Primarily, the factors were interrelated and included long-term supply and demand trends, recent higher energy prices, increased biofuel production, depreciation of the U.S. dollar, adverse weather, and the policy responses to domestic food price inflation by a number of countries.
USDA Economic Research Service found that the impact of higher commodity prices on consumer's food budgets was more severe in low-income food-deficit countries than it was in high-income nations.
In a recently released report, ERS data used a base example scenario contrasted with a 50 percent increase in the price of food staples with 60 percent of that price hike passed on to consumers.
Under those scenarios residents of high-income countries would see the percentage of their incomes going to food purchases increase from 10 percent of their incomes to 10.6 percent. But people in low income countries who previously spent 50 percent of their income on food would end up having to spend 60.5 percent of their income to obtain enough food to eat.
Those figures show why the increases in prices of food threaten not only the food security of individuals and nations, but also the general security of those nations and other nations. Lack of food causes political and social instability. People are likely to riot over lack of food and nations are likely to go to war because of food insecurity.
In addition, people are more likely to become sick, or unable to work if they lack sufficient food. For children, being hungry can lead to health problems or early death and it also makes it more difficult for children to concentrate and learn.
