The UN made an ominous prediction that 2011 would be a year of food riots around the world. Rioting has been predicted even in Britain – something I doubt will happen, not a very British reaction to rising prices is it? We just moan and pay.
Food grain price increases will of course affect developing nations much more and I have seen prices rise on an almost monthly basis in India although the government does often step in. Increased prices don’t greatly pinch the middle classes but I doubt the majority will pass on wage increases to compensate low income workers – the segment of the population who are already exploited by paying the equivalent of £10 per litre of milk as a proportion of their income.
While earlier droughts and floods have been natural causes of food inflation much of the increase has also been due to speculative markets. The UN has data showing the correlation between increased speculation in food grain commodities and increased food grain prices. Surely this practice should be made unacceptable? Unlike chocolate or coffee, food grains are a necessity not a luxury and irresponsible speculation means millions of people will starve or live in deteriorating poverty conditions. Women are often the first to suffer from malnourishment and the related health problems.
Unregulated free markets are not transparent enough to govern themselves and it is really sinister that it is perfectly acceptable for investors to become richer directly as a consequence of pricing people out of the food grain market.
Bubbly
The Chatterjis Blog 