2007–2008 World Food Price Crisis
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food prices Food prices refer to the average price level for food across countries, regions and on a global scale. Food prices affect producers and consumers of food. Price levels depend on the food production process, including food marketing and food di ...
increased dramatically in 2007 and the first and second quarter of 2008, creating a global crisis and causing political and economic instability and social unrest in both poor and
developed nations A developed country, or advanced country, is a sovereign state that has a high quality of life, developed economy, and advanced technological infrastructure relative to other less industrialized nations. Most commonly, the criteria for evalu ...
. Although the media spotlight focused on the riots that ensued in the face of high prices, the ongoing crisis of food insecurity had been years in the making.How do Food Prices Affect Producers and Consumers in Developing Countries?
, ICTSD, Information Note Number 10, September 2009
UN Food and Agriculture Organization (2009). The State of Food Insecurity in the World 2009. Rome. Systemic causes for the worldwide increases in food prices continue to be the subject of debate. After peaking in the second quarter of 2008, prices fell dramatically during the
late-2000s recession The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009.
but increased during late 2009 and 2010, reaching new heights in 2011 and 2012 (see 2010–2012 world food price crisis) at a level slightly higher than the level reached in 2008. Over the next years, prices fell, reaching a low in March 2016 with the deflated
Food and Agriculture Organization The Food and Agriculture Organization of the United Nations; . (FAO) is a specialized agency of the United Nations that leads international efforts to defeat hunger and improve nutrition and food security. Its Latin motto, , translates ...
(FAO) food price index close to pre-crisis level of 2006. The initial causes of the late-2006 price spikes included droughts in grain-producing nations and rising oil prices. Oil price increases also caused general escalations in the costs of
fertilizer A fertilizer or fertiliser is any material of natural or synthetic origin that is applied to soil or to plant tissues to supply plant nutrients. Fertilizers may be distinct from liming materials or other non-nutrient soil amendments. Man ...
s, food transportation, and
industrial agriculture Industrial agriculture is a form of modern farming that refers to the industrialized production of crops and animals and animal products like eggs or milk. The methods of industrial agriculture include innovation in agricultural machinery and ...
. Root causes may be the increasing use of
biofuel Biofuel is a fuel that is produced over a short time span from Biomass (energy), biomass, rather than by the very slow natural processes involved in the formation of fossil fuels such as oil. Biofuel can be produced from plants or from agricu ...
s in developed countries (see also food vs fuel), and an increasing demand for a more varied diet across the expanding middle-class populations of Asia. The FAO also raised concerns about the role of
hedge fund A hedge fund is a Pooling (resource management), pooled investment fund that holds Market liquidity, liquid assets and that makes use of complex trader (finance), trading and risk management techniques to aim to improve investment performance and ...
s speculating on prices leading to major shifts in prices. These factors, coupled with falling world-food stockpiles, all contributed to the worldwide rise in food prices.


Drastic price increases and possible causes

Between 2006 and 2008 average world prices for rice rose by 217%, wheat by 136%,
corn Maize (; ''Zea mays''), also known as corn in North American English, is a tall stout Poaceae, grass that produces cereal grain. It was domesticated by indigenous peoples of Mexico, indigenous peoples in southern Mexico about 9,000 years ago ...
by 125% and soybeans by 107%. In late April 2008 rice prices hit 24 cents (US) per US pound, more than doubling the price in just seven months.


World population growth

Although some commentators have argued that this food crisis stems from unprecedented
global Global may refer to: General *Globe, a spherical model of celestial bodies *Earth, the third planet from the Sun Entertainment * ''Global'' (Paul van Dyk album), 2003 * ''Global'' (Bunji Garlin album), 2007 * ''Global'' (Humanoid album), 198 ...
population growth Population growth is the increase in the number of people in a population or dispersed group. The World population, global population has grown from 1 billion in 1800 to 8.2 billion in 2025. Actual global human population growth amounts to aroun ...
, others point out that world population growth rates have dropped dramatically since the 1980s, and grain availability has continued to outpace population. To prevent price growth, food production should outpace population growth, which was about 1.2% per year. But there was a temporary drop in food production growth: for example, wheat production during 2006 and 2007 was 4% lower than that in 2004 and 2005. World population has grown from 1.6 billion in 1900 to over 7.5 billion today.


Increased demand for more resource intensive food

The head of the International Food Policy Research Institute, stated in 2008 that the gradual change in diet among newly prosperous populations is the most important factor underpinning the rise in global food prices. Where food consumption has increased, it has largely been in processed ("
value added Value added is a term in economics for calculating the difference between market value of a product or service, and the sum value of its constituents. It is relatively expressed by the supply-demand curve for specific units of sale. Value added ...
") foods, sold in developing and developed nations. Total grain utilization growth since 2006 (up three percent, over the 2000–2006 per annum average of two percent) has been greatest in non-food usage, especially in feed and biofuels. One kilogram of beef requires seven kilograms of feed grain. These reports, therefore, conclude that usage in industrial, feed, and input intensive foods, not population growth among poor consumers of simple grains, has contributed to the price increases. Rising meat consumption due to changes in lifestyle can in turn lead to higher energy consumption due to the higher energy-intensity of meat products, for example, one kilogram of meat uses about 19 times as much energy to produce it as the same amount of apple. Although, the vast majority of the population in Asia remains rural and poor, the growth of the middle class in the region has been dramatic. For comparison, in 1990, the middle class grew by 9.7 percent in India and 8.6 percent in China, but by 2007 the growth rate was nearly 30 percent and 70 percent respectively. The corresponding increase in Asian affluence also brought with it a change in lifestyle and eating habits, particularly a demand for greater variety, leading to increased competition with western nations for already strained agricultural resources. This demand exacerbates dramatic increases in
commodity In economics, a commodity is an economic goods, good, usually a resource, that specifically has full or substantial fungibility: that is, the Market (economics), market treats instances of the good as equivalent or nearly so with no regard to w ...
prices such as oil. Another issue with rising affluence in India and China was reducing the "shock absorber" of poor people who are forced to reduce their resource consumption when food prices rise. This reduced price elasticity and caused a sharp rise in food prices during some shortages. In the media, China is often mentioned as one of the main reasons for the increase in world food prices. However, China has to a large extent been able to meet its own demand for food, and even exports its surpluses in the world market.


