This has caused price fluctuations which are not strongly related to the actual supply of food, according to the United Nations. Financial institutions now make up 61% of all investment in wheat futures. According to Olivier De Schutter, the UN special rapporteur on food, there was a rush by institutions to enter the food market following George W Bush's Commodities Futures Modernization Act of 2000. De Schutter told the Independent in March 2012: "What we are seeing now is that these financial markets have developed massively with the arrival of these new financial investors, who are purely interested in the short-term monetary gain and are not really interested in the physical thing – they never actually buy the ton of wheat or maize; they only buy a promise to buy or to sell.
The result of this financialisation of the commodities market is that the prices of the products respond increasingly to a purely speculative logic. This explains why in very short periods of time we see prices spiking or bubbles exploding, because prices are less and less determined by the real match between supply and demand." In 2011, 450 economists from around the world called on the G20 to regulate the commodities market more.
Some experts have said that speculation has merely aggravated other factors, such as climate change, competition with bio-fuels and overall rising demand. However, some such as Jayati Ghosh, professor of economics at Jawaharlal Nehru University in New Delhi, have pointed out that prices have increased irrespective of supply and demand issues: Ghosh points to world wheat prices, which doubled in the period from June to December 2010, despite there being no fall in global supply.
Famine and hunger
Food deprivation leads to malnutrition and ultimately starvation. This is often connected with famine, which involves the absence of food in entire communities. This can have a devastating and widespread effect on human health and mortality. Rationing is sometimes used to distribute food in times of shortage, most notably during times of war. Starvation is a significant international problem. Approximately 815 million people are undernourished, and over 16,000 children die per day from hunger-related causes. Food deprivation is regarded as a deficit need in Maslow's hierarchy of needs and is measured using famine scales.
Food aid
Food aid can benefit people suffering from a shortage of food. It can be used to improve peoples' lives in the short term, so that a society can increase its standard of living to the point that food aid is no longer required. Conversely, badly managed food aid can create problems by disrupting local markets, depressing crop prices, and discouraging food production.
Sometimes a cycle of food aid dependence can develop. Its provision, or threatened withdrawal, is sometimes used as a political tool to influence the policies of the destination country, a strategy known as food politics. Sometimes, food aid provisions will require certain types of food be purchased from certain sellers, and food aid can be misused to enhance the markets of donor countries. International efforts to distribute food to the neediest countries are often coordinated by the World Food Programme.
