Monday, December 10, 2007

How meat and GMC FlexFuel are starving the 3rd world

The current issue of The Economist has some interesting articles on damage done to global economies and the rural poor by 1st world subsidies.

"The end of cheap food" sums it up pretty well and "Cheap no more" elaborates.

The facts and chain of logic square with what I know about ag systems. I especially appreciate their repeated point that if you want to subsidize the poor (e.g. by making sure the poor in the US can afford food), you should do it directly, not by monkeying with the market. Coincidentally, an ad on NPR today remarked that US subsidies are focused on food that aren't especially healthy either, which is true. I think Talk of the Nation tomorrow is actually focusing on the Farm Bill, so I'll likely write more then.

At any rate, I've heard multiple arguments against our ag subsidies but only two for them. I think I can pretty much discount the first; that we need subsidies to keep food affordable. Americans use to spend a much greater proportion of their income on food than they do today, and our middle class rose all the same. The second argument, that we need subsidies to ensure a domestic food supply, I doubt strongly. North America has pretty remarkable ag resources (good soils and climates) and already dominates world markets in many non-subsidized "specialty crops," e.g. almonds. The US does a lot more with ag than grain.

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