Food for thought
You probably don’t need me to tell you that food prices are going up. You have probably noticed that the contents of your shopping basket cost more than they did this time last year. Food price inflation is now 5%, and may soon start to impact on the overall rate of inflation.
It’s not just student food budgets that are feeling the pinch. Indian restaurants (and we have a few of them in Selly Oak) are affected by the rising cost of basmati rice. Worldwide prices are increasing on an even bigger scale than in Britain. Flour prices in Pakistan have doubled. In Mexico, tens of thousands marched last year protesting against the cost of tortillas. Tortillas are the main staple food for the poor in Mexico, and their price has quadrupled in recent years. In Italy there were the so-called “pasta riots”, and food riots have also happened in places such as Yemen, Senegal and Morocco. According to the United Nations’ Food and Agriculture Organisation (FAO) 37 countries are facing food crises. The FAO’s food price index has risen 40% in the past year, which has catastrophic implications for some of the world’s poorest. Put simply, the World Bank reckons that for each 1% rise in food prices, the calorie intake of the poor drops by 0.5%.
It is also the most vulnerable in the UK who are most affected by soaring food prices. Those on fixed incomes, such as the elderly on pensioners and those on benefits, are more likely to suffer. This is another version of Sod’s law: if something bad is going to happen, invariably those most affected are those in the worst position to cope.
Food prices are rising for a number of reasons. The high price of oil is obviously a factor. With a barrel of oil now costing over $90 a barrel, farming costs, such as transportation, are increasing. High oil prices are also leading countries, including the USA, to convert grain into fuel for cars rather than for food. In countries such as India and China, scarce water supplies are being used by the rising populations, rather than on agriculture. The Indians and Chinese are also eating more meat, which requires more grain to feed animals. Food production has always been affected by droughts and floods, but now climate change means that these droughts are becoming more frequent and at irregular intervals. This scarcity of both water and farmland is leading to speculation that this rise in food prices may be longer than expected, according a study out this week by Bidwells Agribusiness.
This is a very depressing picture, and may lead you to the depressing conclusion that we are all screwed, caught in several vicious circles. Have no fear: hope does still remain. Even those who know nothing about economics (I also come under this bracket) know that supply and demand are very important. As demand for food increases, it seems logical that farmers will increase supply. This should keep prices at a reasonable level. On the other hand, in 2007 food production reached its highest level ever, and still prices rocketed. Britain’s food industry is also very competitive, which should theoretically keep prices low. One must take into account the fact that most big businesses are greedy beggars. Late last year Sainsbury’s and Asda admitted that they had kept the prices of dairy products artificially high, which cost consumers £270 million. It is also hoped that Biofuel engineers can develop a method of biofuel that doesn’t require grain, which would leave more food supply. However, with the world’s population predicted to reach 9 billion by 2050, rising food prices is not going to be an issue which goes away too soon.
Cory
