thu 27 dec 2007 08:39:19 — witte de withstraat
whither the wheat
as soon as i awoke this morning, i wanted to know *why* the cost of grain is rising sharply around the world. wheat prices alone rose more than 50 percent in 2007. rice, corn, soybeans are going up.
found an article at dailyyonder.com just written yesterday which tried to explain.
[1] rising oil prices create pressure to use more biofuels, ethanol etc. this creates competition between food and fuel for the grains we live on.
[2] overall the world has grown more prosperous so more people eat meat, which increases demand for feed grain for the animals we eat.
[3] effects of global warming are lowering crop yields in some places.
the price of wheat rose 50 percent in 2007. rice, corn etc are also going up. global supplies of all cereals / staples are actually declining. meanwhile the more prosperous people are consuming more. so there is increasing competition between rich and poor for the food supply. meaning the poor people will be starved out.
so apparently it's not just a difficulty with the cost of production. it seems like it's partly a problem of opportunity. if something is growing scarcer, one is "obliged" to sell it for a higher price because that's how things are supposed to work under the laws of greed.
what i can't see yet, is how the natural market forces will solve this. if only the rich can eat and survive, that eliminates poor people. but it's not the poor people who are causing the problems of the world. what natural market force eliminates the rich? do they just die of overeating? i guess i need a lesson in economics.