SYLVIE DOUGLIS, BYLINE: NPR.
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SALLY HERSHIPS, HOST:
This is THE INDICATOR FROM PLANET MONEY. I'm Sally Herships in for Stacey Vanek Smith.
DARIAN WOODS, HOST:
And I'm Darian Woods. And today we're looking at food prices. So, Sally, I'm not sure if you're feeling a bit of sticker shock at the supermarket aisle or a bit of pain at the grocery counter.
HERSHIPS: I mean, I live in Brooklyn. We go to the deli. But have you seen the price of bagels lately?
WOODS: They're not getting any cheaper. This month's consumer price index came out today, and it is 5.3%. And that means that U.S. prices overall in August were 5.3% higher than they were at this time last year. And food prices, they're growing at a pretty steady clip at 3% per year. But the little bit of food price increases that we're seeing in the U.S. is small compared to what's happening globally. According to the UN's Food and Agriculture Organization, wholesale prices for food like wheat, sugar, meat, they're up 33% from a year ago.
IDA RUDOLFSEN: It's pretty extreme. Yeah, so I've been kind of - not waiting, I shouldn't say that - but I should say worry about what type of consequences this will have.
HERSHIPS: Ida Rudolfsen is a doctoral researcher at the Peace Research Institute Oslo in Uppsala University. She studies food prices. And yeah, that number is big - 33%. So we wanted to know what that means for the world practically.
WOODS: So on today's episode, we're going to figure out why global food prices are so high and what kind of dire consequences we could see if this continues.
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HERSHIPS: Global food prices have really shot up in the last year. And adjusted for inflation, they are running at some of the highest levels since the index begins in the 1960s. And there's no one reason why food prices are high right now. It's all these things all at once.
WOODS: Talking to doctoral researcher Ida Rudolfsen, she said there was one problem on the supply side of food production this year that could be with us for some time given the climate crisis.
RUDOLFSEN: Grain reserves are going down because of drought in Brazil and Argentina and also in the U.S. So there's less wheat and maize and these important staples that are driving food prices up.
HERSHIPS: So this is not all about the pandemic.
WOODS: It's not all the pandemic. I mean, Sally, we can have multiple crises at once.
HERSHIPS: Lucky us.
WOODS: I mean, yeah, it's been a pretty intense year. That is a huge understatement. But one of the other supply issues is squarely the fault of the COVID crisis. All over the world, it's been challenging to get farmworkers, like fruit pickers who might be on temporary visas, as borders have closed off and on and off again. That's been really disruptive.
HERSHIPS: Yeah. And adding to the farmworker shortage, fuel prices are really high right now. And that is due to demand for travel and trucking picking back up after the start of the pandemic. Meanwhile, the supply of oil has been constrained. The group of oil-producing nations, OPEC Plus, has had all this infighting, which has stalled talks over increasing production. And in the U.S., investors in oil companies have been wary of opening up too many rigs because they don't want to get burned like last time when prices quickly shot down.
The price of oil is like this triple whammy for food prices. Cost for transporting food around the country rises, and the cost for stuff like fertilizers goes up when gas is more expensive. And just to top this all off, high oil prices increase the demand for corn and sugar to turn into biofuel instead of the food we can eat. So chew on that.
WOODS: It sounds like high oil prices have a pretty strong link with higher food prices.
RUDOLFSEN: Yes, they do. They're very strongly linked.
WOODS: These supply reasons are key drivers of high food prices right now. That's not saying food demand is not playing a role here. Food demand is reasonably robust right now. But supply bottlenecks are the key problem.
HERSHIPS: And those supply problems are translating into higher prices at the dinner table. In Nigeria, food costs 21% more than it did a year ago, for example. And if you're spending half your income on food, that means people go hungry.
RUDOLFSEN: The number of undernourished people now is around 768 million. And from 2019 to 2020, it's risen about 118 million.
WOODS: So an additional 118 million people were hungry.
RUDOLFSEN: Yeah, it's a lot of people. It's so much that it's difficult to take in.
WOODS: That's 1 in 10 people on this planet walking around hungry. It's the equivalent of the entire population of the U.S. and the EU skipping meals, unable to get enough calories every day at risk of real health complications like heart disease and stroke.
HERSHIPS: Yeah, and the problems don't stop there. There are also consequences of hunger that threaten social stability. All those rising food prices can mean civil unrest. Now, some of that is nonviolent protest - people demanding rights. But rising food prices can also lead to violence and even war.
WOODS: But Ida says that conflict is only likely under certain settings. She breaks it into four conditions that make a country more likely to lead to uprisings.
HERSHIPS: So condition No. 1 - a country would usually mainly import its own food. They don't grow much of their own. Take Afghanistan, Chad, Cameroon - these are some of the countries that import almost all of their food.
WOODS: Second condition, middle incomes - so India, Mexico, Colombia - these countries aren't the world's poorest, but they're also not rich. There's kind of this uncanny valley in between - on the one end, being so wealthy that food prices don't really matter and then, on the other end, so poor that you're just focused on your next meal.
RUDOLFSEN: It's usually not the most hungry who engage in protest - often the urban middle class who has the means to do this.
WOODS: Thirdly, there's usually underlying grievances against the government that don't have anything to do with food. That's what happened in Libya during the Arab Spring in 2011. There was anger at the authoritarian government for all kinds of reasons, but soaring flour and rice prices at the time was a big focal point for the protests that ended up overturning the government.
HERSHIPS: And finally, Ida says there are nondemocratic states where there's a sort of food bargain going on. She uses the example of Egypt, which, by the way, she says, tends to meet all four of those criteria.
RUDOLFSEN: Egypt is a very interesting country to look at when it comes to the importance of food. That's because it's part of their social contract with their citizens. So they provide subsidies so they get cheaper bread. Bread is very important in Egypt, and it's a part of the social contract of - like, even though they have authoritarian traits, they assure cheap food. So when that's not granted, it becomes evidence that the state is not able to uphold their part of the bargain. There's a lot of corruption. There's a lot of inequality, low economic growth. But at least we have bread.
HERSHIPS: And Ida does worry about how high food prices might worsen existing conflicts.
RUDOLFSEN: I worry about Yemen. I worry a lot about Syria and Iraq, Afghanistan now. What's going to happen with the food insecurity levels? The situation in Yemen is so bad that people are dying of hunger.
WOODS: Just yesterday, the U.N. secretary general warned that a million children in Afghanistan were at risk of starvation and death. High food prices are just one more blow to vulnerable people around the world already struggling with droughts, the pandemic and war.
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WOODS: This episode of THE INDICATOR was produced by Jamila Huxtable. It was fact-checked by Kaitlyn Nicholas. Kate Concannon edits the show. And THE INDICATOR is a production of NPR.
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