The Economics Of Food
By: Much like housing, food has become something bigger than itself. It's about far more than sustenance. It's about commodities trading, globalization, trade, energy, biotechnology and government policy.
Food has become very complicated. For ten years now, agricultural subsidies have been among the biggest stumbling blocks to a world trade agreement, known as the Doha round of talks.
Farmers and agribusiness are dependent on government support, even if those policies sometimes hurt consumers.
Commoditiesfutures contracts — involving any number of grains, fruits and animal parts — are traded by the millions daily around the world.Rice, cocoa and frozen orange juice can be more profitable for traders than for farmers or food companies.
Cornand sugar cane and more are not simply foodstuffs — they are also biofuels.
Commodities speculation, say some observers, is the major cause of food inflation, which is eating into the pocketbooks of consumers in even the wealthiest countries.
One thing, however, has not changed: hunger and, worse, starvation, especially in war-torn countries, past or present, such as Angola and Sudan.
For the fortunate, if food is available, it is expensive, and government programs to support consumption can make or break a government, as we saw inNorth Africa and the Middle East.(See our slideshow on the countries most vulnerable to food-price spikes.)
Food is also a good barometer of globalization; as incomes rise, more food — and better forms of it — are consumed, compounding the supply-and-demand formula.
In the U.S., there's a swirl of cross currents around food and agriculture.
In a budget-conscious environment, federal legislators are looking to take to the knife to agricultural support for farmers. Meanwhile, a new generation of entrepreneurs is reversing a decades-long period of flight from the farm. Innovation is also a force, with companies using IT and biotechnology to make crop yields more productive and more perishable.
As crude oil and gasoline prices rise, the American household uses more energy than everin consuming and storing food. Larger appliances — and appetites — are mostly to blame. At the same time,green marketsfeaturing locally-produced food are popping up everywhere, even though the business model is tenuous.
Like its subject, our special report, "Food Economics", is rich in material. Take our quiz and polls, take a tour with our slideshow, and dig into ourarticles.