Food Price Crisis
Food prices have been increasing sharply. According to the World Bank, global food prices have climbed by 83% over the last three years. The real price of rice rose to a 19-year high in March 2008, an increase of 50% in two weeks alone while the real price of wheat hit a 28-year high, triggering an international crisis.
The increase in food prices is impacting the most vulnerable – the poor are particularly affected, as their diets rely on the very staples that are becoming too costly: cereal grains, cooking oil, and dairy. However, the crisis is being felt not only by the poor, but is also eroding the gains of the working and middle classes, while investors and speculators are busy moving financial capital into food commodity markets after the housing bubble burst in 2007. In the meanwhile International Financial Institutions are promoting further trade liberalization and technological fixes such as the Green Revolution to boost agricultural production.
This Policy Brief examines the impact and causes of the soaring food prices and explores the viability of solutions recommended by the World Bank, WTO and the IMF to deal with growing hunger. It then makes own recommendations on how to stave off the starvation.