Speakers:

Michael Kremer (Harvard University and CEPR) Nora Lustig (George Washington University) Peter Timmer (Stanford University and Center for Global Development) Gilles Mettetal (EBRD)

Venue:

EBRD (Auditorium - Lobby Level) One Exchange Square London EC2A 2JN

This lunchtime meeting will start at 12:00.
We look forward to seeing you on Friday.

After decades of stability, prices of food commodities increased 130% from January 2002 to July 2008. These increases have attracted significant attention in the media and in policy circles: they have led to significant and immediate setbacks to poverty reduction, social stability and inflation, as well as medium-term concerns about economic growth in many developing countries. The panel, hosted jointly by EBRD and CEPR and chaired by EBRD’s chief economist Erik Berglöf, brings together four leading specialists to discuss the causes, consequences, and possible policy and market responses of this increase in food prices.

The panel will discuss short-term reasons for the price increases, including: higher demand due to raising living standards; macroeconomic factors such as the decline of the dollar and low interest rates in the US; the surge in biofuel production; speculation by traders looking for alternative to equities and real estate; the high price of petroleum; and import restricting practices by developing countries. A longer-term factor is the slow increase in agricultural productivity, which can be in part attributed to the lack of appropriate incentives for technological innovation, and low prices in the last decade.

The impact of the price increases differs for net consumers and net producers of foodstuffs, but the panel will present evidence suggesting that among the poor, the loss to net consumers may exceed the gains to producers. In addition, the increase in volatility adds to the high level of risk already born by the poor, and protecting them from price fluctuations must be considered a priority.

What are the appropriate policy responses by developing countries, developed countries, and international institutions? To what extent should developing country governments allow the changes in world food commodities prices to be passed through to domestic prices? Restrictions in trade, even if they are the best policy for individual countries, may exacerbate the problems for the world at large. Can international institutions design trading rules that avoid this problem, while still insulating the world’s poor from fluctuations in food prices? Can they encourage market participants to invest in efficiency improvements in the agricultural value chain and raise productivity growth in primary agriculture? In the long-term supply must rise to match the growth in the demand for food driven by increases in income. Much of the supply side response will have to come from technological progress. The panel will therefore discuss options to increase the rate of the development of new agricultural technologies appropriate to poor countries.

Registration is now CLOSED for this event.

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