ACJC H1 Prelim 2024 CSQ1 Solutions

2024ACJCH1EconomicsPrelimCase1 Question1: FoodSecurityandChallenges Table1: Global FoodCommodityPrices The Food and Agriculture Organisation Food Price Index (FFPI) is a measure of themonthlychangeininternational pricesof abasket of foodcommodities. Thetablebelowshowsthefivecommodity groups – food, meat, dairy, cereal, vegetable oil and sugar. Their respectivepriceindexistheaveragepriceindicesover2017to2022. FoodPriceIndex MeatPriceIndex DairyPriceIndex CerealPriceIndex VegetableOilPriceIndex SugarPriceIndex2017 98.0 97.7 108.0 91.0 101.9 99.12018 95.9 94.9 107.3 100.8 87.8 77.42019 95.1 100.0 102.8 96.6 83.2 78.62020 98.1 95.5 101.8 103.1 99.4 79.52021 125.8 107.9 119.6 131.2 164.9 109.32022 144.7 118.8 149.5 154.7 187.8 114.5 Source:FoodandAgricultureOrganizationoftheUnitedNations Extract 1: Whyareglobal foodpricesnear anall-timehigh? Higher global food prices are contributing to a wider trend of increased cost-of-living in bothadvancedandemergingeconomies. Theannual rateof inflationworldwideis9.2%,drivenbyasurgeinenergyaswell asfoodprices. Prior totheRussia-Ukrainewar, droughtsandCovid-19restrictionshavedrivenupglobal foodprices. The price hike worsens after the war, as the combined supply fromboth Russia andUkraineisaround30%ofglobal wheatexportsandaroundafifthoftheworld’smaizesupply.Tomake matters worse, farming activities, including irrigation and transportation of agriculturalmachinery, rely heavilyonenergysourceslikediesel andnatural gas. Therefore, risingenergyprices directly translate to higher production costs, ultimately reflected in food prices. At thesametime, duetolonger lifespan, theworld’spopulationhasgrownexponentiallyover thelastfewdecades. The increased chaos in global food markets has led to a new problem: food protectionism.Some governments haveclampeddownonexportsof staplesincludinggrainsandcookingoilto safeguard supplies for domestic consumption. Apart fromexport quotas, threat of domesticsocial unrest has led to other forms of export restrictions such as taxes and outright bans.These policies have a severeimpact onthedevelopingcountriesthat dependoninternationalmarketsforfoodimports. Source:WorldEconomicForum,12May2022 ©ACJC2024PreliminaryExam8843/01 1

Extract 2: Asustainablefoodsystemfor Singaporeandbeyond Singapore is vulnerabletosupplyshocksanddisruptionsasthecountryimportsmorethan90percentofitsfood.Forgreaterresilience,thegovernmenthasseta“30by30”goal –tobeabletoproduce30percentofthecountry’snutritional needsby2030. Withclimatechangeposingchallengestofoodproduction, Singapore’sagri-foodindustryseesthe need to devote more resources to local food production despite Singapore’s limited landspace. As the country journeys towards her “30 by 30” goal, carving out land spaces andinnovationtechnologywill bekeyenablers. To boost local food production, the government has expanded the Agri-food ClusterTransformation (ACT) Fund to cover more types of food and technology. To encourageinnovation through Research and Development (R