200708 world food price crisis

World food price index, 19902012. Record high prices occurred during the food price crisis followed by another surge
in prices since 2010. Food and Agriculture Organization of the
United Nations.

Chart of global trade volume in wheat, coarse grain and soybeans 1990 to 2008, and projected to 2016. United States Department of Agriculture, 2008.

cluded droughts in grain-producing nations and rising oil

prices.[6] Oil price increases also caused general escalations in the costs of fertilizers, food transportation, and
industrial agriculture. Root causes may be the increasing use of biofuels in developed countries (see also food
vs fuel),[7] and an increasing demand for a more varied diet across the expanding middle-class populations
of Asia.[8][9] The Food and Agriculture Organization also
raised concerns about the role of hedge funds speculating
on prices leading to major shifts in prices.[10]
These factors, coupled with falling world-food stockpiles
all contributed to the worldwide rise in food prices.[11]
Chart of the United States stock to use ratio of soybeans, maize
and wheat, from 1977 to 2007, and projected to 2016. United
States Department of Agriculture, September 2007.

1 Drastic price increases

World food prices increased dramatically in 2007 and

the 1st and 2nd quarter of 2008[1] creating a global crisis
and causing political and economical instability and social unrest in both poor and developed nations. Although
the media spotlight focused on the riots that ensued in the
face of high prices, the ongoing crisis of food insecurity
has been years in the making.[2][3] Systemic causes for
the worldwide increases in food prices continue to be the
subject of debate. After peaking in the second quarter
of 2008 prices fell dramatically during the Late-2000s
recession but increased during 2009 and 2010, peaking
again in early 2011 at a level slightly higher than the level
reached in 2008.[1][4] However a repeat of the crisis of
2008 is not anticipated due to ample stockpiles.[5]

Between 2006 and 2008 average world prices for rice rose
by 217%, wheat by 136%, corn by 125% and soybeans by
107%. In late April 2008 rice prices hit 24 cents (U.S.)
per U.S. pound, more than doubling the price in just seven
months.[13]

1.1 World population growth

Although some commentators have argued that this

food crisis stems from unprecedented global population
growth,[14][15] others point out that world population growth rates have dropped dramatically since the
1980s,[16][17] and grain availability has continued to outThe initial causes of the late-2006 price spikes in- pace population.
1

DRASTIC PRICE INCREASES

1.2 Increased demand for more resource

intensive food
The head of the International Food Policy Research Institute, stated in 2008 that the gradual change in diet among
newly prosperous populations is the most important factor underpinning the rise in global food prices.[22] Where
food consumption has increased, it has largely been in
processed ("value added") foods, sold in developing and
developed nations.[23] Total grain utilization growth since
2006 (up three percent, over the 20002006 per annum
average of two percent) has been greatest in non-food usage, especially in feed and biofuels.[24][25]

Wheat yields in developing countries, 1950 to 2004, kg/HA baseline 500. The steep rise in crop yields in the U.S. began in the
1940s. The percentage of growth was fastest in the early rapid
growth stage. In developed counties the yield growth slowdown
has been less for maize than for wheat and soybeans. In developing countries maize yields are still rapidly rising.[12]

One kilogram of beef requires seven kilograms of feed

grain.[26] These reports, therefore, conclude that usage in
industrial, feed, and input intensive foods, not population
growth among poor consumers of simple grains, has contributed to the price increases. Rising meat consumption
due to changes in lifestyle can in turn lead to higher energy consumption due to the higher energy-intensity of
meat products, for example, one kilogram of meat uses
about 19 times as much energy to produce it as the same
amount of apple.[27]
Although the vast majority of the population in Asia remains rural and poor, the growth of the middle class in
the region has been dramatic. For comparison, in 1990,
the middle class grew by 9.7 percent in India and 8.6 percent in China, but by 2007 the growth rate was nearly
30 percent and 70 percent respectively.[11] The corresponding increase in Asian auence also brought with
it a change in lifestyle and eating habits, particularly a
demand for greater variety, leading to increased competition with western nations for already strained agricultural resources.[8][29] This demand exacerbates dramatic
increases in commodity prices such as oil.

Growth in food production was greater than population growth

from 19612005. The increase in crop yields was extraordinary;
however, yield growth slowed dramatically in recent decades.

Another issue with rising auence in India and China

was reducing the 'shock absorber' of poor people who
are forced to reduce their resource consumption when
food prices rise. This reduced price elasticity and caused
a sharp rise in food prices during some shortages. In
the media, China is often mentioned as one of the main
reasons for the increase in world food prices. However,
China has to a large extent been able to meet its own demand for food, and even exports its surpluses in the world
market.[30]

1.3 Eects of petroleum and fertilizer

price increases
In order to prevent price growth, food production should
outpace population growth, which was about 1.2% per
year. But there was a temporary drop in food production growth:[18][19] for example, wheat production during
2006 and 2007 was 4% lower than that in 2004 and 2005.
World population has grown from 1.6 billion in 1900 to
over 7.2 billion today.[20][21]

Starting in 2007, the prices of fertilizers of all kinds

increased dramatically, peaking around the summer of
2008 (see graphs by the International Fertilizer Industry
Association). Prices approximately tripled for ammonia,
urea, diammonium phosphate, muriate of potash (KCl),
and sulfuric acid (used for making phosphate fertilizer),
and then fell just as dramatically in the latter part of 2008.

