Development Economics

A Review – Food Price Increases: Causes, Impacts and Responses – Part V: Price Trend Policy Solutions

In Search of Economic Policy Solutions

Participants proposed economic policy solutions to address each of the three changed food price dynamics.

Price Trends

Increasing Food Supply – Participants agreed that the food supply must be increased, including promotion of agriculture growth that benefits the poor who are engaged in this sector, with technology and institutional innovations. Alain de Janvry reported on a high level panel of experts (or HLPE) in which he took part, making global recommendations on food security, part of a major effort hosted by the world’s major forum for cooperating for food security hosted by the UN’s Food and Agriculture Organization. One of several findings he reported was that for keeping longer term price trends in check it is necessary to counteract rising scarcities by investing in sustainable agricultural growth.

Focus on Africa – There was universal agreement among participants on the need for a focused new green revolution of productivity advances for sub-Saharan Africa. As Keith Fuglie noted, this is the one region in which productivity growth has stalled where productivity gains elsewhere otherwise continue to impress. And yet Africa is the part of the world where the greatest future population increases are predicted based on its current level of poverty.

Limit the Trend of Conversion of Food to Biofuels – De Janvry noted findings that “Rich countries’ demand for food grains as a source of energy crowds out poor people’s demand,” so that “Food demand in developed countries must be curbed when in conflict with poor countries’ food security.” Curbing demand most importantly means not diverting food to use as an energy source.

Climate Change Mitigation and Adaptation – Several speakers noted that we must address climate change before it gets much worse. For example, Maximo Torero pointed to the value of investments by national governments in climate change adaptation and mitigation using the full potential that agriculture offers. He stressed investments in smallholder productivity, in the face of climate change. De Janvry pointed out that this requires “investment in sustainable agriculture for productivity growth, in context of climate change and resource scarcities.”

Decreasing Waste– Besides increasing output, Torero stressed the need to reduce waste, both reducing postharvest loss in developing countries, and gross and unnecessary waste in the rich countries, noting unnecessary high losses in each part of the world.

Realizing Market Benefits – Markets can be a great help in keeping price increases in check. When prices rise, this should create an incentive for people to invest in agriculture, increasing its productivity. When these constructive market forces are impeded, people living in poverty also suffer through higher food prices. This may involve changing some counterproductive policies, as well as implementing the new policies with great care.


Stephen C. Smith is a Professor of Economics and International Affairs and Chair of the Department of Economics at the George Washington University. He received his PhD in economics from Cornell University and has been a Fulbright Research Scholar, a Jean Monnet Research Fellow, a Brookings Visiting and Non-Resident Fellow, as well as an IZA Research Fellow. Professor Smith is the author of Ending Global Poverty: A Guide to What Works (Palgrave Macmillan, 2005); co-author with Michael Todaro of Economic Development (12th Ed., Addison-Wesley, 2014); and co-editor with Jennifer Brinkerhoff and Hildy Teegen of NGOs and the Millennium Development Goals (Palgrave Macmillan, June 2007). He is also author or coauthor of approximately fifty journal articles, and numerous other publications. (Further details at

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