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#26397 - 06/04/08 10:19 PM Should the United States use its Food Exports
Rallem Offline
Senior Member

Registered: 09/04/06
Posts: 194
Loc: South Royalton, Vermont
Should the United States use its vast food exporting ability as a political weapon and charge excessive prices for it?

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#26399 - 06/05/08 01:35 AM Re: Should the United States use its Food Exports [Re: Rallem]
MikeBinOK Offline
Member

Registered: 06/30/07
Posts: 67
Loc: Oklahoma
Using food as a weapon was regularly talked about during the Cold War days--The Soviet Union was seldom able to feed itself, and the US was by far the largest exporter of grain. So there was periodic talk of embargoing sales of wheat to the Soviet Union. To my memory, the only time it was actually tried was during the Carter presidency after the Russian invasion of Afghanistan. This wasn't too effective, partly because the US was committed by treaty to sell a certain amount of grain (and Carter allowed that amount) and partly because wheat is a "fungible" commodity--If one supplier of wheat won't sell, wheat from a different supplier will be just as good.

Commodity embargoes don't work unless the embargoer has a near monopoly on the good involved. And in the US, the embargo carried a huge political price--It outraged farmers, who have a substantial amount of political clout.

Charging a higher price is actually probably more difficult. Since wheat is grown and sold by individuals who charge as much as they can get on the market, I know of no way to make "higher prices" happen except with export tariffs. These would cause even more political unrest than the grain embargo caused. And will you charge higher prices for everyone, including your dear friends? If so, you'll alienate your friends. If not, your friends will buy wheat at a lower price set just for them, and resell it to undercut your higher price.

Note that some countries suffering from the rice shortage that has received so much media attention have totally banned exports not for some political reason, but simply to hold rice in their own country (thus keeping their domestic prices down) instead of allowing it to be exported to richer countries that will pay a higher price for it!

If you've managed not to fall asleep during the preceding, you shouldn't drink so much coffee! :-)
_________________________
Mike B in OKlahoma

"Never confuse with malice that which is adequately explained by incompetence."


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#26400 - 06/05/08 01:53 AM Re: Should the United States use its Food Exports [Re: MikeBinOK]
Rallem Offline
Senior Member

Registered: 09/04/06
Posts: 194
Loc: South Royalton, Vermont
Yes but with the new production of biofuels won't suppliers of grain be able to sell their grain to fuel producers for more than they are worth as foood?


Edited by Rallem (06/05/08 01:54 AM)

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#26499 - 06/09/08 10:40 PM Re: Should the United States use its Food Exports [Re: Rallem]
Anonymous
Unregistered


Also would we not makre more money if we did change into bio fuel as we would then tax the bio fuel and stop paying the imported fuels???

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#26502 - 06/09/08 11:44 PM Re: Should the United States use its Food Exports [Re: Anonymous]
Rallem Offline
Senior Member

Registered: 09/04/06
Posts: 194
Loc: South Royalton, Vermont
Yes and no. We would in deed stop much of our outgoing money to the rest of the world and convert that money to internal sources, but I think and I am not a real economist, but I think that our economy would shrink in the act of converting food to bio fuel, unless we began exporting our bio fuel to other countries.

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