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Why Did Global Food Price Rice?

In: Business and Management

Submitted By mahmud555
Words 2394
Pages 10
Md. Arafater Rahman Bhuiyan
Assistant Professor
Department of business studies
Bangladesh University of Business & Technology
Subject: Letter of Transmittal
Dear Sir,
With due respect we, the undersigned students of BBA 28 intake, section 07 of a group have Case study on “Why did global food price rise” under the course: International Business.
This case study has enabled us to gain how to increase global food price rise. So it becomes as an extremely challenging and interesting experience. Thank you for your supportive consideration for formulating an idea. Without your Inspiring this case study would have been an incomplete one.
Lastly, I would be thankful once again if you please give your judicious advice on effort. Yours’ sincerely,
On behalf of my group
Md. Mahmud Hasan
ID No- 11123101283
Department of Business Studies

Acknowledgement

Every case study big or small whatever, is successful largely due to dedicated people who have always given their valuable advice. I sincerely appreciate the support and guidance of all those people who help us to complete this case study.
I am Md. Mahmud Hasan. Extreamly grateful on behalf of my group to my course teacher Md. Arafater Rahman Bhuiyan who gave a case study task to complete with good direction.
And also, grateful unknown economic online blogger who wrote articles on his blog & we got some important information.
I also grateful to my group members who done task according to their giving instruction.
I would also like to thank all the faculty members of the university for their critical advice and guidance without which this case study would not have been possible.
Lastly, I place a deep sense of gratitude to my family members and my friends who have been a constant source of inspiration during the preparation of this case study work.

Case in brief:
For the last 25 years global food price has been falling. It may be technological changes, new concept, increased productivity. Whatever, but had happened abrupt matter that by 2007 in may food price hits the height recorded and up from $200 a ton and after the 5 months again it hits a $400 ton. Its only one big cause is demand increase the number of now world’s population is one billion plus which by 2050 the world will last nine billion people. It is true able matter if we look at the China and India, where food consumption in rapidly.
Have a good calculation if cattle take eight kilograms of corn to produce one hundred of beef. An issue that bio-fuel subsidies about where the USA and EU give subsidies and increase production of ethanol and bio-diesel. They think that it happens slow down global warming, though there have a too much question. Since their thinking positive about it, they made a demand in the world and produced ethanol according to increase demand.
An alternative product can be turned into bio-fuels sugar cane and sugar cane is a high tariffs product in US and EU. Only one Brazil is most skillful to produce sugar cane. Indore it is an uncompetitive product with subsidized corn and soybeans. Unfortunately, it is seen as an environmentally friendly product. Because taking less fertilizer than corn and soybean and produce the highest number of products, though thinking that sugar cane and bio-fuel is better but not any plan about trade barrier without increasing it. Brazil is efficient to produce sugar cane, but Brazil is not on the sideline with USA or EU. That’s why not any contract between them is.

Problem statement:
In the case, given last 25 years when food price had fallen, but not any just years. Here have higher price level, but not any lower level when food price had fallen so a inconvenience to estimate between lower and higher price. Here have a demand increase in that expansion food price, but in the world the number of developed countries means those people who live in developed countries do the damage food intentionally about a billion tons every year. Case says, US and EU have adopted policies to increase production of ethanol. But and bio-diesel have a problem and a controversial issue. But is not a counted how much dangerous it for the environment, it is not clear. Sugar cane type of product is higher tariffs, food in the USA and EU. Why it is high tariffs not any information about it. Since sugar cane is the most usable product needed for it to reduce tariff barriers about it cannot meet countries in the world because all of the countries are not same. Not any suggestion to meet these countries.

Executive Summary:
Global food price rise, today is an important issue because 1 billion plus people now, this moment, are starving chronologically. Because global food price rose but, last 25 years, it was still falling. The economist magazine gives a report that price rise hit highest level ever in December 2007 then which was $400 a ton.
What is responsible for that? * Increased demand * Increased people, most notably China and India * Feeding cattle, corn about.
Taking some policy USA and EU that they produce ethanol and bio-diesel in order to slow down global warming. Though it is matter that how effective they are at doing. In 2007 America the target reached 85 million tons and subsidies for ethanol. In 2007 we increase in demand for corn based ethanol accounted for more than half of the global increase.
High tariffs, product like sugar cone, bio-fuels are important in the US and EU market. Brazils world’s most skilled country for producing sugar cane. Sugar cane had already introduced as environmentally friendly raw material. That’s why its demand had created in the market. Sugar cane is needed for developed country, but they don’t want to remove trade barriers because the economic situation is not same for all.

