Skyrocketing food prices have triggered riots across the developing world and forced the world's largest food aid agency to confront a $500 million deficit. The media are focused on short-term consequences, but there are also concerns about the long-term forecast for global food security, poverty, and hunger.
A food line in Africa
Global food prices have been rising steadily since 2000, and are up almost 50 percent in the last year alone. Low-income countries that import more food than they export have been hit hardest. Thirty-seven countries—21 of which are in Africa—are in a food security crisis, according to the United Nations Food and Agriculture Organization (FAO).
The World Bank recently announced that the current food situation could push 100 million people into deeper poverty, undoing years of progress in the fight against global poverty and hunger. Poor households spend between 60 percent to 80 percent of their income on food, compared to only 10 percent to 20 percent in most industrialized countries.
FAO Food Price Index: February 2007 - January 2008
Source: FAO, 2008
What Are the Causes?
Despite several record-breaking harvests, world cereals production between 2000 and 2007 fell well short of consumption. The shortfall has forced the depletion of world grain stocks—a useful proxy for global food security—which are now at their lowest levels in 25 years.
There are several commonly acknowledged drivers behind the current food price spikes, including:
- High price of oil, manifested in increased fertilizer and fuel costs
- Increased demand for meat and dairy products in the developing world, which requires more grain be fed to livestock
- Diversion of crops for biofuel production
- Adverse weather conditions, such as the recent six-year Australian drought that decimated rice production
- Commodity speculation by investors, and
- Lack of access to improved inputs and markets amongst smallholder farmers in the developing world---particularly in sub-Saharan Africa---which limits their ability to react to the incentives created by increased demand, and
- Domestic policy responses to higher food prices in developing countries---such as export taxes, bans, or other restrictions---which exacerbate the problem.
These factors together have created a "perfect storm" that has driven food prices up. Although adverse weather conditions and commodity speculation may nudge food prices up in the short term, the rest of these drivers appear to be longer-lasting, and their effects are likely to be felt for several years.
Short-Run vs Long-Run Measures for Global Food Security
The FAO forecasts a 2.6 percent rise in cereal production in 2008, which would result in a record harvest of over two billion metric tons. If this prediction materializes—much depends on unpredictable weather—the current food crisis should ease somewhat. Even so, experts predict that prices will remain high at least through 2015, indicating that short-term policy interventions are necessary to combat hunger over the coming decade. These actions should include targeted safety nets for vulnerable populations, such as the urban poor; increased support for food aid agencies; and short-run trade policy measures, such as reducing tariffs and taxes on key staples.
Over the long-run, ensuring global food security will require greater effort. While most experts believe that the world's agro-ecosystems, coupled with improved technology, have the physical capacity to satisfy demand through the 21st century, this will not happen if current circumstances prevail. Agricultural trade barriers, environmental degradation, and the under-performance of African agriculture, energy efficiency, and the restoration of marginal lands must all be addressed.
Furthermore, climate change threatens to exacerbate food insecurity in the world's poorest regions. The Intergovernmental Panel on Climate Change (IPCC) predicts that rising temperatures will decrease yields in 40 developing countries, mainly in sub-Saharan Africa, and that three degrees Celsius of warming will increase the price of food by 40 percent. Without concerted global action to help vulnerable populations adapt to a warming climate, while also addressing the other drivers of food security described above, global hunger will not be tackled this century.
Photo by Peter Casier via Flickr
- BBC News: The Cost of Food, Facts and Figures
- Washington Post: UN Warns about High Fuel, Food Costs
- EBRD and the FAO: Fighting Food Inflation</a
- Can a Green Revolution Catalyze African Development?
- Global Biofuel Trends
- Agricultural Trade Reform and Poverty in the Developing World
- Searchable Database: Food Production Index