Food price rises around the world are result of ‘broken’ system, say experts

Food price rises around the world are the result of a "broken" food system that is failing the poor and concentrating power and profits in the hands of a few, food experts have said.

Rising food prices are causing widespread suffering in developing countries, and even in the rich world the combination of high food and fuel prices threatens hardship for millions.

Food prices have surged by about 20% this year and about 345 million people are experiencing acute food insecurity, compared with 135 million before the Covid-19 pandemic.

Alex Maitland of Oxfam told the Guardian the current crisis was "the latest in a long series of failures in the global food system", which has been made even more fragile recently owing to extreme weather and the impacts of the climate crisis, economic upheaval and the pandemic.

He said: "The war in Ukraine has caused massive price volatility and disruption of food supplies globally, but this is just the latest blow facing a global food system that was already broken. Global food chains are dominated by a small number of multinational corporations. It's unsurprising that these corporations can squeeze such massive profits."

The Guardian revealed this week that the ABCD companies (Archer-Daniels-Midland, Bunge, Cargill and Louis Dreyfus) - which control 70-90% of the global grain trade - have been making a record bonanza as food prices have soared in the wake of the Ukraine war. It appears that some have also been increasing their profit margins, further putting the squeeze on consumers.

Campaigners are concerned that seeds and agricultural chemicals are similarly controlled by a handful of companies, with just three multinationals - Bayer-Monsanto, Dupont-Dow and Chem-China Syngenta - controlling 60% of the trade. Among retailers there has also been consolidation, with only 10 grocery businesses accounting for half of all food sales in the EU.

Consumers are not the only victims: farmers, too, struggle to make a living when big companies abuse their dominance. Maitland said: "The people who produce and buy food are the ones who suffer from a system that puts shareholder profits over people. Half of the world's undernourished are smallholder farmers and their families. The poorest spend far more of their income on food than the richest."

Vicki Hird, head of sustainable farming at Sustain, a coalition of civil society groups in the UK, said: "Farmers have no control over setting prices and are ever poorer for it. It's estimated that 25% of farm households [in the UK] are living under the poverty line."

She added: "The current food crisis is not a new one, just accelerated due to the Ukraine invasion, and unless governments recognise this and act to tackle the real causes - the corporate profits at the expense of farmer incomes, workers' wages, consumers and the environment - we will just lurch from this crisis to the next."

She called for government action to halt the worst abuses and restore balance to the food system. "Strong supply chain regulation and curbing financial speculation on food crops is key to ensure that everyone has enough food now and in the future."

Tim Lang, emeritus professor of food policy at City, University of London, said both developed and developing countries were seeing the impacts of years of increasing distortion in food markets. "We are not giving enough attention to food - there's a lot of attention on the energy markets, but not so much on food," he said.

The concentration of power in the hands of a few secretive companies made for a less transparent market, so it was hard to judge whether or where profiteering or dangerous speculation was happening. But this was just one aspect of a food system that was not working in the interests of consumers or farmers, he said.

"We need to rethink the food system. People can't afford a healthy diet, and this is a very serious problem. A lot of people are making a huge amount of money out of food, but food producers get about 8% of the £250bn a year we spend on food," he said.