Tyyr wrote:
Is it a possibility? Yes, it is. Do I think in the middle of a recession that congress will enact protections for farmers that make food more expensive for everyone? No I don't.
Have you been paying attention to the things congress is doing during this recession? And that would be the sort of thing where the government can profit (Because they tax the farmer on a percentage of his profits that rises with income, than tax people a sales tax also based on the price of the item, and a hundred additional taxes in between). It's especially relevant to cash flow because grains are one of the few things we export instead of inport.
It is a little tricky politically to phrase things that way. My guess is that in the current political climate if the change is something someone in the Department of Agriculture can do quitely it'd be done, if they actually had to pass new legislation it'd be dicey. Of course in the current political climate they'll pay almost anything to be "green" so the no ethanol angle is also a moot point. I suspect the sort of congress that would whack ethanol would also likely be willing to control the grain market in their favor.
Regardless of the economics involved I think its ridiculous to be turning food into gas when there are starving people in the world.
I'm telling you it doesn't really matter. We are more than capable of producing enough food for everyone. Even without government controlls farmers are simply not going to produce grain at current levels if the price drops significantly, their profit margins are not that high, and they cannot operate at a loss. Ideally they'd do something like increase meat production (which is where most grain goes anyway I do believe). So Wendies might offer a four patty sandwich for the price of their three patty sandwich, but nobody in Kenya is significantly any better off. But it's also possible a number of farms would simply close up. Again nobody in Kenya is better off, just now we have a weaker economy.
