Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Wednesday, February 25, 2009

Food, Folks and Fun: Why Agricultural Policy Differs from Other Trade Policies

RBR's arguments about subsidies distorting natural competitive advantage and reducing efficiencies are largely unassailable for most areas of trade. To my taste, RBR undervalues the economic pain and dislocation caused by changing trade rules in these areas, which should be part of the cost-benefit analysis, timing, etc. Also, RBR and I disagree as to whether reducing subsidies and tariffs should go hand-in-hand with requirements that our trading partners meet labor and environmental standards. RBR discounts the importance of this, as I see it. But the real issue I have is that arguments about free trade made in general do not apply as well to agriculture as one might think.

Agriculture, is a different kettle of wax, a different ball of fish, a horse of a different feather, and lots of other mangled metaphors. Food is more like a public good (like air and water) than other commodities. Food is a necessity of life. The demand curve for food is unlike most other products. Humans need around 2000 calories/day to thrive (broad averages) and even the most incredible athletes cannot consume more than about 7000 calories per day. Most humans live in the 2000-3000 calorie/day range. Until biofuels were discovered, it was impossible for any human to consume more food than that, regardless of wealth (we have discussed this tragedy elsewhere).

Unfortunately, the market price of food is such that about ¼ of the human race cannot afford their 2000 daily calories. This is not too surprising, when you think of what a market is. A market optimizes. It makes the best price for the most people, but it does not ensure a price low enough for each consumer's demand to be satisfied. Think of any product: housing, medical care, gummi bears, and you will acknowledge that the market creates optimal prices, but does not satisfy all needs. This is a problem when applied to food: each consumer's demand must be satisfied. (IMHO, it is a problem for medical care too). Therefore, unless we subsidize food purchases – whether through lowering prices, payments to farmers to reduce prices, or direct payments to the hungry – starvation results. So, at some level, subsidies for agriculture just have to be part of the world food production scheme. A world free market in agriculture simply cannot feed everyone, and it is not designed to do so. Free trade alone won't do; we need some world agricultural policies.

Think of how subsidies work. If it is true that developed countries "dump" food on third world countries at prices below those which their own farmers could afford to produce and sell food, this may drive those farmers out of business, but it also keeps food prices down. It's a mixed blessing. Allowing the price of food to rise so those farmers would be profitable (by ending subsidies and dumping) would help the farmers but hurt the starving neighbors with higher food prices. If we want to help devloping world farmers without raising food prices, it sounds like more subsidies are needed, just in a different place.

Food calories also are not fungible. Quality matters. Taste matters. Calories are not widgets. If for some reason a rupture in the time/space continuum allowed sufficient quantity of calories for the entire human race to annually appear free of charge, like manna, in the Faroe Islands, this would not be the best of all possible worlds. Fruits and vegetables there would spoil before they could reach the rest of the world. There would be large carbon expenditures in shipping it, too. What I mean by this example is that it is simply impossible to imagine that one can import all foodstuffs and achieve the same quality in all products as is possible with local agricultural production. RBR doubts this is the case, believing that we can basically import everything; I disagree. Steps to make local agricultural production more expensive, therefore, would have the negative effect of increasing prices on high quality products and reduce the number of people who could afford the higher quality products that cannot be imported.

Agriculture is also a way of life that people value. Many people prefer the existence of local agriculture to the more efficient world without it. One could argue that subsidies for rural life in Europe are, in fact, the public's way of "purchasing" or "valuing" the existence of local rural life. As a society, are we not free to value quaintness the way we value other things, such as pretty scenery and the arts?


So there are (1) good reasons to support and maintain local agriculture and (2) good reasons to encourage very low food prices in developing countries, even if that means "dumping" foodstuffs there at prices below that which their own farmers could afford to sell the food. I think any agriculture policy must take these into account. We cannot simply end food subsidies in the developed world and expect that the results will be beneficial in the short term or even the long term.

39 comments:

Raised By Republicans said...

Wow...where do I start.


First, I understand that changing trade policies in any sector will cause a minority of people some pain. I have repeated expressed my support for compensating these people with some of the gains the rest of us get. So LTG is incorrect to say I "undervalue" this. If anything I'm advocating a more efficient way of helping them.


Second, LTG says "A market optimizes. It makes the best price for the most people, but it does not ensure a price low enough for each consumer's demand to be satisfied." He is arguing that we need subsidies and price controls to keep food prices low. What he is ignoring is the fact that the subsidy system is expensive and only rich countries can afford it. The result is uneven subsidies that drive farms out of business in poor countries.

Also, If we keep food prices artificially low in the subsidized parts of the market, we will encourage waste and over-consumption which will result in shortages hitting exactly the people you are trying to help. We are already seeing this effect right now so this is not simply "market theology" as LTG so often likes to say.

When the US dumps corn on the Mexican market it lowers the price initially then raises it in the medium term. That's why dumping is illegal in trade agreements. LTG is only focussing on what happens today not on the longer term effects.

LTG's arguments about quality and taste are odd. If quality and taste matters people will pay more for it. What he is arguing here is that people who don't think taste matters as much as does will simply have to pay for his preferences for local blueberries. If we had a market in this, he would be free to pay his higher price for the tastier organic local stuff and the rest of us could pay less for our cheap imported stuff. He has also made this argument in relation to supporting ag subsidies for desert farming in California. He says that it is better to get your blueberries from down the road than another country. But that only works if you are near the subsidized fields. If you are far away from BOTH the subsidized fields and their foreign competitors the taste thing won't matter. So most people are paying for the subsidies and not getting the taste benefit LTG think is a significant benefit of the policy.

I dismiss the "way of life" thing out of hand. Everyone has a right to live how they would like. But they have no right to expect me to pay them for it if the market won't support it. No one has a right to a particular career or lifestyle at tax payer expense. Would LTG make the same idealistic argument about the nobility of some lifestyle if we were talking about fishing fleets in the Great Lakes or Scandinavia which have been devastated by overfishing and pollution? By LTGs argument we should spend 10s of billions a year to restock the Great Lakes with fresh water salmon to keep those tradition fishing communities viable again.

If we as a society want to value "quaintness" then we should do it democratically. If people really do value it, they'll buy enough local food to keep a few of these people in business. What LTG is now proposing though is that we set up a $50 Billion open air museum of industrial farming.

So, to sum up: LTG misunderstands the long term effects of dumping on prices. It reduces prices in the short term but reduces competition and supply which raises prices in the medium term. His entire argument in support for subsidies rests on this misunderstanding.

Dr. Strangelove said...

