Food riots are erupting all over the world. To prevent them and to help people afford the most basic of goods, we need to understand the causes of skyrocketing food prices and correct the policies that have fueled them.
World food prices rose by 39 percent in the last year. Rice alone rose to a 19-year high in March -- an increase of 50 per cent in two weeks alone -- while the real price of wheat has hit a 28-year high.
As a result, food riots erupted in Egypt, Guinea, Haiti, Indonesia, Mauritania, Mexico, Senegal, Uzbekistan and Yemen. For the 3 billion people in the world who subsist on $2 a day or less, the leap in food prices is a killer. They spend a majority of their income on food, and when the price goes up, they can't afford to feed themselves or their families.
Analysts have pointed to some obvious causes, such as increased demand from China and India, whose economies are booming. Rising fuel and fertilizer costs, increased use of bio-fuels and climate change have all played a part.
But less obvious causes have also had a profound effect on food prices.
Over the last few decades, the United States, the World Bank and the International Monetary Fund have used their leverage to impose devastating policies on developing countries. By requiring countries to open up their agriculture market to giant multinational companies, by insisting that countries dismantle their marketing boards and by persuading them to specialize in exportable cash crops such as coffee, cocoa, cotton and even flowers, they have driven the poorest countries into a downward spiral.
In the last thirty years, developing countries that used to be self-sufficient in food have turned into large food importers. Dismantling of marketing boards that kept commodities in a rolling stock to be released in event of a bad harvest, thus protecting both producers and consumers against sharp rises or drops in prices, has further worsened the situation.
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