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doesn’t matter if we are talking about meat, fruits, vegetables, or any other sort of food produce, everything has seen a massive increase in price over the last 50 years and there are many factors at play here. The rise of these prices is mostly affected by the highly fluctuating economy which governments should have more control of.

What some governments don’t seem to understand is the risks that they are exposing themselves by constantly raising the prices whilst not raising the salaries of citizens at the same rate. It is not just about political risks, but also about the new initiative that many people across the world start to take on board which is migrating to different countries for a better quality of life as well as a better government.

The biggest necessity and expense within modern households

Food has always been one of the highest expenses in households and in some cases, it has become the biggest expense for some countries in which rent or mortgages are at a cheaper rate.

Graph representing food prices in the past 30 years (Source: International Food Policy Research Institute)

Last year has been a huge increase in the prices of food since 2019 and this was mainly caused due to the pandemic, but this year Bloomberg had analyzed a 33% increase since the summer of last year (2020) and they say that the pandemic isn’t anymore the major cause of food prices going out of control. The recession itself which is felt all over the world has also much cause and the main one is the pandemic, but as the world is recouping, we start looking more at what our governments are doing rather than other external influential factors.

In previous years the prices of food would fluctuate accordingly with the general pay rate, but now it seems that food is slowly becoming more of a luxury even for some western countries when looking at the lower social classes.

Surging food prices are especially affecting emerging markets. Data is for the most recent month available in each distinct economy, as of July 29 2021. (Source: World Bank)

Experts within this social field are already predicting that the situation won’t improve in the next 10 years and that things will get much worse. Low-income households will go through some thought times, especially as most governments are planning to lower benefits for low-income households.

What are governments doing about this?

From the United States, all the way to Europe and Australia, governments all around the world are pushing retailers to lower their prices whilst they are trying to improve the global economy that had been affected by simply too many factors in the past two years.

Of course, this problem is more predominant in third world countries, but I believe that everyone is feeling the difference, at least those that are working paycheck to paycheck. The United States had seen a big increase this year in the number of people that are going through hunger. The United Nations had also announced that next year will be a devastating year for the poorest countries in the world, announcing an even higher increase in the number of people going through hunger which is affected by a lower number of donations to food charities.

Overall this is pretty much a political domino effect where this recession is causing problem after problem. Governments are doing what they can, but right now the people that need to play an important role in fixing this problem are retailers which should lower their profit margin for the better of the world. This is long-term can be a benefit for them as they help the global economy get back on its feet, meaning raising the purchasing power of the world’s population.

Looking back in history within the late 20th century or about 50 years ago, this wasn’t such a big problem because people didn’t have so many other spending priorities such as:

  • Smartphones
  • Internet Bill
  • Computers
  • Smart gadgets
  • Expensive education
  • Higher Rent/Mortgage rates
  • Online services (Streaming/Cloud storage)
  • Other commodities

If we start putting everything on paper we would be surprised at the amount of money we spend on commodities besides what people used to spend about 30 to 50 years ago. It is true that the spending power of people, in general, had increased over the years, but this increase is turning into a decrease in some countries.

professor Alastair Smith who is an expert in the field of global sustainable development from the University of Warwick had also mentioned that food is a lot more expensive today compared to most of modern history. He, as well as many other experts within the economy field state that this crisis is only at the beginning and that the worst is yet to come with even higher food prices.

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