Rising Food Prices

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Rising Food Prices

Introduction:

Food prices have been on the rise and have become a global issue. Prices have soared over the past year and a half and threaten to go up further if issues are not addressed immediately. Below is a look at how prices have been over the past year.

Figure 1. FAO Food Price Index: February 2007 - January 2008

Source FAO, 2008

In this project, we attempt to find out the causes for this price rise, the trends of the rise and the effects that this rise has had on us.

Causes:

1. High demand for food in developing countries:

The growing world population is demanding more and different kinds of food. Rapid economic growth in many developing countries has pushed up consumers' purchasing power, generated rising demand for food, and shifted food demand away from traditional staples and toward higher-value foods like meat and milk.

Meat also consumes food resources in a shockingly inefficient way: it takes 8kg of grain to produce 1kg of beef, and 4kg for pork. But each kilo of grain may need a ton of water. And fuel oil is needed throughout the process, to fertilize the grain, pump water and to transport it.

Economic boom in India and China: India and China account for 1/3 of the world population and these countries have seen a great economic boom in the recent years and this partially is attributed to the rising costs. Around the world, people have eaten more as they grew richer. This phenomenon is called Nutritional transition. Hundreds of millions more people are now rich enough to eat meat compared with 10 years ago, with meat consumption in China more than doubling over the past 20 years.

2. Poor Weather in Various countries

There has been drought in various countries in the world whi...

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...earch and extension, rural infrastructure, and market access for small farmers. Rural investments have been sorely neglected in recent decades, and now is the time to reverse this trend. Farmers in many developing countries are operating in an environment of inadequate infrastructure like roads, electricity, and communications; poor soils; lack of storage and processing capacity; and little or no access to agricultural technologies that could increase their profits and improve their livelihoods. Recent unrest over food prices in a number of countries may tempt policymakers to put the interests of urban consumers over those of rural people, including farmers, but this approach would be shortsighted and counterproductive. Given the scale of investment needed, aid donors should also expand development assistance to agriculture, rural services, and science and technology.

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