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High Food Prices: Why This Is Different From 2008

Rice is stable, the global economy is weak and we are more prepared. Here are some of the reasons why, despite recent spikes in international food prices, the current scenario is different from the one which faced the world in 2008.

ROME -- The recent drought in the United States has triggered sharp increases in maize and soya bean prices which are having a knock-on effect on world markets. Although we need to be prepared for the possibility of a repeat of 2007-08, as yet  this is not a food “crisis”. Here’s why:

1. Global stocks of rice and wheat are higher than they were in 2008. The price and supplies of rice, a staple food for many millions of people, are relatively stable in Asia.

2. In 2008, several major food-producing countries imposed export bans, which caused shortages on world markets. Meanwhile, in food-deficit countries, there was panic-buying, with governments paying very high prices, especially for rice. So far this time this has not happened.
 
3. In contrast to 2008, global economic growth is presently weak, so demand is not pushing prices further upwards.
 
4. Many countries are better prepared to face the current situation. Some have worked on establishing and improving social safety nets such as school meals, and public works programmes.
 
5. Better tools exist at the international level to coordinate the policy response. For example, in 2011 the G20 set up the Agricultural Market Information System (AMIS), hosted at FAO, which tracks food commodity markets and aims to improve transparency and act as an early warning system.
 
6. In 2008, the UN established a High-Level Task Force on the Global Food Security Crisis which has been working to present a unified response to the challenge of high prices. It has recommended a twin-track approach which supports long-term investment in agriculture and emergency assistance to ease the effects of high prices on the poor and hungry.