A Reuters analysis (“Soaring food prices raise investment risk,” http://www.reuters.com/article/ousiv/idUSL1466733420080414) begins that:

“Soaring global food prices are sparking riots and political discontent, raising investment risk in a string of emerging markets and taking the shine off otherwise successful economies that escaped the credit crunch.Soaring global food prices are sparking riots and political discontent, raising investment risk in a string of emerging markets and taking the shine off otherwise successful economies that escaped the credit crunch.”

The costs of the rise in food prices are immediately mentioned:

“Higher food prices have been fuelled by dry weather in key growing areas, competition from biofuels, rising oil prices boosting production and delivery costs and growing demand from emerging Asia.”

The countries mentioned as victims of such prices are Haiti, Cameroon, the Ivory Coast, Senegal, Burkina Faso, Ethiopia, Madagascar, the Philippines, and Indonesia.  Finally, here’s the punchline–the article mentions that many governments are instituting food subsidies.  Instead of pointing out the obvious effects of food subsidization, that it assists the Third World poor in acquiring food outside of the market system, it says:

“Many countries are raising food subsidies, putting them at risk of unbalancing their budgets and pushing themselves into the red. That might be affordable although for those reaping the benefits of high commodity prices, but it raises the risk of debt defaults and higher taxes hitting growth.”

To even mention that food subsidies “raise the risk of debt defaults” and will produce “higher taxes” and hurt “growth” in light of people being unable to afford food is ridiculous.  Growth matters only insofar as it is fairly distributed and goes to something important–like feeding your citizens when necessary. 

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