Food is in the news like never before and everyone has an answer to
the "food crisis" based on their experience and their bias.




Prairie farmers will tell you that grain prices aren't out of line.
They've been unreasonably low for so long that the recent price strength
barely compensates for inflation. (Cattle and hog producers who buy feed
grain may have a different opinion.)

If there's rain and if there's no hail or frost and if prices remain
strong, grain producers will do well. If you don't grow a good crop, you're
still stuck paying input costs, which are the highest ever.

Why should farmers take so much risk without the potential for a
return on their investment?

For most consumers in Canada and the United States, the increase in
grain prices is largely irrelevant. The grain price increase may have caused
the price of a loaf of bread to increase by a nickel or a dime in the past
year, but the price of a litre of gas has been going up by that much every
few weeks.

You pull up to the pump for 40 or 60 or 80 litres of gas. How many
loaves of bread do you consume in a week?

Consumers should also keep in mind that much of the increase in food
prices is caused by the increase in transportation costs rather than the
increase in the value of the raw materials.

At some point, consumers may be hit by increases in the price of beef
and pork. Eventually, cattle and hog values will have to reflect the input
cost reality of higher feed grain prices and that may have a more visible
effect on supermarket prices.

For consumers in wealthy countries, the biggest food problem is
obesity. Food is so abundant and cheap that eating has become a national
pastime.

It's difficult for us to relate to the ultra poor people of the world,
who try to survive on a dollar a day or less. For them, the price increases
for wheat, corn and rice has life and death ramifications. Protests, riots
and wars can result from the fear of starvation.

For the good-hearted people who deal with starving masses, the answer
is more abundant food at lower prices. That flies in the face of market
realities. It's like expecting lower oil prices will lead to an increase in
exploration and development.

You can't get more production by suppressing the price. Affluent
nations can and should increase their contributions to food aid, but food
handouts aren't a long-term solution.

Some economists point to market protectionism as part of the problem.
They argue that an unfettered marketplace free from trade barriers is the
best way to ensure adequate food production and distribution.

For too long government subsidies in developed countries have spurred
overproduction, resulting in low world prices that failed to encourage
production in non-subsidized nations.

Others argue that food exports facilitated by free trade agreements
are the problem. Food should be produced locally, they say. Domestic food
security should trump competitive advantage in food production.

You can also find advocates for and against biotechnology and genetic
modification. In affluent North America, we've been consuming genetically
modified crops such as canola, corn and soybeans for more than a decade. Yet
some impoverished countries fear the technology and let their people starve
rather than import GM crops.

Just a couple years ago, the price of food was not an issue. Grains
were cheap and abundant. There were starving people in the world, but food
prices were not pegged as the reason.

Welcome to the new reality where the world no longer takes its food
supply for granted and the whole food chain is scrutinized all the way back
to the primary producer.

www.checkbiotech.org