"When food is short again" (ST, Saturday, April 5 2008)
Monday, April 28, 2008
Area of Concern: Food Shortage (Rise in Food Prices)
Things to take note of:
1) "when the world began consuming more grain than it grew"
(Supply EXCEEDS Demand)
2) "food scarcity is accelerating"
(Scarcity = Limited resources available are unable to satisfy the unlimited human wants)
3) "world grain prices last year alone rose by 42%, and dairy, by 80%"
(An Increase in Demand and Decrease in Supply will cause the equilibrium price to RISE)
Reasons for supply-demand imbalance of grain:
A) Population growth and prosperity in new-rich countries (Increase Demand)
(Changes in Consumer Income is one of the determinants of demand / factors that shift the demand curve. The ability of consumers to buy goods is directly proportionate to their income. Usually, as the income increases, more of a good will be demanded. However, we must also consider that food is income inelastic as one need not consume too much food before feeling satisfied / the rate at which the desire of a good is satisfied as consumption increases is one of the determinants of Income Elasticity of Demand. An increase in income will lead to a less than proportionate increase in consumption of food.)
B) High price of oil (Decrease in Supply)
(This had led to increase in the price of fertiliser that is critical for improving crop yields)
C) Weather disruptions (Decrease in Supply)
(Changes in Climatic Conditions is one of the determinants of supply / factors that shift the supply curve. When there is storm, flood or rain, the supply of agricultural goods will be affected adversely. For example, bad weather conditions will lead to poor harvest for agricultural crops.)
D) Use of considerable amounts of maize and oil seeds to produce biofuels (Decrease in Supply)
(Although this his been beneficial to environment protection, this has led to further food shortages.)
Possible solutions:
i) Using more land for food production
(This method is near impossible due to the lack of land)
ii) Using high-yield strains of rice and wheat (GM food production)
(Genetic manipulation will be able to raise yields per hectare, saving on land area at the same time. However, we should consider the negative medical impacts of excessive consumption of GM food such as allergic reactions and toxicity)
Anonymous
