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Food Prices to Rise by Up to 40% Over Next Decade, UN Report Warns
Growing demand from emerging markets and for biofuel production will send prices soaring, according to the OECD and the UN Food and Agriculture Organisatio
Food prices are set to rise as much as 40% over the coming decade amid growing demand from emerging markets and for biofuel production, according to a United Nations report today which warns of rising hunger and food insecurity.
Somalis protest over high food prices during the spike of 2008. (Photograph: Abdurashid Abikar/Getty Images) Farm
commodity prices have fallen from their record peaks of two years ago
but are set to pick up again and are unlikely to drop back to their
average levels of the past decade, according to the annual joint report from Paris-based thinktank the OECD and the UN Food and Agriculture Organisation (FAO).
The forecasts are for wheat and coarse grain prices over the next 10 years to be between 15% and 40% higher in real terms, once adjusted for inflation, than their average levels during the 1997-2006 period, the decade before the price spike of 2007-08. Real prices for vegetable oils are expected to be more than 40% higher and dairy prices are projected to be between 16-45% higher. But rises in livestock prices are expected to be less marked, although world demand for meat is climbing faster than for other farm commodities on the back of rising wealth for some sections of the population in emerging economies.
Although the report sees production increasing to meet demand, it warns that recent price spikes and the economic crisis have contributed to a rise in hunger and food insecurity. About 1 billion people are now estimated to be undernourished, it said.
Fairtrade campaigners said the predictions of sharply rising prices provided a "stark warning" to international policymakers.
"Investment to encourage the 1 billion people whose livelihoods rely on smallholder agriculture is vital. Not only will this increase yields but will go a long way to increase prosperity in poverty stricken regions," said Barbara Crowther, director of communications at the Fairtrade Foundation.
"At the same time, the promise of increased agriculture commodity prices could spark a new surge in land grabbing by sovereign wealth funds and other powerful investors which risks marginalising further rural communities who must be included in solutions to secure and maintain food supplies."
The report says that agricultural production and productivity must be stepped up and it argues for a well-functioning trading system to ensure fair competition and that surplus food is getting to where it is needed.
It also painted a growing role for developing countries in both boosting demand and production. Brazil is by far the fastest growing agricultural producer, with output expected to rise by more than 40% in the next decade and production growth is also expected to be well above 20% in China, India, Russia and Ukraine.
"The role of developing countries in international markets is growing quickly, and as their impact grows, their policies also have an increasing bearing on conditions in global markets," said FAO director-general Jacques Diouf.
"This makes their role and contribution to global policy issues critical. Policy discussions must be global in scope and we need to improve the framework for such exchange of views."
Another factor driving up food prices is the controversial biofuels industry. The report predicts that continued expansion of biofuel output – often to meet government targets – will create additional demand for wheat, coarse grains, vegetable oils and sugar.
15 Comments so far
Show AllHigh food prices? Imagine food prices after Israel and/or the USA bomb Iran's nuclear reactors, permanently contaminating the Persian Gulf, and starting another long war, in the very region from which comes 50% of the world's oil. The end-of-oil decline is scheduled to take 5 or 6 decades. The next war will run us instantly right over the cliff.
As long as the US Federal Reserve continues to keep interest rates low and the financial industry deregulated, US taxpayers will continue to subsidize speculators who keep creating commodity price bubbles that boost food prices beyond the forces of supply and demand.
I believe food is going to be scarce well before
the UN prediction.
We are just one disaster away as Serious Citizen points out,
it isn't neccessarily going to be a war.
It could be another stock market crash, or government unable
make good government checks.
Couple this rise in food in prices, which is almost certain to occur sooner than UN predictions, with the loss of purchasing power with the US dollar, which is guaranteed to escalate - whether food prices rise or not - and we have the makings of a "perfect storm" of food insecurity, the ramifications of which will go far beyond the 10% of Americans now using food stamps.
Families not in possession of heirloom seeds and/or lack the ability to grow (or have grown) foods produced from unadulterated seeds, will be in world of s**t, when the "Food Wars" begin in earnest.
Oil = "food". The quotes are because what genetically modified outputs pass for food cause medical reactions in a few people. Anyways, the price of oil goes up, and so does the price of oil crops. "A double handful of wheat is your entire day's wages, and spare not the oil or the alcohol production!" -- The Bible, Book of Revelation, roughly translated (the third horseman of the apocalypse).
A decade is such a long time away in this crisis ravaged world.
But with everything changing at once, prediction becomes really messy.
A guess might be that global prices will triple, reflecting real costs and growing demand defeating supply. If demand is sufficient and matched by money, we should be stealing the food for consumption away from uses of livestock and biofuels.
Tragic ecosystem destruction will accelarate until there is not much left to destroy. Agriculture will continue be damaged by climate change and oil price rises. Pesticide and fertiliser will be less effective in maintaining yields. Where possible more sophisticated organic and labour intensive methods will be forced.
As jobs and income are widely depressed, then many of us will not even be in the market to buy. What are all the homeless, jobless and social welfareless people going to do? Go to prison? We will be depending on Government and Charity, and whatever we can grow ourselves.
But in hard times, government and charity develop very hard hearts, always blaming or ignoring the victim.
Many will starve while others are gluttons, because income distribution inequality will grow towards the ultimate state, that is, the death of the poor. Well-fed government troops will be used to massacre rioting and starving people as terrorists, if they have any other resources to appropriate, or otherwise they will be just left to die, if we are to go by current trends. After a few decades more of this the problem will have gone away in mass graves.
Ok you numbskulls when are we going to start growing our own food again? When are we going to start supporting our farmers and co-ops?
I and many others are now growing some of our own food. We also need to get our cities to loosen up on their regulations so that we can grow our own food. Like chickens for one thing, and as for that water waster of a front lawn…do not get me started.
The cities are the last ones to make these necessary changes. Our city fathers are usually people with lots of money and they do not feel the pinch until it is too late. What do they want food rioting their cities. Well…just wait, 'cause she is a comin’.
We grow all our own vegetables year round in the city: many here do. We have a greenhouse in our backyard. We took the initiative: some of us can see a future of food riots and starving people, and are working today for a better tomorrow.
The high prices of food are the result of speculation, not increased demand or increases in the cost of production. Want to stabilize the cost of food? Then you need to control global finance...
Exactly. That's why the most recent spike in food prices occurred around the Wall Street bubble collapse, and practically overnight. Funny, they didn't come down after the bailout, hey.
I wish we could get rid of those financial parasites - they contribute nothing but grief.
So true...
Food prices will escalate way faster and way higher than this article suggests. It's a good thing! I can't wait! It will encourage people to start growing and get involved. It will inspire many to get their hands back into the soil and connect with Earth. Bring it on! It will take an event of this magnitude to get people's butts in gear. Just keep GMO foods out of the equation: nasty stuff: living pesticide factories.