2007–08 world food price crisis

2007–08 World Food Price Crisis

The 2007–08 world food price crisis was a period of extreme volatility in the prices of food commodities, which led to widespread economic and social impacts across the globe. This crisis was characterized by a sharp increase in the prices of staple foods such as rice, wheat, and corn, leading to food shortages and increased hunger in many parts of the world.

Background

The crisis was precipitated by a combination of factors, including:

• **Increased demand**: Rising incomes in China and India led to increased demand for food, particularly meat, which in turn increased the demand for grain to feed livestock.
• **Biofuel production**: The diversion of crops such as corn to produce biofuels, particularly ethanol in the United States, reduced the availability of these crops for food consumption.
• **Weather conditions**: Adverse weather conditions, including droughts in major grain-producing regions, reduced crop yields.
• **Oil prices**: Rising oil prices increased the cost of agricultural inputs such as fertilizers and transportation, contributing to higher food prices.
• **Speculation**: Increased speculation in commodity markets exacerbated price volatility.

Impact

The impact of the food price crisis was felt worldwide, but it was particularly severe in developing countries where a large proportion of household income is spent on food. The crisis led to:

• **Food riots**: Protests and riots occurred in several countries, including Haiti, Egypt, and Bangladesh, as people struggled to afford basic food items.
• **Increased poverty**: Higher food prices pushed millions of people into poverty, exacerbating hunger and malnutrition.
• **Policy responses**: Governments implemented various measures to mitigate the impact, such as export bans, price controls, and subsidies, but these often had mixed results.

Long-term Consequences

The crisis highlighted the vulnerability of the global food system and led to increased attention on food security. It prompted discussions on:

• **Sustainable agriculture**: The need for more sustainable agricultural practices to increase resilience to climate change and reduce dependency on fossil fuels.
• **Global cooperation**: The importance of international cooperation in addressing food security challenges and ensuring fair trade practices.
• **Investment in agriculture**: The necessity for increased investment in agricultural research and infrastructure to boost productivity.

Also see

• Food security
• Biofuel
• Commodity markets
• Globalization
• Sustainable agriculture