Higher Wheat Prices Mean that People Go Hungry

The NYT discusses the impact of higher wheat prices around the world. One of the effects is that people in some parts of the world can no longer afford enough bread. This really should not be a surprise, but it might be to the NYT editorial board. They have repeatedly condemned U.S. agricultural subsidies in strong terms, claiming that they were obstructing development in many poor countries. While there was some truth to the NYT's complaints, the reality is far more ambiguous. The higher world agricultural prices that would come from eliminating U.S. subsidies benefit producers in the developing world, however they hurt consumers. The net effect on the developing world from eliminating these subsidies is likely to be small in either direction, and there is no doubt that there are some big losers in the process. The NYT was very misleading in implying that the elimination of U.S. agricultural subsidies unambiguously helps the developing world, as this article makes clear.

--Dean Baker