Effects of petroleum and fertilizer price increases

Starting in 2007, the prices of fertilizers of all kinds increased dramatically, peaking around the summer of 2008 (see graphs by the International Fertilizer Industry Association). Prices approximately tripled for
ammonia Ammonia is an inorganic chemical compound of nitrogen and hydrogen with the chemical formula, formula . A Binary compounds of hydrogen, stable binary hydride and the simplest pnictogen hydride, ammonia is a colourless gas with a distinctive pu ...
,
urea Urea, also called carbamide (because it is a diamide of carbonic acid), is an organic compound with chemical formula . This amide has two Amine, amino groups (–) joined by a carbonyl functional group (–C(=O)–). It is thus the simplest am ...
,
diammonium phosphate Diammonium phosphate (DAP; IUPAC name diammonium hydrogen phosphate; chemical formula (NH4)2(HPO4)) is one of a series of water- soluble ammonium phosphate salts that can be produced when ammonia reacts with phosphoric acid. Solid diammonium ph ...
, muriate of potash (KCl -potasium chloride), and
sulfuric acid Sulfuric acid (American spelling and the preferred IUPAC name) or sulphuric acid (English in the Commonwealth of Nations, Commonwealth spelling), known in antiquity as oil of vitriol, is a mineral acid composed of the elements sulfur, oxygen, ...
(used for making phosphate fertilizer), and then fell just as dramatically in the latter part of 2008. Some prices doubled within the six months before April 2008. Part of the cause for these price rises was the rise in the price of oil, since most fertilizers require petroleum or
natural gas Natural gas (also fossil gas, methane gas, and gas) is a naturally occurring compound of gaseous hydrocarbons, primarily methane (95%), small amounts of higher alkanes, and traces of carbon dioxide and nitrogen, hydrogen sulfide and helium ...
to manufacture. Although the main fossil fuel input for fertilizer comes from natural gas to generate hydrogen for the
Haber–Bosch process The Haber process, also called the Haber–Bosch process, is the main industrial procedure for the production of ammonia. It converts atmospheric nitrogen (N2) to ammonia (NH3) by a reaction with hydrogen (H2) using finely divided iron metal as ...
(see: Ammonia production), natural gas has its own supply problems similar to those for oil. Because natural gas can substitute for petroleum in some uses (for example, natural gas liquids and
electricity generation Electricity generation is the process of generating electric power from sources of primary energy. For electric utility, utilities in the electric power industry, it is the stage prior to its Electricity delivery, delivery (Electric power transm ...
), increasing prices for petroleum lead to increasing prices for natural gas, and thus for fertilizer. Costs for fertilizer raw materials other than oil, such as
potash Potash ( ) includes various mined and manufactured salts that contain potassium in water- soluble form.
, have been increasing as increased production of staples increases demand. This is causing a boom (with associated volatility) in agriculture stocks. The major IFPRI ( International Food Policy Research Institute) Report launched in February 2011 stated that the causes of the 2008 global food crisis were similar to that of the 1972–1974 food crisis, in that the
1970s energy crisis The 1970s energy crisis occurred when the Western world, particularly the United States, Canada, Western Europe, Australia, and New Zealand, faced substantial petroleum shortages as well as elevated prices. The two worst crises of this period wer ...
was the major driver, as well as the shock to cereal demand (from biofuels this time), low interest rates, devaluation of the dollar, declining stocks, and some adverse weather conditions. Unfortunately the IFPRI states that such shocks are likely to recur with several shocks in the future; compounded by a long history of neglecting agricultural investments.


Declining world food stockpiles

In the past, nations tended to keep more sizable food stockpiles, but more recently, due to a faster pace of food growth and ease of importation, less emphasis is placed on high stockpiles. For example, in February 2008 wheat stockpiles hit a 60-year low in the United States (see also 2008 global rice crisis). Stocks are often calculated as a residual between production and consumption, but it becomes difficult to discriminate between a de-stocking policy choices of individual countries and a deficit between production and consumption.


Financial speculation

Destabilizing influences, including indiscriminate lending and real estate speculation, led to a crisis in January 2008 and eroded investment in food commodities. Foreign investment drives productivity improvements, and other gains for farmers.


Commodity index funds

Goldman Sachs' entry into the commodities market via the Goldman Sachs Commodity Index has been implicated by some in the 2007–2008 world food price crisis. In a 2010 article in Harper's magazine, Frederick Kaufman accused Goldman Sachs of profiting while many people went hungry or even starved. He argued that Goldman's large purchases of long-options on wheat futures created a demand shock in the wheat market, which disturbed the normal relationship between
supply and demand In microeconomics, supply and demand is an economic model of price determination in a Market (economics), market. It postulates that, Ceteris_paribus#Applications, holding all else equal, the unit price for a particular Good (economics), good ...
and price levels. He argues that the result was a '
contango Contango is a situation in which the futures contract, futures price (or forward contract, forward price) of a commodity is higher than the spot price. In a contango situation, arbitrageurs or speculators are "willing to pay more for a commodity ...
' wheat market on the Chicago Mercantile Exchange, which caused prices of wheat to rise much higher than normal, defeating the purpose of the exchanges (price stabilization) in the first place. however, a report by the
Organisation for Economic Co-operation and Development The Organisation for Economic Co-operation and Development (OECD; , OCDE) is an international organization, intergovernmental organization with 38 member countries, founded in 1961 to stimulate economic progress and international trade, wor ...
– using data from the
Commodity Futures Trading Commission The Commodity Futures Trading Commission (CFTC) is an Independent agencies of the United States government, independent agency of the US government created in 1974 that regulates the U.S. derivatives markets, which includes futures contract, fut ...
– showed tracking funds (of which Goldman Sachs Commodity Index was one) did not cause the bubble. For example, the report points out that even commodities without futures markets also saw price rises during the period. Some commodities ''without'' futures markets saw their prices rise as a consequence of the rising prices of commodities ''with'' futures markets: the World Development Movement (WDM, now Global Justice Now) stated there was strong evidence that the rising price of wheat caused the price of rice to subsequently rise as well.


Effects of trade liberalization

Some theorists, such as
Martin Khor Martin Khor Kok Peng (November 9, 1951 – 1 April 2020) was the executive director of the South Centre (organization), South Centre, an intergovernmental organisation of developing countries based in Geneva, from 1 March 2009 to 2018. He replace ...
of the Third World Network, Khor, Martin.
The Impact of Trade Liberalisation on Agriculture in Developing Countries: The Experience of Ghana
', Third World Network(2008)
point out that many developing nations have gone from being food independent to being net food importing economies since the 1970s and 1980s
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
(and later the
World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization headquartered in Geneva, Switzerland that regulates and facilitates international trade. Governments use the organization to establish, revise, and enforce the rules that g ...
's Agreement on Agriculture) free market economics directives to debtor nations. In opening developing countries to
developed world A developed country, or advanced country, is a sovereign state that has a high quality of life, developed economy, and advanced technological infrastructure relative to other less industrialized nations. Most commonly, the criteria for eval ...
food imports subsidised by Western governments,
developing nations A developing country is a sovereign state with a less-developed industrial base and a lower Human Development Index (HDI) relative to developed countries. However, this definition is not universally agreed upon. There is also no clear agreemen ...
can become more dependent upon food imports if local agriculture does not improve. While developed countries pressured the developing world to abolish subsidies in the interest of trade liberalization, rich countries largely kept subsidies in place for their own farmers. United States government subsidies for 2008 pushed production toward biofuel rather than food.


