If you live in the States, it's been hard to miss the headlines about the rationing of rice at many popular wholesale stores. Apparently, restaurants are the primary culprit on this "run on rice" that's causing stores to take pre-emptive measures to prevent stock-outs, limiting purchases to one sack in some cases. The fear of rice shortages is the latest symptom in the global commodities crisis, where many staples have escalated in value between 5% to 100% in the past 12 months (rice happens to be at the higher end of the run-up). What can be done? The simple answer is: let the market (i.e., the farmers) react by producing more food to take advantage of higher prices. But in the US, our system is so convoluted, we still pay farmers not to farm their land (don’t get me started on this topic -- it gets me more fired up than even defending the merits of free trade). Perhaps this latest crisis will be cause for Congress to reform its approach to farm subsidies and incentives, letting the invisible hand once again toil in the soil.
- Jason Busch