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A reminder of another crisis

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It might seem that the food crisis seen in the spring of last year has been warded off already. The harvest was good worldwide last year, commodity prices on global markets are almost back at 2007 levels and newspapers no longer bring reports about the crisis.

Olivier de Schutter, the United Nations special rapporteur on the right to food, says however, that these are global prices, at which, for instance, Nestlé buys commodities. These prices have really decreased again, but in 80% of developing countries, food is now more expensive than it was last year, he says.

Last year’s sudden news reports on the food crisis emerged particularly because it also hit poorer citizens in urban areas who are able to go into the streets to demonstrate against their governments. But what the more passive countryside farmers perceived as a problem in the last two decades was rather the steady decline in prices that they get for their products. So did the food crisis help farmers at the expense of urban citizens in developing countries? De Schutter says that what grew even more than food prices is the prices of fertilisers that are derived from crude oil prices. So farmers are worse off as well, he says. According to UN calculations, the number of starving people has increased by 100 million since the beginning of 2008, exceeding 1 billion for the first time.

The crisis therefore has not been warded off, despite a lack of interest on the part of the media. But today, we know more about the causes of last year’s fast price increase. News reports at the time often mentioned that it was caused by the planting of crops for biofuels and by higher food consumption in India and China. According to de Schutter, however, it is apparent now that the cause was partly the growth of oil prices, which commodity prices depend on, and especially panics among traders. They feared that harvest would be low at a time when global food reserves were at a record-low level already. The subsequent speculative purchases on commodity exchanges produced a price bubble that burst as soon as good news about a new harvest started coming in.

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