1.6

Eects of trade liberalization

Some prices doubled within the six months before April

2008.[31] Part of the cause for these price rises was the
rise in the price of oil, since the most fertilizers require
petroleum or natural gas to manufacture.[11] Although the
main fossil fuel input for fertilizer comes from natural
gas to generate hydrogen for the HaberBosch process
(see: Ammonia production), natural gas has its own supply problems similar to those for oil. Because natural gas
can substitute for petroleum in some uses (for example,
natural gas liquids and electricity generation), increasing
prices for petroleum lead to increasing prices for natural
gas, and thus for fertilizer.
Costs for fertilizer raw materials other than oil, such as
potash, have themselves been increasing[32] as increased
production of staples increases demand. This is causing
a boom (with associated volatility) in agriculture stocks.

3
cated by some in the 20072008 world food price crisis.
In a 2010 article in Harpers magazine, Frederick Kaufman magazine accused Goldman Sachs of proting while
many people went hungry or even starved. He argued that
Goldmans large purchases of long-options on wheat futures created a demand shock in the wheat market, which
disturbed the normal relationship between supply and demand and price levels. He argues that the result was a
'contango' wheat market on the Chicago Mercantile Exchange, which caused prices of wheat to rise much higher
than normal, defeating the purpose of the exchanges
(price stabilization) in the rst place.[37][38][39] however,
a report by the Organisation for Economic Co-operation
and Development using data from the Commodity Futures Trading Commission showed tracking funds (of
which Goldman Sachs Commodity Index was one) did
not cause the bubble. For example, the report points out
that even commodities without futures markets also saw
price rises during the period.[40] Some commodities without futures markets saw their prices rise as a consequence
of the rising prices of commodities with futures markets:
the World Development Movement states there is strong
evidence that the rising price of wheat caused the price
of rice to subsequently rise as well.[41]

The major IFPRI Report launched in February 2011

stated that the causes of the 2008 global food crisis were
similar to that of the 197274 food crisis, in that the oil
price and energy price was the major driver, as well as
the shock to cereal demand (from biofuels this time), low
interest rates, devaluation of the dollar, declining stocks,
and some adverse weather conditions.[33] Unfortunately
the IFPRI states that such shocks are likely to recur with
several shocks in the future; compounded by a long history of neglecting agricultural investments.
1.6

1.4

Declining world food stockpiles

Eects of trade liberalization

Some theorists, such as Martin Khor of the Third World

Network,[42] point out that many developing nations
have gone from being food independent to being net
food importing economies since the 1970s and 1980s
International Monetary Fund (and later the World Trade
Organisation's Agreement on Agriculture) free market
economics directives to debtor nations. In opening developing countries to developed world food imports subsidised by Western governments, developing nations can
become more dependent upon food imports if local agriculture does not improve.[42][43]

In the past, nations tended to keep more sizable food

stockpiles, but more recently, due to a faster pace of food
growth and ease of importation, less emphasis is placed
on high stockpiles. For example, in February 2008 wheat
stockpiles hit a 60-year low in the United States (see also
Rice shortage).[11] Data stocks are often calculated as
a residual between Production and Consumption but it
becomes dicult to discriminate between a de-stocking
policy choices of individual countries and a decit beWhile developed countries pressured the developing
tween production and consumption.
world to abolish subsidies in the interest of trade liberalization, rich countries largely kept subsidies in place for
their own farmers. In recent years United States govern1.5 Financial speculation
ment subsidies have been added to push production toward biofuel rather than food and vegetables .[11]
Destabilizing inuences, including indiscriminate lending
and real estate speculation, led to a crisis in January 2008,
and eroded investment in food commodities.[11]
1.7 Eects of food for fuel
Foreign investment drives productivity improvements,
Main article: Food vs fuel
and other gains for farmers.[34][35][36]
One systemic cause for the price rise is held to be the
diversion of food crops (maize in particular) for making rst-generation biofuels.[44] An estimated 100 million
Main article: Commodity index fund
tons of grain per year are being redirected from food to
fuel.[45] (Total worldwide grain production for 2007 was
Goldman Sachs entry into the commodities market via just over 2000 million tons.[46] ) As farmers devoted larger
the Goldman Sachs Commodity Index has been impli- parts of their crops to fuel production than in previous
1.5.1

Commodity index funds

DRASTIC PRICE INCREASES

years, land and resources available for food production say ethanol demand adds about 75 cents to $1.00 per
were reduced correspondingly.
bushel to the price of corn, as a rule of thumb. Other
This has resulted in less food available for human con- analysts say it adds around 20 percent, or just under 80
sumption, especially in developing and least developed cents per bushel at current prices. Those estimates hint
be priced at only $3 withcountries, where a familys daily allowances for food pur- that $4 per bushel corn might[62]
out
demand
for
ethanol
fuel.
These industry sources
chases are extremely limited. The crisis can be seen, in a
consider
that
a
speculative
bubble
in the commodity marsense, to dichotomize rich and poor nations, since, for
holding
positions
in
corn
futures
was the main driver
kets
example, lling a tank of an average car with biofuel,
behind the observed hike in corn prices aecting food
amounts to as much maize (Africas principal food staple) as an African person consumes in an entire year.[11] supply.
Brazil, the worlds second largest producer of ethanol after the U.S., is considered to have the worlds rst sustainable biofuels economy[47][48][49] and its government
claims Brazils sugar cane based ethanol industry has not
contributed to the 2008 food crises.[49][50] A World Bank
policy research working paper released in July 2008[51]
concluded that "...large increases in biofuels production
in the United States and Europe are the main reason behind the steep rise in global food prices, and also stated
that Brazils sugar-based ethanol did not push food prices
appreciably higher.[52][53] An economic assessment published in July 2008 by the OECD[54] disagrees with the
World Bank report regarding the negative eects of subsidies and trade restrictions, nding that the eect of biofuels on food prices are much smaller.[55]

