Five charts that explain who gets hit hardest by food price rises

Global food prices will remain stable for the year ahead, suggest recent UN forecasts, but in the longer term we can expect much more volatility.

That’s because the food sector is unable to cope with a double whammy of rising demand for food and risks including water scarcity, land degradation and climate change, a recent analysis [pdf] concludes.

In a twist of fate, the countries and people who will be worst affected will be the ones that tend to contribute least to such environmental risks. Here are five charts that help explain the story.

Although food prices have fallen in recent years, the volatility in prices – as seen in the price spikes in 2007-08 and 2011 – will be repeated as the food industry is vulnerable to risks such as climate change and water scarcity, says the UN. Rising global population and incomes are expected to create a growing imbalance between supply and demand, it adds.

Wealthy countries such as Australia, the US and the UK tend to contribute most to the environmental risks that make food prices higher and more volatile, says the UN, as they consume the most natural resources (land, water, carbon emissions etc).

The ecological footprint attempts to measure in hectares the natural resources a country requires on a per capita basis to produce all the food, water and non-food commodities it consumes, or absorb the waste it generates. Nepal, Madagascar and Benin all hover near the bottom, well below the level (1.7 hectares) necessary for us to live within the resources of the planet.

By contrast, Qatar, Australia and the US use more than four times the resources and waste that the planet can regenerate and absorb in the atmosphere. In the long term this means depleted groundwater, deforestation, collapsed fisheries and the accumulation of carbon dioxide emissions in the atmosphere.

The countries that have the lowest ecological footprint tend to be the most vulnerable to the impacts of climate change, including sea level rises and water scarcity. The Notre Dame Global Adaptation Index (ND-GAIN) measures a country’s exposure and capacity to adapt to climate change and gives each country a score. Benin, Mozambique and Nepal are all more than twice as vulnerable to the impacts of climate change as the UK or the US.

A failure to tackle problems including water scarcity, land degradation and climate change is making the food sector more vulnerable, says the recent UN analysis. The result, it says, is a higher risk of price shocks.

A sudden surge in the price of food commodities such as wheat, maize and soybean will mean more income and higher GDP for major exporters like Australia and the US. But for major food importers like India, if there were another doubling in food prices as seen in 2007-08, it will mean a reduction in GDP of an estimated $50bn, according to the UN.

Any rises in the price of food will have the biggest effects on those households spending the highest proportion of their income on food. On a global level that means countries such as Benin, Mozambique or Nepal.

If we look at the look at the gains and losses in proportion to a country’s total GDP, India sees a comparatively small loss. In contrast, Benin, Mozambique and Nepal will see a significant loss. Benin, for example, will see an estimated reduction in GDP of 9% if food prices double as they did in 2007-08.