Rising Food Price A Global Concern

Mousumi Roy

The issue of rising food Prices across the globe is a matter of great concern, and is being discussed on many international forums. Studies show that, since households in developing countries spend most of their income on food items, rising food prices affect them significantly more than households in developed countries.

The rise in food prices is not only due to higher production costs and shortages. It is also a result of poor storage, wastage and improper distribution as well as corruption in managing food policies. It goes without saying that famine, drought and political stability in many countries also have great impact on the rise in global food prices. Speculation is another important reason. infographs on the role played by banks and other financial Institutions in speculative details frequently suggest adverse impacts on global food prices.

Furthermore, global demographic patterns, urbanization and industrialization play their own role in food habits. The resulting high usage of staple foods globally is the combined impact of all these factors. In developing countries, poor food import policies and incorrect political decisions are, without doubt, damaging livelihoods and employment of poor households. Villagers, as local producers, are being deprived of reasonable prices. The protection of local agricultural systems to enhance rural employment should be incorporated in the framework for food security in poor and developing nations. Hence, it is imperative for every country to focus on long term planning to attain stable food self-sufficiency, based on optimum utilization of its own unique natural resources.

In recent times, food security issues have assumed critical importance. Undoubtedly, food price volatility and its adverse impacts are being felt all over the world, more so in the developing countries. At global forums attempts are being made, though not adequately. Some corrective measures are being initiated to address the global food crisis. The FAO has emphasized repeatedly to the world community that excessive financial speculation in derivative markets comprising food grains and other cereals is having a devastating impact on the people's lives. Concerns have been raised for falling world food production. The need for increasing the production of major food corps has been emphasized. Food prices, including the prices of all agricultural commodities, were fairly stable for four decades since the sixties. However, beginning in 2007, excessive fluctuations became the norm as commodity trading in derivatives picked up. Other concomitant factors like wastage, inefficient distribution and other systemic deficiencies in the entire food chain have continued to add to the crisis.

It is important to understand the nature, causes, impacts and responses to such excessive volatility, including the complexities in inter-relationships between agricultural and financial and energy markets. Food price inflation has been a constant source of worry for the policy makers in developing countries and has been adding to the overall inflation in almost everywhere. This has had greater impact on poorer populations who spend up to 75 percent of their income on food. More importantly, the volatility in food prices, declining food production and allowances granted to market forces to have a field day, have had significantly detrimental impact on the global fight against hunger, malnutrition and poverty. As a consequence, many parts of the world have witnessed social and political unrest arising from food shortages and burgeoning prices of food grains.

The debate (or dilemma) of food versus fuel, an embodiment of the risks of diverting farmland or crops for biofuels production, is well known. It works as a detriment to food supply on a global scale. It is strongly believed that large increases in biofuels production in the United States and Europe are the main reason behind the steep rise in global food prices. Urbanization and industrialization (mostly in the developing and emerging economies) are encroaching into the areas meant for farming, adding to the crisis. All these complexities call for multi-pronged policy initiatives.

Many experts feel that agriculture and food issues need to be looked at in a more holistic manner with particular attention to the sustainable use of scarce land and water resources, livelihoods of poor farmers, along with concerns for ecology and the environment, with an increasing role of science and technology in the transformation of agriculture. It is imperative that farmers be given improved and attractive minimum support prices as a means for sustaining agriculture. The world over, agriculture is in peril and is sustained with governmental support. That must continue. Policy parameters must be tightened so as to make speculative trading in commodities unsustainable, thus curbing its exploitative tendencies. Of course, this is easier said than done.

To attain a high GDP, agriculture in the developing countries needs to grow at or above 4 to 5%, with sustained investment in irrigation. The area under irrigation must expand beyond the present dependence on rain-fed farming. Most of the developing countries have a significant percentage of people dependent on agriculture. There is an increasing requirement to creating many more civil job works to encourage people to move away from farming and farm labor. Food security for the poor is imperative to stem hunger and malnutrition among the most vulnerable.

More efficient food procurement, storage and distribution policies that can respond to the market quickly are required urgently to guard against food prices collapsing to the point that it hurts the farmer and removes his incentive to produce more, or rise to the extent that poor consumers are hurt. Finally, the middle and wealthy class in India and other similarly placed countries must address the question of whether it is the correct for the urban people to obtain their produce at some of the lowest prices in the world, depriving the farmers of their dues.

Global poverty, death from hunger are shameful for any community – there must be effective schemes and active initiatives to fight the obstacles to restore the fundamentals of survival...