The impact of food prices on poverty has received much attention in the last few years. Food prices have shown large fluctuations in these years, after a long period when they had remained relatively stable. The demand function for food will be discussed, and a small general equilibrium model constructed, using a simple food-demand function. It will be used first to consider how sensitive food prices might be to variations in supply, and to examine the likely impact on poverty. The model will then be applied to consider the influence of poverty-reduction policies, particularly income transfers, on food prices. Food prices will be shown to rise, possibly a great deal, depending on supply response, if poverty is successfully reduced. We shall look at implications for the desirable level of transfers.