Effects of food for fuel

One systemic cause for the price rise is held to be the diversion of food crops (maize in particular) for making first-generation biofuels. An estimated 100 million tons of grain per year are being redirected from food to fuel. (Total worldwide grain production for 2007 was just over 2000 million tons.) As farmers devoted larger parts of their crops to fuel production than in previous years, land and resources available for food production were reduced correspondingly. This has resulted in less food available for human consumption, especially in developing and
least developed countries The least developed countries (LDCs) are developing countries listed by the United Nations that exhibit the lowest indicators of socioeconomic development. The concept of LDCs originated in the late 1960s and the first group of LDCs was listed b ...
, where a family's daily allowances for food purchases are extremely limited. The crisis can be seen, in a sense, to dichotomize rich and poor nations, since, for example, filling a tank of an average car with
biofuel Biofuel is a fuel that is produced over a short time span from Biomass (energy), biomass, rather than by the very slow natural processes involved in the formation of fossil fuels such as oil. Biofuel can be produced from plants or from agricu ...
, amounts to as much maize (Africa's principal food staple) as an African person consumes in an entire year. Brazil, the world's second largest producer of ethanol after the US, is considered to have the world's first sustainable biofuels economy and its government claims Brazil's sugar cane based ethanol industry has not contributed to the 2008 food crises. A
World Bank The World Bank is an international financial institution that provides loans and Grant (money), grants to the governments of Least developed countries, low- and Developing country, middle-income countries for the purposes of economic development ...
policy research working paper released in July 2008Policy Research Working Paper No. 4682. Disclaimer: This paper reflects the findings, interpretation, and conclusions of the authors, and do not necessarily represent the views of the World Bank concluded that "...large increases in biofuels production in the United States and Europe are the main reason behind the steep rise in global food prices", and also stated that "Brazil's sugar-based ethanol did not push food prices appreciably higher". An economic assessment published in July 2008 by the
OECD The Organisation for Economic Co-operation and Development (OECD; , OCDE) is an international organization, intergovernmental organization with 38 member countries, founded in 1961 to stimulate economic progress and international trade, wor ...
disagrees with the World Bank report regarding the negative effects of subsidies and trade restrictions, finding that the effect of biofuels on food prices are much smaller. A report released by Oxfam ( Oxford Committee for Famine Relief)in June 2008 Report available in pdf criticized biofuel policies of rich countries and concluded that, of all biofuels available in the market, Brazilian sugarcane ethanol is "far from perfect" but it is the most favorable biofuel in the world in term of cost and GHG balance. The report discusses some existing problems and potential risks and asks the Brazilian government for caution to avoid jeopardizing its environmental and social sustainability. The report also says that: "Rich countries spent up to $15 billion last year supporting biofuels while blocking cheaper Brazilian ethanol, which is far less damaging for global
food security Food security is the state of having reliable access to a sufficient quantity of affordable, healthy Human food, food. The availability of food for people of any class, gender, ethnicity, or religion is another element of food protection. Simila ...
." (See Ethanol fuel in Brazil) German Chancellor Angela Merkel said the rise in food prices is due to poor agricultural policies and changing eating habits in developing nations, not biofuels as some critics claim. On 29 April 2008, US President
George W. Bush George Walker Bush (born July 6, 1946) is an American politician and businessman who was the 43rd president of the United States from 2001 to 2009. A member of the Bush family and the Republican Party (United States), Republican Party, he i ...
declared during a press conference that "85 percent of the world's food prices are caused by weather, increased demand and energy prices", and recognized that "15 percent has been caused by ethanol". On 4 July 2008, ''
The Guardian ''The Guardian'' is a British daily newspaper. It was founded in Manchester in 1821 as ''The Manchester Guardian'' and changed its name in 1959, followed by a move to London. Along with its sister paper, ''The Guardian Weekly'', ''The Guardi ...
'' reported that a leaked World Bank report estimated the rise in food prices caused by biofuels to be 75%. This report was officially released in July 2008. Since reaching record high prices in June 2008, corn prices fell 50% by October 2008, declining sharply together with other commodities, including oil. As ethanol production from corn has continued at the same levels, some have argued this trend shows the belief that the increased demand for corn to produce ethanol was mistaken. "Analysts, including some in the ethanol sector, say ethanol demand adds about 75 cents to $1.00 per bushel to the price of corn, as a rule of thumb. Other analysts say it adds around 20 percent, or just under 80 cents per bushel at current prices. Those estimates hint that $4 per bushel corn might be priced at only $3 without demand for ethanol fuel." These industry sources consider that a speculative bubble in the commodity markets holding positions in corn futures was the main driver behind the observed hike in corn prices affecting food supply. Second- and third-generation biofuels (such as
cellulosic ethanol Cellulosic ethanol is ethanol (ethyl alcohol) produced from cellulose (the stringy fiber of a plant) rather than from the plant's seeds or fruit. It can be produced from grasses, wood, algae, or other plants. It is generally discussed for use as a ...
and algae fuel, respectively) may someday ease the competition with food crops, as can grow on marginal lands unsuited for food crops, but these advanced biofuels require further development of farming practices and refining technology; in contrast, ethanol from maize uses mature technology and the maize crop can be shifted between food and fuel use quickly.


Biofuel subsidies in the US and the EU

The World Bank lists the effect of biofuels as an important contributor to higher food prices. The
FAO The Food and Agriculture Organization of the United Nations; . (FAO) is a List of specialized agencies of the United Nations, specialized agency of the United Nations that leads international efforts to defeat hunger and improve nutrition ...
/ECMB has reported that world land usage for agriculture has declined since the 1980s, and subsidies outside the United States and EU have dropped since the year 2004, leaving supply, while sufficient to meet 2004 needs, vulnerable when the United States began converting agricultural commodities to
biofuels Biofuel is a fuel that is produced over a short time span from biomass, rather than by the very slow natural processes involved in the formation of fossil fuels such as oil. Biofuel can be produced from plants or from agricultural, domestic ...
. According to the
United States Department of Agriculture The United States Department of Agriculture (USDA) is an executive department of the United States federal government that aims to meet the needs of commercial farming and livestock food production, promotes agricultural trade and producti ...
(USDA), global wheat imports and stocks have decreased, domestic consumption has stagnated, and world wheat production has decreased from 2006 to 2008. In the United States, government subsidies for ethanol production have prompted many farmers to switch to production for biofuel. Maize is the primary crop used for the production of ethanol, with the United States being the biggest producer of maize ethanol. As a result, 23 percent of United States maize crops were being used for ethanol in 2006–2007 (up from 6 percent in 2005–2006), and the USDA expects the United States to use 81 million tons of maize for ethanol production in the 2007–2008 season, up 37 percent. This not only diverts grains from food, but it diverts agricultural land from food production. Nevertheless, supporters of ethanol claim that using
corn Maize (; ''Zea mays''), also known as corn in North American English, is a tall stout Poaceae, grass that produces cereal grain. It was domesticated by indigenous peoples of Mexico, indigenous peoples in southern Mexico about 9,000 years ago ...
for ethanol is not responsible for the worst
food riot A food riot is a riot in protest of a shortage and/or unequal distribution of food. Historical causes have included rises in food prices, harvest failures, inept food storage, transport problems, food speculation, hoarding, poisoning of food, ...
s in the world, many of which have been caused by the price of rice and oil, which are not affected by biofuel use but rather by supply and demand. However, a World Bank policy research working paper released in July 2008 says that
biofuel Biofuel is a fuel that is produced over a short time span from Biomass (energy), biomass, rather than by the very slow natural processes involved in the formation of fossil fuels such as oil. Biofuel can be produced from plants or from agricu ...
s have raised food prices between 70 and 75 percent. The study found that higher oil prices and a weak dollar explain 25–30% of total price rise. The "month-by-month" five-year analysis disputes that increases in global grain consumption and droughts were responsible for price increases, reporting that this had had only a marginal effect and instead argues that the EU and US drive for biofuels has had by far the biggest effect on food supply and prices. The paper concludes that increased production of biofuels in the US and EU were supported by subsidies and tariffs on imports, and considers that without these policies, price increases would have been smaller. This research also concluded that Brazil's sugar cane based ethanol has not raised sugar prices significantly, and suggest to remove tariffs on ethanol imports by both the US and EU, to allow more efficient producers such as Brazil and other developing countries to produce ethanol profitably for export to meet the mandates in the EU and the US. The Renewable Fuel Association (RFA) published a rebuttal based on the version leaked before the formal release of the World Bank's paper. The RFA critique considers that the analysis is highly subjective and that the author "estimates the effect of global food prices from the weak dollar and the direct and indirect effect of high petroleum prices and attributes everything else to biofuels". An economic assessment report also published in July 2008 by the
OECD The Organisation for Economic Co-operation and Development (OECD; , OCDE) is an international organization, intergovernmental organization with 38 member countries, founded in 1961 to stimulate economic progress and international trade, wor ...
Disclaimer: This work was published under the responsibility of the Secretary-General of the OECD. The views expressed and conclusions reached do not necessarily correspond to those of the governments of OECD member countries. agrees with the World Bank report regarding the negative effects of subsidies and trade restrictions, but found that the effect of biofuels on food prices are much smaller. The OECD study is also critical of the limited reduction of GHG emissions achieved from biofuels produced in Europe and North America, concluding that the current biofuel support policies would reduce greenhouse gas emissions from transport fuel by no more than 0.8 percent by 2015, while Brazilian ethanol from sugar cane reduces greenhouse gas emissions by at least 80 percent compared to fossil fuels. The assessment calls on governments for more open markets in biofuels and feedstocks to improve efficiency and lower costs.


