

Food Inflation, Riots Spark Worries for World Leaders - Goladus
http://online.wsj.com/article/SB120813134819111573.html?mod=googlenews_wsj

======
sdurkin
High food prices, while detrimental to the urban poor, may be the best
opportunity to pull subsistence farmers out of poverty and integrate them into
the global economy.

That said, biofuel subsidies are really just an excuse for corn belt
politicians to score votes at the expense of everybody else. Its corporate
welfare that's good for nobody.

~~~
Goladus
How do you mean? Not that I don't believe you, but I don't follow your logic.
(About the subsistence farmers, I mean)

~~~
sdurkin
Subsistence farmers grow crops using traditional methods mostly. They're
insulated from the fuel costs etc. that generally drive up the cost of
production for the big producers.

Subsistence farmers also tend to bring to market a small portion of their
crop. The hope is that as food prices rise, the amount each farmer receives
for the crop sold will go up to the point where he can start to invest in his
equipment to improve the efficiency of his methods, grow more and sell it, and
integrate himself into the global economy.

Eventually, this turns poor subsistence farmers into wealthier cash crop
farmers.

~~~
Goladus
Ah, ok. I missed the assumption that they'd still be farming. I thought you
meant they'd go work in factories or something.

------
Goladus
Personally I think biofuels are a red herring. Only a fraction of the US
agriculture production goes to biofuels, and part of the cost of importing
food is transportation anyway.

In any case, this could dwarf credit problems if it keeps getting worse.

~~~
shawndrost
"America is easily the world's largest maize exporter—and it now uses more of
its maize crop for ethanol than it sells abroad."

<http://www.economist.com/displaystory.cfm?story_id=10250420>

~~~
yters
While the article may contradict his point, your cite doesn't.

~~~
sdurkin
"Because this change in diet has been slow and incremental, it cannot explain
the dramatic price movements of the past year. The second change can: the
rampant demand for ethanol as fuel for American cars. In 2000 around 15m
tonnes of America's maize crop was turned into ethanol; this year the quantity
is likely to be around 85m tonnes. Ethanol is the dominant reason for this
year's increase in grain prices. It accounts for the rise in the price of
maize because the federal government has in practice waded into the market to
mop up about one-third of America's corn harvest. A big expansion of the
ethanol programme in 2005 explains why maize prices started rising in the
first place."

~~~
yters
But maize is only one grain, and I didn't see it mentioned in the article.

------
yters
Has anyone done the analysis to see the cumulative result of the current
global crises?

