October 17th, 2011
07:00 AM ET

How to curb rising food prices

By Fareed Zakaria, CNN

All over the world, from China to India to the Middle East, people are worried about the price of food. Poor countries paid 20% more for basic food products in 2010 than they did the previous year. Some say the Arab Spring was triggered by food inflation as rising costs were causing public discontent. Even here in the United States, your daily peanut butter and jelly sandwich is going to cost a lot more - peanut prices have doubled this year.

The U.N.'s Food and Agriculture Organization, or the FAO, measures the international prices of a basket of food staples - wheat, rice, sugar, meat - and its data show that prices reached an all-time high this year. There's good news and bad news here. First the bad news: Things are going to get worse. The FAO published a report this week called Food Insecurity in the World. It warns that "high and volatile food prices are widely expected to continue in the future."

The are many reasons. New entrants to the middle classes want more food and more meat. This month the world is expected to welcome a baby who will bring our population to seven billion. That number will rise to 9 billion by 2050 - and we'll need to produce 70% more food than we are right now just to meet the increased demand. Meanwhile the world has seen a surge in extreme weather - from Australia's droughts to Russia's wildfires - which has an impact on food production. And these weather patterns are expected to continue.

So what can we do? Well, the best way to get prices down is through increased productivity. If we can transform food production, making more food at lower costs, that will keep prices down. The FAO's report has a number of policy suggestions - among them, improving market information systems and investing in agro-research. By the way, that means getting over phobias about genetically modified foods.

But here's the good news I promised. I came across another report this week that had real examples of how to implement these solutions. One answer might lie in the mobile phone. The consulting group Accenture conducted a study commissioned by Vodafone. It found that the use of mobile phones among farmers could increase agricultural income by 138 billion dollars across 26 of Vodafone's markets in 2020.

While 70% of people in the developing world now have mobile phones, only one in four have bank accounts. Mobile banking could improve those numbers for farmers - increasing access to financial services, to the marketplace and streamlining what is currently an inefficient supply chain. If farmers know what prices for their goods are in real time, they can bargain better and take out the middlemen who jack up prices and hoard food.

More than 1 billion people around the world are employed in agriculture. Of those, 60% are small-scale workers. These farmers are often isolated, have limited transport or access to basic financial services. A mobile phone could go a long way toward changing their predicament - and increasing their output.

It's just the beginning. We talk a lot about the need to spur innovation on this show: in technology and in advanced manufacturing. This is just as true in agriculture. Grain yields increased by 126% from 1950 to 1980, but only 47% since then. Information technology is just one part of the solution, but it's a powerful tool. And you don't need the new iPhone with all that voice recognition. Any old mobile phone will do.

For more of my thoughts throughout the week, I invite you to follow me onFacebook and Twitter and to visit the Global Public Square every day. Also, for more What in the World? pieces, click here.


soundoff (57 Responses)
  1. Joey at Purdue Univ

    I recall the FAO reporting that there is enough to provide everyone in the world with at least 2,720 kcal per person per day & enough corn in Iowa we can't even fit it all in the silos, so it's really an atrocity that in this day & age we still struggle with things like food insecurity. It brings me great comfort & peace of mind to know that people like Mr. Zakaria thinking of genuine answers to complex problems like these.

    October 17, 2011 at 7:31 am | Reply
    • wasso

      It looks like one year FAO says one thing and the following year it says another thing !

      October 17, 2011 at 10:35 am | Reply
    • Mike

      Food insecurity has very little to do with production. Supply involves all kinds of issues. If it didn't, no one would go hungry.

      To me, worse than food supply shortages is the plague of stupid, cynical, simplistic thinking. Stop trying to spread it.

      October 17, 2011 at 2:33 pm | Reply
      • Sara

        Couldn't agree more.

        October 19, 2011 at 1:13 pm |
    • Goodguy1

      When food became commodities for investment on Wall Street all stability was off. Health care, food, energy should not have pricing manipulated on Wall Street and other world exchanges.

      October 17, 2011 at 8:27 pm | Reply
      • Peter

        You could not be more right.

        October 18, 2011 at 8:13 am |
  2. rightospeak

    Droughts last year in China ,Russia caused prices to jump. What you are failing to show is that NAFTA signed by Clinton put 2 million farmers in Mexico out of business by cheap corn influx from the U.S. Momnsanto is putting many farmers out of business aroung the world with patented seeds. Food is becoming a weapon – it is more potent than bombs. We are importing garlic and Alaska salmon processed by Chinese to Florida-something is wrong with this picture.

