We Grow Enough Food to Feed Everyone in This World, So Why Don’t We? (Part 2)

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?”

We Grow Enough Food to Feed Everyone in This World, So Why Don’t We? (Part 1)

MLB asks:

“Looking around, it seems to me as if one of the greatest economic problems is one of distribution: on the one hand a few own the majority of the resources, while on the other there are large numbers of people who do not have enough to get by. To read the newspapers, however, one would think the only issue economics concerns itself with is growth. If the economy is growing fast enough everything is supposed to be well, but if the rate of growth slows down economists worry. Why are economists more concerned with growth than distribution? Is it simply a matter of who they work for? Why shouldn’t money and resources be able to flow adequately to where they are needed if the economy is not expanding?”

The doomsayers predict worldwide famine and thus give economics another undeserved black eye as Malthus did two centuries ago. As in too many cases, normative economics replaces positive assessments and generally muddles discussions.

The basic facts are that agriculture has made incredibly positive strides over the last two centuries – and especially in the latter half of the twentieth century – and the fears of worldwide starvation are well overblown.

The U.N. Food and Agriculture Organization in various reports, including the latest on worldwide cereal production agrees with most statistical assumptions that the world’s population is expected to reach roughly eight billion by 2030 after which it is expected to experience slower growth. More importantly, it shows that production and productivity growth will continue to exceed demand.

Growth in cereal (wheat and rice) production is projected with an increase of 2.6 percent compared to last year’s crop. Similar increases are forecast for corn and soybeans. While India and China lead the world in producing rice and wheat, the United States clearly enjoys commanding leads in corn and soybeans. Brazil, Argentina, and China are rapidly vying for leadership of the latter.

Clearly, there is no worldwide famine in our immediate future, ceteris paribus.

Nonetheless, substantiated reports of regional famine, especially in sub-Saharan Africa, persist. The important fact to remember is that worldwide food production is not to blame. The weather, of course, does, as is evident through periodic droughts and other natural disasters. Somalia, Ethiopia, Kenya, and others have been in the international news for months and years.

However, more than recurring weather problems on the continent, its basic lack of investment, continuous military conflict, and a chaotic social structure are much more to blame. In most instances, Africa proves that distribution of foodstuffs, not their potential lack, is a far greater danger than demand outstripping supply.

Lack of appropriate infrastructure hampers even international charitable organizations, let alone international or local trade. It, much more so than actual lack of food, is responsible for continuous recurrences of starvation in the so-called Third World.

Since Angola became the last colonial nation in Africa before achieving its independence in 1975, it provides a perfect example of the problems plaguing much of Africa apart from the weather.

Angola with its estimated population of sixteen million inhabitants is far from a poor country in terms of natural resources. It is principally endowed with oil and diamonds, agricultural products, and fisheries. Yet the country has been continually involved in internal war for twenty-seven years, from its independence until 2002. Until the collapse of communism Angola became a sideshow to the U.S.S.R. and the United States as part of the overall Cold War. Since Angola is now a member of OPEC and as such a beneficiary of the rising price of oil, it remains to be seen how the economic benefits of the price hike will be applied in Angola.

The nation should hardly be subject to the ravages of famine and disease, yet it is. In most cases, Angola ranks in the bottom tenth percentile of various measurements. A U.S. State Department analysis of July writes: “Despite abundant natural resources, and rising per capita GDP, it was ranked 161 out of 177 countries on the 2006 UN Development Program’s (UNDP) Human Development Index. Subsistence agriculture sustains one-third of the population.”

Angola’s problems, like those of so many other countries, cannot be laid solely at the feet of American or even Russian economists who vied for position in the country’s lengthy war. The International Monetary Fund, usually in the forefront of providing copious advice and loans, provides continuous reports to the Angolan government. Unfortunately, as is too often the case especially in Third World countries, the IMF imposes restrictions which often are unacceptable to the client countries. Angola opted to establish closer ties with China, now the chief consumer of its oil riches. As a first step, Angola also received a US$2 billion soft loan guarantee from China’s Exim bank.

The example of Angola can be replicated many times over in Africa and other poorer countries across the globe.

It also clearly points out that economists can use all the graphs and formulas to describe the past, present, or future in terms of quantitative data.

Economics and other sciences show us that we can feed everyone in this world today and for the foreseeable future. We can also make our judgments as to distribution.

