So inflation is up again to 3.5%, and it seems that some people are surprised that food constitutes such a large proportion of this increase. Let’s have a quick look at why it’s happening and how you can avoid it.
Cheap, good, and plentiful. Choose two.
Why is food getting more expensive?
Because we’re realising it’s been way to cheap for the last 50 years.
Or more specifically we’ve been paying for it, just not at the till. We pay in farm subsidies, our water bills (to remove fertilisers and pesticides, clean water ways, and to ‘compete’ for its inefficient use of 44% of all fresh water used in the EU), in our public health (diabetes and obesity to name but two), in our genetic heritage (75% of food species have been lost in the last 100 years), in wildlife (farm bird population has halved in the last 30 years alone)… I could go on, but it’s jolly depressing to list all the hidden costs.
We’re increasingly factoring-in these costs, especially by increasing animal welfare standards and shifting subsidy payments.
The direct costs are going up, too. Oil is a vital input for post-war warming models (we expend 9 calories of oil energy for every 1 calorie of food energy we produce, which is pretty dumb). As oil hits $200/barrel, naturally this has a dramatic impact on the cost of food.
We’ve also approaching peak-phosphorus, meaning fertilisers are getting more expensive.
Because we’re trying to feed more people with fewer resources.
Global population increases by ~200,000 people every day. That’s a lot of extra mouths. Those mouths are getting more affluent so buying more meat. That takes more resources (grains, legumes, and water) to produce, so driving up the price of these staples. The rich eat a worse diet, the poor can’t afford good one.
We have drought, of course, which means that farmers are planting less, knowing they won’t be able to water it, so that means less food to go around.
Even if we were planting more, our proclivity for top soil erosion means we have less available fertile land to grow it on.
Besides drought, climate change means big changes in temperature fluctuations and rainfall patterns, which are likely to effect in crop and livestock disease patterns, leading to further speculation.
Food price speculation.
When you’ve got a market which fluctuates, you’ve got an opportunity for hedging. When you’ve got hedging you’ve got profiteering and market shaping, aka speculation.This used to be regulated, but since that was rolled back in the late ’90s, the share of the food market owned by speculators has increased from 12% to 61%, and in the last five years the amount of financial speculation on food has nearly doubled,from $65 billion to $126 billion.
What can you do to avoid food price inflation?
- Nothing. Your food will still be ‘too cheap’ for quite some time yet, and its price will increase. Look at the factors above. Whilst they are reversible it will happen slowly.
- Buy locally produced food. Don’t shop via channels which are subject to food price speculation. i.e. buy from sustainable local food systems which are not subject to the speculations and indulgent whims of distant greed-mongers. Barclays alone makes £340m / yr from this, so move your money.
- Join a CSA and support your local farmers.
- Grow more of your own. It’s easy (even comes in a box), and even if you can only do a little bit, every little bit helps and tastes great.
- Find it for free. Perhaps by foraging, or skip dinner by going dumpster diving. [UPDATED 19 Apr thanks to reminder from UrbanHarvest]
Gosh. Sorry about all that. Bit of a downer, isn’t it?