Food is any substance ingested to nourish human bodies. There are different types of products, which can be eaten raw or cooked. Food prices are the cost required to purchase or sell any substance that can be consumed by human beings (Huang & Huang 2012). Consumers and producers of food are the critical stakeholders in the food market. They rely on one another for their survival (Alem & Soederbom 2012).
In the United Arab Emirates, prices for products fluctuate because of various reasons. Most of the food produced in this country is majorly manufactured through agriculture (Huang & Huang 2012). In the United Arab Emirates, the consumption pattern for products has changed due to the factors like drought and famine, increased human population, high levels of corruption, flooding, and terrorism, among other ones. Despite the fact that food demand was among the Millennium Development Goals, the country has not been able to reach its target (Ackerman & Tellis 2011). It is, therefore, important to investigate the causal forces and their impact on consumers and producers. This effort will help people to understand the reason why the cost for products is increasing and decreasing day in day out (Adam 2009).
Causes of Higher Food Prices to Consumers and Producers
Through cancelling the genetically modified food in the country, the UAE has largely supported agricultural farming to improve the availability of products (Adam 2009). The current fluctuation of products cost has been triggered by the factors like high population growth, decreased income, high living standards, increase demands, among other contributing agents. Increased food insecurity in most parts of the country has become a real disaster despite numerous plans and policies suggested and implemented to eradicate this insecurity (Alem & Soederbom 2012).
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The occurrence of multiple events has largely contributed to induced prices for food. In the world agricultural market, many countries are growing almost similar crops or keeping same types of animals. It has brought a very high competition rate in the global marketplace, thus forcing the developing countries to be less advantaged due to the competitiveness and low quality of products (Adam 2009). To fit in the world trading, such states opt to produce raw materials for the developed countries, hence, forcing them to sell their goods at a very high cost due to high manufacturing levels (Aalto-Set?l? & Raijas 2013).
Increased corruption rates have majorly contributed to higher food prices. For example, a supermarket can be linked to the government. Therefore, it can be controlling food supply within the state (Ackerman & Tellis 2011). This development when someone wants to purchase food may make he or she find it difficult to buy the goods directly from the producer. On the other hand, the manufacturer will be forced to produce food for the leading supermarket, thus not being able to manufacture the required product.
The increased human population and the consequent inadequacy of farming land also worsens the problem (Aalto-Set?l?, & Raijas 2013). This issue has forced farmers to innovate and come up with other ways of producing products. It is expensive compared to the natural means. It is as well a burden of cost to consumers. Over-reliance on the scarce land also leads to the reduction of soil nutrients (Ackerman & Tellis 2011) and their cost leads to higher food prices.
The United Arab Emirates is vulnerable to some disasters, both natural and human-induced. Such ones include landslides, mudslides, earthquakes, droughts, global warming, and climate changes, as well as diseases. As far as these disasters are concerned, they might end up destroying farm lands, hence ruining agricultural products in the ground. These harmful phenomena can stop affecting the economy of the state (Alem & Soederbom 2012).
Dairy and animal beef diseases, which lower the quality of meat, eggs, pork, and milk, among others, thus, make the cost of production higher. By paying more, the products price will cover the single production cost. Therefore, the price of the commodities becomes expensive to consumers. In this situation, both clients and producers are affected directly and indirectly (Aalto-Set?l? & Raijas 2013).
The falling value of the United Arab Emirates currency, as compared to the US dollars, leads to the increased cost of farm inputs such as fertilizers, animal feeds, and farm machinery, among others. This effect triggers the induced prices of agricultural outputs/food (Reusswig et al. 2013). The depreciation of the money value in the world market, especially in agricultural business, forces the United Arab Emirates to spend more in the global marketplace.
The production of counterfeit farm inputs and machinery also affects food prices due to the increased cost of investments and agricultural operations. High taxation of commodities has caused an increase in the cost for most products (Alem & Soederbom 2012). Here, in the United Arab Emirates, most of goods are highly taxed leading to this issue.
The Merits and Demerits of Increase in Food Prices
In the UAE, agriculture contributes about seventy-five percent to the GDP (here as the Gross Domestic Product). Thus, high prices are beneficial to the country’s economy. An increase in the cost for products is one out of many ways to develop the state and raise funds for it through taxation (Alem & Soederbom 2012). By inducing prices, the owner of business then gains profits, thus bringing use to his or her company. On the other hand, the organization will be improved and have a chance to produce more products (Huang & Huang 2012).
Increasing the cost for goods is one way of encouraging consumers to purchase food and other products from other countries. For example, due to increased sugar prices, most people from the United Arab Emirates were made to import cheap sugar from neighboring nations (Reusswig et al. 2013). Due to its high production cost, the related companies went ahead to import sugar from the near countries and pack it under the name of their enterprises. This alternative is one option of discouraging to buy foods locally. Decreasing the cost will promote and contribute to the increased local market (Reusswig et al. 2013).
The increase in prices for food is disadvantageous to every producer. The reason is that consumers may not afford purchasing them. Manufacturers and retailers try to keep prices low to keep their clients. The frequent fluctuation in the cost usually sends away customers. It might lead to a massive fall in their business (Alem & Soederbom 2012). In most situations, increasing the prices for products also induces food insecurity and starvation in the state. The reason is that only the wealthy people can afford the money to buy products. The government should ensure that everybody gets an access the quality food.
Beneficiaries of Increase
In most situations, those parties who benefit in this high cost vary. In many cases, people take agriculture and livestock keeping as an investment. According to the World Development Report (2008), agriculture should be seen as an investment to improve the global economy. The information also stipulates that agriculture and livestock production contributes largely to the development of the whole world. Therefore, it should be supported entirely.
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Those people who get products from producers, i.e. milk processing plant buying its milk from farmers and tea factories purchasing tea from farmers, are the immediate beneficiaries of such goods. The reason is that they acquire products from manufacturers at rather low prices. However, later on, they sell this food to people at a rather high cost. As a result, they are making a huge profit for themselves (Huang & Huang 2012).
To conclude, increased food prices have become a serious problem worldwide. A major contributing factor in this situation is the frequent occurrence of natural and manmade disasters. It largely inputs to global warming and climate. The climatic shift has become a serious problem, which can be controlled at some rate. People should also fight corruption and terrorism in one way or the other one affecting the food production and consumption to both producers and clients. The country should ensure that manufacturers and retailers regulate their costs and set up clear price limits. Therefore, this process suits both merits and demerits. It is one out of many ways to stabilize the state economy. By doing this, there will be no food product that will be sold out of corruption related to any other form of illegal purchase or sale. By controlling terrorist attacks, the country will be able to put up the sufficient reserves of goods or allocate the funds to manage such disasters within the region. Politicians should stand on the leading edge to head and motivate citizens on the way how the allocation of nation funds is done. By this, every dweller of the country will be able to understand the situations when food prices go high.