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Food shortages feed instability

By Julie Bishop - posted Thursday, 13 September 2012

Severe drought in some of the most important food-producing regions of the United States and in parts of Europe has led to a spike in prices for key agricultural commodities.

The World Bank’s Food Price Watch reported recently that during June and July, the price of corn and wheat increased by 25 per cent, while soybeans increased by 17 per cent.

Importantly, prices for rice declined slightly.


Pressure on food supplies has also led to questions about the amount of corn grown in the United States for ethanol fuel production.

The USA is the world’s largest corn producer and exporter.

In 2001 about 7.5% of the US corn crop was used to make ethanol but it is forecast to reach 40 per cent this year.

That represents an estimated 38 million hectares of corn crops.

Part of the difficulty in reversing this trend is that ethanol production has been mandated by law making it a difficult task to return this farmland to food production.

World Bank Group President Jim Yong Kim warned that rising food prices are “… threatening the health and well-being of millions of people. Africa and the Middle East are particularly vulnerable, but so are people in other countries where the prices of grains have gone up abruptly.


This is a concerning development as it will add to the underlying causes of social unrest in many countries.

French President Francois Hollande has called for global leaders to build “strategic food stockpiles” as a buffer against wild swings in prices.

High food prices were one of the factors that triggered the first wave of uprisings against repressive regimes in North Africa and the Middle East.

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About the Author

Julie Bishop is the Federal Member for Curtin, Deputy Leader of the Opposition and Shadow Minister for Foreign Affairs.

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