Topic > The Effect of Oil Price on the Food Industry - 976

When the price of oil skyrocketed in 2011, most industries had to bear this price and the food industry was no exception. The current food sector, including its price, is highly dependent on transportation and fuel. The relationship between fuel and the food industry is systematic and independent. The increase in the price of fuel leads to an increase in the price of food. It is important to note that most food producing businesses and farms use machinery that relies heavily on fuel to operate. They depend on fuel to transport crops and seedlings to farms, to transport food products to market, and to power agricultural equipment. Petroleum is also used as an input in some agricultural chemicals. When oil prices rise, the food system comes under pressure. When the price of oil rises, pressure is put on the entire food production process, from production to supply to the market. The dependence of food production on oil is imminent. In 2011, food prices reached a new peak in terms of prices. This can largely be attributed to rising oil prices. The food crisis has been experienced globally and has had serious consequences. Riots have broken out in developing countries due to rising food prices. In these countries, several women and children slept hungry because they had no finances to purchase food (United Nations, 2011). As oil prices have risen, so has the demand for biofuels, causing food prices to steadily rise. . Rising food prices have increased as agricultural crops are used to produce biofuels. Biofuels are obtained from agricultural products, mainly corn. As demand for biofuels increased in 2011, food prices increased, making food less accessible. In 2011, the Food and Agriculture Organization of the United Nations (FAO)……..became expensive. This passed directly on to consumers as food prices rose globally. This incidence has led to global unrest and many people have died due to hunger and poverty. We must avoid this situation from happening again. To avoid such a crisis, a sustainable and economical food production process should be developed, which does not depend on the cost of oil (Steger, Goodman & Wilson, 2013). Works CitedLee, D. R., & Ndulo, M. (2011). The food and financial crisis in sub-Saharan Africa: origins, impacts and policy implications. Wallingford, Oxfordshire: CABI.Organization for Economic Co-operation and Development., and Food and Agriculture Organization of the United Nations. (2011). OECD-FAO agricultural outlook 2011-2020. Paris:OECD/FAO.Steger, M.B., Goodman, J., & Wilson, E.K. (2013). Justice globalism: ideology, crisis, politics. London: WISE.