The Link Between Food Prices and Political Unrest

Posted by on April 13th, 2011 | 0 Comments »

In the Wall Street Journal blog series ‘Number of the Week’, reporter Mark Whitehouse outlines the findings of a report by International Monetary Fund economists Rabah Arezki and Markus Brueckner, which examines the link between food inflation and political unrest around the globe.

Whitehouse notes that “despotic leaders, entrenched inequality, and new forms of communications” all contributed to the turmoil in the Middle East, but new research points to global food prices as a contributing factor.

“Looking at food prices and instances of political unrest from 1970 through 2007… Arezki and Brueckner… find a significant relationship between the two in low-income countries, a group that includes Tunisia, Egypt, Sudan and Yemen. To be exact, a 10% increase in international food prices corresponds to an added 0.5 antigovernment protests over the following year in the low-income world — a twofold increase from the annual average.”

“Given the recent trend in food prices, leaders of low-income countries — a group that also includes China — might have reason for concern. In February, global food prices were up 61% from their most recent low point in December 2008, according to the IMF. What’s more, the research suggests the effect of food prices has increased in recent years.”

Unlike previous decades of agricultural surplus, today the global balance between production and consumption is dangerously close, which significantly impacts market volatility and food security.  More than ever, localized or regional events or natural phenomena such as fires, floods, earthquakes, and temperature fluctuations, among others, impact global food security.

In order to make real progress in reducing agricultural market volatility, it is critical that the rate of agricultural productivity be increased worldwide. The challenge is that we must make these notable increases in agricultural supply sustainably, without the use of additional land, water or inputs.

Read the full Wall Street Journal post, “Food Inflation Foments Political Unrest

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