SINCE setting a record high in August 2012, global food prices have been on a declining trend, but prices of internationally traded foods still remain high.
World Bank's Food Price Index decreased 6% from June through October 2013, which is actually 16% below the all-time peak in August 2012 and 12% lower than year ago.
Overall, the price of grains has been the biggest driver in food prices during this period. While, in general, there was a decrease in traded prices for most grains like corn and rice, wheat prices showed an increase during the same time period.
A recent report by the U.N. Food & Agriculture Organization (FAO), the World Food Program and the International Fund for Agriculture Development reveals that declining food prices did contribute to a significant improvement in extreme poverty; however, chronic hunger on a global scale remains fairly modest.
Currently, 842 million people are hungry, and the anticipated increase in food demand due to a growing world population will leave many countries heavily reliant on global trade. The fact remains that most countries will not be able produce enough food domestically to keep tempo with the world's increasing population.
Mapping food security
For the first time, researchers have mapped the food security of major cities.
Typically, more than half the human population lives in or near cities, and food consumption obviously differs in rural populations versus urban populations. Since it is rare for a city to have the capacity to supply all of its food needs, it is important to understand the internal and external flow of the food system.
The study took an in-depth look at historical and modern food production, along with the rate of population growth, in the capitals of Australia, Japan and Denmark. Using the collected data, the scientists were able to chart the ability for each capital to provide enough food locally to meet the demand of its growing population.
The research did not take into account whether changes to current land management practices could increase productivity or if citizens would limit their intake to local, seasonally available goods.
Since the populations in the capitals of Australia and Japan have increased immensely in the last 40 years, the self-provision declined from 150% to 90% for Canberra, Australia, and from 41% to 27% for Tokyo, Japan.
On the other hand, even with a decline in farmland, Copenhagen, Denmark, showed a slight increase in its self-provision, from 34% to 45%, because its population has remained flat.
Overall, each capital exhibited a different degree of food self-sustainment. The report explains that, as the population of the cities increased since 1965, so did the amount of imported food, while at the same time, the percentage of food provided by local agriculture declined correspondingly.
"The three major cities in our study achieve food security by different degrees of self-provision and national and global market trade. It is important to understand such food flows in order to relate it to the energy challenge and the risk of national political unrest caused by food shortages and its effect on the open food trade," said University of Copenhagen professor Dr. John R. Porter, who is the leading author on the study.
"When the local capacity to supply a city declines, it becomes more dependent on the global market. As an example, Japan imported wheat from 600,000 hectares of foreign farmland to meet the demand of its capital and surrounding region in 2005. This means that large cities should now start to invest in urban agriculture, especially if climate change has large effects on food production and other parts of the food chain in the future," Porter said.
The study demonstrated the need to determine the self-provisioning capacity of each city, regardless of economic status, before addressing the solution to its food security puzzle.
Furthermore, a future question raised by the study is to what extent government policy will support open food trade.
The study, "Feeding Capitals: Urban Food Security & Self-Provisioning in Canberra, Copenhagen & Tokyo," was published online recently in the journal Global Food Security.
The bottom line is that food security is going to be a growing issue for many countries. As the world clock begins to tick at a faster pace, the global demand for food, in addition the demand for commodities to manufacture non-food products, will put a large strain on agricultural production.
It is still unclear from where the actual increases in agricultural productivity will come. While popular opinion is banking on the small-scale farming operation, large-scale operations are an attractive counterpart. Also, large-scale farming operations have the advantage with more access to credit, finance and technology.
It is reasonable to argue that both small- and large-scale farming practices are necessary to meet the growing global demand for food, as noted by World Bank Group in its November "Food Price Watch."
Food price outlook
The good news is that the outlook for global food prices is positive.
According to FAO, a more balanced food commodity market with less price volatility than in recent years is anticipated due to improved supplies, especially of U.S. corn.
"The prices for most basic food commodities have declined over the past few months. This relates to production increases and the expectation that in the current season, we will have more abundant supplies, more export availabilities and higher stocks," said David Hallam, director of FAO's Trade & Markets Division.
As demonstrated in recent months, the food price index has declined (Figure), and the trend is expected to continue into 2014. Most of the time, this translates into lower food prices, but a tight wheat market and weather concerns are keeping international traded food prices in close range to historical peaks.