Idled farmland

According to the ''New York Times'' on 9 April 2008, the United States government pays farmers to idle their cropland under a conservation program. This policy reached a peak of idled in 2007, that is 8% of cropland in United States, representing a total area bigger than the state of New York.


Agricultural subsidies

The global food crisis has renewed calls for removal of distorting
agricultural subsidies An agricultural subsidy (also called an agricultural incentive) is a government incentive paid to agribusinesses, agricultural organizations and farms to supplement their income, manage the supply of agricultural products, and influence the ...
in developed countries. Support to farmers in OECD countries totals US$280 billion annually, which compares to official development assistance of just US$80 billion in 2004, and farm support depresses global food prices, according to OECD estimates. These
agricultural subsidies An agricultural subsidy (also called an agricultural incentive) is a government incentive paid to agribusinesses, agricultural organizations and farms to supplement their income, manage the supply of agricultural products, and influence the ...
lead to underdevelopment in rural developing countries, including the
least developed countries The least developed countries (LDCs) are developing countries listed by the United Nations that exhibit the lowest indicators of socioeconomic development. The concept of LDCs originated in the late 1960s and the first group of LDCs was listed b ...
; meanwhile subsidised food increases
overconsumption Overconsumption describes a situation where consumers overuse their available goods and services to where they can't, or don't want to, replenish or reuse them. In microeconomics, this is the point where the marginal cost of a consumer is greater ...
in developed countries. The US Farm Bill brought in by the Bush Administration in 2002 increased agricultural subsidies by 80% and cost the US taxpayer US$190 billion. In 2003, the EU agreed to extend the
Common Agricultural Policy The Common Agricultural Policy (CAP) is the agricultural policy of the European Commission. It implements a system of agricultural subsidies and other programmes. It was introduced in 1962 and has since then undergone several changes to reduce ...
until 2013. Former UNDP Administrator Malloch Brown renewed calls for reform of the farm subsidies such as the CAP.


Distorted global rice market

Japan is forced to import more than 767,000 tons of rice annually from the United States, Thailand, and other countries due to WTO rules. Japan is not allowed to re-export this rice to other countries without approval. This rice is generally left to rot and then used for
animal feed Animal feed is food given to domestic animals, especially livestock, in the course of animal husbandry. There are two basic types: fodder and forage. Used alone, the word ''feed'' more often refers to fodder. Animal feed is an important input ...
. Under pressure, the United States and Japan are poised to strike a deal to remove such restrictions. It is expected 1.5 million tons of high-grade American rice will enter the market soon.


Crop shortfalls from natural disasters

Several distinct weather- and climate-related incidents have caused disruptions in crop production. Perhaps the most influential is the extended drought in Australia, in particular the fertile Murray-Darling Basin, which produces large amounts of wheat and rice. The drought has caused the annual rice harvest to fall by as much as 98% from pre-drought levels. Australia is historically the second-largest exporter of wheat after the United States, producing up to 25 million tons in a good year, the vast majority for export. However, the 2006 harvest was 9.8 million. Other events that have negatively affected the price of food include the 2006 heat wave in California's
San Joaquin Valley The San Joaquin Valley ( ; Spanish language in California, Spanish: ''Valle de San Joaquín'') is the southern half of California's Central Valley (California), Central Valley. Famed as a major breadbasket, the San Joaquin Valley is an importa ...
, which killed large numbers of farm animals, and unseasonable 2008 rains in
Kerala Kerala ( , ) is a States and union territories of India, state on the Malabar Coast of India. It was formed on 1 November 1956, following the passage of the States Reorganisation Act, by combining Malayalam-speaking regions of the erstwhile ...
, India, which destroyed swathes of grain. These incidents are consistent with the effects of
climate change Present-day climate change includes both global warming—the ongoing increase in Global surface temperature, global average temperature—and its wider effects on Earth's climate system. Climate variability and change, Climate change in ...
. The effects of Cyclone Nargis on Burma in May 2008 caused a spike in the price of rice. Burma has historically been a rice exporter, though yields have fallen as government
price controls Price controls are restrictions set in place and enforced by governments, on the prices that can be charged for goods and services in a market. The intent behind implementing such controls can stem from the desire to maintain affordability of go ...
have reduced incentives for farmers. The
storm surge A storm surge, storm flood, tidal surge, or storm tide is a coastal flood or tsunami-like phenomenon of rising water commonly associated with low-pressure weather systems, such as cyclones. It is measured as the rise in water level above the ...
inundated rice paddies up to inland in the Irrawaddy Delta, raising concern that the salt could make the fields infertile. The FAO had previously estimated that Burma would export up to 600,000 tons of rice in 2008, but concerns were raised in the cyclone's aftermath that Burma may be forced to import rice for the first time, putting further upward pressure on global rice prices."Cyclone fuels rice price increase"
''BBC News'', 7 May 2008
Stem rust reappeared in 1998 in Uganda (and possibly earlier in Kenya)An assessment of race UG99 in Kenya and Ethiopia and the potential for impact in neighbouring regions and beyond
By expert panel on the stem-rust outbreak in Eastern Africa. 29 May 2005.
with the particularly virulent UG99 fungus. Unlike other rusts, which only partially affect crop yields, UG99 can bring 100% crop loss. Up to 80% yield losses were recently recorded in Kenya.Effect of a new race on wheat production/use of fungicides and its cost in large vs small scale farmers, situation of current cultivars. Kenya Agricultural Research Institute, 2005. Njoro. Cited i
CIMMYT 2005 study
As of 2005 stem rust was still believed to be "largely under control worldwide except in Eastern Africa". But by January 2007 an even more virulent strain had gone across the Red Sea into Yemen. FAO first reported on 5 March 2008 that Ug99 had now spread to major wheat-growing areas in Iran. These countries in North Africa and Middle East consume over 150% of their own wheat production; the failure of this staple crop thus adds a major burden on them. The disease is now expected to spread over China and the Far-East. The strong international collaboration network of research and development that spread disease-resistant strains some 40 years ago and started the
Green Revolution The Green Revolution, or the Third Agricultural Revolution, was a period during which technology transfer initiatives resulted in a significant increase in crop yields. These changes in agriculture initially emerged in Developed country , devel ...
, known as
CGIAR CGIAR (formerly the Consultative Group for International Agricultural Research) is a global partnership that unites international organizations engaged in research about food security. CGIAR research aims to reduce rural poverty, increase food ...
, was since slowly starved of research funds because of its own success and is now too atrophied to swiftly react to the new threat.