Second- and third-generation biofuels (such as cellulosic

ethanol and algae fuel, respectively) may someday ease
the competition with food crops, as can grow on marginal
lands unsuited for food crops, but these advanced biofuels require further development of farming practices and
rening technology; in contrast, ethanol from maize uses
mature technology and the maize crop can be shifted between food and fuel use quickly.

1.8 Biofuel subsidies in the US and the EU

The World Bank lists the eect of biofuels as an
important contributor to higher food prices.[63] The
FAO/ECMB has reported that world land usage for agriculture has declined since the 1980s, and subsidies outside the United States and EU have dropped since the
year 2004, leaving supply, while sucient to meet 2004
needs, vulnerable when the United States began converting agricultural commodities to biofuels.[64] According
to the United States Department of Agriculture, global
wheat imports and stocks have decreased, domestic consumption has stagnated, and world wheat production has
decreased from 2006 to 2008.[65]

A report released by Oxfam in June 2008[56] criticized

biofuel policies of rich countries and concluded that, of
all biofuels available in the market, Brazilian sugarcane
ethanol is far from perfect but it is the most favorable
biofuel in the world in term of cost and GHG balance.
The report discusses some existing problems and potential risks and asks the Brazilian government for caution to
avoid jeopardizing its environmental and social sustainability. The report also says that: Rich countries spent up
In the United States, government subsidies for ethanol
to $15 billion last year supporting biofuels while blocking
production have prompted many farmers to switch to procheaper Brazilian ethanol, which is far less damaging for
duction for biofuel. Maize is the primary crop used for
[57][58]
global food security.
(See Ethanol fuel in Brazil)
the production of ethanol, with the United States being
German Chancellor Angela Merkel said the rise in food the biggest producer of maize ethanol. As a result, 23
prices is due to poor agricultural policies and chang- percent of United States maize crops were being used for
ing eating habits in developing nations, not biofuels as ethanol in 20062007 (up from 6 percent in 20052006),
some critics claim.[59] On 29 April 2008, U.S. Presi- and the USDA expects the United States to use 81 million
dent George W. Bush declared during a press conference tons of maize for ethanol production in the 20072008
that 85 percent of the worlds food prices are caused by season, up 37 percent.[66] This not only diverts grains
weather, increased demand and energy prices, and rec- from food, but it diverts agricultural land from food proognized that 15 percent has been caused by ethanol.[60] duction.
On 4 July 2008, The Guardian reported that a leaked
Nevertheless, supporters of ethanol claim that using corn
World Bank report estimated the rise in food prices
for ethanol is not responsible for the worst food riots in
caused by biofuels to be 75%.[61] This report was othe world, many of which have been caused by the price
cially released in July 2008.[51]
of rice and oil, which are not aected by biofuel use but
Since reaching record high prices in June 2008, corn rather by supply and demand.
prices fell 50% by October 2008, declining sharply toHowever, a World Bank policy research working paper
gether with other commodities, including oil. As ethanol
released in July 2008[51] says that biofuels have raised
production from corn has continued at the same levels,
food prices between 70 and 75 percent. The study found
some have argued this trend shows the belief that the inthat higher oil prices and a weak dollar explain 2530%
creased demand for corn to produce ethanol was misof total price rise. The month-by-month ve-year analtaken. Analysts, including some in the ethanol sector,
ysis disputes that increases in global grain consumption

1.11

Distorted global rice market

and droughts were responsible for price increases, reporting that this had had only a marginal eect and instead
argues that the EU and US drive for biofuels has had by
far the biggest eect on food supply and prices. The paper concludes that increased production of biofuels in the
US and EU were supported by subsidies and taris on
imports, and considers that without these policies, price
increases would have been smaller. This research also
concluded that Brazil's sugar cane based ethanol has not
raised sugar prices signicantly, and suggest to remove
taris on ethanol imports by both the US and EU, to allow
more ecient producers such as Brazil and other developing countries to produce ethanol protably for export
to meet the mandates in the EU and the US.[52][53]

5
tries, including the least developed countries; meanwhile
subsidised food increases overconsumption in developed
countries. The US Farm Bill brought in by the Bush Administration in 2002 increased agricultural subsidies by
80% and cost the US taxpayer 190 billion USD.[72] In
2003, the EU agreed to extend the Common Agricultural
Policy until 2013. Former UNDP Administrator Malloch Brown renewed calls for reform of the farm subsidies
such as the CAP.[73]

