Global warming could cause an inflation of food prices by 1 to 3.2% a year in a decade’s time, according to a study released by the Potsdam Institute for Climate Impact Research.
The paper describes upward pressures on food and headline inflation from “higher-than-normal temperatures, especially when occurring in hot months and countries.”
“This implies short-term rises in inflation from exceptionally hot periods such as that experienced in Europe in the summer of 2022.”
“The implications of our empirical results under future temperature conditions are considerable regarding societal welfare in general and price stability in particular.”
The study suggests that “climate change is likely to alter inflation seasonality, increase inflation volatility, inflation heterogeneity and place persistent pressures on inflation levels.”
Inflation affects consumers and producers. While Australian farmers are adapting and preparing for the challenges posed by climate change, there is considerable anxiety about the logistics chain and health of the farm sector.
Australian National University student Kayleigh Sleath has successfully founded Ohna, a sustainable food start-up which she says provides more accessible, affordable, and sustainable produce straight from farmers.
Sleath, who is studying a Bachelor of Engineering Research & Development with a major in mechatronics, put her passion for climate action to work through creating Ohna.
She says the effects of climate change affecting food prices became clear during the COVID-19 pandemic. “It became super clear that our current food supply chains are not resilient enough to deal with the effects of climate change.”
“We’re in a situation where there are these large industrial farms in very geographically concentrated locations. And that’s a problem because it means that any external shocks to the system [such as] the rising rates of extreme weather events […] can easily cut off our supply chains.”
“We are already seeing these kinds of effects in Australia”, says Sleath, pointing to risks faced by food systems in both rural and urban contexts in the turn of an event such as extreme flooding.
So how does Ohna help?
“The whole premise of Ohna is- can we use tech to connect consumers directly to farmers so that you can cut out that middleman?
“Consumers pay less for fresh food while paying farmers more, which then means it becomes more feasible to be a small to mid-sized farmer.”
“At the moment, small to mid-sized farmers are actively being pushed out of the business by the industrial food system that we are in. But at the same time, we’re paying rising food prices for fresh produce. So the farmers aren’t getting paid enough and we feel like we’re paying too much.”