Soil and productivity losses

Sundquist points out that large areas of croplands are lost year after year, due mainly to
soil erosion Soil erosion is the denudation or wearing away of the Topsoil, upper layer of soil. It is a form of soil degradation. This natural process is caused by the dynamic activity of erosive agents, that is, water, ice (glaciers), snow, Atmosphere of Ea ...
, water depletion and urbanisation. According to him "60,000 km2/year of land becomes so severely degraded that it loses its productive capacity and becomes wasteland", and even more are affected to a lesser extent, adding to the crop supply problem. Additionally, agricultural production is also lost due to water depletion. Northern China in particular has depleted much of its non-renewables
aquifer An aquifer is an underground layer of water-bearing material, consisting of permeability (Earth sciences), permeable or fractured rock, or of unconsolidated materials (gravel, sand, or silt). Aquifers vary greatly in their characteristics. The s ...
s, which now impacts negatively its crop production. Urbanisation is another, smaller, difficult to estimate cause of annual cropland reduction.


Rising levels of ozone

One possible environmental factor in the food price crisis is rising background levels of ground-level tropospheric ozone in the atmosphere. Plants have been shown to have a high sensitivity to ozone levels, and lower yields of important food crops, such as wheat and soybeans, may have been a result of elevated ozone levels. Ozone levels in the
Yangtze Delta The Yangtze Delta or Yangtze River Delta (YRD), once known as the Shanghai Economic Zone, is a megalopolis generally comprising the Wu Chinese, Wu-speaking areas of Shanghai, southern Jiangsu, northern Zhejiang, southern Anhui. The area lie ...
were studied for their effect on oilseed rape, a member of the cabbage family that produces one-third of the vegetable oil used in China. Plants grown in chambers that controlled ozone levels exhibited a 10–20 percent reduction in size and weight (
biomass Biomass is a term used in several contexts: in the context of ecology it means living organisms, and in the context of bioenergy it means matter from recently living (but now dead) organisms. In the latter context, there are variations in how ...
) when exposed to elevated ozone levels. Production of seeds and oil was also reduced. The Chinese authors of this study also reported that rice grown in chambers that controlled ozone levels exhibited a 14 to 20 percent reduction in
biomass Biomass is a term used in several contexts: in the context of ecology it means living organisms, and in the context of bioenergy it means matter from recently living (but now dead) organisms. In the latter context, there are variations in how ...
yield when exposed to ozone levels over 25 times higher than was normal for the region.


Rising prices

From the beginning of 2007 to early 2008, the prices of some of the most basic international food commodities increased dramatically on international markets. The international market price of wheat doubled from February 2007 to February 2008 hitting a record high of over US$10 a
bushel A bushel (abbreviation: bsh. or bu.) is an Imperial unit, imperial and United States customary units, US customary unit of volume, based upon an earlier measure of dry capacity. The old bushel was used mostly for agriculture, agricultural pr ...
. Rice prices also reached ten-year highs. In some nations, milk and meat prices more than doubled, while soy (which hit a 34-year high price in December 2007) and maize prices have increased dramatically. Total food import bills rose by an estimated 25% for developing countries in 2007. Researchers from the
Overseas Development Institute ODI Global (formerly Overseas Development Institute) is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the ...
have suggested this problem will be worsened by a likely fall in food aid. As food aid is programmed by budget rather than volume, rising food prices mean that the
World Food Programme The World Food Programme (WFP) is an international organization within the United Nations that provides food assistance worldwide. It is the world's largest humanitarian organization and the leading provider of school meals. Founded in 1961 ...
(WFP) needs an extra $500 million just to sustain the current operations.Rising Food Prices: A Global Crisis
Overseas Development Institute ODI Global (formerly Overseas Development Institute) is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the ...
, 22 April 2008.
To ensure that food remains available for their domestic populations and to combat dramatic price inflation, major rice exporters, such as China, Brazil, India, Indonesia, Vietnam, Cambodia and Egypt, imposed strict export bans on rice. Conversely, several other nations, including Argentina, Ukraine, Russia, and Serbia either imposed high tariffs or blocked the export of wheat and other foodstuffs altogether, driving up prices still further for net food importing nations while trying to isolate their internal markets. North Korea suffered from the food crisis to such extent that a North Korean official was quoted in June '08 with saying "Life is more than difficult. It seems that everyone is going to die". This nation however is solely relying on food assistance to cope with the crisis.


In developed countries


United States

A May 2008 national survey found that food banks and pantries across the US were being forced to cut back on food distribution as 99 percent of respondents reported an increase in the number of people requesting services. Rising food and fuel prices, inadequate food stamp benefits, unemployment, underemployment, and rent or mortgage costs were factors reported as forcing an average of 15–20 percent more people. Compounding this issue, USDA bonus foods have declined by $200 million and local food donations were down nationally about 9 percent over the same period. According to the California Association of Food Banks, which is an umbrella organization of nearly all food banks in the state, food banks are at the "beginning of a crisis".


Effects on farmers

If global price movements are transmitted to local markets, farmers in the developing world could benefit from the rising price of food. According to researchers from the
Overseas Development Institute ODI Global (formerly Overseas Development Institute) is a global affairs think tank, founded in 1960. Its mission is "to inspire people to act on injustice and inequality through collaborative research and ideas that matter for people and the ...
, this may depend on farmers' capacity to respond to changing market conditions. Experience suggests that farmers lack the credit and inputs needed to respond in the short term. In the medium or long term, however, they could benefit, as seen in the Asian
Green Revolution The Green Revolution, or the Third Agricultural Revolution, was a period during which technology transfer initiatives resulted in a significant increase in crop yields. These changes in agriculture initially emerged in Developed country , devel ...
or in many African countries in the recent past.


Relationship with 2008 Chinese milk scandal

As grain prices increased, China's numerous small-holding milk farmers, as well as producers of feed for cattle, were unable to exist economically. As a result, they turned to putting additives into the feed and milk, including
melamine Melamine is an organic compound with the formula C3H6N6. This white solid is a trimer (chemistry), trimer of cyanamide, with a 1,3,5-Triazine, 1,3,5-triazine skeleton. Like cyanamide, it contains 66% nitrogen by mass, and its derivatives ha ...
, to boost the measured level of protein. Hundreds of thousands of children became ill, China's milk exports virtually ended, executives and officials were arrested and some executed, and companies went bankrupt.


