Last updated on January 4, 2012
Graziano said he expected that food prices wouldn’t rise much but that they also wouldn’t fall. “But volatility will remain, that is clear,” he said.
That’s Jose Graziano da Silva, talking to the CBC. Mr. Graziano is the new head of Food and Agriculture Organization (FAO) of the United Nations (UN).
Mr. Graziano seems to imply that food price volatility is the problem. But we know that it is rising food prices, and not unexpected upward or downward movements — the definition of volatility — in food prices that actually harm the poor. Food price volatility harms food producers and those who are net sellers of food, but it is rising food prices that hurt net food consumers. Let’s not forget that the overwhelming majority of the world’s poor are net food consumers.
I have explained here, here, here, here, and there that rising food prices — not food price volatility — harm the world’s poorest. And that’s just for the light reading — there’s a whole research back end to my claims. Not that it appears to be of interest anyone at FAO, though.
But really, the subtle distinction between the welfare impacts of rising food prices and food price volatility is the least of Mr. Graziano’s problems. Indeed, going back to the quote above, if prices neither go up or down, how can they remain volatile? FML.
(HT: Kim Yi Dionne, via Twitter.)