Amid all the hysteria surrounding the credit crunch, the housing bust, and gas prices, one critical component of the souring economy gets very little attention: food prices.
Food prices rose 23% in 2007, prompting riots from Haiti to Egypt. In the United States, soaring costs have led consumers to cut back on discretionary spending and to buy in bulk from low-cost retailers like Wal-Mart. The exploding prices are attributed in part to ethanol subsidies, which encourage American farmers to grow corn for fuel consumption, reducing the supply of land available for food crops. Sky-high energy prices are also to blame, as well as wealthier Chinese consuming more meat. Business Week explains.
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