I really liked LTG's discussion of the differences between food and other commodities in terms of markets. I may be putting words in LTG's mouth, but I believe implicit in his line of reasoning is the idea that we should view food as a human right. (Health care too.) And since a free market does not guarantee that everyone gets food--not even close--some measure of regulation or subsidy is required to ensure that food is available to all. At its heart it is really quite a simple argument.

To me, then, the real question is what form of regulation or subsidy can guarantee food is available and affordable for everyone, while at the same time preserving as much competition, free trade, and economic choice in the marketplace as possible.

Now I disagree with LTG about calories: they are rather fungible, actually. A poor man will go dumpster diving to get any food he can find, taste and quality not withstanding. Taste takes a back seat to quantity. (As they say, hunger is the best sauce.) And the fungibility is a good thing, because it means the market needs to provide sufficient calories but for the most part we need not dictate which types of food are produced.

But I am baffled by RbR's insistence that keeping food prices artificially low would automatically encourage waste and over-consumption. First of all, the demand for raw calories is quite inelastic. Now I agree that in America, where we have a surfeit of food, we have plenty of waste--that's why dumpster diving works, after all--and we have plenty of over-consumption too, if the obesity "epidemic" is any indication. We have so much access to food in this country that for the most part we're off the map in bizarro-land. I mean, my god, we proudly pay extra to buy food advertised as having zero calories! (Clearly for such foods, LTG is absolutely right that it's all about taste and satiation). But that's because we are a very rich nation. Poor nations are so far down on the supply curve and their people subsist on such low-calorie diets that the notion that somehow they will waste and over-consume is almost insulting.

Maybe one way to go would be to have a sort of "food insurance" plan that people could buy--heavily subsidized for the very poor, of course. You would go to the grocery store, buy your food with your "copay", and then the "food insurance" companies would cover a portion of the cost based on their schedules of cost, calories, vitamins, proteins. Perhaps Safeway or Costco might be your "preferred provider" if you go with a "food maintenance organization." I know the insurance model has its problems, and we'd have to regulate the insurers (as we must do in all cases) to avoid egregious abuses, but like RbR, I value the free market, and I would like to use a market-based solution as much as possible.

The Law Talking Guy said...

RBR writes: "If we keep food prices artificially low in the subsidized parts of the market, we will encourage waste and over-consumption which will result in shortages hitting exactly the people you are trying to help."

I understand this is theoretically true for widgets in a competitive marketplace, but I explained why this was not true for food. Overconsumption is really limited by the human capacity to eat.

What happens with food is not really overconsumption, but consumption of more expensive foodstuffs. So we eat meat even though far more food calories in grain form could be grown on the same land. (Of course, producing grain on that land instead would drive the price down even further, hurting third world farmers even more!)

Food prices need to be artificially low, that's my point.

RBR is only right about the benefits of abandoning subsidized farming if the effects of free trade would ultimately be to (1) lower food prices and (2) increase production below and beyond current levels There's no reason to believe that would happen: ending subsidies is intended to raise prices and keep them higher so that production will increase. If that then causes prices to fall back to current levels, the free market will cut back on production again. In no event are we likely to see both lower prices and greater production than we see currently where we have skewed the market with artificial incentives to overproduction.

Now it is worth distinguishing all of this from US agricultural policy that pays farmers NOT to grow food and/or imposes tariffs to maintain higher prices. To me, that is unconscionable.

The Law Talking Guy said...

RBR, I don't understand your comment that if people want to support local agriculture, they'll pay more for local food. One of the ways people register what their preferences is through government spending. You get more bang for the buck that way, because the majority compels the minority to spend. We do that all the time.

Same thing about my booberries. I prefer to use government to coerce the minority to also pay for higher quality. This will be cheaper (for me) than what the market would do.

This isn't nuts. We already do this through the FDA in terms of avoiding unsafe products. We could let the market determine safety, but we don't. We could let poor people buy food produced in unsafe conditions, which would be cheaper, but we don't. We have had rules forbidding adulterating bread for centuries (supposedly the terms 'baker's dozen' derives from giving an extra product to avoid the harsh penalties for accidentally underweight products). These are just policy choices in a democratic society.

So when you say "if people value quaintness, we should do so democratically" that's what I adovcate! You advocate doing it undemocratically, through the market, where it's one dollar one vote, not one person one vote.

Raised By Republicans said...

http://www.copenhagenconsensus.com/Default.aspx?ID=953

Check this out.

You guys seem to be assuming that the only way to help poor people is by preserving the current system. But we have major starvation now. The subsidy system does not achieve the goals you claim to have for it. This isn't a theoretical prediction this is observable fact. It would be better - as I have said before and been ignored - to simply pay the losers from trade, including starving people in poor countries. Trying to help people by complicated price controls and subsidies and tariffs is bound to fail and has.

As for LTG's $50 Billion dollar open air museum to Agri-industry, if people really want it they'll get it. But I suspect if really given a clear choice they will reject it and opt for the market. Obama is talking about getting rid of the subsidies. If he actually proposes it I would expect LTG to accuse Obama of being some "market theologian" and oppose the move.

RE: the unsafe food thing. You ignored completely my response to your statement about safety of imported food. Please go back and read it again.

Waste and over consumption. Ag production is not one in which you go to the store and say, "I'd like 2000 calories today." It produces food in a variety of forms some are more efficient than others. When we subsidize food production we distort the market signals of which food to produce. We'll end up overproducing some foods and underproducing others. That's exactly what is happening. We are overproducing meat and underproducing rice world wide.

If poor countries are better off with the current system why do they want a free market for agriculture? Are they fools? The Doha round is all about a free market for ag. It is supported by the poor countries in the world and opposed by the USA, EU and Japan. Shame shame shame!

RE: Taste...why should Californians be the only ones who benefit from that? US ag policy shuts down local production around the world forcing them to buy US products that are being dumped on their market.

I'm curious also, what misery Pombat and Spottedhandfish must be suffering through. Australia has no ag subsidies anymore. If LTG is right, your country must be a wasteland of poor quality food with dangerous poisons. The Australian farmer must be nearly as extinct as the Tasmanian devil and Aussies everywhere must be moaning and wailing every time they eat an imported blueberry.

Dr. Strangelove said...

"You guys seem to be assuming that the only way to help poor people is by preserving the current system."

Although RbR appears to have addressed this comment to me as well, I must assume that is not the case, because I obviously have not defended the status quo in any way here. That would, of course, be a straw man.

As LTG says, it is an observable fact that in the absence of regulation, a free market in agriculture consigns hundreds of millions to starvation. And it is equally evident that, as RbR says, the current regime of agricultural subsidies (really a mish-mash of colliding policies) also consigns hundreds of millions to starvation. The free market alone won't do it, but we are doing a piss-poor job of it now. So what we need is a better regulatory scheme. I hope we can agree on that, at least in general terms.

