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Thursday, April 11, 2013

Food Prices on the Climb Again

This week, the Population Association of America meetings are being held in New Orleans, a city famous for great food. For most of us in richer countries, the issue of food is whether it is healthy for us, including questions about the safety of GMOs. For a larger number of humans, however, the issue remains simply getting enough affordable food--food security in its broadest sense. Two reports out this week emphasize that the price of food is climbing globally, and this cannot be good news for a lot of poor people.Timothy Wise of the Global Development and Environment Institute at Tufts University has a blog post on "The Damaging Links Between Food, Fuel, and Finance." The issue is that food crops are being diverted to biofuels, especially since there is more money in energy than in agriculture, and there is a growing trend for big commercial enterprises to buy up agricultural property, which then threatens the free market for food.

Worldwatch has come out with a report covering similar themes:

Perhaps most significant has been an increase in biofuels production in the last decade. Between 2000 and 2011, global biofuels production increased more than 500 percent, due in part to higher oil prices and the adoption of biofuel mandates in the United States and European Union (EU). According to a 2012 study by the University of Bonn’s Center for Development Research, if biofuel production continues to expand according to current plans, the price of feedstock crops (particularly maize, oilseed crops, and sugar cane) will increase more than 11 percent by 2020.
Large-scale imports of agricultural commodities in 2007–08 and 2011 were important factors in the global food price spikes in those years. High Chinese imports of soybeans, for instance, contributed to the 2011 spike. National export restrictions, including taxes and bans, also drove up food prices; policies enacted in 2007–08 in response to the price spike generated panic in net-food importing countries and raised grain prices by as much as 30 percent, according to some estimates.
And, of course, fertilizer, pesticides, and irrigation (pumping especially) are energy-dependent. So, on the one hand, we do need alternative sources of energy in an increasingly energy-dependent world, but on the other hand we can't build that dependence on food, because we depend on food for food.


  1. This is particularly relevant to a country like Egypt right now, which is being hit with a double (or triple, or quadruple) whammy.

    Egypt imports over 50% of its wheat (which is an amazing figure if you think about it), and it is subsidized by the government. But at the same time fuel prices and consumption are also going up, and fuel is also imported and subsidized by the government. And they are related to each other. As fuel prices go up, transport and processing for food goes up.

    Ultimately you have to ask a question about over-population with Egypt. The government subsidy system is no longer viable, and until it is reformed no one wants to lend to Egypt (which is quite reasonable). But as soon as the government touches the fuel subsidy the food price will increase.

    What does the history of demography tell us about such a population? The government can't paper over the lack of natural resources (arable land, water, and petroleum) anymore. The international welfare system is no longer willing to lend to what is clearly an incompetent and inexperienced regime.

    What happens to the population when they start to starve? Another revolution? Historically I think it might have been a war of conquest, no? This does not seem likely today. Mass emigration? Famine, plague, and death, and thus a re-balancing of population with natural resources? Sorry for the long post, but any insights you have would be most appreciated.