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Why are Food Prices so High, Why is There
a Global Food Shortage? The Facts


Take a trip to just about any grocery store in the United States, and you're in for some sticker shock. Since March 2007, grocery costs increased over 5 percent according to government figures -- the worst grocery inflation since the early 1990s.


In the last two years, the price of eggs has increased 62 percent.

Just how much have food prices gone up?

The Labor Department compiled the official inflation numbers and found that:

  • Egg prices have increased 25 percent since February 2007 -- and 62 percent in the last two years

  • Milk, dried beans, peas and lentil prices have increased 17 percent in the past year

  • Cheese prices have increased 15 percent

  • Rice and pasta increased 13 percent

  • Bread costs rose 12 percent

While here in the United States we are faced with rising food costs, people in other regions of the world are not so lucky: they're facing an all-out food shortage.

"This is a silent tsunami," says Josette Sheeran of the World Food Programme, a United Nations agency.

Unlike past hunger crises that have resulted from war or natural disasters, the hunger crisis of 2008 is different. This excerpt from "The Silent Tsunami" in The Economist explains it quite well:

"The measures of today's crisis are misery and malnutrition. The middle classes in poor countries are giving up health care and cutting out meat so they can eat three meals a day. The middling poor, those on $2 a day, are pulling children from school and cutting back on vegetables so they can still afford rice. Those on $1 a day are cutting back on meat, vegetables and one or two meals, so they can afford one bowl. The desperate-those on 50 cents a day-face disaster."

us corn price

Is growing corn to produce biofuels responsible for the global food shortage? Some experts are not so sure.

To put things into perspective, according to some estimates food prices in some poor nations have risen by up to 80 percent.

What is Causing These High Food Prices?

There is no easy answer to this question, though the hot-button response is often "ethanol." Massive amounts of corn are being used to make biofuel, and now there isn't enough food to go around, the theory goes.

The UN's reporter for the Right to Food even went so far as to call biofuel production "a crime against humanity."

Yet this is really only one piece of the puzzle, according to some economists. In fact, U.S. farmers have actually increased their plantings this year (soybeans are up 18 percent, wheat 6 percent), not decreased them to make room for corn, according to this Chicago Tribune article.

What is really contributing to soaring food costs, experts say, is a mix of:

  1. Millions of people in China and India rising out of poverty and demanding a more calorie-rich diet

  2. Rising energy prices, including the price of fuel, which increases the cost of production, transport, wages and packaging of food

  3. A weak U.S. dollar, which is encouraging exports of American crops and food products

  4. Unsustainable use of land and water

  5. Trade imbalances among nations

Meanwhile, a report released by the UN's World Food Program (WFP) says that the world produces enough food for every one, yet over 800 million people go hungry. Why? Politics.

"The unequal distribution of food and conflict over control of the world's dwindling natural resources presents a major political and social challenge to governments," said the report's authors. "[It is] likely to reach crisis status as climate change advances and world population expands from 6.7 billion to 9.2 billion by 2050."

What Can be Done?

On a small scale, you may feel powerless to impact rising food prices, but there are some things you can do.

  1. Consider purchasing a flex-fuel vehicle that can run on biofuels. According to Merrill Lynch analysts, far from causing the food crises, biofuel programs are actually keeping oil prices about $13 lower per barrel -- a savings that adds up to $65 billion in foreign oil payments.

    If everyone were to purchase a flex-fuel vehicle, gasoline would be forced to compete against other fuels, which could ultimately take down the oil cartel. Some are also pushing for Congress to require all new cars to be flex-fuel vehicles that can run on gasoline, ethanol or methanol -- a technology that costs just $100 per vehicle.

  2. Buy your food locally. You may be able to cut your grocery bills simply by supporting local farmers. When you buy your food locally, you're saving on transportation costs and encouraging your local economy. You're also supporting small farms that favor sustainable agriculture.

Recommended Reading

Daryl Hannah, Sex Slaves & the New Global Sex Trade

The Worldwide Threat to Coral Reefs and Why It Should Matter to Everyone


The New York Times March 15, 2008 April 17, 2008

Organic Consumers Association April 21, 2008 May 6, 2008

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