Tuesday, March 15, 2011

The Great Food Crunch by Robert Samuelson.

Here's a question about the Mideast turmoil for future historians: How much did food inflation contribute?

The global food squeeze is a great uncovered story. For now, high prices and short supplies have enriched American farmers, with exports and incomes soaring. But bad harvests this year could overwhelm tight markets and cause panic buying. If nature and technology don't restore a better balance between supply and demand, the consequences for human suffering and political conflict could be fearsome.


Anonymous said...

"China imported 1.57 million metric tons of corn last year, an 18-fold increase on year, the General Administration of Customs said Friday, confirming semi-official statistics released earlier this week."


As rural workers in China moved to the cities in search of better-paying factory jobs, agricultural output began to decline.

Flush with money from American consumers eager to purchase cell phones, laptop computers and flat panel TVs, China used their trade surplus reserves to bid up commodity prices, of which cereal grains are a large component.

Bernanke's "quantitative easing" did not succeed in making American manufacturing exports more competitive; it merely pushed up world-wide commodity prices and fueled the fires of unrest in the Middle East.


Dick's Dad said...

I keep in close touch with the local farmers.

The prices they've been getting over the past year have only got back to the same number of pounds as they were 20 odd years ago.

Everything else has inflated two or threefold since then.

Yes farm incomes and farm gate food prices have gone up recently, but they've been depressed for about two decades.

Putting 40% of US maize into biofuel doesn't help world supply,

But I think a lot of the price rises we are seeing, are due to the value of money declining against an internationally traded item.

I've been comparing prices of goods with friends who are working in China, and everything except fuel is more expensive there than in yoyoland (€uroweenie land).

The reason yoyoland and the US are seeing mild inflation is probably because printing of money is going faster than the deflation we're actually having.

You are right to worry about food security though. Almost every country apart from China has assumed that the can just import food.

The UK agriculture ministry (DEFRA - or "Deathra" to its friends) has just issued its latest 5 year plan. It doesn't mention the word "Agriculture". Just a little foolish for a country that has imported food since the 18th century

I put the trouble in the middle east down to the phenomena of: "Peak Moslems"

Check out the average IQ of inhabitants of those countries.

They are under performing badly, even when compared to non moslem countries with similarly low intelligence, and they have not limited their population growth in the way others have.

jjet said...

As I understand it, as part of the "austerity" measures imposed on Egypt (+Tunisia?) by the IMF, both countries were to stop the supplemental payments used by their citizens to pay for food.

That was the tipping point.

Lenin said food is a weapon.

Didn't the FedGov pass the Food Safety and Modernization Act which will require an FDA license to plant and grow food?

As Mike would say, "Do you understand yet?"