Personally I think that the Runge and Senauer paper is non-sense. It ignores the fact that most people in developing countries are food producers (i.e. peasant farmers) and not food consumers, and so that rising food prices are a *good thing* since they will be able to sell their crops at a higher price.
High food prices do hurt the urban poor, but since the urban poor are the first to riot, developing world governments tend to keep them busy and well fed.
One might want to read “The Road to Hell: The Ravaging Effects of Foreign Aid International Charity”. The book argues that food exports to the developing world are generally a bad thing, since they leave the developing world dependent on agri-business and also put lots of farmers out of work. One should note that the policy agenda of the developing world at the WTO has been to get developed countries to *reduce* subsidizes for agricultural production.
This has some impact on Chinese decision making. One thing that I’ve noticed is that the Chinese government doesn’t seem to be making food inflation a huge priority and that is largely because by letting food prices rise and fixing prices of oil and fertilizer, you have wealth going into rural areas which is the number one priority of the Chinese government.
One other thing this points out is how complex economic decisions really are. One thing that I’ve noticed is this generalization in which you point out how biofuels are hurting some poor people and from these situations one assumes that biofuels and high food prices hurt all poor people, which they don’t. If you are a poor urban dweller, then yes high food prices will hurt you. If you are a poor farmer, then high food prices will help you.
One thing I do before I write something is to do a quick google to do a fact check, and the nice thing about doing this is that I usually learn something new in the process. For example, the reason I wrote some of this was because I was reading in Bloomberg magazine about the riots in Haiti over higher food prices, and how this proves that biofuel subsidies are destroying to poor of the world. So to justify my statement that most poor people in the world are farmers, I did a quick google check, and what I found was quite interesting. Most poor people in the world are farmers, but I was struck at how different the economies of the world were from each other. For example, most people in China, India, Mali, and Mozambique are farmers, but most people in Peru, Algeria, and most significantly Haiti, aren’t.
Here is a map that I found….
One thing that this does tell you is how extraordinarily different the economies of different places are, and how generalizations about things will or won’t work have to be made very carefully.