High food prices are not all bad news

ANY conversation on the streets of New Delhi turns easily to the cost of living, particularly that of eating. Stuck in an ocean of honking traffic in the city centre, Babu Lal complains about the exorbitant rent on his two-room flat, hard to afford on his earnings as a driver. But at least the rent does not vary from month to month. Food prices, on the other hand, have been climbing steadily. Mr Lal now has to fork out Rs110 ($2.40) for a kilo of dal, his main source of protein—a third more than he was paying only a few weeks ago.

Hundreds of millions of people, across India and the world, have similar worries. India’s central bank has raised interest rates six times since January in an attempt to tame double-digit inflation. In China politicians are worried that galloping food prices could cause another round of unrest among the country’s factory workers. The world is not yet in the midst of a food crisis comparable to that of the autumn of 2008. But since the middle of the year there has been a steep rise in the price of most agricultural commodities, including food crops (see chart). And the UN’s Food and Agriculture Organisation reckons that prices are unlikely to fall back to their pre-food-crisis levels in the next decade. …