Friday, June 12, 2015

hunger & crop subsidies

Alternative uses for commodities that are directly consumable by people (wheat, maize, soya, etc.), such as the production of meat, fuel, and bioplastics, drive up the prices of those commodities, making them less affordable to those who can't afford anything else. Government subsidies contribute to the profitability of producing such commodities, but are inefficient as a means of keeping the prices to end consumers under control.

The solution would be to confine subsidies to shipments which actually go to direct human consumption, leaving other uses, including meat production, to compete in an open market. (Dairy and egg production might be subsidized at a lower rate than direct human consumption, although this begins to get complicated as laying hens, dairy cows, and the majority of male chicks and calves go to slaughter sooner or later, so such operations are a mixture.)

However, this approach begs the question of whether the grain that goes into a box of processed breakfast cereal should receive the subsidy. Since some processing (roasting, rolling, milling and/or grinding) renders many commodities more useful, it wouldn't make sense to preclude that, but there are other ways to approach this issue.

Subsidies could be limited to larger package sizes, say one kilogram (2.2 pounds) as a minimum, or to products where marketing overhead (advertising, packaging, etc.) and profit constituted no more than, say, 20% of the price to the end consumer. (That figure would need to be high enough to fund a distribution network, but not so high as to make that business lucrative enough to attract corruption.)

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