Monday, May 5, 2008

The other side of the crisis

I have received today the "watch letter" of the CIHEAM (Centre International de Hautes Etudes Mediterraneennes). This is an incredibly good center, very progressive in its analysis, but mainstream enough to be able to have an impact on policies. It is funded through contributions from member countries. The site is

The current watch letter is sent as a pdf file, and I cannot link to it. The topic is (unoriginally) "Rise in agricultural prices: what repercussions for the Mediterranean?". I like this section from an article by Giulio Malorgio, Professor at the University of Bologna (Italy) about speculations, one of the neglected causes food crisis.

"Mariann Fischer-Boel, the European commissioner for agriculture, observed that it should not be automatically assumed that the increase in retail prices is closely tied to the increase in basic product prices and that a whole range of other factors need to be taken into consideration.
In the case of bread, for example, given that the price of wheat accounts for just 4% of the price of the final product and that a kilo of flour makes 1.4 kg of bread, the increase in the price of bread – 10 to 40% on average depending on the country or region – is not always justified. Many other factors have a role in determining the final price, as is easily ascertained from a simple comparison of the price of bread in the North and South of Italy. The same is true of the increase in the price of dairy products, which is due to a combination of factors related to inefficiencies in the economic organisation of the sector and the distribution processes."

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