Food security and global security - IEEE

José María SumpsiThe volatility of the agricultural markets and the world food crisisinstitutions experienced in tackling the crisis and alleviating the negativeimpacts on world food security. Some of the factors involved in the crisis canbe addressed by governments, whilst others are more volatile and beyond theircontrol, being market-driven akin to oil prices.• Global crisisThe current crisis is global in the sense that what occurs in some countries(economic development, increase in per capita income, the urbanisationprocess, increase in the demand for agricultural produce, changes in diet, andthe various economic, commercial, agricultural, environmental and energypolicies adopted) affects many others due to the phenomenon of globalisationand the interdependence of the global economy in recent years.Nonetheless, the globalisation of the global economy does not mean onlyspatial interdependence, but also sectorial interdependence. In fact, the foodcrisis is a clear example of sectorial interdependence with the energy andfinancial sectors. The food crisis that began in 2007 and worsened in 2008cannot be understood without considering the effects of the energy crisis andthe financial crisis on the international agricultural and food markets.144The relationship between the energy crisis and the food crisis occurs in twoways. The first is cost inflation. In fact, the prices of some of the primary meansof production used in agriculture, such as fertilisers, plastics, herbicides,insecticides, diesel oil, transport depend largely on oil prices. In this way, arise in oil prices ultimately leads to an increase in the cost of food due to higheragricultural costs caused by the substantial rise in the price of oil.The second is the production of biofuels (6) , since as the price of oil increases, theproduction of biofuels from agricultural products becomes economically viable (7)or else the subsidies designed to make it so are significantly reduced. This leads toan increase in the amount of agricultural commodities that are dedicated to nonfooduses, thereby reducing the food supply and forcing a rise in food prices (8) .The relationship between the economic and financial crisis and the food crisis isalso clear. In this sense, the macroeconomic imbalances in the United States, witha strong balance of payments deficit and the policy of extremely low interest ratesfollowed by the Fed, caused the value of the dollar to fall steeply, which affectedinternational agricultural trade flows and contributed to a rise in agricultural(6)See the article Food for Fuel (Daschle, Ford Runge and Senauer, 2007).(7)For the relationship between the prices of agricultural commodities and oil prices andthe threshold which makes the production of biofuels profitable -in particular maize for theproduction of ethanol in the USA- see the work of Tyner et al, 2008 and the study by theInternational Monetary Fund in 2008.(8)See the article by Medina in that same issue which explores in-depth the relationshipbetween food security and energy security.