickly.
lists the effect of biofuels as an important contributor to higher food prices. The FAO
/ECMB has reported that world land usage for agriculture has declined since the 1980s, and subsidies outside the United States and EU have dropped since the year 2004, leaving supply, while sufficient to meet 2004 needs, vulnerable when the United States began converting agricultural commodities to biofuels. According to the United States Department of Agriculture, global wheat imports and stocks have decreased, domestic consumption has stagnated, and world wheat production has decreased from 2006 to 2008.
In the United States, government subsidies for ethanol production have prompted many farmers to switch to production for biofuel. Maize is the primary crop used for the production of ethanol, with the United States being the biggest producer of maize ethanol. As a result, 23 percent of United States maize crops were being used for ethanol in 2006–2007 (up from 6 percent in 2005–2006), and the USDA expects the United States to use 81 million tonnes of maize for ethanol production in the 2007–2008 season, up 37 percent. This not only diverts grains from food, but it diverts agricultural land from food production.
Nevertheless, supporters of ethanol claim that using corn
for ethanol is not responsible for the worst food riot
s in the world, many of which have been caused by the price of rice
and oil
, which are not affected by biofuel use but rather by supply and demand.
However, a World Bank
policy research working paper released in July 2008 says that biofuel
s have raised food prices between 70 to 75 percent. The study found that higher oil prices and a weak dollar explain 25–30% of total price rise. The "month-by-month" five year analysis disputes that increases in global grain consumption and droughts were responsible for price increases, reporting that this had had only a marginal effect and instead argues that the EU and US drive for biofuels has had by far the biggest effect on food supply and prices. The paper concludes that increased production of biofuels in the US and EU were supported by subsidies and tariffs on imports, and considers that without these policies, price increases would have been smaller. This research also concluded that Brazil
's sugar cane based ethanol has not raised sugar prices significantly, and suggest to remove tariffs on ethanol imports by both the US and EU, to allow more efficient producers such as Brazil and other developing countries to produce ethanol profitably for export to meet the mandates in the EU and the US.
The Renewable Fuel Association (RFA) published a rebuttal based on the version leaked before the formal release of the World Bank's paper. The RFA critique considers that the analysis is highly subjective and that the author "estimates the effect of global food prices from the weak dollar and the direct and indirect effect of high petroleum prices and attributes everything else to biofuels."
An economic assessment report also published in July 2008 by the OECD agrees with the World Bank report regarding the negative effects of subsidies and trade restrictions, but found that the effect of biofuels on food prices are much smaller. The OECD study is also critical of the limited reduction of GHG
emissions achieved from biofuels produced in Europe and North America, concluding that the current biofuel support policies would reduce greenhouse gas emissions from transport fuel by no more than 0.8 percent by 2015, while Brazilian ethanol from sugar cane reduces greenhouse gas emissions by at least 80 percent compared to fossil fuels. The assessment calls on governments for more open markets in biofuels and feedstocks to improve efficiency and lower costs.
, meanwhile subsidised food increases overconsumption in developed countries. The US Farm Bill brought in by the Bush Administration in 2002 increased agricultural subsidies by 80% and cost the US taxpayer 190 billion USD. In 2003, the EU agreed to extend the Common Agricultural Policy
until 2013. Former UNDP Administrator Malloch Brown renewed calls for reform of the farm subsidies such as the CAP.
. Under pressure, the United States and Japan are poised to strike a deal to remove such restrictions. It is expected 1.5 million tonnes of high-grade American rice will enter the market soon.
, which produces large amounts of wheat and rice. The drought
has caused the annual rice harvest to fall by as much as 98% from pre-drought levels.
Australia is historically the second-largest exporter of wheat after the United States, producing up to 25 million tons in a good year, the vast majority for export. However, the 2006 harvest was 9.8 million. Other events that have negatively affected the price of food include the 2006 heat wave
in California
's San Joaquin Valley
, which killed large numbers of farm animals, and unseasonable 2008 rains in Kerala
, India, which destroyed swathes of grain. Scientists have stated that several of these incidents are consistent with the predicted effects of climate change
.
The effects of Cyclone Nargis
on Burma in May 2008 caused a spike in the price of rice. Burma has historically been a rice exporter, though yields have fallen as government price controls
have reduced incentives for farmers. The storm surge
inundated rice paddies up to 30 miles (48.3 km) inland in the Irrawaddy Delta
, raising concern that the salt could make the fields infertile. The FAO had previously estimated that Burma would export up to 600,000 tons of rice in 2008, but concerns were raised in the cyclone's aftermath that Burma may be forced to import rice for the first time, putting further upward pressure on global rice prices.
Stem rust
reappeared in 1998 in Uganda (and possibly earlier in Kenya) with the particularly virulent UG99 fungus. Unlike other rusts, which only partially affect crop yields, UG99 can bring 100% crop loss. Up to 80% yield losses were recently recorded in Kenya.
As of 2005 stem rust was still believed to be "largely under control worldwide except in Eastern Africa". But by January 2007 an even more virulent strain had gone across the Red Sea into Yemen. FAO first reported on 5 March 2008 that Ug99 had now spread to major wheat-growing areas in Iran.
These countries in North Africa and Middle East consume over 150% of their own wheat production; the failure of this staple crop thus adds a major burden on them. The disease is now expected to spread over China and the Far-East. The strong international collaboration network of research and development that spread disease-resistant strains some 40 years ago and started the Green Revolution
, known as CGIAR, was since slowly starved of research funds because of its own success and is now too atrophied to swiftly react to the new threat.
Additionally, agricultural production is also lost due to water depletion
. Northern China in particular has depleted much of its non-renewables aquifer
s, which now impacts negatively its crop production.
Urbanisation is another, smaller, difficult to estimate cause of annual cropland reduction.
in the atmosphere. Plants have been shown to have a high sensitivity to ozone levels, and lower yields of important food crops, such as wheat and soybeans, may have been a result of elevated ozone levels. Ozone levels in the Yangtze Delta were studied for their effect on oilseed rape, a member of the cabbage family that produces one-third of the vegetable oil used in China. Plants grown in chambers that controlled ozone levels exhibited a 10–20 percent reduction in size and weight (biomass
) when exposed to elevated ozone levels. Production of seeds and oil was also reduced. The Chinese authors of this study also reported that rice grown in chambers that controlled ozone levels exhibited a 14 to 20 percent reduction in biomass
yield when exposed to ozone levels over 25 times higher than was normal for the region.
doubled from February 2007 to February 2008 hitting a record high of over USD$10 a bushel
. Rice
prices also reached ten year highs. In some nations, milk
and meat
prices more than doubled, while soy (which hit a 34 year high price in December 2007) and maize
prices have increased dramatically.
Total food import bills rose by an estimated 25% for developing countries in 2007. Researchers from the Overseas Development Institute
have suggested this problem will be worsened by a likely fall in food aid. As food aid is programmed by budget rather than volume, rising food prices mean that the World Food Programme
(WFP) needs an extra $500 million just to sustain the current operations.
To ensure that food remains available for their domestic populations and to combat dramatic price inflation, major rice exporters, such as China, Brazil
, India, Indonesia
, Vietnam
, Cambodia
and Egypt
, imposed strict export bans on rice. Conversely, several other nations, including Argentina
, Ukraine
, Russia, and Serbia
either imposed high tariffs or blocked the export of wheat and other foodstuffs altogether, driving up prices still further for net food importing nations while trying to isolate their internal markets. North Korea
suffered from the food crisis to such extent that a North Korean official was quoted in June '08 with saying "Life is more than difficult. It seems that everyone is going to die". This nation however is solely relying on food assistance to cope with the crisis.
, this may depend on farmers’ capacity to respond to changing market conditions. Experience suggests that farmers lack the credit and inputs needed to respond in the short term. In the medium or long term, however, they could benefit, as seen in the Asian Green Revolution
or in many African countries in the recent past.
Relationship with 2008 Chinese milk scandal
As grain prices increased, China's large number small-holding milk farmers, as well as producers of feed for cattle, were unable to exist economically. As a result, they turned to putting additives into the feed and milk, including melamine
, in order to boost the measured level of protein. Hundreds of thousands of children became ill, China's milk exports virtually ended, executives and officials were arrested and some executed, and companies went bankrupt.
and Africa
particularly severely with Burkina Faso
, Cameroon
, Senegal
, Mauritania
, Côte d'Ivoire
, Egypt
and Morocco
seeing protests and riots in late 2007 and early 2008 over the unavailability of basic food staples. Other countries that have seen food riots or are facing related unrest are: Mexico
, Bolivia
, Yemen
, Uzbekistan
, Bangladesh
, Pakistan
, Sri Lanka
, and South Africa.
i capital Dhaka
, smashing cars and buses and vandalising factories in anger at high food prices and low wages. Dozens of people, including at least 20 police officials, were injured in the violence. Ironically, the country achieved food self-sufficiency in 2002, but food prices increased drastically due to the reliance of agriculture on oil and fossil fuels.
Economists estimate 30 million of the country's 150 million people could go hungry.
ian government announced a temporary ban on the export of rice. The ban is intended to protect domestic consumers.
, on February 22, when rioting broke out in the country's second and third largest cities over soaring food prices (up to a 65 percent increase), sparing the capital, Ouagadougou
, where soldiers were mobilized throughout strategic points. The government promised to lower taxes on food and to release food stocks. Over 100 people were arrested in one of the towns. Related policy actions of the Burkinabe government included:
A ban was also imposed on exportation of cereals.
, the world's fourth largest cocoa producer, saw large scale rioting in late February 2008, in protest against inflating food and fuel prices, as well as the attempt by President Paul Biya
to extend his 25-year rule. At least seven people were killed in the worst unrest seen in the country in over fifteen years. This figure was later increased to 24. Part of the government response to the protests was a reduction in import taxes on foods including rice, flour, and fish. The government reached an agreement with retailers by which prices would be lowered in exchange for the reduced import taxes. As of late April 2008, however, reports suggested that prices had not eased and in some cases had even increased.
On April 24, 2008, the government of Cameroon announced a two-year emergency program designed to double Cameroon's food production and achieve food self-sufficiency.
's capital Abidjan
saw police use tear gas and a dozen protesters injured following food riots that gripped the city. The riots followed dramatic hikes in the price of food and fuel, with the price of beef rising from US$1.68 to $2.16 per kilogram, and the price of gasoline rising from $1.44 to $2.04 per liter
, in only three days.
, a boy was killed from a gunshot to the head after Egyptian police intervened in violent demonstrations over rising food prices that gripped the industrial city of Mahalla
on April 8. Large swathes of the population have been hit as food prices, and particularly the price of bread
, have doubled over the last several months as a result of producers exploiting a shortage that has existed since 2006.
.
an Senate voted to dismiss Prime Minister Jacques-Édouard Alexis
after violent food riots hit the country. The food riots caused the death of 5 people. Prices for food items such as rice, beans, fruit and condensed milk have gone up 50 percent in Haiti
since late 2007 while the price of fuel has tripled in only two months. Riots broke out in April due to the high prices, and the government had been attempting to restore order by subsidizing a 15 percent reduction in the price of rice. As of February 2010, post-earthquake Port-au-Prince is almost entirely reliant on foreign food aid, some of which ends up in the black markets.
where food staples and gasoline have nearly doubled in price since January 2008.
