How High Food Prices Transfer Wealth Upwards
According to the UN Food and Agriculture Organization, 673 million people suffer from chronic hunger. Nearly one in three people worldwide face food insecurity, and 2.6 billion cannot afford a healthy diet. In many poor countries in the Global South, up to 70 percent of the population are affected. Many are starving because they are too poor to put enough food on their table, even though in reality there is enough to feed everyone.
The reasons are complex: Poverty, debt, and unequal access to land and water leave billions vulnerable. These injustices collide with the impacts of climate change, wars and conflicts, and the lingering effects of the COVID-19 pandemic to form a polycrisis, a web of overlapping shocks that reinforce one another.
Profits Soaring as People Go Hungry
This manifested itself in the form of the global food price crisis of 2020–2023, which fuelled profit-driven inflation. Hedging and speculation exacerbated the situation, driving already soaring food prices even higher. Just five corporations – Archer Daniels, Bunge, Cargill, COFCO, and Louis Dreyfuss – control up to 90 percent of the world’s grain trade. In 2022, their profits tripled compared with the previous five years, reaching over $17 billion. These companies sit at the heart of a system where price spikes translate into record earnings for a few, while millions slide deeper into hunger. Economists call it seller’s inflation: corporations exploit global shocks to justify price hikes, preserving or even increasing their profit margins. The European Central Bank found that in 2022–2023, almost half of all inflation in Europe stemmed from rising corporate profits rather than higher costs.
The human impact is staggering. In 2023, food price inflation averaged 30 percent in low-income countries, compared to 6.5 percent globally. Zimbabwe recorded 285 percent, Venezuela 158 percent, Lebanon 143 percent. Each one percent increase in food prices pushes around 10 million people into extreme poverty. Poor households spend a far greater share of their income on food – 31 percent for the poorest Americans, versus eight percent for the richest – so price surges hit them hardest. Rising food prices are not just a symptom of inequality; they are a powerful engine of it.
Reclaiming Control of Our Food Systems
The reality is that food systems are incredibly vulnerable to crises, and food prices can fluctuate wildly. Governments can and must act. Public buffer stocks for food – held nationally, regionally, and globally – are one tool to stabilize markets, prevent speculative price spikes, and secure essential supplies. Greater transparency is equally vital. Price monitoring centres could track profit margins across supply chains, expose excessive markups, and ban buying below production costs, as Spain did in 2021. This could be a way to penalize food retailers who resort to price dumping practices in order to boost their profit margins.
For such a ban to be effective, non-compliance with legal requirements will have to be properly sanctioned. Such a mechanism would in turn allow farmers to sell their products at better prices while shielding consumers against extreme price spikes. To prevent the latter, instruments need to be created that set food price ceilings and ensure that people can afford adequate amounts of food. As long as corporations continue to rake in excess profits, these should be taxed and reallocated to fund programmes that promote the positive transformation of our food systems.
In addition to these measures, the financialization of markets for essential staple foods – meaning the transformation of arable land and agricultural commodities into capital investments, as well as speculation with these commodities – must be stopped. Investors with no connection to agriculture like pension or hedge funds should not be allowed to bet on the price of grain. Large players that dominate certain sectors along the entire supply chain must be reined in through stricter antitrust legislation.
High food prices don’t just make life harder, they redistribute wealth from the poorest to the richest. Hunger is political, and so are its solutions. Food should feed people, not fuel corporate profits. It’s time to make that the guiding principle of global food policy.
