Higher prices food for dismal thoughts

…Until last week, I put this down to the burgeoning food demands of the fast-growing, heavily populated emerging economies of the East.

That, and the needs of the bio-fuel industry.

But a thoughtful new paper from UK-based consultants Bidwells Agribusiness suggests something else is driving global food prices higher – namely an ever more pressing world-wide shortage of both fresh water and arable land.


In other words, the current food “cycle” could either be huge – with sky-high prices around for much longer than is often assumed. Or it may even be that natural limits on farm production, combined with a rapidly expanding world population, mean prices are now permanently – or “structurally” – higher.

We economists are sometimes dubbed “dismal scientists”.

That label was originally an insult aimed at Thomas Malthus, who in the late 18th century grimly predicted widespread destitution as population growth exceeded the rate at which food supplies could grow.

Malthus turned out to be wrong – in part because technology produced better irrigation, fertilisers and pesticides, boosting land yields.

However, this new report says that “yield gains have already plateaued”.

Telegraph