Inflation soars for staple foods
Read the article Inflation Tough to Digest for Asia as Food Costs Soar From Pork to Onions and then answer the questions below. You can either read the article in the window below or you can follow the previous link to read the article in a separate window.
Explain how the factors affecting demand are likely to differ between developed and developing countries.
Explain possible values for the price elasticity of demand for staple goods, such as rice, in (a) developed countries and (b) developing countries.
Using appropriate diagrams, examine the principal factors that have led to the rapid rise in the price of staple products on world markets.
Evaluate the likely success of the Indian government's decision to buy onions from abroad, and to impose an export ban, as a method of reducing the price of onions.
Investigate! Develop an inquiring mind
Global food prices remain high, partly due to increasing fuel prices, and the World Bank's Food Price Index is around its 2008 peak. Since June 2010, an additional 44 million people fell below the $1.25 poverty line as a result of higher food prices. Simulations show that a further 10% increase in the Food Price Index could lead to 10 million people falling into poverty, and a 30% increase could increase poverty by 34 million people. Low-income and lower-middle-income countries are experiencing on average 5% points higher food price inflation compared to better-off countries.
World Bank report 2011
- Investigate the reasons why lower-middle-income countries are experiencing higher food price inflation than better off countries.
- Examine possible actions that can immediately reduce the impact of higher food prices on the poor.
Produce a 500 - 1000 word article for publication in a national magazine, outlining the reasons for global increases in food prices, their effects and possible actions to support those countries and communities most affected.
You may wish to read these additional articles and watch the YouTube video to provide more background: