World Food Crisis

I have been doing some research on the world food crisis. It is amazing what can happen throughout the world with us knowing very little about it here in the U.S. Basically, millions of people around the world are going hungrier than before because the cost of nearly every food staple has risen dramatically in the last year. If someone went to the market with all they had before and bought a 10lb bag of rice, now they can only afford a 6lb bag of rice with the same amount of money.

Why is this happening? Well, it's quite complicated but here are some of the reasons from what I've read:

1. rising energy costs - the higher cost of fuel means higher transportation costs associated with delivering food. in addition, the cost of petroleum based fertilizers has skyrocketed. finally, the increasing use and demand for bio-fuels (i.e. corn based ethanol) is taking away from the supply of food.

2. the weather factor - drought in places like Australia (one of the world leaders in wheat production) has had a major impact on supply levels. also, many tropical areas in the world are experiencing shorter growing seasons due to warmer and drier conditions. this is a factor we have little to no control over though many would point to the environmental effects of Global Warming.

3. increasing demand -
a.) part of the current food crisis is in response to positive developments. over the last several years many sites are reporting that millions have escaped poverty, especially in population heavy countries like China and India. this is good news! thankfully, many of these people are able to add meat and dairy products to their diets. that is good but it means the quantities of these foods gets spread thinner and demand rises.

b.) the corollary to this is that as demand for meat rises on a global level the demand for grain to feed livestock rises as well. often debated, it take somewhere between 4-16 lbs of grain to produce 1 lb of beef. and chicken requires roughly half the amount of beef though still substantial amounts.

4. governmental policies (wading into deeper and more controversial waters) -
a.) government subsidies in many countries encourage overproduction and distort prices. this makes it impossible for farmers in other countries to sell their goods at the cost of production, let alone for a liveable wage. this forces these countries to become dependent on imports (presumably cheaper) to feed their populations. when world food prices rise however, the infrastructure to produce their own food doesn't exist and they are dramatically affected.

b.) some grain producing countries enact policies prohibiting certain exports when global food prices rise. they do this understandably to keep domestic food prices under control. what that means for the rest of the world though is that less food is in the markets and so as demand rises (or even remains) supply decreases relatively and prices go up.

c.) countries have to make policy decisions on where to focus their development assistance. underinvestment in agricultural productivity is contributing to supply levels not keeping up and therefore higher prices.


So what can we do?