The question of a reasonable price for food: Policy alternatives to control food price inflation in developed economies

Abstract

This chapter explores a number of policy responses to food price inflation in developed economies. It focuses on previous food price crises, in particular the 2007-2008 food price crisis, and examines how governments of selected developed economies have managed the price inflation of the food basket. In particular, this chapter investigates how Australia, the United Kingdom and France have responded to the challenges of volatile international food prices and have managed to maintain stable national food prices. While food price inflation in Australia and the United Kingdom has reached in excess of 40% over the last 10 years, in France it has been contained to about 20% over the same period. The reluctance of liberal market economies to engage in policies that directly control food price inflation contrasts with the French hands-on approach at regulating the domestic food distribution and retailing sectors. Australia and the United Kingdom advocate that only the improvement of market efficiency will assist in controlling food price inflation rather than intervening along the supply chain. More in-depth research is required to confirm what the present work is suggesting, that is bargaining between state and the food industry contributes towards reducing the speed and magnitude at which price increases are transmitted along the supply chain to the end consumer.