Now I must take issue with RbR's categorical assessment that, "trying to help people by complicated price controls and subsidies and tariffs is bound to fail." It this sort of blanket rejection of any kind of intervention in the marketplace that LRG calls "free market theology."

It is economics 101 that market failures occur in a variety of situations (often in the context of public goods, externalities, human rights, insider trading...) and the market can be patched up by appropriate regulation. I am certain RbR knows this well--most likely better than I do. It is also basic economics, however, that the wrong kind of government intervention in the marketplace will be worse than useless: not only will free market forces subvert and nullify the intended purpose of the regulation, but all sorts of nasty, unintended consequences will result.

If I understand him correctly, RbR suggests a simple mechanism to avert starvation: just give cash payments to starving people so they can buy food. (Note that this is different from giving them food directly.) While there are some logistical difficulties involved in spreading the wealth around like this--and while it does not solve all of the ills LTG worries about--it solves the biggest problem (hunger) in an elegant way.

The FAO estimates about 850 million are undernourished, so if it costs $1 per day to feed a person, that's about $300 billion per year. This is doable if US, Europe, and other nations pitch in. The only concern is that, by spreading the wealth around, this might drive up the price of food, so we'd be caught in a vicious spiral. But it's worth a try if we can somehow manage it.

Pombat said...

LTG, you write: "RBR, I don't understand your comment that if people want to support local agriculture, they'll pay more for local food."

To explain: we have farmers' markets here in Melbourne, one each Saturday, at different sites around the city (one less than ten mins cycle from home, which is nice). To be a stallholder, you must produce your wares yourself, not supply plastic bags, and come from somewhere in Victoria. Prices are higher than the supermarket. But this is where I choose to buy certain seasonal produce - peaches are in and delicious at the moment, rhubarb comes from a lady called Di (very strict about how to prepare it, only lets you have the full stems with leaves if you have a compost bin/worm farm, otherwise you must buy the trimmed ones), eggs from the Green Eggs free range farm. There's even people selling beer. Granted, the range is smaller than the supermarket, or indeed the other markets, but you get to talk to the people who produced the food themselves, and it's good - it satisfies all your local, tree/vine ripened, tasty tasty requirements.

You then go on to say: "I prefer to use government to coerce the minority to also pay for higher quality. This will be cheaper (for me)", and this I think is the main point - you want someone else (the government) to force the producers to produce what you want, for the cheapest price for you. I'm working the other way around - I'm not paying the cheapest price possible, but I am getting the best produce, and supporting local growers, in order that they probably can - eventually - lower their prices somewhat. Plus building a relationship with a producer/stallholder can often result in special treatment that you just can't get in a supermarket :-)

When it comes down to it, I don't believe that you can expect both the highest quality and the lowest price - you have to prioritise one over the other, and provided the cheaper food is still safe, and appropriately nutritious (don't get me started on unhealthy snack/ready meal 'food' being cheaper to buy than fruit), it's fine. If your priority is keeping food as cheap as possible, then you just have to suck it up and accept that it might not taste as good as the pricier stuff. Otherwise it's like saying hey, I want to eat at the restaurant with three Michelin stars, but the government should do something so that I only have to pay McDonalds prices.

RbR then asks: "I'm curious also, what misery Pombat and Spottedhandfish must be suffering through. Australia has no ag subsidies anymore. If LTG is right, your country must be a wasteland of poor quality food with dangerous poisons. The Australian farmer must be nearly as extinct as the Tasmanian devil and Aussies everywhere must be moaning and wailing every time they eat an imported blueberry."

And y'know RbR, you're spot on. I'm sitting here at my desk, with a little esky next to me containing the results of my trip to Vic market this morning: Tasmanian pink eye potatoes (to be eaten boiled, skin on - never peeled, never roasted, mashed or anything else - they're too good for all that), sweet Tasmanian carrots, nice large Queensland bananas (flood waters have receded enough for them to be picked and for the price to go back down from $5/kg to $1/kg - normal for this time of year). I also have local leeks and good brown onions in there. In the fridge round the corner I've got beautiful red Victorian tomatoes (that smell *really* tomatoey), locally grown salad mix, frames and wingtips from free range Australian chooks (for Spotted H's homemade stock, mmm), and my one imported purchase of the day - a hunk of wonderful cheese, courtesy of Steve, from whom I buy all my cheese (and who gives me discounts and freebies, yay!).

At home we have a few imported things - canned Italian tomatoes (because the Aus ones canned by the same company have added salt etc for some reason), some imported pasta, rice and coffee of course. Can't think of anything else off the top of my head (although there probably are a few things). This country is phenomally diverse, growing sugar, mangoes and bananas up north, wheat, stone fruit and tomatoes down here, and some of the world's best potatoes and apples down in Tasmania, the Apple Isle. It's also as large as the US (discounting Alaska and Hawaii), but transporting food seems to work (see QLD bananas above). We eat seasonally, usually allowing the prices at Vic market to dictate our choices (cheap = in season = tastiest for the best price), and food here, whilst probably not cheaper than the US overall, I would say is definitely cheaper when you compare like with like (quality, taste etc).

Oh, and I don't think I've ever eaten an imported blueberry here in Aus (the UK is different of course, being a nation of apples and turnips). In fact I'm planning on growing my very own blueberry bush - apparently they quite like our climate.

The Law Talking Guy said...

RBR - you ignored a lot of my points, and I accepted that because that's what happens on a blog. I don't appreciate being told to "go back and read it again" with one point of yours that you claim I overlooked. It's rude.

The Law Talking Guy said...

RBR's basic comment about subsidies is that they "lower prices in the near term and raise them in the medium term." Well, ag subsidies are decades old. Where are we in the process? This is what I mean by theory being isolated. This is an argument against new subsidies, not about the status quo.

RBR argues that because third world countries argue against subsidies, they must be bad for third world countries. That's a red herring. RBR has argued that subsidies are way too expensive and bad for rich countries, yet we support them. As RBR well knows, policy preferences in foreign or trade policy are the products of domestic constituencies. Obviously farming interests in third world countries want to end subsidies and these usually corrupt and undemocratic governments support them. But that hardly implies it is necessarily good for their people.

The Law Talking Guy said...

Is it possible, I wonder, that shipping costs to Australia act as a natural trade barrier that insulates local farming from imports?

Pombat said...

