Why Do Americans Get To Eat More… A diff take

Posted on by

Earlier this week, one-man blogging machine Amardeep put up a post on the Food Price Kerfluffle asking Why Do Americans Get to Eat More than Indians?

While I agree with Amardeep that there are a couple funny / snarky jabs in the piece, I’ve got pretty much the polar opposite opinion on the situation. So, I figured it would be worth writing up and tossing up my usual, contrarian view in part because it touches on so many of the meta-issues I’ve been writing about here for the past few years.

For example, the first paragraph in his piece highlights the classic Consequentialist vs. Intentionalist divide –

The Source of the World Food Crisis?

On May 2, George W. Bush explained that the current spike in food prices worldwide is primarily a consequence of rising demand from China and India: “when you start getting wealth, you start demanding better nutrition and better food, and so demand is high, and that causes the price to go up.” The quote was widely seen in the English-language Indian media as “blaming” Chindia for the problem, and was met with outrage.

Bush’s assessment for why food prices are higher is econ centered and consequentialist — more demand, relatively static short run supply = higher prices as an emergent property of a world where millions are making independent decisions. The process is detached, impersonal, and decentralized and perhaps most importantly, true regardless of who this basket of newly richer folks are.

The Indian Media’s (& politician’s) response, however, was dramatically intentionalist. By pointing out this relatively straightforward economic model, Bush was somehow turning the issue into a Morality Play and personally “blaming” the racial other. Same facts, different frame, different narrative. So how does this sort out?

The underlying mental model that drives one narrative vs. the other comes into plain sight in one of the first quotes Amardeep selects from the IHT piece –

The food problem has “clearly” been created by Americans, who are eating 50 percent more calories than the average person in India, said Pradeep “In the bad old days, people in China and India supplied the world with a large shock absorber, a large mass of poor people who tightened their belts when prices rose.” – Ajay ShahMehta, the secretary general of CUTS Center for International Trade, Economics and Environment, a private economic research organization based in India with offices in Kenya, Zambia, Vietnam and Britain.

There are at least a couple classic economic errors here. First, and most importantly, we don’t live in a Soviet economic world where a fixed basket of resources are unilaterally allocated by The Man (a fallacy Steven Pinker / Arnold Kling identify as “Authority Ranking“). There isn’t some secretive, ruling cabal that sinisterly wants Indians to starve while privileged Americans are granted 50% more calories. Food products are bought / sold on a global market where individual Americans choose to pay for 50% more calories which individual producers choose to supply.

[yes, there are issues here with things like tariffs, subsidies, etc. distorting the market… but the broad point that we’re more Capitalist than Soviet when it comes to food still holds; for ex., subsidies are highly distortive and merit vigorous opposition but their net effect is often to *increase* supply beyond the market clearing price]

Second, in situations where long run supply and demand have been relatively linearly growing, small changes at the margin can have large impacts on the price. The American caloric binge has been going on for a long time, so it’s clearly something more short term that’s driving these changes at the margin. Martin Wolf has an excellent FT article with a graphic that tries to tease out what’s causing marginal changes and yep, the combination of “Developing Economies” as well as “China” really drive a big % of the change particularly from 2004 onwards –

And in 2007 / 2008? That ethanol mandate is particularly huge –

The latest World Economic Outlook from the International Monetary Fund comments that “although biofuels still account for only 1½ per cent of the global liquid fuels supply, they accounted for almost half of the increase in consumption of major food crops in 2006-07, mostly because of corn-based ethanol produced in the US”.

Several folks have also pointed at this excellent analysis by Ajay Shah on his blog; I particularly liked this blurb that really gets to the heart of where China / India may have qualititatively changed the equation –

In the bad old days, people in China and India supplied the world with a large shock absorber, a large mass of poor people who tightened their belts when prices rose. This gave higher global demand elasticity and reduced price volatility. From the late 1970s, economic reforms in China and India have given greater affluence and thus diminished this shock absorber.

The third classic econ mistake in the IHT blurb is assuming that supply is constant. As Ajay Shah notes, we’re already seeing changes in supplier behavior driven by the market –

high wheat prices can even make Afghan poppy farmers switch to growing wheat! Vast tracts of land in Russia and India have low yields: High prices will give incentives to entrepreneurs to find ways to use this land better. Over the coming two years, a large supply response could come about. Something big might already be afoot: an 8.2% rise in world wheat output is projected for 2008-09, and surely some of it has to do with the incentives put out by high prices.

So where do I look for solutions to the Food Price Kerfluffle? Rather than making overweight Americans collectively forego liposuction to address food prices, I’m naturally inclined to find additional market oriented solutions. Martin Wolf’s original article also notes several areas of interest –

This, then, brings us to the big question: what is to be done? The answers fall into three broad categories: humanitarian; trade and other policy interventions; and longer-term productivity and production…

…Increases in aid to the vulnerable, either as food or as cash, are vital.

