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Zhi -> RE: FINAL WARNING: Food Rationing in the United States RIGHT NOW (4/22/2008 12:15:14 AM)
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quote:
It is my sincere hope that you are right.
But in the past, this hasn't proven to be the case. Ultimately, finance works out to produce these two simple laws:
1.) Given the choice between two options, people should maximize Net Present Value.
2.) Net Present Value= the sum of all future cash flows discounted to the present at an applicable interest rate.
In the past, NPV has suggested that farmers convert cropland into developments- and they've done that. They traded a series of permanent cash flows (their "livelihood") for one lump sum by selling to a developer.
We've also seen this with commercial fisheries in the Atlantic.
I'm not saying there's a way to increase yields significantly by bringing about greater erosion- but if there is, somebody (maybe not current farmers) will eventually employ it if it makes more money than just plain farming.
The farmers working now have survived through truly abysmal grain prices due to the fact that they are in it for the long haul (this includes my father, who has retained his land which is being worked by a friend of his, despite the fact that he himself has quit). Grain was ~$7 a bushel in the 1970s. When my dad stopped farming, it was $3. No wonder the farmers are cashing in on subsidies instead of expending all the fuel, resources, time, and effort to produce the grain.
The wrapper on your loaf of bread cost more (probably more than double, even) than the wheat in your loaf of bread.
I would be much more worried about whether or not we have the transportation necessary to get it to the places where people are eating it. I think that's probably why the west and east coasts are getting hit with this.
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