The purpose of this study is to examine how the global food price crisis 2007-2008 affected poor people in Zambia. The study is supposed to find out how the high world market prices of food were transmitted to Zambia and what impacts the high prices had on the poor people in rural and urban parts of Zambia. The theories that are used in the paper are Amartya Sen’s theory of food entitlement, Henry Bernstein’s writings of poverty and farming and a microeconomic theory of supply and demand. The method that is used is a literature study. The result of the study indicated that poverty increased and poor people suffered welfare losses in Zambia due to the high prices 2007-2008. This very much as a result of that a majority of the poor people are net consumers of food, although ca 70 % of the poor people works in the agricultural sector. Higher prices did not turn out to be an incitement and a possibility for the poor farmers to raise the production. The study shows that small-scale farmers first of all need help to handle other supply-side constraints such as lack of land, information, inputs and credits, before they can increase production according to economic laws.

Economy is not always in perfect equilibrium when it runs in capital market system. Sometimes crisis attacks the development of economy. Economy crisis is a sign which will appear in capital imbalance of economy. Inside economy, capital distribution in three composers--consumption, investment, and government is the key to analyze economy crisis. Between economy, war, global-industrialization, and capinvesting are triggers to worldwide economy crises. The transaction costs of capital market were sharply negative-accumulated and the transaction efficiency was zero and under during the process of economy crisis. Take Asian financial turmoil in 1997 for example, currency distress and banking system disruption were the signs of crisis-hit economy resulting in consumption and investment contraction. And there were adverse real effects on aggregate output and employment in 1998.

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