Question 1:
Who benefit from government policies to (a) promote production of ethanol and (b) place tariff barriers on imports of sugar cane? Who suffers as a result of these policies?
Ans: Recently come a matter in front of us food crisis. We have seen that for the last 25 years global food prices have fallen because of expansion of productivity, output, technological change, new business concept etc. But in 2007 hit price level highest mode. That’s why had taken policy governments of various countries. Most of all use to taking policy Giving subsidies to promote the production of ethanol and place tariff barrier on imports of sugar cane. A question come when government takes policy to promote the production of ethanol. What is ethanol and why does the Government want to promote it?
Ethanol: According to Wikipedia, Ethanol also called alcohol or drinking alcohol, which is volatile flammable, colorless liquid. Because of promoting Ethanol is one of the best tools to fight air pollution from vehicle. And there is no fuel available to improve the overall environment quality compared to gasoline. Ethanol contains 35% oxygen. Beside US and EU have taken policy to promote it in order to slow down global warming. Though have a argued to produce fewer CO2 emissions. For environment producing CO2, if it has a bad effect, then will be being benefited for everyone, taking government policy means promoting the production of ethanol. It has also helped to reduce global warming. Ultimately will be creating a situation still iceberg. In the other sense, because of increasing the demand for ethanol the companies and farmers will going to be together to puzzle out in making ethanol. It will create to be big industry and make more money because of the demand for ethanol. From these policy most of all sufferer are consumers and then industry owner who produces sugar cane. Brazil is the second largest producer in the world and the leader in sugarcane ethanol. That’s why for the short time Brazil economy may fall. But it is more dangerous for consumers. Because if the price of corn and sugar cane have increased it has a bad effect on grocery bills. Have an estimate if cattle take eight kilograms of cereals to produce one kilogram of beef. If the farmer buys corn and sugar cane at an increased rate to feed their animals then the meat buyer’s budget will fail. Ultimately, its impacts on the economy. So the place tariff barrier on impact of sugar cane is a problematic policy.
Question 2:
One estimate suggests that if food price rise by one third, they will reduce living standards in rich countries by about 3 percent, but in very poor ones by about 20 percent. According to the International Food Policy Research Institute, unless policies change, cercal prices will rise by 10 to 20 percent by 2015, and the expansion of bio-fuel production could reduce calorie intake by 2 to 8 percent by 2020 in many of the world’s poorest nations. Should rich countries do anything about this potential problem? If so what?
Ans: According to estimate if it happens, it will be long term bad effect of the world. And added that it is very sorrow for us that unless a change in policy, calorie intake food by 2 to 8 percent by 2020 have to reduce in the poor world. It is very shame for a developed country. Jean Ziegler, who ‘United Nations’ independent expert written an article on the right to food, has called bio-fuel “catastrophe for the poor” and a “crime against humanity.” In the same article he mentioned that the amount of corn that take to fill up SUV is the amount that it would take to feel a person for a year. This matter may laugh when we think of the hungry peoples in our worlds. By 2009 at least one billion people chronically starve. But in 2014 it will be 1 billion plus. Economist Jeffrey Sachs, who are also scientific American columnists and Earth Institute director, said “global institutions failed to keep food moving.” And added that growing crops for biofuel which reduce the available land for food, feed and fiber production. Rich countries should do something about this. According these are – 1. Introduce on implementing new bio-fuel order. 2. Revise existing bio-fuel order while to accelerate climate change. 3. Have to meet together all developed countries in the world about this. 4. Break subsidies and tax exemption for biofuels. 5. Reduce import tariff on bio-fuels. 6. Hoe to make better quality bio-fuels, find out that. 7. Have to give implementation a fund for victim.
Question 3:
The argument for giving subsidies to ethanol producer rests upon the assumption that ethanol results in lower CO2 emissions than gasoline and therefore benefits the environment. If we accept the global warming is a serious problem in itself, should we not be encouraging government to increase such subsidies? What is the argument for and against doing so? On balance, what do you think in the best policy?
Answer: If we accept that ethanol effect on the environment is very bad, then we should be never encouraging to government to give subsidies. Here have too many questions how ethanol effects on global warming. Since we know that ethanol is the same type of alcohol. And alcohol is worse matter for human body. According to British Journalist George Moonboot ensure that ethanol from maize causes between 0.9 and 1.5 times as much warming as petrol and also generates 1-1.7 times the impact of diesel. We recommend those countries which produce ethanol, giving a concentration during the making it so that stay it on good quality. And what has a best policy alternative of ethanol. According to this question we think that since ethanol’s used in worldwide that’s why it is very difficult to find out its alternative. So producer country should find out which element harmful for global warming and gives the least amount of balance in the ethanol. And have to think alternative element against toxic element of making the ethanol. We also recommend that meet to together develop and poor country. And find out the problem and solving that, invent alternative ethanol, which is friendly for the world environment. So, more research needs to be done on the ethanol.