Unrest and government actions in individual countries and regions

The price rises affected parts of
Asia Asia ( , ) is the largest continent in the world by both land area and population. It covers an area of more than 44 million square kilometres, about 30% of Earth's total land area and 8% of Earth's total surface area. The continent, which ...
and
Africa Africa is the world's second-largest and second-most populous continent after Asia. At about 30.3 million km2 (11.7 million square miles) including adjacent islands, it covers 20% of Earth's land area and 6% of its total surfac ...
particularly severely with Burkina Faso, Cameroon, Senegal, Mauritania, Côte d'Ivoire, Egypt and Morocco seeing protests and
riot A riot or mob violence is a form of civil disorder commonly characterized by a group lashing out in a violent public disturbance against authority, property, or people. Riots typically involve destruction of property, public or private. The p ...
s in late 2007 and early 2008 over the unavailability of basic food staples. Other countries that have seen food riots or are facing related unrest are: Mexico, Bolivia, Yemen, Uzbekistan, Bangladesh, Pakistan, Sri Lanka, and South Africa.


Tunisia

Popular protests plagued Gafsa and other rural towns in the country of
Tunisia Tunisia, officially the Republic of Tunisia, is a country in the Maghreb region of North Africa. It is bordered by Algeria to the west and southwest, Libya to the southeast, and the Mediterranean Sea to the north and east. Tunisia also shares m ...
in 2008 against the deaths of two miners and high unemployment rates in the government. Anti-government riots were suppressed and two people died. Unemployed demonstrators and food shortages protests erupted in towns near Gafsa in inspiration but was suppressed harshly.


Morocco

A popular movement unfolded as a series of violent at times but nonviolent demonstrations and events throughout
Morocco Morocco, officially the Kingdom of Morocco, is a country in the Maghreb region of North Africa. It has coastlines on the Mediterranean Sea to the north and the Atlantic Ocean to the west, and has land borders with Algeria to Algeria–Morocc ...
in 2007–2008 after strikes took place. Unfortunately, during riots in Sidi Ifni, 10 demonstrators died after police cursed the protests in June 2008. In November–December, a wave of strikes and protests and violence hit the country as scattered protests broke out against food prices and shortages. The movement was quelled violently with a swift response by the authorities.


Bangladesh

10,000 workers rioted close to the Bangladeshi capital
Dhaka Dhaka ( or ; , ), List of renamed places in Bangladesh, formerly known as Dacca, is the capital city, capital and list of cities and towns in Bangladesh, largest city of Bangladesh. It is one of the list of largest cities, largest and list o ...
, smashing cars and buses and vandalising factories in anger at high food prices and low wages. Dozens of people, including at least 20 police officials, were injured in the violence. Ironically, the country achieved food self-sufficiency in 2002, but food prices increased drastically due to the reliance of agriculture on oil and fossil fuels. Economists estimate 30 million of the country's 150 million people could go hungry.


Brazil

In April 2008, the Brazilian government announced a temporary ban on the export of rice. The ban was intended to protect domestic consumers.


Burkina Faso

One of the earlier food riots took place in
Burkina Faso Burkina Faso is a landlocked country in West Africa, bordered by Mali to the northwest, Niger to the northeast, Benin to the southeast, Togo and Ghana to the south, and Ivory Coast to the southwest. It covers an area of 274,223 km2 (105,87 ...
, on 22 February, when rioting broke out in the country's second and third largest cities over soaring food prices (up to a 65 percent increase), sparing the capital,
Ouagadougou Ouagadougou or Wagadugu (, , , ) is the capital city of Burkina Faso, and the administrative, communications, cultural and economic centre of the nation. It is also the List of cities in Burkina Faso#Largest cities, country's largest city, wi ...
, where soldiers were mobilized throughout strategic points. The government promised to lower taxes on food and to release food stocks. Over 100 people were arrested in one of the towns. Related policy actions of the Burkinabe government included: * The removal of customs duty on rice, salt, dairy-based products and baby foods * The removal of value added tax on durum wheat, baby foods, soap and edible oils * Establishing negotiated prices with wholesalers for sugar, oil and rice * Releasing food stocks * Strengthening of community grain banks * Food distribution in-kind * Reduction of electricity cost, partial payment of utility bills for the poor * Enacting special programs for schools and hospitals * Fertilizer distribution and production support. A ban was also imposed on exportation of cereals.


Cameroon

Cameroon, the world's fourth largest cocoa producer, saw large scale rioting in late February 2008 in Douala, the country's commercial capital. Protesters were against inflating food and fuel prices, as well as the attempt by President
Paul Biya Paul Biya (born Paul Barthélemy Biya'a bi Mvondo, 13 February 1933) is a Cameroonian politician who has been serving as the second president of Cameroon since 1982. He was previously the fifth Prime Minister of Cameroon, prime minister under Pre ...
to extend his 25-year rule. Protesters set up barricades, burned tires, and targeted businesses that they believed belonged to the Biya family, high members of the ruling party, the government, or France. It became the first protest in the nation's history in which minute- by-minute events were covered by social media. By 27 February, a strike was taking place in thirty-one cities, including Yaoundé, Douala, Bamenda, Bafoussam, Buea, Limbe, Tiko, Muea, Mutengene, and Kumba. At least seven people were killed in the worst unrest seen in the country in over fifteen years. This figure was later increased to 24.Time; Food Prices:What went wrong (16 June 2008) Youths were mobilized in ways that had not been seen since the days of the villes mortes. Part of the government response to the protests was a reduction in import taxes on foods including rice, flour, and fish. The government reached an agreement with retailers by which prices would be lowered in exchange for the reduced import taxes. As of late April 2008, however, reports suggested that prices had not eased and in some cases had even increased. On 24 April 2008, the government of Cameroon announced a two-year emergency program designed to double Cameroon's food production and achieve food self-sufficiency.


Côte d'Ivoire

On 31 March, Côte d'Ivoire's capital
Abidjan Abidjan ( , ; N'Ko script, N'ko: ߊߓߌߖߊ߲߬) is the largest city and the former capital of Ivory Coast. As of the Demographics of Ivory Coast, 2021 census, Abidjan's population was 6.3 million, which is 21.5 percent of the overall population ...
saw police use tear gas and a dozen protesters injured following food riots that gripped the city. The riots followed dramatic hikes in the price of food and fuel, with the price of beef rising from US$1.68 to $2.16 per kilogram, and the price of gasoline rising from $1.44 to $2.04 per liter, in only three days.


Egypt

In Egypt, a boy was killed from a gunshot to the head after Egyptian police intervened in violent demonstrations over rising food prices that gripped the industrial city of
Mahalla is an Arabic word variously translated as district, Quarter (country subdivision), quarter, Ward (country subdivision), ward, or neighborhood in many parts of the Arab world, the Balkans, Western Asia, the Indian subcontinent, and nearby nations. ...
on 8 April 2008. Large swathes of the population have been hit as food prices, and particularly the price of bread, have doubled over the last several months as a result of producers exploiting a shortage that has existed since 2006.


Ethiopia

Drought and the food price crisis threatened thousands in Ethiopia.


Haiti

On 12 April 2008, the Haitian Senate voted to dismiss Prime Minister Jacques-Édouard Alexis after violent food riots hit the country. The food riots caused the death of five people. Prices for food items such as rice, beans, fruit and condensed milk have gone up 50 percent in Haiti since late 2007 while the price of fuel has tripled in only two months. Riots broke out in April due to the high prices, and the government had been attempting to restore order by subsidizing a 15 percent reduction in the price of rice.


