Food Prices - The Silent Financial Crisis?

Interesting to see that Barack Obama has managed to persuade G8 leaders to contribute US$12 billion over the next three years to a food security initiative, according to the New York Times. The Times reports that it'll provide 'emergency anti-hunger aid to poor countries and also help build sustainable, productive agriculture and food delivery systems'.

This seems like a wise move, after the price of staples such as corn, rice and wheat rocketed in mid-2008, causing food riots in developing countries including Egypt and Haiti. Prices have since fallen back, but the latest report from the economists at the UN’s Food and Agriculture Organisation (FAO) warned that there was a chance of farmers cutting their plantings in response to a drop in demand caused by the global recession, and of a return to the shortages, high prices and associated social unrest of last year.

The food price spike has been something of a silent financial crisis, affecting as it does the global South much more than developed nations. But our data suggests that across the globe, high food prices have in fact had a much more direct effect on people’s lives than the global financial crisis or the credit shortage. Nearly half (47%) of those in the 24 countries we polled for BBC World Service earlier in the year felt that high food prices had affected them ‘a great deal’, compared to 31% who felt that way about the downturn in the global economy, and just 21% who felt they had been affected a great deal by the shortage of financial credit.

Obama deserves plaudits for continuing to engage on this issue despite the fact that it’s no longer making headlines.