Figure 3: Market access in agricultural areas of Africa, Asia and Latin America. (Source: Sebastian, 2007).
mestic prices do not always follow international prices (FAO, driven by a combination of rising fuel costs, production of bio-
2006). The periods of rising real prices were generally associ- fuels, and unfavorable weather conditions, with trade restric-
ated with real exchange rate devaluations. Relaxation of govern- tions boosting upward price pressures (World Bank, 2008).
ment controls over prices and market systems also led to gains
in producer prices in some cases. In other instances, import Agricultural prices are forecast to decline over the next two
liberalization appears to have contributed to a decline in the years, but remain well above the levels of the first half of this
real domestic prices of some commodities. Consequently, glob- decade. A strong combination of supply response and contin-
al shortages of food and feed that lead to global price increases ued growth in demand is expected to keep prices above his-
are not followed by production increases at the local level. torical levels, but well below the peaks experienced in recent
years (OECD-FAO, 2008). In real terms, prices in 2017 are pro-
FUTURE WORLD FOOD PRICES jected to be 10% to 35% higher than in the past decade (OECD,
2008). While the long-term outlook for agricultural prices is
Accessibility to food is also determined by the long-term trend particularly uncertain, the decline is expected to continue. In
in food prices (which is a different issue from price volatili- Global Economic Prospects, the World Bank projects a decline
ty). The rising trend in global food prices is likely to persist in of about 0.7% a year through the forecast period until 2030
the next decade. In the long run, however, prices will decline (World Bank, 2008b).
(OECD-FAO, 2008).
Price projections depend on a wide range of factors, including
Prices are driven by a complex combination of factors. Histori- climate change, productivity developments, GDP and popula-
cally, productivity gains and increasing competition in trade tion growth and the policy environment. One of the cruel iro-
have overtaken stronger demand, resulting in the declining nies today is seen in the connection between rising energy and
trend of the past 100 years. Recently, food prices have been food prices. Higher energy prices have increased fertilizer and
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