…A host of countries are imposing export taxes instead, thereby fragmenting the world market still more, reducing incentives for increased output and penalising poor net-importing countries. Meanwhile, rich countries are encouraging, or even forcing, their farmers to grow fuel instead of food.

And, Paul Collier’s comment to Wolf’s article has, in particular, gotten a lot of airtime & blogosphere linkage. Why? because he directly addresses one of the key reasons Americans have so many more calories to choose from and one of the attitudes holding back that solution in other countries –

The most realistic way to raise global supply is to replicate the Brazilian model of large, technologically sophisticated agro-companies supplying for the world market. To give one remarkable example, the time between harvesting one crop and planting the next, in effect the downtime for land, has been reduced an astounding thirty minutes. There are still many areas of the world that have good land which could be used far more productively if it was properly managed by large companies. For example, almost 90% of Mozambique’s land, an enormous area, is idle.

Unfortunately, large-scale commercial agriculture is unromantic. We laud the production style of the peasant: environmentally sustainable and human in scale. In respect of manufacturing and services we grew out of this fantasy years ago, but in agriculture it continues to contaminate our policies. In Europe and Japan huge public resources have been devoted to propping up small farms. The best that can be said for these policies is that we can afford them. In Africa, which cannot afford them, development agencies have oriented their entire efforts on agricultural development to peasant style production. As a result, Africa has less large-scale commercial agriculture than it had fifty years ago.

Now granted, none of this is as emotionally satisfying as blaming fat, carnivorous Americans and their unpopular, gaffe-prone leader…. And for many of these chattering classes, global agrobiz is but one rung away from the deepest circle of hell occupied by Big Oil. Still, while Collier’s solutions give us much less room for Moral Grandstanding they are more likely to fill stomachs.

48 thoughts on “Why Do Americans Get To Eat More… A diff take”

  1. And for many of these chattering classes, global agrobiz is but one rung away from the deepest circle of hell occupied by Big Oil. Still, while Collier’s solutions give us much less room for Moral Grandstanding they are more likely to fill stomachs.

    Often the ones who have never farmed are the ones who constantly talk about ‘small agriculture’. Nature is unforgiving and commercial agriculture provides one with the buffer to face repeated attacks droughts / famines / pests. Of course, some will throw Cuba back as an example – however none of the chatterers live in Cuba…

  3. melbourne desi:

    Nature is unforgiving and commercial agriculture provides one with the buffer to face repeated attacks droughts / famines / pests.

    Uh…that’s fundamentally wrong. Commercial farming is responsible for the spread of many pests and famines, thanks to the advent of cloning, genetic invariability, and monoculture. The only “buffer” stems from sheer production quantities and resultant stockpiles, and that’s hardly a buffer.

    But hey, let’s get to a bigger question, which is the “intentionalist” part of Vinod’s post, which is the implications that Americans DESERVE more food than anyone else, simply because they have the resources to be the biggest market. Sorry, but being the biggest glutton on the globe still doesn’t equate to a some form of economic virtue. The “blame” for rising food prices doesn’t lie with India or China any more than it does with the U.S. Quite the opposite. We consume more all across the board, and our consumption of oil also drives up the price of food globally.

    And Paul Collier’s quote (“To give one remarkable example, the time between harvesting one crop and planting the next, in effect the downtime for land, has been reduced an astounding thirty minutes”) turns my stomach. Relentless exploitation is not amazing, it’s a grotesque perversion of agriculture. The only way that land can be cultivated in that manner is with tons of fertilizer, which in turn leads to nitrogen runoff, which in turn leads to water pollution, algal blooms, fish die-offs, and all kinds of havoc. Stop admiring it, please.

    I don’t see why Collier seems to think that any objection to how big agribusiness runs implies a desire to go back to hunter-gatherer days. There’s such a thing as moderation, you know. Quite a few commercial agribusinesses are embracing new models that rely on crop rotation cycles to replenish soil nitrogen, and other ways of more enlightened food production. They’re equally profitable (if not moreso, since they’re also more sustainable by definition). What’s to object to?

    Well, apart from the obvious objection to people who’d stand in the way of rampant corporate greed at any cost.

  4. Have you guys looked into the productivity of Indian agricultural produce. India has one of lowest agricultural productivity in the whole world. Only 2% of agicultural produce reaches market place (source: In spite of Gods – Edward Luce). Why don’t we fix that before complaining some idiot’s (read Bush) ranting!

  5. But I can’t argue with the ethanol mandate. That was one of the most ridiculous pieces of legislation ever produced in America. But then again, it’s yet another case of rampant corporate greed, so I guess we’re supposed to sit back and watch it instead of complaining.

  6. Have American’s suddenly in the past couple of years started eating more ? Not really, so there has to be other short-term causes for the food crisis.

    Bush’s assessment for why food prices are higher is econ centered and consequentialist — more demand, relatively static short run supply = higher prices as an emergent property of a world where millions are making independent decisions. The process is detached, impersonal, and decentralized and perhaps most importantly, true regardless of who this basket of newly richer folks are

    .

