John Block Reports from Washington

Hello everybody out there in farm country. This radio commentary is brought to you by the Renewable Fuels Association, Monsanto, and John Deere. They are all friends, supporters, and allies of a healthy farm economy and prosperous rural America. Thank you.

And now for today’s commentary—

Is the world going to run out of food? The world’s population has doubled since 1970. Grain prices have doubled in the last 4 years. The worry about food supply has many rich countries, including Saudi Arabia, South Korea, and China, buying and leasing land in Africa and where they can find it.

Look at the contrast.

When I was Secretary of Agriculture, we were paying farmers not to grow crops. In order to qualify for price supports, you had to take 10% of your corn acres out of production – just plant it in grass. Farm prices stayed low. There wasn’t very much incentive to grow more. The United States and governments in other developed countries, including Europe, Australia, and New Zealand, tried to stabilize crop prices which, in turn, put a lid on food prices. We always called it the “cheap food policy.” Well, that’s not the case anymore. Farm subsidies have come crashing down. No more buying land out of production. Farmers are getting their money out of the marketplace. New Zealand has the lowest level of farm supports at 1% of total farm income; Australia is next at 3%; Chile is at 4%; and the U.S. is at 4%. The booming demand for food and strong prices has set the stage for continued reduction in government supports.

Where does this leave us, since we are now concerned about growing enough food? It means that the market will be driving food decisions and not governments. That is the way it should be.

There is a new incentive to invest in food production in places in the world such as Africa where there are millions of underutilized acres. In many cases, they don’t even plant hybrid seed corn, they aren’t using genetically engineered seed. They do everything by hand. Their yields are a fraction of what they could be. This will change, and the world will grow more if the market continues to bid for it. I have no doubt, but we will need to take advantage of all the new food production technology.

My message for all the do-good environmentalists is this – if you care about people, stop promoting backward, subsistence farming; that’s the road to starvation.

The world needs to look at the U.S. where the percentage of household income spent on food is 7%. Most of the rest of the world will pay 30% or 40% or 50% of this household income just for food.

We are the role model.

In closing, I would encourage you to access my website which archives my radio commentaries dating back 10 years and will go back 20 years when complete. Check on what I said back then. Go to www.johnblockreports.com.

Until next week, I am John Block in Washington.