The consequences of high and rising food prices around the world | Experts’ Opinion

ByCatalina Russu

The consequences of high and rising food prices around the world | Experts’ Opinion

The Food and Agriculture Organization (FAO) of the United Nations reported recently that global food prices had risen in January 2021 for the eighth consecutive month. A UN report also stated that the coronavirus pandemic has been a major driver of food inequality. The forecasts are not any better as, according to the organizations, world food prices will continue to rise. Let’s see what international consultants say about this.

High food prices have had both short-term impacts and long-term consequences, both good and bad. What are these?  

Lauren Burnhill, Managing Partner at Emerald Peak, Impact Private Equity

“On the positive side, food system disruption has boosted healthier habits. During 2020, investment in CSAs, a form of consumer co-financing for small farmers, was in high demand as people sought secure, local access to nutritious fruits and vegetables. Concerns about health conditions within food processing operations helped increase demand for ethically-managed and manufactured foods. Vegan foods also benefited, with multiple vegan investment funds launching in recent months. On the negative side, hunger has increased dramatically, even in higher-income OECD nations. Food pantries around the world face dwindling food supplies, even as the lines of the hungry grow longer. Feeding America notes that in the US, food insecurity could impact over 50 million individuals in 2021, including 17 million children. The UN warns three dozen countries – including Ethiopia, Nigeria, South Sudan, Syria, Venezuela, and Yemen – could experience famines, pushing an additional 130 million people into starvation. 85 million children in Latin America and the Caribbean, who relied heavily on school feeding programs to combat malnutrition and micronutrient deficiencies, no longer have access to this crucial social safety net. Hungry children have a harder time learning and, since hunger correlates to low income, these are the same children facing significant barriers to remote learning. In low- and middle-income countries, where access to and the quality of education were problematic pre-pandemic, the long-term developmental costs of increased childhood malnutrition could easily translate into lost decades of progress for entire continents.”

Oleg Urazov, Economic Development Consultant

“I think the most immediate adverse effect of high food prices on nutrition may lead to decreased dietary quality and quantity. When almost 20 million poor households in Russia replace meat, fruits, vegetables, and other micronutrient-rich foods with low-priced and mostly trans-fats-based or counterfeit high carbohydrate staples, their energy intake may remain above the minimum requirement, but both macro and micronutrient intake is compromised thus increasing the risk of infant and maternal mortality, stunting, and cognitive disorders, micronutrient deficiencies and associated poor health outcomes. Second-order impacts at household level include decreased utilization of health services, decreased school attendance, and an increased workload for both men and women. As a long-term impact at the national level, the prevalence of stunting, underweight and other forms of malnutrition may increase, slowing human development and economic growth and weakening intergovernmental coordination in food markets.”

 

Geoffrey Ferster, Ph.D., Senior Consultant, Speaker, Lecturer, and Applied Economist

“The negative impacts are even greater malnutrition among children and stunted growth, inflation, and unemployment throughout urban and rural areas. With the pandemic, countries like Indonesia that experienced economic growth and employment through manufacturing have forced individuals who migrated to locations of the manufacturing jobs to return to their rural communities. The benefits include, where possible, incentives for greater food production especially in the deficit producing countries by subsidizing proven applied research in crops, growing husbandry, and particularly farm food-storage units to reduce post-harvest wastage.

 

 

Francis Perry, international finance expert

“In the short term, the impacts of continuing food price increases and COVID-19 include additional hardship for developing nations’ consumers, an adverse impact on poverty effectively denying many poor people access to food, millions of people going hungry as the coronavirus pandemic destroys jobs and pushes food prices higher creating enormous pressure on health systems and diminishing food security and higher unemployment and reduced purchasing power resulting in a rise in hunger. In the long term, the pandemic risks increasing economic inequality, a diminished availability of wholesome food may have a detrimental effect on the health and the mental development of children, long-term deprivation is seen in higher rates of death and illness and it is likely that food insecurity will continue to affect people in developing countries with far-reaching implications for economic consequences, the health and well-being of society.”

 

What is the impact of rising food prices on global food security?    

Oleg Urazov, Economic Development Consultant

“Safety nets, staple food subsidies, government investments in warehouse receipt systems, commodity exchanges, other price risk management tools, community-based nutrition programs, nutrition-enhancing agricultural programs and projects supported by the international donor community are the areas which provide a range of ways to mitigate the impact of high food prices on vulnerable populations.”

 

 

 

Dr Smruti Bulsari, Policy Analyst

“Rises in food prices reduce access to food, especially for poor people. Food price inflation (FPI) affects countries with low and middle per capita income to a greater extent and thus food security. It means that COVID-19 would in all likelihood influence food security and cause people in low-income countries to be vulnerable. While the short-term implications of FPI would be hunger and poverty, the long-term implication is chronic hunger resulting in undernourishment; the effect of which is experienced more by women and children.”

 

 

What should the international community do in this regard?  

Geoffrey Ferster, Ph.D., Senior Consultant, Speaker, Lecturer, and Applied Economist

“International and domestic legal institutions should take certain action such as stopping countries that have ‘land-grabbed’ (especially in sub-Saharan Africa) exporting any agricultural production, stopping hedge funds, banks, commodity indices and sovereign wealth funds from speculating in food and food-related inputs, countries should release food reserves to meet basic demand level and, particularly for female heads of household farmers, enact laws and procedures to give and document full land-ownership rights to their land(s) and residence.”

 

 

Dr Smruti Bulsari, Policy Analyst

“The international community can take steps to strengthen programs to improve overall access to food by focusing on co-ordination, besides improving the supply chain between food exporting and importing countries. Ensuring an uninterrupted and adequate food supply to the marginalized and vulnerable countries is essential for food security.”

 

 

 

Francis Perry, international finance expert

“The international community should support action for the equitable distribution of vaccines to all countries, especially to developing nations, debt resolution and restructuring. One good outcome may be that the experience of remote working may become the new normal, reduce the need to commute and provide workers with more flexibility.”

 

 

 

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