' Food and Agriculture Organization
(FAO) met in Brasília
to confront the issues of high food prices, scarcities and violence that affect the region.
The President of Mexico
, Felipe Calderón
, with industry representatives and members of the Confederation of Industrial Chambers (Concamin), agreed to freeze prices of more than 150 consumer staples, such as coffee, sardines, tuna, oil, soup or tea, among others, until the end of December 2008. The measure was carried out in an attempt to control inflation, which stood at an annual rate of 4.95%, the highest increase since December 2004.
Mexican baking company Grupo Bimbo
, agreed to maintain stable prices of their products, despite of the 20% raise of the production costs. Daniel Servitje, CEO of this company, announced in the 19th Plenary Meeting of the Mexico–China Business Committee. Bimbo is one of the most important baking companies worldwide, with the recent expansion to China. Bimbo also recently has acquired five bakeries in the United States and Canada. Servitje also said that their investment plans of this year will be done, but the long term projects, can be changed.
rural town of Chokwe
and then spread to the capital, Maputo
, has resulted in at least four deaths. The riots were reported in the media to have been, at least in part, over food prices and were termed "food riots." A biofuel advocacy publication, however, claimed that these were, in fact, "fuel riots", limited to the rise in the cost of diesel, and argued that the "food riot" characterization worked to fan "anti-biofuels sentiment."
has been deployed to avoid the seizure of food from fields and warehouses. This hasn't stopped the food prices from increasing. The new government has been blamed for not managing the countries food stockpiles properly.
has produced enough rice to feed itself until now. Rice exports dropped over four decades from nearly 4 million tons to only about 40,000 tons last year, mostly due to neglect by Myanmar's ruling generals of infrastructure, including irrigation and warehousing.
On 3 May 2008 Cyclone Nargis
stripped Myanmar's rice-growing districts, ruining large areas with salt water. U.N. Food and Agriculture Organization estimates that these areas produce 65 percent of the Southeast Asian country's rice. Worries of long-term food shortages and rationing are rife. The military regime says nothing about the rice crisis, but continues to export rice at the same rate.
"...at least the next two harvests are going to be greatly affected and there’ll be virtually no output from those areas during that time. So we’re likely to see considerable food and rice shortages for the next couple of years. The damage to the economy is going to be profound." said economist and Myanmar expert Sean Turnell, of Australia's Macquarie University. (interviewed in "The Irriwaddy", Tuesday, May 27, 2008)
, the Arroyo government
insisted on April 13 that there would be no food riots in the country and that there could be no comparison with Haiti's situation. Chief Presidential Legal Counsel, Sergio Apostol
stated that: "Haiti is not trying to solve the problem, while we are doing something to address the issue. We don't have a food shortage. So, no comparison..." Comments by the Justice Secretary, Raul Gonzalez
, the following day, that food riots are not far fetched, were quickly rebuked by the rest of the government.
On April 15, the Philippines, the world's largest rice importer, urged China, Japan, and other key Asian nations, to convene an emergency meeting, especially taking issue with those countries' rice export bans. "Free trade should be flowing", Philippine Agriculture Secretary Arthur Yap stated. In late April 2008, the Philippines government requested that the World Bank
exert pressure on rice exporting countries to end export restrictions.
had riots in response to the rise in the price of food and fuel. Twenty-four people were arrested and detained in a response that one local human rights group claimed included "torture" and other "unspeakable acts" on the part of the security forces. Further protests took place in Dakar
on 26 April 2008.
as a consequence of the energy shortages
. UN experts announced on 10 October that almost one-third of Tajikistan
's 6.7 million inhabitants may not have enough to eat for the winter of 2008-09.
that began in late March and continued through early April, saw police stations torched, and roadblocks were set up by armed protesters. The army has deployed tanks and other military vehicles. Although the riots involved thousands of demonstrators over several days and over 100 arrests, officials claimed no fatalities; residents, however, claimed that at least one of the fourteen wounded people has died.
released a study in December 2007 projecting a 49 percent increase in African cereal
prices, and 53 percent in European prices, through July 2008. In April 2008, the World Bank
, in combination with the International Monetary Fund
, announced a series of measures aimed at mitigating the crisis, including increased loans to African farmers and emergency monetary aid to badly affected areas such as Haiti. According to FAO director Jacques Diouf
, however, the World Food Programme
needs an immediate cash injection of at least $1700 million, far more than the tens of million-worth in measures already pledged. On 28 April 2008, the United Nations
Secretary-General Ban Ki-moon
established a Task Force on the Global Food Security Crisis http://www.un.org/issues/food/taskforce/ under his chairmanship and composed of the heads of the United Nations specialized agencies, funds and programmes, Bretton Woods institutions and relevant parts of the UN Secretariat to co-ordinate efforts to alleviate the crisis.
On May 2, 2008 U.S. President George W. Bush
said he was asking Congress to approve an extra $770 million funding for international food aid. On October 16, 2008, former US president Bill Clinton
scolded the bipartisan coalition in Congress that killed the idea of making some aid donations in cash rather than in food.
The release of Japan's rice reserves onto the market may bring the rice price down significantly. As of May 16, anticipation of the move had already lowered prices by 14% in a single week.
On April 30, 2008 Thailand announced the creation of the Organization of Rice Exporting Countries (OREC) with the potential to develop a price-fixing cartel
for rice. This is seen by some as an action to capitalise on the crisis.
In June 2008 the Food and Agriculture Organization
hosted a High-Level Conference on World Food Security
, in which $1.2 billion in food aid was committed for the 75 million people in 60 countries hardest hit by rising food prices.
In June 2008, a sustained commitment from the G8
was called for by some humanitarian organizations.
On October 23, 2008, Associated Press
reported the following:
dropped from US $7.99 per bushel in June to US $3.74 per bushel in mid-December; wheat and rice prices experienced similar decreases. The UN's Food and Agriculture Organization, however, warned against "a false sense of security", noting that the credit crisis
could cause farmers to reduce plantings. FAO convened a World Summit on Food Security at its headquarters in Rome in November 2008, noting that food prices remained high in developing countries and that the global food security
situation has worsened.
By early 2011 food prices had risen again to surpass the record highs of 2008. Some commentators saw this as the resumption of the price spike seen in 2007-08. Prices had dropped after good weather helped increase grain yields while demand had dropped due to the recession.
International crisis
An international crisis is a crisis between states. There are many definitions of an international crisis. Snyder "...a sequence of interactions between the governments of two or more sovereign states in severe conflict, short of actual war, but involving the perception of a dangerously high...
and causing political and economical instability and social unrest in both poor and developed nations. Systemic causes for the worldwide increases in food prices continue to be the subject of debate. After peaking in the second quarter of 2008 prices fell dramatically during the Late-2000s recession but have increased during 2009 and 2010, peaking again in early 2011 at a level sightly higher than the level reached in 2008. However a repeat of the crisis of 2008 is not anticipated due to ample stockpiles.
Initial causes of the late 2006 price spikes included droughts in grain-producing nations and rising oil prices. Oil price increases also caused general escalations in the costs of fertilizer
Fertilizer
Fertilizer is any organic or inorganic material of natural or synthetic origin that is added to a soil to supply one or more plant nutrients essential to the growth of plants. A recent assessment found that about 40 to 60% of crop yields are attributable to commercial fertilizer use...
s, food transportation, and industrial agriculture
Industrial agriculture
Industrial farming is a form of modern farming that refers to the industrialized production of livestock, poultry, fish, and crops. The methods of industrial agriculture are technoscientific, economic, and political...
. Root causes may be the increasing use of biofuel
Biofuel
Biofuel is a type of fuel whose energy is derived from biological carbon fixation. Biofuels include fuels derived from biomass conversion, as well as solid biomass, liquid fuels and various biogases...
s in developed countries
Developed country
A developed country is a country that has a high level of development according to some criteria. Which criteria, and which countries are classified as being developed, is a contentious issue...
(see also food vs fuel
Food vs fuel
Food vs. fuel is the dilemma regarding the risk of diverting farmland or crops for biofuels production in detriment of the food supply on a global scale. The "food vs. fuel" or "food or fuel" debate is international in scope, with good and valid arguments on all sides of this issue...
), and an increasing demand for a more varied diet across the expanding middle-class populations of Asia.
These factors, coupled with falling world-food stockpiles all contributed to the worldwide rise in food prices.
Drastic price increases
Between 2006 and 2008 average world prices for rice rose by 217%, wheat by 136%, cornMaize
Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...
by 125% and soybeans by 107%. In late April 2008 rice
Rice
Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...
prices hit 24 cents (U.S.) per U.S. pound
Pound (mass)
The pound or pound-mass is a unit of mass used in the Imperial, United States customary and other systems of measurement...
, more than doubling the price in just seven months.
World population growth
World population
The world population is the total number of living humans on the planet Earth. As of today, it is estimated to be billion by the United States Census Bureau...
population growth
Population growth
Population growth is the change in a population over time, and can be quantified as the change in the number of individuals of any species in a population using "per unit time" for measurement....
, others point out that world population growth rates have dropped dramatically since the 1980s, and grain availability has continued to outpace population. However, despite production gains made in the last decade, world food demand outpaces any production increases.
According to Joachim von Braun, of the IFPRI, total food production increases only about 1 to 2 percent per year, while total world population increases approximately 4%. Aggregate cereal grain food production, per capita, had risen yearly from the 1960s to the 1980s but has been in decline
Decline
Decline is a change over time from previously efficient to inefficient organizational functioning, from previously rational to non-rational organizational and individual decision-making, from previously law-abiding to law violating organizational and individual behavior, from previously virtuous to...
since. However, this does not take into account any non-food uses of grain production.
World population
World population
The world population is the total number of living humans on the planet Earth. As of today, it is estimated to be billion by the United States Census Bureau...
has grown from 1.6 billion in 1900 to an estimated 6.8 billion http://www.census.gov/ipc/www/popclockworld.html.
Increased demand for more resource intensive food
The head of the International Food Policy Research InstituteInternational Food Policy Research Institute
The International Food Policy Research Institute is an international agricultural research center founded in the early 1970s to improve the understanding of national agricultural and food policies to promote the adoption of innovations in agricultural technology...
, stated in 2008 that the gradual change in diet among newly prosperous populations is the most important factor underpinning the rise in global food prices. Where food utilization has increased, it has largely been in processed ("value added
Value added
In economics, the difference between the sale price and the production cost of a product is the value added per unit. Summing value added per unit over all units sold is total value added. Total value added is equivalent to Revenue less Outside Purchases...
") foods, sold in developing and developed nations. Total grain utilization growth since 2006 (up three percent, over the 2000–2006 per annum average of two percent) has been greatest in non-food usage, especially in feed and biofuels.
