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THIS WEEK, OXFAM Ireland highlighted the potential for a global food crisis. The combination of droughts in west Africa and the US as well as the effect of biofuel production on food prices, among other factors, have led to a price hike of up to 50 per cent in world food staples prices since June.
Naturally, this rise – as noted in the United Nations FAO price index – is going to hit the poorest areas of the world hardest. The FAO index found that the international price of a basket of food commodities increased 6 per cent in July (this is after three months of a decline in price).
Countries and states reliant on very basic food staples are particularly vulnerable to price fluctuations – the global futures price of corn has increased by 45 per cent, soybeans by 30 per cent and wheat by 50 per cent since June, according to the World Bank.
Oxfam Ireland’s Chief Executive Jim Clarken said:
When food accounts for about 50 per cent of total household spending in many developing countries, the impact that this has on poverty rates is enormous.
The development of small-scale agriculture operations, in which smallholder farmers grow and keep their own food, is vital, he said.
These are some areas that are being particularly badly hit by the price pressure on food staples:
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The article should mention the Goldman Sachs/Deutsche Bank among a few there as a major contributing factor. Johann Hari has discussed this before. Back at the end of 2006 global food prices suddenly went through the roof, with some staples rising 200/300%. It want because of shortages, in fact there was an excess of food staples that year and less demand. It was all purely down to future trading and bets by the banks in the staples market. This was the first time they had done this on a large scale and happened as a result of the financial crisis as the banks had to look to other markets for risk beside the financial ones. It would take surprise me one bit if we have the same situation again.
Money printing (as predicted) has also been a driver of food price inflation in developing countries.
http://georgewashington2.blogspot.ie/2011/01/quantitative-easing-is-causing-food.html?m=1
Where to begin!?
The whole system is arseways. The World food supply is controlled by too few ( who have their claws controlling the market place like puppet masters) switching to biofuel production for sake of food. Biofuel doesn’t look like its going to work, not only because it digests food production , but also because it’s carbon footprint negates the benefits. The politicians need to stop this straight away. It’s a commercial joke, a false economy. There are people dying while the lobbyists fight for the Fat Cats. Grrrrrrrrrr!
Progress using algae for biofuel production showing much higher yields than from traditional crops and on land not suitable for arable purposes.
http://news.mongabay.com/2008/0815-algae.html
Sean Im a big fan of this algae technology but its a long way from a solution. Its very expensive & requires a lot of infrastructure. There are still problems with this technology when its exposed to the elements & while there is a solution to it, it may put fuel prices as high as $40 liter.
@ Mjhint. I wouldn’t write off algae technology just yet. Significant advances occur periodically in the processing of algae.
While, I believe it is inappropriate for governments to invest in energy markets as it is basically little more than gambling, I don’t believe it is appropriate for politicans to attempt to stop investment or research in developing biofuel technologies as unless an alternative is found to fossil fuels- severe food price inflation will become an issue either way.
http://erstarnews.com/2012/06/29/teen-inventor-and-scientist-explores-biodiesel-
Large scale farming will only make things worse. Combine this with huge companies like Momsanto aggressively suing small farmers and controlling the rights to crop itself, it spells disaster.
It’s frightening that this can occur in the 21st century, with all the technology and the acceptance of social/economic rights under the human rights umbrella. There is something seriously wrong with a global financial system which hasn’t changed since food was exported from this country during the “famine”.
That is very disturbing. However, even with the US drought, this year’s global corn crop and global grain output is second largest in history according to USDA’s supply and demand report. Also, the article points to grain use for biofuels, but the U.S. ethanol industry is projected to use 2.90% of global grain supply in 2012/13, the lowest in five years.
have your say