4 ms·

Grain reserves store grain in adequate quality for at least a year so subsidizing massive overproduction doesn't make a lot of sense if a bad year is the only c

by yakak 5y ago

Grain reserves store grain in adequate quality for at least a year so subsidizing massive overproduction doesn't make a lot of sense if a bad year is the only concern. IMO a lot of food security policy around overproduction is related to poverty, domestic hunger and international starvation in normal years. (Driving prices down is making food a smaller percentage of the economy, making it more affordable directly to people in poverty and easier to support food programs from charity/tax.)

Nasrudith 5y ago
Stores don't help if someone else is willing to pay more for the grain as infamously demonstrated in famines in productive regions (Irish Potato Famine and Holodomor). Just reserves lead to speculation dynamics in shortages. There is always an expectation of the reserve running out and panics turn it self-fuffilling as infamously demonstrated by supply chain issues or possibility of snowfall. Increased production kills the expected future price.
- yakak 5y ago
  You seem to be talking about long term underproduction. In the Irish case, the subsistence farmers would have been devastated by a US overproduction even before a famine, similar to subsistence farmers in Africa and India today. Holodomor includes perpetual mismanagement and a political decision not to accept food help or really do anything. No amount of overproduction before Stalin would have prevented food being seized and then rotting in transit. Certainly it's the case that you need at least enough overproduction to drive prices down marginally and to restock a reserve if it is actually used, and make speculation not a sure bet.. I think current subsidies go beyond that and arguably don't work because all that overproduction drove innovations in making food fungible to energy (i.e. as ethenol) and energy is now a more retainable wealth as the major input to proof of work.

by yakak 5y ago

Nasrudith 5y ago

Stores don't help if someone else is willing to pay more for the grain as infamously demonstrated in famines in productive regions (Irish Potato Famine and Holodomor). Just reserves lead to speculation dynamics in shortages. There is always an expectation of the reserve running out and panics turn it self-fuffilling as infamously demonstrated by supply chain issues or possibility of snowfall. Increased production kills the expected future price.

yakak 5y ago
You seem to be talking about long term underproduction. In the Irish case, the subsistence farmers would have been devastated by a US overproduction even before a famine, similar to subsistence farmers in Africa and India today. Holodomor includes perpetual mismanagement and a political decision not to accept food help or really do anything. No amount of overproduction before Stalin would have prevented food being seized and then rotting in transit. Certainly it's the case that you need at least enough overproduction to drive prices down marginally and to restock a reserve if it is actually used, and make speculation not a sure bet.. I think current subsidies go beyond that and arguably don't work because all that overproduction drove innovations in making food fungible to energy (i.e. as ethenol) and energy is now a more retainable wealth as the major input to proof of work.