Rising food prices — taking care of customers and rulers

At first glance, not much unites the revolution in Egypt, the fight against drought in China or a political campaign in Pakistan. It turns out, however, that all of these have one thing in common, namely the sharp rise in global food prices — our radio commentator writes Christian Caryl.

Food prices have soared to a level last fixed in 2008. If the current growth trend continues, many of today's consumers who will begin to remember the old days with nostalgia. Consequence of the increase in prices is political instability. Experts agree that the rise in food prices in countries like Egypt, where the average person spends on food close to 40 percent of his salary, was the main factor of political upheavals.

"Food prices are at dangerous levels"

The World Bank recently released data from which it follows that since last June by high food prices have resulted in different countries to zgalennya 44 million people. "Food prices are at a dangerous level" — warns World Bank President Robert Zoellick.

In today's world of interconnected markets, a problem in one place to quickly respond to the other. Arable land in Russia, which is one of the major producers of wheat in the world, were badly damaged last year's record-breaking fires. The wheat harvest in Ukraine, also suffered last year from the heat, fell by 15 percent. Both countries have responded to the situation by introducing a ban on wheat exports, and this is only exacerbated the shortage of this product on the market. As a result, global wheat prices over the period from June 2010 to January of 2011 have doubled. According to the World Bank, over the last six months of wheat has risen in Kyrgyzstan by 54% in Bangladesh, 45% and 33% of Mongolia.

The growth in demand for products associated with the expansion of the middle class

As usual, the poorest of the poor — those that spend most of their income on food — are suffering from rising prices the most. Governments around the globally trying to support the poorest subsidies. But such assistance is usually not enough. In Pakistan, for example, the authorities dafinansovvanyya products supplied in a special "cheap shops", apart instantly, barely having time to be available for sale.

The rapid growth of global demand for food is associated among other things with the growth of the middle class in countries such as China and India. In this case, the amount of land under crops advozhanyh remains unchanged, do not give proper results and efforts to increase agricultural productivity.

Lingering effects of the financial crisis complicates aid

The food crisis in the world has a lot of side effects. The President of Indonesia has recently used the speech to urge compatriots grow chili peppers in their backyards. The Iraqi government has revised its plans to buy new fighter jets, finding start up money to increase grain reserves. In the territories devastated by last year's catastrophic floods, Pakistani politicians handing out campaign material with packets of seeds.

Lingering effects of the financial crisis complicates aid to those who need it in the first place. In 2009, the leaders of the "Big Twenty" program set up the World Food Security — an ambitious project to help the poorest countries. But so far, the implementation of this program has been allocated only a small fraction of the declared assets.

China, India and Brazil have significantly increased investments in agriculture

Experts emphasize that solutions to the global food crisis, countries must invest in improving agricultural productivity. To resolve the crisis, also needs to improve weather forecasting and information sharing of food resources.

Meanwhile already there are encouraging signs. Prices of maize and rice — the most important products in Africa and Asia — remain relatively stable — in part because of all the recent major exporters such as Vietnam and Thailand, refrained from imposing a ban on their export. A number of countries, particularly China, India and Brazil, have substantially expanded investment in agriculture. This, experts agree, can not bring a positive change in the coming years.

Like this post? Please share to your friends: