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Food prices high but market will respond
6 Jun 2008
High food prices are expected to persist for another one or two years according to a study of global food supply and demand. The federal government's Rural Industries Research and Development Corporation warns that governments should not respond by increasing trade restrictions. Over the past year the price of rice has tripled, wheat has doubled, while maize costs two-thirds more but they are still well below a price spike that occurred in the 1970's. The report says the increases have been caused by low growth in production compared with demand due to reduced research investment that resulted from a highly protectionist environment in the 1980's and 1990's. "High food prices send signals to millions of farmers around the world to increase production and stimulate investment in capital and research and development," said RIRDC managing director Peter O'Brien.
The Australian, 6/6/2008
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