Food price crisis threatens government in the 2026 election

Jeferson Miola

The loss of popularity of the government stems largely from:

1. The structural discomfort of the population, exacerbated by the amplification of extremism by big techs.
2. The breakdown of trust and credibility in the government, worsened by the "PIX effect."
3. The rising cost of food.

Food inflation severely impacts the majority of the population, who struggle with extremely low incomes:

• 38% of Brazilians earn up to one minimum wage.
• 32% earn between one and two minimum wages.
• 20.5 million families (53.9 million people) receive an average of R$671.21 per month from Bolsa Família.

This majority segment of the population, which makes up the bulk of Lula's electorate, spends at least 40% of the minimum wage on a basic and modest food basket. For this reason, the rise in food prices poses a serious threat to the government's performance in the 2026 election.

There is still time to reverse this unfavorable scenario, but the government must act urgently and boldly, "thinking outside the neoliberal box," as analyzed by Professor Isabela Weber from the University of Massachusetts.

The removal of import taxes on nine types of food products demonstrates the government's central concern with inflation and its efforts to combat high prices. However, this measure has practically no effect.

Moreover, the policy of regulatory food stockpiles was dismantled during Bolsonaro's fascist-military government, and only in Lula’s second year in office did CONAB begin storing products again, following a record harvest.

The situation is even more concerning because food inflation is a global post-pandemic phenomenon, showing persistent growth with no signs of immediate relief.

Another complicating factor is the "internationalization" of food prices, even for staple items, as they are wrongly treated as commodities within economic logic. Even non-exported or non-exportable products are priced based on global market rates, regardless of local production costs.

To reverse food inflation in Brazil, the Lula government is challenged to break away from austerity policies, high interest rates, and dogmatic fiscal adjustment.

Nobel laureate Joseph Stiglitz explains that “this inflation is different from normal inflation. The post-pandemic inflation is different from what Brazil and the world experienced in the past. This is primarily supply-side inflation.”

In his view, “high interest rates are counterproductive in this case. They make things worse,” which is why governments must use alternative measures to combat rising prices and protect the purchasing power of the population.

Mexican President López Obrador, for example, adopted a series of measures that the "market" would consider "drastic" because they step outside the neoliberal orthodoxy. As a result, he curbed runaway food price increases and elected his successor with 60% of the votes and a congressional majority.

The total cost of anti-inflation policies in Mexico was 1.4% of the country's GDP in 2023, amounting to approximately $20.4 billion—proving that fighting inflation requires budgetary priority.

Lula will not be able to implement effective measures to lower food prices if he remains shackled by fiscal austerity and the recessionary monetary policy of the Central Bank.

The government must act urgently in this moment of social emergency caused by food inflation, which could drive tens of millions of people into food insecurity and hunger.

The governments of Mexico and Spain broke free from the neoliberal economic model and implemented successful policies to protect purchasing power, securing electoral victories—as seen in the measures of López Obrador and Pedro Sánchez.

For war-related reasons, the European Union relaxed its fiscal rules to allocate €800 billion (R$5.5 trillion, nearly half of Brazil's GDP) in war spending over the next five years.

Given this, one must ask the financial elites, investors, and technocrats:
Will they criticize Lula if his government eases fiscal constraints to protect millions of Brazilians from food insecurity and hunger caused by global food inflation?

With what moral authority will the oligarchs and their media attack the government for acting in this social emergency, while applauding European governments for blowing up their budgets in the name of war, Russophobia, and Western supremacism?

Food inflation is a serious threat to Lula’s re-election in 2026, and "the market" knows it.