India

India exports two kinds of rice: common and higher quality basmati. In October 2007, the country imposed a minimum export price on common rice in order to increase domestic stocks by reducing exports. In December 2007, they had raised the price, but exports had not declined. Consequently, in March 2008, the government banned the export of common rice. In response to criticism from some rice-importing countries, India made exceptions to allow exports to neighbors Bangladesh and Bhutan and some low-income African countries, but a limited amount was actually exported. The export ban was lifted in September 2011.


Indonesia

Street protests over the price of food took place in Indonesia where food staples and gasoline have nearly doubled in price since January 2008.


Latin America

In April 2008, the Latin American members of the United Nations' FAO met in
Brasília Brasília ( ; ) is the capital city, capital of Brazil and Federal District (Brazil), Federal District. Located in the Brazilian highlands in the country's Central-West Region, Brazil, Central-West region, it was founded by President Juscelino ...
to confront the issues of high food prices, scarcities and violence that affect the region.


Mexico

The president of Mexico,
Felipe Calderón Felipe de Jesús Calderón Hinojosa (; born 18 August 1962) is a Mexican politician and lawyer who served as the 63rd president of Mexico from 2006 to 2012 and Secretary of Energy during the presidency of Vicente Fox between 2003 and 2004. ...
, with industry representatives and members of the Confederation of Industrial Chambers (Concamin), agreed to freeze prices of more than 150 consumer staples, such as coffee, sardines, tuna, oil, soup or tea, among others, until the end of December 2008. The measure was carried out in an attempt to control inflation, which stood at an annual rate of 4.95%, the highest increase since December 2004. Mexican baking company Grupo Bimbo's CEO, Daniel Servitje, announced in the 19th Plenary Meeting of the Mexico–China Business Committee that Bimbo agreed to freeze their product prices, despite a 20% rise in production costs. Bimbo is one of the most important baking companies worldwide, having recently expanded to China. Bimbo has also acquired five bakeries in the United States and Canada.


Mozambique

In mid February, rioting that started in the Mozambican rural town of Chokwe and then spread to the capital,
Maputo Maputo () is the Capital city, capital and largest city of Mozambique. Located near the southern end of the country, it is within of the borders with Eswatini and South Africa. The city has a population of 1,088,449 (as of 2017) distributed ov ...
, has resulted in at least four deaths. The riots were reported in the media to have been, at least in part, over food prices and were termed "food riots". A biofuel advocacy publication, however, claimed that these were, in fact, "fuel riots", limited to the rise in the cost of diesel, and argued that the "food riot" characterization worked to fan "anti-biofuels sentiment".


Pakistan

The
Pakistan Army The Pakistan Army (, ), commonly known as the Pak Army (), is the Land warfare, land service branch and the largest component of the Pakistan Armed Forces. The president of Pakistan is the Commander-in-chief, supreme commander of the army. The ...
has been deployed to avoid the seizure of food from fields and warehouses. This hasn't stopped the food prices from increasing. The new government has been blamed for not managing the countries food stockpiles properly.


Myanmar

Once the world's top rice producer, has produced enough rice to feed itself until now. Rice exports dropped over four decades from nearly 4 million tons to only about 40,000 tons last year, mostly due to neglect by Myanmar's ruling generals of infrastructure, including irrigation and warehousing. On 3 May 2008 Cyclone Nargis stripped Myanmar's rice-growing districts, ruining large areas with salt water. U.N. Food and Agriculture Organization estimates that these areas produce 65 percent of Myanmar's rice. Worries of long-term food shortages and rationing are rife. The military regime says nothing about the rice crisis, but continues to export rice at the same rate. "...at least the next two harvests are going to be greatly affected and there'll be virtually no output from those areas during that time. So we're likely to see considerable food and rice shortages for the next couple of years. The damage to the economy is going to be profound." said economist and Myanmar expert Sean Turnell, of Australia's Macquarie University. (interviewed in "The Irriwaddy", Tuesday, 27 May 2008) On 22 February 2007, a small group of individuals protested the current state of consumer prices in the country. On 15 August 2007 the government removed subsidies on fuel causing a rapid and unannounced increase in prices. Protests grew into what became known as the ''Saffron Revolution''.


Panama

In Panama, in response to higher rice prices the government began buying rice at the high market price and selling rice to the public at a lower subsidized price at food kiosks.


Philippines

In the Philippines, the Arroyo government insisted on 13 April that there would be no food riots in the country and that there could be no comparison with Haiti's situation. Chief Presidential Legal Counsel, Sergio Apostol stated that: "Haiti is not trying to solve the problem, while we are doing something to address the issue. We don't have a food shortage. So, no comparison..." Comments by the Justice Secretary, Raul Gonzalez, the following day, that food riots are not far fetched, were quickly rebuked by the rest of the government. On 15 April, the Philippines, the world's largest rice importer, urged China, Japan, and other key Asian nations, to convene an emergency meeting, especially taking issue with those countries' rice export bans. "Free trade should be flowing", Philippine Agriculture Secretary Arthur Yap stated. In late April 2008, the Philippines government requested that the World Bank exert pressure on rice exporting countries to end export restrictions.


Russia

The Russian government pressured retailers to freeze food prices before key elections for fear of a public backlash against the rising cost of food in October 2007. The freeze ended on 1 May 2008.


Senegal

On 31 March 2008, Senegal had riots in response to the rise in the price of food and fuel. Twenty-four people were arrested and detained in a response that one local human rights group claimed included "torture" and other "unspeakable acts" on the part of the security forces. Further protests took place in
Dakar Dakar ( ; ; ) is the capital city, capital and List of cities in Senegal, largest city of Senegal. The Departments of Senegal, department of Dakar has a population of 1,278,469, and the population of the Dakar metropolitan area was at 4.0 mill ...
on 26 April 2008.


Somalia

Riots in Somalia occurred on 5 May 2008 over the price of food, in which five protesters were killed. The protests occurred amid a serious humanitarian emergency due to the Ethiopian war in Somalia.


Tajikistan

In 2008, ''
The Christian Science Monitor ''The Christian Science Monitor'' (''CSM''), commonly known as ''The Monitor'', is a nonprofit news organization that publishes daily articles both in Electronic publishing, electronic format and a weekly print edition. It was founded in 1908 ...
'', neweurasia, and other media observers predicted that a nascent hunger crisis would erupt into a full
famine A famine is a widespread scarcity of food caused by several possible factors, including, but not limited to war, natural disasters, crop failure, widespread poverty, an Financial crisis, economic catastrophe or government policies. This phenom ...
as a consequence of energy shortages at the time. UN experts announced on 10 October that almost one-third of Tajikistan's 6.7 million inhabitants were at risk of running out of food during the winter of 2008–09.


Yemen

Food riots in southern Yemen that began in late March and continued through early April, saw police stations torched, and roadblocks were set up by armed protesters. The army has deployed tanks and other military vehicles. Although the riots involved thousands of demonstrators over several days and over 100 arrests, officials claimed no fatalities; residents, however, claimed that at least one of the fourteen wounded people has died.


