MARKETS AND DETERMINANTS OF FOOD PRICES - Food Security, Food Prices and Climate Variability - page 98

unlikely that we will be able to anticipate either future price levels or price variability.
These are:

1. Increases in food prices in 2007-08 and again in 2010-11 occurred during a time of

abundance, not scarcity (Webb, 2010).

2. Record production of cereals and other food was accompanied by a changing distribu-

tion of the food insecure in developing countries, many of whom are net food buyers
who are sensitive to high food prices (FAO, 2012).

3. Rising food demand occurred after a period of neglected agricultural investment in

developing countries starting in the 1970s, that has resulted in declining per capita food
production in the poorest countries with the fastest growing populations ( Figure 5.3 )
(Funk et al ., 2008).

4. Finally, higher prices for cereals have not translated into higher producer prices for small

farmers. Developing country smallholder farmers are reliant on locally available seeds,
and have limited access to improved varieties and fertilizer that would boost yields.
Although farmers get higher prices at the farm gate for their goods, they also have to pay
more for food when their own stocks are depleted. In addition, a large portion of the
most food insecure is functionally landless rural laborers or the urban poor who rely
almost entirely on the market for food (FAO, 2011, 2012).

10

South America
Central America
Middle East
North America
Sub-Sahara Africa
European Union

9

8

7

6

5

4

3

2

1

0

1960 1970 1980 1990

Year

2000 2010 2020

FIGURE 5.3 Global yield increases for maize (corn) that shows that Africa and Central America
have not managed to gain from the global transformation of maize productive capa-
city (source: data from the USDA Production, Supply and Distribution database).