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Sunday, October 17, 2021

Food prices rise around the world

Rising food prices around the world are forcing people to think twice about what they buy at the grocery store.

Among the factors are high oil prices, which have in turn increased production costs on the farm, marketing and processing aspects. Weather changes that have affected harvests, increased use of corn for biofuels and imports – which are more expensive due to the weak U.S. dollar – are also to blame, said Daniel Sumner in an e-mail interview. Sumner is the director of the UC Davis-based University of California Agricultural Issues Center.

“In a nutshell, the commodity crisis across the board has risen very sharply over the last four months,” said Colin Carter, professor of agricultural and resource economics. “Some of the prices increase started before that. There will be an impact on California agriculture to the extent that some farmers will alter their production decisions to take advantage of high prices like expanded production of corn and wheat.”

While incomes of poor people in countries like China and India are experiencing steady growth, they have stopped growing their own food because they now have enough money to buy food.

Retail food prices went up by about 5 percent or so over the past year, which is slightly more than general inflation. Some products, like milk and eggs, went up more, Sumner said.

Where the rise in food prices may be an inconvenience for some people, it has a greater effect on poorer households.

“The average American spends 10 percent or some of their income on food, so this is not a major income item for most people,” Sumner said. “Any increase in living costs matters to the poor, and higher prices for some items will affect government programs to help the poor – food stamps, school lunch program budgets, and the Women Infants and Children program that provides supplementary support for food for pregnant women and families with small children.”

A few types of specialty rice, like basmati rice, may be more expensive, but general consumer impacts will be moderate.

“Crop farmers have been doing well with high prices despite higher input costs,” Sumner said. “That is true in California and elsewhere.”

The crisis, however, lies among the poor in developing countries, who are now suffering even more.

“They have seen prices of farm-based commodities that they buy as bulk items [like] rice, wheat and corn jump by 50 percent or 100 percent,” Sumner said. “We need to assure that food markets continue to be flexible and to facilitate trade. We can also drop our wasteful and distorting policy in the U.S. to shift food to fuel with huge subsidies and trade barriers. That makes no sense on any economic criterion and is helping to make food more costly around the globe.”

Pam Ronald, a professor in UC Davis’ department of plant pathology, sees genetic engineering and organic farming as important tools for the future of food production.

“Genetic engineering is a way to generate modified seeds,” Ronald said. “The process is different from conventional breeding, but the result is the same. You can take that seed and put it into any farming system because a seed is a seed. When you think about using genetic engineered seed in an organic farming system you benefit from the seed and from using those productive farming systems that are ecologically favorable.”

Organic farming eliminates pesticides and harmful fertilizer, which have negative consequences on the environment.

“They are both very important tools that [we] need to be considering if you look at some of the land use issues that we have,” Ronald said. “Looking into the future, we are going to have to use twice as much land in the next 30 years. We need to produce more food on less land. Seed and farming practices are only parts of the solution.”

 

POOJA KUMAR can be reached at city@californiaaggie.com XXX.

 

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