The New York Times had a good, concise editorial yesterday on the global surge in food prices:
Last week, the president of the World Bank, Robert Zoellick, warned that 33 nations are at risk of social unrest because of the rising prices of food. "For countries where food comprises from half to three-quarters of consumption, there is no margin for survival," he said.
With riots breaking out in Haiti and Egypt over the cost of food, I don't think Zoellick's being too alarmist here. After all, "Nigerian families spend 73 percent of their budgets to eat, Vietnamese 65 percent, Indonesians half." Even a small price spike can be wrenching, and the current spike hasn't been small. (Although, mind you, the price rise can sometimes be good for small farmers in poorer countries—hardly an insignificant group.)
The Times' to-do list is on point: Developed countries have to stop catering to their corn lobbies and put the kibosh on biofuels subsidies—corn ethanol production in the United States alone has caused roughly half the rise in corn demand over the past three years. (Biofuel subsidies are also, horror, cranking up the price of beer.) For the time being, most biofuels are worse than gasoline in terms of carbon impact, anyway. There are far cleaner transportation options out there—financing public transit, say, or developing plug-ins.
Meanwhile, the World Food Program is currently facing a $500 million shortfall, so foreign aid can help, too. Staring further down the road, food prices aren't going to relax anytime soon (they're being driven by high oil prices and growing demand from China and India), so Zoellick is calling on rich countries to help finance a "green revolution" in the developing world to boost crop yields as a longer-term solution. What that would entail is unclear.
P.S. Kevin Drum offers up a handy chart that gives a sense of the scale of the jump in prices:
--Bradford Plumer