Chapter 1 – Scarcity – World Food Price Crisis

Chapter 1 – Scarcity – World Food Price Crisis

http://en.wikipedia.org/wiki/2007%E2%80%932008_world_food_price_crisis

Summary:

This article reports on the global crisis of food pricing in the years of 2007-2008. Dramatic rises in world food prices create a global crisis and cause instability politically and economically. This dramatic increase in pricing has caused major social unrest in both poor and developed nations. The causes of this worldwide crisis in food prices continue to be debated. Initial causes of the price spikes in 2006 include unseasonable droughts in grain and wheat producing nations and also the rising oil prices. As a result of the oil price rising, the costs of fertilizers, food transport, and industrial agriculture have all risen.

Connections:

In the article, the global crisis of rising food prices relate to the scarcity of resources like oil and also external factors, like the unexpected seasonal droughts. The scarcity factor of the economy, stated in the text, is that of an “insufficient amount or supply of a specific resource”. In the article, the scarce resource would have to be the oil and resources needed to produce food for the global market. Since oil is a scarce resource, the supply and demand of oil is constantly changing, thus affecting the supply curve of food and its global market pricing.

Reflection:

I have always believed that the world food pricing crisis would affect us one day. Simply because our world is still growing, population wise, we need to produce more food to feed everyone on the globe. The scarcity of food and what allows the food industry to run is oil, a resource needed to run industrial agriculture and import/export of foods. I believe that the rising food prices were inevitable, and that everyone should consider saving energy and resources by refraining from wasting resources and using them wisely.