A Nutshell Guide to the Global Food Crisis

A Nutshell Guide to the Global Food CrisisGlobal food prices are spiralling out of control, particularly in the developing world. The trading price of a bushel of corn skyrocketed over 75 percent between summer 2007 and summer 2008, while rice went up 70 percent in the same period. Internationally, wheat prices at the start of 2008 were 83 percent higher than the year before.

In many countries, escalating prices have caused civil unrest, and the food crisis has plunged an additional 75 million more people into hunger globally, according to the UN Food and Agriculture Organization.

Here, the rise in prices has been minimal. According to Statistics Canada, overall consumer prices for groceries rose 1.2 percent in the 12 months ending April 2008, while they climbed 7.1 percent in the European Union and 5.9 percent in the U.S. Increased grain and fuel costs make it likely we’ll see increases on the horizon. Here’s why:

  • Adverse weather is affecting crop harvests in Asia, Africa, South America and, yes, North America. The culprit: climate change.
  • The booming new middle class of China and India now want — and can afford — resource-gobbling foods like meat and dairy, which use copious amounts of land, water and grain to produce.
  • Demand for corn-derived biofuel has increased. Biofuels ate up 25 percent of America’s corn production last year, and it’s estimated to rise to 33 percent. It is thus less accessible as livestock feed and human food.
  • Wheat is increasingly being diverted to livestock feed, replacing corn.
  • Cutbacks in funding from the “have” countries to the “have-nots” in the field of crop research and aid are resulting in lower crop productivity in the form of crops lost to disease or insect infestation.
  • The U.S. financial crisis has caused a tightening of credit worldwide. This affects governments in the developing world, as well as individual farmers who need microloans to finance their operations. (Psst: you can help by loaning your own money — as little as $25! — at kiva.org.)
  • Additionally, aid agencies and NGOs, including heavyweights Oxfam and World Vision, are experiencing a fall-off in corporate donations.
  • Producer nations like Russia, India, China, Vietnam and Egypt are implementing export embargoes, taxes and restrictions on staple crops to keep them for the domestic market, tightening the supply elsewhere.
  • Rising oil prices are resulting in rising fertilizer costs, making it harder for small farmers in poorer countries to improve their yields.
  • Rising fuel costs also mean rising transportation costs — costs passed on to the consumer in food prices.

Keep reading to find out ways we can help.

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