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A new emerging global food crisis

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8 September 2010 13:41

The world experienced major unrest and riots in low- and middle-income countries when food prices sky-rocketed in 2007-2008. Now, only two years later, food prices are soaring again and the world is on the brink of a new global food price crisis.

Analysing the causes of the 2007-2008 food price crisis, my colleagues Alan Dupont and Mark Thirlwell write in an article for Survival that 'a key driver of the recent (2007-2008) price spike was a sharp increase in world prices of cereals'. This price spike was a result of a number of intertwined issues. On the demand side we find population growth, shifting diets (the nutrition transition), urbanisation, unsustainable lifestyles, and increasing private investor demand.

But the supply side also has its problems, with climate change, environmental pollution, soil depletion, and increasing fresh water scarcity. Over 2009, none of these issues were structurally addressed, which leaves many of the underlying problems unresolved and likely to trigger a new food price crisis at any time.

The recent climate-change-induced drought and catastrophic wildfires in Russia have seriously affected grain production, and led the Russian Government to introduce export bans to at least the end of this year. Consequently, food prices are once again surging and were up 5 per cent in August, but are, according to the UN's Food and Agriculture Organization (FAO), still 38 per cent below the peak of June 2008. Nonetheless, a 30% price increase for bread did spark riots in Mozambique last week.

It appears that this new food crisis could mark the start of what Dupont and Thirlwell call 'a new era of food insecurity'. The FAO does not want to set off any alarms prematurely, and carefully tries not to depict the recent sudden price spike as a 'crisis' or 'emergency'. This makes sense; the distress signals in the 2007-2008 crisis made food prices rise even more and caused a massive increase in foreign investment in agricultural land.

This race for the world's farmland will be the subject of a follow-up post.

Photo by Flickr user .SantiMB, used under a Creative Commons license.

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