Unless you've been living under a rock like President Bush the past few months, you know that food prices have been skyrocketing. Wal-Mart and Sam's Club have even been rationing items like rice in their stores. "No more rice for you!" As for causes of the problem, Latin American leaders blame capitalism and parasitic speculation, while promising to grow more food. However, growing more food may not be the answer as outlined in this article. Some even blame the ethanol craze for leading to high prices. Others blame failed governmental policies.[ This problem is more acute for poorer nations. Haitians have been heading for the seas and fleeing due to a lack of food. Afghans have been protesting as well.


Questions for debate:

1.)What is the primary cause of the rising food prices?

2.)What initiatives should be implemented to help consumers?

1.)What is the primary cause of the rising food prices?

All of the above?

First off, the ethanol "craze" has caused a pretty sizable bump in demand for corn, especially. More demand = higher price for a freely traded good. As price for corn rises, people seek alternatives, such as rice. So rice prices jump as well.

Meanwhile, mismanagement and poor infrastructure in food growing nations, such as India, causes crops to rot in the field. India's idiotic need to micromanage the economy leads to them banning exports on rice and wheat flour.

Thirdly, the price of all commodity goods throughout the world are rising, largely caused by the negative real interest rate that currently exists in US T bills. No use buying a guaranteed money loser, so why not buy a more profitable, yet safe, investment like a commodity such as corn or rice. This demand raises the price of food.

This really is a confluence of several factors.

2.)What initiatives should be implemented to help consumers?

A worldwide communist government that is run by, and for, "peasants" and "workers". Price controls, food subsidies, the whole nine yards.

Actually, because this is a combination of factors, one solution is not going to work. What is needed is to tackle the individual problems that lead up to this end result. It's the old addage: "How do you eat an elephant?" "One bite at a time."

1.)What is the primary cause of the rising food prices?

The primary cause is simple enough - the declining value of the US dollar. As Amlord pointed out, demand has increased which would certainly affect the price, but I doubt that the demand has grown at such a rate that it would affect the prices as much as the currency. The currency and commodities always go in opposite directions. The dollar is going down and investors are looking for something safer and stronger. Its the same reason oil and gold are at record highs.

2.)What initiatives should be implemented to help consumers?

Capitalism

Except that food prices (and indeed, all commodity prices) have increased relative to the Euro as well. The Euro has also been increasing in value as the alternative reserve currency to the dollar. So I don't think the weak dollar has much to do with global food prices.

I tried to get some discussion going on this issue several weeks ago in THIS Forum but only Amlord posted a response which I failed to see at that time.

Amlord is right, it is all of the above and more! I differ profoundly in how he characterizes the importance or different causes, however. Supply and demand is of key importance but all kinds of things effect supply and other things effect demand. Historically, western governments have subsidized their farm sectors heavily. This produced huge surpluses. To reduce surpluses, pressures were exerted though the World Bank and IMF to open 3rd World agriculture markets so that western subsidized grains drove many indigenous farmers out of business or into alternative cash crops like flowers. (Haiti for instance use to be self sufficient in rice and now produces very little). Meanwhile the surpluses disappeared partially because of weather such as the drought in Australia, partially because of grain demand for bio fuels, partially because of increased demand for meat by the populations of China and India, and also because of growing populations around the world.

In the immediate term, aid has to be provided to the really poor so they can stay alive. In the intermediate term, Western countries need to address their trade polices to help reestablish indigenous food production. They also need to make sure future bio fuels are produced from non food sources and without destroying rain forests. In the long term, however, we have to face the fact that food production is limited by the availability of land and water. This limitation is made worse by climate change.

Just some more food for thought*... As we speak the Federal Government in Canada is paying Hog farmers to kill their breeding stock and decrease future supply of pork. Why you ask? Because the price of grain has doubled and demand for pork has not. Seems like an odd circumstance during a looming food shortage...

