Skip to content

Some Thoughts on Food Prices and Famine

Tom Murphy had an interesting post on food prices last week in which he discussed how food prices remain very high, but how they are not the only culprit behind the current famine in the Horn of Africa. At the end of his post, Tom wrote that he hoped I would comment on the role of food prices and agriculture.

Sadly, I have very little to add. In June, the price of food was 39 percent higher than a year earlier, according to the Food and Agriculture Organization (FAO) of the United Nations.

But given that the FAO’s food price index encompasses five categories of food, this statistic masks a considerable amount of heterogeneity. Looking at the five categories that make up the food price index, we get the following price increases:

  • The price of meat increased by 18 percent;
  • The price of dairy increased by 14 percent;
  • The price of cereals increased by 72 percent;
  • The price of oils and fats increased by 53 percent; and
  • The price of sugar increased by 59 percent.

At one extreme, the biggest increase — and by a long shot — has been in the price of cereals, which constitute the bulk of what the world’s poor eat. At the other extreme, one of the smallest increases has been in the price of meat, which is mostly consumed in industrialized and middle-income countries.

Knowing that food accounts for over 50 percent of a typical household’s budget in most developing countries but less than 10 percent of a typical household’s budget in most industrialized countries, it is easy to see why food prices, which are a major public policy issue in developing countries, are a (very) minor public policy issue in the US. This also makes it easy to see why sharp increases in food prices may well cause people to riot, especially in places where their freedoms are considerably curtailed.

Food Prices and Famine

About famine specifically, Tom notes that food prices have not been higher in famine-stricken areas than in other areas. Generally speaking, I agree that famines are not caused by high food prices, nor are they caused by a (general) lack of food to go around. Rather, they are caused by specific political economy conditions — think of the opening scene in Black Hawk Down, where one of Mohammed Farah Aidid’s men seizes a food convoy — or by a lack of infrastructure — some regions are simply inaccessible due to a lack of ports, roads, or airports.

Sen’s famous statement that famines never occur in relatively free societies has been repeated so often lately that it has become somewhat of a bromide, but that does not lessen the truth it contains. In free societies, people can demand lower food prices and better infrastructures from policy makers, and they can use elections to keep politicians in check. If you are interested in this idea, I suggest reading Bates’ (1981) book, Markets and States in Tropical Africa.

Moreover, Sen’s point is an extremely difficult one to get across to some people, as is the fact that food crises and famines are not caused by overpopulation. On the latter, I recently read a comment on a post about the current famine in the Horn of Africa on one of the blogs run by La Presse in which the reader said that he (or, let’s be fair, she) wouldn’t be sending money to aid organizations until they specifically advocated sterilization of people whose children were at risk of famine. If you read French, you can find that (absolutely repugnant) comment here — it is the fifth comment, by a user named “wfaf.”

The problem, I suspect, is that in matters of social sciences, everyone believe themselves to be experts, and everyone mistake their beliefs for cold, hard scientific facts. I am pretty sure that people in the “hard” sciences face a lot less of that type of hubris than we social scientists do.

If you sincerely believe overpopulation is the problem, you need to have a very good explanation for why humankind has not yet starved itself to oblivion. You also need to have a very good explanation for why China, still the most populous country in the world, has not experienced famine since 1958. And even back then, it is pretty obvious that famine was not caused by a lack of food to go around