Economists Urge Obama Not to ‘Overreact’ to High Food Prices
Leading advocates for the world’s poorest and hungriest are urging President Obama not to “overreact” to recent spikes in food prices, particularly by imposing export bans on U.S. agricultural products.
In its February report, the World Bank noted “sharp increases” in the global prices of wheat, maize, sugar, and edible oils over the last six months, with an accompanying rise, albeit smaller, in the price of rice. The bank’s food price index surged by 15 percent over the last quarter of 2010, and stands only three percentage points below its peak, reached in June 2008. Since then, an estimated 44 million people in developing countries have fallen below the poverty line.
Rising food prices have been linked to the unrest that has swept through the Middle East and North Africa in recent weeks. In most of the uprisings, calls for greater personal and political freedoms have been accompanied by complaints about unaffordable staple food prices.
Asked by FOX News how they would advise the Obama administration to contend with the spikes – which have as much to do with natural disasters and weather shocks as with human factors – both Hassan Zaman, lead economist at the World Bank’s Poverty Reduction and Equity Group, and Manuel Hernandez, a postdoctoral fellow at the International Food Policy Research Institute (IFPRI), said they would caution the president not to manipulate food markets with trade policy.
“I would tell him, ‘Try to not overreact to the increasing prices we are seeing right now,’” said Hernandez, a Peruvian-born economist educated at the University of Texas. “We should expect fluctuations, but we shouldn’t exacerbate these fluctuations by…imposing obstructions to the market that could make things worse…The situation is not the same as in 2007 and 2008. So there is no major concern that we should worry about another food crisis.”