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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.

Overview

Food prices change in response to such things as climatic shocks, energy prices, demand for biofuels, speculation, and trade policy. Oil price increases affect the price of fertilizers as well as the cost of shipping and transportation. Demand for biofuels such as corn ethanol increases world demand for particular crops and changes crop distribution. Following the 2008 financial crisis, many investors shifted funds from mortgage markets to agriculture commodities creating a demand shock that increased commodity prices. Additionally, since the 1980s, many countries have moved from self-sufficiency to being 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 the 2011 food crisis, which has sparked riots, protests, and strife around the 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 crises and, through its advocacy and outreach activities, ensuring that the right solutions find their way into on-the-ground policy.

Media

Revisiting Rome

Development and Cooperation

Promises Are No Substitute for Food

IPS - Inter Press Service

Free Market Famine

Foreign Policy In Focus

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