Ultimately, economists point out that demand for food is simply rising as the world's population grows along with its appetite for higher quality food.Of course, my guess about future trends is just a guess. The more interesting question is whether an economist's understanding of what prices are makes any sense to anybody else. When I see food prices go up, I think not just of the hardship they cause -- though I do think of that, too -- but also of the signal the prices send about choosing foods that use fewer resources and hence cost less. I also think of the farmers around the world, including some of the poorest people in the world, who benefit from high prices. The tough question, on which comments are welcome, is: "Are high food prices unambiguously bad?"
"Higher food prices are here to stay. I don't know if that means that the current high rate of inflation will continue, I just wouldn't expect a substantial retrenchment," said Parke Wilde, an agricultural economist at Tufts University.
"It's a clear signal to people that resources are scarce."
Thursday, July 24, 2008
High food prices
I didn't notice until this morning that a Reuters report a couple weeks ago quoted me on the food price dilemma: