Global food prices have been rising significantly in recent months and this has led to food riots in a number of countries, rationing being reintroduced in Pakistan and price controls being introduced in Russia. What has caused these rapidly rising prices and to what extent will they slow the rate of economic development in the Third World?
UK farmers forced to ride income rollercoaster Guardian (26/2/08)
They’re going to need a lot more money to meet the same needs Guardian podcast (26/2/08)
Feed the world? We are fighting a losing battle, UN admits Guardian (26/2/08)
Record rise in fuel prices fuels inflation Guardian (12/2/08)
India’s farmers struggling to keep food on the table Times Online (29/2/08)
Questions
| 1. |
Using supply and demand diagrams as appropriate, illustrate the changes taking place recently in world food markets. |
| 2. |
Assess the main factors affecting the level of farmers’ incomes in the UK . |
| 3. |
Analyse the likely impact of rising world food prices on the rate of economic development in Third World countries. |
With oil prices over $100 a barrel and petrol prices over £1 per litre, it is difficult to imagine a county where the entire tank of a 4×4 can be filled for 42p, but Venezuela is just such a country. Not surprisingly, Venezuelans are resisting any attempt to change the level of subsidy that creates this situation.
Cheap and cheerful: Venezuelans cling for right to petrol at 42p a tank Guardian (18/1/08)
Questions
| 1. |
Using supply and demand diagrams as appropriate, show the impact of the Venezuelan fuel subsidy on the equilibrium price of petrol. |
| 2. |
Assess the impact on economic efficiency of a subsidy on this scale. |
| 3. |
Discuss the impact on the socially optimal equilibrium level of output of the Venezuelan fuel subsidy. |
January 2007 saw unseasonably cold weather in California and the big freeze that occurred may have destroyed up to 70% of the Californian orange crop. Prices as a result of oranges are likely to treble in US shops. The impact on prices elsewhere in the world may be less, but is still likely to be significant as California is an important area in global terms. Oddly the price of orange juice is unlikely to be affected as very few of the Californian oranges go for turning into juice. The majority of oranges for juice are grown in Florida.
Questions
| 1. |
Using supply and demand diagrams as appropriate, explain the impact of the freezing weather in California on the world price of oranges. |
| 2. |
Using supply and demand diagrams as appropriate, compare and contrast (a) the change in the price of oranges and orange juice and (b) the change in the price of oranges in the USA and the rest of the world.. |
| 3. |
Examine the likely impact of the cold weather in California on prices of other foods. |