1.11 Distorted global rice market

Japan is forced to import more than 767,000 tons of

rice annually from the United States, Thailand, and other
countries due to WTO rules,[74] although Japan produces
over 100% of domestic rice consumption needs with 11
million tons produced in 2005 while 8.7 million tons were
consumed in 20032004 period. Japan is not allowed to
re-export this rice to other countries without approval.
This rice is generally left to rot and then used for animal
feed. Under pressure, the United States and Japan are
poised to strike a deal to remove such restrictions. It is
An economic assessment report also published in July
expected 1.5 million tons of high-grade American rice
[54]
2008 by the OECD
agrees with the World Bank rewill enter the market soon.[75]
port regarding the negative eects of subsidies and trade
restrictions, but found that the eect of biofuels on food
prices are much smaller. The OECD study is also critical of the limited reduction of GHG emissions achieved 1.12 Crop shortfalls from natural disasters
from biofuels produced in Europe and North America,
concluding that the current biofuel support policies would
reduce greenhouse gas emissions from transport fuel by Several distinct weather- and climate-related incidents
no more than 0.8 percent by 2015, while Brazilian ethanol have caused disruptions in crop production. Perhaps the
from sugar cane reduces greenhouse gas emissions by at most inuential is the extended drought in Australia, in
least 80 percent compared to fossil fuels. The assessment particular the fertile Murray-Darling Basin, which procalls on governments for more open markets in biofuels duces large amounts of wheat and rice. The drought has
and feedstocks to improve eciency and lower costs.[55] caused the annual rice harvest to fall by as much as 98%
from pre-drought levels.[76]
The Renewable Fuel Association (RFA) published a rebuttal based on the version leaked before the formal release of the World Banks paper.[67] The RFA critique
considers that the analysis is highly subjective and that
the author "estimates the eect of global food prices from
the weak dollar and the direct and indirect eect of high
petroleum prices and attributes everything else to biofuels.[68]

1.9

Idled farmland

According to the New York Times on 9 April 2008, the

United States government pays farmers to idle their cropland under a conservation program. This policy reached a
peak of 36,800,000 acres (149,000 km2 ) idled in 2007,
that is 8% of cropland in United States, representing a
total area bigger than the state of New York.[69]

1.10 Agricultural subsidies

The global food crisis has renewed calls for removal of distorting agricultural subsidies in developed
countries.[70] Support to farmers in OECD countries totals 280 billion USD annually, which compares to ofcial development assistance of just 80 billion USD in
2004, and farm support depresses global food prices, according to OECD estimates.[71] These agricultural subsidies lead to underdevelopment in rural developing coun-

Australia is historically the second-largest exporter of

wheat after the United States, producing up to 25 million
tons in a good year, the vast majority for export. However, the 2006 harvest was 9.8 million.[77] Other events
that have negatively aected the price of food include the
2006 heat wave in Californias San Joaquin Valley, which
killed large numbers of farm animals, and unseasonable
2008 rains in Kerala, India, which destroyed swathes of
grain. These incidents are consistent with the eects of
climate change.[78][79]
The eects of Cyclone Nargis on Burma in May 2008
caused a spike in the price of rice. Burma has historically
been a rice exporter, though yields have fallen as government price controls have reduced incentives for farmers.
The storm surge inundated rice paddies up to 30 miles (48
km) inland in the Irrawaddy Delta, raising concern that
the salt could make the elds infertile. The FAO had previously estimated that Burma would export up to 600,000
tons of rice in 2008, but concerns were raised in the cyclones aftermath that Burma may be forced to import

RISING PRICES

rice for the rst time, putting further upward pressure on study also reported that rice grown in chambers that conglobal rice prices.[13][80]
trolled ozone levels exhibited a 14 to 20 percent reducover
[81]
Stem rust reappeared in 1998 in Uganda (and possibly tion in biomass yield when exposed to ozone levels
[89]
25
times
higher
than
was
normal
for
the
region.
[82]
earlier in Kenya)
with the particularly virulent UG99
fungus. Unlike other rusts, which only partially aect
crop yields, UG99 can bring 100% crop loss. Up to 80%
yield losses were recently recorded in Kenya.[83]
As of 2005 stem rust was still believed to be largely under control worldwide except in Eastern Africa.[82] But
by January 2007 an even more virulent strain had gone
across the Red Sea into Yemen. FAO rst reported on 5
March 2008 that Ug99 had now spread to major wheatgrowing areas in Iran.[84]
These countries in North Africa and Middle East consume over 150% of their own wheat production;[81] the
failure of this staple crop thus adds a major burden on
them. The disease is now expected to spread over China
and the Far-East. The strong international collaboration
network of research and development that spread diseaseresistant strains some 40 years ago and started the Green
Revolution, known as CGIAR, was since slowly starved
of research funds because of its own success and is now
too atrophied to swiftly react to the new threat.[81]

1.13 Soil and productivity losses

Sundquist[85] points out that large areas of croplands are
lost year after year, due mainly to soil erosion, water
depletion and urbanisation. According to him 60,000
km2 /year of land becomes so severely degraded that it
loses its productive capacity and becomes wasteland,
and even more are aected to a lesser extent, adding to
the crop supply problem.
Additionally, agricultural production is also lost due to
water depletion. Northern China in particular has depleted much of its non-renewables aquifers, which now
impacts negatively its crop production.[86]
Urbanisation is another, smaller, dicult to estimate
cause of annual cropland reduction.[87]

