Lucknow Farms

Global and US Food Prices Are Rising. What Is the Long Term Future of Prices?

Gary Becker and Richard Posner debate the long term future of commodity food prices. Becker thinks that much of the price rise is due to governmental regulations and policies (such as, in the US, ethanol, which takes corn out of food production), but that if prices have some freedom, food supply should increase in response to increase in prices. Farmers can always plant more and raise more. Posner agrees that food prices will increase, but that eventually supply will catch us with demand and they new equilibriums of low prices will be established. In wealthy countries; but, he argues, that poor countries will suffer greatly.

US Ready-to-Eat Food Imports Doubled 1998-2007

Imports of ready-to-eat foods, such as raw fruits and vegetables, doubled. See this Carpe Diem article on a recent USDA report. Several questions.

It would be interesting to know several matters.

• What proportion of imported ready to eat foods are organic and/or natural?
• What proportion of imported consumer ready foods is from Mexico?
• What proportion is imported foods is produced by US farmers who have purchased or leased land in another country, such as Mexico and Brazil, in raise food for US consumption?
• What proportion of imported consumer ready foods are "re-exports"? For example, US Florida grown tomatoes that are exported to Mexico for cleaning and packaging, then imported for sale in the US?
• What proportion of US agricultural exports is comprised of consumer ready foods?

The expansion of global food trade should benefit American growers and American domestic growers, as well as foreign growers.

Effects of Globalization of Agriculture on Indian Subsistance Farmers

The documentary, "Bullsh**t," by PeĀ Holmquist, follows the Indian social activist, Vandana Shiva, as she engages several issues involving globalization of markets in India. I saw the film on Link (cable) TV.

Several political episodes in Shiva's career are highlighted, her mobilization of opposition to a Coco-Cola bottling plant, which she accused of draining ground water away from nearby villages, and opposition to the efforts of Monsanto to get Indian subsistence farmers into the global grain market using Monsanto seeds. Monsanto's efforts led to some farmers getting over their heads in debt and some farmers, apparently as a result, committed suicide. The Monsanto struggle began in 1997 with the first farmer suicide. The documentary lays out the basic outlines of the effect of globalization, without in depth analysis. Shiva identifies "GMOs and the WTO" and "American [model of] agriculture" as the villains. Subsistence farmers raised a variety of crops for their families and only sold 10% of their harvest to market. Monsanto's efforts led farmers to raise a single crop in quantity. According to farmers who were interviewed, this episode was a disaster that is destroying traditional agriculture and driving small farmers out of business. The farmers are enticed to take loans from banks, equipment and/or seed dealers, with the expectation they would make enough money to repay the loans and improve their standard of living. The farmers complained that world prices for the commodity fell, resulting in lower sale proceeds. At the time, deregulation of fertilizer prices increased costs so much costs of production took all the farmers' revenue.