Wednesday, April 16, 2008
Recently, one of our staff happened to mention in a campus-wide email that he/she thought that increasing demand for biofuels was not causing the food crisis. I thought that outlook optimistic to say the least. Of course any diversion of foodstuffs like commodity maize (corn) on a large scale from food commodity markets to fuel markets will, all other things being equal, increase the cost and decrease the supply of food, at least in the immediate future.
It will also, all things being equal, increase the demand for, and price of, farmland, increase the price of secondhand and new farm equipment, stimulate conversion of land from non-fuel crops to fuel crops, raise the price of close substitutes, and even cause an increased rate of development of virgin land. All of these exchanges will occur at the margin and in the short term, that is to say, an incremental change in the independent variable of food quantity, will cause an incremental change in the dependent variable of food price, until the market corrects by finding other ways to satisfy demand.
Another way of saying this, is there are no magic bullets or black and white explanations, just reasoned marginal analysis.
Should anyone who hasn't taken micro-economics be permitted an opinion on this? Well, of course. We value free speech, as well as free enterprise. Will that opinion be reasoned and of predictive value? I leave that for the reader to decide.
Micro-economics will only do you so much good, though. It will tell you what a market will do under specified conditions : perfect information of parties to bargains, absence of force and fraud, no free rider effects and so on. It won't tell you what a market should do. That, as Hume explained, is a different question, for a different discourse with different rules of operation. Should the government intervene to help feed people? Of course it should if they are hungry and the market is temporarily disabled. That's what governments are for. No "modest proposals" here, please.
In general, if I put on the uncomfortable cap of augury, what I see for the immediate future is a food crisis. A food crisis is also a farm opportunity. There remain serious ecological problems for agriculture to solve. The chief process for producing ammonia-based fertilizer also depends on fossil fuels, already less economic. And the large scale shipping of food, while obviously key to human life as we currently know it, will become somewhat less economic. Land currently disused or lightly used for agriculture, or in patches previously too small to work economically, may now be more economic to work. Land in northern climates previously marginal for agriculture will, because of climate change, now be more likely to be economic to use. All these changes too will occur at the margin.
All this suggests opportunities for local and regional agriculture. It suggests farmers may now be able to make some money from Maine farmlands previously tending towards disuse. It also suggests that local and regional nutrient cycling using compost, manures, and rotational crops will be more attractive to busy farmers than they were in the last fifty years. Mixed farm systems, using livestock like these piglets to manage wastes back into food, and to produce fertilizer, as well as growing crops, will become somewhat more necessary, somewhat more useful, and somewhat more economic.
This doesn't mean to say farmers will all become Small Farmers Journal or Mother Earth News types with that same believer's attitude. I get both magazines. But I also get Sheep Industry News, highly recommended for its lengthy articles on the preferential characteristics of exploding and cyanotic coyote baits over plain exploding ones, or its considerable discourses on how to get a higher value per unit feed with early spring lamb at Easter than late near-mutton in fall. (In other words, don't bother to feed the cuddly lamb babies all summer, but kill them off early to get the best profit per unit input.)
There has to be a middle ground between the crumbling rock of airy-fairy hippified ridiculousness and the hard, hard place of thoughtless, callous, agribusiness. Is there anyone with both a conscience and a brain that thinks either system, applied wholesale, would actually be tolerable and ecologically stable? The reasoned position is likely to be somewhere between each of these upsettingly iconic editorial positions.
And yes, biofuels are one of the causes of high food prices. Climate change is another.
One thing is for sure, agriculture is NOT going away any time soon. Anyone who doesn't think farming is important, never went hungry, even for a day.
Hunger. Strikes. Riots. The food crisis bites
Across the world a crisis is unfolding at alarming speed. Climate change, China's increasing consumption and the dash for biofuels are causing food shortages and rocketing prices - sparking riots in cities from the Caribbean to the Far East. Robin McKie and Heather Stewart report on the millions facing starvation - and the growing threat to global security