    October 17, 2011 at 8:54 am | Reply
  3. JIm

    Food production across the world goes up and down, it is nothing alarming about it. Droughts, floods and other disasters come and go. What kills agriculture is urbanization. Giving farmers mobile phones and expect rise in productivity is simply idiotic. The poll was sponsored by cell phone giant!!! REALLY?!! This article is raw and doesnt appeal as pro-made. Wrong facts tied with wrong polls and solutions, what a joke!

    October 17, 2011 at 9:21 am | Reply
    • John

      I live in El Salvador here we just had over three feet of rain in seven days which probably took out 35% of the harvest for substinence farmers. Price of food will shoot up and millions will go hungry in a country about three hours from the US. Giving farmers more accurate information on market prices and access to mobile banking is not a joke and can mean the difference between crops getting planted and people going hungry.

      October 17, 2011 at 1:44 pm | Reply
  4. Bemused

    Need food? Head down to the closest major port; I guarantee there's at least one ship there with a cargo hold full of food doing nothing but waiting to rot because of ridiculous regulations. Great system we have, isn't it?

    October 17, 2011 at 9:23 am | Reply
    • Rodeoguy

      I was the Chief Engineer on a small US flaged cruise ship, in 1998, we received food stores from the US while inside the Panama Canel. Once we made it back to Seattle where we re-entered the country, USDA inspectors quarantined The ship until we threw out about $50,000.00 of meat, meat that came from the US, all because of regulations.

      October 17, 2011 at 3:10 pm | Reply
  5. zafarrano Wolffe

    Dear US Government: Quit supplementing corn-based ethanol production so that the phoney-fuel's price becomes fair. Do import Brazilian ethanol, without tarifs, because it is cheaper than US-produced ethanol. Meanwhile, dear Government, ask American farmers to direct the corn they grow back into food production (most goes to ethanol producers at higher, government-supplemented prices) and related corn prices decrease while distirbution increases.

    October 17, 2011 at 9:25 am | Reply
    • iRex

      I'd rather not have the corn go back into food, because they put in in food as High Fructose Corn Syrup. I'm all for canning the subsidies though.

      October 17, 2011 at 10:20 pm | Reply
  6. j. von hettlingen

    No doubt nature has an impact on food production. But the prices are often fixed by producers to maximise profits. Food is then exported mostly to countries that have strong purchase power. The example in the West shows the unequal distribution and supply. Those who can afford to spend on food are usually weight-watchers. Those with lower incomes buy cheap stuff, which is often junk food and they are in most cases obese. In the emerging economies like China and India food consumption reflects the social behaviour of the customers, which has more to do with prestige than basic needs.

    October 17, 2011 at 10:09 am | Reply
  7. Funny

    I noticed he mentioned "getting over phobias about genetically modified foods" I am only afraid of the untested GMO foods OH, funny that means I have to be afraid of all GMO food because the FDA doesn't require testing on any of it, so yea I am afraid.

    October 17, 2011 at 10:27 am | Reply
    • wasso

      Actually, you have been eating GM foods in one form or another for the last 30 years perhaps without knowing it.

      October 17, 2011 at 10:38 am | Reply
    • driranek

      Granted the tools have changed, but basically everything you eat has been drastically "genetically modified" from its natural state via the millenia-old means of selective breeding.

      October 17, 2011 at 12:31 pm | Reply
      • Philip Solman

        Amazing how the same argument (GM is really no different to natural selection) keeps appearing in comments if someone dares to question the benefit of Genetically Modified foods. Anyone who claims this is either: A. Someone who knows nothing about the subject and is regurgitating something they heard elsewhere. B. A shill for the biotech industry.
        The honest truth is that no-one actually knows 100% if tinkering with genes in this way is benign or dangerous (although many 'claim; to know). What we do know is that big players in the biotech industry fight tooth and nail against labeling laws that would give consumers in the US & Canada the right to choose. And our governments have decided to support biotech secrecy rather than give the citizenry what they want (survey after survey shows that the vast majority of consumers in US & Canada want labeling of GM foods). GM foods are so new and novel that they claim utility patents as new 'inventions', so they should be labeled differently on ingredient lists. 50+ governments across the world from China to Brazil, from Australia to Korea, and all the European Union have decided that GM foods should be labeled, so by what right do our governments continue to ignore the will of the people?

        October 18, 2011 at 11:30 am |
    • Simon

      Couldn't help but jump in since I am shocked that Fareed would carte blanche endorse genetic polution of our food(seriously Fareed?). The lack of testing is shocking. The fact that the FDA says that modified foods are not substantively different compared to their unmodified counterpart is absurd. Genetic polution is not something you can reverse and for now its a big experiment in cross pollenation and consumption. And also a quick comment – selective breeding is human assisted natural selection of Species which is quite different than taking genetics from completely different Kingdoms (not even in the plant group) Consumers aren't even allowed to exercise our right to choose to buy GM in North America.

      October 17, 2011 at 3:48 pm | Reply
    • Jane Carter

      Seeing as these gentically modified seeds do not always produce a higher yield (in some cases they have produced lower ones to poor farmers who have paid through the nose for them. And African soil is poor – if you pull a higher yield you need a better soil. GM crops are not the answer. And so far the testing done shows they aren't even safe.

      October 18, 2011 at 11:32 am | Reply
  8. Robert R.

    Perhaps my math is a bit rusty, but how does a 30% rise in the world population require a 70% rise in food production? Even if you take into account the necessary reduction of seafood as a percentage of the global diet, I'm not seeing it...

    October 17, 2011 at 10:28 am | Reply
    • Soulcatcher

      That's because we are 2.33 times larger.

      2.33 * 30% =70% more food.

      October 17, 2011 at 12:38 pm | Reply
    • NNelson

      That number is factoring in an increase in the percentage of people eating more energy/land intensive foods (meat, fruits, etc.). They mentioned just before that statement that there has been and will continue to be an explosion of the middle class in developing countries (China, India) which will lead to an increase in food consumption greater than the increase in actual population.

      October 17, 2011 at 2:38 pm | Reply
  9. ADiff

    The best way? Turn more food into over-priced fuel. At least that appears to be Congress's opinion.

    October 17, 2011 at 10:54 am | Reply
  10. Alex

    Something that might be worth looking at when thinking of the production of food, and the reduction of cost for the individual family, is the model that was employed during WWII to reduce the pressure on the public food supply: the Victory garden.

    According to an article on Wikipedia, "These gardens produced up to 40 percent of all the vegetable produce being consumed nationally." That's pretty amazing. And for anyone who has planted a vegetable garden, you can't deny the positive emotional impact of picking a vegetable from your own garden, that you grew and nurtured, which in turn nurtures your own family.

    There are many benefits that go beyond the immediate cost of the food item itself. There is also the environmental impact of large-scale agriculture, from the use of pesticides and fertilizers, to the fossil fuels needed to transport the produce to market. Vegetables grown in a personal or community garden, in those terms, have a very minimal environmental impact.

    There's also the aspect of nutrition and quality. Those tomatoes that are bred and grown with uniformity, transport, and shelf stability as their main criteria, are usually fairly tasteless and of an unappealing texture, and lose a lot of their nutritional value during transit. A tomato, fully ripened, pulled off the vine from your backyard, porch, or fire escape, will taste amazing and have a higher nutritional value.

    Can this type of thinking have a global impact? Quite possibly. When agricultural policy and practices are defined by large profit-driven corporations like Monsanto, who produce genetically modified seed they don't allow to be harvested and reused, and litigate to keep it that way, we're going to see a reliance on these companies, and a conformity and uniformity that won't allow for diverse thinking and practice in the way we produce food.

    There is a shift happening in this country towards more locally- and responsibly-produced food. This is happening in urban environments, too. With community supported agriculture (CSA) and organizations like Growing Power and Brooklyn Grange, for example. We don't need to get "over [our] phobias about genetically modified foods", we need to rethink our relationship to the food we eat, and how it's produced.

    October 17, 2011 at 11:12 am | Reply
    • Waldo

      Now if we could just get people to quit massing in hugh cities that don't allow this kind of solution. Then we might get somewhere with it.

      October 17, 2011 at 1:55 pm | Reply
  11. Tahira Asad

    One of many solution is people eat less meat!We spend more farm products,crops,labour to feed animals to raise them for Meat consumption.We need to educate peolple that lentals,Beans and other grains are as high in protien as meat!!!!
    In developing countries people are spending as much as 70% of their income on food.All over the world TURMOIL is about
    Food!!and rising price of FOOD.........
    It is really a atrocity that in this day and age where technology is at the TOP!!! we r still struggling with basic things like Food insecurity.

    October 17, 2011 at 11:15 am | Reply
  12. donna

    excellent.

    October 17, 2011 at 11:43 am | Reply
  13. Pat

    Why is a 2050 population of 9B assumed to be likely? Or even possible?

    What is far more likely is disruptions to a precariously-balanced global food supply-chain will result in a few million or even billion people being killed, either directly through famine or indirectly due to famine-induced socio-economic upheaval.

    The idea that we can sustain our current habits through the year 2050 and a 9B population level is actually the LEAST LIKELY outcome we should be preparing for.

    Wanna prepare for mankind's future? Study flint-knapping. It's coming back in a big way.

    October 17, 2011 at 11:58 am | Reply
  14. driranek

    Much of the price increase is due to the burning of corn as ethanol in motor fuels. Get rid of subsidies that promote the burning of food.

    October 17, 2011 at 12:28 pm | Reply
  15. Thinker

    Idiots keep producing children and the the world is becoming hungrier and hungrier.

    I wish my parents hadn't produced me, I think I was better off in non-existence.

    October 17, 2011 at 12:41 pm | Reply
  16. Thinker

    Is it good to come here in this world and then die miserably. Wasn't it better not to come here in the first place. I mean there should be a total moratorium on child production in the world till the population is reduced to less than a billion. This the the most the world can sustain and provide a decent living to.

    October 17, 2011 at 12:49 pm | Reply
  17. Thinker

    Read in above as: "This is the most the world can sustain and provide a decent living to."

    October 17, 2011 at 12:54 pm | Reply
  18. dww

    GLobal warming is changing our world. Better wake up before it's too late.

    October 17, 2011 at 12:55 pm | Reply
  19. Menekse Gencer, mPay Connect

    This was a great segment which I enjoyed watching as well. I'm very happy to see CNN reporting on the use of mobile money for food security. For more info on this topic: http://slidesha.re/cOJO67
    Mobile money can improve other areasfor the poor as well such as health and energy access. If interested in learning more, please feel free to reach out at: mgencer@mpayconnect.com.

    October 17, 2011 at 1:00 pm | Reply
  20. Thinker

    I'll tell you, even the occupy Washington movement will not bring any fruitful results for the masses, although capitalism must die through this movement, but unless the masses do their part too, to not produce children for the flimsy desire that they have to have children, the masses and their children in future will have a much more deprived and horrible life.

    If you don't get it then wait and see.

    October 17, 2011 at 1:01 pm | Reply
  21. Thinker

    I have thought about the welfare of the people on this earth for decades and have come up with the best possible solutions, but the elite and the ordinary people both are not listening to the wisest words that I have been putting across.

    So the misery and tears continue for the human race. Alas, you humans don't learn the easy way.

    October 17, 2011 at 1:10 pm | Reply
    • dww

      You think a little too much of yourself.

      October 17, 2011 at 1:57 pm | Reply
  22. mark o. david

    I am small farmer and I am seeking capitol to refine my farm(hazelnut orchard)If you want to secure your food supply please support people like me directly not with better access to a bank. contact: mmarkodavid@hotmail.com thank you for your consideration

    October 17, 2011 at 1:18 pm | Reply
  23. Joel Walker

    Here's a thought: Why don't we do something about food (and energy) demand besides always trying to find ways to meet it? If we weren't just blithely anticipating 7 billion people as inevitable, available resources would go much farther.

    October 17, 2011 at 1:19 pm | Reply
  24. P-man

    Cell phones to the rescue! That's a good one. I imagine farmers running wild with their combines and harvesters because they are too busy texting. Less cell phones make a better world, not more.

    October 17, 2011 at 3:15 pm | Reply
  25. Joel Walker

    I don't think anyone's talking about a farmer with 1,000 acres of oats talking on a cell while running his harvester over the hired man. I think the idea is to put communication in the hands of the guy with three acres planted to some hand-harvested crop. Then, when it's time for his family schlep their product to market, he wants to work out the best deal he can before he decides to hike across the river six miles to market of over the hill eight miles to another market.
    Sheesh.

    October 17, 2011 at 3:30 pm | Reply
  26. capnmike

    Nature has a way of curbing the excess population...and she doesn't give a hoot if humans like it or not.

    October 17, 2011 at 5:01 pm | Reply
  27. Ron

    There always have been articles talking about how to increase food productivity and energy production. At certain point, an optimum range is reached. The land can only produce so much even if given optimal condition. What is taboo topic is how to control world population to a level where demand do not outstrip supply.

