Global justice: Why global food prices rise, in tandem with global poverty and hunger

Posted: June 28, 2011 in society
Tags: , ,

“Global food prices are at record highs, driven by huge increases in the price of wheat, corn, sugar, dairy and oils. A complex mix of factors simultaneously boosting demand and constraining supply means the recent price surges might be just the beginning”. Below is a list of some of the main factors on the demand and supply side:

DEMAND

  • continuing rapid population growth, especially in so-called developing countries, means rising demand for food (we’re close to reaching 7 billion people on this planet this year, with 9.5 billion predicted by 2050, which will be a 300% increase on 1950s’ figures)
  • rising prosperity, especially in Asia and Brazil: wealthier people eat differently compared to poorer people, and they eat more and are willing and able to pay more for food; meat and dairy consumption has been growing rapidly and dietary pattern developed in Western countries over centuries have shifted in developing countries in decades
  • the arrival of new investors in food commodity markets (including large pension funds), being attracted by higher profits as a result of higher food prices

Supply

  • ever-increasing production of biofuels: a result of peak oil, rising fossil fuel demands from growing economic power houses like China, India and Brazil, climate change concerns, misguided and unsustainable government policies and economic interventions, profiteering by energy companies and other factors that made energy prices shoot up; all have led to a reduction in available areas dedicated to growing food and diverting millions of tons of cereals away from food markets
  • climate impacts, having led to weather related crop destruction over the last few years in main food producing countries like Russia, the US and Australia
  • the so-called Green Revolution that started to deliver increasing outputs since the 1960 is coming to the end of its life cycle
  • urbanisation and pollution are contributing to a growing scarcity of land and water; it is predicted that by 2030, 47% of the world’s population will be living in areas under water stress if current trends aren’t being reversed (and that will not just affect to so-called developing world)
  • government policies, especially restrictions and bans on food exports having negative consequences on food availability

Interesting times ahead, not just for food supply but also for whatever exists as world peace …

Source: SMH

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