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BY LAST SPRING, RECORD FOOD PRICES HAD pushed the poorest regions of the planet to the brink of mass hunger. As the media filed reports of food riots, the United Nations hosted a food crisis summit in Rome in June. I ran into an agricultural economist I know a few days before the big event, which attracted everyone from Zimbabwe's Robert Mugabe to Robert Zoellick of the World Bank. My friend told me that the summit, for all its star (and rogue) power, worthy speeches and news releases promising billions in food aid, would cure absolutely nothing.

The market, not UN hysteria aimed at shaking down reluctant donors, would eventually fix the problem. "The best cure for high prices is high prices," he said, repeating the old economist's line.

Six months after the summit, "the market" has been discredited in many sectors. It may not even exist in some sectors any more as a crisis of another name—financial—sends banks, investment dealers, insurers and automakers scrambling for taxpayer-funded rescues. But the market we knew and loved is not dead everywhere. In the food trade, it's quietly doing its own thing and doing it rather well.

Prices for many of the world's food staples have fallen by 50% or more since their peaks earlier this year. Wheat topped out at about $13 (all currency in U.S. dollars) a bushel. By late October, it was down near $5. Corn has gone from $7.50 a bushel to about $3.75. Rice is in surplus in some countries, notably Thailand. Ditto soybeans. Palm oil has fallen by about two-thirds, to $460 a tonne.

A variety of factors helped push prices down. Oil dropped like a limestone helicopter, bringing down the cost of fuel for tractors and other farm machinery. Investment and hedge funds that plowed tens of billions of dollars into food commodities unloaded their positions, removing speculative premiums. Rainfall has returned to some drought-stricken areas. The bubble has burst on the heavily subsidized corn-based ethanol industry. The U.S. dollar rose, and commodities are priced in dollars, so as the dollar climbs, global commodity demand and prices often weaken.

But economists and analysts say the main reason food prices sank is that the market worked—surprise: High prices triggered more production. The UN's Food and Agriculture Organization (FAO) predicts world cereal production this year will climb by 4.9% to a record high, with an 8% increase in cereal stocks possible. "I think, to a large extent, we have come out of the supply bottleneck," says Abah Ofon, the agricultural commodities analyst in Dubai for Standard Chartered Bank. "We are seeing good supply responses."

Food prices now seem to be in a rare sweet spot. They're still above historic averages, meaning farmers will plant as much as they can, but not so high that hunger rates are set to spike. The crisis could return, of course. Climate change, population growth and demand for meat-rich diets in developing countries could result in shortages down the road. In the short term, the credit crunch will prevent some farmers from getting loans.

The bigger potential problem is waning farm productivity. Crop yields are rising at a slower pace than they were during the height of the Green Revolution in the 1960s and '70s. Since the mid-1980s, cereal productivity growth has been about 1.5% a year, roughly matching population growth, but not exceeding it. If population growth were to outpace productivity growth, you'd be hearing a lot more about the demographic theories of that dour 18th-century English clergyman Thomas Malthus.

The UN food summit was not an entire waste of time. It did heighten awareness about the risks of food export bans and other trade barriers. In a wishy-washy way, some summiteers warned that turning food into biofuel to fill your SUV tank may not be the smartest idea when about 900 million people, by the FAO's estimate, go undernourished.

But it missed the bigger point: The solution to high prices is to let them work their magic. No number of speeches and press releases demanding "urgent and co-ordinated action" could do what the market was doing all by itself, even as the summit tried to ramp up the fear factor.

In late October, Bill Clinton told a UN audience that the crisis showed "we all blew it, including me when I was president," because crops were treated "like colour TVs" instead of vital commodities. But why not treat rice, wheat and soybeans like colour TVs? Prices went up and more food was produced. Isn't that how it's supposed to work?