mandag den 26. maj 2008

Germans know how to reduce food prices!

So why not listen a bit to them. Norbert Walter from Deutsche Bank Research tells us how to make the prices fall again.
This shouldn't be so difficult, since he's about right in every one of his arguments. But ... One thing is economic mechanisms. Another thing is political reality. To stop subsisizing the setting-aside of agricultural land shouldn't be too difficult politically. I really hope farmers would love to grow more crops at higher prices. But giving up subsidies on biofuels that run on crops/food (1. generation) and only subsidize biofuels that run on organic waste (2. generation) would leave large parts of an industry completely broke. They rely on subsidies because of politicians (that probably saw "An Inconvinient Truth" more times than they saw documentaries about starving children in Africa).

The best way to go immediatly is to expand supply to it's maximum. and this can be done by cutting subsidies. If this measure does not have an large enough impact on food prices, then let's talk. Of course subsidies to 1. generation biofuels shouldn't have been implemented in the first place...

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