ThePanelist.com - Could Higher World Food Prices be Good for Poor Countries?

Could Higher World Food Prices be Good for Poor Countries?

Written by David Neubert

Tuesday, 15 April 2008

Farmers complain that when rich countries keep food prices low with farm subsidies they shut out the possibilities for poor countries to develop their farming industries. At ThePanelist.com, blogger Jean Roberts complains that high food prices hurt the poor. I think she's right that high food prices hurt the poor in rich countries that do not have a support program for the poor, but for the poorest of developing nations where most people are subsistence farmers, higher prices encourage the production of more crops and thus make localized famines less likely.

The problem is that even the current higher food prices are not likely to create too many incentives for greater production in poor countries because there is the fear that subsidized cheap crops from rich countries will be dumped on local markets and put farmers out of business again.

The path to self sustaining agriculture is a long one . . .

Disclosure: I am lucky, I am not hungry. One-billion people in the world subsist on less than one-dollar a day. I bet most of them are hungry.

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Comments (3)

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written by Jeanne Roberts , April 15, 2008

Your premise makes sense, and works when arable land and the food it produces exceed the needs of regional populations. What happens when there isn't enough land, or enough water to grow crops on that land, as is occurring in other parts of the world? High prices then cease being an incentive and become a stranglehold. With the rise of ethanol, I think we can stop worrying about cheap crops being dumped on the international market to depress local production, and start worrying about mass starvation. Localized famines are, historically, the result of weather (flood, drought, etc.), all of which are driven to extremes by global warming. You haven't convinced me yet, Mr. Neubert, but I'm not an economist, just hungry.

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written by Adam Waitt , April 16, 2008

Blast! Government farm subsidies are wrong on so many levels. Plus, our 'free trade' agreements are exactly opposite of what the name implies. No wonder our agriculture infrastructure is in disarray. Does anyone else here believe a truly free market would bring down the cost of food and best allocate our resources to meet the need of the consumer? Not to mention the benefits for overseas farmers who would be able to compete with unsubsidized domestic farms. In addition, I find it extremely unethical to forcefully take money out of my paycheck to subsidize corn (probably the least effective way to reduce carbon emissions) which only drives up the price for all other produce. Bollocks!

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written by David Neubert , April 20, 2008

Jean you make a good point if referring to "basket case" countries that have no chance to produce food.

I think the global policy forum explains well how farm subsidies help rich agribusiness and hurt the small farmer in both rich countries and poor.

http://www.globalpolicy.org/socecon/trade/subsidies/index.htm

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