One kilogram of beef requires seven kilograms of feed grain. These reports, therefore, conclude that usage in industrial, feed, and input intensive foods, not population growth among poor consumers of simple grains, has contributed to the price increases.
| India | China | Brazil | Nigeria | |
|---|---|---|---|---|
| Cereals | 1.0 | 0.8 | 1.2 | 1.0 |
| Meat | 1.2 | 2.4 | 1.7 | 1.0 |
| Milk | 1.2 | 3.0 | 1.2 | 1.3 |
| Fish | 1.2 | 2.3 | 0.9 | 0.8 |
| Fruits | 1.3 | 3.5 | 0.8 | 1.1 |
| Vegetables | 1.3 | 2.9 | 1.3 | 1.3 |
Although the vast majority of the population in Asia remains rural and poor, the growth of the middle class
Middle class
The middle class is any class of people in the middle of a societal hierarchy. In Weberian socio-economic terms, the middle class is the broad group of people in contemporary society who fall socio-economically between the working class and upper class....
in the region has been dramatic. For comparison, in 1990, the middle class grew by 9.7 percent in India and 8.6 percent in China, but by 2007 the growth rate was nearly 30 percent and 70 percent respectively. The corresponding increase in Asian affluence also brought with it a change in lifestyle and eating habits, particularly a demand for greater variety, leading to increased competition with western nations for already strained agricultural resources. This demand exacerbates dramatic increases in commodity
Commodity
In economics, a commodity is the generic term for any marketable item produced to satisfy wants or needs. Economic commodities comprise goods and services....
prices such as oil.
Another issue with rising affluence in India and China was reducing the 'shock absorber' of poor people who are forced to reduce their resource consumption when food prices rise. This reduced price elasticity and caused a sharp rise in food prices during some shortages. In the media, China is often mentioned as one of the main reasons for the increase in world food prices. However, China has to a large extent been able to meet its own demand for food, and even exports its surpluses in the world market.
Effects of petroleum price increases
The rise in the price of oil has heightened the costs of fertilizerFertilizer
Fertilizer is any organic or inorganic material of natural or synthetic origin that is added to a soil to supply one or more plant nutrients essential to the growth of plants. A recent assessment found that about 40 to 60% of crop yields are attributable to commercial fertilizer use...
s (in some instances doubling the price within the six months before April, 2008), the majority of which require petroleum
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
or natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
to manufacture. Although the main fossil fuel input for fertilizer comes from natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
to generate hydrogen for the Haber–Bosch process (see: Ammonia production
Ammonia production
Because of its many uses, ammonia is one of the most highly-produced inorganic chemicals. There are numerous large-scale ammonia production plants worldwide, producing a total of 131,000,000 metric tons of ammonia in 2010. China produced 32.1% of the worldwide production, followed by India with...
), natural gas has its own supply problems similar to those for oil. Because natural gas can substitute for petroleum in some uses (for example, natural gas liquids and electricity generation
Fossil fuel power plant
A fossil-fuel power station is a power station that burns fossil fuels such as coal, natural gas or petroleum to produce electricity. Central station fossil-fuel power plants are designed on a large scale for continuous operation...
), increasing prices for petroleum lead to increasing prices for natural gas, and thus for fertilizer.
Costs for fertilizer raw materials other than oil, such as potash
Potash
Potash is the common name for various mined and manufactured salts that contain potassium in water-soluble form. In some rare cases, potash can be formed with traces of organic materials such as plant remains, and this was the major historical source for it before the industrial era...
, have themselves been increasing as increased production of staples increases demand. This is causing a boom (with associated volatility) in agriculture stocks.
The major IFPRI Report launched in February 2011 stated that the causes of the 2008 global food crisis were similar to that of the 1972-74 food crisis, in that the oil price and energy price was the major driver, as well as the shock to cereal demand (from biofuels this time), low interest rates, devaluation of the dollar, declining stocks, and some adverse weather conditions. Unfortunately the IFPRI states that such shocks are likely to recur with several shocks in the future; compounded by a long history of neglecting agricultural investments.
Declining world food stockpiles
In the past, nations tended to keep more sizable food stockpiles, but more recently, due to a faster pace of food growth and ease of importation, less emphasis is placed on high stockpiles. For example, in February 2008 wheat stockpiles hit a 60-year low in the United States (see also Rice shortage). Data stocks are often calculated as a residual between Production and Consumption but it becomes difficult to discriminate between a de-stocking policy choices of individual countries and a deficit between production and consumption.Financial speculation
Destabilizing influences, including indiscriminate lending and real estate speculation, led to a crisis in January 2008, and eroded investment in food commodities. The United States, specifically, had been facing an economic crisis that eventually led to recession.Financial speculation in commodity futures following the collapse of the financial derivatives markets has contributed to the crisis due to a "commodities super-cycle." Financial speculators seeking quick returns have removed trillions of dollars from equities and mortgage bonds, some of which has been invested into food and raw materials. That American commodities speculation could have a worldwide effect on food prices is reflected in the globalization of food production. It represents the concentration of wealth
Concentration of wealth
"Concentration of wealth" often refers to:*Wealth condensationRelated:*Distribution of wealth*Income disparity*Economic inequality*Income inequality metrics*International inequality...
throughout the world, which Frances Moore Lappé
Frances Moore Lappé
Frances Moore Lappé is the author of 18 books including the three-million copy Diet for a Small Planet. She is the co-founder of three national organizations that explore the roots of hunger, poverty and environmental crises, as well as solutions now emerging worldwide through what she calls...
equates to a weakening in fundamental democracy. In a recent article for The Nation
The Nation
The Nation is the oldest continuously published weekly magazine in the United States. The periodical, devoted to politics and culture, is self-described as "the flagship of the left." Founded on July 6, 1865, It is published by The Nation Company, L.P., at 33 Irving Place, New York City.The Nation...
, she suggests that there is no food shortage but that "as long as food is merely a commodity in societies that don't protect people's right to participate in the market, and as long as farming is left vulnerable to consolidated power off the farm, many will go hungry, farmers among them—no matter how big the harvests."
Commodity Index Funds
Goldman Sachs' entry into the commodities market via the Goldman Sachs Commodity Index has been implicated by some in the 2007–2008 world food price crisis. In a 2010 article in Harper's magazine, Frederick Kaufman magazine accused Goldman Sachs of profiting while many people went hungry or even starved. He argued that Goldman's large purchases of long-options on wheat futures created a demand shockDemand shock
In economics, a demand shock is a sudden event that increases or decreases demand for goods or services temporarily. A positive demand shock increases demand and a negative demand shock decreases demand. Prices of goods and services are affected in both cases. When demand for a good or service...
in the wheat market, which disturbed the normal relationship between Supply and Demand
Supply and demand
Supply and demand is an economic model of price determination in a market. It concludes that in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded by consumers will equal the quantity supplied by producers , resulting in an...
and price levels. He argues that the result was a 'contango
Contango
Contango is the market condition wherein the price of a forward or futures contract is trading above the expected spot price at contract maturity. The resulting futures or forward curve would typically be upward sloping , since contracts for further dates would typically trade at even higher prices...
' wheat market on the Chicago Mercantile Exchange, which caused prices of wheat to rise much higher than normal, defeating the purpose of the exchanges (price stabilization) in the first place.
In a June 2010 article in The Economist
The Economist
The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd. and edited in offices in the City of Westminster, London, England. Continuous publication began under founder James Wilson in September 1843...
, the argument is made that Index-tracking funds (of which Goldman Sachs Commodity Index was one) did not cause the bubble. It describes a report by the Organisation for Economic Co-operation and Development
Organisation for Economic Co-operation and Development
The Organisation for Economic Co-operation and Development is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade...
that used data from the Commodity Futures Trading Commission
Commodity Futures Trading Commission
The U.S. Commodity Futures Trading Commission is an independent agency of the United States government that regulates futures and option markets....
to make the case. For example the report points out that even commodities without futures markets also saw price rises during the period. The counter-argument to this view is that the commodities without futures markets saw their prices rise as a consequence of the rising prices of commodities with futures markets: the World Development Movement states there is strong evidence that the rising price of wheat caused the price of rice to subsequently rise as well.
Effects of trade liberalization
Some theorists, such as Martin KhorMartin Khor
Martin Khor is the Executive Director of the since 1 March 2009. He replaced Dr. Yash Tandon who was the Executive Director of the South Centre from 2005-2009. Mr...
of the Third World Network
Third World Network
The Third World Network is an international network of organizations and individuals involved in issues relating to environment, development and the Third World and North-South issues. It has its international secretariat in Penang, Malaysia...
, point out that many developing nations have gone from being food independent to being net food importing economies since the 1970s and 1980s International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
(and later the World Trade Organisation's Agreement on Agriculture
Agreement on Agriculture
The Agreement on Agriculture is an international treaty of the World Trade Organization. It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO on January 1, 1995....
) free market economics directives to debtor nations. In opening developing countries to developed world food imports subsidised by Western governments, developing nations have become dependent upon food imports that are cheaper than what local smallholders agriculture produces, even in the poorest regions of the world.
While developed countries pressured the developing world to abolish subsidies in the interest of trade liberalization, rich countries largely kept subsidies in place for their own farmers. In recent years United States government subsidies have been added to push production toward biofuel rather than food and vegetables
.
Effects of food for fuel
One systemic cause for the price rise is held to be the diversion of food crops (maizeMaize
Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...
in particular) for making first-generation biofuels. An estimated 100 million tons of grain per year are being redirected from food to fuel. (Total worldwide grain production for 2007 was just over 2000 million tonnes.) As farmers devoted larger parts of their crops to fuel production than in previous years, land and resources available for food production were reduced correspondingly.
This has resulted in less food available for human consumption, especially in developing
Developing country
A developing country, also known as a less-developed country, is a nation with a low level of material well-being. Since no single definition of the term developing country is recognized internationally, the levels of development may vary widely within so-called developing countries...
and least developed countries
Least Developed Countries
Least developed country is the name given to a country which, according to the United Nations, exhibits the lowest indicators of socioeconomic development, with the lowest Human Development Index ratings of all countries in the world...
, where a family's daily allowances for food purchases are extremely limited. The crisis can be seen, in a sense, to dichotomize rich and poor nations
North-South divide
The north–south divide is a socio-economic and political division that exists between the wealthy developed countries, known collectively as "the north", and the poorer developing countries , or "the south." Although most nations comprising the "North" are in fact located in the Northern Hemisphere ,...
, since, for example, filling a tank of an average car with biofuel
Biofuel
Biofuel is a type of fuel whose energy is derived from biological carbon fixation. Biofuels include fuels derived from biomass conversion, as well as solid biomass, liquid fuels and various biogases...
, amounts to as much maize
Maize
Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...
(Africa's principal food staple) as an African person consumes in an entire year.
Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
, the world's second largest producer of ethanol after the U.S., is considered to have the world's first sustainable biofuels economy and its government claims Brazil's sugar cane based ethanol industry has not contributed to the 2008 food crises. A World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
policy research working paper released in July 2008 concluded that "...large increases in biofuels production in the United States and Europe are the main reason behind the steep rise in global food prices", and also stated that "Brazil's sugar-based ethanol did not push food prices appreciably higher". An economic assessment published in July 2008 by the OECD disagrees with the World Bank report regarding the negative effects of subsidies and trade restrictions, finding that the effect of biofuels on food prices are much smaller.
A report released by Oxfam
Oxfam
Oxfam is an international confederation of 15 organizations working in 98 countries worldwide to find lasting solutions to poverty and related injustice around the world. In all Oxfam’s actions, the ultimate goal is to enable people to exercise their rights and manage their own lives...
in June 2008 criticized biofuel policies of rich countries and concluded that, of all biofuels available in the market, Brazilian sugarcane ethanol is "far from perfect" but it is the most favorable biofuel in the world in term of cost and GHG
Greenhouse gas
A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...
balance. The report discusses some existing problems and potential risks and asks the Brazilian government for caution to avoid jeopardizing its environmental and social sustainability. The report also says that: "Rich countries spent up to $15 billion last year supporting biofuels while blocking cheaper Brazilian ethanol, which is far less damaging for global food security
Food security
Food security refers to the availability of food and one's access to it. A household is considered food-secure when its occupants do not live in hunger or fear of starvation. According to the World Resources Institute, global per capita food production has been increasing substantially for the past...
." (See Ethanol fuel in Brazil
Ethanol fuel in Brazil
Brazil is the world's second largest producer of ethanol fuel and the world's largest exporter. Together, Brazil and the United States lead the industrial production of ethanol fuel, accounting together for 87.8% of the world's production in 2010. In 2010 Brazil produced 26.2 billion litres Brazil...
)
German Chancellor Angela Merkel
Angela Merkel
Angela Dorothea Merkel is the current Chancellor of Germany . Merkel, elected to the Bundestag from Mecklenburg-Vorpommern, has been the chairwoman of the Christian Democratic Union since 2000, and chairwoman of the CDU-CSU parliamentary coalition from 2002 to 2005.From 2005 to 2009 she led a...
said the rise in food prices is due to poor agricultural policies and changing eating habits in developing nations, not biofuels as some critics claim. On April 29, 2008, U.S. President George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
declared during a press conference that "85 percent of the world's food prices are caused by weather, increased demand and energy prices", and recognized that "15 percent has been caused by ethanol". On July 4, 2008, The Guardian
The Guardian
The Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...
reported that a leaked World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
report estimated the rise in food prices caused by biofuels to be 75%. This report was officially released in July 2008.
Since reaching record high prices in June 2008, corn prices fell 50% by October 2008, declining sharply together with other commodities, including oil. As ethanol production from corn has continue at the same levels, some have argued this trend shows the belief that the increased demand for corn to produce ethanol was mistaken. "Analysts, including some in the ethanol sector, say ethanol demand adds about 75 cents to $1.00 per bushel to the price of corn, as a rule of thumb. Other analysts say it adds around 20 percent, or just under 80 cents per bushel at current prices. Those estimates hint that $4 per bushel corn might be priced at only $3 without demand for ethanol fuel." These industry sources consider that a speculative bubble in the commodity markets
Commodity markets
Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts....
holding positions in corn futures
Futures contract
In finance, a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange...
was the main driver behind the observed hike in corn prices affecting food supply.
Second- and third-generation biofuels (such as cellulosic ethanol
Cellulosic ethanol
Cellulosic ethanol is a biofuel produced from wood, grasses, or the non-edible parts of plants.It is a type of biofuel produced from lignocellulose, a structural material that comprises much of the mass of plants. Lignocellulose is composed mainly of cellulose, hemicellulose and lignin...
and algae fuel
Algae fuel
Algae fuel might be an alternative to fossil fuel and uses algae as its source of natural deposits. Several companies and government agencies are funding efforts to reduce capital and operating costs and make algae fuel production commercially viable...
, respectively) may someday ease the competition with food crops, as can grow on marginal lands unsuited for food crops, but these advanced biofuels require further development of farming practices and refining technology; in contrast, ethanol from maize uses mature technology
Mature technology
A mature technology is a technology that has been in use for long enough that most of its initial faults and inherent problems have been removed or reduced by further development...
and the maize crop can be shifted between food and fuel use quickly.
Biofuel subsidies in the US and the EU
The World BankWorld Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
lists the effect of biofuels as an important contributor to higher food prices. The FAO
Fão
Fão is a town in Esposende Municipality in Portugal....
/ECMB has reported that world land usage for agriculture has declined since the 1980s, and subsidies outside the United States and EU have dropped since the year 2004, leaving supply, while sufficient to meet 2004 needs, vulnerable when the United States began converting agricultural commodities to biofuels. According to the United States Department of Agriculture, global wheat imports and stocks have decreased, domestic consumption has stagnated, and world wheat production has decreased from 2006 to 2008.
In the United States, government subsidies for ethanol production have prompted many farmers to switch to production for biofuel. Maize is the primary crop used for the production of ethanol, with the United States being the biggest producer of maize ethanol. As a result, 23 percent of United States maize crops were being used for ethanol in 2006–2007 (up from 6 percent in 2005–2006), and the USDA expects the United States to use 81 million tonnes of maize for ethanol production in the 2007–2008 season, up 37 percent. This not only diverts grains from food, but it diverts agricultural land from food production.
Nevertheless, supporters of ethanol claim that using corn
Maize
Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...
for ethanol is not responsible for the worst food riot
Food riot
Food and bread riots are caused by harvest failures, incompetent food storage, hoarding, poisoning of food, or attacks by pests like locusts. When the public becomes too desperate in such conditions, they attack shops, farms, homes, or government buildings to attain bread or other staple foods like...
s in the world, many of which have been caused by the price of rice
Rice
Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...
and oil
Oil
An oil is any substance that is liquid at ambient temperatures and does not mix with water but may mix with other oils and organic solvents. This general definition includes vegetable oils, volatile essential oils, petrochemical oils, and synthetic oils....
, which are not affected by biofuel use but rather by supply and demand.
However, a World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
policy research working paper released in July 2008 says that biofuel
Biofuel
Biofuel is a type of fuel whose energy is derived from biological carbon fixation. Biofuels include fuels derived from biomass conversion, as well as solid biomass, liquid fuels and various biogases...
s have raised food prices between 70 to 75 percent. The study found that higher oil prices and a weak dollar explain 25–30% of total price rise. The "month-by-month" five year analysis disputes that increases in global grain consumption and droughts were responsible for price increases, reporting that this had had only a marginal effect and instead argues that the EU and US drive for biofuels has had by far the biggest effect on food supply and prices. The paper concludes that increased production of biofuels in the US and EU were supported by subsidies and tariffs on imports, and considers that without these policies, price increases would have been smaller. This research also concluded that Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
's sugar cane based ethanol has not raised sugar prices significantly, and suggest to remove tariffs on ethanol imports by both the US and EU, to allow more efficient producers such as Brazil and other developing countries to produce ethanol profitably for export to meet the mandates in the EU and the US.
The Renewable Fuel Association (RFA) published a rebuttal based on the version leaked before the formal release of the World Bank's paper. The RFA critique considers that the analysis is highly subjective and that the author "estimates the effect of global food prices from the weak dollar and the direct and indirect effect of high petroleum prices and attributes everything else to biofuels."
An economic assessment report also published in July 2008 by the OECD agrees with the World Bank report regarding the negative effects of subsidies and trade restrictions, but found that the effect of biofuels on food prices are much smaller. The OECD study is also critical of the limited reduction of GHG
Greenhouse gas
A greenhouse gas is a gas in an atmosphere that absorbs and emits radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth's atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone...
emissions achieved from biofuels produced in Europe and North America, concluding that the current biofuel support policies would reduce greenhouse gas emissions from transport fuel by no more than 0.8 percent by 2015, while Brazilian ethanol from sugar cane reduces greenhouse gas emissions by at least 80 percent compared to fossil fuels. The assessment calls on governments for more open markets in biofuels and feedstocks to improve efficiency and lower costs.
Idled farmland
According to the New York Times on April 9, 2008, the United States government pays farmers to idle their cropland under a conservation program. This policy reached a peak of 36800000 acres (148,924.4 km²) idled in 2007, that is 8% of cropland in United States, representing a total area bigger than the state of New York.Agricultural subsidies
The global food crisis has renewed calls for removal of distorting agricultural subsidies in developed countries. Support to farmers in OECD countries totals 280 billion USD annually, which compares to official development assistance of just 80 billion USD in 2004, and farm support depresses global food prices, according to OECD estimates. These agricultural subsidies lead to under-development in rural developing countries including the least developed countriesLeast Developed Countries
Least developed country is the name given to a country which, according to the United Nations, exhibits the lowest indicators of socioeconomic development, with the lowest Human Development Index ratings of all countries in the world...
, meanwhile subsidised food increases overconsumption in developed countries. The US Farm Bill brought in by the Bush Administration in 2002 increased agricultural subsidies by 80% and cost the US taxpayer 190 billion USD. In 2003, the EU agreed to extend the Common Agricultural Policy
Common Agricultural Policy
The Common Agricultural Policy is a system of European Union agricultural subsidies and programmes. It represents 48% of the EU's budget, €49.8 billion in 2006 ....
until 2013. Former UNDP Administrator Malloch Brown renewed calls for reform of the farm subsidies such as the CAP.
Distorted global rice market
Japan is forced to import more than 767,000 tons of rice annually from the United States, Thailand, and other countries due to WTO rules. This is despite the fact that Japan produces over 100% of domestic rice consumption needs with 11 million tonnes produced in 2005 while 8.7 million tonnes were consumed in 2003–2004 period. Japan is not allowed to re-export this rice to other countries without approval. This rice is generally left to rot and then used for animal feedAnimal feed
Animal feed may refer to:*Compound feed, commercial pelleted food produced in a feed mill and fed to domestic livestock*Fodder, food given to domestic livestock, including plants cut and carried to them*Forage, growing plants eaten by domestic livestock....
. Under pressure, the United States and Japan are poised to strike a deal to remove such restrictions. It is expected 1.5 million tonnes of high-grade American rice will enter the market soon.
Crop shortfalls from natural disasters
Several distinct weather- and climate-related incidents have caused disruptions in crop production. Perhaps the most influential is the extended drought in Australia, in particular the fertile Murray-Darling BasinMurray-Darling Basin
The Murray-Darling basin is a large geographical area in the interior of southeastern Australia, whose name is derived from its two major rivers, the Murray River and the Darling River. It drains one-seventh of the Australian land mass, and is currently by far the most significant agricultural...
, which produces large amounts of wheat and rice. The drought
Drought
A drought is an extended period of months or years when a region notes a deficiency in its water supply. Generally, this occurs when a region receives consistently below average precipitation. It can have a substantial impact on the ecosystem and agriculture of the affected region...
has caused the annual rice harvest to fall by as much as 98% from pre-drought levels.
Australia is historically the second-largest exporter of wheat after the United States, producing up to 25 million tons in a good year, the vast majority for export. However, the 2006 harvest was 9.8 million. Other events that have negatively affected the price of food include the 2006 heat wave
2006 North American heat wave
The 2006 North American heat wave spread throughout most of the United States and Canada beginning on July 15, 2006, killing at least 225 people. That day the temperature reached 117 °F in Pierre, South Dakota, with many places in South Dakota that hit well into the 120s. A 130 degree...
in California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
's San Joaquin Valley
San Joaquin Valley
The San Joaquin Valley is the area of the Central Valley of California that lies south of the Sacramento – San Joaquin River Delta in Stockton...
