Wednesday, August 06, 2008

Is there an upside for humanity in high food prices?

The Economist is having a fascinating debate on the proposition:
There is an upside for humanity in the rise in food prices.
Homi Kharas of the Brookings Institution says "yes," because higher prices encourage greater food production, reduce the incentive to use food crops for fuel, raise incomes for poor farmers, and encourage economic development in rural areas of low-income countries.

Joachim von Braun of the International Food Policy Research Institute (IFPRI) agrees that moderately high prices have these benefits, but argues that the drastic price spike in the past couple years will be devastating. For example, he notes, an episode of childhood hunger caused by the food crisis can lead to stunted physical development and a lifetime of poorer health for millions of children.

The debaters wisely agreed not to be too lenient in defining "an upside." Both sides interpreted the proposition to say that high prices are a good thing on balance.

Slightly more than half of online voters at the site agree with the proposition, with good comments on both sides.

After we discussed a similar question here a couple weeks ago, Half Changed World and its interesting commenters took up the thread.

I will be giving a short briefing on food prices for Congressional staff in Washington on or near Sep. 22, arranged by the Council on Food, Agricultural, and Resource Economics (C-FARE). Advance commments and reading suggestions are welcome. On today's reading list: the World Bank report, finally released to the public, which greatly raised estimates of the impact of biofuels on food prices.

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