Rising Food Prices

Rising Food Prices

By Dr Arvind Kumar

According a recent World Bank press release, world food prices have jumped 37 percent from a year ago. It has pushed an estimated 44 million more people into poverty. As countries around the world recover from weak economies, political instability or from natural disasters, a central concern should be the price, safety and availability of food. According to the Food and Agriculture Organization (FAO) of the United Nations, the global food price index, a measure of the international prices of a basket of food commodities, hit the highest level in February this year since records were first kept in 1990. That eased a bit in March, but the index still stood at over double its level in 2004. The average price of wheat this year, $346 a ton, is twice the price in 2005. Part of that comes from increased demand, but another part connects to the rising price of energy.

Each rise in prices falls heavily, and unfairly, on the poorest 1.2 billion people living below the poverty line of $1.25 per day, who spend most of their money on food. According to Nobel laureate Amartya Sen, past famines were caused less by actual shortages of food than by the loss of purchasing power by the poor. There is need to focus social assistance and nutritional programs on the poorest people, invest more and better in agriculture, address climate change and remove grain export restrictions, which can increase prices in the importing countries. Relaxing biofuel mandates when food prices exceed certain limits should also be on the agenda because this could reduce the demand for food crops.