, which killed large numbers of farm animals, and unseasonable 2008 rains in Kerala
Kerala
or Keralam is an Indian state located on the Malabar coast of south-west India. It was created on 1 November 1956 by the States Reorganisation Act by combining various Malayalam speaking regions....
, India, which destroyed swathes of grain. Scientists have stated that several of these incidents are consistent with the predicted effects of climate change
Climate change
Climate change is a significant and lasting change in the statistical distribution of weather patterns over periods ranging from decades to millions of years. It may be a change in average weather conditions or the distribution of events around that average...
.
The effects of Cyclone Nargis
Cyclone Nargis
Cyclone Nargis , was a strong tropical cyclone that caused the worst natural disaster in the recorded history of Burma. The cyclone made landfall in Burma on Friday, May 2, 2008, causing catastrophic destruction and at least 138,000 fatalities...
on Burma in May 2008 caused a spike in the price of rice. Burma has historically been a rice exporter, though yields have fallen as government price controls
Price controls
Price controls are governmental impositions on the prices charged for goods and services in a market, usually intended to maintain the affordability of staple foods and goods, and to prevent price gouging during shortages, or, alternatively, to insure an income for providers of certain goods...
have reduced incentives for farmers. The storm surge
Storm surge
A storm surge is an offshore rise of water associated with a low pressure weather system, typically tropical cyclones and strong extratropical cyclones. Storm surges are caused primarily by high winds pushing on the ocean's surface. The wind causes the water to pile up higher than the ordinary sea...
inundated rice paddies up to 30 miles (48.3 km) inland in the Irrawaddy Delta
Irrawaddy Delta
The Irrawaddy Delta or Ayeyarwady Delta lies in the Ayeyarwady Region , the lowest expanse of land in Burma that fans out from the limit of tidal influence at Myan Aung to the Bay of Bengal and Andaman Sea, 290 km to the south at the mouth of the Ayeyarwady River...
, raising concern that the salt could make the fields infertile. The FAO had previously estimated that Burma would export up to 600,000 tons of rice in 2008, but concerns were raised in the cyclone's aftermath that Burma may be forced to import rice for the first time, putting further upward pressure on global rice prices.
Stem rust
Stem rust
The stem, black or cereal rusts are caused by the fungus Puccinia graminis and are a significant disease affecting cereal crops. An epidemic of stem rust on wheat caused by race Ug99 is currently spreading across Africa, Asia and most recently into Middle East and is causing major concern due to...
reappeared in 1998 in Uganda (and possibly earlier in Kenya) with the particularly virulent UG99 fungus. Unlike other rusts, which only partially affect crop yields, UG99 can bring 100% crop loss. Up to 80% yield losses were recently recorded in Kenya.
As of 2005 stem rust was still believed to be "largely under control worldwide except in Eastern Africa". But by January 2007 an even more virulent strain had gone across the Red Sea into Yemen. FAO first reported on 5 March 2008 that Ug99 had now spread to major wheat-growing areas in Iran.
These countries in North Africa and Middle East consume over 150% of their own wheat production; the failure of this staple crop thus adds a major burden on them. The disease is now expected to spread over China and the Far-East. The strong international collaboration network of research and development that spread disease-resistant strains some 40 years ago and started the Green Revolution
Green Revolution
Green Revolution refers to a series of research, development, and technology transfer initiatives, occurring between the 1940s and the late 1970s, that increased agriculture production around the world, beginning most markedly in the late 1960s....
, known as CGIAR, was since slowly starved of research funds because of its own success and is now too atrophied to swiftly react to the new threat.
Soil and productivity losses
Sundquist points out that large areas of croplands are lost year after year, due mainly to soil erosion, water depletion and urbanisation. According to him "60,000 km2/ year of land becomes so severely degraded that it loses its productive capacity and becomes wasteland", and even more are affected to a lesser extent, adding to the crop supply problem.Additionally, agricultural production is also lost due to water depletion
Water crisis
Water crisis is a general term used to describe a situation where the available water within a region is less than the region's demand. The term has been used to describe the availability of potable water in a variety of regions by the United Nations and other world organizations...
. Northern China in particular has depleted much of its non-renewables aquifer
Aquifer
An aquifer is a wet underground layer of water-bearing permeable rock or unconsolidated materials from which groundwater can be usefully extracted using a water well. The study of water flow in aquifers and the characterization of aquifers is called hydrogeology...
s, which now impacts negatively its crop production.
Urbanisation is another, smaller, difficult to estimate cause of annual cropland reduction.
Rising levels of ozone
One possible environmental factor in the food price crisis is rising background levels of ground-level tropospheric ozoneTropospheric ozone
Ozone is a constituent of the troposphere . Photochemical and chemical reactions involving it drive many of the chemical processes that occur in the atmosphere by day and by night...
in the atmosphere. Plants have been shown to have a high sensitivity to ozone levels, and lower yields of important food crops, such as wheat and soybeans, may have been a result of elevated ozone levels. Ozone levels in the Yangtze Delta were studied for their effect on oilseed rape, a member of the cabbage family that produces one-third of the vegetable oil used in China. Plants grown in chambers that controlled ozone levels exhibited a 10–20 percent reduction in size and weight (biomass
Biomass
Biomass, as a renewable energy source, is biological material from living, or recently living organisms. As an energy source, biomass can either be used directly, or converted into other energy products such as biofuel....
) when exposed to elevated ozone levels. Production of seeds and oil was also reduced. The Chinese authors of this study also reported that rice grown in chambers that controlled ozone levels exhibited a 14 to 20 percent reduction in biomass
Biomass
Biomass, as a renewable energy source, is biological material from living, or recently living organisms. As an energy source, biomass can either be used directly, or converted into other energy products such as biofuel....
yield when exposed to ozone levels over 25 times higher than was normal for the region.
Rising prices
From the beginning of 2007 to early 2008, the prices of some of the most basic international food commodities increased dramatically on international markets. The international market price of wheatWheat
Wheat is a cereal grain, originally from the Levant region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...
doubled from February 2007 to February 2008 hitting a record high of over USD$10 a bushel
Bushel
A bushel is an imperial and U.S. customary unit of dry volume, equivalent in each of these systems to 4 pecks or 8 gallons. It is used for volumes of dry commodities , most often in agriculture...
. Rice
Rice
Rice is the seed of the monocot plants Oryza sativa or Oryza glaberrima . As a cereal grain, it is the most important staple food for a large part of the world's human population, especially in East Asia, Southeast Asia, South Asia, the Middle East, and the West Indies...
prices also reached ten year highs. In some nations, milk
Milk
Milk is a white liquid produced by the mammary glands of mammals. It is the primary source of nutrition for young mammals before they are able to digest other types of food. Early-lactation milk contains colostrum, which carries the mother's antibodies to the baby and can reduce the risk of many...
and meat
Meat
Meat is animal flesh that is used as food. Most often, this means the skeletal muscle and associated fat and other tissues, but it may also describe other edible tissues such as organs and offal...
prices more than doubled, while soy (which hit a 34 year high price in December 2007) and maize
Maize
Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...
prices have increased dramatically.
Total food import bills rose by an estimated 25% for developing countries in 2007. Researchers from the Overseas Development Institute
Overseas Development Institute
The Overseas Development Institute is one of the leading independent think tanks on international development and humanitarian issues. Based in London, its mission is "to inspire and inform policy and practice which lead to the reduction of poverty, the alleviation of suffering and the achievement...
have suggested this problem will be worsened by a likely fall in food aid. As food aid is programmed by budget rather than volume, rising food prices mean that the World Food Programme
World Food Programme
The World Food Programme is the food aid branch of the United Nations, and the world's largest humanitarian organization addressing hunger worldwide. WFP provides food, on average, to 90 million people per year, 58 million of whom are children...
(WFP) needs an extra $500 million just to sustain the current operations.
To ensure that food remains available for their domestic populations and to combat dramatic price inflation, major rice exporters, such as China, Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
, India, Indonesia
Indonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
, Vietnam
Vietnam
Vietnam – sometimes spelled Viet Nam , officially the Socialist Republic of Vietnam – is the easternmost country on the Indochina Peninsula in Southeast Asia. It is bordered by China to the north, Laos to the northwest, Cambodia to the southwest, and the South China Sea –...
, Cambodia
Cambodia
Cambodia , officially known as the Kingdom of Cambodia, is a country located in the southern portion of the Indochina Peninsula in Southeast Asia...
and Egypt
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
, imposed strict export bans on rice. Conversely, several other nations, including Argentina
Argentina
Argentina , officially the Argentine Republic , is the second largest country in South America by land area, after Brazil. It is constituted as a federation of 23 provinces and an autonomous city, Buenos Aires...
, Ukraine
Ukraine
Ukraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...
, Russia, and Serbia
Serbia
Serbia , officially the Republic of Serbia , is a landlocked country located at the crossroads of Central and Southeast Europe, covering the southern part of the Carpathian basin and the central part of the Balkans...
either imposed high tariffs or blocked the export of wheat and other foodstuffs altogether, driving up prices still further for net food importing nations while trying to isolate their internal markets. North Korea
North Korea
The Democratic People’s Republic of Korea , , is a country in East Asia, occupying the northern half of the Korean Peninsula. Its capital and largest city is Pyongyang. The Korean Demilitarized Zone serves as the buffer zone between North Korea and South Korea...
suffered from the food crisis to such extent that a North Korean official was quoted in June '08 with saying "Life is more than difficult. It seems that everyone is going to die". This nation however is solely relying on food assistance to cope with the crisis.
United States
A May 2008 national survey found that food banks and pantries across the U.S. were being forced to cut back on food distribution as 99 percent of respondents reported an increase in the number of people requesting services. Rising food and fuel prices, inadequate food stamp benefits, unemployment, underemployment, and rent or mortgage costs were factors reported as forcing an average of 15-20 percent more people. Compounding this issue, USDA bonus foods have declined by $200 million and local food donations were down nationally about 9 percent over the same period. According to the California Association of Food Banks, which is an umbrella organization of nearly all food banks in the state, food banks are at the "beginning of a crisis."Effects on farmers
If global price movements are transmitted to local markets, farmers in the developing world could benefit from the rising price of food. According to researchers from the Overseas Development InstituteOverseas Development Institute
The Overseas Development Institute is one of the leading independent think tanks on international development and humanitarian issues. Based in London, its mission is "to inspire and inform policy and practice which lead to the reduction of poverty, the alleviation of suffering and the achievement...
, this may depend on farmers’ capacity to respond to changing market conditions. Experience suggests that farmers lack the credit and inputs needed to respond in the short term. In the medium or long term, however, they could benefit, as seen in the Asian Green Revolution
Green Revolution
Green Revolution refers to a series of research, development, and technology transfer initiatives, occurring between the 1940s and the late 1970s, that increased agriculture production around the world, beginning most markedly in the late 1960s....
or in many African countries in the recent past.
Relationship with 2008 Chinese milk scandal2008 Chinese milk scandalThe 2008 Chinese milk scandal was a food safety incident in the People's Republic of China, involving milk and infant formula, and other food materials and components, adulterated with melamine....
As grain prices increased, China's large number small-holding milk farmers, as well as producers of feed for cattle, were unable to exist economically. As a result, they turned to putting additives into the feed and milk, including melamineMelamine
Melamine is an organic base and a trimer of cyanamide, with a 1,3,5-triazine skeleton. Like cyanamide, it contains 66% nitrogen by mass and, if mixed with resins, has fire retardant properties due to its release of nitrogen gas when burned or charred, and has several other industrial uses....
, in order to boost the measured level of protein. Hundreds of thousands of children became ill, China's milk exports virtually ended, executives and officials were arrested and some executed, and companies went bankrupt.
Unrest and government actions in individual countries and regions
The price rises affected parts of AsiaEconomy of Asia
The economy of Asia comprises more than 4 billion people living in 46 different states. Six further states lie partly in Asia, but are considered to belong to another region economically and politically...
and Africa
Economy of Africa
The economy of Africa consists of the trade, industry, and resources of the people of Africa. , approximately 922 million people were living in 54 different countries. Africa is by far the world's poorest inhabited continent...
particularly severely with Burkina Faso
Burkina Faso
Burkina Faso – also known by its short-form name Burkina – is a landlocked country in west Africa. It is surrounded by six countries: Mali to the north, Niger to the east, Benin to the southeast, Togo and Ghana to the south, and Côte d'Ivoire to the southwest.Its size is with an estimated...
, Cameroon
Cameroon
Cameroon, officially the Republic of Cameroon , is a country in west Central Africa. It is bordered by Nigeria to the west; Chad to the northeast; the Central African Republic to the east; and Equatorial Guinea, Gabon, and the Republic of the Congo to the south. Cameroon's coastline lies on the...
, Senegal
Senegal
Senegal , officially the Republic of Senegal , is a country in western Africa. It owes its name to the Sénégal River that borders it to the east and north...
, Mauritania
Mauritania
Mauritania is a country in the Maghreb and West Africa. It is bordered by the Atlantic Ocean in the west, by Western Sahara in the north, by Algeria in the northeast, by Mali in the east and southeast, and by Senegal in the southwest...
, Côte d'Ivoire
Côte d'Ivoire
The Republic of Côte d'Ivoire or Ivory Coast is a country in West Africa. It has an area of , and borders the countries Liberia, Guinea, Mali, Burkina Faso and Ghana; its southern boundary is along the Gulf of Guinea. The country's population was 15,366,672 in 1998 and was estimated to be...
, Egypt
Egypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
and Morocco
Morocco
Morocco , officially the Kingdom of Morocco , is a country located in North Africa. It has a population of more than 32 million and an area of 710,850 km², and also primarily administers the disputed region of the Western Sahara...
seeing protests and riots in late 2007 and early 2008 over the unavailability of basic food staples. Other countries that have seen food riots or are facing related unrest are: Mexico
Mexico
The United Mexican States , commonly known as Mexico , is a federal constitutional republic in North America. It is bordered on the north by the United States; on the south and west by the Pacific Ocean; on the southeast by Guatemala, Belize, and the Caribbean Sea; and on the east by the Gulf of...
, Bolivia
Bolivia
Bolivia officially known as Plurinational State of Bolivia , is a landlocked country in central South America. It is the poorest country in South America...
, Yemen
Yemen
The Republic of Yemen , commonly known as Yemen , is a country located in the Middle East, occupying the southwestern to southern end of the Arabian Peninsula. It is bordered by Saudi Arabia to the north, the Red Sea to the west, and Oman to the east....
, Uzbekistan
Uzbekistan
Uzbekistan , officially the Republic of Uzbekistan is a doubly landlocked country in Central Asia and one of the six independent Turkic states. It shares borders with Kazakhstan to the west and to the north, Kyrgyzstan and Tajikistan to the east, and Afghanistan and Turkmenistan to the south....
, Bangladesh
Bangladesh
Bangladesh , officially the People's Republic of Bangladesh is a sovereign state located in South Asia. It is bordered by India on all sides except for a small border with Burma to the far southeast and by the Bay of Bengal to the south...
, Pakistan
Pakistan
Pakistan , officially the Islamic Republic of Pakistan is a sovereign state in South Asia. It has a coastline along the Arabian Sea and the Gulf of Oman in the south and is bordered by Afghanistan and Iran in the west, India in the east and China in the far northeast. In the north, Tajikistan...
, Sri Lanka
Sri Lanka
Sri Lanka, officially the Democratic Socialist Republic of Sri Lanka is a country off the southern coast of the Indian subcontinent. Known until 1972 as Ceylon , Sri Lanka is an island surrounded by the Indian Ocean, the Gulf of Mannar and the Palk Strait, and lies in the vicinity of India and the...
, and South Africa.
Bangladesh
10,000 workers rioted close to the BangladeshBangladesh
Bangladesh , officially the People's Republic of Bangladesh is a sovereign state located in South Asia. It is bordered by India on all sides except for a small border with Burma to the far southeast and by the Bay of Bengal to the south...
i capital Dhaka
Dhaka
Dhaka is the capital of Bangladesh and the principal city of Dhaka Division. Dhaka is a megacity and one of the major cities of South Asia. Located on the banks of the Buriganga River, Dhaka, along with its metropolitan area, had a population of over 15 million in 2010, making it the largest city...
, smashing cars and buses and vandalising factories in anger at high food prices and low wages. Dozens of people, including at least 20 police officials, were injured in the violence. Ironically, the country achieved food self-sufficiency in 2002, but food prices increased drastically due to the reliance of agriculture on oil and fossil fuels.
Economists estimate 30 million of the country's 150 million people could go hungry.
Brazil
In April 2008, the BrazilBrazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
ian government announced a temporary ban on the export of rice. The ban is intended to protect domestic consumers.
Burkina Faso
One of the earlier food riots took place in Burkina FasoBurkina Faso
Burkina Faso – also known by its short-form name Burkina – is a landlocked country in west Africa. It is surrounded by six countries: Mali to the north, Niger to the east, Benin to the southeast, Togo and Ghana to the south, and Côte d'Ivoire to the southwest.Its size is with an estimated...
, on February 22, when rioting broke out in the country's second and third largest cities over soaring food prices (up to a 65 percent increase), sparing the capital, Ouagadougou
Ouagadougou
Ouagadougou is the capital of Burkina Faso and the administrative, communications, cultural and economic center of the nation. It is also the country's largest city, with a population of 1,475,223 . The city's name is often shortened to Ouaga. The inhabitants are called ouagalais...
, where soldiers were mobilized throughout strategic points. The government promised to lower taxes on food and to release food stocks. Over 100 people were arrested in one of the towns. Related policy actions of the Burkinabe government included:
- The removal of customs duty on rice, salt, dairy-based products and baby foods
- The removal of value added tax on durum wheat, baby foods, soap and edible oils
- Establishing negotiated prices with wholesalers for sugar, oil and rice
- Releasing food stocks
- Strengthening of community grain banks
- Food distribution in-kind
- Reduction of electricity cost, partial payment of utility bills for the poor
- Enacting special programs for schools and hospitals
- Fertilizer distribution and production support.
A ban was also imposed on exportation of cereals.
Cameroon
CameroonCameroon
Cameroon, officially the Republic of Cameroon , is a country in west Central Africa. It is bordered by Nigeria to the west; Chad to the northeast; the Central African Republic to the east; and Equatorial Guinea, Gabon, and the Republic of the Congo to the south. Cameroon's coastline lies on the...
, the world's fourth largest cocoa producer, saw large scale rioting in late February 2008, in protest against inflating food and fuel prices, as well as the attempt by President Paul Biya
Paul Biya
Paul Biya is a Cameroonian politician who has been the President of Cameroon since 6 November 1982. A native of Cameroon's south, Biya rose rapidly as a bureaucrat under President Ahmadou Ahidjo in the 1960s, serving as Secretary-General of the Presidency from 1968 to 1975 and then as Prime...
to extend his 25-year rule. At least seven people were killed in the worst unrest seen in the country in over fifteen years. This figure was later increased to 24. Part of the government response to the protests was a reduction in import taxes on foods including rice, flour, and fish. The government reached an agreement with retailers by which prices would be lowered in exchange for the reduced import taxes. As of late April 2008, however, reports suggested that prices had not eased and in some cases had even increased.
On April 24, 2008, the government of Cameroon announced a two-year emergency program designed to double Cameroon's food production and achieve food self-sufficiency.
Côte d'Ivoire
On March 31, Côte d'IvoireCôte d'Ivoire
The Republic of Côte d'Ivoire or Ivory Coast is a country in West Africa. It has an area of , and borders the countries Liberia, Guinea, Mali, Burkina Faso and Ghana; its southern boundary is along the Gulf of Guinea. The country's population was 15,366,672 in 1998 and was estimated to be...
's capital Abidjan
Abidjan
Abidjan is the economic and former official capital of Côte d'Ivoire, while the current capital is Yamoussoukro. it was the largest city in the nation and the third-largest French-speaking city in the world, after Paris, and Kinshasa but before Montreal...
saw police use tear gas and a dozen protesters injured following food riots that gripped the city. The riots followed dramatic hikes in the price of food and fuel, with the price of beef rising from US$1.68 to $2.16 per kilogram, and the price of gasoline rising from $1.44 to $2.04 per liter
Litér
- External links :*...
, in only three days.
Egypt
In EgyptEgypt
Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...
, a boy was killed from a gunshot to the head after Egyptian police intervened in violent demonstrations over rising food prices that gripped the industrial city of Mahalla
El-Mahalla El-Kubra
El-Mahalla El-Kubra is a large industrial and agricultural city in Egypt, located in the middle of the Nile Delta on the western bank of the Damietta branch. It is known for its dominant textile industry...
on April 8. Large swathes of the population have been hit as food prices, and particularly the price of bread
Bread
Bread is a staple food prepared by cooking a dough of flour and water and often additional ingredients. Doughs are usually baked, but in some cuisines breads are steamed , fried , or baked on an unoiled frying pan . It may be leavened or unleavened...
, have doubled over the last several months as a result of producers exploiting a shortage that has existed since 2006.
Ethiopia
Drought and the food price crisis threatened thousands in EthiopiaEthiopia
Ethiopia , officially known as the Federal Democratic Republic of Ethiopia, is a country located in the Horn of Africa. It is the second-most populous nation in Africa, with over 82 million inhabitants, and the tenth-largest by area, occupying 1,100,000 km2...
.
