December 2008: The International Food Policy Research Institute (IFPRI), a center of the Consultative Group on International Agricultural Research (CGIAR), published a discussion paper entitled “Anatomy of a Crisis: The Causes and Consequences of Surging Food Prices,” which provides a comprehensive review of causes and consequences of recent increases in international food prices.

The paper compares different explanations for the surge in food prices based on empirical research and theoretical modeling. The authors argue that increasing oil prices, depreciation of the US dollar and increased production of biofuels are among those explanations that are both well documented and theoretically convincing, while explanations such as declining stocks, low interest rates and financial speculation are less persuasive. They also show that prices for some food crops were affected by commodity specific factors, such as export restrictions on rice. The authors conclude that even though it is likely that food prices have already peaked, they will remain high for several years to come, especially if oil prices remain high and demand for biofuels persists. [The Paper]