2007–08 world food price crisis

As a food price crisis 2007-2008, the increase in prices of food between 2007 and 2008 is called.

According to FAO, starved as a result of increased prices worldwide in 2007 at least 75 million more people, including 41 million in Asia and the Pacific, and 24 million in sub-Saharan Africa. The U.S. Department of Agriculture estimated the effect of higher prices in 2007 to 30 million additional hungry people in 70 developing countries analyzed. In over 60 countries, there were social and political unrest, which ran partly violent.

Price History

In particular cereals ( increase to 238% of the average price from 2002 to 2004 according to the FAO ), dairy products (220 %) and oils ( 227 % ) also rose to 2008. Prices of four major food rice, corn, wheat and soybean tripled between autumn 2005 and mid-2008. in 2007, a rapid increase was recorded and the price peaks were reached in winter 2007 and spring 2008. In developing countries, it was partly to increases in the consumer prices of up to 40%. In the course of 2008, prices fell then temporarily back.

Causes

Due to the interaction of different influences, it is very difficult to identify the direct causes of the price rises. In addition to environmental factors, among others, the following causes that contributed together to the price increase, were expressed in the public and scientific debate:

• The growth of the world population.
• The change in diet in some emerging countries. For example, meat consumption in China has increased significantly - which is why more agricultural products used for the feeding of animals for slaughter.
• Become lower inventory levels. Thus, the cultivation of rice is less lucrative than, say, for example in China the cultivation of fruits such as bamboo or pineapple, and there is less agricultural land due to industrialization.
• The increase in energy prices and the associated increase in the price of fertilizers (which in the production of oil or natural gas often require )
• Agricultural trade and policies. Since the 1980s, many developing countries have become food importers. In this context, for example, criticized the development organization Bread for the World, the ( by structural adjustment programs carried out ) unconditional opening of markets in developing countries for food imports from developed countries. In the context, the subsidies for food production in industrialized countries are criticized, whereby food exports will be promoted in developing countries. Moseley, Carney and about Becker analyzed the trade policy and the food crisis in Gambia, Ivory Coast and Mali. The urban areas in Mali were there comparatively little affected by the food crisis, which the authors attributed to the fact that Mali even produced a higher proportion of its rice instead of importing it.
• Competition for space: the strong increase in the use of cereals for the production of biofuels for several years (especially maize in the United States).
• In addition, food speculation is recognized as an important causal factor. So the crisis of world hunger and help Oxfam 's view, as well as individual experts UNCTAD and the World Bank was mainly due to speculation in food. Also, several experts at a hearing of the Bundestag shared this assessment.

In particular, the impact of the production of biofuels and the food speculation are discussed controversially. Tang ( Princeton University) and Xiong ( Renmin University ) come in their study concluded that the financialization of commodity markets, the large price increases miterklären. So the prices were influenced in the non-energy commodity markets, not only by demand and supply, but also by strategies of financial investors. An investigation of the Bank of Japan also provides financial effects as a causal factor influencing price. However, according to a study by the Office of Science of the British government ( Government Office for Science ) Regulations 2011 makes lack of data quality, it is not possible to prove the influence of speculation sound methodology or disprove. While speculation could theoretically have an impact on prices, am suggesting a review of potential mechanisms that speculation probably made ​​no significant contribution to the food price crisis. A preliminary study of Michael Schmitz (Institute of Agricultural Policy and Market Research at the University of Giessen ) on behalf of the German Biofuels Industry and the Union for the Promotion of Oil and Protein Plants comes to the conclusion that in general neither speculation on financial markets or the production of biofuels for the large rise in food prices were responsible. In the food price study for the German Agro Action by Hans -Heinrich Bass ( University of Bremen ) is emphasized that the data necessary for an accurate measurement of the influence are difficult available. However, it is undeniable that adverse impacts are made by financial speculation. Researchers from the DIW 2011 estimated that global liquidity making up about 20 percent of food price changes. It therefore were other factors that affect the price more, but rising demand from financial investors exaggerating the price.

Reactions

The U.S. futures exchange supervision Commodity Futures Trading Commission ( CFTC ) proposed as a preventive measure against instabilities and of the prize bubbles on commodity markets to set position limits in the financial market for the large non-industry stakeholders.

In the food price study by the World Hunger Relief of 2011, among other reporting obligations to some financial activities, the introduction of a financial transaction tax and a fairer world trade policies have been proposed. By strengthening the bargaining power of producers of food in developing countries compared to the seed producers and international marketers ( thus larger share of income for producers) should be created for the expansion of food production incentives.

Some developing countries have changed as a consequence of the crisis, its agricultural policy, for example, Malawi increased food production through subsidized cheap fertilizer. International responses to the crisis, as those on regulating against price fluctuations or for larger agricultural assistance, there was hardly, as the head of the Germany World Food Programme, Ralf Südhoff criticized.