Jul 10, 2019 in Economics

Abstract

Food insecurity is set to enlighten the production process in the future; thus, it has become the matter at the top of the world issues. In today’s world, the demand for food is high because of the population increase and growth of income. The witnessed global food insecurity can be transformed into an opportunity for developing nations and international communities to restore global agriculture output and trade. The two causes of food shortages discussed in this report are the increasing global prices of foods and lack of investment in the agricultural sector.  Addressing this problem requires substantial improvements in agricultural productivity and encouraging people to make investments in the agricultural sector.

Introduction

The fact that over 795 million people around the world are suffering from hunger indicates that the world food shortage is one of the most critical problems now. In terms of the world food shortage, it means that more people need food than the amount of food available globally. Due to the nature of what is involved and unlike a shortage of mobile phones, food shortages have drastic consequences for humanity. Addressing the consequences such as poverty and hunger cannot take place unless we understand what the critical factors are causing the world food shortage. The purpose of this report is to look at the factors that cause food shortages and suggest possible solutions to these. Firstly, this report describes two important causes associated with the world food shortages, which are Increases in global food prices and lack of investment in agriculture. Secondly, the report suggests that improvements in agriculture productivity might be reducing the world food prices and motivate investors might mitigate the lack of investment in agriculture. Finally, this report concludes by proposing recommendations which governments and industry can adopt in order to manage and lessen the world food shortage.

The Causes of Food Shortage in the World

The two major causes of the world food shortages are Increases in global food prices and lack of investment in agricultural innovation.

Increases in Global Food Prices

Increasing the world food prices often have impacts on food shortages. When the price rises, it is hard for people in poor countries to afford food, and this causes food shortages in these countries. Firstly, on the farming cost side, rising of the oil prices increases costs for fertilizers, machine operation and transportation, which directly increase the farming costs. For example, in the US the price index for nitrogen fertilizers was 118 in 2000; however, it reached 204 by 2006. Moreover, poor production in some exporting countries such as Australia where drought heavily decrease yield leads to the decrease of world grain stocks. Secondly, on the demand side, when people’s incomes increased in developing countries such as China and India, they want to eat more meat, which means more grains will be need to feed more livestock. Thus, the food cost will raise accordingly, and this makes it difficult for low-income people more difficult to afford for basic food. Overall, the increase in costs associated with farming is poised to result in an increase in the prices of food, which subsequently generates more hunger in poor countries because people are not in a position to buy food.

 

The food crisis witnessed in 2007-2008 has been attributed to dramatic increases in the prices of foods. The increase in oil prices together with persistent draughts that occurred in countries that produce grains have been cited to contribute to the food crisis. In addition, the high demand for foods that are processed, especially from people in high-income countries. This increase in demand has soared the prices of foods. With such increases, poor people have no other option but to lessen their food consumption levels amidst the increase in prices. 

Lack of Investment in Agriculture

Marginal investments in agriculture is the second factor contributing to food shortages across the globe. Majority of developing countries are deficient when it comes to core agricultural infrastructure like irrigation systems, warehouses and good roads. The outcome associated in such a case is an increase in the costs of transport, absence of facilities for storing food, and water supply that is not reliable. A combination of these factors play a role in limiting agricultural output as well as availability of food. This is a supply issue. In this situation, the primary factor underlying the supply shortage is due to the agricultural productivity has been very in low in developing countries. 

 

The poor state of agricultural infrastructure is worsened further by the unavailability of land and low crop yield productivity in the regions. For that reason, it is evident that many developing and least developed nations lack enough land due to settlement on the agricultural land as a result of population growth. In the same case, the citizens in the affected areas cannot utilize the lands for agricultural activities. The average area, therefore, is diminishing, and more farmers are forced to work on the economically unproductive land. Due to population growth and loss of farmland, the average size of the farm, for example, in China and Bangladesh has fallen from approximately 1.5 hectares in the early 1970s to barely 0.5 hectares at present. 

 

Furthermore, poor access to water and electricity in underdeveloped states has also contributed to the threat. According to Dexia Asset Management, in other states, the access to irrigation has become a major challenge as well as the lack of investment in agriculture. Consequently, the potential for farming production and crop yield declines; thus, later, a serious economic crisis would appear as an outcome. On the same note, low agricultural output has been reinforced by a systemic failure of development strategy, which is the absence of public and private investment in the rural and agriculture commodity sector. This hinders farming improvement and food production. Ironically, the economic sector that is the essential department in political, economic, and social sense has received a minimum support. In many developing nations, the agriculture department receives limited support from the government budget although it is among the largest contributors to gross domestic product and employment.

