Food Price Trends and Volatility Some Stylized Facts. Sailesh Tiwari Hassan Zaman Poverty Reduction and Equity (PREM) April 22, 2011. Food prices have increased. Comparing price changes. Causes of price increases.
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Poverty Reduction and Equity (PREM)
April 22, 2011
Some drivers of the food price crisis in the mid-70s:
1. Weather shocks:
“..in 1972, a series of bad weather events transpired to afflict crops across the globe..”
2. Growing demand:
“.. apparent inability, or unwillingness, of poor, food insecure countries to restrain population growth rates embittered many policy-makers and economists, who were forewarning that their profligacy would undermine progress in the green revolution..”
3. Fuel price shock:
“.. The quadrupling of the market price of petroleum posed a real threat to the green revolution, since the success of the hybrids was heavily dependent on pesticides, herbicides and nitrogen-based fertiliser applications, all of which are derived from petroleum..”
“….the United States, Canada, the former Soviet Union and much of Asia gathered poor crops in that year as a result of bad weather. At the end of the year, world cereal reserves had reached a 22-year low, equal to about 26 days supply, compared with a 95-day supply in 1961. To make matters worse, the United States government banned the exportation of 10 million tons of grain…”
Thank you. temperature events
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