High Food Price Crisis

The food price spike of 2007-2008 pushed the total number of hungry people to over one billion - 1/6th of the world's population. Since then, food prices have continued an upward trend, reaching an all-time peak in January 2011. In developing countries, these increases mean millions have been pushed into poverty and malnutrition.

The Facts: 

Food prices change in response to such things as natural shocks, energy prices, biofuels demand, speculation, and trade policy. Oil price increases affect the price of fertilizers as well as the cost of shipping and transportation. The demand for biofuels such as corn ethanol has increased world demand for particular crops and changed crop distribution. Following the 2008 financial crisis, many investors shifted funds from mortgage markets to agriculture commodities creating another demand shock that increased commodity prices. Additionally, since the 1980s, many countries have moved from being self-sufficient to net food importers. This increases their exposure to supply and price risks instigated abroad.

 
The UN's Food and Agriculture Organization (FAO) reported a 45% increase in the world food price index during the 2008 food crisis. Wheat prices increased by 130% relative to 2007 levels. Similarly, soy prices went up by 87%, rice prices by 74%, and maize prices by 31%. While the short-term causes of the crisis include weather shocks, increased oil prices, speculation, and growing demand for biofuels, many experts believe trade agreements and agricultural commoditization set the stage for tremendous price increases. Similar reasons are cited for 2011 food crisis, which has sparked riots, protests, and strife around world.

 

What we are doing about it: 

Citizens can work together to change the economic climate that has produced the recent food crises. The Oakland Institute is committed to studying root causes of global food crisis and, through its advocacy and outreach activities, ensure that real solutions find their way into on-the-ground policy.

Frederic Mousseau, OI Policy Director, is the author of the Chapter III of the new World Disaster Report published by the International Federation of Red Cross and Red Crescent Societies (IFRC). This new report warns that the world's poorest people are at serious risk from rocketing food prices and volatile global markets.

Achieving Regional Integration: The Key to Win the Fight Against Hunger in West Africa assesses the relevance and potential of regional institutions and mechanisms in reducing hunger and undernutrition in West Africa - where chronic hunger remains pervasive - decades after the devastating droughts of the 1970s. The report analyzes the role regional institutions have in the fight against hunger and argues that, despite weaknesses, the existence and commitment of regional institutions is key.

High food prices in 2007-2008 threatened the livelihoods and food security of billions of people worldwide for whom getting enough food to eat was already a daily struggle. All over the world, individuals, civil society groups, governments and international organizations took action to cope with the crisis triggered by skyrocketing food prices.

The 2008 Food Price Crisis: Rethinking Food Security Policies, the latest in the G-24 Discussion Paper Series, is a timely report as member states of the United Nations come together 16-18 November, 2009 at the World Summit on Food Security in Rome, in an effort to find lasting solutions to world hunger. Intended to inform current policy discussions on how to address ever-growing food insecurity, the report contends that it is essential to examine the structural causes of growing food insecurity and to understand the dynamics that have propelled the food crisis.

July 1, 2009
The G8's extravaganza in L’Aquila, Italy this week (July 8-10, 2009) will showcase its efforts to combat world hunger. Reports sugest that the United States will announce a “significant” increase in funding for agricultural development aid and urge multi-year commitments from other G8 countries to reach a $15 billion target, that will be pooled in a global agriculture and food security trust fund administered by the World Bank. This move follows the G8’s admission of failure in tackling hunger at its first-ever farm conference in Treviso, Italy in April 2009.
December 1, 2008
Even though world commodity prices have somewhat stabilized since October 2008, the alarming increase in global food prices over the past thirty-six months continues to warrant immediate measures to address the failures in the global food system.
October 1, 2008
In recent weeks, several UN agencies have issued warnings against impending "food riots" because of the acute hike in prices of rice, corn, wheat, and other staples. Morocco, Guinea, Egypt, Mexico, Haiti, Yemen, Mauritania, Senegal, Indonesia, and Uzbekistan have already been rocked by mass protests. The World Food Program (WFP), which feeds 73 million people in almost 80 countries, has called upon donor governments to close the $500 million funding gap by May 1, 2008 or it may not be able to make its food aid commitments. Worst affected by resulting hunger are the poor, surviving on less then $2 a day, in developing countries.
September 30, 2008
Pasar Baru (New Market) at the outskirts of the city of Porong in East Java is a temporary home to many refugees from Lapindo Brantas land slide – a calamity that occurred more than two years ago. Approximately 2,000 people are using this enormous market site, just a few kilometers from the disaster area as their temporary refuge. Even inadequate compensation package of about US $6,500 is continuously delayed. Men, women and children live in unhygienic conditions, sleeping on what used to be the market stalls, sheltered from each other by plastic sheets. They have very limited access to potable water, medical care and electricity. Their hardship is extreme, but to many, it is symbolic of the situation in Indonesia today. For the country’s poor, Indonesia is plagued by an indifference towards the poor, lack of protection for the majority, stagnating salaries, and constantly rising fuel, land and food prices.
July 1, 2008
World prices for basic staples have skyrocketed―up 83 percent compared to three years ago―while hunger and destitution reaches record levels. Corn registered a 31 percent increase between March 2007-2008, rice 74 percent, soya 87 percent and wheat a whopping 130 percent. Policy makers and media continue to place blame for skyrocketing prices on a variety of factors, including high fuel costs, bad weather in key food producing countries, and the diversion of land to biofuels. Increased emphasis, however, has been placed on a surge in demand from emerging economies―for instance, from the middle classes of India.
May 1, 2008
Food prices have been increasing sharply since 2005. According to the World Bank, global food prices have climbed by 83% over the last three years. The real price of rice rose to a 19-year high in March 2008―an increase of 50% in two weeks alone―while the real price of wheat hit a 28-year high, triggering an international crisis.
April 1, 2008
UN agencies are meeting in Berne to tackle the world food price crisis. Heads of International Financial Institutions (IFIs), including Robert Zoellick, President of the World Bank (former U.S. trade representative) and Pascal Lamy, WTO’s Director General, are among the attendees. Will the “battle plan” emerging from the Swiss capital, a charming city with splendid sandstone buildings and far removed from the grinding poverty and hunger which has reduced people to eating mud cakes in Haiti and scavenging garbage heaps, be more of the same – promote free trade to deal with the food crisis?
Quick Facts: 

1.02 billion - people worldwide are undernourished

84% price increase - in wheat between July 2010 and 2011

87% price increase - in wheat between 2007 and 2008