Keep an eye on the environment as prices rise

Spare a thought for the environment as food prices jump and an uncertain future lies ahead.

Food prices are rising for many reasons, not the least of which is the Russian invasion of Ukraine, one of the world’s most significant grain producers and exporters. Unless the war stops or ends in a couple of weeks, grain stocks will dwindle because Ukraine can’t get a crop planted.

Dwindling stocks mean a tight squeeze on supplies, which leads to higher prices because no one is trying to unload their harvests at low prices. Competition dries up.

Influences on grain prices are many and varied. But when there’s a supply shortage and prices rise, crops get planted to later be sold and take advantage of the market.

Back in the late 1980s and early 1990s, prices tanked. Some farmers tried to stay afloat by eking out as much grain as possible on the land that was available. In some cases, the land was environmentally sensitive and should have been left untouched or untilled. But times were tough and farmers’ backs were against the wall.

Today, prices have totally flipped around, hitting record highs in some cases. And worries are arising that once again questionable land will be brought into production, for the same reason: farmers want to squeeze production and profit out of every bit of land possible.

Farmers care about sustainability, but they also need to be profitable. And even with high prices, an overwhelming number of farmers are still getting the majority of their income off the farm. They cannot make ends meet on farm sales alone.

Exporting nations are keeping a close eye on the situation. No importer wants to do business with an environmentally careless country. It looks bad, and it is bad. But no country wants to go without food staples, either.

Back in the mid-80s, the US government tried to stem the temptation of using environmentally sensitive land for crops by actually paying farmers to preserve land – not just telling them they should.

The US program was a huge hit, despite being condemned by some countries as a thinly veiled subsidy program that paid crop-growing farmers to not grow crops, at a time when a movement was underway to get rid of subsidies.