Every economist, expert and commentator I’ve seen seems to be flummoxed (and mildly panicked) about food inflation. The question on everyone’s lips is, “What can be done about high food prices?” The answer to that is fairly simple. I asked Thomas Carlyle’s parrot to explain.
Price is a wonderful number. It contains a lot of information, and alerts both producers and consumers to a variety of facts. Examine each of these signals, and you’ll have a fairly good idea whether a perceived problem really is a problem, and if so, what public policy prescription might help.
The first point to make is that the solution to high prices is high prices.