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Video - The 2007 food price crisis
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来自 University of Western Australia 的课程
Agriculture, Economics and Nature
145 个评分
从本节课中
Agricultural production and prices, and agriculture’s reliance on natural resources
Week 1 provides a history of agricultural production and prices, an examination into the reasons behind changes in production and prices, and discussions of the 2007 global food crisis and agriculture’s usage of resources.
与讲师见面
Professor David Pannell, BSc(Agric), BEc, PhDHead of School of Agricultural and Resource Economics
University of Western Australia
Jacob Hawkins, BA(Biol), MESM, PhDSchool of Agricultural and Resource Economics
University of Western Australia
The world food price crisis was a major event
affecting agriculture around 2007.
The prices for some major agricultural commodities
increased quite dramatically at this time,
including rice, which went up by over 200%, maize, wheat,
and soybeans, which each went up by over 100%.
And these price increases pushed an estimated 130 to 155 million
more people into poverty around the world.
On this graph, you can see the extent
of these price increases.
This is an index of food prices generally.
And in 2007, 2008, there was this clear spike
where the price was much greater than the prices had been
before that, and, in fact, higher than it was immediately
after that as well.
High food prices caused significant
political and social instability in a number
of countries, including countries in Africa,
in Asia, the Middle East, Latin America, and the Caribbean.
Why did it happen?
A number of different reasons have
been suggested by commentators, including increasing oil
and energy prices, drought and climate
change in various places, export restrictions, panic buying
in some countries, increased demand for food in Asia,
and biofuel policies in several countries.
So I'll talk a little bit about each of those.
And try to give you some indication of which
of these were the main causal factors.
First, increasing oil and energy prices.
Oil prices tripled between January 2007 and July 2008.
And this would have contributed to higher cost of production,
higher cost of processing and distribution
for agriculture commodities.
And we know from our understanding
of supply and demand that an increase in an input
cost like this would increase the marginal cost
of production.
And an increase in the marginal cost of production
means that the supply curve moves up,
as it does in this graph.
We also know that an increasing supply curve or a rising supply
curve like that causes an increase in the price.
You can see it in this graph.
The price increases from P1 to P2
as a result of the rise in the supply curve.
At the same time, we can also see
that the quantity of production also decreases from Q1 to Q2,
due to the higher cost of production.
What research has shown is that the contribution
of this factor to the increase in prices
was probably not that large.
It may have played a role, but it probably
wasn't one of the major factors.
For example, we know that in 1998, energy process doubled,
but average food prices didn't change after that.
So there's an example which illustrates
that energy prices aren't really a dominant cost
for agriculture.
They are one of the costs, but they're not
one of the main costs driving the cost
of agricultural production.
The other reason why we think it wasn't
one of the main causal factors is
that if it was one of the main factors,
we would've expected the quantity of production
to fall, as it does on this graph.
You can see that the quantity of production
fell due to the rise in the supply curve.
But during the world food price crisis,
we didn't observe any fall in production.
So it probably wasn't one of the causal factors.
At least not one of the main ones.
The second factor I want to talk about
is drought and climate change.
There were a number of significant crop failures
due to drought in some regions at around this time.
Perhaps the most prominent example
was in the Murray-Darling Basin in eastern Australia.
That could have been a factor because Australia
is the second-largest wheat exporter in the world.
It normally produces around 25 million tons of wheat
each year.
But the 2006 harvest was only about 10 million tons.
So very significant shortfall, at least for this country.
And if that was one of the causal factors, then,
again, we would have expected to see the supply curve moving
upwards and to the left, like it does in this graph.
And that, again, would have contributed to higher prices,
and would've been associated with the lower quantities
that we observed in Australia at that time.
However, again, this probably wasn't
one of the main contributors, because despite Australia's
drought, the statistics show that there
was no exceptional yield shortfall
for the world as a whole.
So there must have been some other countries where
production was a bit above average to counterbalance
the shortfall in Australia.
And, also, in the early 1970s, we
saw a huge spike in food prices, but no exceptional yield
shortfall then, either.
So for those reasons, we don't think that drought-- perhaps
caused by climate change, or perhaps just
climate variability-- we don't think
that that was one of the main contributing
factors in this case.
The next one is export restrictions.
In a desire to contain domestic prices, a number of countries
decided to restrict their cereal exports to try and keep
plenty of supply locally in their own countries
to keep local prices down.
And that includes Argentina, China, India, Egypt, Pakistan,
Russia, Ukraine, and Vietnam.
