|
By Ira Karen Apanay, Senior
Reporter
The world prices of major food
items, such as grain and vegetable oils, have increased more than 60
percent over the last two years, the US Department of Agriculture
reported.
And the Philippines is identified
as one of 19 low-income, food-deficit countries that faces social
unrest as a result of the sharp increases that breached historic
highs, according to the report Global Agricultural Supply and
Demand: Factors Contributing to the Recent Increase in Food
Commodity Prices. It was published in May 2008 by the Economic
Research service of the US Agriculture department.
In 2007, bad weather affected
yields across the globe, the report said. It added that retail food
prices in many countries have also risen in the last two years,
triggering concerns worldwide.
"Although the food commodity
index has risen more than 60 percent in the last two years, the
index for all commodities has also risen 60 percent and the index
for crude oil has risen even more," according to the report.
Agricultural economist Ronald
Trostle, the report’s author, said that since mid-1999 when all
three indices were at about the same level and were about where they
had been 10 years earlier, food prices have risen 98 percent as of
March 2008. The index for all commodities has risen 286 percent, and
the index for crude oil has risen 547 percent.
Trostle added that an increase in
the prices of food causes hardships for many lower-income consumers
around the world. "That is why much of the world’s attention
is now focused on the increase in food prices, more so than on the
more rapid increase in prices of other commodities."
Reasons for increase
The economist explained that slow
production growth and strong consumer demand have gradually put
upward pressure on agricultural prices.
Also, the report mentioned that
reduced agricultural research and development by governments and
international institutions may have contributed to the slowing
growth in crop yields.
"Stable food prices during
the last two decades have led to some complacency about global food
concerns and to a reduction in R&D funding levels," the
report added.
But the report noted that private
sector funding of research has grown, but the researches are
generally focused on innovations that private companies could sell
to producers.
There are other factors
contributing to high prices, such as the conversion of agricultural
lands to non-agricultural uses, which has been happening worldwide
for decades now. Also water for agricultural uses is harder to get,
either because gravity-flow irrigation systems are more difficult
and expensive to develop, or because irrigation wells have to be dug
deeper as water tables decline.
Climate change is also mentioned
as a concern, but the report added, "Its impact on crop
production is unclear."
Poor at most risk
The report stressed that rising
food commodity prices tend to negatively affect lower-income
consumers more than wealthier ones. "Lower-income consumers
spend a larger share of their income on food," Trostle
explained.
The report added that the recent
price spike has led to social unrest in a number of countries, which
the author based on news media reports, citing riots in Guinea,
Mauritania, Morocco, Senegal, Cameroon, Mexico, Uzbekistan, Yemen,
Niger, Burkina Faso, Egypt, Haiti, Ethiopia, Philippines, Thailand,
Mozambique, Ivory Coast, Bangladesh and Indonesia.
Most of these incidents have
occurred in low-income, food-deficit countries, the report said.
Protests in other countries were
peaceful—by millers and bakers in Malaysia, by people selling
soybean and meats in Indonesia, and by wheat marketers in Pakistan.
In Peru, farmers blocked rail lines to protest rising fertilizer
costs. And in South Africa, members of the National Labor Federation
demonstrated against rising food and electricity prices.
|