1.14 Rising levels of ozone

One possible environmental factor in the food price crisis
is rising background levels of ground-level tropospheric
ozone in the atmosphere. Plants have been shown to have
a high sensitivity to ozone levels, and lower yields of important food crops, such as wheat and soybeans, may have
been a result of elevated ozone levels. Ozone levels in
the Yangtze Delta were studied for their eect on oilseed
rape, a member of the cabbage family that produces onethird of the vegetable oil used in China. Plants grown
in chambers that controlled ozone levels exhibited a 10
20 percent reduction in size and weight (biomass) when
exposed to elevated ozone levels. Production of seeds
and oil was also reduced.[88] The Chinese authors of this

2 Rising prices
From the beginning of 2007 to early 2008, the prices
of some of the most basic international food commodities increased dramatically on international markets.[90]
The international market price of wheat doubled from
February 2007 to February 2008 hitting a record high
of over US$10 a bushel.[91] Rice prices also reached tenyear highs. In some nations, milk and meat prices more
than doubled, while soy (which hit a 34-year high price
in December 2007[92] ) and maize prices have increased
dramatically.
Total food import bills rose by an estimated 25% for
developing countries in 2007. Researchers from the
Overseas Development Institute have suggested this problem will be worsened by a likely fall in food aid. As
food aid is programmed by budget rather than volume,
rising food prices mean that the World Food Programme
(WFP) needs an extra $500 million just to sustain the
current operations.[93]
To ensure that food remains available for their domestic
populations and to combat dramatic price ination, major rice exporters, such as China, Brazil, India, Indonesia,
Vietnam, Cambodia and Egypt, imposed strict export
bans on rice.[94] Conversely, several other nations, including Argentina, Ukraine, Russia, and Serbia either imposed high taris or blocked the export of wheat and
other foodstus altogether, driving up prices still further
for net food importing nations while trying to isolate their
internal markets. North Korea suered from the food crisis to such extent that a North Korean ocial was quoted
in June '08 with saying Life is more than dicult. It
seems that everyone is going to die.[95] This nation however is solely relying on food assistance to cope with the
crisis.[96]

2.1 In developed countries

2.1.1 United States
A May 2008 national survey found that food banks and
pantries across the U.S. were being forced to cut back on
food distribution as 99 percent of respondents reported
an increase in the number of people requesting services.
Rising food and fuel prices, inadequate food stamp benets, unemployment, underemployment, and rent or mortgage costs were factors reported as forcing an average of
1520 percent more people.[97] Compounding this issue,
USDA bonus foods have declined by $200 million and local food donations were down nationally about 9 percent

4.2

Brazil

over the same period. According to the California Association of Food Banks, which is an umbrella organization
of nearly all food banks in the state, food banks are at the
beginning of a crisis.[98]

Eects on farmers

If global price movements are transmitted to local markets, farmers in the developing world could benet from
the rising price of food. According to researchers from
the Overseas Development Institute, this may depend on
farmers capacity to respond to changing market conditions. Experience suggests that farmers lack the credit
and inputs needed to respond in the short term. In the
medium or long term, however, they could benet, as
seen in the Asian Green Revolution or in many African
countries in the recent past.[93]

7
of people, including at least 20 police ocials, were injured in the violence. Ironically, the country achieved
food self-suciency in 2002, but food prices increased
drastically due to the reliance of agriculture on oil and
fossil fuels.[107]
Economists estimate 30 million of the countrys 150 million people could go hungry.[108]

4.2 Brazil
In April 2008, the Brazilian government announced a
temporary ban on the export of rice. The ban is intended
to protect domestic consumers.[109][110]

4.3 Burkina Faso

One of the earlier food riots took place in Burkina Faso,

on 22 February, when rioting broke out in the coun3.1 Relationship with 2008 Chinese milk trys second and third largest cities over soaring food
prices (up to a 65 percent increase), sparing the capital,
scandal
Ouagadougou, where soldiers were mobilized throughout
strategic points. The government promised to lower taxes
For more details on this topic, see 2008 Chinese milk
on food and to release food stocks. Over 100 people were
scandal.
arrested in one of the towns.[111] Related policy actions of
the Burkinabe government included:
As grain prices increased, Chinas numerous smallholding milk farmers, as well as producers of feed for
The removal of customs duty on rice, salt, dairycattle, were unable to exist economically. As a result,
based products and baby foods
they turned to putting additives into the feed and milk,
including melamine, in order to boost the measured level
The removal of value added tax on durum wheat,
of protein. Hundreds of thousands of children became ill,
baby foods, soap and edible oils
Chinas milk exports virtually ended, executives and of Establishing negotiated prices with wholesalers for
cials were arrested and some executed, and companies
[99]
sugar, oil and rice
went bankrupt.
Releasing food stocks

Unrest and government actions

in individual countries and regions

Strengthening of community grain banks

Food distribution in-kind
Reduction of electricity cost, partial payment of utility bills for the poor

The price rises aected parts of Asia and Africa particu Enacting special programs for schools and hospitals
larly severely with Burkina Faso,[100] Cameroon, Senegal,
Mauritania, Cte d'Ivoire,[101] Egypt[102] and Morocco
Fertilizer distribution and production support.
seeing protests and riots in late 2007 and early 2008 over
the unavailability of basic food staples. Other countries
[112]
that have seen food riots or are facing related unrest are: A ban was also imposed on exportation of cereals.
Mexico, Bolivia, Yemen, Uzbekistan, Bangladesh,[103]
Pakistan,[104] Sri Lanka,[105] and South Africa.[106]

