The paper "Effects of Food Crisis" is a wonderful example of an assignment on macro and microeconomics. Food crisis refers to a situation where a nation, a region, or the world is unable to meet the food demands of its people using the available land and production means. Several factors may contribute to this problem, among them population explosion, adverse climatic changes, poor implementation of agricultural policies, an outbreak of crop diseases among others. (i) Some of the effects of the food crises include soaring food prices, starvation, malnutrition, very high exports, and over-reliance on food aid from donors.
As illustrated in the graph below when the demand increases while supply remains the same, the demand curve shifts and this leads to a higher equilibrium price which is passed onto the citizens. Figure 1: Price vs quantity demanded and supplied graph when demand curve shifts As the population grows, food demand to feed that population likewise increases. In a free market, an increase in demand leads to a parallel increase in food prices as food is an essential commodity. However, during the food crisis, food prices go beyond what the poor population can afford since the income levels remain stagnant. Figure 2: Price Vs quantity supplied graph when supply curve shifts (ii) Outbreak of wheat disease Wheat is one of the commonly used food crops.
It is produced on a wide-scale in most countries for their own consumption and the excess is exported. When there is an outbreak of wheat disease production goes down and this lowers the quantity supplied. When this happens the amount sold by the sellers will decrease and the supply curve will shift to the left as the demand curve remains static.
The overall effect will be a change in supply and a similar change in the quantity demanded resulting in equilibrium with a lower quantity and a higher price. When supply decreases and demand is the same prices go up. These prices reach a point where the poor can no longer afford to call for the government’ s intervention.
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