A fast unfolding food affordability crisis is occurring simultaneously in many countries around the world, the first time that this has happened since the early1970s. In 2007, wheat prices rose by about 80 percent, and soy, rice, and corn prices by about 18 percent. In 2008, the rate of increase for wheat and rice prices has accelerated, making for some of the sharpest rises in food prices ever. This food price shock is sending a new wave of hunger and poverty rippling through the world’s poorest nations, igniting street riots and threatening to destabilize governments. These impacts reflect the role of wheat, rice, and other grains as staple foods eaten directly by the majority of the world’s population.

A compounding politics of food scarcity is also emerging, as governments impose price controls, lower import tariffs, increase purchases to stockpile food, and restrict grain exports to check the rise in domestic food prices. These responses distort the overall world food market and drive prices even higher.

More expensive food is disproportionally impacting the world’s poorest individuals, who are predominately small-scale subsistence family farmers. These farmers live in communities and countries of concentrated poverty – areas containing over 92 percent of the world's households that consume $1 or less of goods per person per day. Without the financial ability to pay more, they are experiencing increased suffering and economic hardship. The 1.5 billion people who live on $1 - $2 a day are cutting meat consumption and spending on items such as health care. The 1 billion people living on $1 a day are eating cheaper cereals such as sorghum and taking their children out of school. The absolute poorest families, living on 50 cents a day, are selling their animals, tools, and other possessions. All are eating less food.

These price increases are the cumulative effect of several trends that are simultaneously accelerating growth in demand, slowing growth in supply, and increasing the cost of production:

• Consumption of more dairy and meat products in economically growing countries
• Higher costs for land, energy and fuel, fertilizer, irrigation, and other agricultural inputs; and limited access to credit
• Ethanol production from corn or sugar cane and biodiesel from soy and oil palm
• Reduced yields from the loss of productive lands to urbanization and salinization; droughts, changing rainfall patterns and increased temperatures; declining availability of water resources; and increasing pest and disease infestations
• Slowing growth in per acre crop productivity, reduced investments in agricultural research and development, and poor access to agricultural extension services
• Political instability; inequitable trade and market systems; inflation and currency devaluation
• Shrinking size of family farms and unfavorable governmental land holding policies in developing countries

The U.N. World Food Program (WFP) and governments are responding in the short term by boosting humanitarian relief, food subsidies, and other social-protection programs. As prices rise, large farmers in the Americas, Europe, and other economically advanced countries are responding with increased grain plantings. These plantings should stabilize and then reduce prices in the near term. However, as trends of growing demand, constrained supplies, and increasing production costs are expected to continue, many analysts predict that we are entering a period where prices may still be 45 percent higher than they were in 2006-2007. This changing scenario suggests that the world must cope with a new reality of more expensive food.

Addressing these trends requires sustainable growth in food production. If the increased food production continues to come primarily from large-scale farms in America, Europe, and other major producers, then the world’s poor will remain dependent on a food production system that is vulnerable to price shocks. These shocks will continue to disproportionally affect the food security and well-being of the world’s poorest individuals and the communities and countries where they live.

Including the world’s small-scale subsistence family farmers in the effort to grow more food would directly benefit them by raising farm incomes. Yield increases translate into increased food security by providing more money for farm families and communities. With higher incomes, they can attain better diets and improved health care, better educate their children, and afford household goods and farming technologies to improve their quality of life. Subsistence farmers also manage a disproportionate share of the world's water and land resources, so raising the productivity of their existing land would be more environmentally beneficial than clearing more land for fields.

Improving yields on subsistence farms will depend on agricultural science; access to technology, land, and water; open and available markets; and economic incentives and supporting institutions. Appropriate action must address these interrelating factors in ways that balance increasing production with the needs of family farmers and their communities.

Food Security Primer: People who donot live in hunger or fear of starvation are considered “food secure.” Food insecurity exists when people are undernourished, a result of the cost or physical unavailability of food and/or inadequate nutrition. Worldwide, around 852 million people are without enough food to eat on a regular basis, and 2 billion people face intermittent food insecurity. There are 22 countries, 16 of which are in Africa, in which undernourishment affects over 35 percent of the population.

There are strong, direct relationships between agricultural productivity, hunger, and poverty. Families with the financial resources to escape extreme poverty rarely suffer from chronic hunger. Meanwhile, poor families not only suffer the most from chronic, consistent hunger, but are also the segment of the population most at-risk when food shortage situations arise. Threequarters of the world's poor live in rural areas and make their living from agriculture. Hunger and child malnutrition are greater in these areas than in urban areas. Moreover, the higher the proportion of the rural population that obtains its income solely from subsistence farming (without the benefit of pro-poor technologies and access to markets), the higher the incidence of malnutrition. Therefore, improvements in agricultural productivity aimed at small-scale farmers will benefit the rural poor first.

Increased agricultural productivity enables farmers to grow more food. This translates into better diets and, under market conditions that offer a level playing field, into higher farm incomes. With more money, farmers are more likely to diversify production and grow higher-value crops, benefiting not only themselves but the economy as a whole.