Business School

Rafael Pampillon, Professor of Economics at IE Business School is shown in the same line: rising prices has generated it subsidy to ethanol and biofuels, which have generated a perverse effect of scarce food. It must also take into account, that high oil prices affect the latest agricultural techniques that rely on increasingly more energy. Due to the low growth of the supply and the strong increase in demand, cereal stocks are at its level lowest since early 1980s. Costa says that the natural and demographic effects are changing relationships with nature, and the relationship with food will be one of the effects. I think that prices will stabilize at a level minimally something higher, albeit with fluctuations at that level for reasons of speculation. For its part, Pampillon recognizes that prices will thus remain high while biofuels continue subsidizing, the world economy is still relatively strong, and as countries develop you prefer a cheaper energy, but use agricultural products dearer food, especially for the poorest. In addition, adds that the European Commissioner for trade, Peter Mandelson, recently stated that there are two ways to react to the food crisis that we face. The first, with further growth of domestic agricultural production and more protectionism.

The second, with an agreement in the framework of the Doha round undertaken great negotiation to liberalize trade world–that would facilitate a more efficient trade in economically more affordable food. The solution is necessarily to eliminate subsidies for biofuels. For the first time, until the means of communication is unanimous. World agricultural production has grown more than food and the population wouldn’t have to miss, Pampillon believes. Insists on pointing out, that the world can currently live with a barrel of oil to $110, and we started to think about how we can live with a price of $300, exemplifies Costa. Pampillon believes that the current trend, both in the U.S.