Vol. 72/No. 12      March 24, 2008

Over the last year in Latin America, Asia, and sub-Saharan Africa there have been protests against high costs of food and fuel. Governments were forced to increase food subsidies and hold down prices to maintain political stability.

In Burkina Faso, 200 people were arrested during protests last week that spread from cities in the north and west to the capital Ouagadougou. The protests came two weeks after the government announced it would take measures to curb price hikes on basic goods and did nothing. Protesters stoned government offices and blocked the main highway with burning tires.

In Cameroon, 20 people were killed in the last week, when a strike by taxi drivers turned into a broader protest against increased fuel and food prices. Similar protests have taken place in Yemen, Senegal, Mauritania, and Morocco, where 34 people were jailed for protesting.

The Pakistani government announced in February that it would reintroduce the ration card for the first time since the 1980s. This would allow workers and farmers to purchase basic food items at subsidized prices from state outlets.

Similarly in Russia, the government had to extend a price freeze on milk, eggs, vegetable oil, bread, and kefir, a fermented milk drink, for three months when it expired in January.

According to the United Nations World Food Program, which provides food for 73 million people in 78 countries, a 40 percent increase in food prices in the last year endangers its ability to continue providing food. The agency threatened to cut rations to countries dependant on aid if it doesn’t receive more funds to supplement its $2.9 billion budget.

Last year, the United States, the world’s largest corn exporter, tilted the world production of cereal crops by producing nearly 14 million tons of corn for ethanol fuel. This was 20 percent of the world crop. The price of corn has doubled in the last year, reaching a 12-year high of $5.25 a bushel. The United States exports 70 percent of the world’s total corn exports, much of which is used for livestock feed. Many countries rely on imported corn as a staple.

The price of rice jumped 20 percent in the last year. Wheat is now $20 a bushel. Government backing for ethanol production has led to a high demand for corn to be used as fuel. In addition to driving up the price of corn as food, this also means that less and less farming is being devoted to growing soybeans, especially in the United States and Asia. Prices for soybeans have skyrocketed, reaching an all-time high in February of $14.22 a bushel.

In January 10,000 Indonesians protested the increased soy prices, which rose 50 percent in one month and 125 percent over the last year. Much of Asia relies on soybeans as a source of protein.

The increase in the cost of staples has led to an 18 percent increase in food prices in China, 13 percent in Indonesia and Pakistan, and 10 percent or more in Latin America, Russia, and India.  
 
 
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