The wider ripples of more expensive groceries

The Centre on International Cooperation have produced a paper on 'Rising Food Prices – Drivers and Implications for Development' as part of the Chatham House Food Supply Project. The paper focuses on the drivers of rising food prices and the implications for international development.

Within this it also raises some very interesting questions around the process of strategic analysis and planning for the future (including scenarios) whilst responding to immediate need. It focuses on the role that donors will need to play in the future, as well as seeking to reframe both debate and action in terms of ‘food democracy’ rather than ‘food security’. The idea of ‘food democracy’ being to stress that we do in fact have the power to make important choices about global food systems.

The rise in global food prices have been driven by factors such as high income growth in emerging economies, like China and India, the increasing use of crops for biofuels and historically low stock levels. What is unusual about the current situation is the sudden rise in prices, and that all major food and feed commodities are involved.

In the short term the pressure is on the demand side for food. Countries are responding to this in a variety of ways: some reducing exports, others increasing imports and a few looking at bi-lateral and/or regional agreements. However, this diversity of response is also adding to the complexity and level of the problem.

Looking forward in the medium to long term, ‘scarcity trends’ - that is climate change, including extreme weather, a lack of water and land and rising energy costs – will have a large impact on the ability to actually produce food. The World Bank estimates that demand will rise by 50% by 2030 which presents a significant challenge.

An immediate concern is the impact on rising food prices to poor countries and poor people, who will be the hardest hit, and the implications for humanitarian aid. The paper argues that there needs to be an increase in the amount and quality of aid; becoming more proactive through cash transfers for instance as opposed to reactive, e.g. in terms of giving food packages.

The paper raises the issue of ‘fair shares’ as becoming a major global issue. Changes in the food consumption of a growing global middle class has reduced the affordability of staple foods for poorer consumers. And although inequality between countries is falling, it is significantly increasing within them, particularly in developing countries.

If higher food prices represent a structural shift in the world, rather than some kind of blip, then there are certainly some serious issues to understand, questions for us to ask, and practical actions to be taken.

NCVO Third Sector Foresight has recently looked at the implications of the global economic slow down on the VCS, a slowdown that is affected by shortages of commodities such as food. Risks such as reduced spending on the products/services that VCOs sell as a result of people having less disposable income were highlighted, as were opportunities, such as more sympathy for issues such as social justice. This could perhaps result in a growing desire for concepts such as ‘food democracy’ mentioned earlier. Read the summary and have a listen to the seminar, the first speaker Peter Hahn, Cass Business School gave an overview of some of the key trends currently affecting the UK economy and explored where these might go in future. Keith Hickey, Chief Executive, Charity Finance Directors’ Group then explored the main implications of the current economic climate on the VCS and highlighted some strategic responses to deal with these.

Megan’s recent news post highlights that while ethical consumerism has seen a rise in recent years, the credit crunch has changed people’s priorities (see our driver on consumer spending and confidence). Although, Caroline’s post backs this up, highlighting research showing that environmental issues are now the lowest priority of voters, she raises the issue that the green movement may remain strong in areas where people can save money, e.g. by growing their own food.

In the forthcoming Voluntary Sector Strategic Analysis (see previous editions of this annual publication from the Foresight team) Dr. Moya Kneafsey looks at the growth of ‘alternative’ food initiatives in the UK, including the rise of Community Supported Agriculture schemes. However she also suggests this is a time of uncertainly for food ‘alternatives’, e.g. the ability to compete with large supermarkets in terms of cost, and that the benefits, such as social cohesion and increased health need to be more widely recognised to ensure continued consumer attention and engagement (see our drivers on localism and community responsibility).

This all raises important questions for the voluntary and community sector. How might this global situation impact on their work as organisations, the services they provide and the lives of their beneficiaries more generally?

  • What might the impact be on charities and social enterprises trading ethical products and services? (Megan discusses ideas on this here)
  • May there be a change in membership subscriptions and charitable donations? (Megan discusses this)
  • How might an increase in fuel prices impact on VCOs providing transport?
  • Could rising food prices affect services such as lunch and breakfast clubs?
  • Will VCOs need to change some of the services they deliver and perhaps the clients they serve as rising food prices affect more people?
  • Does the VCS as a sector need to consider how they might create additional ‘space’ to debate these issues and support those worse affected – globally and domestically?
  • Does the VCS as a sector see part of its role as providing information and support to people and helping them to cope with rising food prices and potential shortages?
Last updated at 12:00 Mon 07/Feb/11.
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Caroline's picture

Caroline

Third Sector Foresight

Apparently, the latest hot investment is Russian collective farms . The investment and re-structuring of the farms has the potential of massively increasing Russia’s agricultural output, which could lead to less pressure on other agricultural nations and an easing of the overall global pressure on food production. It also has the potential of increasing Russia’s power within the wider global market and it remains to be seen whether this will be positive or negative.

Kathryn's picture

Kathryn

Third Sector Foresight

It can be argued that it’s when times are tight that people are the most innovative; a trip to a developing country and you come away amazed at their resourcefulness and the multiple uses that are found for a fairly mundane household item – flipflops made of car tyres anyone? Innovation and resourcefulness: NCVO believes the voluntary and community sector is innovative in its approach to working. I think economic forces at the moment, such as high resource costs, is a prime time for innovation to spark off even further. Faced with forecasts such as this one in this week’s Sunday Times, organisations are busying themselves with cost cutting measures. This isn’t the only way to face these changes though. You may be moving down the path of innovation without realising it: have you been thinking about how you can do things differently to make them more cost effective? This is the time to really think long-term; some innovations may take a while to provide benefits and will require embedding in your thinking going forward. If we’re looking at at least a decade of rising prices, surely we should be making plans to counteract these which will stand the test of time as well?

Kathryn's picture

Kathryn

Third Sector Foresight

Sarah's post talks about rising prices; this visualisation shows the way in which what people eat has changed over the years. It's an absorbing insight into how eating habits have changed over time: lard has become less popular, ready-made salads only appeared on the scene recently... Dig a bit deeper and I think the graphic carries messages - the increase in chicken for example could also reflect the growing obsession with fattier foods; the large decline in the popularity of liver - does this reflect the increasing 'faddiness' of foods? It would be interesting to see if other offal has also declined in popularity (I suspect it would have done), hinting perhaps at an overall move away from the whole-animal consumption concept, which is arguably a more sustainable approach.

The data is measured in g consumed per person per week, which reveals a chilling shadow behind the pretty picture. At first glance you can look at a product and say consumption's gone down or stayed the same but that's not the whole picture. Take, for example, white fish. Consumption of this food category looks to have remained the same, but whilst consumption per person has remained the same it is important to remember that the number of said people has increased (see poplink text) so overall the consumption of this food product has actually increased exponentially. Is this a white elephant with this data set? I appreciate more trained statisticians and social scientists than I could draw far more complex conclusions and poke more holes in this data presentation, but I think that presented as it is, it's a fundamental flaw.

Thinking along these lines, it's interesting to think about environmental messages around consumption. People are being urged to eat less meat - see this document from Compassion in World Farming or the report released by the Food Climate Research Network.There's a recent increased focus on the issue of marine sustainability with the release of End of the Line re-igniting the debate over over-fishing. If this data was reviewed in 5-10 years time, would this campaigning be shown to have an impact? Clearly information about the health benefits of low-fat spreads vs butter have been percolating through to the buying (and eating) public, will environmental messages have the same impact?

It would also be fascinating to see if provenance data could be overlaid against the current data: have the sources of our food shifted? Are we seeing more or less coming from overseas? A new angle to the food airmiles debate perhaps...

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