New Food Crisis Looms


Flood victims wait in line for food handouts at a relief camp in Pakistan’s Sindh province. (Athar Hussain/Courtesy Reuters)

The world experienced a major food crisis in 2008 that led to civil and political unrest from Bangladesh to Haiti and added millions more to those suffering from malnutrition. Though prices have dropped somewhat, some analysts say the crisis never totally ended. With prices rising dramatically in 2010, the world could be on the brink of a new crisis.

While food prices remain below their 2008 highs, “they’re a lot higher than they were before ‘the food crisis of 2008’ took hold,” says financial journalist Addison Wiggin (Forbes), noting that wheat, corn, and sugar prices are up more than 50 percent since the beginning of the year. Farm commodity expert Don Coxe argues the first major crop failure in 2011 is all that’s needed to “have a full-blown food crisis,” one potentially worse than 2008.

In a November report last week, the UN’s Food and Agriculture Organization (FAO) sounded the alarm over skyrocketing food prices, predicting the world’s food import bill (PDF) could be more than $1 trillion in 2010. The FAO says that food stocks are high enough to avert a new crisis but that predictions that cereal yields in chief producing countries will decrease in the coming year are driving prices up much faster than they rose in 2008.

The report notes countries such as Pakistan, devastated by flooding this summer, and many least-developed countries are expected to feel rising food prices the most; it argues more should be done to understand the implications of commodity market speculation on food prices. “A key lesson of 2008 is that volatile global financial markets can result in food commodity price speculation that has dire consequences for the world’s poorest,” notes CFR’s Laurie Garrett. But others say that it was export restrictions, panic buying, and hoarding (JakartaPost) that precipitated the 2008 crisis.

Some countries are already beginning to respond. Russia announced in October it would continue its ban on grain exports for another eight months, a measure put in place in August following the severe drought and wildfires that decimated crops in the country this summer. China, experiencing the worst food inflation since 2008 (SydneyMorningHerald), announced last week it would cap prices on grains, edible oil, and sugar. And the EU is contributing 40 million euros to stabilize Pakistan’s food prices.

As global food demand increases, experts say more should be done to bolster agriculture production in least- developed countries and reduce agriculture trade barriers. “Looking beyond the immediate crisis, the United States and other developed countries must renew long-neglected investments in agriculture assistance across the developing world, targeting small farmers as the fundamental drivers of economic growth,” wrote John Podesta and Jake Caldwell (FP) of the progressive think tank Center for American Progress in August. In particular, they argue that the United States, responsible for half of global food aid, should loosen restrictions on allowing aid dollars to be used for locally grown food.


Concerns about global wheat supplies are sparking fears that price inflation in the wheat market could lead to a food crisis akin to the one in 2008, says CFR’s Laurie Garrett.

A report by the U.S.-based International Food Policy Research Institutes argues to avert another food crisis several steps are necessary, including making agricultural trade freer; addressing long-term threats to productivity; and encouraging agricultural production in countries heavily dependent on food imports.

In Foreign Affairs, Roger Thurow says that with one billion people already going hungry and the world’s population rising, global food production must urgently be increased, and Africa, with help, has the best opportunity to increase production.

This 2008 CFR working paper examines causes and policy implications of food price inflation.

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2 Responses

  1. tony N says:

    put these desalination plants in , , and start pumping water inland to alternative growing facilities like this , and this would set the stage for future developments of these types of Growing facilities to be built over a long term for the needs of alternative food productions as well as a Whole Host of other creative resource needs Like Bio Algae growing facilities
    The Pulp from this is high in Protein so all kinds of food stuff could be generated along with the energy produced from this resource ,\

  2. tony N says:

    The rise in Food Prices are telling people they need to grow MORE FOOD , if you don’t keep that Mechanism in place you will not see the trend early enough in Time to avert the Supply shortages , this is what happened in the late 1800s and early 1900s in Europe that led to famine , conflicts , social unrest and eventual Concentration camps and gulags because the short sightedness and lack of technology to create abundance was never understood until it was to late due to no free market speculators accounting the production numbers and seeing the future trends in Food productions and then reacting with speculative bids signaling shortages or surplus .

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