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Rising food prices threaten world's poor people
Date:12/4/2007

this market, including the capacity to address safety and quality standards and produce large quantities for food processors and retailers.

Bioenergy

In response to rising oil costs, the production of biofuels as an alternative source of energy is also contributing to dramatic changes in the world food situation. According to the report, increased production of bioenergy will adversely affect poor people in developing countries by increasing both the price and price volatility of food. Subsidies for biofuels, which are common, exacerbate the negative impact on poor households, as they implicitly act as a tax on basic food.

Using state-of-the-art computer modeling, IFPRI has projected the possible price effects of biofuels for two potential scenarios up to the year 2020:

  • Under scenario one, which is based on the actual biofuel investment plans of many countries and the assumption that high-potential countries will expand their production of bioenergy, maize prices would increase by 26 percent and oilseed prices would rise by 18 percent.
  • Under scenario two, which assumes that the production of biofuels would expand greatly, to twice the level of scenario one, maize prices would increase by 72 percent and oilseeds by 44 percent.

In both scenarios, rises in crop prices would lead to decreases in food availability and calorie consumption in all regions of the world, with Sub-Saharan Africa suffering the most. As biofuels become increasingly profitable, more land, water, and capital will be diverted to their production, and the world will face more trade-offs between food and fuel.

Agricultural Trade

In addition to biofuels, IFPRI also modeled the impact of supply and demand changes on prices and projects that up to 2015, cereal prices could further increase by 10 to 20 percent, benefiting certain countries and population groups while ill-affecting others. China and almost all African coun
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Contact: Jeff Haskins
jhaskins@burnesscommunications.com
86-136-931-176-573
CGIAR
Source:Eurekalert

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