The power of incentives

A couple of news stories today help illustrate some of the more unexpected consequences of the vast price rises some commodities have experienced over the past few years—caused largely by increasing demand in the rapidly growing countries of the developing world. The New York Times reports that enterprising thieves in Leicestershire have been stripping rural churches of lead strips in their roofs. The motivation for these bizarre acts of theft is the sky-high price for lead on global markets; the metal is now worth seven times what it was just six years ago. (I'm reminded of a similar story a few years ago about a sudden epidemic in manhole cover theft in Britain and Ireland at a time of soaring prices for cast iron. In fact, a quick Google search reveals that the activity now seems to have spread to the US and Canada—and even to China.)

But more cheery news emerges from Helmand province in Afghanistan (now there's a sentence you don't read every day). Con Coughlin, the Telegraph's man in Helmand writes on his blog that high prices for wheat have succeeded where Nato troops and the Afghan government have failed: in getting Afghan farmers to stop growing poppies, which are of course used as the basis for heroin. As Chris Haskins wrote in Prospect a few months ago, wheat prices have risen rapidly in recent years, caused partly by poor harvests and partly by a growing turn in developing countries towards the western diet. Now Afghan farmers want their share of the pie. And so while the spectacular rise in global wheat prices may raise the spectre of a "Malthusian crunch" in years to come, at least in the short term it's weaning Afghanistan off its poppy addiction.