food prices

The most recent Food and Agricultural Organization (FAO) Price Index indicates that food prices such as dairy and oil have reached their lowest levels since 2009. This is part of a global, ongoing trend that the FAO predicts will continue for the coming decade.

The FAO Price Index is weighted by trade and looks at international market prices for foods such as cereals, dairy, meat, sugar and oil. The August 6 release of the FAO Price Index pegged the Index at 164.6 points, down 19.4 percent from what it had been in 2014. Dairy prices have dropped 7.2 percent and vegetable oil prices are the lowest they have been since June 2009. Meat prices are at levels similar to what they were last year, while cereal and sugar prices have increased. Cereal price increases are attributed to poor growing conditions in North America and Europe, and sugar prices are increasing due to poor harvesting conditions in Brazil.

The FAO Price Index is supported by other data from Reuters. This data indicated that soybean prices have gone down 13 percent since August 2014, while wheat prices have dropped 14 percent and corn prices have dropped eight percent. Generally, the decrease in prices is attributed to an increase in global supply in conjunction with a decrease in demand, particularly from China, North Africa and the Middle East.

Across western Europe, specifically the United Kingdom, France and Belgium, farmers are demonstrating against the falling price of milk. The 7.2 percent drop in dairy price from August 2014 includes a one percent drop in prices since June. As farmers protest, European governments are considering giving them millions of dollars in support as a result of their livelihood being less profitable. The decrease in demand makes the increase in production a burden rather than a profit for producers.

However, the drop in food prices indicates the increased affordability of foods worldwide, particularly for domestic products. This allows for a greater number of people to afford food, especially in countries whose populations are seeing rising incomes. Consequently, populations have greater access to different foods and can diversify their diets.

Priscilla McCelvey

Sources: CNBC 1, CNBC 2, Food and Agricultural Organization of the UN, Reuters, United Nations
Photo: Ingredients Network

Hunger and malnutrition are significant concerns in the country of Guinea-Bissau that can be attributed to several factors including food insecurity, poor health and sanitation, limited access to water and low literacy rates.

According to a report released by the World Food Programme, only seven percent of people living in Guinea-Bissau are food secure. The report also revealed that 93 percent of the rural population in the country is food insecure as a result of cashew prices. In addition, an estimated 15,000 children suffer from malnutrition across Guinea-Bissau.

Due to Guinea-Bissau’s political instability and socioeconomic uncertainty, the country’s food security remains compromised. Poverty rates have increased from 65 percent in previous years to 75 percent and although the country has ample natural resources, a substantial amount of rainfall and good soil, Guinea-Bissau is still dealing with the political disruption that makes it susceptible to poverty.

A large aspect of the country’s economy can be found in the agricultural sector, which 85 percent of the population relies upon. The population of 1.6 million not only relies on agriculture as a main source of income but also as a main source of nutrition. Cashews account for 98 percent of the country’s revenues, while other crops such as rice are grown for sustenance.

In the past several years alone, food insecurity in Guinea-Bissau has increased as a result of strikes and political upheaval, both have devastated the cashew nut season and compromised the country’s main source of income. This disruption not only affected revenues, but it also limited access to food and further burdened households in rural areas.

In past years Guinea-Bissau had not been making a political commitment to combating hunger in the country; however, recently the country along with several other organizations including WFP have partnered up in an effort to reduce hunger.

“Thanks to the work we do with our partners on emergency preparedness, support to family farmers, nutritional assistance – particularly in a child’s first 1,000 days – and building the resilience of communities to withstand shocks, millions of people are now better able to focus on building a future free of hunger for themselves and the next generation,” said WFP Executive Ertharin Cousin.

WFP and the government of Guinea-Bissau have launched several initiatives in hopes of alleviating hunger and combating malnutrition in the country. The initiatives aim to provide immediate food aid, operate school meal programs and aid small-scale farmers. WFP is currently providing meals to 86,000 schoolchildren and handing out rations as a means to increase attendance among girls. As part of the initiative, an estimated 36,000 women and children have received resources to combat malnutrition.

