Are we Heading towards Global Famine? – Part 3

I’m very fortunate that in my line of work, I manage to speak to a very diverse range of people from all walks of life and industry. Today, I had a very interesting chat with a farmer.

He runs quite a large farm, specialising mostly in vegetables and some live stock. However, he has decided to move away from vegetable farming. Asking why, he explained to me that his input costs have risen dramatically over the last couple of months. For example, a 25 kg bag of fertilizer has risen from just over R200 to just over R800. Phosphate has risen from R2000 per ton to a staggering R11000 per ton!

So how does he cope with these huge increases in input costs? He doesn’t. He is unable to recover these costs because he is unable to pass on the price increases to the consumer. So the only thing left to do is to stop farming vegetables. And he is not the only one. Nobody can run a business at a loss.

The implications of this are frightening. If every second vegetable farmer decides to stop farming vegetables, then it will be inevitable that a shortage of vegetables will occur. Real shortages spell disaster because the implication will be a horrendous increase in prices.

I don’t even want to go further discussing how people will react to this. We’ve already seen across the world how the poor reacted, and you can’t blame them. Unfortunately, they don’t understand why this is happening. They believe it is the evil farmers and businessmen causing this and the government won’t stop them believing that.

They wouldn’t want the people to know that their stupid fiscal and monetary policies, together with Central Banks and Banks are the cause of this. They will be lynched if the truth is ever to be known. Expect more stupid Government intervention in the light of this disaster waiting to happen. The worst idea I expect government to implement will be to fix prices below market rates which will cause even more shortages and create an even bigger disaster.

This issue is discussed in Part 1 of Are we Heading towards Global Famine.