Haiti
On April 12, 2008, the HaitiHaiti
Haiti , officially the Republic of Haiti , is a Caribbean country. It occupies the western, smaller portion of the island of Hispaniola, in the Greater Antillean archipelago, which it shares with the Dominican Republic. Ayiti was the indigenous Taíno or Amerindian name for the island...
an Senate voted to dismiss Prime Minister Jacques-Édouard Alexis
Jacques-Édouard Alexis
Jacques-Édouard Alexis is a Haitian politician. He served as the Prime Minister of Haiti from 1999 to 2001 and was Prime Minister for a second term from 2006 to 2008 when he was dismissed due to political fallout from food riots....
after violent food riots hit the country. The food riots caused the death of 5 people. Prices for food items such as rice, beans, fruit and condensed milk have gone up 50 percent in Haiti
Haiti
Haiti , officially the Republic of Haiti , is a Caribbean country. It occupies the western, smaller portion of the island of Hispaniola, in the Greater Antillean archipelago, which it shares with the Dominican Republic. Ayiti was the indigenous Taíno or Amerindian name for the island...
since late 2007 while the price of fuel has tripled in only two months. Riots broke out in April due to the high prices, and the government had been attempting to restore order by subsidizing a 15 percent reduction in the price of rice. As of February 2010, post-earthquake Port-au-Prince is almost entirely reliant on foreign food aid, some of which ends up in the black markets.
India
India has banned the export of rice except for Basmati types of rice, which attract a premium price.Indonesia
Street protests over the price of food took place in IndonesiaIndonesia
Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...
where food staples and gasoline have nearly doubled in price since January 2008.
Latin America
In April 2008, the Latin American members of the United NationsUnited Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
' Food and Agriculture Organization
Food and Agriculture Organization
The Food and Agriculture Organization of the United Nations is a specialised agency of the United Nations that leads international efforts to defeat hunger. Serving both developed and developing countries, FAO acts as a neutral forum where all nations meet as equals to negotiate agreements and...
(FAO) met in Brasília
Brasília
Brasília is the capital city of Brazil. The name is commonly spelled Brasilia in English. The city and its District are located in the Central-West region of the country, along a plateau known as Planalto Central. It has a population of about 2,557,000 as of the 2008 IBGE estimate, making it the...
to confront the issues of high food prices, scarcities and violence that affect the region.
Mexico
The President of Mexico
President of Mexico
The President of the United Mexican States is the head of state and government of Mexico. Under the Constitution, the president is also the Supreme Commander of the Mexican armed forces...
, Felipe Calderón
Felipe Calderón
Felipe de Jesús Calderón Hinojosa is the current President of Mexico. He assumed office on December 1, 2006, and was elected for a single six-year term through 2012...
, with industry representatives and members of the Confederation of Industrial Chambers (Concamin), agreed to freeze prices of more than 150 consumer staples, such as coffee, sardines, tuna, oil, soup or tea, among others, until the end of December 2008. The measure was carried out in an attempt to control inflation, which stood at an annual rate of 4.95%, the highest increase since December 2004.
Mexican baking company Grupo Bimbo
Grupo Bimbo
Grupo Bimbo is the largest Mexican food company and the largest bakery in the world with brands in Americas, Europe, and China.-History:Grupo Bimbo was established in Mexico in 1945 by Lorenzo Servitje, Jose T. Mata, Jaime Sendra, and Jaime Jorba...
, agreed to maintain stable prices of their products, despite of the 20% raise of the production costs. Daniel Servitje, CEO of this company, announced in the 19th Plenary Meeting of the Mexico–China Business Committee. Bimbo is one of the most important baking companies worldwide, with the recent expansion to China. Bimbo also recently has acquired five bakeries in the United States and Canada. Servitje also said that their investment plans of this year will be done, but the long term projects, can be changed.
Mozambique
In mid February, rioting that started in the MozambicanMozambique
Mozambique, officially the Republic of Mozambique , is a country in southeastern Africa bordered by the Indian Ocean to the east, Tanzania to the north, Malawi and Zambia to the northwest, Zimbabwe to the west and Swaziland and South Africa to the southwest...
rural town of Chokwe
Chokwe, Mozambique
Chokwé, and earlier known as Vila Trigo de Morais, is a rural town and capital of Chokwe District in the province of Gaza in Mozambique. It is located about 230 km north of the capital city of Maputo. This agricultural town is noted for its tomatoes.-Economy:Chokwe lies in the mixed farming...
and then spread to the capital, Maputo
Maputo
Maputo, also known as Lourenço Marques, is the capital and largest city of Mozambique. It is known as the City of Acacias in reference to acacia trees commonly found along its avenues and the Pearl of the Indian Ocean. It was famous for the inscription "This is Portugal" on the walkway of its...
, has resulted in at least four deaths. The riots were reported in the media to have been, at least in part, over food prices and were termed "food riots." A biofuel advocacy publication, however, claimed that these were, in fact, "fuel riots", limited to the rise in the cost of diesel, and argued that the "food riot" characterization worked to fan "anti-biofuels sentiment."
Pakistan
The Pakistan ArmyPakistan Army
The Pakistan Army is the branch of the Pakistani Armed Forces responsible for land-based military operations. The Pakistan Army came into existence after the Partition of India and the resulting independence of Pakistan in 1947. It is currently headed by General Ashfaq Parvez Kayani. The Pakistan...
has been deployed to avoid the seizure of food from fields and warehouses. This hasn't stopped the food prices from increasing. The new government has been blamed for not managing the countries food stockpiles properly.
Myanmar
Once the world's top rice producer, MyanmarMyanmar
Burma , officially the Republic of the Union of Myanmar , is a country in Southeast Asia. Burma is bordered by China on the northeast, Laos on the east, Thailand on the southeast, Bangladesh on the west, India on the northwest, the Bay of Bengal to the southwest, and the Andaman Sea on the south....
has produced enough rice to feed itself until now. Rice exports dropped over four decades from nearly 4 million tons to only about 40,000 tons last year, mostly due to neglect by Myanmar's ruling generals of infrastructure, including irrigation and warehousing.
On 3 May 2008 Cyclone Nargis
Cyclone Nargis
Cyclone Nargis , was a strong tropical cyclone that caused the worst natural disaster in the recorded history of Burma. The cyclone made landfall in Burma on Friday, May 2, 2008, causing catastrophic destruction and at least 138,000 fatalities...
stripped Myanmar's rice-growing districts, ruining large areas with salt water. U.N. Food and Agriculture Organization estimates that these areas produce 65 percent of the Southeast Asian country's rice. Worries of long-term food shortages and rationing are rife. The military regime says nothing about the rice crisis, but continues to export rice at the same rate.
"...at least the next two harvests are going to be greatly affected and there’ll be virtually no output from those areas during that time. So we’re likely to see considerable food and rice shortages for the next couple of years. The damage to the economy is going to be profound." said economist and Myanmar expert Sean Turnell, of Australia's Macquarie University. (interviewed in "The Irriwaddy", Tuesday, May 27, 2008)
Panama
In Panama, in response to higher rice prices the government began buying rice at the high market price and selling rice to the public at a lower subsidized price at food kiosks.Philippines
In the PhilippinesPhilippines
The Philippines , officially known as the Republic of the Philippines , is a country in Southeast Asia in the western Pacific Ocean. To its north across the Luzon Strait lies Taiwan. West across the South China Sea sits Vietnam...
, the Arroyo government
Gloria Macapagal-Arroyo
Gloria Macapagal-Arroyo is a Filipino politician who served as the 14th President of the Philippines from 2001 to 2010, as the 12th Vice President of the Philippines from 1998 to 2001, and is currently a member of the House of Representatives representing the 2nd District of Pampanga...
insisted on April 13 that there would be no food riots in the country and that there could be no comparison with Haiti's situation. Chief Presidential Legal Counsel, Sergio Apostol
Sergio Apostol
Sergio Antonio Figueroa Apostol was born on January 17, 1935 in Catbalogan City, Samar.Apostol, a Roman Catholic, graduated from the Ateneo Law School and was a member of the Ateneo Law Journal. He passed the Philippine Bar exams in 1958, finishing 7th...
stated that: "Haiti is not trying to solve the problem, while we are doing something to address the issue. We don't have a food shortage. So, no comparison..." Comments by the Justice Secretary, Raul Gonzalez
Raul M. Gonzalez
Raúl Maravilla González, was the Chief Presidential Legal Counsel and was the Former Secretary of Justice of the Philippines. He was replaced by Agnes Devanadera in 2009 from the orders of Gloria Macapagal Arroyo.-External links:****...
, the following day, that food riots are not far fetched, were quickly rebuked by the rest of the government.
On April 15, the Philippines, the world's largest rice importer, urged China, Japan, and other key Asian nations, to convene an emergency meeting, especially taking issue with those countries' rice export bans. "Free trade should be flowing", Philippine Agriculture Secretary Arthur Yap stated. In late April 2008, the Philippines government requested that the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
exert pressure on rice exporting countries to end export restrictions.
Russia
The Russian government pressured retailers to freeze food prices before key elections for fear of a public backlash against the rising cost of food in October 2007. The freeze ended on May 1, 2008.Senegal
On 31 March 2008, SenegalSenegal
Senegal , officially the Republic of Senegal , is a country in western Africa. It owes its name to the Sénégal River that borders it to the east and north...
had riots in response to the rise in the price of food and fuel. Twenty-four people were arrested and detained in a response that one local human rights group claimed included "torture" and other "unspeakable acts" on the part of the security forces. Further protests took place in Dakar
Dakar
Dakar is the capital city and largest city of Senegal. It is located on the Cap-Vert Peninsula on the Atlantic coast and is the westernmost city on the African mainland...
on 26 April 2008.
Somalia
Riots in Somalia occurred on May 5, 2008 over the price of food, in which five protesters were killed. The protests occurred amid a serious humanitarian emergency due to the Ethiopian war in Somalia.Tajikistan
The Christian Science Monitor, neweurasia, and other media observers are predicting that a nascent hunger crisis will erupt into a full famineFamine
A famine is a widespread scarcity of food, caused by several factors including crop failure, overpopulation, or government policies. This phenomenon is usually accompanied or followed by regional malnutrition, starvation, epidemic, and increased mortality. Every continent in the world has...
as a consequence of the energy shortages
2008 Central Asia energy crisis
The 2008 Central Asia energy crisis is an ongoing energy shortage in Central Asia, which, combined with the severe weather of the 2007-08 winter and high prices for food and fuel, has caused considerable hardship for many. The abnormally cold weather has pushed demand up for electricity,...
. UN experts announced on 10 October that almost one-third of Tajikistan
Tajikistan
Tajikistan , officially the Republic of Tajikistan , is a mountainous landlocked country in Central Asia. Afghanistan borders it to the south, Uzbekistan to the west, Kyrgyzstan to the north, and China to the east....
's 6.7 million inhabitants may not have enough to eat for the winter of 2008-09.
Yemen
Food riots in southern YemenYemen
The Republic of Yemen , commonly known as Yemen , is a country located in the Middle East, occupying the southwestern to southern end of the Arabian Peninsula. It is bordered by Saudi Arabia to the north, the Red Sea to the west, and Oman to the east....
that began in late March and continued through early April, saw police stations torched, and roadblocks were set up by armed protesters. The army has deployed tanks and other military vehicles. Although the riots involved thousands of demonstrators over several days and over 100 arrests, officials claimed no fatalities; residents, however, claimed that at least one of the fourteen wounded people has died.
