The Dilemma

Policy-makers in the developing countries are confronted with a fundamental dilemma. On the one hand, they want high prices fot food in order to encourage agricultural production. On the other hand, they want low prices to protect (at least in the short run) the poor buyers of food. There is a large literature advocating each of these courses. A heavy weight of writing has now accumulated which shows that agricultural producers have been discriminated against in many low-income countries, and that this has been detrimental to growth, equity, employment, and poverty alleviation. But there is also a large literature showing that adequate supply of food is not enough to eliminate malnutrition, hunger and starvation; poor people must also have ‘access’ or ‘exchange entitlements’ to the food. Above all, this means adequate incomes and low prices of food. In addition, they must have access to complementary goods and services, such as education and health services, for which income is not a sufficient condition, and the distribution of food within the household must meet the nutritional requirements of all its members.