Good question LTG. The costs certainly don't have an impact on us importing items such as rice and coffee that are impractical to grow here. And they don't seem to have an impact on our exports (although a lot of these are live animal exports, which is a whole different argument).

Both the shipping costs and the time taken probably act as a bit of a barrier, with the result being that we eat a lot more Aus-grown produce than we would if we had our own Mexico, but I don't think they're that much of a barrier: if they were, I would expect to see much higher produce prices in Aus than we are seeing. As I said before, when comparing like produce with like, Aus prices are competitive against US ones (and the coffee's definitely much better here in Melbourne ;-p).

I think I need to do a bit more research into all this, particularly the water side of things. What I am pretty convinced of though is that eating seasonal produce grown at least fairly locally is the most sustainable way to go. I think a lot of people are too taken with our convenience lifestyles, that they expect to have whatever they want, when they want, all year around. Sure, eating my way I might not be able to have blueberries all year round, but when I do, they'll be oh so tasty.

Raised By Republicans said...

LTG, I apologize for snapping.

I think Australia and the US are an excellent comparison in this case. Both have enormous amount of arable land relative to their populations.

Pombat, Australia ended its ag subsidies quite recently, right? Do you have an idea of how much money the government saved, how many farms went under and what changes in price you noticed at the market - if any?

Dr. Strangelove said...

Speaking of ignoring points, I notice no one has responded to anything in any of my comments on this subject. I guess what I wrote is just so obviously true that it does not bear repeating :-)

Raised By Republicans said...

OK Dr S. Here goes...

"It is economics 101 that market failures occur in a variety of situations (often in the context of public goods, externalities, human rights, insider trading...) and the market can be patched up by appropriate regulation. I am certain RbR knows this well--most likely better than I do. It is also basic economics, however, that the wrong kind of government intervention in the marketplace will be worse than useless: not only will free market forces subvert and nullify the intended purpose of the regulation, but all sorts of nasty, unintended consequences will result."

Yes, of course there are market failures. I've posted about how medical care may be one because people have an infinite and inflexible demand for health. So the question is not whether or not I think there are market failures but whether I think the agriculture market is an example of one. LTG argues that agriculture is a public good and so is prone to market failure. This is a misunderstanding of what a public good is. It is a pretty profound misunderstanding and I was reluctant to respond to it before being pressed.

A public good is defined by two characteristics. First, it must be "non-rivaled." That means that if I consume some unit of it, your consumption of it will not be reduced. Second, it must be "non-excludable." That means that it is impossible to prevent any individual from consuming the good if one individual consumes it. Food meets neither of these conditions, therefore it is NOT a public good. Neither is food quality which I think was where LTG was going with his point actually. It is possible to allocate high quality food to some people and not to others.

The reason it is important to address this public good issue is because public goods cannot be easily priced. Also, one characteristic of public goods is that they will be frequently be underproduced. I suspect it is this second characteristic that leads LTG to blame the market for world hunger. The market clearly plays a role in world hunger and we should take steps to address it - as Dr. S. says, I think I've presented an elegant solution, and I like Dr. S's solution as well. I proposed giving money instead of food because money is easier to transport and gives more choice to the recipients.

"This is doable if US, Europe, and other nations pitch in. The only concern is that, by spreading the wealth around, this might drive up the price of food, so we'd be caught in a vicious spiral"

Here Dr. S. raises an interesting point about foreign aid for hunger relief. Yes, if the rich countries started buying food to feed the hungry it would raise the price of food. But that price would reflect the actual world demand for food not some distorted version of that demand. It would stop rising when it reached the equilibrium price. The real threat to food prices is the finite amount of arable land in the world combined with rapidly rising populations in developing countries as health care and food availability increases. We should combine food aid with family planning aid for these countries. One draconian approach - which I'm not sure I support so don't jump on me - is to offer food aid in exchange for sterilization. The slogan could be "Get your tubes tied for a tuber!" or "Tie your tubes, fry a tuber!" ...we could have a contest (sorry, female sterilization is a more efficient means of population control I'm afraid - because men are pigs).

LTG is correct that developing countries are not unitary actors and some governments might be dominated by political interests that benefit from a policy that would hurt most of their people. But if that were the process going on here we'd expect to see a lot of variation in government positions on the subject in the developing world - much like we see among rich countries where some, like the EU, US and Japan favor ag subsidies and others, like Australia and New Zealand oppose them. Even within the EU ag subsidies are among the most controversial political and budgetary conflicts around. But support for removing ag subsidies is nearly universal in the developing world.

Raised By Republicans said...

Dr. S. estimated the costs of feeing the world's hungry at $300 billion per year. Is that cheaper or more expensive than what rich countries currently spend on an ag subsidies system that doesn't even come close to addressing the world hunger issue and may contribute directly to exacerbating it?

LTG noted that the Cato Institute said that the US currently spends about $50 billion a year on its ag subsidies. Japan spends another $50 billion, S. Korea $20 billion, Canada $6 billion, Switzerland $6 billion. The EU spends $133 billion per year on ag subsidies according to Cato. So the Cato institute figures that we could end subsidies and directly feed the world (which subsidies currently do NOT do) and we would spend $300 billion instead of $265 Billion which is more. But we'd actually accomplish something in the process. Right now we are just throwing away $265 billion a year.

Plus we need to consider that if the rich countries ended ag subsidies to their agribusiness interests and started buying food on a free world market, it would induce many farmers in the 3rd world who had been put out of business by US and EU dumping to start farming again. And they might be able to stop growing cash crops like tobacco and shift back to food production. So we could actually start a virtuous cycle with this move.

Raised By Republicans said...

Of course, the Cato Institute would probably oppose feeding the world's poor.

Dr. Strangelove said...

Thank you for the responses, RbR! Leaving aside your "draconian approach," which I assume was merely offered as food for thought (so to speak) I just want to offer a few of observations.

First, I take to heart your point that the agricultural sector is not an example of market failure in the classic sense of the term. Absent government intervention, the market for food will clear, efficiently matching supply to demand. Similarly, I agree that food is not an example of a "public good." But if you believe as I do that food is a human right, then we have a problem, because free market mechanisms alone do not guarantee food for all. On the contrary, under present conditions of mass poverty, an unfettered free market would guarantee mass starvation.

(Notice that I am not talking about the quality of food or where the food is produced. Those are other issues--important, yes, but ultimately lesser issues. The most important concern for society should be simply to ensure no one is malnourished, even if their diet must be dull.)

Second, RbR has suggested the simple expedient of giving poor folks the wherewithal to buy the food they need: a cash subsidy to the billion-or-so undernourished people in the world. At first I was concerned that this would ultimately just end up raising prices, rather than feeding more people... But the more I think about it, the more I realize that is not so much of a concern, because of the same unique features of the demand curve for food that LTG was talking about. People really need it: the demand really is terribly inelastic at the end of the curve.

