Impact of rising food and fuel prices
In this century, rising food and fuel have become the important problems in the global. From these impacts have effects to many countries, especially in poor and developing countries. This article analysis the causes of the rising international food and fuel prices crisis with direct and indirect situations, the impact to householders and the economic in their countries, especially the organization appropriate policy response to support the agricultural products. In conclusion, is to brief about what we learn from this crisis and what will it happen in the future.
International prices of food and fuel have been uncertain since 2003 and continued rising in every year. From sharply increasing price in agricultural commodity has been the major of problems to concern and consciousness in developing countries. The causes of this impact are reinforcing factors, low stocks for wholegrain products, rising oil prices, and import and export rates and depreciation of U.S. dollars.
Most concern is rising the price of food in the developing countries. All poor people will spend much money on cost of living. From dramatically rising prices, the developing countries will increase millions of hunger and malnutrition people, therefore, the government and organization will solve this crisis effectively. Moreover, rising fuel price will affect to the world economy and economic growth especially in developing countries.
In the first article is to explain the potential problem of increasing food and oil price. Next article is to provide the potential consequences on the poor with direct and indirect conditions. The analysis on rising oil price can effect automatically to food price. Finally, the government and organization such as UN, IMF, and World Bank will support the policy responses this crisis. In addition, this article will recommend solutions and expect trends in the future.
Impact on the rising food price
The costs of agricultural import, particularly fuel, have been rising. Nowadays, global farming structure has change more than ever happen before because of many factors with directly (e.g. shipping, agriculture, refrigeration, and distribution) and indirectly (e.g. pesticides the price of urea, and product of fertilizers) (Currie, 2007). Furthermore, oil prices are rising much more than happened and affect to agriculture cost in long term, that’s mean there are linkage between food and fuel prices (Column, 2008).
In this paper has identified the factors which can be caused of high food price (Abbott, 2008). The current impact is become a global phenomenon and can cause many problems. The price of food had panic since the 1950s; therefore, the government had the green revolution policy to improve the agriculture product such as cereals, corn and rice and to reduce food price and reductions in poverty. However, food prices have been increasing since 2000s and especially in 2006. For example, the wheat price per ton rose from US $105 in January 2000 to US $481 in March 2008 (IMF Primary Commodity Prices, 2008). In the next ten years, IMF predicts that the price of wheat will continue increasing because of economic crisis.
As figure 1, the percentage of staple crops prices had highly changed around 148.4% from 1970 to 1974 because of food crisis. However, their prices had slightly changed about 101.9% between 2004 and 2008. All energy prices had been increasing by 80-120% that were metals and minerals. The depreciation of the dollars involved to low interest rates and property bubble (Headey