A Note on Rising Food Prices

By D. Mitchell. 2008

1,207 citations recorded by the source corpus.

The rapid rise in food prices has been a burden on the poor in developing countries, who spend roughly half of their household incomes on food. This paper examines the factors behind the rapid increase in internationally traded food prices since 2002 and estimates the contribution of various factors such as the increased production of biofuels from food grains and oilseeds, the weak dollar, and the increase in food production costs due to higher energy prices. It concludes that the most important factor was the large increase in biofuels production in the U.S. and the EU. Without these increases, global wheat and maize stocks would not have declined appreciably, oilseed prices would not have tripled, and price increases due to other factors, such as droughts, would have been more moderate. Recent export bans and speculative activities would probably not have occurred because they were largely responses to rising prices. While it is difficult to compare the results of this study with those of other studies due to differences in methodologies, time periods and prices considered, many other studies have also recognized biofuels production as a major driver of food prices. The contribution of biofuels to the rise in food prices raises an important policy issue, since much of the increase was due to EU and U.S. government policies that provided incentives to biofuels production, and biofuels policies which subsidize production need to be reconsidered in light of their impact on food prices.

Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/769819a78a78662458c4d5e6075e7cb5f8ae1487

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Citations in the corpus

Poverty Effects of Higher Food Prices: A Global Perspective (2009, background): “In fact, the latter has played a major role in the 20052008 spike in food prices, according to Mitchell (2008) and World Bank (2009, Chapter 2).”
Global trade and environmental impact study of the EU biofuels mandate. (2010, methodology): “Studies range from back of the envelope calculations, such as those from the JRC (de Santi, 2008) and the World Bank (Mitchell, 2008) to extensive modeling exercises.”
A Vision for Human Well-Being: Transition to Social Sustainability (2012, neutral): “For example, the demand for bio-fuels to counteract the rising cost of fossil fuels was a key factor in increasing food prices [1].”
Rethinking the global food crisis: The role of trade shocks (2011, methodology): “Although this is difficult to assess in the absence of reliable econometric or modeling evidence (Section 2), we use back-of-the-envelope calculations similar to those reported by Mitchell (2008) and Timmer (2009) to provide ballpark estimates.”
Jatropha plantations for biodiesel in Tamil Nadu, India: Viability, livelihood trade-offs, and latent conflict (2010, background): “The dramatic rise of prices for basic food staples in 2008 was arguably related in part to farmers switching from food crops to biofuels (Mitchell, 2008; Ewing and Msangi, 2009).”
Safeguarding food security in volatile global markets. (2011, background): “Mitchell (2008) estimates that over 2002-07, the combined effects of higher energy and transport costs have raised production costs in United States of America agriculture by 1520 percent.”
Food Price Surges: Possible Causes, Past Experience, and Longer Term Relevance (2008, background): “Mitchell (2008) estimated that dollar devaluation increased the food price index by 20 percent between January 2002 and June 2008.”
Evaluation of the Physical and Sensory Characteristics of Bread Produced from Three Varieties of Cassava and Wheat Composite Flours (2014, neutral): “The soaring wheat prices on the global market [5] and local concern about huge import of cereal grains, there is an interest to promote the utilization of local sources of flour for partial substitution of wheat flour in these applications.”
Biofuel-related price transmission literature: A review (2013, background): “…population, policy regulations, or macroeconomic conditions (exchange rates, interest rates,monetarypolicy, etc.) can alter food and energy prices and their links (Balcombe, 2011; Cooke and Robles, 2009; Gilbert, 2010; Headey and Fan, 2008; Meyers and Meyer, 2008; Mitchell, 2008; Wright, 2011).”
The Economics of Grain Price Volatility (2011, background): “13See Abbott et al. (2008, 2009), Mitchell (2008), Timmer (2008), Headey and Fan (2008) and Gilbert (2008).”
Commodity Booms and Busts (2011, background): “Mitchell (2008) identifies the rise in biofuel production in the United States and the European Union (EU) as the leading cause of higher agricultural commodity prices in 2007–2008.”