The cost of food in America and the world has risen over the past few years. There are several reasons for this, and the issues are being tackled by world leaders today.
In the United States
The Consumer Price Index stated that the prices rose by over four percent in 2007. Based on official records this is the highest it has been for the past 17 years. The agency also reported that the same increase occurred in 2008.
The rising cost is also being seen in other ways. Bakeries have reported that demand had increased rapidly, which has made it difficult to meet demand. The high cost of food is also due to the dwindling supply. The USDA has revealed that the level of food donation has gone down by 10% as well.
Around the World
The World Bank has shown that this trend is worldwide. Studies have shown that the price of wheat has skyrocketed by over 130%. Soya prices have shot up by 90% and rice over 70%. Corn has also gone up by 30%.
There are many reasons for the high prices. At its root however, it simply boils down to supply and demand. The imbalance has also been caused by several elements coming together.
The increasing world population is one reason. By 2050 the World Bank estimates that there will be billions that need to be fed. A large part of the world’s population live in poverty. The high cost of food is something they cannot afford.
Change in Lifestyle
Another reason for the rising costs are the changing diet of people. As countries grow in prosperity, the people’s diet undergoes change. Increasing wealth is usually accompanied by demand for meat. As demand for beef, pork etc. grow, the supply is strained.
Not to be discounted are the effects of global warming and climate change. Farmers are dependent on the seasons to grow their crops. Recent years have seen extreme forms of weather. From excessive heat to violent storms, it has greatly affected the quality of food crops.
Another reason for the high cost of food has to do with economy and trade. Some farmers say that trade liberalization have affected them negatively. Local farmers complain that imported products are driving them out of business. When the imported products take over the market, they can dictate the price.
Another basis for the skyrocketing cost has to do with uncertain economic situations. Wheat, corn and other commodities are subject to speculation in the market. Speculators often exert an influence on the price of these basic food products.
According to the World Bank, the effect of this can be disastrous. With prices very high and unemployment soaring, street protests are sure to follow. Rioting over food may take place. The World Bank and other agencies have asked rich countries to provide more help for suffering Third World nations.
The cost of food will likely go up some more in the coming years. For this reason, it is imperative that countries develop solutions to handle it.