OCR 2888: The Social Impact of Agflation

Two of the key themes of the OCR2888 pre-release stimulus material this year are the causes and consequences of rapid food price inflation - something known to economists as agflation. 2007-08 witnessed a dramatic increase in the prices of many basic foodstuffs across the world. Agflation has many demand and supply-side causes (discussed in our toolkit publication) and the economic and social impact is hugely important not just for EU consumers and producers but around the world. This is highlighted by a number of global campaigns by organizations such as the World Food Programme and Save the Children.

A recent Save the Children press release for a food relief programme for people in Kenya makes the point better than I ever can:

“Poor people in the poorest countries were hit hard by the rise in food and fuel prices last year. The financial crisis will hurt them even more, and children are most at risk. Without a big increase in financial resources for the poorest countries, large numbers of children will fall into poverty, drop out of school, suffer ill-health or be more exposed to violence and exploitation.”

And now Save the Children is turning its attention to food poverty in the United Kingdom. This BBC article covers the issue but better to turn to this short video clip. Persistently high food price inflation creates winners and losers (someone somewhere receives the money down the supply chain) but the social consequences cannot be denied especially the dangers of malnutrition and its impact on education and health outcomes among the most vulnerable.