food is the first issue

Food is the first issue

 

Global food prices are increasing to dangerous level and as World Bank reported nearly 44 millions of people have driven into poverty.  Global food prices have risen 36% in the last year, led by maize (74%), wheat (69%) and soybeans (36%). Crude oil prices have increased 21% in the first quarter of 2011. (blogs.worldbank)

To face this issue many countries apply policies to insulate their products from rising prices by increasing limitations in export and reducing barriers in import, but this strategy is not efficient because it will increase the world prices and will rise income transfers. According to a paper by Christophe Gouel trade is important to reduce domestic price. In small, open economy their policy includes import subsides and export restrictions by tax which will reduce overall welfare. This policy could decrease domestic prices. (blogs.worldbank)

Solutions that were recommended are:

1-      Increasing investment in agricultural production and productivity." In the last two years, countries like Burkina Faso and Malawi have demonstrated that and have doubled their output and moved from being net food importers to food exporters." 

2-        Greater investment in infrastructure to help farmers to give their products into markets easily .

3-      Providing better risk management tools for farmers like weather forecasting and climate change, also more information on quality and quantity of grain stock.

Questions that come to mind:

1-      Investment in educating farmers besides investing in agriculture could be another solution to better food production?

2-       To provide cheaper optimal food , using more subsidies by government for poor could be effective?

 

Reference:

www.blogs.worldbank.org

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Bahar Forghani