Bruce wrote:
I was responding to your thesis that American farm subsidizes were
causing a burden on the poor farmers, just as you say above. I was
pointing out that in Asia, with it's population of approximately
3,880,000,000 that it just isn't true.
That really wasn't what I was saying. Food aid and subsidies was
injected into the discusion by someone else. But if you want to examine
Asian examples where direct aid has been harmful, look at the
Philippines and Pakistan. Both are agricultural basket cases due to US
aid. But the original subject was the effects of ethanol on world grain
prices. My point was that ethanol has rendered food aid and govt.
support programs to farmers irrelevant.
My thesis with respect to 3rd worlsd farmers was that cheap agricultural
commodity prices is what makes poor farmers poor. And that ethanol
production in the US is resulting in higher commodity prices which is
turning into a great boon to third world farmers - including rice
farmers in Thailand.
There is no mystery why third world farmers are poor. You too would be
poor if you were being paid 1960's wages. The price of cereal grains has
remained stagnant for many decades.
The price of rice has in the last few years broken through that ceiling
it has been stuck below for 50 years. And I guarantee you that if
ethanol production in the US ceased today the price of rice would drop
like a stone and rice farmers will again be stuck right back where they
have been historically. Now you can speculate why the price of grains
have remained stagnant for so many years, but there is little doubt that
the ethanol boom in the US is a significant new force that is moving
grain prices world wide from where they have been stuck for decades.
The "slums that surround 3rd world cities" in Asia, which is largely
all 3rd world, are hardly due to the U.S. farm exports. In fact the
U.S. imports a substantial amount of farm products FROM these poor,
impoverished countries.
Slums are very definitely due to destroyed rural economies, which is
is another way of saying farmers not making any money..
People don't come to the cities because they want to live in a slum -
they come because they have no alternative. Back in the 60's a farmer
could grow a bushel of corn and buy more than 10 gallons of fuel from
the proceeds. The price of everything else in the world steadily
increased while the price of agricultural commodities has hardly
changed. By 2005 a bushel of corn would just barely by one gallon of
fuel. But in the last 5 years that has all changed dramatically. Prices
of grains world wide have all broken through the ceiling they have been
stuck below for decades.
It doesn't matter if the farmer is growing rice, corn, wheat, beans or
barley the story is the same.
Your reference, above, isn't true, at least in the S.E. Asia nations
where the price of rice is controlled by the government and
surprisingly enough, very much in favor of the rice growers, to the
great dismay of the city folks.
"the price of rice is controlled by the government". That is a joke,
right?
The governments in Asia have about as much control over the price of
rice as they do over cyclones, typhoons and Tsunamis. Sure, they try to
do what is within their power to mitigate the effects of natural
disasters and world commodity prices. The production of ethanol in the
US has done more for the rice farmer in Thailand in the last few years
than all the decades of Thai government programs put together.
Try
http://www.bloomberg.com/news/2010-1...-exporter.html
for a report on rice prices from less political viewpoint.
So explain the huge increase in rice prices around May of 2008. There
was no crop failure, reduced harvest or increased consumption at that
time. But it did coincide with a huge increase in the price of corn.
When you make a statement that is totally wrong for some 40% of the
world's population it cast some doubts on the veracity of your entire
thesis.
Except that I didn't make a statement that was wrong. The fact that
certain farmers in Asia are not as bad off as some farmers in Africa or
Central and S. America is really just splitting hairs.
-jim
Cheers,
Bruce