Worldwide, food prices have been rising over the past decade. Here, for example, is the UN FAO food price index.
In real terms, the world food price index is higher today than it has been in 40 years.
Enter this new paper by Marc Bellemare just published in the American Journal of Agricultural Economics. He finds:
“for the period 1990–2011, food price increases have led to increases in social unrest, whereas food price volatility has not been associated with increases in social unrest.”
As is typical of Marc's work, this is a careful analysis of the issue. He takes issues like endogeneity seriously (do higher food prices cause social unrest or does social unrest cause higher food prices or does some third factor case both?) and he considers the sensitivity of his results to the data he uses and model specification.
A couple excerpts from the conclusions:
“Do food prices cause social unrest? The results in this article indicate that the answer to this question is a qualified “yes.” While rising food prices appear to cause food riots, food price volatility is at best negatively associated with and at worst unrelated to social unrest. These findings go against much of the prevailing rhetoric surrounding food prices. Indeed, whereas many in the media and among policy makers were quick to blame food price volatility for the food riots of 2008 and of 2010–2011, the empirical results in this article indicate that rising food price levels are to blame and that increases in food price volatility may actually decrease the number of food riots. ”
and
“the objective of keeping prices low would be best attained by policies aimed at increasing the supply of food where it will be the most helpful, whether this means investing in agricultural research aimed at increasing agricultural yields (Dorward et al. 2004), encouraging urban or peri-urban agriculture (Maxwell 1995), liberalizing the international trade of agricultural commodities, increasing access to and the use of biotechnology in developing countries (Paarlberg 2009), eliminating farm subsidies in industrialized countries, and so on.”