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Sunday, July 5, 2009

Economic 'Mismatches' Mean Food Crisis Is Here to Stay

The various sectors of the global economy have become so entwined with food production that prices are acting in a very “puzzling” manner, the Economist reports. Last year, the market responded rationally to the global food crisis of 2007-08, increasing production and thus lowering prices. But with another bumper crop expected, prices are up, “increasing at a time of plenty.”

The response to the food crisis isn’t just troubling academically. Farmers responded by putting more land into cultivation, a practice that cannot hope to meet skyrocketing demand. More, production increased overwhelmingly in industrialized nations, depriving poor countries that consume most of the produce of potential fruits of their labor: “The spike of 2008 did not signal a mere bubble—but rather, a genuine mismatch of supply and demand.”

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