Soaring Food Prices

26th April 2011

Agriculture: Soaring Food Inflation. Perhaps it is time for a Global Policy on Environmental Vegetarianism.


In the report published today by Asian Development Bank, it said that:

"The specter of high commodity prices has recently reemerged, with global food prices registering a new peak in February 2011, triggered mainly by production shortfalls due to bad weather. The 30% hike in international food prices has translated to an average domestic food price inflation in developing Asia of about 10%. This could push an additional 64.4 million Asians into poverty, or lead to a 1.9 percentage point increase in poverty incidence based on the $1.25-a-day poverty line. The frequency with which food price spikes have occurred in recent years suggests that short- and long-term solutions need to be implemented to secure food supplies for the world's growing population."

Vision Finance recognizes this to be a major problem, and the ADB report to be an excellent outline of the problem, though as always it is easier and more media catching to outline the problem than to offer the solution.

Vision Finance wants to suggest a simple solution, perhaps a single and simplest solution out there today:
Global Policy on Environmental Vegetarianism. 


source:  (thank you Wiki)

In tracking food animal production from the feed through to the dinner table, the inefficiencies of meat, milk and egg production range from a 4:1 energy input to protein output ratio up to 54:1 (yes you guessed it, it is your beef steak) . This means that 54 people could be fed for each steak that we eat. This ration is 4:1 for chicken.

Now, Vision Finance is not advocating to stop eating beef, as this would be totally unrealistic and a utopian dead policy (plus some of us enjoy our steaks and beef tartar too much), but there is absolutely no reason why the centralised government policy could not implement an extra say 108% tax on beef food, 8% tax on Chicken food, tax 100% on lamb, or some formula in the following style:

TAX ON MEAT = EGOISM RATIO (or Energy Input To Protein Output Ratio)  x  2*.

*this multiplier could be increased or decreased depending on the calculations that we did not do 
(Vision Finance is happy to sponsor ECONOMIC research in this area.  Email for more information)

Now this money would significantly shift consumer behaviour, what ironically would not only have a very positive effect on people's diet and subsequently healthcare, meaning significant savings in healthcare, but it would actually lead to a massive drop in the prices of grain crops not only helping some 300 million people to leave the poverty line, but also solve number of budget issues in the Western World.  Ironically the freed capacity to grow grain, would not only then stop deforestation but could also be used to crop oil efficient crops that could be sold for much higher amount than food crops.  Everyone would benefit, apart from perhaps McDonalds, but even McDonalds could still sell their Veggie Burgers, or at least more chickenburgers which are still some 13 times more environmentally efficient than beefburgers.  EVERYONE WOULD BENEFIT.

Lets look at USA for instance:

Each U.S. citizen consumes an average of 260 lbs. of meat per year, the world's highest rate. That is abut 1.5 times the industrial world average, three times the East Asian average, and 40 times the average in Bangladesh.

To summarize the grain used to feed livestock in United States could be used to feed 800 million people. Furthermore the surge of crops exports would help USA to generate further USD80 billion (using 1997 prices as clearly the grain prices of today would go down), so this is not only about the environment, its also about filling of the huge financial hole, balance of payments issues, debt levels.

To summarize:

  • A substantial decrease in food consumption
  • Help to 60 million people in Asia who will enter poverty this year because of high food prices
  • A huge tax revenue to fill those 10% budget deficits
  • Significant decrease in obese population and reduction in healthcare bills
  • Ability to grow more biofuel crops instead of grains
  • Higher appreciation from eating meat - we do not want to ban it, just tax it!

  • Grain manufacturers will lose revenue (perhaps some temporary compensation system could be in place)
  • Some lobby groups in USA will lose money for sure, but frankly if we can regulate Tobacco we can regulate other examples of social irresponsibility too


Vision Finance is not about idealism or utopia.  We recognise that to solely rely on people's good nature and logic is at times not leading to best results, if any results (see the US society). A great example of where human nature and lack of proper regulation has led to disastrous inefficiencies was the recent banking crisis.   

However, if we thought that Banking Crisis was a problem, please consider the lives of 60 million people who will enter poverty in Asia this year because of our total lack of will to do anything to change things, especially when change makes perfect economic sense.   Sometimes, "The Adjustment Bureau" is simply the only choice.

You can read about our other policies on our Stop Global Warming page. 
Krzysztof Samberger (DISTRIBUTION),
26 Apr 2011, 05:35