ABSTRACT
Food security is a basic need. Its nonfulfillment is one of the most serious development failures in a world of affluence today. Every day, 25,000 people die of hunger and related diseases and the problem has become even worse in recent years with food prices increasing in 2007 and 2008. How the food crisis developed during 2008 has been well documented by now (see, e.g., Headey et al. 2009). The price hike (see Figure 5.1) started with a surge in demand for maize and vegetable oil, as a result of increased mandatory blending and subsidization of biofuels particularly in the US (bioethanol) and the EU (biodiesel) that also made it possible for high energy prices to spill over to the food markets, particularly in the US (Tyner 2009). Next, the hike spilled over to the wheat and barley markets, via substitution on the demand side, particularly of feed grains. Rice prices rose particularly sharply in the cities, and in response several Asian rice-exporting countries imposed export bans, whereas China maintained price controls, leading to prices to climb even further. The most important consequence was that malnutrition rose dramatically in 2008, according to the FAO, from an estimated 850 million to 1 billion (FAO 2009), particularly in urban and semiurban areas.