Projections and early mitigation efforts

The FAO released a study in December 2007 projecting a 49 percent increase in African cereal prices, and 53 percent in European prices, through July 2008. In April 2008, the World Bank, in combination with the
International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...
, announced a series of measures aimed at mitigating the crisis, including increased loans to African farmers and emergency monetary aid to badly affected areas such as Haiti. According to FAO director Jacques Diouf, however, the
World Food Programme The World Food Programme (WFP) is an international organization within the United Nations that provides food assistance worldwide. It is the world's largest humanitarian organization and the leading provider of school meals. Founded in 1961 ...
needed an immediate cash injection of at least $1700 million, far more than the tens of million-worth in measures already pledged. On 28 April 2008, the United Nations Secretary-General
Ban Ki-moon Ban Ki-moon (born 13 June 1944) is a South Korean politician and diplomat who served as the eighth secretary-general of the United Nations between 2007 and 2016. Prior to his appointment as secretary-general, Ban was the South Korean minister ...
established a Task Force on the Global Food Security Crisi

under his chairmanship and composed of the heads of the United Nations specialized agencies, funds and programmes, Bretton Woods institutions and relevant parts of the UN Secretariat to co-ordinate efforts to alleviate the crisis.


After the crisis

2013 research concluded that the spike was the result of an unusual combination of circumstances and prices in the future will be higher than before the spike, depending on
oil prices The price of oil, or the oil price, generally refers to the spot price of a barrel () of benchmark crude oil—a reference price for buyers and sellers of crude oil such as West Texas Intermediate (WTI), Brent Crude, Dubai Crude, OPE ...
,
climate change Present-day climate change includes both global warming—the ongoing increase in Global surface temperature, global average temperature—and its wider effects on Earth's climate system. Climate variability and change, Climate change in ...
, and future diets. WDM noted in 2010 that after the spike in prices in 2008, prices of wheat, maize and rice lowered but were still higher than before the crisis. The impacts of the spike on poor people were concentrated in low-income countries and may have been less severe than once thought, thanks to rising rural wages in some countries. The researchers called on developing countries to ensure good data on the key indicators of distress and to strengthen
social protection Social protection, as defined by the United Nations Research Institute for Social Development, is concerned with preventing, managing, and overcoming situations that adversely affect people's well-being. Social protection consists of policies and ...
, and on those involved in international development to continue increasing focus on reducing child
malnutrition Malnutrition occurs when an organism gets too few or too many nutrients, resulting in health problems. Specifically, it is a deficiency, excess, or imbalance of energy, protein and other nutrients which adversely affects the body's tissues a ...
and stimulating agricultural development.


Actions by governments

IFAD is making up to US$200 million available to support poor farmers boost food production in face of the global food crisis. On 2 May 2008, US President
George W. Bush George Walker Bush (born July 6, 1946) is an American politician and businessman who was the 43rd president of the United States from 2001 to 2009. A member of the Bush family and the Republican Party (United States), Republican Party, he i ...
said he was asking Congress to approve an extra $770 million funding for international food aid. On 16 October 2008, in a speech at a United Nations gathering on World Food Day, former US president
Bill Clinton William Jefferson Clinton (né Blythe III; born August 19, 1946) is an American politician and lawyer who was the 42nd president of the United States from 1993 to 2001. A member of the Democratic Party (United States), Democratic Party, ...
criticized the bipartisan coalition in Congress that blocked efforts to make some aid donations in cash rather than in food. Referring in part to policies that had pressured African governments to reduce subsidies for fertilizer and other agricultural inputs, Clinton also said:
We need the World Bank, the IMF, all the big foundations, and all the governments to admit that, for 30 years, we all blew it, including me when I was President. We were wrong to believe that food was like some other product in international trade, and we all have to go back to a more responsible and sustainable form of agriculture.
The release of Japan's rice reserves onto the market may bring the rice price down significantly. As of 16 May, anticipation of the move had already lowered prices by 14% in a single week. On 30 April 2008, Thailand announced an agreement in principle to create the Organization of Rice Exporting Countries (OREC) with the potential to develop a price-fixing
cartel A cartel is a group of independent market participants who collaborate with each other as well as agreeing not to compete with each other in order to improve their profits and dominate the market. A cartel is an organization formed by producers ...
for rice. In June 2008 the FAO hosted a High-Level Conference on World Food Security, in which $1.2 billion in food aid was committed for the 75 million people in 60 countries hardest hit by rising food prices. In June 2008, a sustained commitment from the G8 was called for by some humanitarian organizations.


Food price decreases

In December 2008, the global economic slowdown, decreasing oil prices, and speculation of decreased demand for commodities worldwide brought about sharp decreases in the price of staple crops from their earlier highs. Corn prices on the
Chicago Board of Trade The Chicago Board of Trade (CBOT), is an American futures exchange, futures and options exchange that was founded in 1848. On July 12, 2007, the CBOT merged with the Chicago Mercantile Exchange (CME) to form CME Group. CBOT and three other excha ...
dropped from US$7.99 per bushel in June to US$3.74 per bushel in mid-December; wheat and rice prices experienced similar decreases. The UN's Food and Agriculture Organization, however, warned against "a false sense of security", noting that the credit crisis could cause farmers to reduce plantings. FAO convened a World Summit on Food Security at its headquarters in Rome in November 2008, noting that food prices remained high in developing countries and that the global
food security Food security is the state of having reliable access to a sufficient quantity of affordable, healthy Human food, food. The availability of food for people of any class, gender, ethnicity, or religion is another element of food protection. Simila ...
situation has worsened. By early 2010, food prices had risen again to surpass the record highs of 2008. Some commentators saw this as the resumption of the price spike seen in 2007–08. Prices had dropped after good weather helped increase grain yields while demand had dropped due to the recession.


See also

*
2000s commodities boom The 2000s commodities boom, commodities super cycle or China boom was the rise of many physical commodity prices (such as those of food, oil, metals, chemicals and fuels) during the early 21st century (2000–2014), following the Great Commoditie ...
* 2020s commodities boom * Agreement on Agriculture *
Agribusiness Agribusiness is the industry, enterprises, and the field of study of value chains in agriculture and in the bio-economy, in which case it is also called bio-business or bio-enterprise. The primary goal of agribusiness is to maximize profit ...
* World food crises (2022–2023)


References


External links


Food and Agriculture Organization FAO World Food Situation Portal
Food and Agriculture Organization The Food and Agriculture Organization of the United Nations; . (FAO) is a specialized agency of the United Nations that leads international efforts to defeat hunger and improve nutrition and food security. Its Latin motto, , translates ...
*
FAO Global Information and Early Warning System

World Summit on Food Security 2009

Reuters
– Special Coverage: Agflation
International Food Policy Research Institute
– Research Area: Food Prices
Research Brief: State of Food Insecurity & Opportunities in Muslim Countries
– DinarStandard Research Brief
Anti-Hunger Protests Rock Haiti
2008. North American Congress on Latin America, by Jeb Sprague

from Reuters AlertNet
The Food Bubble: How Wall Street Starved Millions and Got Away With It
– video report with Frederick Kaufman by ''
Democracy Now! ''Democracy Now!'' is an hour-long TV, radio, and Internet news program based in Manhattan and hosted by journalists Amy Goodman (who also acts as the show's executive producer), Juan González, and Nermeen Shaikh. The show, which airs live ...
'' {{DEFAULTSORT:2007-2008 world food price crisis 2000s in economic history World food price crisis World food price crisis Biofuels Economic crises Economy of Africa Economic history of Asia Energy crops Food politics Great Recession