Recently, the global economy has seen a significant increase in food prices during a time of political unrest and social volatility in the Middle East and North Africa. Marc Bellemare, assistant professor of public policy economics in the Sanford School of Public Policy, believes there is a correlation between the two—specifically, that rising food prices may be an indirect cause of social revolution. The Chronicle’s Chinmayi Sharma spoke with Bellemare about extensive research in the fields of agricultural development, global food markets and microeconomics in developing countries.
The Chronicle: How high are the food prices relatively? How serious is the situation?
Marc Bellemare: Food prices have never been this high since the United Nations started recording them in 1990. In real terms, they are more than double what they used to be. This is calculated keeping a control on regular inflation so that is taken into account. It is difficult to make a statement about the natural trend of food prices over time because there are many factors that go into the final price of food.
TC: What is the food price index?
MB: The measure of the level of the food prices worldwide since 1990 is from data collected by the Food and Agriculture Organization of the United Nations. It encompasses five broad categories of commodities, and they are meat, dairy, sugar, oils and cereal. It is a unique number that comes up every month that tells you how the food prices worldwide as an average compare to the previous month. It is not a perfect measurement, but it accounts for a lot of factors like the Consumer Price Index does in the United States. And it helps world leaders see significant trends.
TC: Are the high food prices simply reflective of a generally bad economy?
MB: Well it is a simple question of supply and demand. There is too much demand currently for the supply out there. As for why this is, there are many reasons. I believe this is the result of mostly natural phenomenon such as climate change, droughts in Africa and the floods in Australia. These are uncontrollable factors that lead to a discrepancy between the quantity supplied and quantity demanded, which leads to the price hikes.
TC: What correlation do these prices have to gas prices?
MB: Well obviously gas prices will affect the final price of food because they are a necessary resource in the production and transportation of food, but in the United States this is true as well as in other developed countries. But for places still developing, the fact is that the people usually eat the food that is available to them locally, except for during the period right before harvest when communities may have to import some food.
TC: What sort of relationship exists between food prices and political turmoil?
MB: I think the causal relationship flows mostly from high food prices leading to political unrest. I can’t make a definite causal statement. We can’t observe a world in which nothing would have changed except for food prices, because there are so many factors that cannot be controlled. In the summer of 2008, it is uncanny that during that period of high food prices we had revolt in Indonesia and East Africa. Likewise, we are experiencing high food prices, and we have unrest in the Mediterranean.
TC: How do food prices lead to political unrest?
MB: Tunisians became very upset because of high food prices as well as a host of other problems. It is a dictatorship, and when I went there in 2001 it was painfully obvious that it was a police state, so I think the food prices acted as a catalyst in that instance, spurring the revolutionary movement. Then, like an informational cascade, the sentiments spread like wildfire, and people in Egypt see what is happening in Tunisia and they want a revolution too. The Libyans see that this strategy worked for the Tunisians and Egyptians, and so they try their hand at it too. Among other similarities, all these states suffered from high food costs.
TC: Historically, have food prices led to political unrest or is that more of a new phenomenon?
MB: We do not have good data for anything prior to 1990, so it is very difficult to know with certainty the information to compare times of high food prices and political unrest. What I can say is that looking at the numbers it seems that quantitatively, there seems to be a correlation between food prices and political unrest.
TC: How can the correlation be quantified?
MB: The way we numerically measure this is by going to news publication archives such as LexisNexis and searching the words “revolution,” or some other word having to do with political unrest, and “food” at the same time to see the density of these words together in articles over time. There is also an international country risk guide published by the [Political Risk Services] group that encompasses measures of government stability, socioeconomic conditions, measures of internal conflict and others. The measure of internal conflict is one of the most important numbers, because it shows how upset people really are.
TC: Are there any structural reasons relating to the market that might push up the cost of food?
MB: [According to] basic microeconomics, consumers are hurt when the price of a commodity goes up where the producers benefit. In most countries, you hear more about the producers than you do the consumers. It is difficult to strike a balance between producers and consumers. Governments sometimes try to intervene to maintain this balance. In the 1960s and 1970s, African governments adopted a price support policy [to] prevent prices from falling below a certain point. Their intentions are understandable, but this doesn’t let the market do its job. Producers form a more cohesive group because they can form lobbies for their causes and organize themselves whereas consumers are diffused across the economy and can’t come together to speak on the behalf of that population as a whole. This is why we end up with a lot of policy that favors producers, leading to higher food prices.
TC: Are there any trends among the type of political government instituted and the likelihood of social revolt due to high food prices?
MB: If there is a relationship, it is too small to detect. I don’t think that you can say that because one country was a bit more socialistic, or another was a bit more capitalistic, they are more susceptible to high food prices and revolution.
TC: Do you believe the governments of Tunisia and Egypt are aware of the effect food prices have on the stability of the state and what should be done?
MB: I think the best thing we can do is encourage agricultural research to support technological innovation to do more with the land that we have. Every once in a while someone comes along and says that in 60 years there will be ten billion people and not enough food. The truth of the matter is that you never have a situation when everything stays constant and one factor changes and historically, humankind has been very resilient to population growth and been able to distribute food efficiently. We need to be optimistic, innovate technology and adapt. Necessity is the mother of invention. We have the tools, we just need to overcome the political bumps of bureaucracy and corruption to implement them.
This article has been corrected to reflect the fact that Marc Bellemare is an assistant professor of public policy and economics and that his primary appointment is in the Sanford School of Public Policy.
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