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The Forum > Article Comments > An economist's questions on food ... > Comments

An economist's questions on food ... : Comments

By Bill Richmond, published 17/6/2008

What are the political and economic factors behind the inability of some people to obtain sufficient food?

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Every time I read that grain is being sold to produce bio-fuels, not feed the hungry, I wonder at the logic behind such comments. Grain throughout history has been sold to the highest bidder. The bio-fuel industry does not deserve a whipping. Neither does the farmer who has chosen to sell his grain for that purpose.
At this moment in the Phillipines, there is a shortage of rice and the price has risen, but the farmer who grows the rice is not being paid more than previously.
Farmers are always price takers, not price makers. If we are prepared to pay more for grain as food, it will be sold to us rather than for bio-fuels. Furthermore, if the price is right, there will be an incentive for farmers to grow more grain for both food and bio-fuel.
Posted by Country girl, Tuesday, 17 June 2008 9:51:19 AM
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Country girl, it seems to me a little more complex than you opine. If you have not the money to buy the grain or cereal for food, what do you think these people or economies will do?
Posted by Q&A, Tuesday, 17 June 2008 10:59:20 AM
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Of course it is more complex. But, before we have food for sale, we must have farmers growing and selling the food. During the past fifty years farm income has not kept pace with other prices which has been the main reason both in Australia and overseas that the population is becoming increasingly urbanised and unable to produce their own food. I don't believe in offering subsidies to farmers, just a price incentive to produce. How that then translates into feeding the starving is another issue. In Australia it is called welfare. Are Australians, as tax payers, willing to assist the developing nations to receive and distribute food supplies? Much more food could be produced in Australia if there was a price incentive to grow it.
I believe what the writer of this article says is pertinent.
But, as Jesus said, "The poor will always be with us." Two thousand years of history hasn't changed that situation. The issue is poverty, not the price of food.
Posted by Country girl, Tuesday, 17 June 2008 11:38:35 AM
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There have been a number of articles on OLO of late around the current "Food Crisis". I have need seen any hard evidence that there is a food crisis, ie there are a lot people eating less than at any time in the last 50 years or so, but I suppose there must be one as everyone keeps talking about it.

We have now seen two articles - this one and the one yesterday by Mick Keogh, that say the food crisis could be fixed by improving governance in countries like Africa and Myanmar. I can't argue with that. Africa in particular has a lot of land, and if the got their act together they could produce a lot of food.

The trouble with this argument is that as far as I can remember some parts of the world have always been dysfunctional. If anything, it seems to me that over the decades whole world wide governance is getting better - not worse. And yet the current food crisis apparently runs deeper any in my lifetime.

If this food crisis is indeed unique, then it is not because of poor governance in some countries. The real problem is somewhere else. To me these noisy ruminations about governance issues seem as useful as having an argument on the Titanic about where to place the deck chairs while the hole below just keeps growing.

In the case of these articles on OLO, it gets worse. There doesn't seem to be any suggestion that our own agriculture is poorly run. Our deck chairs are apparently neatly lined up on the part of the ship that will go down last. Instead we are arguing about where other people should place their deck chains. These people haven't listened to us in the past century, and aren't about to now. It's all a bit surreal.
Posted by rstuart, Tuesday, 17 June 2008 11:49:25 AM
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Aside from the distributional aspects of food production, there are looming factors that must affect the total supply. First is oil depletion; it is thought that for every calorie (or kilojoule) of energy in food ten times as much energy is input as fertiliser, tractor tillage, processing and transport. Crude oil production is declining about 4% a year and gas to make nitrogen fertiliser is in heavy demand for other uses.

The second factor is rainfall decline or variability. The Queensland floods a few moths ago barely made a dent in the low water levels of the Murray Darling system. That suggests the MD basin irrigation industry could be finished. Desalinated water will be too expensive and wastewater is limited. Overseas there are problems with declining snowmelt and river diversion. The typhoon in Burma brought too much rain for a normal growing season. Yet these problems look set to get worse, not better. Couple that with population growth and the task of producing adequate food in total becomes harder, let alone sharing it equally.
Posted by Taswegian, Tuesday, 17 June 2008 2:21:41 PM
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The failure of governance cannot be underestimated. Consider the economic mismanagement of nations such as North Korea or Zimbabwe.

Both Europe and the USA pay enormous subsidies to their farmers, in effect rewarding inefficient farm practices. At the same time, they block imports from efficient farming countries such as Australia and, more importantly, block developing nations from accessing their markets. Opening up these markets would generate enormous opportunities and incentives for greater food production world-wide. And it would also assist in reducing poverty.
Posted by ed_online, Tuesday, 17 June 2008 7:08:40 PM
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