From Finance to Food: The Next Global Crisis?
Tuesday 29th April, 2008
16:00 BST / 11:00 EDT
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While much attention has been devoted to the sub-prime crisis, the likelihood is increasing of a global food crisis. Agricultural prices have been rising significantly due to a combination of factors. Rising food prices may spark a ‘siege mentality’ that could provoke a return to protectionist tendencies. Indeed the past two months have seen many cases of trade restrictions, after the UN in February warned that grains stockpiles are dangerously low and 36 countries face food shortages this year. These include food price controls and export restrictions. Yet these measures may remove farmer incentives and actually reduce food supply in the long run.
This raises a number of key questions:
- Is the global financial crisis making the food crisis worse?
- Who are the winners and losers?
- What sets of problems are faced by food-exporting nations? By food-importing nations?
- Which regions, and which countries, are at greatest risk?
- Is this part of a cyclical pattern of harvests, or does it reflect a structural break from the prevailing pattern?
- How do food prices affect overall inflation rates?
- How can governments preserve social stability without incurring an unbearable fiscal burden?
- How do policymakers balance maintaining free trade against the desire to ensure domestic supply?
- Are there better food security policies available, eg better-targeted poverty relief?
- Will this crisis cause a re-examination of the utility of biofuels?
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