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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: sageyrain who wrote (78960)	5/10/2008 6:40:52 AM
From: elmatador	Read Replies (1) \| Respond to of 116555

Two agriculture specialists from Brazil’s Embrapa are here in Benin to design plans to help farmers increase cotton production. We met for a beer yesterday. He said: Brazil has less 7% planted area and 70% productivity growth. Has 200 million hectares that can be put into production Blames food high costs in subsidies that distorted the market and high oil prices He said: If agriculture was not distorted, the market would adjust to higher prices by increasing production. But because there are distortions, the market will take a long time to react. He continues: We deliver a ton of frozen orange juice in the US and handover $400 to the government for the privilege of selling there. If Brazil would have to deliver ethanol, for each gallon it would handover to the US government 54 cents. And this goes for meat, grain you name it. Now there is need to get food quick to the market and people are thinking: Why should I increase my production to feed other government coffers? People are paid not to plant in those heavily subsidized countries of Europe and in the US. If the government says: we are not going to pay for you not to plant. No income. You have to plant to get an income. Political pressure will mount and governments are afraid of the blow back. He laughs about the idea bio-fuels are responsible for food inflation. What is increasing the costs of food is oil prices. Because of the transportation and fertilizer costs are getting higher.