Farmers Will Grow It

May 7, 2008

May 7, 2008

Hello everybody out there in farm country. Today, I say "hats off' to Wal-Mart Stores. In thee times of a slowing economy and rising fuel and food prices, Wal-Mart continues to be the largest corporate contributor reaching out to help those in need. In 2007, Wal-Mart gave 296 million dollars for hunger relief, education, health care, disaster relief. Thank you, Wal-Mart.

And now for today's commentary.

You have heard it said that the cure for high prices is high prices and the cure for low prices is low prices. That's how the market works.

With that in mind, I would suggest that the increase in global food prices will encourage investment in agriculture and more food will be produced.

So, what kind of investment will give us more food? How about turning our attention to those farmers in the world that aren't using the best technology? For example, there are countries in Africa where they don 't even plant hybrid seed corn. They don't have commercial fertilizer or chemicals to control weeds and insects. And just as important, they don't use genetic engineered seeds. U.S . farms account for half of the biotech crops in the world. We're way ahead of everybody. But there are millions and millions of acres that are being farmed like my grandfather farmed. How much could they produce if they used modern technology? Maybe 20% more, maybe 30% more. Maybe 50% more. Who knows?

The fact is the world has had an abundance of cheap food for a long time. There has been no incentive to grow more. But now, even some Europeans that have vilified biotech foods calling them "Franken Foods" are urging approval of imports of GM crops. The Chairman of European Parliament' s agriculture Committee, Neil Parish, said that as prices rise, Europeans "may be more realistic" about GM crops: "Their hearts may be on the left but their pockets are on the right."

It's only a matter of time and the world will conclude that to feed a hungry world we need to employ our best technology. That will, of course, include genetically modified plants to resist draught, to use fertilizer more efficiently to resist insects, and to yield more pounds, more bushels, more tons.

Markets are calling for more food . If the governments allow the markets to work, farmers will grow it.

Until next week, I am John Block from Washington.