So all we need to do is ensure poor people can afford to pay for the costs of production and transport--plus a little extra for capitalist encouragement--and then we can be confident that the free market will respond with sufficient supply to meet that demand. The food available at such rock-bottom prices will not be pretty, but it will suffice. I am not sure how to ensure that such food has sufficient nutritional value, not just sufficient calories, and there are logistical problems too, but I think it's basically a good plan.

Raised By Republicans said...

Dr. S. I think another thing that is worth thinking about is that if we end the subsidies in the rich part of the world, farmers in the poor areas will be able to make a profit producing food instead of cash crops. That will increase the local supplies of food in these countries. Which would decrease the transportation costs you are talking about while also increasing local quality.

I remember hearing a case study of Jamaica in the 70s and 80s. Jamaica used to have a thriving dairy industry. Then the US started dumping subsidized powdered milk into the Jamaican market. Overnight, Jamaican dairymen were competing with carnation powdered milk that cost pennies on the dollar compared to their fresh milk. Jamaican dairy farms started going out of business. Once they were gone, US dairy exporters started increasing their prices until Jamaicans were paying almost as much for the powdered milk as they were for the local fresh milk. They lost the utility of the difference between the two products.

This story is the dark underside of LTG's subsidized California blueberry story. LTG's may get a nice juicy blueberry but someone else is getting screwed at the other end of the system. And that person is probably poor, rural and of color. Whereas LTG is rich, white and suburban. Who of these two people can afford to deal with paying extra for their blueberries? Or fresh milk?

I think this is the kind of story that leads Pombat to her philosophy about farmers' markets in Victoria.

Pombat said...

RbR: Yep, you're probably right about my philosophy, although I'd always looked at it in a much simpler way: I am directly taking personal responsibility for my actions, rather than expecting someone else (the government) to do it for me (although I'll be perfectly happy if they want to help too!).

The Law Talking Guy said...

Pombat - I believe your approach makes good blueberries only available to the more prosperous (like you) who have the time and money to shop as you do. Market forces will price good blueberries above the reach of most people. That is why I support government actions that would essentially subsidize the supply of better blueberries. One of my objections to the whole "organic food" thang is that it is not an affordable option for the world's poor, unless by regulation and subsidy we essentially force all producers to adopt organic farming methods wihtout raising prices. Taking responsibility for yourself is noble, but I think we also need to take responsibility for your fellow human beings. I think that means intervening in the free market to expand the quality and availability of produce beyond what the market would do on its own. This does lower the cost of blueberries for the rich, to be sure, but it - more importantly - lowers the cost for everyone. Btw, I am not suburban, but urban. I live in the heart of Los Angeles, one of the greatest metropolitan centers on the planet.

RBR - Your definition of public good is correct, but hardly shows that I "fundamentally" misunderstood anything. In fact, it shows I am right. Food, as I said, is "more like" a public good. Perhaps I should have said that it "ought to be" more like a public good. The attributes of a public good are what we want for food: that every child should be able to consume as much as he or she wants/needs without excluding others from doing so. From the market's point of view, this result *requires* "overproduction." Overproduction has serious economic effects, most notably that it is self defeating: it drives producers out of business and production contracts. Sustained overproduction requires sustained external inputs: subsidies for production or support for consumption.

Treating food as an ordinary commodity in the market simply means that people will go hungry. That's my point.

RBR writes "If we end the subsidies in the rich part of the world, farmers in the poor areas will be able to make a profit producing food instead of cash crops. That will increase the local supplies of food in these countries."

I've tried to analyze this statement before and been ignored. Let's try again. WHY will the farmers in poor areas be able to profit? Just because foreigners are gone? No. The answer is that relative scarcity will allow them to raise prices above current levels at which they cannot compete currently. That may increase the locality of production - which is a benefit - but will not help feed the hungry. It will hurt the hungry. Only if farmers locally begin to overproduce such that they replace the quantity of cheap food that was previously available under the "dumping" regime, will this help the hungry. But if they try this in a pure free market, they will either have to become more efficient or go out of business, contracting supply again. The only solution I can see is to redirect farm subsidies to farmers in the developing world so that they can both produce locally and make a profit without raising prices of food: in short, so that they can "overproduce" from a market standpoint, lowering the price WAY below the optimum profit-making level so that everyone can afford it.

We are really talking, I think, about how to redistribute wealth to the poor by which they can buy the food they need. Once we accept that some sort of redistributive support from rich governments is needed in order for the free market to feed the world, we then can talk about whether the kind of subsidies we have work. But I think the evidence shows that we cannot just say "let's just go to a pure free market, all will be better, you'll see" and expect it to feed the hungry.

Raised By Republicans said...

"I've tried to analyze this statement before and been ignored. Let's try again. WHY will the farmers in poor areas be able to profit? Just because foreigners are gone? No. The answer is that relative scarcity will allow them to raise prices above current levels at which they cannot compete currently. That may increase the locality of production - which is a benefit - but will not help feed the hungry."

Actually, I have tried to address this point exactly several different ways and been ignored. I will also try again.

First, there is the Jamaica story which shows how subsidies can decrease local supply by lowering prices in the short run only to see the prices go back up in the long run. The reason that is possible is because the subsidies allow agribusinesses in rich countries to make money even when selling products for less than their real world costs. Ending that practice will make farmers in parts of the world where farming is naturally profitable do better. More people will farm and fewer resources will be concentrated in the hands of companies like ADM and Carnation.

Second, it is true by definition that a country that has a comparative advantage in agriculture will naturally have a majority of its population making a living from agriculture. So if prices for food products go up world wide, developing countries with a comparative advantage in ag, will gain more than they lose.

Third, it is true that the free market will not feed the hungry. That is why I propose a simple solution. Buy food for the hungry and give it to them or give them the money to buy their own food. What LTG is arguing - then denying that he is arguing it - is that the market is incapable of feeding everyone therefore we need to keep the subsidies we have now even though we KNOW they don't feed everyone either. Really, the only way to make sure that the world's hungry get food is to buy it for them and distribute it or give them the money and let them buy it.

What I am arguing is that if feeding the world is our goal (and I think it should be) we have a choice: We can buy food for the poor in a world with a free market for food or we can subsidize ag in rich countries, concentrate resources in the hands a few big agribusiness conglomerates, create a lot of extra poverty in the developing world and THEN buy food for the poor. Neither strategy has really been tried although we have done the subsidies part just not the buying food for the poor part. We KNOW the status quo does not come close to accomplishing the goals LTG now cites as justifications for opposing reform. My suggestion would at worst save the world a lot of money and at best feed the poor for less than we are currently spending to make sure LTG can buy juicy blueberries at reduced cost.

Raised By Republicans said...

Actually, LTG, I think you do misunderstand something important here about public goods and economics in general.

If wishing would make it so, I would wish that everyone in the world had a star trek style food replicator with a free and inexhaustible power supply to keep it running. But until Dr. Strangelove's buddies get those things into production, we're stuck with the world as it is. And in that world, food is not a public good.

What's more, if we got the world together and agreed that food SHOULD be a public good it would not change the market nature of food. We would still need to buy food and distribute it to people.

The real question then for LTG is how do we feed the world. LTG seems to be arguing that ag subsidies will do it. But we have massive ag subsidies now and it has not fed the world but has brought on crippling debt crises in the developing world and distorted patterns of land use on entire continents.

I have not seen a single argument from LTG that shows how ag subsidies in of themselves have alleviated world hunger.

I have argued that it would be cheaper and more efficient for us to simply give money to the poor for them to purchase the food they need.

The difference between my proposal and LTG's is that LTG's system (the status quo) not only tries to feed the poor (by trying to increase supply - it is debatable if this is actually a result of subsidies) but also artificially determines WHERE the food will be grown. I don't care WHERE it is grown. I would prefer that the market determine WHERE the food is grown.

Which brings us back to the Central Valley of California....

Dr. Strangelove said...

RbR implies that the San Joaquin and Sacramento Valleys (collectively known as California's central valley) are not suited to the current level of large-scale agriculture because they do not get enough water naturally. But while rainfall is surely an important consideration in determining the suitability of land for agriculture, it is not the only factor. Soil, temperature, sunshine, and accessibility also matter--and the central valley has these in abundance, which is what permits California (as LTG has noted) to engage in year-round agriculture outdoors on a scale not feasible elsewhere.

Because the central valley has everything it needs to be an agricultural powerhouse except for more water, California decided to invest in providing that water, through building aqueducts and subsidizing the cost. But California water policy is not anti-competitive for the simple reason that California farmers still pay more for their water (per yield) than farmers elsewhere, who get much of their water from the sky. In other words, California water policy enables California farmers to compete but does not give them competitive advantage.

So in reality, California's vast system of subsidized aqueducts is more like our national freeway system or our vast electrical power grid: it is a state-sponsored, state-regulated investment which makes an industry possible. And Californians get a darned good return on this investment too. By providing that last vital ingredient (water), this allows us to make amazing use of all that fertile soil, temperature, sunshine, and accessibility--it allows us to leverage great natural resources that would otherwise go to waste. Unlike protectionist subsidies, which raise prices, California's investment ultimately lowers the price of food for everyone.

Pombat said...

LTG: at no point did I talk about organic food, which I agree is currently very expensive and out of the reach of many. Notably, it hasn't always been incredibly expensive in comparison to other available food - the price has only gone up in very recent times, as big agribusiness have taken over, with their pesticides, machines, and unnaturally large and artificially fertilised fields. But I digress.

What I am talking about is locally produced food, yes, naturally produced if possible, and eating seasonally. I do not eat blueberries year round, because they are not in season year round. Ditto pretty much everything else (notable exceptions being things like onions, potatoes etc, although these are all storing veg, so hey). I want to support the smaller, local growers as and when I can, and in doing so, *not* support the larger agribusiness style growers. I want to do this for many reasons: the selfish one is that the food really is better, the others include reducing food miles, reducing water usage, reducing chemical usage on the fields and so on.

If we then address the organic vs agribusiness question that you appear to be raising: take a drive through the UK sometime, look at the size of the fields nowadays. They're massive. Hedgerows have been ripped out in order to make large, convenient fields that fit enormous machines. Now, machines are all well and good, and certainly easier than ploughing with an ox, but losing the hedgerows means losing habitat for all sorts of birds and other wildlife. Losing all that wildlife means losing the natural pesticide function they met (by eating the bugs), which means you need to use chemical pesticides. Not rotating the fields nor allowing them to lay fallow means artificial fertilisers need to be used, which frequently leach into rivers. And the end result is food which is not as good as could be grown naturally. Which seems ridiculous to me - we're using all these extra chemicals, destroying habitats left right and centre, and still ending up with *worse* food, without enough to feed everyone!

Additionally, big agribusiness and their reliance on very few crop varieties, bred for resistance, high yield and consistent appearance, are very likely putting our future food security very much at risk. I say this because when you only have a few crop varieties, you need very consistent conditions, and if the climate changes - as it very well might - we may end up without any crops that can cope, leading to an increase in world hunger. Fortunately, people like those local growers I'm so keen to support are themselves very keen to support diversity of food, in terms of heritage breeds and seeds (two websites for seeds to illustrate my point: Diggers and Eden Seeds, both big on seed saving, self-sustainability, and of course heritage varieties, many of which I have never ever heard of. For example, did anyone know that carrots were actually originally purple?).

And addressing your point about organic food not being affordable for the world's poor: how exactly do you think those in the third world farmed prior to agribusiness involvement?

Dr. Strangelove said...

"how exactly do you think those in the third world farmed prior to agribusiness involvement?"

Well one thing is they farmed a lot less. Consider that in 1980 Africa's population was 470 million, and now it's 970 million--Africa's population has doubled in the last generation. We have no way of knowing what would happen if agribusiness, which helped fuel this boom, were cut off.

Dr. Strangelove said...

It just hit me... Carrots were originally purple?? My reality crumbles!

Raised By Republicans said...

Yes, California is sunny and warm. But it doesn't have water. You can't just say "two out of three is good enough, let's pretend we have a comparative advantage in agriculture and be happy."

Farming in California costs a lot per unit - especially in the inland areas. It is only possible because of massive government outlays of money. Money that could have been spent on other things - like actually feeding the poor. I have tried to explain factor endowment models of economics on early versions of this debate. The short version is that the world will be better off if every country focussed on those items they can produce at lowest cost (most efficiently). California is abundant in two things: capital and labor. It has a lot of land but unfortunately, much of it is not naturally arable. California would be a richer place for focussing on things like the high tech industry rather than trying to make deserts bloom with other people's money and other people's water.

Now, on to the situation in Africa. We have to remember that if we ended subsidies to the Big Ag companies, it would not simply remove their products from the market and stop. It would change how Africans manage their resources too. This change would not be instantaneous but it would be very very quick (single digit years rather than decades).

