Rising Food Prices Attributed To New World Economy

Washington, D.C. (AHN) - A food expert from Cornell Universities traced the cause of rising food prices to the new world economy. Edward McLaughlin identified the factors as the production of fuel from grain and other food items and escalating global demand for higher-protein diet.

The phenomenon of rising food prices brings the 1970s to mind, according to economists that see a parallel to what happened 30 years ago and what is taking place now, which both share a common factor of soaring oil prices.

The non-stop increase of food prices has prompted the U.S. Agriculture Department to project food prices to exceed inflation rate for the next few years. Ephraim Leibtag, an economist in the department's Economic Research Service, told USA Today, "The question now is the rate of increase."

The Labor Department said on the average prices of food in the U.S. has gone up by 5 percent for the past 12 months, the highest rate of yearly increase in almost 20 years. Eggs went up by more than 30 percent, dairy by 12 percent and baked items by 9 percent.

In contrast, the inflation rate was only 2.6 percent.

Meanwhile, the Food Summit in Rome closed with a pledge from delegates of 181 nations to cut trade barriers and increase agricultural production to ease the global food shortage. Immediate assistance would be provided small farmers in poorer nations through donations of seed, fertilizer and animal feed.

U.N. Secretary General Ban Ki-moon called for a cut in import taxes and export limits for food products. Despite the Rome Food Summit being being a pledging session, the gathering raised billions of dollars in assistance from several nations, regional banks and the World Bank.