And at the international level, this graph
would depict the world market, not the market
within those individual countries.
But outside that group of countries,
that would have reduced supply somewhat
and helped to push up prices.
And we've already observed that there
wasn't a really notable reduction in supply
at the international level.
So the contribution probably wasn't that big.
But it probably did make some contribution.
One analysis by economists from the World Trade Organization
and the International Monetary Fund
suggested that prices would have been 13% lower
without these restrictions.
Not the major factor, but possibly one of the factors.
Next was panic buying.
A number of countries decided that they would try and buy up
grain rapidly-- more than they needed in the current year--
to try and build up stocks to contain domestic prices.
And that included Bangladesh, Nigeria, some Gulf countries,
and the Philippines.
Unfortunately, this wasn't a well-implemented policy,
and it resulted in some quite large losses of food, wastage
of food that went off in storage.
And in the short term, what that would have done
was push up the demand curve, as you can see here.
And in this graph, I've got a very steep supply curve.
I've shown it that way, because in the very short term--
and this panic buying would have been something that happened
in the short term-- the ability to respond and change supply
is quite limited.
So the supply curve becomes quite steep.
And that means that an increase in the demand curve,
like what we can see here, would have a significant increase
in the price of a commodity.
And you can see that that's happened
this graph-- an increase in price from P1 to P2,
and a smaller increase in the quantity from Q1 to Q2.
We expected this probably did make
at least a temporary contribution to higher prices.
But again, not the major factor.
And we observed that this panic buying
has subsided subsequently.
But you'll see later on in this segment
that prices have remained reasonably high,
or they've gone back to being high at times, even
without this panic buying.
So panic buying may have made a contribution,
but, probably, again, wasn't the major factor.
The next one that's been proposed
is increased demand for food in Asia.
We know there have been higher incomes
in various Asian countries, particularly in China.
And history shows us that when people in countries
develop high incomes, get higher incomes,
they often increase their demand for meat.
And that has been observed in China.
And the higher demand for meat leads
through to a higher demand for grain
to be used to feed to animals.
And for beef cattle, a particularly important feed
grain is soya beans.
If that happens, again, we would expect an increase
in demand for grain.
And you can see in this graph, we've
got the demand curve moving upwards and to the right.
And that's resulting in an increase
in the price and an increase in the quantity of production.
The evidence suggests that this probably
did make a contribution to higher prices.
And it was probably one of the more important factors
that pushed prices up.
But it didn't explain all of the price surge.
It only explained part of it.
And finally, biofuel policy.
In certain countries, particularly Europe
and the USA, there's been strong policy support
for biofuel production.
And these policies, in some cases,
have led to food crops being diverted away
from food production into production of biofuels.
And the most prominent example of that
would be maize in the US.
If this is done on a big enough scale,
this could really make a difference,
because one fuel tank full of ethanol
is enough grain to feed a person for a year.
And a lot of fuel tanks of ethanol
have been used in the US, starting at about that time.
And again, this is an example of increasing demand pushing up
prices and quantities.
So we've seen there are a whole variety of different factors
that may have contributed to these rising prices
that we saw in around 2006, 2007, 2008.
Some of those factors relate to increased demand.
Some relate to lower supply.
And some of them are actually caused by policy, rather than
events out in the climate or things like that.
So what I've argued, or said in this talk,
is that the evidence tends to suggest
that the policy-related factors and the increased demand
were more important than lower supply.
And whatever combination of factors they were,
they combined to cause large and rapid price increases.
And we saw that they subsequently fell.
However, they didn't stay low.
They rose again quite quickly afterwards,
and have been volatile ever since,
as you can see in this graph.
They probably have stayed relatively high
because some of the factors that I've talked about
have also stayed in place.
And they would be the export restrictions, increasing
incomes in Asia, and biofuel policies, which are still
influencing prices to this day.
One of the questions that arises from this would be
is cheap food finished?
We saw in an earlier talk-- a couple
of earlier talks-- I mentioned that we've
seen this long-term trend of declining
prices for some major agricultural food commodities.
But that's really different to what we observed in 2007.
And is that a sign of things to come?
And that's a question that I'll be looking
at in more detail in the next segment.
In summary, then, the 2007 food crisis
was a major spike in world prices for agricultural food
commodities.
It affected low-income people in developing countries
quite severely.
We've talked about six contributing factors that
are related to policy, demand, and supply,
and concluded that the policy and demand-related factors
are probably the key ones.
