The Food Crisis & The Perils Of Efficiency

My take from this article is that if we keep allowing agricultural markets to become more efficient vs becoming more reliable- we may face an unforeseeable foodcrisis or should I say blackswan. (Click Here To Read The Full Article On Efficient Agricultural Markets and the Food Crisis)

Article Introduction (Via The NewYorker)

This spring, disaster loomed in the global food market. Precipitous increases in the prices of staples like rice (up more than a hundred and fifty per cent in a few months) and maize provoked food riots, toppled governments, and threatened the lives of tens of millions. But the bursting of the commodity bubble eased those pressures, and food prices, while still high, have come well off the astronomical levels they hit in April. For Americans, the drop in commodity prices has put a few more bucks in people’s pockets; in much of the developing world, it may have saved many from actually starving. So did the global financial crisis solve the global food crisis?

Article Excerpts (Via The New Yorker)

“Temporarily, perhaps. But the recent price drop doesn’t provide any long-term respite from the threat of food shortages or future price spikes.”

“Four decades after the Green Revolution, and after waves of market reforms intended to transform agricultural production, we’re still having a hard time insuring that people simply get enough to eat, and we seem to be more vulnerable to supply shocks than ever.”

“The logic behind these reforms was simple: the market would allocate resources more efficiently than government, leading to greater productivity. Farmers, instead of growing subsidized maize and wheat at high cost, could concentrate on cash crops, like cashews and chocolate, and use the money they made to buy staple foods.”

“The problem is that, while this system is undeniably more efficient, it’s also much more fragile. Bad weather in just a few countries can wreak havoc across the entire system.”

Click Here To Read The Full Article On Efficient Agricultural Markets and the Food Crisis