Blog: Raising food prices to end hunger
In this blog post for Global Food Security, former FAO agricultural economist Andrew MacMillan says the doctrine that food prices should be kept as low as possible to end hunger is wrong.
He states that higher food prices or better targeted subsidies could give more to local producers in the long term and that “a deliberate rise in consumer food prices, passed back up the value chain in line with fair trade principles, would offer one of the best means of cutting the incidence of hunger by creating greater rural economic prosperity”. He argues that higher food prices could easily be absorbed by consumers in industrialised and emerging economies who typically only spend around 20% of their incomes on food. Higher prices, MacMillan argues, would also reduce food waste at household level.
One important remark made by MacMillan is that before the economic benefits start to show up in hunger reduction, it is important that countries put in place social protection policies that can ensure that all poor families can eat adequately by providing them with income supplements, indexed to local food prices.
You can read the full blog post and comment on the views expressed here
While some of the food system challenges facing humanity are local, in an interconnected world, adopting a global perspective is essential. Many environmental issues, such as climate change, need supranational commitments and action to be addressed effectively. Due to ever increasing global trade flows, prices of commodities are connected through space; a drought in Romania may thus increase the price of wheat in Zimbabwe.