An Agriculture Peace Corps: Cutting Food Prices

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China will begin to encourage companies within its borders to buy farmland abroad. The world’s most populated country sees it as a way to lock in food supply. According to the FT "A proposal drafted by the Ministry of Agriculture would encourage domestic agricultural firms to make the offshore acquisitions, with the focus on South America and Africa."

The countries where China makes its investments may not like the idea. They may need the yield from the land to make up for their own food shortages. But, money talks, and China will likely get its way, at least in part.

The news raises the question about whether the US government should look to a similar program, with less immediate, but longer term benefits. The global food shortage is fueling inflation in the US as the prices of everything from bagels to coffee are driven through the roof by shortages. The Fed and other bodies are now more concerned about inflation than they are the crisis in the credit markets. Oil prices, coupled with the rising price for agricultural goods, could do the US consumer great harm.

The US is the largest exporter of agricultural products. Even the cost of the yield of crops here is rising sharply. Some of that is due to corn being used for ethanol and other alternative fuels. Some is simply due to global demand.

The US is especially adroit at growing food. To some extent that is expertise and to some extent it is because of genetic seed development which creates bountiful crops which glow in the dark. But, they do feed the hungry and the farm animals which produce milk and meat. So far, although the seeds come from laboratories, they do not appear to be harmful.

The US has the opportunity to buy land overseas as well, or give tax benefits to US companies that do. Using the ingenuity of the American farmer and the gift of genetic alterations, the yield from foreign land could undoubtedly be improved.

None of the production from the crops need come to the US. Companies here could make modest profits on the farming, but the selfish reason to do it is to help the pocketbook of the American consumer.

Douglas A. McIntyre