Rising Food Prices a Global Problem
Protests leading to the ouster of dictators in Egypt and
Tunisia have been hailed as democracy breaking out in the Middle East, but
the reality may have less to do with the masses yearning for freedom and more
to do with people simply looking for a way to put bread on the table.
Bank report warns that rapid inflation in food prices is driving up the numbers
of impoverished men, women and children around the globe.
Food prices, according
to the bank, rose 15 percent between October 2010 and January. On a year-over-year
basis, prices were up 29 percent for the period. Current food prices are only
three percent below the highest point on the index reached in 2008. Wheat prices
doubled between June and January, while maize was up 73 percent. Sugar and
edible oils have all seen major spikes, while rice has risen more slowly.
Bank estimates that 44 million people have fallen into poverty since June.
Impoverished consumers spend more than half of their income on food, according
to the bank. Those defined as living in "extreme poverty" exist
on less than $1.25 a day.
"Global food prices are rising to dangerous levels and threaten tens
of millions of poor people," Robert Zoellick, president of the World
Bank, said on a conference call. "If we don’t get a relief on the
weather side, then I foresee conditions getting worse, and mistaken policy
actions such as exports bans or other tax or price controls will exacerbate
Closer to home, food prices are also rising but not nearly
at the rate seen in developing country markets. While gas prices rose 8.5 percent
in December, food was up only 0.1 percent, according to the Bureau of Labor
Statistics. Many believe, however, that while food prices are currently lagging
fuel, that gap will eventually close. Even so, higher gas and food prices have
always hurt the poorest in society disproportionately.
Developments in Washington,
D.C. may also adversely affect the poor’s access to food.
to cut supplemental nutrition programs such as the WIC (Women, Infants and
Children) by $758 million could ultimately force people off the program, although
the actual effect has yet to be determined. Food manufacturers and retailers
serving WIC consumers could also be adversely affected.
- Food Price Watch – The World Bank
- Food Price Hike Drives 44 Million People into Poverty – The World Bank
- CR Spending Cuts to Go Deep – Committee on Appropriations
- The Thing That Ate the WIC Budget – Truthdig
Discussion Questions: How will rising prices and supply issues in other parts of the world affect the food industry in the U.S.? Are you concerned that rising food prices will stall the economic recovery in the U.S.?