What economics cannot do is determine why we don’t feed everyone. That is a question that requires a subjective answer based on your own perspective on the nature of mankind. And that perspective presupposes your own values and beliefs.

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?”

Multi-National Food Chains: The Poor Aren’t Buying It

Multi-national food chains are cropping up in poor countries, but no one is buying.

It sounds like a good idea in theory. Poor people require cheap food, and giant food chains can provide them. So why aren’t the poor lined up outside the doors to buy the goods?

In developed countries, consumers flock to these chains to buy their groceries at cheaper prices than they might get at the neighborhood store. One would think that the same would be true in poorer countries. It seems this is not the case.

In a study by Bart Minten, a Senior Research Fellow at the New Delhi office of the International Food Policy Research Institute, Minten concludes that even at very low prices, “food prices in the global retail chains are 40-90% higher than those in traditional retail markets.” His study found that shoppers were still not willing to pay the prices of the large global retail chains, instead preferring to do their shopping at the local markets “who operate at very low margins and carry local foods of widely varying quality largely untouched by modern agriculture, both of which would be unacceptable to a multinational company.”

If Minten’s conclusions are correct, multinational food chains will have a hard time enjoying the huge profit margins that they can enjoy in more developed countries. The surge in percentages of food retail that supermarkets have enjoyed in recent years may become a flop in some developing countries. As Minten remarks, “If the chains do survive in poorer countries, they will likely remain exclusively the domain of the middle classes, especially so in the poorest African nations.”

Apart from grocery chains, fast-food chains are also opening across poorer countries. These chains, however, are more cognizant that the average consumer in these countries cannot afford fast food, and deliberately target the middle class.

Although the idea of supplying food cheaply to consumers in poorer countries would seem to be a wonderful idea at first glance, those considering such a move might reconsider.

Source: Rudy Faust, University of Chicago Press Journals http://www.medicalnewstoday.com/articles/112137.php

The Default Vegetarian: Thoughts on the Economics of Food

Lately, every time I go to the grocery store, all of the most basic items I routinely purchase seem to have increased in price anywhere from a nickel or two to a dollar or more each. Milk, eggs, cereal products, rice, and fresh vegetables all cost more now than they did just a few weeks ago, and as of this writing no relief is in sight. In the middle of summer, green peppers are $4 a pound. Milk is up to $4.59 for half a gallon. A 12-ounce box of Rice Crispies is $3.99 and will probably cost more by the time you read this.

Meat has become especially expensive; no doubt a result of the increased cost of the grain needed to feed the animals and the now insanely expensive diesel fuel needed to transport the animals, butcher them, and bring their meat to market. A recent trip to my favorite grocer found me staring forlornly at a package of five bratwursts marked ‘on sale’ for $7.98.

$7.98 for five sausages? On sale? My son can eat five sausages as a snack!

I didn’t buy them. It wasn’t just the price. The truth is I’ve been put off by meat and the way it is grown and processed for quite some time now. Not too long ago we all witnessed (over and over again) nightly news footage of a downed cow being shoved around by a couple of guys driving forklifts. Cows that cannot stand because they are sick or injured are not supposed to be processed into meat for human consumption, and they certainly aren’t supposed to be shoved around with forklift prongs.

But there it was, in living color, right on the evening news.

Before that, the news flash was all about packing plants that pumped carbon dioxide into cellophane trays to give the hermetically sealed meat a bright-red, fresh appearance even if it was spoiled and no longer safe to eat. Before that, it was corporate hog farms causing e. coli contamination of nearby vegetable fields, city water tables, lakes, and rivers. And before that (and still, today, as the Korean protests over American meat imports show) it was another case of BCE or ‘mad cow disease’ turning up in the U.S., with the beef industry out in front of the cameras assuring everyone that it was a truly isolated incident, so move along folks, nothing to look at here.

Too many isolated incidents and, like the South Koreans, I get nervous.

And I haven’t even gotten to the part yet about the unsafe hormones and chemicals that are fed or injected into the meat and dairy animals or the fact that the grain the animals eat is badly needed in other parts of the world right this minute for food. Corporate meat production is one of those issues that, once you start to dig into it even just a little bit, can make you pretty sick to your stomach.

So usually I handle this issue the way most Americans do: I try not to think about it.

