As a group, we believe that rising food prices is not a result of lack of food in the world. Rather, it is because of many reasons which are US recession, increased use of bio fuels, poor weather conditions and high demand but low productivity, especially in countries like India and China. Countries like Vietnam and India have already banned exporting rice so as to save the grains for their own people, while others like Thailand are hoping to get more control over rice prices as they have taken into account the economic losses that the country will face as they are importing expensive fuels but exporting rice, which is cheap in comparison to the fuels.
We believe the Singapore government can counter this by having friendly ties with different nations to boost economy as well as getting different sources for food in the event of many countries banning exporting of rice.
Furthermore, with corn becoming increasingly popular, the demand for corn has increased and the price of corn would increase naturally. The increase in demand for corn and other grains might be due to the rising cost of fuel, and corn and other grains can be made into ethanol for gas.
The rising prices of gas and the US recession also affect the Singapore economy, causing inflation. Basically, the price of fuel is rising rapidly due to increasing demand but lack of supply, and also a sliding US dollar. The US dollar is losing value the country is now facing an economic recession - when a county’s GDP or Gross Domestic Product is decreasing for a least 2 quarters. This recession is caused by the sub prime mortgage when banks give loans to people with unfavourable credit history and when these people cannot pay, the bank can go bankrupt or implement credit tightening, which would cause many businesses to be unable to function, and so the country goes into recession.
Another problem that causes rising food prices would be poor weather conditions due to flooding of drought. This is because of the imbalance in demand and supply, as demands are increasing while supplies of crops would be decreasing because their yield would be badly affected by these environmental problems. An example of such events would be the drought that took place in China in 2006, destroying many crops, and thus badly affecting the supply of rice both in the national and international level, as China is one of the major rice exporters.
In Singapore, there have been cases of hoarding food supplies, especially rice. This would also cause the prices to go up as ‘demand’ goes up. This causes many supermarkets to buy more stock and raising the prices if demand keeps increasing.
The government can also educate the public, conducting seminars and talks in school as well. We believe that many people especially those who are illiterate do not understand the current crisis. Therefore, by educating the public, everyone can reduce wastage of food and buying sufficient food for the week instead of hoarding rice. Parents can set good examples by always finishing every grain of rice from the plate and children can help by cutting down on unnecessary food like snacks.
With the rising of inflation, many Singaporeans are feeling the pinch especially the low and middle class people. Many older workers like those who have low wages are mostly affected.
Singapore has set up the GIC, which is the government of Singapore Investment Corporation. They manage Singapore’s foreign reserves and help to invest in major company shares or for long time purposes. They raise funds for a difficult situation Singapore faces like high inflation prices and for the US recession.
The government has also set up major projects like the integrated resort. We believe this will boost the economy as not only do more people get jobs, people will also have to upgrade their skills, and thus decreasing the unemployment rate in Singapore.
Singapore government encourages older, low wage workers to upgrade their skills and go for training courses in order for them to remain employable so they would be able to keep up with inflation. The Workfare Income Supplement also rewards people who continually top up CPF savings. We believe this will also help many workers remain employable and keep up with the changes in the world as well as keeping more elderly active at work.
The Singapore government has also set aside $3 billion to help the people. Growth dividends and other relief measures are targeted at the low and middle income people. Many low wage people have already received Workfare Income Supplement. Middle income families will also receive some benefits that will reduce the high cost of inflation. We as individuals also have to learn to save and spend only on the necessary.
On an international level, ASEAN can also come together to discuss a solution on how to control the rising cost of fuel and rice. We believe that ASEAN would be able to find a solution that is fair to all. Meanwhile, countries could help each other by providing food aid using non-governmental organization.
We strongly believe that we as individuals must also play our part in order for Singapore to be able to thrive despite inflation and the US recession.
Problem:
1. Why do food prices rise?
-US recession, the Gross Domestics Product is less for 4 successive quarters. High fuel cost and increasing use of bio fuels, poor weather conditions, high demands n wheat but low productivity, due to major countries like India and china needing more food, etc etc
http://www.youtube.com/watch?v=MGACRXbbBXE&feature=related2. How it affects people and economy, in the context of Singapore.
-the US recession affects the global market
-Singapore-rising cost of living like rice as wheat is used for ethanol
-older, low wage people are vulnerable and easily affected by inflation.
-food riots and many protests
http://www.youtube.com/watch?v=xy178F67ipo&feature=relatedSolution:
1. National and Global Scale
Trade restrictions on agricultural food productsMany governments have placed trade restriction to discourage exports to other countries so as to prevent further increases in prices of local food products. This in turn causes a rise in food prices in other countries with little food supply, whose problem would be further aggravated by the ban on exports. Some other countries may have also banned imports from certain countries due to issues concerning health and safety standards that have not been met by food from other countries, for example, China.
Acknowledgements:
http://www.washingtonpost.com/wp-dyn/content/graphic/2008/04/26/GR2008042602496.htmlhttp://www.wilsoncenter.org/index.cfm?topic_id=1421&fuseaction=topics.item&news_id=249492
Changes in dietAs people’s income increases, their diets change. Diets in developing countries are changing from mainly starch to meat, and thus more grains would be needed to feed cattle to meet the consumers’ needs. Therefore, there would be less grain for the people and prices of these products will rise.
Acknowledgements:
http://www.bread.org/learn/rising-food-prices/congressional-research-service-on-food-price-inflation.pdfHigher demands in productsHigher demands in particular products such as corn can cause a shortage of many others. This is because the increase in demand would increase the product’s price, and thus indirectly encouraging farmers to switch from other products to those that are more profitable, for example, from wheat to corn. This will then cause a reduction in the wheat supplies, and therefore prices of wheat will rise.
