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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Cogito Ergo Sum who wrote (26118)	12/7/2007 8:35:08 AM
From: elmatador	Respond to of 220437

$303-billion in agricultural subsidies in 2006. Of that amount, a bit more than half - $156-billion - went to the European Union. In the EU, farmers receive 32 per cent of their revenues from subsidies, triple the U.S. rate (though less than South Korean and Japanese farmers). Go to Norway if you want to get into the farm business; there, 66 per cent of farm revenues comes from subsidies. The ratio in Switzerland, where to be a cow is to live like a king, is almost as high. In New Zealand, about as far away from world markets as you can get, the ratio is only 1 per cent. What is doubly remarkable about the endless trough-loads of freebies is that they're arriving when food prices are taking off. The combo - high subsidies and high product prices - amounts to a golden age for farmers. Never mind that it's a fraud on the taxpayer. The Economist Intelligence Unit's price index for food, feedstuffs (food for domestic livestock) and beverages rose by 16 per cent in 2006, partly because of the soaring production of biofuels such as corn-based ethanol. Drought in some countries was another factor. The Economist forecasts that grain prices will rise 23 per cent in 2007. The International Institute for Sustainable Development's Global Subsidies Initiative says agricultural commodity prices are on fire. Between 2005 and 2007, maize prices jumped 64 per cent, while wheat climbed 43 per cent. Palm oil rose 64 per cent, and rapeseed oil 23 per cent. The United Nations Food and Agriculture Organization last summer said dairy prices had risen 46 per cent since November, 2006. Agricultural prices tracked by Toronto-Dominion Bank (in U.S. dollars) jumped by almost 40 per cent in the year to November. "Agriculture, and in particular crops, has entered a new era of high prices, supported by rising food consumption from emerging markets and the prospects of competing demand for crops as a source of [biofuels]," TD economist Derek Burleton said in a report on the end of Canadian agriculture's dark era. Everywhere, food price inflation exceeds headline inflation. Italians in the autumn held a one-day pasta strike to protest against rising pasta prices. Things suddenly look pretty good down on the farm, and there is no reason to believe food prices will collapse any time soon. Every year, the equivalent of two Canadas are added to the world's population. Biofuel production mandates in many countries will keep upward pressure on food prices. France wants 7 per cent of all its fuel to come from biofuel by the end of the decade. There was a time when farmers were in real trouble. In 1985, Neil Young, Willie Nelson and others started the Farm Aid concerts in the U.S. Midwest to help farmers who were about to lose their land to surly creditors (the concerts are still held). In Europe, farmers seem to have had second careers as protesters. Americans, Canadians and Europeans grew fat on cheap food. Today, with prices moving up at double-digit rates across the board, it makes no more sense to subsidize farmers than it does to subsidize oil producers. On both sides of the Atlantic, agriculture reform has been more myth than reality. Yes, farm subsidies as a percentage of farm income has come down by a small amount. But the drop has been offset many times by the rise in prices. If there were any time to get serious about weaning the farmer off the taxpayer teat, it's now. theglobeandmail.com