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Q&A: Rising world food prices

The price of wheat, rice and maize have nearly doubled in the past year - and they are not the only foodstuffs trading at a high price on the international commodity market.

Things have got so bad that aid agencies are having to rethink their programmes.

BBC News looks at why prices are rising and what can be done about it.

What is going on?

Prices are increasing sharply for some of the most basic foodstuffs traded on international commodity markets.

The price of wheat has doubled in less than a year, while other staples such as corn, maize and soya are trading at well above their 1990s averages.

Rice and coffee prices are running at 10-year highs, and in some countries, prices for milk and meat have more than doubled.

Why are we seeing these increases now?

It could be the breakdown of the "Goldilocks era" for global commodities - a period stretching back more than 30 years, during which the price of basic foodstuffs has been neither too high nor too low, but remained relatively constant.

For most of this period, the cost of staples such as wheat, corn and soya has actually fallen in real terms.

And food buffer stocks are at all-time lows as countries saw no need to accumulate them.

But it seems this long period of stability is coming to an end. Most commentators believe we are on the cusp of a new era of volatility and rising prices which will last for some time to come.

Who are the winners and losers?

The main losers are poor people who live in cities in developing countries, who are facing higher prices for imported food on low incomes.

Food riots from Haiti to Indonesia are causing increasing political instability.

The World Bank says that the high price of food could lead to developing countries missing international poverty targets.

The main gainers are farmers in rich and emerging market nations like the US, Brazil, Argentina, Canada and Australia, who are getting record prices for their harvests.

Some poor farmers are also benefiting from higher prices.

What are the main causes?

The first reason why prices are rising is growth in the world's population, which is expected to top nine billion by the middle of the century.

That is an incredible number of mouths to feed and will put pressure on a range of resources, including land, water and oil, as well as food supply.

But lurking behind the headline figures for population is an even more significant factor pushing up prices, and that's the economic miracle driving emerging economies such China and India.

To put it bluntly, rich people eat more than poor people, and all this economic growth is generating a whole new tier of middle-class consumers who buy more meat and processed food.

The FAO estimates that processed food now accounts for 80% of food and beverage sales.

What other factors are involved?

There is also the added environmental pressure all these extra people are loading onto the planet, as well as the impact of climate change.

Desertification is accelerating in China and sub-Saharan Africa, while more frequent flooding and changing patterns of rainfall are already beginning to have a significant impact on agricultural production.

And global warming has played a significant role in another driver of rising prices: the shift in agricultural production from food to biofuels.

Ethanol production is on course to account for some 30% of the US corn crop by 2010, dramatically curtailing the amount of land available for food crops and pushing up the price of corn flour on international commodity markets.

What can be done about it?

Many countries are subsidising the price of food, and the World Bank has called for targeted subsidies to help the poor.

And the UN's World Food Programme needs another $500m (£250m) to make up the gap in emergency food aid.

In the longer term, international aid agencies have called for more money to support food production in developing countries.

So far, only a small part of foreign aid goes to help farmers, but the World Bank says it will double its assistance to African agriculture to $800m

The food crisis is also likely to complicate the task of agreeing the next round of world trade talks, the Doha round, which is focused on agriculture.

Agencies like Oxfam also want protection for small farmers in developing countries and agricultural marketing boards against the demand of the rich countries that they fully open their markets.