so much for biofuels

Prices go up because demand exceeds supply. The higher prices of such crops will induce the world's farmers to acquire more farmland. One might say that all the arable land is used up but more arable land can be created - cut down forests and jungles.

If that's not enough and demand cannot be met, then the market ensures supply goes to those who need it the most - those who don't really want the crops will drop out the market when the price is too high. If the Third World don't buy crops, they clearly don't want to eat as much as the rich want to drive cars.

If the poor are really that attached to eating, they'll find some means of raising the cash required. Migrating to rich countries, doing the jobs the natives won't do and sending money home is a common method. Obviously, any impediments to worker migration is an impediment to the free market and should be removed.

If migrant workers fail to reach countries with worker demand due to immigration laws, then they clearly don't need the money that much. After all, they can always use the black market. It's the basis of the Russian and various East European economies. Indeed, they've already set up people smuggling operations.

In short, rising crop prices are just part of the system. If the poor are starving they're simply being lazy.

[link|http://www.washingtonpost.com/wp-dyn/content/article/2006/07/01/AR2006070100962_pf.html|Washington Post]:

Sunday, July 2, 2006; A01

EL CAMPO, Tex. -- Even though Donald R. Matthews put his sprawling new residence in the heart of rice country, he is no farmer. He is a 67-year-old asphalt contractor who wanted to build a dream house for his wife of 40 years.

Yet under a federal agriculture program approved by Congress, his 18-acre suburban lot receives about $1,300 in annual "direct payments," because years ago the land was used to grow rice.

Matthews is not alone. Nationwide, the federal government has paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all, according to an analysis of government records by The Washington Post.

Some of them collect hundreds of thousands of dollars without planting a seed. Mary Anna Hudson, 87, from the River Oaks neighborhood in Houston, has received $191,000 over the past decade. For Houston surgeon Jimmy Frank Howell, the total was $490,709.

"I don't agree with the government's policy," said Matthews, who wanted to give the money back but was told it would just go to other landowners. "They give all of this money to landowners who don't even farm, while real farmers can't afford to get started. It's wrong."

The checks to Matthews and other landowners were intended 10 years ago as a first step toward eventually eliminating costly, decades-old farm subsidies. Instead, the payments have grown into an even larger subsidy that benefits millionaire landowners, foreign speculators and absentee landlords, as well as farmers.

Most of the money goes to real farmers who grow crops on their land, but they are under no obligation to grow the crop being subsidized. They can switch to a different crop or raise cattle or even grow a stand of timber -- and still get the government payments. The cash comes with so few restrictions that subdivision developers who buy farmland advertise that homeowners can collect farm subsidies on their new back yards.

[...]

It makes some sense for farmers to be paid not to grow crops in some cases, but it certainly doesn't make sense for owners of land that can't be used for farming to get the payments.

The federal farm programs are a huge mess.

Cheers,
Scott.

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