Food prices have increased significantly over the past few years. The United Nations (UN) FAO Food Price Index jumped 25 percent in 2010. And according to the World Bank, they sent 44 million people into poverty in that year alone. Former World Bank president, Robert Zoellick, has said, “Food price inflation is the biggest threat today to the world's poor...one weather event and you start to push people over the edge.”
Some people put the blame on biofuels. But, the people I spoke with in the biofuel industry claim that their contribution is quite small, pointing out that, for example, while 40 percent of the U.S. corn crop is used for ethanol production, roughly one third of that is recycled back into animal feed in the form of distillers dry grain.
So what is causing food prices to go up?
According to the World Food Program, the top five causes of hunger are as follows:
First, you must understand what quantitative easing actually is. It is a new, unproven, untested, financial drug, on which the Federal Reserve exercises its authority to print new money as a way to try and stimulate economic growth. In the past, printing new money has done nothing except stimulate inflation, but somehow they believe that it will work differently this time. Perhaps it’s the fact that the Fed will be using the money to buy U.S. Treasury bonds, not from the U.S. Treasury, but from Goldman Sachs, which will profit from every transaction. (See video).
Since this move severely undermines the value of the underlying fiat currency, investors rush out to buy more secure “hard” assets such as gold, silver, oil, land and food. With speculators bidding up the price of food, as they might a stock or mutual fund, those on the brink of poverty cannot compete in this global auction. As a result, they go hungry.
According to Henderson, “Blindness to the role of finance and speculation in rising prices of food and commodities attests to the power of free market ideologies among global financial interests.”
The blindness, of course comes about as the result of externalizing the social and environmental costs that, in the absence of accountability, do not affect the bottom line.
But, new systemic models such as Global Reporting Initiative (GRI) and Beyond GDP connect the dots between such policies and their far reaching impacts. One recent study from the New England Complexity Science Institute (NECSI) uncovers the causal links between rising food prices, riots among affected peoples with financial speculation and perverse government policies. The model predicts more food price spikes in 2013, unless restrictions on speculations contained in the Dodd-Frank bill, now law, are implemented.
RP Siegel, PE, is an inventor, consultant and author. He co-wrote the eco-thriller Vapor Trails, the first in a series covering the human side of various sustainability issues including energy, food, and water in an exciting and entertaining format. Now available on Kindle.
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RP Siegel (1952-2021), was an author and inventor who shined a powerful light on numerous environmental and technological topics. His work appeared in TriplePundit, GreenBiz, Justmeans, CSRWire, Sustainable Brands, Grist, Strategy+Business, Mechanical Engineering, Design News, PolicyInnovations, Social Earth, Environmental Science, 3BL Media, ThomasNet, Huffington Post, Eniday, and engineering.com among others . He was the co-author, with Roger Saillant, of Vapor Trails, an adventure novel that shows climate change from a human perspective. RP was a professional engineer - a prolific inventor with 53 patents and President of Rain Mountain LLC a an independent product development group. RP was the winner of the 2015 Abu Dhabi Sustainability Week blogging competition. RP passed away on September 30, 2021. We here at TriplePundit will always be grateful for his insight, wit and hard work.