Food Inflation: Causes and Consequences
It took millions of years for the global population to reach the ultimate population of hundred millions but it took mere hundred years to clock the second billion. Owing to this burgeoning population, the food demand rose by multiples. Despite the fact that the fertile land is insufficient to cater to the needs of the globe, man’s productivity achieved new heights and filled the bellies of the entire world. However, the recent trend statistics as exposed by World Bank states that food prices have increased 30 percent over the last year, driving some 44 million people into extreme poverty. Grigorios Livanis, assistant professor of international business and strategy at Northeastern University assesses this dilemma with a worldly accepted methodology.
According to the assistant professor, the demand supply criterion has intervened in this latitude too. The growing consumption of corn in the fructification of ethanol increases the demand for and thus the cost of corn. Escalated corn prices prompt the cost of livestock as corn is central to the production of meat and poultry. In addition to the ascending cost of corn, the prices of all dossiers used in the production of food are about 17 percent superior in 2010 than in 2007. A major component of this increase is higher fuel figures.
The sky-high costs of corn and fuel mingled with population growth, higher income per capita around the globe, and strong demand for food essentials — especially for meat products in emerging economies — help to elucidate the rise in food prices. However, economic recessions, especially in conjunction with rising food prices, may change how food is consumed. In developed countries, people will tend to eat more meals at home and less at restaurants. In developing countries recessions might lead to miniaturised food exhaustion.