The Washington Post is doing a series of articles entitled Global Food Crisis about France’s prospects in the next World Cup…and something about why everybody’s starving to death.
Yesterday they covered U.S. wheat: essentially, domestic wheat production is way down (64 million acres of wheat this year vs a high of 88 million in 1981) as farmers switch to more profitable crops like corn & soybean. Things have been exacerbated recently by poor wheat harvests worldwide combined with the weak U.S. dollar, which caused international buyers to buy up a lot of U.S. wheat. Relatively little research money is spent on coming up with better wheat varieties because companies see higher profits in other crops. I thought the biggest “WTF?!” revelation in the article was this one: “In 1996, Congress gave a strong nudge to these changes by passing legislation allowing wheat growers for the first time to switch to other crops and still collect government subsidies. The result is that farmers received federal wheat payments last year on 15 million acres more than were planted.” We paid wheat subsidies to farmers for NOT growing wheat? FAN-tastic.
Today they covered U.S. corn: about a quarter of all U.S. corn goes into ethanol production. When fuel prices go up, that includes the price of ethanol, which drives up demand for corn, which drives up prices for all corn. [The corn used in ethanol is not the same type as the corn people eat, but naturally acreage devoted to ethanol corn is not being used for edible corn.] Corn is also used as animal feed, so an increase in corn prices affects them as well.
There’s a lot of payments out there for farmers for not growing crops on land as part of the farm bill’s pro environment stuff. So farmers don’t plant their worst soil and get $$$ as part of the old Conservation Reserve Program
Agreed, the whole biofuel thing is ridiculous. Top it off with this, which I hope they included to show how the EU has further screwed things up:
The European Union doles out about $41 billion a year in agriculture subsidies, with France getting the biggest share, about $8.2 billion. The 27-nation bloc also has set a target for biofuels to supply 10 percent of transportation fuel needs by 2020 to combat global warming.
Killing off the poorest, least pollution making segment of the world population through prolonged starvation doesn’t exactly seem the sensible way to combat global warming. Maybe another conventional world war?
War is devasting to the environment, though. How about a man-made epidemic? Sure, that HIV thing didn’t work out so well, but surely human ingenuity can come up with something more effective, something that only targets fat rich plutocrats, for example.
With the rising costs of fuel, food and energy, the poor of the world will probably die from the elements and it’ll be too costly for those of us who aren’t in bad shape to send them relief. I could see how this could work out.
But that’s only because I’m thinking like an evil person right now.
Except if I’m reading the article right, that’s not what they’re getting paid for: they’re receiving wheat subsidy money for millions of acres which are used to grow other (presumably more profitable) crops. If true, that’s just nuts: the entire point to farm subsidies (in theory) is to get farmers to grow critical crops like wheat which would otherwise lose money for them, in part to avoid the very shortages we’re now seeing.
Actually, the US government has frequently used subsidies as incentives to not engage in particular kinds of agricultural activities when it was thought that too much production was rendering the entire industry unsustainable. A good example was milk production in the 1930s. If profit margins from wheat production were getting so low as to threaten the commercial viability of US wheat producers in general, then the subsidy for planting other crops makes sense. Don’t know if this is actually the case, but the article implies that it might be.
Why? I mean, at some point the profit margins for cartwheel makers got so low that the cartwheel industry pretty much died out, but nobody suggested spending billions of taxpayer dollars to keep it running on life support.
Is there demand for wheat? Are people willing to pay money for it? Then somebody will grow wheat. I don’t particularly care if it’s grown by Americans. I don’t need the warm safety blanket of a strategic wheat shield to protect me from the Red Chinese.