4.4 Cameroon

4.1

Bangladesh

Main article:
protests

2008 Cameroonian anti-government

10,000 workers rioted close to the Bangladeshi capital

Dhaka, smashing cars and buses and vandalising facto- Cameroon, the worlds fourth largest cocoa producer, saw
ries in anger at high food prices and low wages. Dozens large scale rioting in late February 2008 in Douala, the

UNREST AND GOVERNMENT ACTIONS IN INDIVIDUAL COUNTRIES AND REGIONS

countrys commercial capital. Protesters were against inating food and fuel prices, as well as the attempt by President Paul Biya to extend his 25-year rule. Protesters set
up barricades, burned tires, and targeted businesses that
they believed belonged to the Biya family, high members of the ruling party, the government, or France.[113]
It became the rst protest in the nations history in which
minute- by-minute events were covered by social media.
By 27 February, a strike was taking place in thirty-one
cities, including Yaound, Douala, Bamenda, Bafoussam,
Buea, Limbe, Tiko, Muea, Mutengene, and Kumba.[113]
At least seven people were killed in the worst unrest
seen in the country in over fteen years.[114] This gure was later increased to 24.[95] Youths were mobilized
in ways that had not been seen since the days of the
villes mortes.[113] Part of the government response to the
protests was a reduction in import taxes on foods including rice, our, and sh. The government reached an
agreement with retailers by which prices would be lowered in exchange for the reduced import taxes. As of late
April 2008, however, reports suggested that prices had
not eased and in some cases had even increased.[115]

4.8 Haiti
On 12 April 2008, the Haitian Senate voted to dismiss Prime Minister Jacques-douard Alexis after violent food riots hit the country.[121] The food riots caused
the death of 5 people.[95] Prices for food items such as
rice, beans, fruit and condensed milk have gone up 50
percent in Haiti since late 2007 while the price of fuel
has tripled in only two months.[122] Riots broke out in
April due to the high prices, and the government had been
attempting to restore order by subsidizing a 15 percent
reduction in the price of rice.[123] As of February 2010,
post-earthquake Port-au-Prince is almost entirely reliant
on foreign food aid, some of which ends up in the black
markets.[124]

4.9 India
India has banned the export of rice except for Basmati
which attracts a premium price.[125]

The ban has since been removed, and India now exports
On 24 April 2008, the government of Cameroon an- a variety of rice.
nounced a two-year emergency program designed to double Cameroons food production and achieve food self4.10 Indonesia
suciency.[116]

4.5

Cte d'Ivoire

On 31 March, Cte d'Ivoire's capital Abidjan saw police

use tear gas and a dozen protesters injured following food
riots that gripped the city. The riots followed dramatic
hikes in the price of food and fuel, with the price of beef
rising from US$1.68 to $2.16 per kilogram, and the price
of gasoline rising from $1.44 to $2.04 per liter, in only
three days.[117]

Street protests over the price of food took place in

Indonesia[126] where food staples and gasoline have nearly
doubled in price since January 2008.[127]

4.11 Latin America

In April 2008, the Latin American members of the
United Nations Food and Agriculture Organization
(FAO) met in Braslia to confront the issues of high food
prices, scarcities and violence that aect the region.[128]

4.12 Mexico
4.6

Egypt

The President of Mexico, Felipe Caldern, with industry representatives and members of the Confederation of
Industrial Chambers (Concamin), agreed to freeze prices
of more than 150 consumer staples, such as coee, sardines, tuna, oil, soup or tea, among others, until the end
of December 2008. The measure was carried out in an
attempt to control ination, which stood at an annual rate
of 4.95%, the highest increase since December 2004.

In Egypt, a boy was killed from a gunshot to the head after Egyptian police intervened in violent demonstrations
over rising food prices that gripped the industrial city of
Mahalla on 8 April. Large swathes of the population
have been hit as food prices, and particularly the price
of bread, have doubled over the last several months as a
result of producers exploiting a shortage that has existed
since 2006[118] .[119]
Mexican baking company Grupo Bimbo's CEO, Daniel
Servitje, announced in the 19th Plenary Meeting of the
MexicoChina Business Committee that Bimbo agreed
to freeze their product prices, despite a 20% rise in pro4.7 Ethiopia
duction costs.[129] Bimbo is one of the most important
baking companies worldwide, having recently expanded
Drought and the food price crisis threatened thousands in to China. Bimbo has also acquired ve bakeries in the
Ethiopia.[120]
United States and Canada.[130]

4.18

Russia

4.13 Mozambique

9
situation.[133] Chief Presidential Legal Counsel, Sergio
Apostol stated that: Haiti is not trying to solve the problem, while we are doing something to address the issue.
We don't have a food shortage. So, no comparison...[134]
Comments by the Justice Secretary, Raul Gonzalez, the
following day, that food riots are not far fetched, were
quickly rebuked by the rest of the government.[135]

