The food business environment and the role of China and Brazil building a “food bridge”

Abstract

PurposeThe purpose of this paper is to discuss the economic crisis of 2008/2009 and the major impacts on developing nations and food‐producing countries. Within this macro‐environment of food chains, there is concern that food inflation might come back sooner than expected. The role of China as one of the major food consumers in the future, and Brazil, as the major food producer, is described as the food bridge, and an agenda of common development of these countries suggested.Design/methodology/approachThis paper reviews literature on causes of food inflation, production shortages, and investigation of programs to solve the problem in the future, it is also based on author's personal insights and experience of working on this field in the last 15 years, and recent discussions in forums and interviews.FindingsThe major factors that jointly caused food prices increase in 2007/2008 were population growth, income distribution, urbanization, dollar devaluations, commodity funds, social programs, production shortages, and biofuels. A list of ten policies is suggested: horizontal expansion of food production, vertical expansion, reduction in transaction costs, in protectionism and other taxes, investment in logistics, technology and better coordination, contracts, new generation of fertilizers and to use the best sources of biofuels.Originality/valueTwo major outputs from this paper are the “food demand model” that inserts in one model the trends and causes of food inflation and the solutions; and the “food bridge concept” that also aligns in one box the imminent major food chain cooperation between China and Brazil.