Agflation

I am starting this habit called Lesson A Day. The idea is this: We learn something important every day. However we forget it. If we can record the lessons that we learn every day, we can review them later and refresh our memory.

Rise of Food Prices, aka Agflation

Food prices have been rising. Why? Financial Times gives four reasons

  • Rise in demand due to increase consumption of milk & meat in developing countries like India, China, Russia & Brazil.
  • Increase in oil prices.
  • Climate change is affecting the crop yields in many countries like Australia, India, England etc. The climate change is seen in the form of droughts and floods during crop growing seasons.
  • Use of farm land to produce Biofuels. US is the main culprit here. US is using more and more their corn fields to produce corn based ethanol. This mean that the corn supply for cosumption has reduced raising the price of corn.


Financial Times has a good post on this issue here.

I think in the future we may have wars on basic necessities like Food & Water.