This is the first of two linked posts. The second one is here.
Food prices surged to record highs twice in the past five years – in 2007-08, before the financial meltdown, and again in 2010-11. There seem to be several sets of causes: (i) long-term increases in costs, caused by dearer oil (for transport) and gas (for making fertiliser), relative shortages of land and water, and a slowdown in productivity improvements; (ii) the frenetic increase of financial activity around agricultural commodities markets, and the speculation it generates; and (iii) legacies of corporate agriculture’s dominance and the subjugation of the global south. After the 2007-08 price surge, world yields of basic foodstuffs hit records in 2008 and 2009, which helped to refill warehouses – but, despite this, a series of bad weather events in 2010 sent wheat and coarse grains prices spiralling upwards, already-thin stocks ran down, and in February 2011, the index of international food commodity prices kept by the UN Food and Agriculture Organisation (FAO) hit a new record high. The FAO, in a report issued jointly with the Organisation for Economic Cooperation and Development (OECD, the “rich countries’ club), reckon that basic food prices will be significantly higher in the next decade than in the last decade.
Much anger has been expressed by left-wing commentators, civil society organisations and even UN bodies about the damage done by financial speculation. During the price surges, it almost certainly made international prices more volatile and pushed them higher than they would have gone otherwise. But this article will focus on the more substantial, underlying causes of food prices rising over the long term – many of which stem from the way that the world food economy, lorded over by the corporations and industrial agriculture, is coming up against natural limits (reflected in oil prices, stagnating yield gains, etc).