Monday, December 17, 2007

When food becomes an issue

The UN is concerned about global food supplies, prices, and the effect of climate disruptions. It's not a trivial question, whether you worry about the impact in human suffering, or about the resulting political instabilities. Right now the main factor behind rising prices seems to be higher demand (in particular from China), so this should lead to rising supplies [*] and hence a new equilibrium. However, climate change will also affect supplies; should the global agricultural system fail to adapt to the changing climate conditions, we'll be looking into a very messy situation.

[*] A caveat here: it depends on specific fiscal and trade policies - few countries have deregulated or economically efficient agricultural sectors, so milleages might and will vary.

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