Food Economic Forces

Today I read:

Constant improvements in technology, mechanization, plant breeding and farm chemicals have steadily increased food production per acre, and for the last 30 years led to a world that we assumed would be awash in cheap food.

Yet world prices for wheat, corn, rice, soy, coffee, cotton, dairy products, meats, fruits and vegetables have suddenly reached record levels. Why now?

The answer starts with

  • the half-billion new middle-class consumers in
  • increasingly wish to emulate the rich diet that
  • Westerners take for granted. And
  • they have the cash to buy the food they want
  • on the world market.
  • Despite slowing growth rates, world population
    • is nearing seven billion people and
    • may reach nine billion mouths in less than 40 years.

In addition,

  • increases in the cost of oil have sent
    • diesel fuel,
    • fertilizers and
    • farm chemical
  • prices sky-high. Those added costs are now being passed on to consumers.
  • [Forces] continue to cut back arable acreage[:]
    • Environmental regulations,
    • water scarcities and
    • urban development.
  • Constant improvements in
    • Technology and
    • machinery
  • now only marginally improve on past serial leaps in production.
  • More than one-fifth of the American corn crop is now devoted to ethanol.

In short, the era of cheap food, like the age of cheap gas, may be about over.

The result is a growing revolution in the way we envision the economics of agriculture, and it should be reflected in the efforts of all nations to ensure much freer trade in food.

Source: Op-Ed Contributor – Harvesting Money in a Hungry World – Op-Ed – NYTimes.com, content reorganized, esp. paragraphs split into bulleted lists, by jcarroll.

So, what should we do?

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One comment on “Food Economic Forces

  1. David says:

    Fantastic. Another analysis of the world situation which justifies one world government. Don’t be fooled. When people talk about free trade, they are talking about a unified government. The less borders are important, the less power local government has and the more power goes to the ruling body which covers all.

    Changes in prices like this is a natural and healthy part of a capitalist society. Prices go up, encouraging and funding innovation. Soon enough someone invents something new to solve one of the problems you’ve listed, and prices come down, or at least stop rising while inflation catches up.

    Ethanol usage is a fad, IMHO. There are other technologies on the verge of breaking out on the open market which I believe are being funded indirectly by high fuel prices. These include, but are not limited to:
    Improved desalinization which could, in a few years, be used on a scale large enough to supply Los Angeles with at least half its water.
    Improvements in solar technology, which should reduce the cost to benefit ratio enough to allow the middle class to purchase solar panels for the homes and medium to large businesses to see a cost savings to having their own solar power.
    A major breakthrough in finding a catalyst to separate hydrogen and oxygen in water. This could easily lead to powering the homes of the middle class using a micro-power plant the size of an air-conditioner to power their house at a minor fraction of the cost of current energy prices.
    Alternatively powered vehicles, such as the air-gas hybrid car, slightly larger than the SMART car which will get more than 100 miles to a tank of gas.

    People making these dire economic forecasts ignore the possibility of new inventions and changes in thinking and policies. The best part about a capitalist society is that the mighty dollar funds research in the areas that society is having a problem with. Yes, times are tough. But solutions to the problems listed are on the way. The only problem you listed that won’t be corrected naturally is the restrictions by the government on how much farmland we aren’t allowed to use.

    David

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