Monday, May 22, 2006

The Price Is Wrong

by Umbra Fisk
Grist Magazine

"In the United States, a very small percentage of income goes toward purchasing food: less than 10 percent in 2004, compared with 23 percent in 1929 (and 24 percent in modern Mexico). You probably know that the federal and state governments heavily participate in and financially support U.S. agricultural production. I've been told this is a legacy of the Depression, sort of an "as God is our witness, we'll never go hungry again" attitude. Prices for our food are low and consistent because of strong government involvement in the form of subsidies, grants, paying not to produce, buying surplus, supporting technological development, and tax incentives. Look back at my scintillating discussion of oil subsidies, which describes the various ways government can ease the path of any industry. We pay twice for our food: once to the IRS and once at the supermarket. In short, the cheapness of food is a delusion.

"...Organic food is more expensive because it costs more to produce, has less support from the government, supply is less than demand, and in general we pay the true cost of food when we buy organic. When we buy conventional, we pay the fake cost of food."

©2006 Grist Magazine, Inc.

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