Agricultural climate policies have an unequal effect on food prices in high-income and low-income countries, a new study by the Potsdam Institute for Climate Impact Research (PIK) has found.
The study, which was published in the Nature Food journal, examined the dynamics of climate policies on the food chain, utilising statistical and process-based modelling to assess food price components across 136 countries and 11 food groups.
As it noted, in wealthier countries, such as the US and Germany, farmers receive less than a quarter of consumer spending on food, compared to 70% in countries in sub-Saharan Africa. However, as these economies industrialise, the farmers’ share of food spend declines.
“This gap underscores how differently food systems function across regions,” commented David Meng-Chuen Chen, PIK scientist and lead author.
By analysing prices across the entire food value chain, the researchers revealed insights into how greenhouse gas mitigation policies impact consumers.
“Climate policies aimed at reducing emissions in agriculture often raise concerns about rising food prices, particularly for consumers,” Chen added. “Our analysis shows that long supply chains of modern food systems buffer consumer prices from drastic increases, especially in wealthier countries.”
Ambitious climate policies
As the study found, under ‘very ambitious climate policies’, consumer food prices in 2050 would be 1.25 times higher in wealthier countries, even if producer prices rise by 2.73 times.
At the same time, in low-income countries, consumer food prices would increase by a factor of 2.45, while producer prices would rise by 3.3 times.
‘While even in lower-income countries consumer price rises are less pronounced than for farmers, it would still make it harder for people in lower-income countries to afford sufficient and healthy food,’ the researchers noted.
A necessary step
Despite concerns about rising food prices, the researchers argue that ambitious climate policies are necessary to safeguard agriculture and food systems in the long run.
“Without ambitious climate policies and emission reductions, much larger impacts of unabated climate change, such as crop harvest failures and supply chain disruptions, are likely to drive food prices even higher,” added Hermann Lotze-Campen, head of the Climate Resilience research department at PIK and author of the study.
“Climate policies should be designed to include mechanisms that help producers and consumers to transition smoothly, such as fair carbon pricing, financial support for vulnerable regions and population groups, and investments in sustainable farming practices.” Read more here.
