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The truth behind rising food prices
Categories: News

The truth behind rising food prices

17 August 2011, 13:41
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Mainstream media coverage of rising food prices has been perpetuating the same myth over and over again: China and India’s increased consumption is to blame for the rise in food prices. However, a new report issued by the FAO last month goes a long way towards debunking the notion that the Asian Giants are largely responsible.

A multitude of factors
It might seem logical at first glance – these are the world’s fastest growing populations, whose emerging middle classes are using their increased purchasing power to consume more meat, grains, and other staple commodities such as sugar, rice and oil. But this eye-opening report demonstrates that there are many influences at work here. A convergence of factors such as irresponsible speculation in commodities markets, depleted stocks and severe weather conditions (to name just a few) caused the exceptional 98 percent rise in wheat prices in 2008.

These are not just statistics. Citizens of developing countries spend up to 70% of their income on food, and drastic fluctuations like these can easily tip the balance towards poverty and malnourishment.

Support for biofuels: time for a rethink?
So if China and India aren’t to blame, then who is? According to the report, one of the most significant factors in price fluctuations is the ever-expanding biofuels industry. The US and EU are now jointly responsible for diverting, through subsidies, an incredible 40% of US corn production and two thirds of vegetable oil production in the European Union away from food consumption and towards biodiesel. They receive combined subsidies worth billions of dollars, distorting markets and undercutting producers in the developing world.

The report emphasises that this support for biofuels needs to be drastically rethought if we are to have any hope of preventing life-threatening price increases in the future. To get a better idea of the challenges at hand, you can read the full report here.

Zeena Price is a Copywriter for Fairfood International.

Photography: Dey (CC License)

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