The non-partisan Farm Foundation released a report on the forces driving food price increases, citing “global changes in production and consumption of key commodities, the depreciation of the dollar, and growth in the production of biofuels.”
The report said that “based on existing research, it is impossible to say whether price levels have been influenced by speculative activity, and added that “Another side of the higher commodity price story that has gotten relatively little attention is the potentially large supply response that could result as farmers in developing countries increase production and productivity. Higher prices could induce these farmers to purchase and use inputs such as improved seeds and fertilizer, which would lead to substantial increases in productivity and economic gains.”
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