NationStates Jolt Archive

Couldn't find much about it on the Internet, but I did hear something about it on CNBC. Worldwide, food prices are on the rise, and are projected to keep rising for the next 15 years. This is do to a multitude of factors. For one, demand is rising, especially in newly rich Asian societies. They're consuming much more milk and meat, meaning that more crops need to go to feed. Another factor is the rise of ethanol as a fuel source, increasing the demand for corn. Wholesale prices in the US have already risen 8% this year, and it's estimated that the typical American family will need to budget $1000 more toward food this year.
So what does this trend mean? Discuss.

ZOMG, THE CORN!!!

Seriously, though, inflation is pretty natural, is it not?

That if wages do not catch up to compensate for the increased prices, a lot of the world's poor would go hungry.

Increases in the price of gasoline are the single driving factor in the rise in food prices.

First because of the direct effect that the rise in gas prices has had on production. It costs more to harvest, transport, store, etc. because of these increases.

Secondly, the increases in the price of gasoline have also driven an increase in the demand for corn, as corn is a good that can serve as an alternative for petroleum based gasoline in the form of ethanol. Knowing how much stuff corn goes into, the impact is immense.

That if wages do not catch up to compensate for the increased prices, a lot of the world's poor would go hungry.

Well, wages never do catch up.
http://en.wikipedia.org/wiki/Class_stratification


On the other hand, we've massively overpopulated the world as it is. If most human beings don't die off fairly soon, we'll cause irrepairable damage to the ecosystem, if we haven't already. So, hell, in the long run, this might be a good thing. Who knows?

That if wages do not catch up to compensate for the increased prices, a lot of the world's poor would go hungry.

The world's poor are largely subsistence farmers, comparatively unaffected by market prices for these goods.

They would be well advised to start growing corn, and selling it, though. The next cash crop, and this time it's a reliable cash crop to boot.

ZOMG, THE CORN!!!

Seriously, though, inflation is pretty natural, is it not?

Very. But it's been at least 25 years since food prices have seriously risen, and we are a society fed on low inflation with high growth rates. Hopefully, though, this new era of inflation doesn't spell stagflation as well.

The world's poor are largely subsistence farmers, comparatively unaffected by market prices for these goods.

They would be well advised to start growing corn, and selling it, though. The next cash crop, and this time it's a reliable cash crop to boot.
Probably not. As urbanization increases, a lot of them would actually be urban poor.

Let's see if I have this right:

If you're poor, we want you to cut back to using one square of toilet paper.
Never mind that if you're rich.

If you're poor, you already put out less than half the carbon of a rich person, but we want you to start making less carbon, while we rich people buy carbon offsets and keep living the jet set life.

If you're poor, the price of food is going to go up while we rich people burn biofuels made of your food.

I think I've got it.

Fuck the poor.

Probably not. As urbanization increases, a lot of them would actually be urban poor.

The urban poor still remain a minority amongst the world's poor. Further, it is likely that increases in food prices will have an opposite effect on urbanization. Remaining rural, where you can handle your own food needs, and possibly even make a profit if you're clever, will seem increasingly attractive amongst the LDC's.


Oh, and for some absurd reason I always think your name is Brutland am Norden...no clue why. Damn German, ruining my ability to read :)

actually China has put allot of effort into the cattle industry in subsidies etc due an increase in wealth, however these farms have been failing due to lack of demand

so milk and cheese should be doing good for awhile yet :)

http://www.economist.com/world/asia/displaystory.cfm?story_id=8929260

Fuck the poor.

Its more of a "Meh" for me

The urban poor still remain a minority amongst the world's poor. Further, it is likely that increases in food prices will have an opposite effect on urbanization. Remaining rural, where you can handle your own food needs, and possibly even make a profit if you're clever, will seem increasingly attractive amongst the LDC's.

That's true only if wages are way behind price inflation, and in developing countries, there'd be a greater need to retain workers, and thus raise wages. Personally, however, I don't think that a food price inflation spurt would last long enough to completely reverse urbanization. It sure didn't slow it down in the seventies.

actually China has put allot of effort into the cattle industry in subsidies etc due an increase in wealth, however these farms have been failing due to lack of demand

so milk and cheese should be doing good for awhile yet :)

http://www.economist.com/world/asia/displaystory.cfm?story_id=8929260

Buy up those cheese futures, my friend. Buy 'em up!

Still, there would be people that will go hungry. Call me an idealist, but I live in a "developing" country, I'm exposed to what being so poor is like. ;)

Well, I'd argue that it would make sense for the developed world to remove subsidies and trade barriers with the developing world, that would make sense.

You studying German?

Since I was thirteen :)

The urban poor still remain a minority amongst the world's poor. Further, it is likely that increases in food prices will have an opposite effect on urbanization. Remaining rural, where you can handle your own food needs, and possibly even make a profit if you're clever, will seem increasingly attractive amongst the LDC's.


