The dramatic rise of global food prices in the first half of 2008 to as high as 75% to 85% from their 2006 levels, severely affected not only the more than 800 million already hungry and impoverished people in the world but also sent 50 million more into poverty. The devastating social impact of the crisis also underscores the vulnerability of poorer countries to food price and supply volatilities – a phenomenon that has been recurring within the present context of globalization and increased economic integration among countries.
But more significantly, the global food price explosion of 2008 revealed the reduced capacity of developing countries to secure their food supply, particularly their staple grains, as a consequence of decades of neo-liberal policy making that have made them increasingly dependent on the international food market for their food security. The reason why global rice stocks were at their 30-year low in 2008 is not merely attributable to weather disturbances in food exporting countries nor to short-term factors such as the boom in agrofuels use but to a more fundamental restructuring of the economies in the Third World that reoriented their agriculture production to exports, to the detriment of domestic food production. Farmlands were converted to plantations of high value crops for exports and to industrial estates, further reducing food crop outputs. In consequence, while population steadily grew, domestic rice production has failed to meet rising consumption, leading to sharp gaps in supply and thus to dramatic increases in rice imports.