Risks of higher food prices on international markets

Abstract

Agricultural commodity prices have increased since the early 2000s in response to a combination of causes on the demand side (demographic growth, increased animal product consumption in emerging countries and biofuel mandates) and on the supply side (the phasing out of agricultural policies subsidising food supply in the European Union and United States, lack of public investment in agriculture, reaching ceilings in cereal yields in already high-yield countries and an increase in energy prices). The succession of food crises between 2008 and 2012 has brought the agricultural price regime and its implications for food security back to the forefront. Even though the increase of average agricultural prices could profit some farmers, part of the price increase corresponds to increased costs and urban dwellers, as well as many food-insecure food producers, depend on the market for their supply. In addition, environmental policies concerning the protection of biodiversity, climate mitigation and pesticide reduction could make these issues even more acute.