Feed The World. Let It Trade.

Forbes ^ | 5/6/2008 | Joshua Zumbrun,

[bruinbirdman]

There are "seven meals between civilization and anarchy," says Josette Sheeran, executive director of United Nation's World Food Program. What takes those meals away, driving citizens to base needs and destabilizing countries? Growing demand, changing diets, weather disruption and, sadly enough, restricted trade.

There has been little good news for food relief. A forecast today from Goldman Sachs said oil prices could rise to $150 to $200 per barrel in the next two years--dramatically driving up the price of producing and transporting food for the foreseeable future. The rising price of oil makes ethanol and other biofuels more viable, furthering increasing purchases of food to be used as fuel, and driving up prices.

~snip~

For many of the world's poorest, the crisis is moving to its second and most desperate phase. Spending on health care and education has stopped, their few assets have been sold and even the prices of less nutritious foods are rising.

Existing trade policies haven't made things any easier. So far this year, some two dozen countries, from Argentina and Bolivia to China and India to Russia and Ukraine, instituted export restrictions or food price controls. These restrictions echo the continuing failure of leading economies to negotiate lifting restrictions through the Doha Round of trade talks, largely over disputes of agriculture policies.

The effects of export controls do not necessarily help domestic markets either. In Argentina, for example, the government introduced a tax on many agricultural exports. In addition to raising the price internationally, farmers withheld supplies in protest, as their smaller domestic market could not consume all they produced and, internationally, the export tax made it difficult to compete. The tax reduces the farmer's incentive to produce, ultimately reducing their agricultural output and exports when the world desperately needs increased supply.

[bruinbirdman]

""I think the world can produce enough food," Sheeran says. The question is, will its leaders allow it to be shared?"

[smoketree]

But the most important thing is that the frozen arctic is left pristine. Even though noone ever goes there.
Better that people starve and economies are ruined than drill a few oil wells.

[bruinbirdman]

The theme of the article is really capitalist free enterprise under the rule of law with fair trade.

I would like to see a list of countries suffering comparative hyper food inflation. Remember, these basic commodities are super cheap because of subsidies. The new price would be super cheap to westerners. (Well some Italians are complaining and East Europeans.)

Note, the countries suffering are those that subsidize staples, basic food stuffs. Commies, socialists, dictators, authoritarian dictatorships and oligarchys all, no free enterprise. That would include Mexico for god's sake!

Unfortunately, revolutions caused by lack of basic human necessities usually turn out poorly.

yitbos

[familyop]

I don’t know how countries with fears of near-future food shortages will be talked into dropping export controls, although it would be nice to see Chinese prices in general go up more. ;-)

It’s an interesting and somewhat strange article. It seems that import taxes and other restrictions have been historically entered in more international complaints (unfair trade and the like). Are some interests perhaps fearing that we in America will do more agriculture and agricultural exports again? Former farming areas of states like Kansas have been largely vacant for a long time because of high property taxes, anti-farming rumors and enticements leading to foreclosures (loans for unnecessary and expensive items).

As for oil prices, it’s likely that international trade will slow down for us, unless we drill in hitherto forbidden fields (for examples, near certain expensive coastal neighborhoods in California and Florida) and re-rural-ize and stabilize more businesses (for shorter drives to work).

[familyop]

"Note, the countries suffering are those that subsidize staples, basic food stuffs. Commies, socialists, dictators, authoritarian dictatorships and oligarchys all, no free enterprise."

...agreed. Notice also, the lessening of encouragements of ingenuity and agriculture in small operations in the West over the years. We need to find out to greater depths as to really who has been funding and instituting certain socialist programs and other discouragements against small businesses that could eventually become larger (and thus, present domestic competition).

IMO, if we don't correct our ways, we can look closely at some of those communist countries to get an approximate picture our own future.

[CarrotAndStick]

 

Note, the countries suffering are those that subsidize staples, basic food stuffs. Commies, socialists, dictators, authoritarian dictatorships and oligarchys all, no free enterprise. That would include Mexico for god's sake!

Farm subsidies, in million US$.

[CapnJack]

“A forecast today from Goldman Sachs said oil prices could rise to $150 to $200 per barrel in the next two years”

What Golden Sacks really meant was ....
“A request today from Goldman Sachs to oil producers, to raise oil prices to $150 to $200 per barrel in the next two years so they can make a bundle of money”

There, that more like it.

Every time I here some “analyst” predict oil to be some outrageous prices in the next year or two,I can't help thing this guy must be loaded with oil stocks and is just helping himself.

Am I wrong?