Home > Miscellaneous > Gin, politics, and the price of grains

Gin, politics, and the price of grains

On the Agricultural Biodiversity Weblog, Jeremy Cherfas points us to the nice story that at the beginning of his regency the English King William III sought to gain the support of the land-owning aristocracy by keeping the price of grains high. A means of achieving this was the deregulation of distilling, which then led to the famous English 18th century gin boom.

Those who know a bit the political economy of biofuels and the debate on the impact of biofuel policies on food prices may be as quick as Cherfas to draw the parallels to this contemporary phenomenon.

But biofuels aside. Cherfas raises the interesting question whether the demand for grain for distilling has had any impact on food prices in the 18th century? Let’s have a look:

Bild

The graph shows the prices of Barley, Rye and Wheat in England from 1650 to 1720. The vertical black line roughly marks the deregulation of distilling by King William (1689 is the date I’ve found after some superficial online search).

What we can observe is that grain prices were declining since the mid 1670s. And indeed, after the deregulation of distilling, this negative trend is reversed and prices started to rise and continued doing so for the following ten years.

Well, as things look like, the price rises have been really substantial. The question is whether drinking alone can cause, say, wheat prices to more than double. It may be more conceivable that 250,272,812 motor vehicles in the US and even more elsewhere running on ethanol blended fuel drive up corn prices …

(Amendment: Many thanks to the International Institute of Social History for making the price series available.)

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  1. 11/01/2013 at 3:34 am

    Thanks for running the numbers Ulrich — and for the link to GPIH, which I was not aware of. You do seem to have shown a rise in cereal prices after the liberalisation of distilling. Now to add yields (which I believe were high in the 1690s) and bread prices, if I can find them.

  2. Ulrich K.
    11/01/2013 at 8:17 am

    It would really be interesting to have a look at the yields. But even if we find rising or constant yields (i.e. no supply side pressure on market prices) we might still be left with the problem of attribution of the price rises to distilling. The measure might have been only one part of a broader protective policy package. Like, for example in the common market organization for wine of the European Union, where distilling is one of several measures of market price support.

    Would be great to have an expert in the history of agricultural policies…

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