The World Food Crisis, a Matter of Supply and Demand ?

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This action can decrease the food supply powerfully.

 Eg. In North Africa, Morocco, the government cut wheat import tariffs to historically low levels. The Government is also considering the import of soft wheat privatization. In Asia, the Far East, in China, in December 2007 following the abolition of export tax rebates wheat, rice, corn and soybeans, the government since January 1, 2008 for wheat, buckwheat, barley and oats began to impose a 20% export tax of rice, maize, sorghum, millet and soybean export tax levied 5%.

- Shortage of farm labor

as we mentioned before, the uncontrolled food price and rising food cost will damage the enthusiasm of farmers. And in many developing countries, farmer is Synonym of poverty, that’s why many young people want to find a job in the big city instead of staying in the village to be a farmer. It will straightly cause the shortage of farm labor. And if there are no people being farmer, from whom we can buy food? As this reason, the less people to work in agricultural, the les food they can offer, which means the food supply will decrease.

3. Movement on both demand and supply

In the case for both the demand and supply will shift just like the same directions which stated on the above, which demand increase, demand curve shifts rightwards, the price increase and quantity decreases; supply decrease, supply curve shifts leftwards, the price increase and quantity decreases. It is just depends on the scale of the slope that how far will the demand and supply curve shift, no matter how long the scales are, shortage still exists.

Case1

Case 2

Price ceiling

Price ceiling is the maximum price a seller is allowed to charge a product which imposed by government. As with shortage, the price of food increase and the quantity decrease. Since food is necessity, people need food in daily live so no matter how the price is growing, they still need to pay for the food. Normally, the government may imply policy to help them such as setting the price ceiling, as a result in general, there is a price control which the food price will keep on a standard, so that the poverty may still able to pay for the food price.

Black market

However, in reality, lots of businessmen would like to earn profit as much as they could as a result black market would easily exist. The Black market is meant the price would set above the equilibrium price but with the same quantity provided. In the case, the wealth people will still be able to pay for the higher food price, and the poverty will be as usual that can only pay for plenty of food.

Solution

One of the solution is to develop technology in producing food. Technologies play a great role in our food supply. The demand to provide more food to more people using a limited land provides the power to increase productivity and efficiency. There is a need to produce food even if there are natural disasters such as droughts and flood. Food technologies can seem essential to many parts of the world hunger where malnutrition is common and problematic. Newly developing technologies can help people with these problem. Population growth can lead to lack of food, so it can be beneficial to attempt the limit to population growth. One effective way for a country to control the population growth is to makes laws that prohibit high fertility. For example, China is a well-known for instituting law “one child policy” which make it illegal for urban people to have more than one child. Another important way is to strengthen development and urbanization in less developed countries. Economics play significant role in resolving population growth. Countries that are well-developed have lower population growth and urbanized, with the higher living cost. When the cost of having a child is high, it prevent the parents to not having a lot of children.

One final solution worth mentioning is that each country should adopt policies to try to feed their population for the short-term and expand ways for food security needs for the future. For example, India eliminated an export ban on non-basmati rice and other products. China made diesel fuel more easily available for farm vehicles during the cereal harvest season, while Ukraine removed restrictions on grain import. These examples demonstrate that each individual country is starting to change their policies in response to the global food crisis.