In developing nations, I believe a large problem regarding food security is the economic issues associated with food security. I plan on having another post about international agriculture, trade and the World Trade Organization (WTO), but for now I’ll try to explain some things that affect the price of food.
Some of these are quite contentious and people can argue the effects of one or the other on actual food prices and access to food. That being said, I will try to provide an unbiased look at food issues.
I decided to break this topic into multiple posts, as there’s kind of a lot to say and I really don’t want to bore you all (not that any of this is boring!!) or oversimplify it to the point of making it inaccurate.
So I’ll start with one cause
Potential Cause #1: Low Food Stocks
As the supply of a certain good decreases, the price increases if demand does not change. Today I will only cover one of the things that influences the supply of food in the world.
Natural Disasters: Natural disasters and weather patterns can negatively or positively affect the harvest in any given year. However, this may not be a particularly strong argument as, generally speaking, countries with adverse weather patterns generally are aware of these possibilities and therefore can often mitigate negative outcomes.
Bad harvests in certain areas are often offset by good harvests in other areas, as was the case in 2007. Bad harvests the EU and the Ukraine and Australia were offset by good harvests in Argentina, Kazakhstan, Russia and the US. While weather issues can contribute to decreases in food production and subsequent increase in prices, the impact should not warrant a global food crisis.
(Source: Jenifer Piesse and Colin Thitle, “Three Bubbles and a Panic: An Explanatory Review of Recent Food Commodity Price Events.” Food Policy 34)
Next time… Government Policies that affect food prices…
What are your thoughts?