OBSERVER OPINION |
Feeling the crunch of food prices
Increasing prices at the grocery store – oh so annoying here – are symptoms of a much larger crisis around the globe.
At home, skyrocketing prices for staples such as corn and wheat have been a boon for grain farmers, who’ve suffered through years of low returns. Those on the livestock side, where corn is a major feedstock, haven’t fared so well, however.
For consumers, the past year has seen double-digit hikes on a variety of items at the supermarket, from cheese to pasta. Low-income earners have felt the pinch, but we’ve been sheltered from the kind of impacts seen elsewhere, particularly in the developing world.
Climate change, biofuels and political upheaval have played a role in reducing outputs and increasing the cost of the food we do produce. In North America, where food takes up 10 or 20 per cent of our incomes, the results have been noticeable; in countries where food takes up 60, 70 or even 80 per cent of earnings, the changes have been catastrophic.
While governments in the West worry about propping up investments rather than dealing with the causes and effects of poor food policies, their counterparts in the developing world are increasingly worried about unrest
In the past month, 20,000 textile workers in Bangladesh protested in the streets over soaring food prices, demanding higher wages. Unions and shopkeepers held a two-day general strike in the West African nation of Burkina Faso to protest rising prices. Several hundred demonstrators marched on parliament in Phnom Penh, Cambodia to protest food price hikes. The cost of a kilogram of rice has risen to $1 in a country where the average income hovers around 50 cents a day.
Similar demonstrations, strikes and clashes have taken place in Egypt, Bolivia, Peru, Mexico, Indonesia, the Philippines, Pakistan, Uzbekistan, Thailand, Yemen, Ethiopia, and throughout most of sub-Saharan Africa.
Even normally callous organizations such as the World Bank and the International Monetary Fund have taken note, though not likely on humanitarian grounds.
The World Bank last month noted there are 33 countries where social unrest could develop due to rising food prices.
At a media briefing last month, an IMF official noted, “If food prices go on as they are today, then the consequences on the population in a large set of countries, including Africa, but not only Africa, will be terrible. Hundreds of thousands of people will be starving. Children will suffer from malnutrition, with consequences for all of their lives.”
The UN Food and Agriculture Organization found that between March 2007 and March 2008, prices of cereals increased 88 per cent, oils and fats 106 per cent, and dairy 48 per cent. The FAO food price index as a whole rose 57 per cent in one year.
Another source, the World Bank, says that that in the 36 months ending February 2008, global wheat prices rose 181 per cent and overall global food prices increased by 83 per cent. The most popular grade of Thailand rice sold for $198 a tonne five years ago and $323 a tonne a year ago. By the end of April, the price hit $1,000.
Such increases have potentially catastrophic outcomes for some 2.6 billion people on the planet living on less than $2 a day. Many of them simply cannot afford to eat. It’s no wonder the protests and civil unrest are becoming more pronounced.
At home, skyrocketing prices for staples such as corn and wheat have been a boon for grain farmers, who’ve suffered through years of low returns. Those on the livestock side, where corn is a major feedstock, haven’t fared so well, however.
For consumers, the past year has seen double-digit hikes on a variety of items at the supermarket, from cheese to pasta. Low-income earners have felt the pinch, but we’ve been sheltered from the kind of impacts seen elsewhere, particularly in the developing world.
Climate change, biofuels and political upheaval have played a role in reducing outputs and increasing the cost of the food we do produce. In North America, where food takes up 10 or 20 per cent of our incomes, the results have been noticeable; in countries where food takes up 60, 70 or even 80 per cent of earnings, the changes have been catastrophic.
While governments in the West worry about propping up investments rather than dealing with the causes and effects of poor food policies, their counterparts in the developing world are increasingly worried about unrest
In the past month, 20,000 textile workers in Bangladesh protested in the streets over soaring food prices, demanding higher wages. Unions and shopkeepers held a two-day general strike in the West African nation of Burkina Faso to protest rising prices. Several hundred demonstrators marched on parliament in Phnom Penh, Cambodia to protest food price hikes. The cost of a kilogram of rice has risen to $1 in a country where the average income hovers around 50 cents a day.
Similar demonstrations, strikes and clashes have taken place in Egypt, Bolivia, Peru, Mexico, Indonesia, the Philippines, Pakistan, Uzbekistan, Thailand, Yemen, Ethiopia, and throughout most of sub-Saharan Africa.
Even normally callous organizations such as the World Bank and the International Monetary Fund have taken note, though not likely on humanitarian grounds.
The World Bank last month noted there are 33 countries where social unrest could develop due to rising food prices.
At a media briefing last month, an IMF official noted, “If food prices go on as they are today, then the consequences on the population in a large set of countries, including Africa, but not only Africa, will be terrible. Hundreds of thousands of people will be starving. Children will suffer from malnutrition, with consequences for all of their lives.”
The UN Food and Agriculture Organization found that between March 2007 and March 2008, prices of cereals increased 88 per cent, oils and fats 106 per cent, and dairy 48 per cent. The FAO food price index as a whole rose 57 per cent in one year.
Another source, the World Bank, says that that in the 36 months ending February 2008, global wheat prices rose 181 per cent and overall global food prices increased by 83 per cent. The most popular grade of Thailand rice sold for $198 a tonne five years ago and $323 a tonne a year ago. By the end of April, the price hit $1,000.
Such increases have potentially catastrophic outcomes for some 2.6 billion people on the planet living on less than $2 a day. Many of them simply cannot afford to eat. It’s no wonder the protests and civil unrest are becoming more pronounced.