In his latest column and in recent blog posts, Paul Krugman explains the rise in commodity prices through simple supply and demand, as opposed to blaming speculators or monetary policy. Demand in emerging economies is rising, particularly in China where grains are imported to satisfy the demand for more meat. Mr. Krugman correctly notes that droughts and heat waves have lead to sharply reduced wheat harvests in Russia, which certainly affects price. What he did not include but should have was Russia’s decision last summer to halt wheat exports through the end of the 2011 harvest.
High food prices are causing unrest around the world. In America, going from $3 to $4 is a 33% increase in price, but we can easily absorb the $1 increase. But when you’re living in a poor country and living on just a few dollars per day, a 33% increase is dramatic.
Many cities or regions across the U.S. are food insecure or can be classified as food deserts. We at Agrinovare want to help build local and regional food distribution networks for stronger, more resilient communities. High oil prices directly affect the price of food. Producing, processing, and distributing food is energy intensive. Climate change will wreak havoc on crop yields. Localizing our food sources and adding transparency to the food system is our way of building resiliency to better withstand systemic shocks later.
That’s our reason for doing this. What’s your’s?
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