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« Vestments: The Voice of the Vatican? | Main | "... his mother taught him how to sew" »

April 24, 2008

Comments

I'm not completely convinced that the increase in biofuel production is the prime mover in the food price increases. This article addresses it from a wider perspective. I don't see an extraordinary increase in cars running on ethanol blends either, though that could be just a peculiarity of the S-W PA demographic.
As for grain prices, it could stabilize next year, if these reports on record grain production in the 2007-08 year are any indication.

It is not the "prime" mover but is definitely a factor. The problem first showed up when poor villagers in southern Mexico began to go hungry due to a corn shortage. Now a similar phenomenon has been observed in rice growing countries like Indonesia wher rice farmers have begun growing soybeans for fuel. Most poor Indonesians are dependent almost wholly on rice as their major staple. Price of rice due to reduced supply has gone up and caused much hardship. Farmers will do what is profitable. Afghan farmers grow poppy for cash while villagers there go hungry.

The ethanol story is promoted enthusiastically by environmentalists as the solution for "low cost," clean and renewable fuel. While the last two are correct, the "low cost" part is not.

Whatever the actual supply situation for rice, it's definitely true that the 'shortage of rice' meme has now spread like wildfire and is being covered prominently by all news agencies. This, despite some efforts to tamp it down. Those who have invested in rice futures must be rubbing their hands in glee at this sudden windfall with the sharp rise in rice prices (up by 300% over the last year).

Roger Cohen of the New York Times says that it is not the production of ethanol per se that is causing the hike in food prices but the source of that ethanol. Again, he too blames farm politics.

I saw the news report about the "rationing" of rice in mega markets like Sam's Club and Costco. I buy my rice at Asian stores. I haven't checked what the situation there is regarding availability. But the price of Basmati rice as well as that of most other foods in my regular grocery store is definitely up.

Silent no more. Everywhere we turn we read about this escalating problem. Sometimes I just don't understand.

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