Commodoties

Food, fuel and water, are among the most heavily subsidized commodities on Earth. These three commodities form “basic” commodities and ensuring access to them is essential for just about every person. Nearly every government works to provide its population has access to these basic resources and many of those governments who have failed to do so have faced populace backlash. Yet as labor markets and wages for working class people have stagnated in recent years while food & basic living costs have continued to rise

Food remains relatively cheap in the United States, constituting only some 7 percent of the average family’s budget. However, while food has remained cheap, other necessities, such as healthcare, education, and housing have continued to increase thus reducing household’s discretionary income. Now, small rises in food will strain already tight living budgets.

In other nations, both developed and developing, food makes up a much larger portion of a family’s annual spending. Food accounts for a whopping 45 percent of spending in Pakistan and 25 percent in Brazil. Even in Japan, food still accounts for nearly 15 percent of spending.

Despite rapid advancements in agricultural productivity, many developing nations remain dependent on donations and subsidies in order to maintain food supplies. The reasons are multifold. For one, most agricultural innovations have been for crops grown in developed nations which mostly reside in temperate zones, while developing countries are usually found in tropical zones. And even when knowledge and techniques are transferable, the actual diffusion has been minimal.

Meanwhile, markets in developing countries with sustainable pricing models and industries have been completely wiped out by an influx of cheap and often subsidized agricultural goods from United States and elsewhere. While political leaders are becoming more aware of the downsides of forcing under-developed to open up their none-industrialized agricultural sectors the practice is still widely used.

As the world’s population continues to grow food supplies will continue to be strained, especially as food-based products become increasingly popular substitutes for oil-based products. Already, ethanol is a widely used additive in the United States, consuming some 24 percent of the country’s corn supplies.

Meanwhile processes to convert food stuffs into plastics and a wide range of other products are currently underway. Wood substitutes, plastics, and other polymers can now all be produced from various food-based crops and by-products of said crops. These organic polymers promise a way to source vital materials from renewable resources but they could also strain global food supplies and cause prices increases.

In 2008 a global recession combined with spiking food prices set off food riots in nations across the world. Haiti saw wide spread and violent protests which lead to the dismissal of Prime Minister Jacques-Édouard Alexis. And in Egypt violent clashes broke up between police forces and civilian protestors, foreshadowing the coming ‘Arab Spring.’

Now a series of droughts in the United States, Russia, and other major food-producing countries is threatening to cause a world-wide shortage of staple foods. Prices could rise considerably, making food too expensive for millions impoverished people across the world. Further, with the global economy already strained and numerous nations facing budget crisis there is a high-risk that many developed countries will not be able to contribute as much aid as in the past.

The question now remains to be answered: will the world face a serious spike in food prices, and if so could food riots erupt on a mass scale? With tensions already high in many societies and the spread of social and electronic media the risk of a “contagion” of unrest is perhaps higher than at any point in the past. If important crops continue to fail in the face of draughts and other natural disasters the world could be facing turbulent times ahead with food riots evolving into mass civic unrest and potentially even revolutions.