Agflation

Source: Wikipedia, the free encyclopedia.

Agflation (or agrarian

social unrest
.

Key features

  • Agflation can be a starting point for the general inflation.
  • Agflation creates additional pressure on a household income, reducing available money for other purposes.
  • It is especially dangerous both for the poor countries and for the countries that are dependent on imported food.

Reasons

Several reasons may cause agflation: structural (changes in the supply-demand balance), monetary (the result of loose monetary conditions or speculations), and external (climate change, natural disasters, etc.) Among them are:

  • Growing population living on the same area of arable lands. Higher demand creates an upward trend in the prices for food.
  • Emergence of
    biofuels has substantially changed the agriculture business, creating additional demand for certain crops.[6]
  • Climate change may decrease the area of arable lands, reducing food supply.
  • Rising demand from
    emerging markets sends food prices upward.[5]
  • Devaluing United States dollar creates upward pressure on prices.[5]
  • Violent weather phenomena (droughts, floods, hurricanes) usually result in a reduction of food supply.
  • Export limitations by governments of major food exporting countries push prices for certain food items higher.[7][8]
  • Excessive quantitative easing has created much new capital that chases the same amount of food.[5]
  • Food speculation by big players has recently become a substantial problem.[5]

See also

References

  1. ^ Hayes, Adam (December 17, 2020). "Agflation". Investopedia. Retrieved 21 June 2021.
  2. ISBN 978-1-4391-9955-8
    . Retrieved 23 June 2021.
  3. ^ Rabinovitch, Simon (2007-05-14). ""Agflation" takes root in world prices" (in Chinese). Reuters. Retrieved 21 June 2021.
  4. thestreet.com
    . Retrieved 21 June 2021.
  5. ^ a b c d e Islam, M. Shahidul. "Of Agflation and Agriculture: Time to Fix the Structural Problems" (PDF). National University of Singapore. Retrieved 23 June 2021.
  6. ISBN 978-4-431-54895-9
    . Retrieved 23 June 2021.
  7. ^ Giordani, Paolo E.; Rocha, Nadia (April 2012). "Food Prices and the Multiplier Effect of Export Policy" (PDF). World Trade Organization. Retrieved 23 June 2021.
  8. ^ Espitia, Alvaro; Rocha, Nadia; Ruta, Michele (May 2020). "Covid-19 and Food Protectionism: The Impact of the Pandemic and Export Restrictions on World Food Markets" (PDF). World Bank. p. 1. Retrieved 23 June 2021.
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