    Though don’t know how quantitatively correct it is, but according to recent article in Time, there is one more way Bush can be right abt India and China’s contribution – wealthier middle class are consuming more meat and milk and hence more grains are being diverted to feeding livestock rather than people. Interesting question for future would be if American style retail groceries in India/China go directly to the farmers to purchase food materials and if these materials are diverted to American style processed and packed food consumption, will this escalate the food crisis ?

  7. blaming fat, carnivorous Americans… agrobiz… Big Oil…

    Apparantely, the Canadians feel that it’s the nexus between subsidies for Big Energy and high calorie diets. 😉

  8. i agree with the general thrust of v-man’s posts; as usual. but two points

    1) http://www.nationmaster.com/graph/hea_obe-health-obesity, obesity rates….

    1 United States: 30.6%

    2 Mexico: 24.2%

    3 United Kingdom: 23%

    4 Slovakia: 22.4%

    5 Greece: 21.9%

    6 Australia: 21.7%

    7 New Zealand: 20.9%

    8 Hungary: 18.8%

    9 Luxembourg: 18.4%

    10 Czech Republic: 14.8%

    11 Canada: 14.3%

    12 Spain: 13.1%

    13 Ireland: 13%

    14 Germany: 12.9%

    15 Portugal: 12.8%

    16 Finland: 12.8%

    17 Iceland: 12.4%

    18 Turkey: 12%

    19 Belgium: 11.7%

    20 Netherlands: 10%

    2) i think there are negative externalities to fatitude. i’ve long had my libertarian card revoked, so i’ll offer that we’re not going to deny people health care (especially with fatitude becomes normative) based on weight differentials or ban applying the american with disabilities act on the morbidly obese. as more and more people get fat this externalities will lock in because rational discrimation will become impossible when you have a critical mass of people affected by said discrimination (even if the majority are not fat, the majority do have a relative who is fat if they themselves are not fat; though higher SES groups tend to be less fat, skewing one’s perspective).

  9. That picture of the guy is the head football coach of Kansas. I’m surprised he didn’t take a physical to get that job. Heh.

  10. Uh…that’s fundamentally wrong. Commercial farming is responsible for the spread of many pests and famines, thanks to the advent of cloning, genetic invariability, and monoculture. The only “buffer” stems from sheer production quantities and resultant stockpiles, and that’s hardly a buffer.

    could one say that monocultures redue the frequency of famine, but increase the magnitude? e.g., ireland in the 19th century was a classic example; before the potato famine it was an agriculture success as manifested by rapid pouplation grown from the 18th century.

  11. Uh…that’s fundamentally wrong. Commercial farming is responsible for the spread of many pests and famines, thanks to the advent of cloning, genetic invariability, and monoculture.

    and there are no pests or famines in the ‘small agriculture’ status. Yes, keep dreaming. It is much worse in the small agriculture sector.

    turns my stomach. Relentless exploitation is not amazing, it’s a grotesque perversion of agriculture. The only way that land can be cultivated in that manner is with tons of fertilizer, which in turn leads to nitrogen runoff, which in turn leads to water pollution, algal blooms, fish die-offs, and all kinds of havoc. Stop admiring it, please.

    A stomach that is no doubt pretty full. Mate, as an American you have not known hunger, so can you please stop telling the the rest of us the wonders of an empty stomach.
    Bush is an arrogant American – no different from the vast majority of ‘small agriculture’ fanatics. Both would like to keep the unwashed masses down. This is not a theoretical discussion – at least not for the hungry.
    As someone who has strong links with subsistence farmig in India, I cant but argue for more commercial agriculture.

  12. and there are no pests or famines in the ‘small agriculture’ status. Yes, keep dreaming. It is much worse in the small agriculture sector.

    right. downsides of modern agriculture must be framed in the context of the alternatives. in 1900 50% of americans lived on family farms. today 2% do. monocultures do increase the risks of a blight taking out a whole crop, but i think frankly the only response is going to be better agricultural genetics and genetic modification; diversified farming isn’t scalable enough to support the population we have today in terms of its per unit productivity.

  14. I’m not an economist, and I’ve only read the Ajay Shah blog post, not the other materials people have been linking to.

    But it’s worth pointing out that it seems like most are in agreement that the increased demand in China and India aren’t causing the price spike alone, and certainly not in the past six months. That is the first argument Ajay Shah refutes, and he goes from there. So Bush and Rice are wrong on the face of things. (Then again, I haven’t seen anyone defending them, so perhaps I am beating a dead lame duck. I should add that I personally was not outraged by the comments the way some Indians quoted in the media were. Rather, I simply thought Bush was wrong to point the blame outwards, when there is plenty of culpability at home.)

    That said, I wouldn’t dispute that the increased demand from the developing world is an important factor, among several factors, driving this. I have no problems with Ajay Shah’s “shock absorber” thesis, though that particular phrasing masks an inordinate amount of human suffering that occurred when the poor were, in the past, forced to engage in the “belt tightening” he describes. I would rather see a few rich people have to tighten their XXXL belts first.

