The Curious Relationship of Food and Money
Today’s installment of our series, Best of Daily Reckoning, 2012, is all about food — both about how to make money by selling it and about how to “make money” by giving it away.
Here at The Daily Reckoning, we think food is a pretty big deal…and as the Earth’s population explodes, we think it will become an even bigger deal — not just from a socio-economic standpoint, but also from an investment standpoint. In a pinch, the world can do without iPhones and Xboxes. Really, it can. But it can’t do very well without grains, vegetables and fruits.
Chris Mayer, editor of Capital and Crisis, has been a vigilant observer of the agriculture (and water) sector for several years. During the timespan, he has sourced a number of winning investment ideas. But he still thinks there’s plenty of money to be made, as he pointed out in an October 29, 2012 column entitled, “Feed the World, Make Money.”
Interestingly, the US government champions an entirely different way to “make money” by feeding people. The process begins by giving the food away. In a September 24, 2012 column entitled, “In Stamps We Trust: Paving the Road to Prosperity with Food Stamps,” yours truly examined the USDA Food and Nutrition Service’s assertion that, “SNAP [i.e. food stamps] is the only public benefit program which also serves as an economic stimulus.”
Yes, it’s true; this particular government agency agues that increasing the ranks of food-stamp recipients also increases economic activity.
“By generating business at local grocery stores,” the FNS asserts, “new SNAP benefits trigger labor and production demand, ultimately increasing household income and triggering additional spending…Every five percentage point increase in the national participation rate [in food stamp usage] would generate a total of $2.2 billion in economic activity.”
Hmmm…interesting. Too bad “activity” and “growth” are not synonyms.
Comments: