Food Prices (and what to do about them)

Food prices are high, spelling trouble for the poor who are already spending most of their income to fill their bellies. There are various causes, but the most important one is that millions of Chinese and Indians are getting wealthier, and are able to eat more. This is clearly a good thing. Still, this increased demand, and the higher prices that follows, must be met somehow if we are to avoid increased starvation in other parts of the world. Many proposed solutions are predictably unrealistic (stop eating meat, large aid programmes, and so forth), but there are also some good ones. What it comes down to is increasing the supply of food, and the way to do that is by improving technology. Paul Collier has written an excellent comment to a Martin Wolf article.

The best solution to a problem is often not closely related to its cause (a proposition that that might be recognized in the climate change debate). China’s long march to prosperity is something to celebrate. The remedy to high food prices is to increase food supply, something that is entirely feasible. The most realistic way to raise global supply is to replicate the Brazilian model of large, technologically sophisticated agro-companies supplying for the world market. To give one remarkable example, the time between harvesting one crop and planting the next, in effect the downtime for land, has been reduced an astounding thirty minutes. There are still many areas of the world that have good land which could be used far more productively if it was properly managed by large companies. For example, almost 90% of Mozambique’s land, an enormous area, is idle.

Unfortunately, large-scale commercial agriculture is unromantic.

I recommend reading all of it.

While on the topic of technology and food production, I would also like to point you to these three articles by Johan Norberg. Things are happening, and new ideas are constantly being tested.

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HT: Marginal Revolution
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