    I am also not opposed to industrialized farming or GMO in principle; I don’t romanticize de-industrializing agriculture as is currently popular in the “organic” trend. Obviously the Green Revolution in India is a key example of industrialization working to the greater common good. Unfortunately, the way GMO is currently affecting Indian farmers, especially as introduced by Monsanto in particular, is not a good thing. It is leading to rapid soil degradation, and bankrupting thousands upon thousands of Indian farmers. It’s hard not to think that more government regulations and protections are needed to protect farmers from debt cycles, and greater caution needs to be exerted to protect resources. I am not saying that a return to socialism (the Green Revolution was largely implemented along socialist principles, as I understand it) is the answer. But rather, the current near-monopoly dominance of companies like Monsanto needs to be challenged — greater competition would benefit everyone, and sometimes competition has to be nurtured by governmental intervention. (There are signs that competition to Monsanto is starting to emerge in India around products like Bt Cotton.)

    Farm subsidies and agricultural tariffs in the U.S. aren’t helping matters. (Vinod puts this qualification in brackets — but it gives away the game. The current world “free market” is far from free and the playing field is far from even. The question in principle is whether it would be better to regulate the market less to lead to some idealized form of totally unregulated capitalism, or, as I would prefer, to simply regulate the market more justly, so as to increase competitiveness, and reduce the likelihood of famine across the board.)

  15. Unrelated: Did anyone see WLIW World (Channel 21) Global Voices: The Day My God Died Sunday, May 18, 10:00pm “The Day My God Died” examines child sex slavery in Bombay’s red-light district. Included: the stories of young women forced into prostitution; the work of men and women trying to stop sex slavery. Tim Robbins narrates.

  16. and there are no pests or famines in the ‘small agriculture’ status. Yes, keep dreaming. It is much worse in the small agriculture sector.

    No one ever said that pests are not a problem for small farms, or for diverse farms. But they are less of a problem. In the simplest terms, diversity of cropland leads to increased pest resistance, and also a decrease in rate of and severity of spread of most plant diseases. Razib has it right: commercial monoculture has resulted in some big gains for mankind in certain areas, but it’s hardly perfect.

    A stomach that is no doubt pretty full. Mate, as an American you have not known hunger, so can you please stop telling the the rest of us the wonders of an empty stomach. Bush is an arrogant American – no different from the vast majority of ‘small agriculture’ fanatics. Both would like to keep the unwashed masses down. This is not a theoretical discussion – at least not for the hungry. As someone who has strong links with subsistence farmig in India, I cant but argue for more commercial agriculture.

    Spare me. I’m hardly some “small agriculture” proponent. And your equation of hunger with virtue is ridiculous. I don’t need to be going hungry to understand the problems with large-scale commercial monoculture. Nor do I need to be hungry to understand the problems with turning a blind eye to corporate greed. Keep all the strong links to farming you want. But there’s growth, and then there’s prosperity. So if you’re going to slap me with the “blind liberal American elitist” label, well, it sure sounds like you’re just a shrill shill for agribusiness.

  18. 14 · Amardeep said

    Farm subsidies and agricultural tariffs in the U.S. aren’t helping matters…. The question in principle is whether it would be better to regulate the market less to lead to some idealized form of totally unregulated capitalism, or, as I would prefer, to simply regulate the market more justly, so as to increase competitiveness, and reduce the likelihood of famine across the board.

    The problem, of course, is that subsidies and tariffs were PRECISELY attempts to “regulate the market more justly”.

  19. 3 · Salil Maniktahla said

    But hey, let’s get to a bigger question, which is the “intentionalist” part of Vinod’s post, which is the implications that Americans DESERVE more food than anyone else, simply because they have the resources to be the biggest market. Sorry, but being the biggest glutton on the globe still doesn’t equate to a some form of economic virtue. The “blame” for rising food prices doesn’t lie with India or China any more than it does with the U.S. Quite the opposite. We consume more all across the board, and our consumption of oil also drives up the price of food globally.

    “Deserve” is sort of a intentionalist thing as well because it strongly connotes moral right whereas I look at it as a bit morer matter-of-factly… BUT, if we want to phrase it with that word, I’d say

    “Americans produce a LOT, they deserve to spend the product of their productivity… and much of this happens to be on a lot of food“

    (by “produce” / “product” / “productivity” here, I mean “per capita GDP”)

    So, generally, I link “deserve” to “production” rather than “consumption”. He who produces has the prima facie right to his production.

  20. 16 · Salil Maniktahla said

    No one ever said that pests are not a problem for small farms, or for diverse farms. But they are less of a problem. In the simplest terms, diversity of cropland leads to increased pest resistance, and also a decrease in rate of and severity of spread of most plant diseases. Razib has it right: commercial monoculture has resulted in some big gains for mankind in certain areas, but it’s hardly perfect.

    Razib (and Paul Collier for that matter) are making comparative rather than absolute advantage statements…

    Some risks/costs clearly go up with commercial agro-biz vs. mom&pop agro-biz (for ex., disease risk from monoculture).

