Has anyone looked into the extent to which low food prices contributed to the industrialisation in the era after WWII up until the 1990's?
Are there studies comparing the experiences of countries under different food price scenarios, or facing agricultural policies?
(ie. trade liberalisation vs protectionism, food subsidies, export restrictions)
It seems to me that agricultural subsidies and food dumping by developed countries made it possible for countries like Brazil and Mexico to displace populations from the countryside to large cities to work in industry even with very low wages.
It seems like the era of productivity breakthroughs in agriculture, and subsequent growth in industry and services has come to an end. A new era of high commodity prices has coincided with a phenomenon Dani Rodrik and others refer to as premature deindustrialization in emerging countries, which creates a new set of challenges- especially the lack of new sectors to pick up the slack from manufacturing.
one of the alleged reasons to set up the Common Agricultural Policy in the European Community in the Sixties was to keep food prices uniform across the member states. You may easily find literature reporting this debate at that time. Later, food consumption ceased to be a major expense on EC incomes and the issue faded away.
I know an excelent book which covers this kind of issue :
"Histoire des agricultures du monde : du Néolithique à la crise contemporaine". (https://ideas.repec.org/p/ulb/ulbeco/2013-44782.html)
Unfortunatly, it's only in french, hope you speak the language as I know no translation of it.
The question addresses a long standing debate about the role of agriculture in economic development, see for example writing of John Mellor, Bruce F Johnston,, Walter falcon in the 1960s and 1970s.
At early stage of development low food prices help industrial and service dector development by keeping urban food prices low. Turning terms of trade against agriculture has been put forward as a strategy. However, a precondition for that strategy to succeed is generation of improved technology for agricultural productivity improvement so that unit cost of production decreases and higher output and lower cost give enough margin for farm families and farm labour to improve their living standards. there are good empirical examples this phenonmenon. However, problems of poverty and lack of balanced growth in many developing countries have many reasons, some genral and specific to individual countries. So theory and evidence need to be discussed for specific contexts.
Low food prices in support of industrial growth in developing countries
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