GLOBAL RESOURCES ANALYSIS
EFFECTS | HIGHER FOOD PRICES
Food is Oil. For each food calorie we consume, globally average 10 fossil energy calories are burned. In Europe and Japan this is average 1 to 40 and in the US this is even 1 to 90. Higher oil prices are equal to higher food prices. No oil is equal to no food (but that's not the subject here, although is the unfortunately truth). A second development that causes higher food prices is the accelerating global demand by the grown wider spread higher prosperity levels. The EU has no by subsidizing caused milk sea, butter mountain or wine sea anymore. An example: Cheese prices in Europe have rising 20% in 2007 just by the milk purchases of Chinese importers on the European market. Two never stopping developments will give year after year higher food prices globally. Local food production will gain enormously in popularity, for prices reasons and for independency reasons. The cost of living will severely increase by the rising food prices. In the western world (with low economic growth or even economic decline) food will take severe more space in people's budget and purchasing power. The FAO (Food and Agricultural Organization of UN) publish twice a year an agricultural market report (UN FAO Food Outlook), the latest is of November 2007: ftp://ftp.fao.org/docrep/fao/010/ah876e/ah876e00.pdf and indicates an 37% overall price rise of food from September 2006 to September 2007 and for example for dairy/milk products it even states a price rise of 88% in that period. Any good news in this not pleasant development? Yes, the price difference between home cooked food and restaurant dinners will be less.
Author: Gijs Graafland
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