Sunday, May 4, 2008 

By Dr. Emmanuel Martin   

The hunger riots arising from soaring food prices are a terrible human drama. The world price of wheat has nearly tripled in three years, and doubled in the last year; the price of rice has increased by more than 50 % in three months. The cost of a meal is 40% higher than one year ago in many poor countries. When food purchases can represent 75% of a household's budget, those price increases become a nightmare. This could mean the return of millions under the poverty threshold, wiping out several years' development efforts. What are the reasons for this situation? Given that the economy is made of complex interconnections, we shall seek the real reasons of the crisis in more depth than is usually done. The crisis can be interpreted as the unintended consequence -the perverse effect- of several policies which prevent many decision-makers from acting responsibly.