Hurrah – Dani Rodrik has a blog. Rodrik is a great international development thinker and a co-author – together with Nancy Birdsall and Arvind Subramanian – of my favourite development think piece of 2005, which was absolutely required reading in DFID when it came out.
Anyway, Rodrik’s just been blogging about food prices and poverty, where he observes the existence of two camps cheerfully talking past one another. On one hand, advocates of the Doha Development Round trumpted that higher food prices from agricultural liberalisation will benefit the poor. On the other hand, people worried about the effect of biofuels on food prices (like me) argue that higher food prices will be bad news for the poor. But Rodrik points out that:
The real answer of course is that it depends on whether a poor household is a net seller or buyer of food (that is, whether it grows more or less food than it consumes). This means that the rural poor generally tends to benefit from higher food prices, whereas the urban poor generally get hurt. How large the impact is depends, in turn, on the size of the food account as a share of total expenditures or income of a household. And whether the change is good or bad for a nation’s poor as a whole depends on the geography of poverty in a country.
So as an economist loves to say, it depends. But it depends in predictable ways on household and country characteristics.
A fair point. But Rodrik overlooks the gorilla in the room: climate change. As we’ve argued here before, the effect of biofuels is just one driver of rising food prices – along with other factors like weather variability, water scarcity, rising demand in China and India and so on. While biofuels is the the key driver among these for now, it’s climate change that is likely to become the real biggie over time.
And the thing about climate change, as IPCC assessment reports make clear, is that while climate change will likely lead to higher food prices, farmers in the poorest countries are likely to become worse rather than better off – since they’ll be hardest hit by the effects of climate change. William Cline, an expert at the Center for Global Development, has a new book out about this which should be required reading in donor agencies:
Developing countries, many of which have average temperatures that are already near or above crop tolerance levels, are predicted to suffer an average 10 to 25 percent decline in agricultural productivity by the 2080s, assuming a so-called “business as usual” scenario in which greenhouse gas emissions continue to increase, according to the study. Rich countries, which typically have lower average temperatures, will experience a much milder or even positive average effect, ranging from an 8 percent increase in productivity to a 6 percent decline.
Individual developing countries face even larger declines. India, for example, could see a drop of 30 to 40 percent. Some smaller countries suffer what could only be described as an agricultural productivity collapse. Sudan, already wracked by civil war fueled in part by failing rains, is projected to suffer as much as a 56 percent reduction in agricultural production potential; Senegal, a 52 percent fall.
