Foodflation (also known as Food price bubble) is the continuous rise in the food prices which is higher than the general inflation level. According to Reuters food prices have gone up by 11.7% in the first 11 months of 2010 whereas the general price level (inflation) has risen only by 1.9%. This indicates a serious mismatch and requires precautionary measures to avoid food crisis creating starving nations. Majority of people from developing nations spend more than 80% of their income on food and what will happen if the food prices rise at 15%-20% rate? Should n’t this issue be given more priority in the agendas of world economists?
World leaders fear of food crisis. They expect for a world without food, starvation, hunger and may be a world war III to not divide/acquire countries but to for survival and reduce the hunger of the nations. Certain countries have already started missions to get rid of food crisis. Indonesian President have requested his people to start a vegetable farm in their gardens in a smaller scale which will help them to reduce effects of food crisis. Indian and Chinese governments have taken precautionary measures but they seem to have failed and the food prices in those countries are rising. Meanwhile, Sri Lanka is warned of food crisis at the beginning of the year 2011 and it is the time for us to think about foodflation at a local level.