The World Food Economy : A 40 Year Perspective on the Past , and a Look Forward
What has driven changes in food security over the past three decades ?
There are three big topics that we need to discuss . 5 First is the changing global environment , in which national food systems are set . The global economy is more connected , more competitive , and more driven by the economies of emerging nations . Second is the return of food price volatility . Between 1982 and 2002 , food prices kept falling . They were very stable and it looked like you could just forget about food price volatility and scarcity as the driver of any problems . You may have access issues , but you don ’ t have to worry about volatility and supplies . Now , food price volatility is back . The third topic , which has been on my intellectual horizon for many years but which now has entered the policy debate in a serious manner , is the growth in income inequality within very important countries and across countries . 6
There are many dimensions to the changing global environment , and they can be mentioned only briefly here :
Rapid economic growth , especially in Asia . Because of its speed and the number of households involved , Asia ’ s economic growth has led to the emergence of hundreds of millions of households into the middle class , with new demands — demands for automobiles , television sets , but also demands for improved diets . A dietary transition comes with this rapid economic growth that includes more meat , seafood , and high-quality fruits and vegetables . This dietary transition also comes with significant health consequences .
The ICT revolution . Modern information and communications technology is important at both household and international levels . The ability to communicate almost instantly transforms how efficiently markets can operate because markets operate on information . The faster they can get the information the more efficient they will be . It doesn ’ t have to be in billions of a second the way the US stock market operates , but the fast transmission of information , and its accessibility to all market participants , is very important .
Global financial integration . Global financial markets have become interested in the emerging economies , and this interest is not necessarily all for the good . Yes , having access to cheaper sources of capital so you can build expensive infrastructure is fine . But if the funds are “ hot money ” and the country is building a road with it , there is a mismatch in the time horizon that gets really scary when the money suddenly flows out . Then you can ’ t meet your bills , you have to depreciate your domestic currency ,
5
Even though there was little time to do so in the lecture itself . The topics of food price volatility and impact of income inequality have been treated elsewhere and were not discussed at length in the lecture .
6
As an example of that early interest , see , for example , “ Growth , Inequality and Poverty Alleviation : Implications for Development Assistance ” ( with M . K . Gugerty ). CAER II Discussion Paper ( Cambridge , MA : Harvard Institute for International Development , November 1999 ).
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