Acknowledgements:
http://www.bread.org/learn/rising-food-prices/congressional-research-service-on-food-price-inflation.pdfUnfavourable weather conditionsDroughts in countries such as Australia have discouraged the growth of crops such as wheat and corn, and this in turn causes a decrease in the world’s food supply. This decrease in supply would cause an increase in price as there would be less supply to meet the increased demands of the world’s population.
Acknowledgements:
http://www.bread.org/learn/rising-food-prices/congressional-research-service-on-food-price-inflation.pdfBiofuels – ethanolIn an attempt to reduce consumption of oil and other non-renewable sources to produce energy, the demand for biofuels, a renewable source of energy, has increased. One of these biofuels is ethanol, which is produced by using corn. Therefore, there is an increase in demands for corn, causing prices of corn to increase. Since corn is now too costly to be used to feed livestock, countries have turned to sorghum, a type of grain, to feed the animals. This then cause a rise in sorghum prices, and aggravating the problem is the fact that sorghum is a grain that is consumed by the world’s poorest people.
Acknowledgements:
http://www.washingtonpost.com/wp-dyn/content/graphic/2008/04/26/GR2008042602496.html
Rising fuel pricesAs fuel prices rise, the cost of transporting foodstuffs from one country to another has also increased, and this indirectly discourages exports of food to other countries.
Acknowledgements:
http://www.washingtonpost.com/wp-dyn/content/graphic/2008/04/26/GR2008042602496.html
Research Materials and acknowledgements
Newspaper articles
PM Lee’s may day rally speech from the straits times
https://app-pac.mica.gov.sg/data/vddp/embargo/45390568.htmhttp://www.straitstimes.com/Latest%2BNews/Singapore/STIStory_232953.htmlhttp://www.usatoday.com/money/industries/food/2008-05-02-asia-rice-pec_N.htmInsights
As a group, we believe that rising food prices is not a result of lack of food in the world. Rather, it is because of many reasons which are US recession, increasing use of bio fuels, poor weather conditions and high demand but low productivity especially for countries like India and china. Countries like Vietnam and India have already banned exporting rice. Countries like Thailand are hoping to get more control over rice prices. This is because countires have to import expensive fuel but export cheap rice which will affect the economy.
We believe this is because the government is afraid of having insufficient rice for the locals, but this may also pressurized other countries like Thailand in to banning exporting of food.
We believe the Singapore government can counter this by having friendly ties with different nations to boost economy as well as getting different sources for food in the event of many countries banning exporting of rice.
Furthermore, with corn becoming increasingly popular, the demand for corn has increased and the price of corn would increase naturally. the increase in demand to corn and other grains might be due to the rising cost of fuel, and corn and other grains can be made into ethanol for gas.
The rising prices of gas and the US recession also affect the Singapore economy, causing inflation. Basically, the price of fuel is rising rapidly due to increasing demand in supply but lack decreasing amount of supply and a sliding US dollar. The US dollar is losing value as a recession is when a county’s GDP or Gross Domestic Product is decreasing for a least 2 quarters. The recession is also cause by the sub prime mortgage when banks give bad loans to people with bad credit history and when people cannot pay, the bank can go bankrupt or credit tightening. If this happens, many businesses cannot function so the country goes into recession.
We feel as individuals, many of our parents have cars, so we could save cost by taking more public transport or walking for short distances. We could also think about car pooling with friends and neighbours. This way, we spend less money on fuel and we save the environment as well.
Another problem would be poor weather conditions due to flooding of drought. Countries like China have faced drought in 2006 which destroys many crops, badly affecting the economy. Other countries such as Australia also have been affected by drought.
In Singapore, there have been cases of hoarding food supplies especially rice. This would also cause the prices to go up as ‘demand’ goes up. This causes many supermarkets to buy more stock and raising the prices if demand keeps increasing.
The government can also educate the public, conducting seminars and talks in school as well. We believe that many people especially those illiterate people do not understand the current crisis. Therefore, by educating the public, everyone can reduce wastage of food and buying sufficient food for the week instead of hoarding rice. Parents can set good examples by always finishing every grain of rice from the plate and children can help by cutting down on unnecessary food like snacks.
With the rising of inflation, many Singaporeans are feeling the pinch especially the low and middle class people. Many older workers like those who have low wages are mostly affected.
Singapore has set up the GIC, which is the government of Singapore Investment Corporation. They manage Singapore’s foreign reserves and help to invest in major company shares or for long time purposes. They raise funds for a difficult situation Singapore faces like high inflation prices and for the US recession.
The government has also set up major projects like the intergreted resort. We believe this will boost the economy as not only do more people get jobs, people will also have to upgrade their skills, there would be a decrease in unemployment.
Singapore government encourages older, low wage workers to upgrade their skills and go for training courses in order for them to remain employable so they would be able to keep up with inflation. The Workfare Income Supplement also rewards people who continually top up CPF savings. We believe this will also help many workers remain employable and keep up with the changes in the world as well as keeping more old people active at work.
The Singapore government has also set aside $3 billion to help the people. Growth dividends and other relief measures are targeted at the low and middle income people. Many low wage people have already received Workfare Income Supplement. Middle income families will also receive some benefits that will reduce the high cost of inflation. We as individuals also have to learn to save and spend only on the necessary.
On an international level, ASEAN can also come together to discuss a solution on how to control the rising cost of fuel and rice. We believe that ASEAN would be ableto find a solution that is fair to all. Meanwhile, countries could help each other by providing food aid using non governmental organization.
We believe that meanwhile we as individuals must also play our part in order for Singapore to be able to thrive despite inflation and the US recession.
