Corn trade restrictions, price increases and the impact on the urban poor

An article in the Economist (September 15, 2012) describes impact of the recent drought in the US, coupled with ethanol blending requirements for fuel on a spike in corn prices. Similar choices by other drought stricken countries and price sticker shock by importers are described as causing even further price increases. But while corn price increases help rural agricultural labor, they hurt the urban poor and increase the overall number below the poverty line. Should countries do nothing, as the article suggests, and let the market adjust supply and demand ? Should biofuel regulationa be eased to free up corn for human consumption ? Or should food be subsidized to ease trade flows ?

About aviyer2010

Professor
This entry was posted in Global Contexts, Supply Chain Issues, Sustainability and tagged , , , , , , . Bookmark the permalink.

One Response to Corn trade restrictions, price increases and the impact on the urban poor

  1. Relaxing biofuel regulation is an adjustment to free market supply/demand. I don’t understand the public good of biofuel requirements. Ethanol is worse on the environment than carbon fuels, had massive government subsidies, and decreases the supply of a drought-stricken crop. Smells like lobbyists to me…

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