The food economy is complicated, there are numerous factors behind every fluctuation in price or supply. The fact is that high food costs are caused by many things being mentioned here (and elsewhere). In addition to the factors mentioned by Amlord there is the increasing cost of transportation (gas costs $4.50/gallon here), a global increase in protein-rich diets (cattle, which requires an increase in grain diversion), prohibitive trade problems, geopolitical conflicts, etc. As correct as Amlord is in identifying the problems, his solutions have more to do with ideology. Export bans may lead to the destruction of crops, but where nations fail to act there is the real risk of food-riots and further instability in the food supply. I don't mean to condone protectionism, but it is a symptom and not a cause in this circumstance.

There are several ways out of the current morass. Prices have been artificially low for over a decade, so the era of cheap food may have ended, but shortages are not necessary. They can be prevented or seriously mitigated by doing the following:

1. Stop burning food for fuel
2. Stopping agricultural subsidies (which act as price controls)
3. Stop aid programs which prevent indigenous production (I'm looking at you USAID)
4. Conserve fuel (the less we consume driving H3's the cheaper it is to haul a load of tomatoes)
5. Work to mitigate global political instability (this increases the price of fuel and destabilizes food markets)
6. Start devaluing meat-heavy diets
7. Stop wasting food (trite, I know... but mother was right)

* Come on... it's been ages since I've made a bad pun. It had to be done.

It's funny how H3's are always the target of liberals when it comes to so called harm on the environment, but you could have just as easily named a Nissan Pathfinder, which has the same fuel economy as a Hummer H3.

I know though it's easier to hate on the H3 cause it's an American SUV and we all know it's all the United State's fault for global warming and food shortages.

I think the main cause is by far the Ethanol craze.

Here is a great story by John Stossel on Ethanol from 20/20: Link to Video

I choose the other option becuase (as has been said) its a bit from all the above (except maybe the Ethanol). The economy isn't helping in the least. With energy costing more then the price to do all kinds of business gets effected. The increase on the cost of business gets passed on to the consumer. Rising prices in gas means it costs more to get the food to us. Subsidies don't help either. Personally I don't think ethanol has much to do with it. Ethanol isn't that widely used or produced so while it does take some resources I just don't think it takes enough to be that big a problem...though I could be wrong.
<Tin Foil Moment> It could be that prices in energy, gas, and food are rising to see how far the envelope could be pushed. If gas goes to 4 bucks no problem for big oil if American make due. If food rises no problem if it still gets bought. So you keep raising prices to find the price Americans are still willing to live with or tolerate.

It's funny how H3's are always the target of liberals when it comes to so called harm on the environment, but you could have just as easily named a Nissan Pathfinder, which has the same fuel economy as a Hummer H3.

You can stow the indignation... the Pathfinder is built in the States too. I pick on the H3 not only because of its fuel efficiency, but pictures like this.



People don't realize how much corn is needed to produce one gallon of ethanol. Some estimates have up to one third of non-animal-feed corn being diverted to ethanol production.

The answer to your question removes a significant amount of corn from the system. I expect the outcry in the next 12-18 months to be enough to divert existing ethanol production to cellulosic though that will really cut volumes until the process is perfected. Once it is than things will be significantly easier. The point is this is not a full answer and at best may constitute around 10% of the solution because ethanol production uses a large amount of potable water.



1.)What is the primary cause of the rising food prices?

A little bit of everything. If I had to pick a singular reason I would say that have the two most densely populated countries in the world change their diets and demand wheat grains and meat to be a significant factor.

2.)What initiatives should be implemented to help consumers?

The obvious answer is to remove artificial demand by cutting back biofuels. This might create enough of a demand loss that it might pull out some of the hot money speculators. The longer term answer is a restructuring of the highest uses for grain. In this case it means turning t-bone steaks, and most beef products into a luxery item. Reducing cattle feeds is an important part of freeing up grains. Unfortunately any further population growth or reduction in fertilizer usage resulting in lower crop outputs will put us back to square one. We're at the point where helping one group of people may come at the expense of another, especially if population growth continues and arable land decreases.

1.)What is the primary cause of the rising food prices?

The obvious answer to this is the rising cost of transportation. Think of it this way -- it's making for a richer gas/oil industry because not only do you have to get around, so does your food.

2.)What initiatives should be implemented to help consumers?

Alternative energy now!

