Grain prices are rising quickly. Several factors are involved. There has been bad weather in several grain growing areas in the last year. Increased incomes in China and India are increasing demand for meat, and thus indirectly for feed grain. Animals eat a number of pounds of grain to produce a pound of meat for the table. Some land is being taken out of agriculture in China and India. Oil prices are rising, leading to increased costs for fuel and other inputs for farmers, as well as for the transport of food to market. Major grain exporting countries are restricting exports by adding export taxes to their grain exports.
The World Food Program has stated that, due to the cost increases, they will either have to have more money to buy food or have to reduce their food distributions.
The affluent will divert money from other uses to pay the added costs for the food that they want. The poor will face a much worse problem unless the world rallies to their aid.
Tuesday, February 26, 2008
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