    October 17, 2011 at 5:54 pm | Reply
  28. Jeremy

    I live on 22 acres between San Antonio and Houston. I have a small cottage powered by 2 windmills. I have an electric water well powered by the same. I do consume electricity, but I produce more than I consume and sell the overage back to the grid. I grow corn and ferment it into biodiesal. With this I power my 2000 F150 truck and 1956 John Deere 420 tractor (purchased for $1600). I maintain a collection of books (mostly fiction) and firearms (various makes and models), and raise sheep for wool and for their meat. I am fortunate enough to have a small lake full of largemouth bass. I created this lake myself using the tractor. On weekends I trade cotton, corn and livestock for fruits and consumables with the local menonite population. I would say my wife and our two young children are likely more content than most of our contemporaries. My annual property tax bill on ag exemption is $163 which I pay in full. We have an iPad and enjoy 3G access for which we pay $25 a month. Politically, I am a rational republican. It is wholly possible to live in a mutually beneficial relationship with our planet, enjoy the sacred blessings of individual liberties, and by sheer example export this wisdom to anyone in the world who would have it. And it doesn't require a dime of tax money to do so. Anyways, that's my 2 cents.

    October 17, 2011 at 5:56 pm | Reply
  29. American Citizen

    As I just posted on a different article, I've never seen so much food on store shelves as there is today. I do not see a valid food shortage at all. This is misrepresentation. In fact, all I do factually see are the abundant food sources with exorbitant prices being attached to them with this bogus excuse. People plant more food and raise more food when the population increases. What kind of morons will believe this schmuck that keeps glooming and dooming readers? I say – stop listening to fools that make such claims on baseless terms. When I see a news reporter standing in an empty field that was recently a significant farm for the United States, then I'll start believing there is a food shortage. (And this discounts any former farmers now CEO's of a corporation that simply abandoned their livelihood for a new one). There's food! And plenty of it! Fools!

    October 17, 2011 at 6:31 pm | Reply
  30. midgick

    stop paying subsidies to the farmers and encourage them to produce that we can feed our own and export to the rest of the world. This means more taxes for the government, more work for the unemployed. We have fantastic and fertile farmland which we have slowly over the years encouraged farmers not to use.
    This also means encouraging farmers to keep their farm and others to invest in out farmlands.
    THIS IS ONE HELL OF AN EXPORT THE WHOLE WORLD NEEDS AS IMPORTANT OR MORE SO THAN OIL.

    LET'S GET OUR HEADS OUT OF THE SAND AND DO WHAT MADE THE US GREAT.

    October 17, 2011 at 11:07 pm | Reply
  31. cpc65

    Great. We'll have to switch to turnip butter.

    October 17, 2011 at 11:23 pm | Reply
  32. b

    Why do some countries and some people think its their duty to populate the earth? 1 billion people in 1 country?

    October 18, 2011 at 1:40 am | Reply
  33. Greg

    I big point was missed and it was food speculation. A new theory is emerging among traders and economists. The same banks, hedge funds and financiers whose speculation on the global money markets caused the sub-prime mortgage crisis are thought to be causing food prices to yo-yo and inflate. The charge against them is that by taking advantage of the deregulation of global commodity markets they are making billions from speculating on food and causing misery around the world. Good old fashion greed is ultimately the cause of higher food prices.

    October 18, 2011 at 7:29 am | Reply
  34. unsheepled One

    Sir you can eat all the gut killing GMO Frankenfoods you want. I reserve the right to eat organic.I rather pay at the grocery store /farmers market than at the DR office and pharmacies. But then you are a mouthpiece to those who pay your salary , you gotta speech that way. There is no food shortage except that is man made by greedy corporations . But then no one here is interested in truth.. or they would not parrot so much drivel

    October 18, 2011 at 11:30 am | Reply
  35. DoNotWorry

    I don't always agree with Fareed, but this is completely dumb. A cell phone is going to grow more food, how? I have grown food on my own land for over 20 years, and didn't produce even one extra carrot after I bought a cell phone. I can't believe you told us to eat GM foods... give me a break, they aren't even better products, they just make a lot of money for Monsanto. I think Monsanto is paying Congress enough to protect their interests. Number one cause of cost increases for food is globalization... everything you put in your mouth being shipped on average 1,500 miles? Absurd. I eat locally produced foods from my farmers market, but as my new garden gets as productive as my old one, I will eat LOCAL, thank you very much. Seed Savers and home grown. Put Monsanto and its frankenfood out of business.

    October 19, 2011 at 4:28 am | Reply
  36. ruchi

    good read, easy statistics! definitely to be shared with people for gen awareness

    October 29, 2011 at 3:58 pm | Reply
  37. Speedy Bubbles - Bubble Shooter - Play Bubble Shooter Games

    Great story, I am going to bookmark this.

    January 26, 2012 at 12:12 am | Reply

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