In mid February, rioting that started in the Mozambican rural town of Chokwe and then spread to the capital, Maputo, has resulted in at least four deaths. The riots
were reported in the media to have been, at least in part,
over food prices and were termed food riots. A biofuel
advocacy publication, however, claimed that these were,
On 15 April, the Philippines, the worlds largest rice imin fact, fuel riots, limited to the rise in the cost of diesel,
porter, urged China, Japan, and other key Asian nations,
and argued that the food riot characterization worked to
to convene an emergency meeting, especially taking issue
fan anti-biofuels sentiment.[131]
with those countries rice export bans. Free trade should
be owing, Philippine Agriculture Secretary Arthur Yap
stated.[136] In late April 2008, the Philippines government
4.14 Pakistan
requested that the World Bank exert pressure on rice exporting countries to end export restrictions.[137]
The Pakistan Army has been deployed to avoid the
seizure of food from elds and warehouses. This hasn't
stopped the food prices from increasing. The new gov- 4.18 Russia
ernment has been blamed for not managing the countries
food stockpiles properly.[132]
The Russian government pressured retailers to freeze

4.15 Myanmar
Once the worlds top rice producer, Myanmar has produced enough rice to feed itself until now. Rice exports
dropped over four decades from nearly 4 million tons to
only about 40,000 tons last year, mostly due to neglect
by Myanmars ruling generals of infrastructure, including irrigation and warehousing. On 3 May 2008 Cyclone
Nargis stripped Myanmars rice-growing districts, ruining large areas with salt water. U.N. Food and Agriculture Organization estimates that these areas produce 65
percent of Myanmars rice. Worries of long-term food
shortages and rationing are rife. The military regime says
nothing about the rice crisis, but continues to export rice
at the same rate. "...at least the next two harvests are going
to be greatly aected and there'll be virtually no output
from those areas during that time. So we're likely to see
considerable food and rice shortages for the next couple
of years. The damage to the economy is going to be profound. said economist and Myanmar expert Sean Turnell, of Australias Macquarie University. (interviewed
in The Irriwaddy, Tuesday, 27 May 2008)

food prices before key elections for fear of a public backlash against the rising cost of food in October 2007.[138]
The freeze ended on 1 May 2008.[139]

4.19 Senegal
On 31 March 2008, Senegal had riots in response to
the rise in the price of food and fuel. Twenty-four
people were arrested and detained in a response that
one local human rights group claimed included torture
and other unspeakable acts on the part of the security
forces.[140] Further protests took place in Dakar on 26
April 2008.[141]

4.20 Somalia
Riots in Somalia occurred on 5 May 2008 over the price
of food, in which ve protesters were killed. The protests
occurred amid a serious humanitarian emergency due to
the Ethiopian war in Somalia.

4.21 Tajikistan

4.16 Panama

The Christian Science Monitor, neweurasia, and other

media observers are predicting that a nascent hunger criIn Panama, in response to higher rice prices the govern- sis will erupt into a full famine as a consequence of the
ment began buying rice at the high market price and sell- energy shortages.[142] UN experts announced on 10 Ocing rice to the public at a lower subsidized price at food tober that almost one-third of Tajikistan's 6.7 million inkiosks.
habitants may not have enough to eat for the winter of
200809.[143]

4.17 Philippines
4.22 Yemen
In the Philippines, the Arroyo government insisted on
13 April that there would be no food riots in the coun- Food riots in southern Yemen that began in late March
try and that there could be no comparison with Haitis and continued through early April, saw police stations

10

torched, and roadblocks were set up by armed protesters.

The army has deployed tanks and other military vehicles.
Although the riots involved thousands of demonstrators
over several days and over 100 arrests, ocials claimed
no fatalities; residents, however, claimed that at least one
of the fourteen wounded people has died.[144]

ACTIONS BY GOVERNMENTS

2008, former US president Bill Clinton scolded the bipartisan coalition in Congress that killed the idea of making
some aid donations in cash rather than in food.[151]
The release of Japans rice reserves onto the market may
bring the rice price down signicantly. As of 16 May,
anticipation of the move had already lowered prices by
14% in a single week.[152]