    BUT significant other benefits are clearly realized as well (for ex., better protection from droughts / pests, much greater agricultural productivity = more supply = lower cost).

    AND, when you tally up all the costs + all the benefits of the 2 systems, agro-biz has a pretty compelling ratio (esp. b/c “more supply” is a massive benefit that’s difficult for other factors to outweigh). This is a very qualitatively different statement from “commercial agro-biz is perfect” (which no one – even Melbourne Desi – is making).

  21. i dunno bout any of u ppl, but i need my INDIAN RICE, i cant eat the sticky/grainy stuff they sell here. blech, at least not with sabjis and dals. speaking of dals they are not exporting those either!!! vegetarians depend on that for protein . . .

  22. Vinod, that equation holds true to this point in time. I can’t and wouldn’t argue about the great gains of widespread monoculture, and the increased crop yields. And yes, the net benefits greatly outweigh the negatives. But the further we go along this path, the riskier things become. At the very least, we need to start incorporating ways to produce our food sustainably, even if it results in short-term production losses compared to the “business as usual” approach.

    A great worry of large-scale agribusiness is the vastly increased vulnerability to any disruptions in production. Consider the impact of a large-scale infestation or disease that affects a major grain crop in the U.S. (like corn or wheat). Since genetic variation is very low across most of the strains of wheat and corn grown in America, any disease would spread like wildfire. The net result would not necessarily be famine in a country like America, but it would be a pretty dark time nonetheless. If you think I’m being alarmist, well, there have been various outbreaks of just this sort, dating back to the Great Potato Famine in Ireland, and they’ve resulted in political and social upheaval of the worst sort.

    Then there’s the issue of the way that agribusiness focuses not just the production of food, but also its distribution, into the hands of just a few key players. That can have major repercussions in the economy.

    Then there are complicating factors like horizontal gene transmission which are poorly understood and can impact both crops and weeds, and which we’re only just beginning to get a handle on.

    I understand the values of economies of scale very well, and I do appreciate how great it is to get that loaf of bread at the supermarket. But the flipside of the coin is what these businesses undertake to make and retain money, power, and political capital.

    (Kind of off-topic, but have any of you guys read “Bananas! How The United Fruit Company Shaped the World?” Great read…I’d highly recommend it for anyone who wants to understand a bit about the repercussions of market demand caused by simply eating a food they enjoy).

  24. Can we have Razib’s sepia commenter card revoked too?

    i’ve been commenting on this blog for 4 years, and that’s probably one of the weakest “zings” i’ve seen 😉

    salil,

    your concerns are real. the problem is that i doubt there’s any way that we’re going to reverse the arrow re: monocultures and industrialization; the population is just too high, and more elastically the preferences of consumers for cheap and varied foods too strong. genebanks and reserve pools of lines, as well as constant genetic modificaiton, are probably the way we have to go to keep up with pests & disease. additionally, it isn’t like the whole world relies just on wheat, corn or rice. if all of our major crops were hit we’d be screwed, and since epidemics hit stochastically that certainly is a possibility…but i assume that ag scientists have calculated the right balance of lines of crops to the background emergence of blights.

  25. First, and most importantly, as a commenter on the other thread pointed out, it’s kerfuffle.

    Second, a statement by the political leader of the world’s biggest power about two of the world’s largest growing economies, is automatically, not merely econ-centered/consequentialist/detached/impartial etc., it is driven by an agenda.

    Third, the inflammatory effect of the statement is compounded by the fact that it is wrong. Demand from India and China has been growing significantly for the last 10 years, if not longer. The dramatic rise in prices in the last year is best explained by severe short-term shortfall on the supply side, due to both weather conditions, and the disastrous side effects of bad politically motivated ethanol policy, not a sudden demand increase in the last year. Some further evidence for the short term nature of the causes of the price rise is that the price of wheat has actually fallen again since the beginning of this year, although it is not yet close to its historically low values, which it maintained till 2006!

    So, it is no wonder that people immediately look to food habits in America when their own food consumption is incorrectly highlighted as a cause for a critical global crisis (even if you believe that there is no judgment involved in Bush’s statement).

  26. 17 · tevadi said

    Can we have Razib’s sepia commenter card revoked too?

    Not that it affects me one way or another, but you’d have a better chance of electing Jeremaiah Wright president.

  27. There are no “perfect” farming systems; whatever the faults of commercial large-scale farming (and they are plenty), it will continue to evolve and improve, and spread to other countries. Even countries like Afghanistan could export grain if it had political stability and a modern infrastructure (roads, communications, law and order, functioning market economy, etc.).

    The roots of modern starvation problems are political. Case in point: Zimbabwe, once the breadbasket of Africa, now can’t feed its own people thanks only to the misrule and chaos caused by dictator Robert Mugabe.

    BTW, population numbers in the West are expected to drop in the foreseeable future. Also, China’s one-child policy will most likely cause its population to decrease. How will this change the global picture? (When populations go down in one part of the world, demand goes down… but will that also automatically mean a greater surplus to export?)

