Medium- to long-run implications of high food prices for global nutrition.

The combined food, fuel, and financial crises of 2007-2009 had severe and widespread negative impacts around the world. Two key questions challenging governments were: how long would the high prices last and with what effects on food security and nutrition over the longer run? This paper considers the drivers of the crisis and explores if, unlike past shocks, the recent price increases reflect structural changes in food price formation that will have lasting global implications. New cross-commodity relationships allowed prices to spike, although there was no shortage of food at the global level nor indeed a significant downturn in recent yields. Yet recent record levels of farm production were also mirrored by growing numbers of people chronically undernourished and/or micronutrient deficient. The gap between supply and need was underpinned by growing urban demand, consumption of processed and higher-value foods (including meat), biofuel policy, and purchasing power erosion, but also by short-term market-distorting policies implemented by governments responding to perceived shortages of food. Thus, the impact of future food price crises will depend largely on what policymakers chose to do in response to the peaks and what they do not do during the troughs. Appropriate investments are urgently needed not just in smallholder developing country agriculture, but in effective food policies and targeted programming that can reverse the recent negative trends in nutrition and that support access globally to improved diet quality as well as food quantity.