Tim Worstall responds to an article by Michael Hanlon:
The storm is coming. One of the great dependables of modern life — cheap food — may be about to disappear. If a growing number of economists and scientists are to be believed, we are witnessing a historic transition: from an era when the basics of life have been getting ever more affordable, to a new period when they are ever more expensive.
Ah, no, I’m afraid you’ve not understood the projections. Yes, food is expected to become more expensive. But also more affordable at the same time.
For the driving force of the rise in food prices is expected to be that people are getting richer. Thus able to afford three squares a day, some of them even containing meat. The rise in incomes is expected to be greater than the rise in food prices: thus food becoming both more expensive and more affordable as a portion of incomes.
BTW, if you think that’s not how the word affordable is used in such contexts then do speak to the booze puritans. They say exactly this: booze has become more expensive but cheaper as a portion of incomes: more affordable.
And if incomes do not rise as predicted we don’t expect to see the food price rises. For it is not the idea of 10 billion people that is predicted to raise the prices. It’s the idea of billions currently on $2 a day becoming billions on $20 that is.
Also, as I’ve mentioned before, a significant part of the rise in global food prices is driven by particularly stupid government policies on ethanol production.
