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Topic:
The end of cheap food
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Jabbadabbado
Registered:
Mar '99
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Date Posted:
4/16 12:39pm
Subject:
RE: The end of cheap food
- Date Edited:
4/16 1:17pm (1 edits total)
Edited By:
Jabbadabbado
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But wouldn't increased consumption help an economy recover from the recession faster?
In the case of food stocks (grain storage) and energy, there is very little spare capacity in the entire global system. The reason prices are increasing is because capacity cannot otherwise expand quickly enough to meet growing global demand.
Decreasing consumption is the key to creating spare capacity, just as Espaldapalabras noted. There is a tremendous amount of inefficiency and waste in the global food production and distribution system, and it's not the kind of problem that "allowing the markets to work" will fix. Global free markets are not designed to feed everyone, they're designed to maximize profits.
With energy, perhaps it's less critical that everyone have access to petroleum and other forms of modern energy. But as with food there is an incredible level of inefficiency and waste in global energy production, distribution AND consumption. Energy conservation is the key to freeing up energy supplies. In this case, markets can play an important role by rationing energy through pricing mechanisms.
More news from Bloomberg:
Kazakhstan, the world's fifth-largest wheat exporter, banned shipments of the grain until Sept. 1 to control domestic prices for bread and other foods.
First rice, now wheat. You can see governments starting to panic. The exporters are panicking. And that means the importers must really be panicking.
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Jabbadabbado
Registered:
Mar '99
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Date Posted:
4/17 9:05am
Subject:
RE: The end of cheap food
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A map of recent food riots. It's incomplete, but still gives a sobering picture of the results of high food prices.
A lot of Americans could absorb a doubling of food prices without much hardship. We eat a lot of processed crap, so the actual underlying cost of the staples that go into what we eat is not necessarily the main price component. In some cases, the packaging our food comes in costs more than the food.
Not so for people who live on rice, or corn and beans, or wheat. What probably isn't terribly surprising for people who have been in the developing world is the razor thin margin between eating and not eating. Even in South Africa:
Many South African pensioners are on the verge of malnourishment and starvation because of escalating food prices and can no longer afford even basic items, old age associations and consumer groups have warned.
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Tactic_Thrawn
Registered:
Jul '06
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Date Posted:
4/19 5:11pm
Subject:
RE: The end of cheap food
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From a fairness point of view, subsidies in the developed world should stop. France's action to provide food aid--while still refusing to end subsidies--was infuriating. The United States should stop subsidies, too. At least in the area of cereal grains. Those subsidies have retarded agricultural growth in developing countries because they've been flooded with cheap, subsidized food from the developed world. The ECONOMIST has been making a lot of valid points on this topics for the last few issues.
And even the ECONOMIST, which--although they try to dress it up with a little altruism here and there--is a pretty bottom dollar publication, and they're advocating massive (+$700 million) so that people don't starve to death.
This is sort of deja vu(ey). In the 1930s, the stock market crashed, but even then the economy didn't completely collapse. That was a result of the stock market crash and the Great Dust Bowl, when much of the Great Plains' topsoil blew away and crops failed almost simultaneously, putting farmers out of work and driving up food prices.
Now, the housing bubble bursting and the credit crunch might not collapse the global economy, but those two in conjunction with this new driving up of food prices, does pose a great threat to the global economy and globalization.
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Espaldapalabras
Registered:
Aug '05
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Date Posted:
4/19 7:17pm
Subject:
RE: The end of cheap food
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The interesting development has been in biofuels created by our food stocks. What was formerly only a national boondoggle of epic proportions is now a weapon of mass starvation.
Unfortunately I don't think we will be able to value the lives of hundreds of millions of people around the world more than the economic prosperity of 30,000 farmers in Iowa due to the current political landscape.
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Princess_Tina
Registered:
May '01
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Date Posted:
4/20 9:00am
Subject:
RE: The end of cheap food
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Espaldapalabras posted:
Unfortunately I don't think we will be able to value the lives of hundreds of millions of people around the world more than the economic prosperity of 30,000 farmers in Iowa due to the current political landscape.
Yes. Unfortunately, for the congressmen whose constituents include all the Iowa farmers, their votes are more important than the lives of hundreds of millions of people around the world. 
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Jabbadabbado
Registered:
Mar '99
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Date Posted:
4/20 10:56am
Subject:
RE: The end of cheap food
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To be fair, not everyone saw this coming. True, there have been several years of warning about lower grain stock levels, but the Australian drought had a sudden and severe effect on top of the latest ethanol boom.
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Jabbadabbado
Registered:
Mar '99
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Date Posted:
4/22 12:29pm
Subject:
RE: The end of cheap food
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An interesting expected result of all the recent media stories of an impending food crisis: hoarding behavior. We might see some of this with gas this summer as well.
Costco CEO says demand rises for rice and flour
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Jedi Merkurian
Title: Games: RPG d20 GM
Registered:
May '00
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Date Posted:
4/29 11:39am
Subject:
RE: The end of cheap food
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Here's one about the ripple effect corn subsidies (along with other thingss) are having on wheat prices.
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Jabbadabbado
Registered:
Mar '99
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Date Posted:
4/30 8:24am
Subject:
RE: The end of cheap food
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Yet one more proximate cause of the food crisis: the Washington Consensus. The article skims the issue of how IMF and World Bank policies promoting globalization and trade liberalization undermined the agricultural independence of the developing world, while noting that there are many causes of the current crisis.
The list of causes:
-drought
-international monetary and trade policies
-the logistics of food aid
-the price of oil
-biofuels
-population growth
-growing demand caused by Chinese and Indian wealth
I would add to that:
pressure on the oceans as a food source - we're at/near/or past the global peak of calories available to the human population from sea food.
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Rogue_Follower
Title: Manager: Literature
Registered:
Nov '03
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Date Posted:
5/9 12:31pm
Subject:
RE: The end of cheap food
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And of course there are natural disasters, like cyclones.
I just heard on the radio today that the recent cyclone in Myanmar/Burma will impact the country's rice crop, with many rice paddies full of saltwater. Though this will certainly affect the local population, it could also drive up global rice prices even more. We'll see how this goes...
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