article on rising food prices?
Answers
Drought has already led to significant changes in Australia's agricultural trends. Some farmers are abandoning rice, which requires large amounts of water, to plant less water-intensive crops like wheat or, especially in southeastern Australia, wine grapes. Other rice farmers have sold their fields or their water rights, usually to grape growers.
Scientists and economists worry that the reallocation of scarce water resources — away from rice and other grains and toward more lucrative crops and livestock — threatens poor countries that import rice as a dietary staple. As we see in this data, since grape production gives the farmers more profit they are turning to grape production instead of rice. Things like this are causing rice prices to go up tremendously.
Even with the recent doubling of rice prices, to around $1,000 a metric ton for the high grades produced by Australia, it is even more profitable to grow wine grapes.
Rise in oil prices and effect on food prices
Oil prices have risen exponentially in the last few years and this has had a tremendous effect on the food prices. Oil prices have increased by more than 4 times in the last 6 years. This means that it costs four-times as much to plant, irrigate, harvest and transport as it was six years ago.
The sharp increase in food prices over the past couple of years has raised serious concerns about the food and nutrition situation of poor people in developing countries, about inflation, and—in some countries—about civil unrest. Real prices are still below their mid-1970s peak, but they have reached their highest point since that time. Both developing- and developed-country governments have roles to play in bringing prices under control and in helping poor people cope with higher food bills.
In 2007 the food price index calculated by the Food and Agriculture Organization of the United Nations (FAO) rose by nearly 40 percent, compared with 9 percent the year before, and in the first months of 2008 prices again increased drastically. Nearly every agricultural commodity is part of this rising price trend. Since 2000—a year of low prices—the wheat price in the international market has more than tripled and maize prices have more than doubled. The price of rice jumped to unprecedented levels in March 2008. Dairy products, meat, poultry, palm oil, and cassava have also experienced price hikes. When adjusted for inflation and the dollar’s decline (by reporting in euros, for example), food price increases are smaller but still dramatic, with often serious consequences for the purchasing power of the poor.