Learning from the 2008 food crisis: what happened, lessons learned, and ongoing consequences

By Simon Ross, IWCAN

In an interview, Quentin Fradton, an economist at the Australian National University, spoke about how a key report created in response to the 2007/2008 food crisis had inspired his work to bring people together to do something about it. This article gives a bit of background to this crisis, including how it came about, the impacts it had, and what we can learn from it to help us adapt in the future to respond to these inevitable pressures before they happen.

‘The future of food and farming’ report by the Foresight group details some concerning facts about the pressures the global food system will face in the next 40 years. In 2050, the world’s population will probably surpass 9 billion people. There will be increased pressures on land and water resources and most likely conflict over them. Climate change will also be more intense and there will be a set of truly wicked problems to solve.

What led to the 2007-2008 food crisis?

In 2007 and 2008, world food prices jumped rapidly. It primarily affected staple commodity grains such as rice, wheat, corn, and soybeans, which left the poor in many countries vulnerable. There is evidence to suggest that the factors that led to these kinds of problems are the new norm, with new price peaks again occurring in 2010, and presumably more in the foreseeable future. The conditions that lead to this food crisis have been described as a ‘perfect storm’.

Global food production has been affected by a new set of creeping challenges. On top of climate challenges such as the increased frequency of natural disasters, soil degradation and desertification, and the sedimentation of rivers and lakes, other factors were at play. These factors placed increasing pressure on food prices and sent them upward to a breaking point, where they peaked rapidly, increasing by a factor of two to three times.

For example, in the period between 2001 and 2007:

  • incomes in developing countries rose, contributing to greater demand for more water-intensive food;
  • biofuel producers for developed countries were willing to pay high prices for grain crops to meet demand and had the support of government subsidies;
  • agricultural input costs increased based on the rising price of oil;
  • overall crop production failed to keep up with population increases worldwide;
  • there were severe droughts in major grain-producing countries like Australia, Russia and the Ukraine that led to major crop failures.

Source: World Resource Institute (http://www.wri.org/)

What was the reaction?

Crises can cause humans to react in unusual ways and things can escalate quickly. There were claims that investment funds were being used to speculate on food futures, creating instability and further pushing up prices. Many countries placed export bans on staple food crops and starting increasing grain stockpiles in response, further limiting food availability and increasing pressure on prices. Riots and violent demonstrations occurred in many developing countries leading to military intervention and political instability. Corruption also hindered national responses to protect the nutritional requirements of vulnerable people.

What are some of the lessons learned through all of this?

  1. Export bans do not work: while it may be natural for a country to want to protect their own citizens first and ban exports of important crops, this led to prices during the food crisis being 30% higher than they would have been otherwise. Panic buying, and stockpiling also led to high levels of wasted food, which is already way too high and is a good place to start to look for a solution.
  2. People experiencing poverty are vulnerable and need to be protected from the impacts of price rises: price pressures will be more common in the future and there are long-term financial and nutritional impacts of hunger, and safety nets need to be built into markets, to reduce risks for vulnerable people, particularly children, including access to water for productive uses.
  3. Investment is required in water resources to improve the productivity and market access of smallholder farmers: this is not only important for enabling sufficient food to be produced for the needs of 9 billion people in 2050 but also to improve the participation of the poor in the benefits of the global food system to reduce vulnerability. Long term investments are required to replace aid with appropriate local markets.
  4. Grain-based biofuels are not a sustainable solution to energy shortages: biofuels contributed to at least 30% of the price rises in the food crisis, placed significant pressures on other scarce resources and caused much greater political instability than any energy crisis may have caused. The food-energy-water nexus is very strong and

Crises occur because of a culmination of social, economic, and natural consequences that are haphazard, difficult to predict and cause conflict due to the different values attributed to what basic needs and productive uses should be prioritized and how natural resources should be allocated to reflect their equitable allocation. Natural disasters, climate change, and political instability all contribute to food and water insecurity and the capacity of the stakeholders to adapt appropriately to these conflicts is most important

The 2007/08 food crisis demonstrated the consequences of ignoring legitimate needs and values surrounding the use of resources Active participation by conflicting interests in response to crises using the resilience frameworks discussed in the interview is a powerful approach to achieving lasting change in the way information is sourced and shared and decisions that meet collective needs are met, rather than a relapse to business-as-usual.

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