All around the world, the agriculture and food industry has highly complex structures. From primary producers to food supply chains, from retail and logistics networks to households, there are several issues. All stakeholders of the agriculture and food ecosystem are dependent on each other. For this reason, any problem that affects one player rapidly spreads and deeply affects the entire ecosystem. That is why, from the public service perspective, the industry is an area that must be continuously followed by tens of thousands of experts and auditors on the field. The effective management of prices in the sector is another issue that needs to be managed in favor of the consumer.
The Food and Agriculture Organization of the United Nations (FAO) announced that global food prices rose 28% in 2021, reaching their highest level in the last 10 years. The FAO's analysis highlights that the market conditions for global agricultural and food products are not expected to stabilize in 2022. The FAO's assessment is that the current conditions leave no room for optimism for 2022. Under normal circumstances, it is expected that high prices would be replaced by production growth. But it is at the same time stated that the high input costs, the ongoing uncertainties of the global pandemic and the natural disasters such as severe drought or large-scale storms caused by global climate change are expected to make it difficult to return to more stable market conditions for 2022. The 2021 average of the FAO's Global Food Price Index marks a 28.1% increase compared to 2020.
The 2021 average of the grain price index has reached its highest annual level since 2012 with an increase of 27.2% compared to the previous year. The vegetable oil price index, on the other hand, points to an all-time high with an increase of 65.8% compared to the 2020 average prices. Moreover, the sugar price index recorded its highest level since 2016 with an increase of 29.8% compared to the previous year for the whole of 2021, despite falling to the lowest level of the last five months in the last month of 2021. Although the meat price index showed some stability in the last two months of 2021, it increased by 12.7% year-over-year in the whole of 2021. Finally, the dairy price index continued to rise even in the last month of 2021, increasing by 16.9% on the 2021 average compared to 2020.
The pressure of rising food prices in 2021 on increasing the risk of global inflation is evaluated by the FAO as putting low-income classes in food importing countries at risk in terms of “food security” for 2022. The FAO's field studies show that, as of last September, 161 million people, 45 million of whom are at risk of starvation, face acute food insecurity. It is worrying that this figure, which was 155 million in the whole of 2020, continues to increase. The two-thirds of this population at risk of acute hunger are in rural areas around the world and survive only on daily food and income. Their livelihoods are also under threat today due to global climate change. As the crisis caused by climate change deepens, the livelihoods of 2.5 billion small-scale farmers, fishermen, foresters and pastoralists are exposed to rapidly increasing risks. The 15 major food crises in 2020 were primarily caused by extreme weather conditions.
