El Blogador makes a regular-almost daily-habit of reviewing movies.  One topic that recently caught my eye was the movie ‘Food Inc’, not because I’ve seen it, but because I worked on a business plan recently which touched on this topic.

I’m going to skip commentary on the apparently anti-market movie and El Blogador’s anti-American sentiment, since neither their opinions or my response is likely to be of surprise to readers, but the primary topic should be.  As I’ve learned in recent years, 98% of the food supply in the US is produced by only 2% of the population, and the bulk of the food is produced and distributed by a few large companies.  (If I were a liberal I would say, ‘a few evil multinational corporations’).

Naturally these companies respond to market pressures to produce large quantities of food at low prices.  Despite what the poor and uneducated may believe, these companies do not begin with the objective ‘produce low quality food’, but rather, interpret market demands and then seek to satisfy them.  In the US, and it would appear around the world, people want lots of good tasting food and don’t want to pay very much for it.  Imagine that.

Because the market works more efficiently in the US than in most other countries-and certainly most other large economies due to the relatively low level of governmental interference-the market is getting what it wants, and that means that the food is not very nutritious but it looks/tastes good and is cheap.  El Blogador blames this on subsidies, and while there are subsidies (that debate will have to wait), subsidies represent a tiny fraction of the US food production marketplace. I therefore conclude the structure of food prices has more to do with The Invisible Hand than the subsidies, which are really designed to keep domestic production viable when it might otherwise disappear due to foreign government subsidies of their exports.

What does this all mean?  Well, the Nutrition Nazis have long favored locally produced organically grown food, mostly for the wrong reasons.  They want us to eat mostly vegetables because consuming animal products is wrong, because locally produced food deprives evil multinational agribusiness of revenue, and because organic processes respect the rights of insects and diseases.

The truth, of course, requires a little more discernment and won’t be as satisfying to the partisans.  Locally produced food has the great advantage of being fresh and being close to the consumer.  Freshness usually translates into higher nutritional density, and a shorter supply line means disruption is less likely and also the cost of delivery is lower.  It almost always translates to higher prices, since the small farmer cannot reasonably compete with the large one in terms of price or efficiency.  It also means that diversity suffers, since local production is likely to be more specialized.  For the libs, this diversity-challenged farming approach really should be a deal-killer.

Organic would seem on the surface to make sense, but one challenge is the loss of efficiency that goes hand in hand with a reduction of fertilizers and pesticides that deter and or prevent plant death and disease.  The lower efficacy of organic approaches lead to reduced crop yield, which has two consequences:  lower supply and higher prices.  The left’s obsession with organic has reached levels similar to the demagoguery that surrounded DDT for most of my life, only to be proven to be largely politically motivated.

There are some good reasons to choose locally produced and organic food.  I enjoy knowing that much of the food we now consume here in Guatemala was produced within a short drive from where we live.  This means that there are few risks to the food supply and less is spent on distribution and marketing.  This, combined with a low cost of labor, is the reason local food is inexpensive.  These are market-relevant factors, not politically motivated ideologies that run against market forces.

I enjoy organic food here because I know the people producing the food are concerned with the nutritional value.  Those producers who are working to achieve size and beauty in their produce have an incentive to achieve these objectives without regard to the nutritional value.  They may be sufficiently motivated even to chemically manipulate their produce in a manner that is unhealthy.  Knowing that in the US there is some regulation of the food suggests that the manipulation is measured, whereas here I can have no such confidence.  So organic is a reasonable choice-perhaps a gamble-that the nutritional density is greater.  Add to this consideration that the organic grower’s concern for nutrition may translate into a more hygienic handling of the product and you have a formula which justifies the substantially higher price.

One final comment-US food prices have remained relatively low for a long time, despite record levels of crop failure and destruction (due to weather), increasing use of corn for alternative fuels (ethanol), and a booming, more affluent population in Asia, which translates into a much higher caloric intake.  Were global warming true, this would likely solve the world’s food problem (longer growing seasons and a larger global production area), but as some of us have long suspected it is a total fraud, and in fact the earth is likely entering another little ice age, which spells further trouble for the global food supply, and means higher food prices for you and I.