High demand and low supply likely caused this dramatic spike. In addition, speculators prompted commodity prices and their transportation and production costs to rise by pushing oil prices to a peak of $150 in 2008.
Skyrocketing food prices are correlated with countless revolutions and strikes. Coupled with the volatility of broader political events, ruling political regimes are finding themselves face to face with a hungry, angry populace ready to revolt in street protests in Tunisia, Yemen and Egypt. These protests have resulted from political dissatisfaction, but also from anger over price increases for basic foodstuffs such as cooking oil, rice, cereals and sugar. Urban populations across the world are feeling the squeeze and are likely to revolt in the future as the foods they eat require more fuel to grow, produce, and transport.
Developing countries are the most vulnerable to food price increases. Americans spend an average of only 10 percent of their income on food; Indonesians spend 50 percent of theirs, Chinese 30 percent, and North Koreans 70 percent. Many developing countries have not meaningfully invested in efficient food production systems and are consequently stuck with poor storage facilities and a lack of pest control. Populations are booming in these countries, but local farmers are not producing enough food to give their people the required diet of 2,000 calories per day. The growth of the middle class–India’s middle class is already larger than the entire US population–will increase demand for energy intensive foods such as milk and meat.
Although there are growing movements to return to local production and increase food sovereignty, factors such as poverty, unstable governments and discriminatory business practices prevent local farmers in developing countries from accessing banks and loans to buy the appropriate seeds, credit and equipment necessary for profitable and sustainable food production.
In addition to shortcomings in food production, climate change is making farmland scarcer each year. In China, Australia and Africa, deserts are encroaching on arable lands. This year, a severe drought threatens to wipe out China’s wheat lands, and frantic hoarding is likely to occur as wheat prices continue to rise and importers speed up purchases to preempt inflation.
The US needs to change its approach to its farming sector, which currently exacerbates the phenomenon of rising global food prices. The ethanol fuel program, which uses corn for biofuel rather than food, is a particularly wasteful and ill-conceived program. Studies by Cornell University show that it takes 1.3 gallons of fossil fuel to make one gallon of bio fuel. “Fermenting corn for bio fuel is a folly,” says Larry Grill, Visiting Professor of Biology in the Joint Science Department at Pitzer College. “Without government subsidies, this inefficient use of corn could not exist. Corn should remain a food grown on good farmland. Instead, grasses such as miscanthus or switchgrass should be grown on less fertile land and be used for the plant bio fuels.”
Given that the US produces 40 percent of the world’s corn supply, ethanol fuel from corn raises the price of corn and corn products in other countries. “Instead, subsidies which encourage the production of cellulosic ethanol from non food sources and ethanol from other sources such as algae should be encouraged,” says Samuel Tanenbaum, Professor Emeritus of Engineering at Harvey Mudd College.
Thanks to government subsidies, American farmers are doing well in these hard times. According to the Department of Agriculture, Midwest farmers reported record high prices for their produce. This year, American farmers’ incomes are expected to increase by 20 percent.
Critics say U.S. food aid has little regard for structural problems in global food production and only benefits American farmers and multinational corporations. Only an estimated 4 percent of development aid goes to the rural poor who live on less than $1 per day. The timing and extent of food aid largely fluctuates with market conditions rather than the needs of developing countries. In the 1970s, U.S. cereal prices reached a record high. Because cereals were more commercially profitable to sell domestically, U.S. Food for Peace shipments dropped to less than one tenth of 1960s levels even while there were acute food shortages in developing countries.
Furthermore, critics charge that U.S. food aid focuses too closely on emergency response to crises but not to chronic hunger and food shortages. Food aid should go hand in hand with agricultural investment to small scale farmers. The Obama administration has already begun to change the paradigm of food aid with the “Feed the Future” initiative designed to help countries develop local solutions to food insecurity. The initiative created the Global Agricultural and Food Security Fund, which supports projects that favor innovative models of agricultural development most likely to have the greatest impact on the most vulnerable and poorest citizens.
Necessary changes need to be made. Presently, there is no agreement within the international community regarding the balance between large scale industrial food production and small farms that cater to local consumption. While the world economy has grown sevenfold in the past 50 years, the Earth has remained the same. Three Earths would be required to support the current human population if everyone were to adopt the Western lifestyle.
The world has grown dangerously complacent with agricultural innovation in the past fifty years, causing investment in agricultural research, especially on genetically modified organism (GMO) foods, to be shelved in the past decade. “GMO foods can help to achieve higher yields, and are both nutritious and sustainable foods,” says Grill. “There are hundreds of GMO plants that have been created at universities that will never be released because of the regulatory costs and the disinterest of the larger seed companies. For example, if ‘golden rice’ were available to the farmers around the world, pro-vitamin A (beta-carotene) would be more available and could substantially reduce the high numbers of deaths and blindness attributed to the lack of vitamin A….keeping GMO foods ‘off the table’ is a short-sighted move.”
Commodity price speculation must be better regulated and wasteful food consumption must be reduced. Environmentalists must build local farmers’ existing knowledge and promote the use of new technology. Governments across the world must take agricultural innovation seriously and find new and reliable ways to meet their citizens nutritional needs. To overcome rising global food prices, we urgently need to spark a second “Green Revolution.”