This idea that the policies we have influence the choices made in the developing world - and the development of the developing world - has been missed a few times in this ongoing debate. Our subsidies force developing countries to reallocate resources away from their comparative advantage in ag and also inhibits their ag sectors from improving efficiency and quality. The flip side is that if we stopped this despicable practice, the developing countries would change in response. It would be wrong to assume that the are as they are forever.

Spotted Handfish said...

A couple of comments about the market in Australia (sorry if I've missed some of these being said before, I've run out of time to read this thread in detail, but I hope to do that soon). I believe there are no subsidies of ag production in Australia. There is drought relief support for farmers during bad years but no ongoing subsidies. The only areas where things tend to break down are when the market forces are implemented badly. Let me explain with two examples.

There are two major supermarket chains in this country. One effect is that they can squeeze the producers to offer products at very low cost: milk is the prime example that I can think of, and one area where market forces break down. The other one is where we don't price/tax raw goods or waste. Greenhouse taxing has been mentioned before and is not included in food costs; this would increase the cost of meats. (Our CSIRO is a world leader in innoculating cattle to reduce methane emissions...) Water as a resource also has not been priced, and hence we do have the situation where a water poor country like Australia does grow rice and lettuce in areas where the water would otherwise feed the dieing river systems. These are areas where I can see the government having a good effect, in protecting the general environment of the country.

Personally I agree with RBR and Pombat: if I want a crayfish, I'll buy it unless the cost is too high for the benefit. In which case I'll eat prawns.

The Law Talking Guy said...

RBR, you keep saying that what happens with subsidies is that prices lower in the short run, local produces go out of business, then prices go up. I keep responding: (1) where are we on the cycle? Have prices in the third world increased? Or are they still low?
(2) increases in food prices (by ending subsidies) are exactly what you claim will spur local food production. So if food prices have gone up in the third world, why aren't we seeing local production? Right now, the USA is seeing cheap goods dumped on the marekt by China, which is basically providing subsidies via the exchange rate. Nobody would argue that electronics prices would go down in the USA if the Chinese devalued their currency.

RBR is using a straw man, saying that I am arguing for the status quo. I am not. I have made that clear. Rather, I am arguing against the idea that a free market in food is a useful goal in and of itself. RBR then asks me how the current status quo has solved the hunger problem in the status quo - which is, of course, a clever rhetorical device and an impossible question to answer. The status quo is what it is. Would there be worse hunger if subsidies had never been imposed? I do not know. I do know that the solution for hungry countries is not to export their food to the developed world.

I reject the idea that if we simply eliminated subsidies for agriculture, the food situation in the world would automatically and/or quickly improve. It is pollyannish. I think I have argued persuasively that without some form of subsidies, the free market will never be able, as a matter of both theory and practice, to solve the problem of hunger in the world.

Dr. Strangelove said...

When you have two out of three required resources, sometimes it makes good economic sense to invest in the third. In our case, California already had a fantastic climate for agriculture with plenty of easily accessible, arable land. Our state-sponsored irrigation system allows us to leverage those resources. While the free market alone would have left the tremendous agricultural potential of the central valley untapped, California's support for agriculture has instead provided for a truly amazing return on investment--a win-win for taxpayers and farmers alike. The return has been so great that it is hard to imagine any other investment could have been more productive. You have to think "leverage" instead of "subsidy", RbR: it's a different paradigm. This unusual situation is made possible because we were not facing a zero-sum game here: vast resources were waiting to be tapped.

By the way, the average annual rainfall in Sacramento is 17 inches per year--an arid region, but not a desert. It's not like we're farming sand dunes over here. (By comparison, Idaho gets only 11 inches for its potatoes. Kansas gets 28, Wisconsin gets 31, and Iowa gets an average of 32 inches of rain.)

Raised By Republicans said...

OK, LTG, I misunderstood your question. Where are we in the cycle? We are in the mature stage. The 3rd producers are going to out of business - and shifting away from food and towards cash crops. This happened after the 3rd world countries stopped their own ag subsidies back in the 1980s. They had tried to keep up with the US and EU with ag subsidies but had to borrow massive amounts of money to do it. That was fine when interest rates were low in the 50s and 60s but when interest rates rose after the 1970s oil embargo by OPEC, developing countries essentially got "margin called" and have been in periodic debt crises ever since. One of the things they can no longer afford to do it subsidize their ag sectors - so their farms have trouble competing with our subsidized farms. Now our farms dominate the world market and prices reflect that trend towards monopoly. Also, because most of the world is importing their food from us, their food prices are very sensitive to fuel price shocks which happened last year.

LTG, you ARE defending the status quo. You oppose reducing ag subsidies and presumably - since you also claim not to be opposed to the market economy in general - you also oppose increasing them. So you support the status quo with regard to ag subsidies. At the very least you support a world ag regime based on massive ag subsidies in the rich part of the world combined with food aid the poor part. But this is much closer to what we have than what I'm proposing.

What would encourage people to go back into farming in the third world is NOT simply higher prices. It is the ability to make a profit. Under the current system, prices are high but because we subsidize there is no incentive to try to compete with our farms. Our Big Ag companies simply start dumping cheap subsidized food again.

OK, Dr. S, I should be even more upset about water policies in Idaho. That doesn't let California off teh hook. Nor does it mean that California has the comparative advantage in ag that you seem to be trying to claim. 17 inches of rain is far below what your farms are consuming. You also cherry picked Sacramento. It is the wettest part of the Central Valley. What about Modesto? There they only get 12 inches of rain. In Fresno, it is 11.23 inches. Sand dunes here we come! Palm Springs, CA which I think we would all agree IS a desert gets 5.23 inches of rain in an average year.

Dr, S, if you now claim that ag subsidies are a "win-win" then you have not understood a single point I've made. The only way we can play the "my paradigm is equally valid to yours" game is if we shift from a debate about the costs and benefits of ag subsidies in aggregate to a debate of "do I support ag subsidies for selfish reasons."

I think this is really at the root of LTG's staunch support for ag subsidies. He has a natural dislike for market economics. He also seems to have an inexplicable emotional attachment to corporate farming the central valley because of the bucolic atmosphere it creates. So what it really boils down to is LTG wants the world to pay in a variety of ways for his preferred policy. OK, just admit it. Just admit, I'm a selfish bastard and I'll stop complaining because in the end we all are. But don't pee in my ear and tell me in raining in Modesto.

Raised By Republicans said...

Regarding the best two out of three lets invest in the third idea. It depends how much that third thing costs. Investing in irrigating the Central Valley costs billions a year in the obvious costs. It also imposes costs on other industries by forcing them to pay higher prices for water so the farmers don't have to. And it damages the environment the costs of which are hard to quantify.