Projections
The UN (FAO)Fão
Fão is a town in Esposende Municipality in Portugal....
released a study in December 2007 projecting a 49 percent increase in African cereal
Cereal
Cereals are grasses cultivated for the edible components of their grain , composed of the endosperm, germ, and bran...
prices, and 53 percent in European prices, through July 2008. In April 2008, the World Bank
World Bank
The World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
, in combination with the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
, announced a series of measures aimed at mitigating the crisis, including increased loans to African farmers and emergency monetary aid to badly affected areas such as Haiti. According to FAO director Jacques Diouf
Jacques Diouf
Jacques Diouf is a Senegalese diplomat with the Food and Agriculture Organization of the United Nations. He has been serving as Director-General of FAO since January 1994...
, however, the World Food Programme
World Food Programme
The World Food Programme is the food aid branch of the United Nations, and the world's largest humanitarian organization addressing hunger worldwide. WFP provides food, on average, to 90 million people per year, 58 million of whom are children...
needs an immediate cash injection of at least $1700 million, far more than the tens of million-worth in measures already pledged. On 28 April 2008, the United Nations
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
Secretary-General Ban Ki-moon
Ban Ki-moon
Ban Ki-moon is the eighth and current Secretary-General of the United Nations, after succeeding Kofi Annan in 2007. Before going on to be Secretary-General, Ban was a career diplomat in South Korea's Ministry of Foreign Affairs and in the United Nations. He entered diplomatic service the year he...
established a Task Force on the Global Food Security Crisis http://www.un.org/issues/food/taskforce/ under his chairmanship and composed of the heads of the United Nations specialized agencies, funds and programmes, Bretton Woods institutions and relevant parts of the UN Secretariat to co-ordinate efforts to alleviate the crisis.
Actions by governments
IFAD is making up to US$200 million available to support poor farmers boost food production in face of the global food crisis.On May 2, 2008 U.S. President George W. Bush
George W. Bush
George Walker Bush is an American politician who served as the 43rd President of the United States, from 2001 to 2009. Before that, he was the 46th Governor of Texas, having served from 1995 to 2000....
said he was asking Congress to approve an extra $770 million funding for international food aid. On October 16, 2008, former US president Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
scolded the bipartisan coalition in Congress that killed the idea of making some aid donations in cash rather than in food.
The release of Japan's rice reserves onto the market may bring the rice price down significantly. As of May 16, anticipation of the move had already lowered prices by 14% in a single week.
On April 30, 2008 Thailand announced the creation of the Organization of Rice Exporting Countries (OREC) with the potential to develop a price-fixing cartel
Cartel
A cartel is a formal agreement among competing firms. It is a formal organization of producers and manufacturers that agree to fix prices, marketing, and production. Cartels usually occur in an oligopolistic industry, where there is a small number of sellers and usually involve homogeneous products...
for rice. This is seen by some as an action to capitalise on the crisis.
In June 2008 the Food and Agriculture Organization
Food and Agriculture Organization
The Food and Agriculture Organization of the United Nations is a specialised agency of the United Nations that leads international efforts to defeat hunger. Serving both developed and developing countries, FAO acts as a neutral forum where all nations meet as equals to negotiate agreements and...
hosted a High-Level Conference on World Food Security
High-Level Conference on World Food Security (2008)
The High-Level Conference on World Food Security was a conference held in June 2008, under the auspices of the Food and Agriculture Organization of the United Nations. Its formal name was "High-Level Conference on World Food Security: the Challenges of Climate Change and Bioenergy"...
, in which $1.2 billion in food aid was committed for the 75 million people in 60 countries hardest hit by rising food prices.
In June 2008, a sustained commitment from the G8
G8
The Group of Eight is a forum, created by France in 1975, for the governments of seven major economies: Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. In 1997, the group added Russia, thus becoming the G8...
was called for by some humanitarian organizations.
On October 23, 2008, Associated Press
Associated Press
The Associated Press is an American news agency. The AP is a cooperative owned by its contributing newspapers, radio and television stations in the United States, which both contribute stories to the AP and use material written by its staff journalists...
reported the following:
"Former President ClintonBill ClintonWilliam Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
told a U.N. gathering Thursday [Oct 16, 2008] that the global food crisis shows "we all blew it, including me", by treating food crops "like color TVs" instead of as a vital commodity for the world's poor.... Clinton criticized decades of policymaking by the World BankWorld BankThe World Bank is an international financial institution that provides loans to developing countries for capital programmes.The World Bank's official goal is the reduction of poverty...
, the International Monetary FundInternational Monetary FundThe International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...
and others, encouraged by the U.S., that pressured Africans in particular into dropping government subsidies for fertilizer, improved seed and other farm inputs as a requirement to get aid. Africa's food self-sufficiency declined and food imports rose.
Now skyrocketing prices in the international grain trade — on average more than doubling between 2006 and early 2008 — have pushed many in poor countries deeper into povertyPovertyPoverty is the lack of a certain amount of material possessions or money. Absolute poverty or destitution is inability to afford basic human needs, which commonly includes clean and fresh water, nutrition, health care, education, clothing and shelter. About 1.7 billion people are estimated to live...
."
Food price decreases
In December 2008, the global economic slowdown, decreasing oil prices, and speculation of decreased demand for commodities worldwide brought about sharp decreases in the price of staple crops from their earlier highs. Corn prices on the Chicago Board of TradeChicago Board of Trade
The Chicago Board of Trade , established in 1848, is the world's oldest futures and options exchange. More than 50 different options and futures contracts are traded by over 3,600 CBOT members through open outcry and eTrading. Volumes at the exchange in 2003 were a record breaking 454 million...
dropped from US $7.99 per bushel in June to US $3.74 per bushel in mid-December; wheat and rice prices experienced similar decreases. The UN's Food and Agriculture Organization, however, warned against "a false sense of security", noting that the credit crisis
Subprime mortgage crisis
The U.S. subprime mortgage crisis was one of the first indicators of the late-2000s financial crisis, characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages....
could cause farmers to reduce plantings. FAO convened a World Summit on Food Security at its headquarters in Rome in November 2008, noting that food prices remained high in developing countries and that the global food security
Food security
Food security refers to the availability of food and one's access to it. A household is considered food-secure when its occupants do not live in hunger or fear of starvation. According to the World Resources Institute, global per capita food production has been increasing substantially for the past...
situation has worsened.
By early 2011 food prices had risen again to surpass the record highs of 2008. Some commentators saw this as the resumption of the price spike seen in 2007-08. Prices had dropped after good weather helped increase grain yields while demand had dropped due to the recession.
See also
- 2000s commodities boom2000s commodities boomThe 2000s commodities boom is the rise in many physical commodity prices which occurred during the decade of the 2000s , following the Great Commodities Depression of the 1980s and 1990s...
- Agreement on AgricultureAgreement on AgricultureThe Agreement on Agriculture is an international treaty of the World Trade Organization. It was negotiated during the Uruguay Round of the General Agreement on Tariffs and Trade, and entered into force with the establishment of the WTO on January 1, 1995....
- AgribusinessAgribusinessIn agriculture, agribusiness is a generic term for the various businesses involved in food production, including farming and contract farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales....
- Agricultural effects of Peak oil
- Agriculture and petroleum
- Carrying capacityCarrying capacityThe carrying capacity of a biological species in an environment is the maximum population size of the species that the environment can sustain indefinitely, given the food, habitat, water and other necessities available in the environment...
- Commodity price shocksCommodity price shocksCommodity price shocks are times when the prices for commodities have increased suddenly. - 1971–1973 :At the time of the 1973 oil crisis the price of corn and wheat went up by a factor of three.- 2005–2008 :...
- Corn stovesCorn stovesA corn stove is a home heater that uses local renewable whole kernel shelled corn, wood pellets or multiple biomass as fuel....
- Environmental vegetarianismEnvironmental vegetarianismEnvironmental vegetarianism is the practice of vegetarianism or veganism based on the indications that animal production, particularly by intensive agriculture, is environmentally unsustainable...
- Food vs. fuel
- Food waste in the United KingdomFood waste in the United KingdomFood waste in the United Kingdom is a subject of environmental, economic and social concern that has received widespread media coverage and been met with varying responses from government. Since 1915, food waste has been identified as a considerable problem and has been the subject of ongoing media...
- Issues relating to biofuelsIssues relating to biofuelsThere are various social, economic, environmental and technical issues with biofuel production and use, which have been discussed in the popular media and scientific journals...
- In vitro meatIn vitro meatIn vitro meat, also known as cultured meat, is an animal flesh product that has never been part of a complete, living animal.This form of meat has been described, sometimes derisively, as "laboratory-grown" meat. In vitro meat should not be confused with imitation meat, which is a vegetarian food...
- Lists of disasters
- Malthusian catastropheMalthusian catastropheA Malthusian catastrophe was originally foreseen to be a forced return to subsistence-level conditions once population growth had outpaced agricultural production...
- OverpopulationOverpopulationOverpopulation is a condition where an organism's numbers exceed the carrying capacity of its habitat. The term often refers to the relationship between the human population and its environment, the Earth...
- Population dynamicsPopulation dynamicsPopulation dynamics is the branch of life sciences that studies short-term and long-term changes in the size and age composition of populations, and the biological and environmental processes influencing those changes...
- Risks to civilization, humans and planet EarthRisks to civilization, humans and planet EarthVarious existential risks could threaten humankind as a whole, have adverse consequences for the course of human civilization, or even cause the end of planet Earth.-Types of risks:...
- Slow FoodSlow FoodSlow Food is an international movement founded by Carlo Petrini in 1986. Promoted as an alternative to fast food, it strives to preserve traditional and regional cuisine and encourages farming of plants, seeds and livestock characteristic of the local ecosystem. It was the first established part of...
- Societal collapseSocietal collapseSocietal collapse broadly includes both quite abrupt societal failures typified by collapses , as well as more extended gradual declines of superpowers...
- SurvivalismSurvivalismSurvivalism is a movement of individuals or groups who are actively preparing for future possible disruptions in local, regional, national, or international social or political order...
- Sustainable agricultureSustainable agricultureSustainable agriculture is the practice of farming using principles of ecology, the study of relationships between organisms and their environment...
External links
- Food and Agriculture Organization FAO World Food Situation Portal (FAOFood and Agriculture OrganizationThe Food and Agriculture Organization of the United Nations is a specialised agency of the United Nations that leads international efforts to defeat hunger. Serving both developed and developing countries, FAO acts as a neutral forum where all nations meet as equals to negotiate agreements and...
) World Food Situation Portal - World Summit on Food Security 2009
- Reuters — Special Coverage: Agflation
- International Food Policy Research Institute - Research Area: Food Prices
- Research Brief: State of Food Insecurity & Opportunities in Muslim Countries - DinarStandard Research Brief
- Anti-Hunger Protests Rock Haiti. 2008. North American Congress on Latin America, by Jeb Sprague
- Crisis briefing on food and hunger from Reuters AlertNet
- The Food Bubble: How Wall Street Starved Millions and Got Away With It - video report with Frederick Kaufman by Democracy Now!Democracy Now!Democracy Now! and its staff have received several journalism awards, including the Gracie Award from American Women in Radio & Television; the George Polk Award for its 1998 radio documentary Drilling and Killing: Chevron and Nigeria's Oil Dictatorship, on the Chevron Corporation and the deaths of...