“Every year, we witness hunger’s devastating effect on families, communities and whole economies,” Cousin says. “But despite horrific crises engulfing entire regions, we are making real progress in the fight to sustainably and durably end hunger and chronic malnutrition.”

– Nada Sewidan

Sources: World Food Programme, International Food Policy Research Institute
Photo: DNS Tvind

ActionAid USA
ActionAid USA is working to end global poverty and further enhance human rights. Operating in over 40 countries around the world, through their work the organization has been able to reach and impact the lives of approximately 25 million people.

ActionAid addresses a variety of issues that affect the daily lives of people in an assortment of countries. The organization works to change policies surrounding biofuels (in the hopes of stabilizing food prices) and to help countries in poverty adjust to the shifting changes in climate.

It also focuses its attention on aiding countries that are hit by natural disasters and do not have the resources to help themselves. In providing relief, they have been able to respond to 87 of these occurrences and help about 7 million people.

Additionally, the organization has been looking for new ways to empower women, engage the youth and improve the overall quality of life for people across the globe.

One of ActionAid’s most recent projects has been advocating for President Obama to approve the Assessing Progress in Haiti Act, which he signed on August 8, 2014.

In the aftermath of the Haiti earthquake in 2010, although billions of dollars were donated to Haiti, the money was not always  spent in the most efficient way. The new act  requires that the U.S. government submit an extremely detailed report stating exactly how the money donated to provide relief for the Haitian people is being spent.

The organization, however, is not so supportive of President Obama’s backing of the “New Alliance” plan regarding agriculture in Africa. It claims putting agriculture into the hands of big businesses will hurt smaller farming communities and increase poverty levels. Buba Khan, the ActionAid International Advocacy Officer, stated that, “Companies should be part of Africa’s cultural future, but profit should not be prioritized over people’s rights.”

 As part of their efforts to effectively combat global hunger and poverty, ActionAid works to make sure that their opinions on what the U.S. government is doing right and what the U.S. government is doing wrong are clearly expressed. 

– Jordyn Horowitz

Sources: Lee House
Photo: ActionAid USA

world food
Global food prices fell to a six-month low in July, according to the United Nations Food and Agriculture Organization.

The FAO’s Food Price Index – which measures price shifts according to the average price of a basket of over 50 food products – measured the average international price of food at 2.1 percent lower than in June. Current levels are the lowest they’ve been since January 2014 and 1.7 percent lower than in July 2013. While global meat prices rose due to higher demand in Asia, prices for grains, oil-seeds and dairy fell. The expected crop production of the United States and South American surpluses drove down the value of soy oil.

“The lingering decline of food prices since March reflects much better expectations over supplies in the current and forthcoming seasons, especially for cereals and oils, a situation that is expected to facilitate rebuilding of world stocks,” says top FAO economist Concepcion Calpe.

The global average price of cereals has dropped 36.9 points since July 2013 while vegetable oils dropped 5.6 points and dairy 17.5 points during the same time period. Sugar and meat prices have risen, however, by 20.1 points and 25.4 points, respectively.

The release of this data comes as Russia has declared a year-long ban on Western food imports in retaliation for Western sanctions against Russia over the Ukrainian conflict. Russia imports 40 percent of its food, and prices within the Federation will likely rise without food imports from the U.S., the European Union and Norway.

Prices in the EU could lower as the ban will decrease overall demand.Yet Calpe does not believe the ban will significantly affect global food prices, saying, “The big losers in this case would be more the consumers in Russia themselves because it means they would pay higher prices. It would increase prices internally in the Russian Federation, but for the rest of the world it would tend to depress the quotations.”