  28. Questioning the enormous commercialization of farming in the form of humongous coporate food growing machines, does not mean the questioner wants to go back to 1900. Nor are they ignorant of the hazards of small farming. Proponents of alternative forms of medicine do not want to do without anesthesia. This is not an either or question. Being intensely wary of the intentions of big corporations is only common sense. Surprise–their first chore is making money for the CEOs and forcing farmers to buy seeds from them every year, and cutting out privately owned business, are dandy, time-honored ways of doing that. Doesn’t totally seedless grain/veggies/fruit make anybody wonder about its nutrients, aside from the burden to the grower? Farmers want to make money for themselves and their families. Corps. want to make money. Razib, i know you are a geneticist and naturally talk of genetically modified food in positive terms–haven’t we been there and done that? I don’t know your opinion on this so I’m not trying to start an argument, just want to know what you think, from a genetic-biologist pov (I think that’s your profession.) Would you want to be a farmer and have to buy seeds every year when you were formerly able to save them from previous crops? Also, gmo crops upset the ecological balance. One American friend’s family had a farm in the 1900 and early 20th century. She said bugs and stuff were rarely a problem and that pesticides seemed to make the problem worse. This would not always be the case, but it often was. There is a movement in the United States of farming on a small to very small scale. I know of a number of young people, well educated, not raised on farms, who have bought and are farming in various creative ways, small plots of land, 2-20 acres. Some intend to expand, but because they have little experience, they are starting small. This is a growing movement and encompasses all kinds of food and other products like flowers, herbs, etc. Although the emphasis is on being a local supplier, access to transportation does make it more potentially lucrative in a developed country than does small farming in India. The food “crisis” does not have one answer but we are what we eat, right? It’s important people have choices and not have stuff forced down their throats. The denatured stuff that passes as “food” is probably one reason there are so many overweight people here. They keep guzzling and guzzling, never satiated with the sugar water and grease.

  30. Now granted, none of this is as emotionally satisfying

    Did we just read Thomas Sowell

    No, supply and demand is not too “complex.” It is just not very emotionally satisfying.
  32. while Collier’s solutions give us much less room for Moral Grandstanding they are more likely to fill stomachs.

    Yeah, talking sure will fill stomachs.

  33. Going green (San Francisco Democrat appeasement style) is the reason why prices go up. Add in the fact of low interest rates & subsidies of American farm food.

  34. tossing up my usual, contrarian view… Bush’s assessment for why food prices are higher is econ centered and consequentialist… the process is detached, impersonal, and decentralized …

    The only thing that Bush’s assessment is “detached” from is reality. Any explanation for increasing prices that focuses purely on increased demand (especially when that demand is not a new phenomenon in the past year), without even a rudimentary accounting for the supply (especially when the supply has drastically been shrinking in the past couple of years) would justifiably get laughed out of the room in the opening lecture of an econ 101 class, and extolling the virtues of such a theory is “contrarian” for a reason – it is plain wrong.

    It is also silly to defend Bush’s remark as right (even in a technical sense) while taking jabs at Pradeep Mehta’s comment which was intentionally exaggerated to draw attention to the ridiculousness of Bush’s argument. In fact, the article itself explicitly says that Mehta acknowledges as much about his comment. Indian politicans’ comments about the rising food prices caused by Americans eating too much (an objective truth, in fact) are no more or less intentionalist, consequentialist, or any other fancy-irrelevant-word-ist than Bush’s remark that this selfsame rise is caused by increasing food consumption by Indians and Chinese, unless you choose to interpret
    them that way. And claiming that Indian politicians are demagoging while defending the words of an American politician, especially one with an impeccable track record of running roughshod over the rest of the world with his wrongheadedness, when he makes yet another blunder: all I can say to that is wow!

    Further, the article mentions declining supply in at least a couple of places, so it certainly does not “make the classic econ mistake of assuming that supply is constant” unless applying a Bushian technique of selective interpretation.

    Preening about one’s superior ability to analyze issues dispassionately while calling others economic idiots (the basic thesis of your authority ranking link) is distasteful at the best of times, and is especially annoying when it is completely unjustified and the only sensible things in the post are regurgitated from other more coherent accounts, which actually capture the complexity in the situation and are, as a consequence, fairly non-“contrarian” (at least to the extent of our current knowledge and understanding of the situation).

  35. And your equation of hunger with virtue is ridiculous.

    I was equating hunger with the reason why someone would be a supporter of commercial agriculture. And yes, small agriculture is a cool concept when one has not lived on a subsistence farm. Reminds of someone from interior Bidar talking about the evils of dating.

    So if you’re going to slap me with the “blind liberal American elitist” label, well, it sure sounds like you’re just a shrill shill for agribusiness.

    A liberal is someone who has an open mind – you refuse to accept that commercial agriculture mostly produces better outcomes than ‘small farming’. So dont flatter yourself. A society where the poor are fat and food is plentiful is way more preferable than one where the poor are starving. If commercial agriculture puts food on the table, I have no qualms in advocating increasing commercialization for food. Farmers have the right do what they want with their seeds – Monsanto be damned. I applaud the ones who are going off on 2 acre farms and trying to make a living – I wish them well.

  36. Vinod, thanks for pointing out that subsidies often increase supply. It’s an important economic point to get right, even if subsidies distort the market in other ways.

    The multi-dimensional aspect of the smaller-scale farm v agrobusiness argument is something that people are grappling with in the comments. Salil is right in pointing out the lack of sustainability of the “fertilize it all to death” approach. We had a former agro-chemical salesman here who is now on the other side of the coin, pushing for a rebalancing of the soil composition. Because the fertilizers and pesticides have thrown the phosphate/nitrogen levels out of whack, the soil is soon going to produce less and less. The answer is not necessarily to provide more chemicals. Add to that the farmers often have little choice of chemicals or chemical companies.

    As important, there does need to be a move toward increasing the competitiveness of farmers. Eliminating the middlemen, who negotiatecontrol the prices and access to the markets, providing more infrastructure such as cold storage and delivery systems, and instituting saftey valves for natural disasters are doable, but require political will to balance the competing interests. And I’d argue there is an “inherent dignity” in a farmer’s choice to run a small farm that is the equivalent of the choice to run a big-name supermarket.

  37. Bush’s assessment for why food prices are higher is econ centered and consequentialist
    1. consequentialitsm is a moral/ethical theory and does make a qualitative judgment. it is ‘impersonal’ only in the way that each agent’s preferences/values are counted exactly once (ie according the common ‘each one counts for one’ principle). here is how consequentialism is defined:
    Consequentialism refers to those moral theories which hold that the consequences of a particular action form the basis for any valid moral judgment about that action. Thus, from a consequentialist standpoint, a morally right action is one that produces a good outcome, or consequence. Consequentialism is usually understood as distinct from deontology, in that deontology derives the rightness or wrongness of an act from the character of the act itself rather than the outcomes of the action and from virtue ethics, which focuses on the character of the agent rather than on the nature or consequences of the action itself.

    So according to your analysis, if Bush is a consequentialist, and if he thinks that rising food prices are bad, then he is actually making a moral judgment. You might say that market-clearing mechanism is impersonal, but consequentialism is definitely not. if any agent carries out an action which results in net harm, then consequentialist theories think the agent carried out an unethical/immoral act. so even if you invade iraq with good intentions but end up producing more harm than good, consequentialist theories hold that your act was immoral. tangentially, consequentialism would say if increased consumption in developing countries made more people happy than the people who are inconvenienced by the price rise, then it is a better state of affairs.

    1. second, ‘intentionalist‘ is usually used in historiography, as contrasted with functionalism. intentionalism, in the philosophical sense, is dealt with here. the word, in standard usage, is NOT the opposite of consequentialism. what you might mean are ethical theories that judge whether acts permissible/impermissible or moral/immoral based on the intentions of the actors (non-consequentialist theories): deontological ethics (eg Kant) or virtue ethics (eg Aristotelianism). you may also be happy to know that do-gooder peter singer is a consequentialist. i hardly think he would endorse bush’s or your unique brand of impersonal ‘consequentialism.’

    2. it’s pretty clear that mehta does not believe in a global conspiracy that intends to starve indians. perhaps you ought to interpret his statements with the same charitable largesse you extend to bush’s blundering declarations.

    3. somehow, when socialists subsidize the poor they’re distorting the markets, but when apparent capitalists subsidize they’re increasing supply. same facts, different narrative, vinod? no protectionist ‘intention’ here, just a magnanimity that has the nice ‘consequence’ of nudging third world farmers out of the market.

  38. I applaud the ones who are going off on 2 acre farms and trying to make a living – I wish them well.

    Actually that is IMHO a big problem with agriculture in India. Agriculture and land owning for traditional farming families is a thing of family honor and pride (movies like Do Bheega Zameen and Mother India shed some light on such issues). Plus with successive generations, the land keeps getting divided into smaller and smaller chunks thus resulting lack of ability for investment and thus increasing productivity, sub standard profitability and efficiency due to lack of economies of scale, etc. Credit availability is another problem due to the high amount of risks involved and thus credit is only available at crazy rates of interest. These result in the cycle of debt along with dependence on rains etc resulting in starvation, lack of self confidence among farmers and thus suicidal tendencies. Not to mention, too many people are involved in this kind of farming resulting in a sector that is under par on productivity and growth.

    Commercial farming is the way to go, albeit making sure that some checks and regulations are put in place. Small farmers should be encouraged to look at options such as the manufacturing sector (a sector which is growing above 10% till recently as opposed to agriculture which is under 3%) to improve their own lot if nothing more.

  39. somehow, when socialists subsidize the poor they’re distorting the markets, but when apparent capitalists subsidize they’re increasing supply. same facts, different narrative, vinod? no protectionist ‘intention’ here, just a magnanimity that has the nice ‘consequence’ of nudging third world farmers out of the market.

