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Spiffor
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CPA - Evil Clone brigade
Nov 2001
time: 06:33
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quote:
Originally posted by Ramo
The point, again, is that their produce will be more valuable without supply being massively inflated by our agrisubsidies. |
I wouldn't say for sure the supply will stop being massively inflated, for two reasons:
1. Now that it will be profitable to create an agribusiness in the third world, you can expect many new agribusinesses to emerge and compete for the now-open market. This will increase production, until the market balances itself out.
2. I don't know for the US, but in Europe, agrisubsidies come along with production quotas. That's because the EU tries for a long time not to contribute to the fall of world food prices. The more we produce, the lower the overall prices, and the more the EU must pay for subsidies, so it's a sound plan.
Should we remove the agrisubsidies, these production quotas will have no reason to exist anymore. Agribusinesses and family farmers alike won't show restraint in their production. They'll produce with even more heart that their profit per unit will freefall, and they'll try to make up for the loss by selling more units.
In short, I would imagine the suppression of Agrisubsidies will mean an explosion of the supply at short term. The consumer will benefit greatly from this, as the costs for food will dramatically fall (our food in Europe can be seen as ridiculously overpriced - I think the same applies in Japan). The third world agribusinesses that are successful will benefit from this as well. But I don't think the situation will be any better for the farmers in the end.
quote:
And anyways, there's the possibility of socialist farming enterprises in the third world to take advantage of these economies of scale. |
I wish. But a modern farm needs heavy investments. I don't see the banks lending money to a socialist enterprise, especially in the climate of risk that will characterize the opening of the food market. And this kind of enterprises aren't fashionable with States anymore.
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Spiffor
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CPA - Evil Clone brigade
Nov 2001
time: 06:33
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quote:
Originally posted by KrazyHorse
No, what it means is that there won't be as much produce coming from French farms. Only the more profitable fields will be farmed. |
Yep, by agricorps, like today. The difference is that family farmers (those who have the non-profitable fields) will be ****ed. Agricorps, OTOH, can lower their production costs by exploiting their fertile land more intensively, by pressuring or switching suppliers, and by reducing their massive profits.
quote:
Simply claiming that the businesses will find some magic way to be more eeficient doesn't cut it. |
There is room already. The European Commission has made a set of rules to avoid the production to rise, and the prices to fall. Our agricorps could produce much more, with little extra cost, once these regulations are removed.
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Spiffor
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CPA - Evil Clone brigade
Nov 2001
time: 06:33
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quote:
Originally posted by Kidicious
Yikes. Sounds more like the Great Depression to me, but I don't think it would play out like that. You can't really sell more food like that. People can only eat so much. |
Exactly what I have in mind.
Recently, most markets have been opened after a technological breakthrough. Personal computers and cell phones come to mind. In these situations, the demand grew pretty much as quickly as the supply. These products are on the brink of reaching maturity, ie the demand begins to be mostly about replacing the old apparels, which explains why these markets have calmed down so much (most "new" demand comes from the rapidly developing countries).
This can't be said with food. Pretty much every human being alive more or less satisfies his demand for food already. Sure, there is room for improvement, with more than a billion of malnourished people, but all in all, the demand is far less extendable than with computers or cell phones.
Yet, the market will be open soon. With a bunch of new competitors who will try to be successful on the market. And with the impending fall of the old order. The technology to produce more food at lower costs is perfectly mastered, and easily accessible anywhere in the world; besides, the formation of the workforce to use this technology is really minimal. The only thing needed to start an agribusiness is some big money.
Unless we make an international regulatory instance that allows production quotas for each country (I don't see that happening), I fail to see why it would be different than with the great depression. It will be a general free-for-all, where the strong will ruthlessly crush the weak.
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Kidicious
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Diety of Kidiverse
Mar 2003
time: 21:33
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One thing's for sure. Prices are going to fluctuate big time. They will fall in the EU and US, and they will rise in the developing world. The rising prices will cause inflation, and the falling prices could cause big problems in the developed world. In the long run things might work out, but things could get a lot worse before then.
Last edited by Kidicious on 02-08-2004 at 12:40
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Kidicious
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Diety of Kidiverse
Mar 2003
time: 21:33
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quote:
Originally posted by Spiffor
In Europe, the regulations forced some fertile land not to be farmed.
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Are you saying that exports will increase from Europe with the end of subsidies there?
quote:
Originally posted by Spiffor
In Brazil, Argentina, India and China, there is much land that could become production powerhouses if enough capital is invested to modernize the exploitations.
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They can't wait to modernize their farming in those places. It doesn't happen over night though. Think of the displacement of workers, and the politics involved.
quote:
Originally posted by Spiffor
And there still is room for improvement in the Eastern European and Russian lands as well.
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Improvement in Russia? 
quote:
Originally posted by Spiffor
Besides, many agricultural products don't depend on land anymore. Cattle and poultry are produced in what can be basically called factories. Vegetables are often grown in greenhouses (they grow bananas in Iceland!).
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Cattle and poultry don't depend on fertile land, but cattle and poultry need food produced on fertile land. Green houses aren't going to bring down any prices. The're only justified where prices are high.
quote:
Originally posted by Spiffor
And I'm not even counting the GM revolution that currently doesn't affect the majority of the world. Really, we can produce much, much more food from this planet than we are doing. The question is whether we will do |
Can we? Maybe in an ideal world, but not the real world, not with free trade.
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CerberusIV
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Interesting debate. However, it's not always that simple.
If a first world agribusiness decides to use its muscle and dump food on third world markets to destroy the local agricultural industry, what is going to stop them?
[cynic mode] Is this why they are now ready to agree this deal?[/cynic mode]
The UK has basically 2 kinds of farm. Lowland intensive (agribiz) and upland marginal. We are already moving towards paying the marginal farms to maintain the landscape (drystone walls, wildflower meadows and wildlife habitats) and that will just expand - so the EU taxpayer isn't going to save much.
Guess who owns most of the farms in Eire? The Bank of Ireland do! As the farmers have gone bust over the years and defaulted on loans the bank has taken the farms. But there is no way to make any money from the land except put the farmer back in as a tenant farmer and allow him to continue to farm.
A lot of european farmers, particularly in France, are still part time. Cutting subsidies will push up unemployment and its associated costs (welfare benefits) for several EU countries. As an EU citizen I'm not convinced that a gesture (and that is all it will prove to be) to help third world, particularly african, farmers is worth the pain it could cause here.
Overall, it sounds good but I am willing to bet that the small print, if a deal is actually reached, will still leave most small farmers outside North America and the EU completely stuffed.
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02-08-2004 11:36
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