Developing strategies to end hunger

Is Another Food Crisis Brewing?

A severe drought in the U.S. Midwest has cut projected grain yields dramatically. The impact of the U.S. drought on global markets is exacerbated by the fact that other major food producers are also currently suffering weather-related production issues. Almost continuous rain is causing problems for the wheat crop in many European countries, whereas the wheat crops in Russia, Ukraine and Kazakhstan have been hit hard by a lack of rain.  In India, monsoon rainfall is about 20 percent below the long-term annual average, which will likely affect poor farmers.

In 2008, a sharp increase in food prices caused riots in some countries and raised questions about the use of crops to make biofuels.

Food price volatility affects all families, but especially those who are poor—because poor people spend so much of their entire incomes, often 50 percent to 70 percent, on food. It is very difficult for them to adjust to rapid price increases because there is little discretionary spending in the household budget. There are also indirect economic costs. When food prices increase and families have less to spend on other goods and services, there is further weakening of already fragile local and national economies. In many low-income countries, high food prices are a major direct contributor to hunger and poverty.

The World Bank points out that the current conditions differ from the 2008 crisis.  In 2008, although other grains also increased in price, rice and wheat prices rose the most. In 2012 however, prices have risen across all the non-rice grains:

  • Wheat prices are up over 50 percent since mid-June;
  • The price for corn has risen more than 45 percent since mid-June; and
  • Soybeans are up almost 30 percent since the beginning of June and up almost 60 percent since the end of last year.


Fruits-and-vegetablesPhoto Credit: FAO

As recently as early June, analysts had expected price declines after the new harvests, not spikes.The Bank stresses that price increases will affect not only bread and processed food, but also animal feed and ultimately the price of meat.

In a statement last week, the World Bank President Jim Yong Kim emphasized that this problem demands both short-term and long-term interventions. The Bank’s contribution includes:  Faustine Wabwire is senior foreign assistance policy analyst at Bread for the World Institute.


« Beginning Farmers Deserve Stronger Support—Especially in a Drought An Olympic-Sized Boost to Child Nutrition »


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