A SILENT tsunami of food shortages is sweeping the world. And it could have an overwhelmingly greater impact on world trade than the much-hyped credit crunch.
As this wave of food price inflation moves around the world it is leaving riots and shaken governments in its wake.
Nobody is immune. In poor countries meat and vegetables are being foregone, so a bowl of rice can be bought. In developing countries health care spending is cut, so families can have three meals a day. In developed countries consumer spending is under pressure as food bills take more of the household budget, reported The Economist last week.
Billions of people are being affected. At a global level free trade is being hit, as countries apply protectionist policies to conserve limited food supplies. And the political implications for countries suffering unrest could be significant.
Meanwhile, global agriculture is in limbo. Yes, the world of cheap food has gone. But a new era has yet to arrive. Global traders, politicians and processors are grappling with a transition that is far more costly and painful than they ever expected.
Their challenge is to continue the process, to establish a new world order for food. Until then farming faces huge uncertainty. Yes, shortages may mean high prices in the short-term. But volatility is inevitable as knee-jerk over-production threatens to send prices plummeting one year later.
Farmers must ready themselves for a roller-coaster ride of market signals. Yet the bottom line remains – the world needs more food, fibre, fuel and feed. As the ripples of this tsunami spread around the world, UK farmers will need to monitor market signals with care.