Will High Food Prices Lead to Civil Unrest?
Wholesale food prices like wheat, sugar and vegetable oil have increased by roughly 33% globally since last year, according to the UN's Food and Agriculture Organization. But in some countries, the rising cost of food might be a tipping point – resulting in protests and even war, said Ida Rudolfsen, doctoral researcher at Uppsala University and the Peace Research Institute Oslo.
Creditors will want to keep an eye on emerging social risks in countries already struggling with poverty as food prices continue to skyrocket, with no sign of stabilizing anytime soon.
A shortage of wheat due to drought in major wheat supplying countries, like Argentina and Brazil, are driving up the cost. Farms around the world are struggling to keep up with the little number of crops growing due to a labor shortage. Throw in the high cost to transport food due to expensive oil, and you have barriers at every step from supplier to consumer, Rudolfsen told NPR during an episode of The Indicator from Planet Money podcast.
Increased global hunger has serious consequences that threaten social stability, but only if other conditions are in play, she explained. Rudolfsen told NPR about four other circumstances that when mixed with high food prices, make a country more susceptible to social unrest.
- 1.Countries that rely almost entirely on imported foods, like Afghanistan.
- 2.Middle income countries like India, Mexico and Columbia that are not the world's poorest but also not the richest.
- 3.Countries with preexisting political issues.
- 4.Nondemocratic countries where there's a food bargain, like Egypt.
Rudolfsen said Egypt meets all four criteria. "Egypt is a very interesting country to look at when it comes to the importance of food because it is part of their social contract with their citizens," she said. "Even though Egypt has authoritarian traits, they assure cheap food. So, when that is not granted, it becomes evidence that [the government is] not able to uphold their part of the bargain."
Other countries Rudolfsen is worried about as food prices increase include Yemen, Syria, Iraq and Afghanistan.