The conflict in Ukraine brought a brief spike in global food prices in March, but experts remain skeptical that the fighting could affect food prices to the extent of the 2008 world food crisis. From 2005 to 2008, global food prices increased by 83 percent – a drastic change that rendered 40,000 million more people unable to afford food. Tens of thousands of citizens found themselves suddenly unable to afford the new prices, demonstrated throughout sub-Saharan Africa, Egypt and parts of Asia.

Economists have since blamed the crisis on decreased levels of production, higher demand from emerging economies, higher energy costs and a new demand for safer agricultural stocks in the wake of the housing bubble.

Still, the decrease in prices comes as good news to those in developing nations who spend a significant portion of their income on food. As the FAO points out, 842 million people worldwide still suffer from chronic hunger, but the organization continues to strive “…to make sure people have regular access to enough high-quality food to lead active, healthy lives.”

Erica Lignell

Sources: UN 1, Bloomberg, FAO 1, UNCTAD, FAO 2, The Guardian, FAO 3
Photo: Business Insider

Continued sectarian violence in Nigeria resulted in the widespread abandonment of farms. Conflict spreads throughout the country, affecting the agricultural season in rural and often isolated regions. This led to dramatic decline in household food stocks. In addition to farming, the conflict limits “off-season livelihood activities” such as fishing.

This coupled with a predicted shortened growing season to create a potentially devastating food crisis. Consequently, Nigerian government reported as many as one million people facing food shortages in the coming months.

The Islamist insurgency in northern Nigeria, which began in 2009, has forced more than 365,000 people to flee their homes and farms. Agriculture generally serves as the primary means of support. Moreover, as refugees, these families have little opportunity to independently replenish their food supplies. According to The Guardian, “violence linked to the Boko Haram insurgency has caused 60 percent of farmers to leave the fertile region.”

In addition to low production, this conflict led to disruption in trade routes. Those managing the trade fear security, for the products and their lives. As production declines, the prices for staple food rise. These prices rose an estimated 10 percent from last year and more than 30 percent from the five-year average.

Alone, this lack of production has led to serious food shortages. Now, the strain of drought-induced food shortage threatens a full-scale crisis. According to The Nigerian Meteorological Agency, the national agricultural sector depends heavily on rain, “with the bulk of its produce cultivated in the north and central regions.” Weather forecasters predict the rainy season to begin in June, though it typically starts in May. In addition, the rain season may end before September. The result: a severely shortened growing season. With a population of 160 million to feed, Nigeria prepares this looming food crisis.

Refugees and farmers affected by the drought cannot afford the drastic rise in prices. Without an independent stock of food, though, these individuals must rely on the market.

In response, farmers are encouraged to use early maturing seeds to help generate a shorter planting season.

However, as Ibrahim Mota of the Dawanau Grain Traders Union shared recently, “Seeds, no matter how sophisticated, have to be planted by humans to germinate.” The Famine Early Warning Systems Network continues to monitor the food supply in this region, encouraging the Nigerian government to alleviate the burden of this conflict on farmers. Without details on the exact tactics to mitigate conflict, families live in constant risk of acute food security.

– Ellery Spahr

Sources: The Guardian
Photo: India Times

Rising Food Prices
Food is the most fundamental need in daily lives. This need even comes before clothing, shelter or social interactions. Without food, the human body cannot function properly, and without balanced nutrition, children are unable to develop at a healthy rate. The recent increase in food price has tremendously negative effect on everyone, especial people in poverty.

Global food prices for meats and dairy products have been rising over the last five years. According to the Bank’s Food Price Index, the price of food in October 2013 was six percent lower than last year, but was still not far from the food price peak in August 2012. However, food price peaked again in December and became the third highest on record (United Nations agency.)  The food price increase makes it more difficult for people in poverty to finance the household. With high unemployment rate along with high inflation rate in developing countries, many people lost their ability to support the household when their incomes remain unchanged.

The reason for the increased food price is the sharp increase in demand. However, the supply for food has stayed the same. Most of food supply comes from developing nations. The increase indicates the inability to meet the demand for food in developing countries. In regions heavily affected by poverty, farmers do not have access to sophisticated machinery and seeds needed to effectively make use of their resources.

