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Comment by lukasb | Hacker News Reader

I remember seeing a headline in Thailand "rise in rice prices hits small farmers hard". I've seen similar things in Kenya: "high maize prices devastate small farmers."

It turns out many subsistence farmers (of which there are roughly a billion) are net consumers of their staple crop. In order to survive, the poor diversify across a variety of agricultural products. Large industrial farming operations are growing the rest of the rice/maize ... and I'm guessing quinoa.

So, if the same pattern holds here, farmers consume more quinoa than they sell, and suffer when prices go up.

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I still don't understand. If a farmer produces 10 units of quinoa and sell 4 every year, they'll still produce 10 units no matter what the price is. They'll still be able to sell 4 units, and still be able to consume 6. The only difference would be that farmers will make more of a profit selling the 4 units.

The only possible explanation would be that the resources (farming equipment, seeds, fertilizer?) required to grow the crop go up in price as the price of the crop does - in which case, blame the suppliers of these resources.

More typically, farmers produce 10 units, sell 3, and buy another 10 later in the year. Hence any rise in price is a net loss for them.

How did that ever work?

Well, in western Kenya anyway:

1. Farmers used to have 100-200 acres apiece. At that point you can feed a family even with very low yields. There were few (if any) large-scale farming operations for them to buy from, anyway.

2. Each generation, the farmer would divide the land up amongst his sons.

3. Fast-forward to today, farmers have more like 2 acres, and with traditional farming techniques don't have enough yield to feed their families.

4. They make up the difference with cattle, chickens, beans, odd jobs - or don't make up the difference, as malnutrition and starvation are a constant problem. But if they make enough money, there is a national maize market to buy from, which previously there wasn't. Hence, they're net maize consumers.

It didn't. You're just reading bullshit economics masquerading as insight.

From reading the grandparent:

"subsistence farmers are net consumers of their staple crop. In order to survive, the poor diversify across a variety of agricultural products"

I don't understand the downvotes for the parent. They are growing other products, or have cash from other activities, and use this to buy the staple they can't grow. If price of staple rises and price of other products and services does not, they can't afford to do this. The beneficiaries are large industrial farmers of the staple. Did I miss something?

The part where even if that is true, there are other, cheaper staples. This should be a classic self-correcting problem. The world as a whole has gotten by on staples other than quinoa. Now that the market price of this particular local staple has skyrocketed, it can be sold in exchange for greater quantities of less-expensive staples used elsewhere.

If there is in fact a problem (and I do question its existence), I believe lukasb is looking for it in the wrong place.

They don't have access to other, cheaper staples. These are geographically isolated farmers in countries with poor infrastructure.

If the quinoa can get out, other things can get in.

Where does the second set of 10 units come from?

Large-scale industrial farming operations. That was the case in Kenya, anyway.

The problem is that not everyone is a quinoa farmer or farms mainly quinoa. For example, here in Brazil we have a similar problem with Açai - if you are not an Açai farmer (fisherman, farm something else, etc) then the rising Açai prices are very bad.

What if you're not a farmer? What if you're a ditch-digger, and now can't afford your staple food?

Simple! Teach yourself to code, and earn 6 figures in an office chair!

> farmers consume more quinoa than they sell, and suffer when prices go up.

Unless there are other foods they can buy which are cheaper. Then they benefit from the higher prices and don't pay them.

The reason staples are staples is because they're cheapest per calorie. There probably are not replacements that are as cheap per calorie. Remember that subsistence farmers tend to be geographically isolated so you can't assume they have access to the same food products you do.

If they are net consumers of the staple, they must be net producers of some other crops.

If the price of the staple increases dramatically, can't they shift towards eating other crops (that they were previously net producers of)?

"If they are net consumers of the staple, they must be net producers of some other crops."

Again, those other crops are likely more expensive per calorie. That means there is no mix of consumption that will get them the same amount of calories they previously consumed, which for subsistence farmers will often mean malnutrition if not starvation.

> those other crops are likely more expensive

In terms of effort required to grow those crops, or in terms of market price? If they're growing the crops in order to eat them, the market price isn't relevant (except that if those other crops are expensive on the market, they can sell those for a profit, too).

Shipping costs, which are significant when dealing with bulk products.

Something you sell is, generally speaking, more vulnerable to confiscation than something you make yourself... I mean, taxes, for example, are generally levied between when you sell a thing and when you buy food. (in my jurisdiction, I don't have to pay sales tax when buying food I intend to eat, but if I sold something to afford that food, I'd have to pay taxes on that income. If I grew food for my own personal use, there would be no taxes involved.) For me? It's not a huge deal because food (and housing and other post-tax expenditures... ) is a very small portion of what my business brings in,(most of my expenditures are things like electricity and payroll, which come out of the business pre-tax) but i imagine it makes a difference for sustenance farmers.

I mean, I'm not saying taxation is the only way it's easier for others to get their hands on your crops if the crops are bought and sold... but it's one of the more clear examples.

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