Staple foods are more expensive than ever. But with fears over a recession, will politicians and executives be too busy to address the problem at the World Economic Forum?
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A man carries bread in front of riot police during a protest in Cairo. In 2007, food shortages and high prices caused tensions in Mexico, India, and elsewhere (Photo: Reuters) |
Food prices have been on the decline for decades, but the tide now seems to be turning. While farmers and producers may profit from price hikes, consumers all over the world are seeing a growing share of their income go to simple staple foods.
Prices for wheat and corn reached record highs in 2007, while global food reserves reached a 25-year low. The UN Food and Agricultural Organisation reports food price inflation reached 18 percent in China last year, 13 percent in Indonesia and Pakistan, and 10 percent or more in Latin America, Russia, and India. Wheat doubled in price, and rice is 20-percent more expensive than in 2006.
The reasons for high prices are manifold. Milk prices have spiked in China, for example, because a growing middle class is discovering lattes and other dairy goodies. Indians must endure higher costs for rice, because of higher gas prices and transportation costs. And the rising cost of tortillas and many other products can be pinned at least partly on a booming U.S. ethanol fuel industry, which now consumes about a fifth of the U.S. harvest each year.
Perfect storm
"In the last year or so, food reserves have been hit by a "perfect storm" of factors, including the switch to biofuels, drought in Australia, floods in the UK, a badly affected wheat crop in Canada, many factors have contributed," says Sylvia Lee, co-author of the World Economic Forum's "Global Risks 2008" report. "We will not see food prices come down in the next year or two."
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Eight global risks that will be discussed at the 2008 World Economic Forum |
Global food security found its way onto the report's shortlist of four major, emerging risks, but it could take a backseat at the World Economic Forum to more immediate issues, such as a possible U.S. recession, tumbling financial markets, and geopolitical tensions.
Concerns over food prices, however, go beyond short-term economic problems like the current credit crunch. The UN predicts that world population will grow to around 9 billion people by mid-century, and with it the demand for food. Global warming will also become a driving factor.
"The combined effects of erratic weather linked to climate change, increased energy and input prices, growing demand in emerging markets like China and India, and increased demand for biofuels is pushing food prices up and poor people will suffer most," says Barbara Stocking, director of the development and relief organization, Oxfam, in Great Britain.
All these facts lead scientists to infer that the global warming we now experience is not a natural occurrence and that it is not brought on by natural causes. Man is responsible, they say. What did we do? Read more about the man-made causes of global warming in the following articles.
editor: Karin Lindinger
publishing date: April 30, 2007
