UN Director General: Food Riots Would Not Be A Surprise

Tuesday October 30, 2007

"If prices continue to rise, I would not be surprised if we began to see food riots,” said Jacques Diouf, director-general of the UN’s Food and Agriculture Organisation.

The FAO’s food price index has risen to its highest level since it began in 1990. Wheat and milk prices reached a record high this summer while other agricultural commodities, such as corn and meat, are trading well above 1990s averages.

Rising food prices are likely to force developing countries to follow Russia’s example and impose retail price controls to avoid social unrest, according to Diouf.

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Of course, since price controls will only cause shortages of food (Econ 101), it is not exactly clear how price controls will remove the potential for social unrest.

Note that little to nothing is said about the most important factor in rising food prices, United States encouraged, worldwide central bank monetary expansion.

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