Soaring food prices pose problems for three groups. First, the poor whose ability to buy food is undermined. Second, governments of low-income countries facing higher import bills, soaring costs for safety net programmes and political unrest. Third, aid agencies juggling increased demands for food, cash and technical advice. High food prices threaten the gains made since the 1960s and highlight the long-term need for investment in, and better management of, the global food supply. This Paper examines the causes of rising food prices, expected trends, the likely impact, and possible policy responses. It calls for immediate action to alleviate the distress caused by the price spikes, such as transfers to the poor or general food subsidies. Resources are needed to support WFP and compensate poor countries for higher import bills. In the medium term, growth can boost incomes to compensate for high food prices, but the right policies are needed to help farmers produce more food.
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