On 30 April 2008 Thailand announced the creation of

the Organization of Rice Exporting Countries (OREC)
with the potential to develop a price-xing cartel for
The UN (FAO) released a study in December 2007 pro- rice.[153][154] This is seen by some as an action to capijecting a 49 percent increase in African cereal prices, and talise on the crisis.
53 percent in European prices, through July 2008.[145]
In June 2008 the Food and Agriculture Organization
In April 2008, the World Bank, in combination with the
hosted a High-Level Conference on World Food SecuInternational Monetary Fund, announced a series of mearity, in which $1.2 billion in food aid was committed for
sures aimed at mitigating the crisis, including increased
the 75 million people in 60 countries hardest hit by rising
loans to African farmers and emergency monetary aid to
food prices.[155]
[146]
badly aected areas such as Haiti.
According to FAO
director Jacques Diouf, however, the World Food Pro- In June 2008, a sustained commitment from the G8 was
gramme needs an immediate cash injection of at least called for by some humanitarian organizations.[156]
$1700 million,[11] far more than the tens of million-worth On 23 October 2008, Associated Press reported the folin measures already pledged. On 28 April 2008, the lowing:
United Nations Secretary-General Ban Ki-moon established a Task Force on the Global Food Security Crisis
under his chairmanship and composed of the heads of
the United Nations specialized agencies, funds and proFormer President Clinton told a U.N.
grammes, Bretton Woods institutions and relevant parts
gathering Thursday [16 October 2008] that
of the UN Secretariat to co-ordinate eorts to alleviate
the global food crisis shows we all blew it,
the crisis.[147]
including me, by treating food crops like
color TVs instead of as a vital commodity for the worlds poor ... Clinton criticized decades of policymaking by the World
6 After the crisis
Bank, the International Monetary Fund and
others, encouraged by the U.S., that pressured
2013 research concluded that the spike was the result of
Africans in particular into dropping governan unusual combination of circumstances and prices in
ment subsidies for fertilizer, improved seed and
the future will be higher than before the spike, dependother farm inputs as a requirement to get aid.
ing on oil prices, climate change, and future diets. The
Africas food self-suciency declined and food
impacts of the spike on poor people were concentrated in
imports rose. Now skyrocketing prices in the
low-income countries and may have been less severe than
international grain trade on average more
once thought, thanks to rising rural wages in some counthan doubling between 2006 and early 2008
tries. The researchers called on developing countries to
have pushed many in poor countries deeper
ensure good data on the key indicators of distress and to
into poverty.[151]
strengthen social protection, and on those involved in international development to continue increasing focus on
reducing child malnutrition and stimulating agricultural
development.[148]
We need the World Bank, the IMF, all
the big foundations, and all the governments
to admit that, for 30 years, we all blew it,
including me when I was President. We were
7 Actions by governments
wrong to believe that food was like some
other product in international trade, and we
IFAD is making up to US$200 million available to supall have to go back to a more responsible and
port poor farmers boost food production in face of the
sustainable form of agriculture.
global food crisis.[149]
Former US President Bill Clinton, Speech
On 2 May 2008 U.S. President George W. Bush said he
at United Nations World Food Day, October
was asking Congress to approve an extra $770 million
16, 2008[157]
[150]
On 16 October
funding for international food aid.

Projections

11

Food price decreases

In December 2008, the global economic slowdown,

decreasing oil prices, and speculation of decreased demand for commodities worldwide brought about sharp
decreases in the price of staple crops from their earlier highs. Corn prices on the Chicago Board of Trade
dropped from US$7.99 per bushel in June to US$3.74
per bushel in mid-December; wheat and rice prices experienced similar decreases.[158] The UNs Food and Agriculture Organization, however, warned against a false
sense of security, noting that the credit crisis could cause
farmers to reduce plantings.[159] FAO convened a World
Summit on Food Security at its headquarters in Rome in
November 2008, noting that food prices remained high
in developing countries and that the global food security
situation has worsened.

[10] Katie Allen (18 July 2010). Hedge funds accused of

gambling with lives of the poorest as food prices soar.
the Guardian.
[11] Reguly, Eric (12 April 2008). How the cupboard went
bare. The Globe and Mail. Archived from the original
on 15 April 2008.
[12] Fischer, R. A.; Byerlee, Eric; Edmeades, E. O. Can
Technology Deliver on the Yield Challenge to 2050
(PDF). Expert Meeting on How to Feed the World (Food
and Agriculture Organization of the United Nations): 12.
[13] Cyclone fuels rice price increase, BBC News, 7 May
2008
[14] World in grip of food crisis. IANS, Thaindian News. 7
April 2008.
[15] Burgonio, TJ (30 March 2008). Runaway population

By early 2011 food prices had risen again to surpass

growth factor in rice crisissolon. Philippine Daily Inthe record highs of 2008. Some commentators saw
quirer (Manila). Archived from the original on 28 August
this as the resumption of the price spike seen in 2007
2015.
08.[160] Prices had dropped after good weather helped increase grain yields while demand had dropped due to the [16] World Population Information. United States Census Bureau. Data updated 27 March 2008.
recession.[161]

9
10

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number of Ethiopians in need of emergency food aid in

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[143] Tajikistan: Almost One-Third of the Population Is in
Danger of Going Hungry This Winter, EurasiaNet

11 External links

[144] Food riots rock Yemen, The Intelligence Daily, 4 April

2008.

Food and Agriculture Organization FAO World

Food Situation Portal Food and Agriculture Organization

[145] Cereal prices hit poor countries, BBC, 14 February 2008.

UN warns on soaring food prices, 17 December 2007.

FAO Global Information and Early Warning

System

[146] World Bank tackles food emergency, BBC, 14 April 2008.

World Summit on Food Security 2009

[147] UN Sets up food crisis task force, BBC, 29 April 2008.

Reuters Special Coverage: Agation

16
International Food Policy Research Institute Research Area: Food Prices
Research Brief: State of Food Insecurity & Opportunities in Muslim Countries DinarStandard Research Brief
Anti-Hunger Protests Rock Haiti. 2008. North
American Congress on Latin America, by Jeb
Sprague
Crisis brieng on food and hunger from Reuters
AlertNet
The Food Bubble: How Wall Street Starved Millions
and Got Away With It video report with Frederick
Kaufman by Democracy Now!
Feeding Nine Billion

11

EXTERNAL LINKS

17

12
12.1

Text and image sources, contributors, and licenses

Text

200708 world food price crisis Source: https://en.wikipedia.org/wiki/2007%E2%80%9308_world_food_price_crisis?oldid=

724134852 Contributors: AxelBoldt, Edward, D, Fred Bauder, Kku, Mpagano, Mac, Peregrine981, Tpbradbury, Populus, Robbot,
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