Ethanol is only a part of the answer, and it is more of a bandaid than an answer. Think cheap electricity from the sun and from geothermal generation. We really should keep our nuclear generation 63 million miles away from the earth.

Steeply rising food prices were also common in the 1970s. What was going on then? Oh yeah, the oil embargo. You had your horse meat that was tried (failed), the juicy burger (half soy protein, not too bad, a tad sweet), cellulose filler in bread (like sawdust), and a slew of food co-ops that bought in bulk, so you had to take your own containers/wrappers when shopping. Those became yuppie-fied in the 1980s.

I'm glad that I've got six healthy high-altitude tomato plants going in the solarium. Yes you can grow some of your own food. Beans and rice make for good protein, not a bad substitute for meat. Eggs make a real good protein source.

In other words, people will do what they can to keep food on the table and within budget. It's too bad that the price of a loaf of bread is tied so closely to oil. It's less as close if you bake your own.

Another thing that can use more development is hydroponic farming in greenhouses all year around. Stop importing produce from S. America.

1.)What is the primary cause of the rising food prices?
Besides the diversion of farmland to ethanol production and the falling dollar, the rising cost of of oil can also be blamed as well.
We must not overlook the cost of oil in this. The fuel for running the giant tractors, the giant harvestors, the fertilizers and pesticides, and the fuel for shipping the food over to the supermarkets is most likely the biggest culprit.

2.)What initiatives should be implemented to help consumers?
First off, as the other posters have pointed out, the Government must stop subsidizing ethanol. I heard that if you filled up your gas tank with pure ethanol, the amount of grain required to produce that ethanol would amount to a 1 year supply of breakfast cereal. Obviously, the middle class would choose breakfast over their gas tanks.

Second, there is the issue of rising fuel costs, which is not going away. The days of the 1000 mile Caesar Salad are going to come to a close at some point. Food will have to be grown closer to where people live. But to do this, America will have to find a way to get the Family Farms back in business. With the Real Estate bust happening, local Governments could bulldoze a lot of foreclosed houses and convert the area back into Green Space. If American Families cannot afford to open up their own family farms, local governments could let people farm on publicly owned spaces and figure out a way to redistrubute the land later on.

Exactly. And farmers switch to corn from wheat when the corn prices are high so that the effect of increasing the demand for corn is that other commodities including meats become more expensive. The ripple efect has just begun.

The policy is very stupid and the Europeans are backing off as well

http://www.spiegel.de/international/busine...,478901,00.html

Honestly I think this problem is being exaggerated. Prices always fluctuate, but personally I haven't seen any significant fluctuation locally. Perhaps the situation is different depending on where you are but here in North Carolina a year ago I spent about 160 - 200 dollars a month on groceries, today its about the same. Last month I spent about 180 which is average for me. I go grocery shopping once a month for myself unless I need fresh milk or bread in between shopping visits.

As for food shortages, I'm just not seeing any. Ive yet to have any trouble finding the things all stores should be well stocked on, like rice, ground beef, chicken, fish, sugar, orange juice, ect ect. I mean sometimes they don't have my favorite flavor of Gatorade, but I'm sure I'll survive. Nothing unusual about that. Now I have been reading that nation wide prices have fluctuated and I don't disbelieve that they have.

However personally I believe a slight recession has opened up a new field of political arguments that are being taken advantage of. This time last year it was all about the war in Iraq, now focus has shifted to the economy. I see hints of this everywhere for example look at this phrase in the opening post.....


Unless you've been living under a rock like President Bush the past few months, thumbsup.gif you know that food prices have been skyrocketing.

Now while I don't doubt there is a recession, phrases like this put me under the impression that this argument is being used to support or criticize political parties. Personally I think it can be explained with something as simple as gas prices being high, and we ll know those prices will continue to go up until we become less Dependant on oil. I don't have any party to blame on this one to be frank, but the economy is important and we should always look for the root causes rather than who is to blame. This problem is much to complex to be pinned on a single person or party. Thats just what I think.

We will see no shortages here only some price increases that most people hardly notice. Like a slight increase in milk, meat, bread etc. In some countries – esp. poor ones the increase is large and unbearable.

http://www.baynews9.com/content/36/2008/3/15/332616.html

1.)What is the primary cause of the rising food prices?