    Just to make it clearer, most Indian farmers are not killing themselves or, getting deeper into debt due to first world subsidies of first world farmers. It is because the middle-men have a stranglehold the avenues of distribution to the consumer. These middle-men are politically connected, have the muscle and under normal conditions (steady market) make 40% of the retail price. It is more during the inflationary spurts. Just to be even more clearer, these midlle-men do not have any transportation expense. The farmer and seller bear the tranportation costs. It would be great if the Tata, Birlas, Reliance and Walmart are allowed by the Indian govt. to negotiate buying prices from the farmers and sell to the consumer. The competition and efficiencies that these companies could provide would translate to better prices for the farmer.

  40. amaun # 39, i am talking about this.

    my comment was not limited to indian farmers, but maybe you can link to me an article which shows me the benefits that have accrued to indian farmers from subsidies extended to first world farmers? it may be that indian farmers have several problems that squeeze them more, but i don’t see how a general climate of subsidies is beneficial to them. you might take a look at these two pieces, to begin with.

    It would be great if the Tata, Birlas, Reliance and Walmart are allowed by the Indian govt. to negotiate buying prices from the farmers and sell to the consumer.

    it might be — without a good legal system to support and protect them, informational asymmetries and the power of these corporations may leave indian farmers with very little bargaining power. i am all for increasing agricultural efficiencies, but i will not be pleased if indian farmers will be selling their land or produce to big firms at below-market rates. this is well-documented in other cases (especially africa) — mass displacement and low-wage employment for native people living close to precious resources. people are systematically and often, coercively alienated from their assets. meanwhile, the profits are diverted out and the social infrastructure remains under-developed.

    tangentially: here is the impact subsidies within india (for the sugar lobby) have for maharashtrian cotton farmers.

  41. It would be great if the Tata, Birlas, Reliance and Walmart are allowed by the Indian govt. to negotiate buying prices from the farmers and sell to the consumer.

    also, your rosy assumption that these companies will not resort to extra-judicial/constitutional methods to deal with farmers seems naive. this news report might inject a dose of reality to your fanciful musings:

    An estimated 20,000 small farmers and other food producers in Singur (West Bengal, India) will be evicted on September 27, 2006 by the Left Front West Bengal government. In the name of “development”, their 1,253 fertile lands will be given to Tata Motors, a giant Indian company.

    amaun, take a look what a google search for “tata land adivasis” brings up. vinod, for the sake of fairness, i would love to see post (authored by you) on the extra-judicial means corporations use in india, and how that could be characterized as a market failure.

  42. jus so we clear, My point is that for a majority of Indian farmers life/death problems will continue even if we fixed our farm bill. In present day India the government is complicit in continuing the problems of the farmers. By the Tatas/Birlas/Reliance/Walmart, I meant their foray into the fresh-food/grain retail sector. For the last 60 years the Food Corporation of India (govt.) screwed the farmers over by their inefficiency. When the farmers go the independent route it is the middle-man who is complicit with local politicians who screws them over. It is far easier to get companies to behave than it is to make the middle-man/politicians give up easy money. So, if Reliance is buying fresh food/grains from the farmers directly this would be a far better solution and would fix the farmers problems NOW! If you google the issues you will see that there is a lot of opposition to these retail giants getting in the fresh-food/grain business. Why do you think that is the case? It is not the farmers that are objecting and putting up road-blocks. Anyway, this is not the crux of Vinod’s post.

  43. your rosy assumption that these companies will not resort to extra-judicial/constitutional methods to deal with farmers seems naive.

    Do you even know what a farmer with 17 acres of paddy/vegetables has to go through to get paid? My father would have killed for a chance to be able to negotiate with a Reliance Fresh buyer. I am sure that all companies are blood-sucking leeches when viewed through your pink glasses.

  44. 43 · amaun said

    My father would have killed for a chance to be able to negotiate with a Reliance Fresh buyer.

    yes, negotiation is good — not coercion; something which farmers in india should protected against.

  45. From ‘How The World Works‘ (a very thought-provoking blog):

    …an obscure, century-old law in the United States designed to promote American exports allows American potash producers to essentially collude on price-setting. But the numbers are eye-opening — in the last year, fertilizer prices have risen faster than fuel prices. If you’re looking for a culprit not-named biofuels to blame for the global food price run-up, fertilizer fits the profile.

  46. And more from the latest “How the World Works.” This time it’s the effects of Roundup-resistant pigweed on cotton monoculture.

    How did this happen? Simple — over-reliance on a single herbicide — Roundup — used in conjunction with genetically modified cotton that included built-in resistance to Roundup. Both products, incidentally, brought to you by Monsanto. At first, it seemed like a great deal for farmers. Plant the cotton, douse the field with Roundup, and watch everything besides the cotton seedlings die. But just as many scientists have long predicted, monocrop agriculture in combination with reliance on just one herbicide turned out to be the most effective way to develop super-weeds that would spit in Roundup’s face that farmers could have devised.