Wednesday, August 01, 2007

Malthusian nonsense never goes away

Over the nearly 200 years since the good Rev. Malthus published his famous hypothesis that food supply can't keep up with population growth, the facts have shown, over and over again, that he got it wrong. Yet, every time food prices rise, neo-Malthusians rise up and say that this time it'll be different.

Well, today's Malthusian Chicken Little is none other than celebrity Harvard professor Niall Ferguson (see here, hat tip to Economist's View). Sure, food prices have risen over 20% as he states. And yes, per capita grain production has not kept up with world population growth over the last two decades. So, is he right that food will be increasingly scarce and expensive in the future?

Nonsense. The IMF's commodity food price index has risen 23% over the last 24 months. (Not all atributable to ethhanol, weather and oil prices have also played their part). But they're only 7.7% above their level in 1980. So even if we assume a modest world inflation rate of 2% a year on average over the last 27 years, in real terms food prices are actually 37% below the 1980 level.

How about the grain supply? According to the FAO, world grain production rose 32.5% between 1979-1981 and 1999-2001, while the world's population rose 45% over the same period. Yet, during this time, meat production jumped 72% and fruit/vegetable production rose 91.7%. Folks, this is a sign of greater affluence and better nutrition.

While there's no denying that climate change will pose challenges, I have no doubt the world will be able to feed itself in the future, as yields rise in many emerging economies and the genetics revolution spreads. And I'm just as sure that uninformed doomsayers like Dr. Ferguson will keep appearing every time food prices rise.