The first step will be to help farmers get proper equipment and knowledge. This is essential to solve this crisis. In the long run, they can produce food more efficiently and more effectively and drive up the food supply and the food price will decrease as the result. The second step is to help them allocate their income to better improve their farming equipment without further income support. The third step is to create a network to connect them to one another so they can share experience and form alliance to deal with crisis as a whole and not as separated entities.

Agriculture is one of the major exports in developing countries. By improving agriculture, the developing countries are not only able to have food for domestic concern but also able to spur economic growth.

– Phong Pham

Sources: New York Times, Food and Agriculture Organization, World Bank, United Nations
Photo: The Guardian

Niger's 3N Initiative to Improve Food Security
The African country of Niger, a landlocked nation in the north-central part of the continent in the Sahel region, has struggled intermittently with food security for the last fifty years. Before the 1960s, Niger was a productive agricultural region that was not only self-sustaining but exported cereal grains. Now, due to a rapidly growing population, recurring droughts and poverty, Niger struggles to grow enough food to feed its people.

The Nigerien government is implementing an ambitious agricultural transformation plan called the 3N Initiative – Nigeriens Feeding Nigeriens. It is estimated to cost $2 billion in the first three years and will address issues and reformations in the agricultural, environmental, industrial, and energy sectors. Initiatives range from providing farmers with technology and seeds to expanding market access and management.

Overcoming obstacles to food and nutrition security in Niger is no small task. Drought is the main impediment to productive agriculture: Niger experiences drought at least once every two years, although droughts have been increasing in the last decade. Only one percent of the country’s land receives more than 23 inches of rain each year, and just 12 percent of the land can sustain agriculture.

In a country where eighty percent of the population depends on agriculture for sustenance and livelihood, addressing agricultural issues is critical. Niger has one of the fastest-growing populations of any country, has doubled from 7 million in 1988 to 15 million in 2010. In addition to population growth and drought, unstable food prices have contributed to food insecurity throughout the Sahel region. The prices of staple cereal grains such as millet are well above the five-year average. For the world’s poor, food accessibility is just as important as agricultural productivity in improving health and quality of life.

Attempts by previous Niger administrations to achieve food security have clearly not been successful in the long run. Current national administrators say that political will, coordination, and centralized leadership set the 3N Initiative apart. The Nigerien government is working to draft legislation that will ensure the existence of the Initiative well into the future.

Both Niger and the Food and Agriculture Organization (FAO) acknowledge the urgency of addressing food security throughout the Sahel region, which suffered a major drought and resulting famine in 2010. Niger’s FAO representative states that addressing food security is necessary for every country in the region. Niger’s 3N Initiative, if successful, can serve as an example for other African countries seeking to achieve food security through agricultural and political transformation.

– Kat Henrichs

Source: FAO
Photo: AusAID

Food Prices & Obesity in Developing CountriesUnhealthy food is not only one of the cheapest options in the United States; junk food is also cheaper in developing countries. Because impoverished people cannot afford to purchase healthy, more expensive foods, they risk obesity and “undernutrition.” Even though food prices have decreased in the past six months, these prices are still near a record high level.

The high food prices are contributing to an increase in obesity in third world countries. Otaviano Canuto, World Bank Group’s vice president for poverty reduction and economic management, explains, “When poor people with some disposable income in developing countries try to cope with high and increasingly volatile food prices, they also tend to choose cheap food that is high in calories but without much nutritious value.”

There are many factors contributing to increased food costs. A drop in the supply of wheat and grains caused the price of cereal to go up by 3%. The prospect of more droughts in wheat-producing countries, like Argentina, Australia, and South Africa, could mean even further price increases. The higher cost of oil is also contributing to the problem.

