If the headlines read:
Improved Standard of Living in Once Stunted Nations
Alternative Fuel Initiative Supported By Federal Government
Farmers Receive Subsidies From Federal Government To Grow Crops
Then you'd say, "Hey---things are looking up!" Oddly enough, it turns out that all of these things have contributed to the lowest estimated U.S. wheat stockpiles since 1948 and rising wheat prices (up to over $10 per bushel in mid-February '08, from only $3.54 in '92). In countries such as Afghanistan, flour prices have soared up to 60% to 80% in the past year. The price of corn tortillas rose 400%, leading to protests in Mexico City in late January. The UN World Food Program anticipates major difficulties reducing hunger in developing nations with rising prices cutting into their food aid budgets (no better time than now to play the vocabulary game at Freerice.com, eh?).
Rising oil prices have made the transporting food to the market an expensive proposition, so you'd think
that farmers would be thrilled that the federal government has gone full speed ahead on its alternative energy initiatives. Well, farmers of corn and palm have benefited from government subsidies since their crops translate directly to biofuels, but this selective subsidization has been to the detriment of farmers who grow soy and wheat. Thus, less wheat, less stock, higher prices.
With the rise of service and technology-oriented jobs, people in Asian countries have gained economic mobility. With an increased standard of living in developing nations, people are eating better and eating more meat. According to Homi Kharas at the Brookings Institution, it takes about eight times as much corn to produce the same number of calories from meat as from bread. As a result, the demand for feed grains has increased.
Some kind of balance has to be struck between our Western energy needs and government initiatives and the reality of food production decreases and world demand for grains. There are no easy solutions, especially when you consider the fact that the energy bill George Bush signed last year requires 36 billion gallons of renewable fuel by 2022 (with 15 billion of that being corn-based ethanol).
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