Price rise: blame it on change in environment
Food prices have been falling from the Green Revolution days in the 1970s. But in the new millennium, income growth, climate change, high energy prices, globalisation and urbanisation are all converging to transform food production, markets and consumption. As a result of this new food equation, global demand and prices are likely to rise, threatening the livelihoods and nutrition of poor people in developing countries, says a report titled ?The World Food Situation: New Driving Forces and Required Actions? from the International Food Policy Research Institute (IFPRI).
According to IFPRI director-general Joachim von Braun, food prices have been steadily decreasing since the Green Revolution, but the days of falling food prices may be over. Surging demand for food and fuel have recently led to drastic price increases. Aggregate prices for grains rose from $100/tonne in 2000 to $153 in 2006 and went even higher in 2007.
The prices are not likely to fall in the foreseeable future. Global food consumption currently exceeds production, resulting in the depletion of global stocks of grains, such as wheat and rice, and increasing market uncertainty and price variability. Without a dramatic boost in agricultural productivity, prices will continue to increase, the report says.
Climate change will also have a negative impact on food production, compounding the challenge of meeting global food demand and potentially worsening hunger and malnutrition among the world?s poorest.
The report says, many regions of the developing world, especially China and India, have seen high economic growth in recent years. Together with an expanding urban population, income growth is altering spending and consumer preferences.