Given that half of the obese people in the world live in nine countries, China, United States, Germany, India, Russia, Brazil, Mexico, Indonesia and Turkey, it is clear that the epidemic is no longer only prevalent in developed countries. The World Bank fears that these high food costs may become the “new normal,” a phenomenon that could potentially cause the number of obesity cases in developing countries to double by 2030.

– Mary Penn

Source: SCMP

The Connection Between Political Instability and Food PricesThe New England Complex Systems Institute has released a study on the relationship between political instability and food prices in the Middle East. The paper, titled The Food Crises and Political Instability in North Africa and the Middle East, examines contributing factors to social unrest and finds that violent protests have coincided with high food prices since 2008.

The problem of food riots, which are closely related to hunger, poverty, and high food prices, is nothing new. The French Revolution was due, in part, to the hungry protesting high food prices. In today’s global economy, where countries regularly import and export large quantities of food, even regional riots and resulting political instability hold vast implications for the entire world.

NECSI examines the relationship between political instability and food prices by using mathematical modeling to describe changes in food prices, then interpreting those models to determine the threshold at which riots become likely. Authors of the study predicted that high prices for US-grown corn and wheat in 2010 would cause unrest elsewhere. Their prediction came true with the events of the Arab Spring that began at the end of 2010.

Can socially disruptive riots and protests be accurately predicted? The NECSI study says yes: that when the FAO Food Price Index rises above 210, riots become significantly more likely.

The New England Complex Systems Institute (NECSI) is an independent research and education institution that studies the development of complex social, biological, and ecological systems. NECSI applies evidence-based science to real-world social problems such as poverty and climate change.

– Kat Henrichs

Sources: NECSI, NPR
Photo: DW

Who is Benefiting From Land and Water Grabbing?It is assumed that the already existing gap between developed and developing nations is large and apparent enough that wealthier nations would try and fill this gap and bring these opposite ends closer together. According to an ABC Environmental article, however, wealthy nations are instead competing over ‘land’ and ‘water grabbing’ to appease their growing populations and the “stressed” supply of basic necessities such as food and water. Investors in a foreign land, or better yet, the land-grabbers, are countries and investment firms from biofuel producers to large-scale farming operations (agricultural investors).

Since 2000, the major countries that have contributed to this land purchasing are the U.S., Malaysia, the U.K., China, and the U.A.E. Experts aren’t sure of these investors’ motives but it is clear that they are only focusing on buying land where there is clear access to water.

‘Land grabbing’ is defined by Paolo D’Odorico, a professor at the University of Virginia, as “a deal for about two km2 or more that converts an environmentally important area currently used by local people to commercial production.” According to an environmental study, 454 billion cubic meters sums up the ‘water-grabbing’ per year by corporations on a global scale, which is about 5 percent of the world’s annual water consumption. According to the public database Land Matrix “1,217 deals have taken place, which transferred over 830,000 square kilometers of land” since 2000, with 62 percent of such deals happening in Africa alone.

From 2005 to 2009, during a major food price crisis, land purchases, which fall under a very low level of regulation, skyrocketed. In 2011, the Food and Agricultural Organization of the U.N. released guidelines that advise investors to consider the people and communities whose land is being used. However, such guidelines are viewed as humanitarian concerns and have little enforcement, meaning that they aren’t strict enough to have corporations and investors abide by them or even care for them.

Governments who are interested in and have been leasing and selling land to foreign countries and investors are mainly those in Eastern Africa and Southeast Asia. They are interested in these sales because they want to modernize their farming and believe this is the way to do it. However, the reality is that the resulting development from such ‘land and water grabbing’ depends on the investors’ terms and conditions, as well as their sense of morality.

The main problem is that the majority of these sales are happening in poor countries in which there are high rates of hunger and where resources valuable to the local populations are being purchased by wealthier developed nations or even by private corporations. The main question of the matter is this: Who is benefiting from land and water grabbing? Are these sales helping the local people since it is their land? Or are these purchases only concerned about foreign benefits and the population concerns of developed nations?

– Leen Abdallah

Source: ABC
Photo: Water Governance