How have world food prices, after 20 years of relative stability, spiked tremendously, prompting food shortages and riots in developing countries?
There is a general cocktail of causes, not least due to the increase in the price of oil which increased the costs of fertilizers, food transport, and industrial agriculture. The increasing use of biofuels in developed countries is also one major cause, but so is the burgeoning middle-class tier growing in the new powerhouses such as Brazil, India and China.
Crudely, rich people eat more than the poor: in practical terms, this expanding tier of people is demanding an increasingly varied diet, especially meat.
In the meantime, the price of rice has risen by three-quarters in the past year, that of wheat by 130%. There are food crises in 37 countries. According to the World Bank, 100 million people could be pushed into deeper poverty by the high prices.
And yet, at 2.1 billion tonnes, 2007’s global grain harvest broke all records. If there is plenty of food already, what will happen if harvests decline?

Population troubles
You could take the acclaimed environmentalist and social critic George Monbiot’s advice: eat less meat, and leave it for special occasions.
With global population figures expected to rise to 9 billion by 2050, an extra 531 million tonnes of grain will be required for livestock production at current world consumption levels of meat and milk – and that would be 30% below the current world rate. It is slowly becoming unsustainable to consume as much meat as we do today.
Although Monbiot suggests to eat the freshwater fish tilapia instead of meat, because it can be raised on vegetable matter and has the best conversion efficiency - about 1.6kg of feed for 1kg of meat – he admits it’s a surreal proposition: in the UK and the developed world the supermarket shelves are stocked and we can hardly register what the crisis is all about. “It is hard to understand how two such different food economies could occupy the same planet, until you realise that they feed off each other.”

Two worlds
So indeed, there is plenty of food. But it is just not reaching everybody. Of the 2.13 billion tonnes likely to be consumed this year, only 1.01 billion, according to the UN’s Food and Agriculture Organisation (FAO), will feed people. Food, there is aplenty. But it is not reaching the poorest of nations.
There is no worse indictment of the sacrifice of food on the altar of biofuel production than Jean Ziegler’s, the UN’s special rapporteur, who called it “a crime against humanity”.
Biofuels take land out of food production for the use of corn and maize to produce fuel, around 100 million tonnes of grain per year in fact, resulting in less food available for human consumption, especially in developing and least developed countries. Can you imagine filling your tank with as much maize an African consumes in an entire year? Murderous.
Hence the word ‘agflation’ (you might have heard the Prime Minister mentioning it). It’s a portmanteau of ‘agriculture’ and ‘inflation’, and it describes how the redirection of maize harvests towards biofuels, together with the increasing price of oil, has sent price inflation through other commodities: first wheat and soy, then rice, soy oil, and a variety of cooking oils.
And then there is the price of oil (we don’t know the real expanse of OPEC’s oil reserves, so by keeping supply ‘down’, they will forever command oil prices as long as the demand is there, and rising). Rising oil prices have increased the cost of fertilizers, and food transport. And the more the price of oil increases, the greater the demand for biofuels – something being championed greatly by the USA and Europe. The most vulnerable to the food crisis are therefore the poor: those who are eating at subsistence levels now face the first and heaviest prices increases, as the price of oil keeps on rising.

Free market malaise
So how to solve the food crisis, many ask? It looks like the scene is squarely divided between those proposing a greater dose of free market medicine, and those critics who claim any more liberalisation will surely kill the patient for good.
British PM Gordon Brown wants to take the matter to the World Trade Organisation, to further liberalise international trade and open world markets to the exports of multinational corporations.
Critics say it is precisely the liberalisation of agricultural markets that has exposed poor countries to the full force of the food crisis, because farmers are overwhelmed by competition from cheaper imports from rich nations.
That’s because liberalisation, especially that demanded by the US-dominated WTO, means the removal of subsidies and state protection against global price shocks, which force up prices.
A WTO deal now, UN chiefs and farmers’ associations warn, would make prices more volatile, increase developing countries’ dependence on imports, and strengthen the power of multinational agribusiness.
The crippling reality for Third World nations, previously food-independent countries, was the enormous debt they racked up in the 1970s and 1980s. As part of the directives to debtor nations, they are forced by the International Monetary Fund and WTO to open up their markets.
So while developing countries have had to open up to food imports from the US and Europe, these same countries still have their harvests subsidised by their own rich governments. Indeed, the EU and US have high subsidies protecting their own agriculture supply.
But because their supplies outstrip home demand, the excess can be dumped onto developing countries at cheap prices, undercutting local producers, who have no choice but to up and leave the fields, unable to compete.
The result has been that developing nations have become dependent upon food imports that are cheaper than those which can be produced by local smallholders agriculture, even in the poorest regions of the world. The result has been the collapse of local production systems. To further liberalise would mean leaving local agricultural sectors unprotected, and putting food supply at the mercy of multinationals.