Oh, and for some absurd reason I always think your name is Brutland am Norden...no clue why. Damn German, ruining my ability to read :)
Still, there would be people that will go hungry. Call me an idealist, but I live in a "developing" country, I'm exposed to what being so poor is like. ;)

You studying German?

Buy up those cheese futures, my friend. Buy 'em up!

Who'd ever think that the agricultural sector would heat up again? Or that farming would become sexy?

That's true only if wages are way behind price inflation, and in developing countries, there'd be a greater need to retain workers, and thus raise wages. Personally, however, I don't think that a food price inflation spurt would last long enough to completely reverse urbanization. It sure didn't slow it down in the seventies.

This rise in food prices is far more complex, global and permanent than the effects of the seventies.

This rise in food prices is far more complex, global and permanent than the effects of the seventies.

Probably. But it won't take the market another century or so to respond to this. Food prices won't rise forever.

Well, I'd argue that it would make sense for the developed world to remove subsidies and trade barriers with the developing world, that would make sense.
Agreed. But in practice, it has been the other way around.

Since I was thirteen :)
The only thing I know in German is Scheiße.

Food prices are very low - we spend a tiny portion of out income on food. A century ago, food used to be very large portion of our income.

The major reason why corn is expensive is not because of natural supply and demand, but because of the absurd subsidies for growing and using corn which greatly distorts the market. End all food subsidies and trade barriers and you will see greater food security for the whole world as production becomes more decentralized and restructures to fit actual consumption.

The statistics showing a significant increase in the cost of food in developed nations arise from the growing specialty markets with organic foods. Bulk food commodities are cheap as dirt.

The major reason why corn is expensive is not because of natural supply and demand, but because of the absurd subsidies for growing and using corn which greatly distorts the market. End all food subsidies and trade barriers and you will see greater food security for the whole world as production becomes more decentralized and restructures to fit actual consumption.
That's probably true. It may not be enough to end long term trends, though.
The statistics showing a significant increase in the cost of food in developed nations arise from the growing specialty markets with organic foods. Bulk food commodities are cheap as dirt.
That's somewhat true. In the US at least, less healthier foods are also less expensive. Then again, one has to budget that against longer-term costs, such as healthcare. Personally, I admire the Japanese diet. It may be expensive on a week-to-week basis, but given their longevity, I think it's worth it.

At the same time, the EU pays farmers to grow rapeseed, and the UK pays farmers to grow nothing.

EU's subsidies messes up the entire agriculture industry. It is impossible for farmers to survive without focusing their energy on sucking up as much subsidies as possible because the ones who gets the most money from EU can sell their goods the cheapest and knock out the rest. So the farmers are forced to tailor the agriculture industry after subsidies instead of after the market's demands.

Despite the tons of paperwork and bureaucracy around EU subsidies they're still not as accurate and stable as the market would be. Farmers could be forced to change their entire business overnight if a policy changes. Or they could be forced to keep producing something the market doesn't want, for example France is still producing a lot more wine then there is demand for.

The problem reaches outside of EU too. Subsided farmers in rich EU countries export food to poor countries outside the union cheaper then the poor can produce it. That drives poor farmers out of business and makes them dependent on that EU keeps paying much more expensive farmers to export food to them below production cost.

Let's see if I have this right:

If you're poor, we want you to cut back to using one square of toilet paper.
Never mind that if you're rich.

If you're poor, you already put out less than half the carbon of a rich person, but we want you to start making less carbon, while we rich people buy carbon offsets and keep living the jet set life.

If you're poor, the price of food is going to go up while we rich people burn biofuels made of your food.

I think I've got it.

Fuck the poor.

isnt that the way the rich have always treated the poor?

Being one of the few farmers on here,

There are very few subsidies left in the US and I'm for removing all of them but those left are designed to pay the richest of the rich so they aren't going to be removed under the current leadership. 10% of the "farmers" get 90% of the money.

Ethanol has little to do with a rise in corn prices. After the ethanol is produced the remainder goes to feed. And the feed is actually more digestible than pure corn.

Fuel prices have caused an increase since nearly all food is transported by truck. The US basically destroyed the rail road industry in favor of trucks so we are stuck with few options.

Prices at the farm level have changed little in the last 10 years.

The number one cause of food inflation----There is no competition. Over the last 25 years the number of companies handling grain has shrunk to 3. The number of companies handling the bulk of meat has shrunk to 4. Just like in all of the industries that have been allowed to form virtual monopolies in the last 25 years, the agricultural industry can pay the farmers little and charge a lot. This is the legacy of "deregulation".

Well, wages never do catch up.
http://en.wikipedia.org/wiki/Class_stratification


On the other hand, we've massively overpopulated the world as it is. If most human beings don't die off fairly soon, we'll cause irrepairable damage to the ecosystem, if we haven't already. So, hell, in the long run, this might be a good thing. Who knows?

The problem is that increased food prices will only kill off the poor and they aren't polluting that much anyway. The people who are pumping out the most pollution probably won't even notice the price rises.