During the early 1970s, there was a major price explosion for virtually all the primary commodities which are traded internationally. For the first time since the Korean War rising food prices were a major factor in fuelling the world’s rate of inflation. FAO suggests1 that in the year ending summer 1974. ‘rising food prices … probably accounted for as much as half of Western Europe’s inflation2 and two-thirds that of the United States’. The same picture probably applied in the developing world as well, although the rates of price increase involved would have been higher, even if not quite as convincingly documented. Underlying the developments for food products were those for agricultural commodities, especially cereals. Cereals are the key, as they are not only the major source of human food in their own right, but they also form the principal class of feedstuffs for livestock. As a result, when the price of wheat and rice nearly trebled between 1971–2 and 1974–5 not only were bread and rice prices forced up, but also production-costs for beef, pork, milk and eggs because of the consequent rise in the price of feedstuffs.3 But before exploring these developments the first essential is an appreciation of the basic facts relating to production, consumption and trade in cereals.
KeywordsCereal Production Export Subsidy Commodity Trade World Prex Rice Price
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