Hi,
Politely, let me call BS on that...
Food prices respond to EXACTLY the same forces oil prices do: SUPPLY AND
DEMAND.
Of course, and I accept that diversion of corn from food to fuel
exerts an upward price pressure on food. But we can get
quantitative. How much pressure?
The US Dept. of Ag. has done this analysis and concludes that it
contributes 5% of the rise in world food prices.
But that is not the only input to the equation. The occurence of
drought in the world this year -- Australia is a good example -- also
contributes. Lesser supply of corn, again, higher price.
But the main contribution is the dramatic rise in the cost of energy
in the form of gasoline for farmers and of natural gas for fertilizer
manufacturers. You know about gasoline. Did you know that natural
gas -- widely used in fertilizer manufacturing -- has tripled in price
in the last year or so? Costs must be passed through.
You cite population pressure. That is quite true in China and India,
where not only has the population risen but also the wealth of that
population and their ability to command world resources has risen
sharply. There are traffic jams in Beijing and Calcutta! Greater
demand -- higher price.
So we can do more than just say "supply and demand." We can analyze
the problem further and find the coefficients of the input variables.
I appreciate everyone's tiny little efforts to "clean up this" or "use a
little less of that" but I'm afraid I cannot accept ANY solution that
doesn't also include a population control element is anything if not
partially to totally off base.
If we stay on topic and confine ourselves to the price of energy, I
would say that the success of capitalism in China and India has led
their populations not only to increase in numbers but, more
importantly, in wealth. The US demands lots of energy because it is
wealthy. China and India are becoming wealthy, and they want lots of
energy too.
But then there is the problem of peak oil. Whether it is now or in
twenty years, the oil wells of the world will start gradually to peter
out. A few large discoveries will postpone the day, but the day will
come when oil is just too scarce to burn for transportation. We will
use it for pharmaceuticals and other high value products.
So that is why we are starting to prepare for the future by exploring
biofuels. Some of us are eager to explore them now; others will be
dragged kicking and screaming into the game. When gasoline is $30 per
gallon, everybody will come on board.
Ben