Recommendation
Food price rise recently, it is increasing globally. It must be occur bad effect on poor county. Most thinking matters are, if there creates a lack of nutrition in poor country, it will be a laughable matter for all of countries and it will be a shame for us.So, we shoud that taking a step to reduce the food price rise. After this case study, we can give some recommendation.
Informing the discussion on bio-fuels
Making agriculture a priority
To protect the poor, announce a fund for them
The health and nutrition of the poor are a priority for reasons of equity
Have to convince to develop country to meet with other poor country
Have to research about ethanol
Have to more conscious to world leader about food price rise
Reduce trade barriers
Making a world food bank, a regional food bank etc.
Implanting globally food supply honestly
Growing food according to market demand
Transferring population country to country
Habiting various foods
Don’t cut the tree because it helps to grow food
Distributing food systematically
Don't destroy the environment
Giving priority food production
Taking the decision from food expert
Managing world summit outcome
Also, we have to research or get a project that how to reduce the global food price hike. Then we may get a achieves about rising food price rise.

Bibliography (Refferance)
Book:
Author (Hill-McGrW). International Busisiness. City: Avenues of the Americas, 1994.
Magazine:
The economist magazine, Part of The Economist Group
Newspaper:
The economist Time, India
Person:
Hasan Ronak. Student. 01/09/2014.
Magazine article:
The Business Insider. "World Bank Sounds Alarm On Sharp Rise In Global Food Prices’’. 19/05/2014 . World Wide Web: http://www.indexmundi.com/commodities/?commodity=rice&months=60 http://www.businessinsider.com/world-bank-global-food-prices-2014-5 http://en.wikipedia.org/wiki/List_of_business_newspapers http://938169.com/essay-on/Why-Did-Global-Food-Prices-Rise/49124 http://www.ethanolrfa.org/pages/ethanol-facts-environment http://www.synonym.com/synonyms/efficient/
http://carnegieendowment.org/2011/01/13/how-to-stop-rise-in-food-price-volatility…...

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...Global Food Prices Case study why did global food prices rises. 1. The farmer benefits from the government policies to promote production in ethanol because it created a incentive for farmers to plant more crops that can be turned into biofuels, and also farmers receive subsidies from the government between .29 to .36 per liter of ethanol. Placing a tariff on imports of sugar cane hurts the producers of sugar cane, and consumer of sugar cane such Brazil and typical consumers because nations such as United States tariff is 25 % of the value, and Eu tariff is 50 % of tariff. Now consumer must pay much more, and Brazil is left uncompetitive in the bigger markets. The final consumer and producer of sugar cane which is Brazil suffers the most from those policies. 2. If food prices are projected to raise to 1/3 of the price, reducing living standards in rich countries by about 3 %, and in poor countries by 20% , products such as cereal rising 10 to 20 % by 2015, and biofuel production reducing calorie intake by 2 to 8 % by 2020 in many of the world`s poorest country this is huge so rich countries should definitely do something, because the balance in the economy between the rich and poor will shift greatly with more poor`s in developed nations. An in the poor nations with calorie intake increasing the demand for food will continue to rise eventually until poor nations can`t afford it and a large amount of their population dies from starvation. So this issue......

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Premium Essay

Food Prices

...4, 2011 Analysis Paper Food Prices Increase Most in 36 Years There are many different reasons for the price of food to fluctuate up and down. For some people when price of food goes up, they buy less of it, which is known as a normal good. On the other hand, some people find certain foods a necessity to their diet that it does not matter the price of the good, they just buy it anyways. In this case, food runs as a necessity. Recently, wholesale prices have jumped by the most it has seen in nearly two years due to high energy cost and the steepest rise in food prices. Wholesale prices are prices that are usually about half the price of something that could be purchased in retail value. The price of food has soared 3.9 percent last month, causing the biggest gain since November 1974. This increase in food was due to a rise in vegetable cost, which increased by 50 percent. Along with this increase, meat and dairy products also rose. To figure out how the price of food rose, we look at the supply and demand curve of food and other things that could have caused this. Food is known as a necessity because people will always buy it. When taking a look at the demand side of food, the demand curve for food would be perfectly inelastic because no matter what the price of food is people will always buy some type of food; compared to someone buying an ipod, which we would consider a luxury good. In the article, it does not say whether the price of food will cause the demand to......

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