Solutions to these Problems

The problem of food shortage across the glove can be solved by improving agricultural productivity and motivating investors. 

Improving Agricultural Productivity

A solution to address the issue of food insecurity is through enhancing agricultural productivity. Boosting agricultural productivity is a sure solution to addressing the problem of food shortages. In fact, when the levels of agricultural output are high, the supply of food is high, which translates to a reduction in the prices of food. This means that poor people will afford to buy food; hence, reducing anger. Despite the fact that improving agricultural productivity is a challenge today amidst the increasing prices of fuel and food, global warming, soaring poverty and population growth, it is an achievable and practical undertaking. 

 

Various measures can be taken to enhance agricultural productivity. The first measure entails the development of improved seeds. High yielding seeds have been used in some regions such as India to enhance agricultural output, and the outcome has been largely beneficial. The second measure that can be taken towards the same involves the establishment of irrigation facilities in areas having shortages of water. Irrigation helps in enhancing agricultural output through facilitating multiple cropping.  Third, efforts should be adopted aimed at plant protection. Diseases, pests and insects are detrimental to crops. In this respect, governments should employ technical employees charged with the responsibility of spraying insecticides as well as pesticides to crops. Even with better irrigation systems, seeds, and fertilizers, farmers need significant resources in order to be highly productive. This underscores the need for strengthening the credit facilities available to small-scale farmers.

Motivating Investors

According to the FAO, agricultural investments is five times more effective in alleviating food shortage when compared to investments in other sectors. Scientists are also advocating for massive investments to be initiated in sustainable agriculture as a means of reducing global hunger. According to Terence, investments in the agriculture sector as well as food distribution systems are required to alleviate the prevalent global hunger. Moreover, such investments must be directed towards areas that are most susceptible to climate change since the same areas that are at a higher risk of food insecurity. A worrying trend that should be reversed is that the parts of the world with most prevalent food shortages have been experiencing stagnant or plummeting rates of investment in agriculture during the recent years. This spells dooms with respect to efforts aimed at reducing world hunger. In order to hunger to be eradicated in these parts of the world, investments must be made in the agricultural sector in order to enhance food production significantly. These investments should not only come from the private sector but also the government sector.

 

There are several ways of encouraging investments in the agricultural sector. The first approach entails identifying the barriers that hamper investment in the agricultural sector. A potential significant barrier that hampers investments in agriculture is the high costs of farm inputs such as fertilizers and electricity. In this respect, governments should come up with policies that offer incentives to investors such as subsidies on farm inputs in order to lessen the costs associated with agricultural inputs. People probably refrain from investing in agriculture because of the high costs, which creates a perception that the venture is not profitable when compared to other sectors. Second, the government can fund technological and agricultural research in order to come up with more effective fertilizers as well as stronger seeds. When the agricultural sector leads in technological research, there is no doubt that it will appear attractive investors. Other sectors like the technology sector have always thrived on massive investments in technological innovations. A similar approach should be adopted for the agricultural sector. Third, attracting investment in the agricultural sector requires setting up mechanisms and structures to help farmers have access to capital in order for them to acquire equipment and expand their farming business. Funding is one of the significant barriers hampering investment in agriculture; as a result, when access to capital is made easy, there is no doubt that investment in farming will increase significantly.

Conclusions

The issue food shortage requires immediate attention before it gets out of hand. With the world currently facing other problems such as global warming, rising prices of oil, and terrorism among others, solving problem of food security is central to addressing these other problems. In other words, the world cannot afford the issue to escalate further. The two main causes of food shortage are the increasing prices of food and lack of investments in the agricultural sector. To this end, this report has recommended two practical solutions that can be used in solving the issue of food shortages. The first recommended solution entails improving agricultural productivity. This is possible through the development of better-quality seeds; establishment of irrigation facilities in areas having shortages of water; plant protection; and strengthening the credit facilities available to small-scale farmers. The second recommendation focuses on encouraging investments in the agricultural sector. With respect to this, this report recommends governments to offer incentives woo investors to the agricultural sector; funding technological and agricultural research to develop better seeds; and improving access to capital by farmers.

 

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