Tuesday 29 April 2008
Full article: http://www.channelnewsasia.com/stories/afp_world_business/view/344427/1/.html
Summary
International organisations urged countries not to use food export bans to deal with global food crisis, saying these would only fuel inflation.
"Not good economic solutions in the short run"
"It is obvious such measures would result in a further increase in prices"
Review
As we all know, one of the main factors affecting supply is expecations. When farmers expect that the price of rice is going to increase, they would withhold their supply, and wait for market forces to push their prices up till their expectations before selling it.
However, such acts cannot be tolerated as it has caused the poor to be adversely affected. Therefore, I feel that the government should provide a subsidy, especially for the lower income group, or set a price ceiling. (less desirable)
Regards
Collin
P.S: Lets get cracking
Tuesday, April 29, 2008
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