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At the beginning of 2008, the global prices of most commodities hiked significantly, in most cases, the prices doubled within few months and in several cases within few days. However, unlike most commodities, rising food prices became of greater concern to the developing nations. Majority of the poor nations depend significantly on food production as a mean of their livelihoods, similarly, most of the developing economies allocate large portion of the budgets on food commodities. The alarming prices rise provided limited means of adjustment and substitution, particularly for the poor in urban. This became a concern since it was a possible mean, through which millions of people would plunge into poverty, and for those who were already poor, the situations would be made worse through increased hunger and malnutrition. Although the food crisis has largely subsided since the mid of 2008, and was overtaken by the global financial crises, food prices have continued to be high in reference to the historical standards, and they are expected to remain high (Cohen 2009).
Before the economic crisis, the high food prices received a significantly greater deal of attention from the media, policy makers, and academic fraternity. Heated debates have been undertaken, regarding the possible causes of the food crisis, the impact it had on the developing economies, and on the possible solution to this crisis. Although there were a lot of commentaries concerning this issue, most of them lacked reliable evidence backing or scientific evidence. To investigate the scenario and to generate possible solutions, there was a need for scientific studies. Nevertheless, some of these studies were insightful, considering the sudden need for such research. Concurrently, the present paper is a review of the existing studies on the food crisis, pointing out the knowledge gap and highlighting the key causes of the crisis (Benson 2008).
The Causes of the Crisis
Numerous researches have attempted to identify the factors that were behind the recent surges in the food prices; however, it is only a few papers that have attempted to contribute unambiguous orders of magnitude to various factors. In the current work, we review and reassess the evidence on the food crisis. The food crisis that was experienced globally in 2008 was a global phenomenon, which was regarded by many as a distinctive event. This implied that some of the mechanism that is used by economist for the purpose of unearthing causality was quite restricted in the food crisis context. As an alternative, the most appropriate study depends on a less formal detective research, involving the mix of history and logic, economic theories, in combination with statistical analysis. The crucial question that needs to be addressed is on which of the proposed explanation for food crisis is constant with the stylized facts (Himmelgreen 2010).