The second reason for optimism relates to the lower productivity of food production in the poorer parts of the world relative to the United States and other developed countries. Higher food prices will induce an increase in productivity in developing nations by encouraging greater use of machinery, fertilizers, and other forms of capital. It will also encourage consolidation of some agricultural holdings into the hands of more efficient farmers.In other words the crisis will resolve itself soon enough without actual intervention by politicians, so they may as well position themselves to claim credit for it.
Wednesday, April 23, 2008
Food Glorious Food.
Gordon Brown's "Food Summit" to discuss the food prices crisis seemed a bit insensitive to hold so soon after John Prescott's
hilarious shocking bulimia revelations. As a political gimmick though promising to tackle the food crisis is probably a clever and cost free idea. Nobel winning economist Gary Becker explains here: