Can We Survive the Next Financial Crisis?

In addition to working in the tech field, I also work with farmers and my opinions are from my own experiences, research, and study.

From what I understand, the price of 90% of what you buy in a grocery store is not the real cost to produce and delivery that item to the grocery store.

That price is heavily influenced by what the market value is of the commodity, which at the moment is mostly driven by industrial farming operations.

Industrial farming relies on their massive scale to make a profit, and they also rely on predictable growing conditions to obtain those results, which is also a tangential problem.

Non-industrial farming operations (local farmers, family famers, etc...) rely on multiple sources of income, resources, and commodities to break even. Typically, one of the partners of the farm has a full or part time job to cover OPEX, and any profits made from farming is used for CAPEX. At the end of the day, the farmer has to decided to either compete with the industrial farmers and unrealistic market values, or they bypass that and sell straight to consumers.

Another issue, is that for everyone else who doesn't live near farmers, they are accustomed to market values that are not reflective of the real cost to produce those goods.

As of right now, the market value is reflective of industrial operations that use both scale and subsidies to produce cheap food.

My entire point, is that this trend is not sustainable for consumers, farmers, or nature.

So in addition to the next financial crisis, we will also be seeing a dramatic change in our food production and distribution system.

None taken.

>From what I understand, the price of 90% of what you buy in a grocery store is not the real cost to produce and delivery that item to the grocery store.

>That price is heavily influenced by what the market value is of the commodity, which at the moment is mostly driven by industrial farming operations.

>Industrial farming relies on their massive scale to make a profit, [...]

>Non-industrial farming operations (local farmers, family famers, etc...) rely on multiple sources of income, resources, and commodities to break even. Typically, one of the partners of the farm has a full or part time job to cover OPEX, and any profits made from farming is used for CAPEX. At the end of the day, the farmer has to decided to either compete with the industrial farmers and unrealistic market values, or they bypass that and sell straight to consumers.

I don't get what you're saying. Large farms have larger economies of scale, so they can out-compete smaller farms on commodities. This is basic economics. How is this increased efficiency intrinsically bad? Why should consumers pay more for food that's produced by inefficient small scale operations?

You say that the price you pay doesn't represent the "real cost", but obviously it does, otherwise the farm will go out of business operating at a loss. The only other explanation is externalities, but you haven't really explained what negative externalities big farms are producing that small farms aren't.

>[...] and they also rely on predictable growing conditions to obtain those results, which is also a tangential problem.

Is there a reason why industrial farms are more reliant on predictable growing conditions than a smaller farm? If anything large farms can weather shocks better than small operations because they have better expertise to mitigate the negative effects and bigger bankroll to avoid bankruptcy.

>Another issue, is that for everyone else who doesn't live near farmers, they are accustomed to market values that are not reflective of the real cost to produce those goods.

disagree. in the same way that living next to a GM plant doesn't accustom me to the the real cost in producing a car.

>As of right now, the market value is reflective of industrial operations that use both scale and subsidies to produce cheap food.

scale: as I said earlier, I don't see anything intrinsically wrong with economies of scale associated with large scale operations. If anything, they're a net benefit to society because they have higher efficiency.

subsidies: this mainly hinges on whether large scale operations get more subsidies (relative to size) compared to small scale operations. I haven't done any research on this so I won't comment either way.