From what I hear, there are many causes that are converging now. The biofuel vs. food controversy is probably only a part of the issue. Since many of the nations you cite that are rioting for food do not directly rely on corn much as a staple, the cause would be more indirect anyway. For example, economic: farmers watching the rise in corn prices wanting to jump on the bandwagon, switching crops from soy and rice to corn, thereby reducing the amount of those crops for export. There have also been major droughts in Australia recently that have wrecked havoc with their harvests and hence crop exports. Developing nations like India and China, although their populations have not doubled over the last few years, apparently their consumption of food has. Since meat consumption has nearly doubled in China, that means a disproportionate amount of grain has to go into livestock, meaning a quadrupling or more of grain useage for that purpose.

Agrabusiness is also fuel intensive. Rising fuel prices directly translates to rising food prices.

2.)What initiatives should be implemented to help consumers?
Advocacy for vegetarian diets. I forget the exact stats, but many pounds of grain go into one pound of meat. It is calorie inefficient. Also, as people get older and more inactive, people need far fewer calories anyway. As noted in the health commentaries, people in industrialized countries vastly overeat. They could use a diet.

I agree but it will never happen. A billion people with more money to spend in China are demanding more meat. India as well. Couple this with a price rise in corn, farmers growing more of it and less wheat and you have the crisis and it will get worse before it gets better esp. if we don’t stop the stupid ethanol crap and just drill for out own dam OIL.

Yea thats about what I gathered Ted, but its interesting to see some people say ((food prices prices have been skyrocketing)) and if you don't know it your living in a cave, I guess that makes North Carolina a pretty big damn cave, lol. I mean skyrocketing food prices in the U.S.???

Thats a little over the top IMO. Then of course they make references to members of the opposing political party like George Bush. Then the post starts to make perfect sense.......

Step 1. describe a problem,
Step 2. exaggerate the problem,
Step 3. reference the opposing political party as either being the cause of the problem or ignoring it.

Its like the Iraq debate strategy was adopted, given a face lift, repackaged, then applied to another field (the economy). lol Brilliant

That has to be the most astute and concise post ever written! I would have to think someone(s) must be picking themselves off the floor after that! But you forgot what most do on the left here in the US:

Step 1. describe a problem
Step 2. relentlessly bitch about said problem without ever offering a sane alternative

Rinse Repeat.

1.)What is the primary cause of the rising food prices?Cost of fuel for production and transportation of goods.

2.)What initiatives should be implemented to help consumers?Part of production costs is fertilizer and fertilizer requires large amounts of energy to produce. Increased cost of fuel for tractors and other machinery adds to the overhead of production. Producing fuel from food products compound the problem of supply and demand but there has been an almost equal increase acreage in corn production of that used for ethanol so the effect is the increased use of fuel/fertilizer to produce the ethanol. The very largest reason for increased food costs is the devaluation of the US dollar since all commodities are traded in dollars. For example Europe pays more for fuel than the US but their percentage of increase in pump costs is 70% lower in comparison to our pump prices due to the difference in the value of the dollar to local money.

If domestic energy were developed the dollar would become stronger since the money would stay in the US. Domestic development of natural gas could reduce the price of a unit of NG from now $11. to around $3 to $4. resulting in less expensive production of domestic fertilizer. Domestic development of oil production and refining would contribute to lower prices for fuel at the pump therefore eliminating much of the current overhead between field and grocer shelf.

IMO this is the “blowback” from a stupid energy policy. Certainly it was nice for Congress to award all their farm buddies with billions in new revenue but you would have thought that someone with a brain would have thought of the consequences.

As it stands any money we save from buying foreign oil goes to the resultant increased cost of food – and 10s of thousands or more will starve all over the world because of this idiotic policy.

And we do this knowing that our oil companies would be gland to spend 10s of billions of their money drilling for oil – if only we would let them. And beyond that the taxes the oil companies would pay would fund alternative energy projects – as it is we “subsidize” farmers to make more money growing corn – and we pay double as food prices increase.

How stupid can we be……………..