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Decision and Policy Analysis Research Area – DAPA

The price of food – 2010 discussion roundup

When push comes to shove the real motivator for change in our agriculture system revolves around two little words: food prices.  In developed countries low food prices have contributed to oversupply and overproduction; in developing nations, that means small farmers are unable to compete and natural resources are exchanged for fast-cash.   Be it organic, fair trade, rainforest certified, small-farmer inclusive; business models that are accounting for these environmental and social impacts are feeling the pinch when compared to their conventional counterparts.

In developing countries, the price of basic commodities are often more volatile and price volatility has a direct relationship with hunger levels.   In 2008 we saw the effects of skyrocketing prices in Africa and Asia as some of the world’s poorest struggled to feed themselves during devastating price spikes.

The giant elephant in the room is begging us to start having some serious discussions about the price of food and how it’s contributing to hunger, climate change, poverty, and environmental degradation.  How do we build better price mechanisms into the system?

Having some insight into the market forces that contribute to the final price of food gives us better insight into what or what is not being calculated.  Recently, some good discussions about how prices are set are occurring over at the web.  A great collection of BBC postings on the cost of food in January, and great series on food prices by Boris over at planetretail.com.  At planetretail.com, the series is exploring:

  • the fairly drastic ups and downs in food price inflation that have come about in the period from 2007 to today;
  • aspects driving changes in global food commodity prices, such as population growth, urbanization, the rise of new middle classes in emerging markets, agricultural productivity, environmental pollution, global warming, and shifts in the financial markets;
  • how changing food commodity prices trickle through supply chains to finally arrive at supermarkets and consumers;
  • what the social and developmental implications are of volatile food prices in both developed and emerging markets; and
  • what the long-term outlook could be for food price inflation beyond the current period of economic recovery and far into the next decade.


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