The Flip Side of Declining Food Prices

Yes, as I have noted many times, food is getting a lot cheaper. But the other downsides to the current economic mess are likely to overwhelm any short term benefits for the hungry in the world’s poor parts, according to an analysis by Joachim von Braun of the International Food Policy Research Institute, published in Thursday’s Nature (sub. req.):

An International Food Policy Research Institute (IFPRI) model, developed by division director Mark Rosegrant, explores what might happen in the face of the recession. If global economic annual growth falls by 2–3 percentage points below recent years’ figure of about 5%, and agricultural investment declines in parallel by 20% — a realistic scenario — this would result in cereal prices 30% above what is expected without a recession by 2020. Globally, 16 million more children would be malnourished.

That’s a lot of hungry kids. Von Braun argues for R&D investment to help plug the holes:

Doubling all agricultural R&D in developing countries between 2008 and 2013, from US$5 billion to $10 billion, could increase agricultural growth by 1.1 percentage points a year, and lift about 282 million people out of poverty by 2020. Although this would mark a historic turnaround in such investment, it pales in comparison to the financial bailout costs.

One Comment

  1. Complicated situation, this world food conundrum. The more we become disentangled from being the developing world’s commodities provider, the more people slide down the scarcity chute into starvation. The more we micro-manage and manipulate markets (through over-production and labyrinthine trade policies) in the name of global economic “health,” the more we discourage self-sufficiency and the reinvestment in local farmers and local land ownership.
    The green revolution is a perfect example of the short-sightedness with which our economic system operates. The end of cheap food spells the end of cheap human growth fed by surplus. I don’t see how the population bubble, driven by the same logic that drives any bubble, won’t be the next bubble to burst. The artificial boosting of carrying capacity in other parts of the world is slamming right up against the constraints of ecological and economic reality. Helping developing nations move smoothly down the slope of the curve is a moral imperative, for certain, and makes sense from a cost-benefit perspective, as well. But I see a wave of isolationism afoot in the coming era, and fear what that will mean for rest of the world.

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