Finally, it encourages people to expect access to something all the time that is actually quite vulnerable to shocks. That is what we are seeing now with the massively reduced water allocation. The sudden dislocation to the Central Valley farmers who were essentially paid to set up farms where they were bound to get hit by a lack of water sooner or later should be considered as part of the costs.

Please, really please look up some literature on Hecksher-Ohlin trade models. http://en.wikipedia.org/wiki/Heckscher-Ohlin_model

Dr. Strangelove said...

"Dr, S, if you now claim that ag subsidies are a "win-win" then you have not understood a single point I've made."

Actually I understood you perfectly well. I disagreed. If you want to learn more about California agriculture, you might want to look at some of the summaries at the UC Davis Agricultural Issues Center.

1. CA Agriculture has a strong return on investment.

"Agriculture creates significant ripple effects (i.e. multipliers) throughout California's economy. Each dollar earned within agriculture fuels a more vigorous economy by stimulating additional activity in the form of jobs, labor income, and value added... For the agricultural production and processing industry there is a value added multiplier of 2.27. Thus for every dollar of value added in that sector, there is an additional $1.27 added to the state economy."

2. The same paper estimates (Table 5.1) that net taxes minus subsidies to agriculture is -$1.7 billion. But for that investment, we get a total value added of $20.8 billion for agricultural production alone. And if you include agricultural processing as well, the value jumps to $90 billion. (These estimates do not include indirect costs like the environmental concerns you mentioned.)

3. Another useful brief estimates the value of subsidies. In 1997, water subsidies accounted for $236 million. (Of course it might be double or triple that now. But it is certainly not in the "billions" range.)

Raised By Republicans said...

Item 1) Ag is not the only investment we could make and other investments might yield bigger ripples. Also I'm dubious of the way they count the subsidies. Are they counting the cost of all the water pricing stuff for example. It doesn't look like it.

Item 2) Same issue.

Item 3) that only counts direct subsidies for water. It doesn't count the entire cost of the entire system.

I very suspicious of this data. I think it is not presenting a complete picture of the costs and - possibly - giving a lot of credit for "ripples" where there are multiple causes in play.

Dr. Strangelove said...

I picked Sacramento because (a) it is geographically in the middle of the central valley, (b) its average rainfall is the same as the average rainfall for all of California, and (c) contrary to what you said, Sacramento's rainfall is also representative of much of the valley. (This handy map shows precipitation across California.) Some parts of the valley are wetter, notably in the north and up into the mountains, some are drier, notably in the south and down into the deserts. California moves water from the wet, mountains to the drier, fertile plains.

The great ancient civilizations in Egypt and Mesopotamia all relied on state-sponsored irrigation systems to grow precious crops on arid land too. If the world farmed only in areas of high rainfall, the world would starve.

And finally, a critical point is that California's support for agriculture is not anti-competitive. California farmers still pay more for water than their counterparts in Kansas, for example. Californians are able to compete because the climate is good year-round, the land is very fertile, and California has invested heavily in increasing yield per acre.

Dr. Strangelove said...

According to the same study, the typical industry has a ripple of about 2.0, so agriculture does better than most.

One issue you raised is the devastating effect of droughts--shocks to the system. This is a serious problem anywhere (just ask the Aussies) as well as in California. There are also environmental impacts (think "Salton Sea") that can be quite dramatic. But of course the free market suffers the same weather and is famous for ignoring environmental devastation too (think "Dust Bowl).

The Law Talking Guy said...

Pombat writes "Addressing your point about organic food not being affordable for the world's poor: how exactly do you think those in the third world farmed prior to agribusiness involvement?"

Before the Green Revolution, it was without industrial pesticides. After the Green Revolution, which dramatically increased crop production in much of the world, only those who used industrial pesticides could compete on a production-per-acre basis. We are seeing this in Mexico now, where GM corn and modern industrial pesticides are driving out local farming and local corn landraces (the corn is promiscuous and is actually breeding it away, since it breeds up to a mile away by air). The crop yields per acre of industrially-farmed corn are so much greater than traditionally-farmed corn that the industrial prodcuers lower prices and put the others out of business.

Of course, right now the price of food is still soaring in the third world for reasons unrelated to agricultural subsidies or anything else, but to biofuel production.

Pombat said...

Putting aside for the moment my distaste for the phrase Green Revolution (I live with a different meaning for capitalised Green), would you agree that the industrialisation of food is actually a bad thing, since it has not resulted in the guaranteed feeding of everyone in the world, and is having effects such as breeding away heritage breeds, leading to less food security for the future, as I discussed before?

Additionally, would you agree that demanding the cheapest possible blueberries, regardless of how they were produced (as long as it was in the US), is contributing to exactly the effect that you've identified - where the industrial farms lower prices and put others out of business?

And then there's Dr.S's point, from halfway back up the thread, that in 1980 Africa's population was 470 million, as compared to 970 million now, with a lot of that increase made possible by agribusiness involvement. In the context of this article talking about how the world cannot sustain ongoing population growth, I think that makes another point against agribusiness and cheap blueberries for all.

Although a strong case can also be made for this also being to do with religious beliefs being strongly applied to aid packages and thus limiting the contraception/abortion options available to people in these countries (I'm also not convinced about the hypothetical draconian approach RbR mentioned, and regards that - my assumption would be that sterilising men would be a more effective means of population control, given that women can only produce one baby every year or so, multiple births aside. I am very supportive of the idea of combining family planning and food aid, and increasing the safety of pregnancy/giving birth, and childhood survival rates).

Pombat said...

As a semi-aside, but related to all this, given my interest in growing our own food, protecting heritage varieties and so on, two websites that may be of interest to people obtaining seeds in the US:

Seed Savers Exchange, who have a ridiculous number of heritage seeds available, at not-expensive prices (I have a bit of seed-availability envy, I must admit!)

The Garlic Store (US), who, surprisingly, sell garlic, and all things garlicky. I'm going to grow us some garlic here at home, having discovered it's a pretty hardy plant which adapts well to most situations, and all the imported Chinese stuff we get in Aus is fumigated by Quarantine with methyl bromide, which is kinda unpleasant. As a bonus, going sustainable with garlic is as simple as saving a clove or two from each bulb you eat and stuffing them back into the ground - I was told to eat the garlic until it starts shooting, then plant. Too easy.

An additional source for articles on growing your own food, from why we should, to how, is Digger's, who are an Aussie company (link is to their articles page). Digger's and Eden Seeds seem to be our best heritage seeds sources in Victoria - if anyone knows of another or better source, I'm all ears! :-)