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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (91554)	7/30/2001 6:58:22 PM
From: Joan Osland Graffius	Respond to of 132070

Tim, >>(Or maybe the food was subsidized in some way, or faced less import bariers then in the US, for example sugar is much more expensive in the US because of barriers against importation of sugar) One thing Australia has going is they can grow all foods. The people live on the coastal areas and the food is also grown there, therefore cost to bring the food to market is less expensive than here since most foods are close to the consumer. Land is not expensive either. They also have a much more efficient method of bringing the food to the people. They have markets where the farmer does business directly with the consumer, similar to France. In the US we have tons of layers between the farmer and the consumer. I also observed their wine industry and in my judgement the cost of the US equivalent wine in Australia is at least 50% cheaper and in some cases 60%. We looked at some real-estate (homes) and those costs are about 50% of our cost here. Of course Australia has a lot of land and only 20 million people. I talked to a few people about their real-estate and they said they have had some inflation. In my opinion they don't know what inflation is in that sector. I would not pay one half the price for my house that people are willing to pay. <g> Joan

To: TimF who wrote (91554)	7/30/2001 7:25:30 PM
From: Don Lloyd	Respond to of 132070

twfowler - If the food is cheap after converting the prices to American dollars it would seem to indicate that the US dollar was strong there. (Or maybe the food was subsidized in some way, or faced less import bariers then in the US, for example sugar is much more expensive in the US because of barriers against importation of sugar) My theory would be that most local labor (including farmers)works at jobs which are of low absolute productivity with little capital investment. This would result in incomes that are too small to pay high prices for food. Thus the food must also have low costs, probably often the low marginal cost of the surplus food of local farmers who have little or no food or shelter costs for themselves and possibly low land costs. In a predominately farming environment, it will additionally be food costs that are driven down by whatever capital investments and consolidations exist. Regards, Don