World food prices had a dramatic increase throughout 2007, and the first and second quarter of 2008, creating global problems mainly that of political and economic instability and social unrest in poor and developing nations. Major unrest and government actions were taken in countries like Bangladesh, India, Pakistan, Ethopia, Indonesia, Myanmar, Egypt, Cameroon etc. These can be categorized as the developing or the less developed nations of the World.

Systemic and well determined causes of the World Food Crisis continue to be a matter of debate, however, there are many areas of concern that had been focused on and identified as the causes of this Crisis. The primary cause of increased prices was claimed to be an increase in demand for more resource intensive food, namely processed food by the world’s fast growing population. As stated by the Head of International Food Policy Research Institute in 2008, that ‘the gradual change in diet among the newly prosperous population is the most important factor underpinning the rise of the Global Food crisis’.

Modernization of population in Asia majorly, led to a vast majority of the population now growing into becoming the ‘middle-class’. Taking into account the populations of India and China, we can clearly witness this change. In 1990, the middle class grew by 8.6% in China and 9.7% in India, however in 2007 the growth rate was 70% and 30% respectively. Hence, the corresponding increase in the middle class led to them adopting a different lifestyle and different eating habits where they demanded for more variety, eventually leading to a competition with the western countries and pressurizing the agricultural resources present. This increase of demand exacerbated increase in commodity prices such as Oil.

A developed relation in the agricultural sector is that off petroleum prices and food prices, both being highly correlated to one another with an estimated Correlation co efficient of more than 0.6. This is mainly due to that fact that fertilizers tend to be a ‘necessity’ in our modern-day agriculture, and fertilizers largely require petroleum or natural gas in order to be manufactured. Hence, due to the oil price hike starting in 2007 the prices of fertilizers dramatically increased, reaching their maximum peak in summer 2008 where the prices of ammonia, urea, potash and phosphate approximately tripled. In addition to this the transportation cost also doubled over a two year period, leading to difficulty in the supply chain of food products.

However, the sole input related cause should not be pointed towards the increase in the prices of fertilizers only. Other environmental factors which may be a direct input for agriculture are the atmospheric composition and soil productivity. Plants are highly sensitive to ozone, and lower yields of crops such as wheat and soybean in 2007 may have been due to elevated ozone levels. Large amounts of cultivable lands are also being lost at an extremely fast pace mainly due to water depletion, soil erosion and urbanization. According to a famous theorist Sundquist, “60,000km2/year of land becomes degraded that it loses its productive capacity and becomes wasteland”. Water depletion has also led to the formation of non-renewable aquifers which have negative impact on crop yield, and urbanization leads to annual cropland reduction, all collectively leading to low productivity, low crop yield, high demand and eventually higher food prices which is explained to be the phenomena behind the 2007-2008 world food crisis.