Since food, together with air and water, is one of the three basic items which all living things require without question, it is an ideal subject for economic discussion. Unfortunately, it is also almost ideal for normative economic judgments. “We should” or “they should” abound from intellectual forums to universities to television shows, often without regard to the potential consequences of any one or a series of actions taken.

Economics has neatly quantified the question of supply and demand. On a factual basis, we can reasonably predict the growth of world population, ceteris paribus. Other sciences have determined a general level of nutrients, usually measured in calories, required for the average human being to exist. Still others can show how much food we can produce, given acreage, climate, and the potential for inclement weather conditions.

The sum of independent, impartial analysis shows clearly that much of the world’s population is more likely to die from disease or war, including nuclear, than from long-term starvation.

Debates ranging from global warming to energy, biotech, poverty, hunger, disease, and education, among others, are too often described as “crises.” This is certainly true of the current recognition that oil is a reasonably predictable finite supply, while existing and future demand can increase or decrease, depending on individual people’s choices.

In the short run, of course, the oil “crisis” will no doubt have a substantial impact on world agriculture. Economics can measure (or predict) what is likely to occur as prices rise or fall, as crops are switched, or as government policies change.

As farmers opt to change to corn production to feed the biofuel craze to help offset global warming, certain other crops usually grown on the same acreage are likely to increase in price. In Germany, for example, the price of barley doubled from 2005 to 2007. Further increases and switches out of barley and hops can be anticipated. Beer in Germany is as much a staple as tortillas are in Mexico. Economic impacts can be easily measured and calculated, down to such items as beer or tortillas.

Grain production, including corn, soybeans, and other cereal grains, have reached record prices and are expected to continue at least through 2009, according to USDA estimates.

The good news for American consumers: the same report indicates that retail prices are likely to be affected with an increase of less than ten percent of the change in corn prices. While there will be an obvious price impact, it is clear that the United States does not face an imminent “food crisis” as so many would-be pundits like to predict.

The same cannot be said for various consumers around the world. Since conventional economic wisdom measures prices in terms of American dollars, it is clear that certain segments of the world’s population, especially farmers in Third World countries, will suffer. Grain prices that might have been marginal before adding the costs of the current crude oil spike are likely to be unsustainable.

It is not the agricultural output of the world that may cause starvation but the simple acceptance of modern economic theories, such as the use of “free enterprise” as a world standard and goal.

Government policy controls fare little better. China’s economic policies during Chairman Mao’s “Great Leap Forward” and “Cultural Revolution” resulted in some twenty to thirty million deaths from starvation. They were largely unreported at the time.

In July, Argentina, one of the world’s top suppliers of soybeans, defeated by one vote a government proposal by President Cristina Fernandez-Kirchner to impose a proposed increase on the tax on its nations’ farmers to 44.1%. That proposal led to a nationwide farm strike in Argentina.

According to RIA Novosti political commentator Andrei Fedyashin, “It became clear in early April that the farmers’ strike in Argentina – soy, maize, and wheat producers – was creating a threat to the world economy. … By the end of March, bread, pasta, poultry, and milk started disappearing from shops in many cities, including Buenos Aires. Beef was almost gone. For a country where more beef is consumed than anywhere else – 74 kg per capita in one year (compared to about 46 kg in the United States and a little over 16 kg in Russia) – this was quite an ordeal.”

Whether individual nations choose to adopt a free enterprise approach or one of government control, it again sheds light on the nature of mankind and its perception.

Economics may quantify certain effects in the private market or government-regulated or dictated policies.
It cannot help to end regional hunger or starvation.

Stephan is a former department chair for economics and taught at various colleges and universities at both graduate and undergraduate levels. Read his full bio at and submit your economics-related questions to his post “Got an Economics Question?”

Related posts:

1. We Grow Enough Food to Feed Everyone in This World, So Why Don’t We? (Part 1)
2. Is There Widespread Price Fixing in the Food Industry?
3. Multi-National Food Chains: The Poor Aren’t Buying It
4. World Hunger and Its Complications
5. The Default Vegetarian: Thoughts on the Economics of Food