However, as food becomes less and less affordable, all that is starting to change for me. It’s one thing to buy dirty, mistreated mystery-meat when it’s a dollar or two a pound and my family is clamoring for it. It’s something else again to part with a ten-spot for a little package of bleeding poison that is barely going to make one meal for us. That’s two whole gallons of gasoline or twenty pounds of potatoes.

I’m finding that, at least in my own case, empty pockets make for loftier principles.

I don’t believe it is intrinsically wrong to eat meat. My own perspective is that everything eats everything in this world, and you don’t have to look very far or think very hard to realize this. Life by definition is a carnivorous game. Right this minute some microbe in my very own gut is devouring some other microbe. Even the virtuous plants embraced by vegans eat decomposed matter (which gardeners call “compost,” but let’s be honest, we’re talking about dead stuff here.) Some day, each of us will become worm food, and when the worms are done with us then whatever is left will make some hungry tree very happy. It never ends. So if you want to get worked up about the morality of digestion at any given point on the food chain, that is your prerogative, but I don’t generally go there.

However, I do believe that we are responsible for our actions, and that our actions should at minimum aspire to be humane and intelligent. The way that meat is grown, processed, and marketed in the U.S. today has become selfish, inhumane, profit-driven, and dangerous. The meat is no longer predictably safe to eat, and enormous resources are wasted to produce a single pound of the stuff. While much of the world goes hungry, we use our grain and disappearing fossil fuels to fatten cattle and hogs that are not safe to eat when we get done with them, not even here.

When socialist Upton Sinclair wrote his famous novel The Jungle in 1906, he wasn’t thinking of the fate of the unfortunate food animals themselves so much as he was protesting the horrifying conditions under which the packing plant employees eked out their meager livings. The novel vividly drove home the packing plant as a metaphor for unfettered capitalism: the bodies of the workers were no more valued or cared for by their corporate overlords than the bodies of the animals they slaughtered. The filthy, dangerous conditions in the plant mirrored the violence and utter squalor in which the workers themselves were forced to live.

So, apart from the price, that’s what I was actually thinking about, looking at those five $7.98 sausages last week. I was wondering: how many people lost arms so I can clog up my arteries with this crap I can’t even afford? How many people will not eat at all today because pounds and pounds of grain that could have been shipped to them went into this expensive, unhealthy snack instead? What kind of life, if you can call it a life, did the pig that got ground up for this sausage lead anyway? Did it ever see the sun? Or did it live out its days cramped into a big tin building with a pig poop lake under it, getting fat as fast as possible, aided by hormone shots, force-feeding, and God knows what else?

You are what you eat, or so they say. I bought a 10-pound bag of Jasmine rice instead.

It’s pretty good.

Poor Countries Reject U.S. Answer to World Hunger

At the UN summit in Rome, which ended June 5, the UN’s Food and Agriculture Organization (FOA) appealed to governments to step up to the plate and provide at least $20 billion per year to help feed the world’s hungry.

On the agenda (at least for U.S. Agricultural Secretary Ed Schafer) was promoting the use of genetically modified (GM) foods, but the concept left a bad taste in some people’s mouths.

Europe has been the main holdout to using GM foods. France, who is Europe’s number one producer of agriculture, passed a bill by a single vote to allow GM crops if and when the EU accepts them. Some European farmers are willing to give GM crops a try, as they are seeing the tangible (financial) rewards of GM crops.

Some of the poorest countries who are most in need of food have rejected the use of GM foods as a way to ease the burden of hunger – which angers countries like the U.S. who commonly use GM crops to produce processed foods, oils, and corn syrup.

So why are people so against using a technology that could help end world hunger by producing crops that are drought-resistant, insect and disease resistant, and that yields higher levels of nutrients?

The answer is simple: people are afraid. GM foods have only been in existence for a few years. Although (thus far) there have been no reports of adverse effects, scientists are unable to say with any certainty that there will never be any ill effects from consuming foods produced from GM crops.

The American Medical Association states: “Worldwide, many people are eating GM foods with no overt adverse effects on human health reported in the peer-reviewed scientific literature and according to regulatory agencies.” In their adopted policy as of 2000, the AMA recognizes “the many potential benefits offered by genetically modified crops and foods, does not support a moratorium on planting genetically modified crops, and encourages ongoing research developments in food biotechnology.”

However, they once thought Thalidomide was the answer to the nauseated pregnant woman’s prayer.