Runaway inflation of foodstoff prices hits Russia hard

[AMX]

I strongly recommend the documentary "Darwin's Nightmare", which describes the effect of asymmetrical agricultural exports in painfully explicit fashion. The doco was actually made by an African rather than a Hollywood director on safari, so it's not too polished or well-produced. It kind of meanders along and there are parts in the early going where you start wondering where the fuck this film is going. But by the end, the point is razor-sharp, because rather than preach at you, it simply shows you.

Austrian, actually.


Oh, and I happened to hear something interesting last week:
Under laboratory conditions, you can expect photosynthesis to be no more efficient than 7%; under typical agricultural conditions, expect between 1 and 2%.
Compare with current photovoltaics to see how nonsensical biofuels are.

[Master of Ossus]

Ummm... bringing in MORE food is how you correct a famine.

That acts on the premise that imported food is cheaper. The price hike is caused by the rising import prices as well.

No, it acts on the premise that the problem in a famine is lack of food.

Clearly the higher import prices are a sign of a higher international price of food, which is precisely why domestic Russian grain producers are exporting their product more. I love the way you act as if all of the grain producers are independently choosing to do all of these things, as if they're not all responding to the same market conditions.

You can lower prices by exporting less, since more of the product remains in the country.

And how do you export less without raising prices in your country?

Really, and why? Since some rich fucktards care more about their profits than about starving citizens?

Yes. Because the "rich fucktards" respond to market conditions, and they'll do so even if you cap the price.

That's not an argument.

No, that's not an argument.

If the price cap allows operating with a minimal or zero profit, and is combined with export ban, it's perfectly viable way to stop hunger and food price inflation.

Oh, I see. You're adding a ban on exports to the house of economic cards your erecting. What a great way to encourage people to grow food in the future and to solve the long-term problems represented by the famine.

You're a moron if you think that's what the government is doing. The government is LOWERING import tariffs for fuck's sake, to compensate for import prices rising, which is OUT OF IT'S CONTROL. The food is "taken away" by greedy exporters, not by the government.

My argument wasn't remotely prefaced on what the government was doing--it was based on food and other goods having different price elasticities of demand, which can be measured and demonstrated fairly easily.

[Master of Ossus]

It's also perfectly viable to use oil superprofits to compensate food production losses, if the food production operates at a loss.

However, I do not see Russia's grain producers operating at loss - they still have not met real domestic demand, but they voluntarily choose to export since outer bidders outbid the citizens of the country. Therefore, it's an issue of choosing higher profit which directly harms citizens, not "oh doom and gloom, they'll go bust if they don't export the grain but sell it at home".

So what? The point is that you correct the long-term imbalance by paying them for their product. Well, why do you want to keep people from outbidding the foreigners? That is precisely what your policy of price-caps will do. The foreigners are under no such pressure to keep their bids low, so your policy will compound the problem rather than correct it. As for your idea of a "complete export ban," go right ahead. Heck, why don't you create a command economy? That is what Russia is known for, after all.

They will NOT go bust, they will merely have less profits. Oooh, I'm so sad right now that Russia's grain didn't go to the First World and the grain traders didn't get gazillions of profits, I'm almost crying out my eyes.

Then fix the real problems with the economy, don't sit there and cry about how the market is cold and heartless.

[Darth Wong]

Ummm... bringing in MORE food is how you correct a famine. You cannot stop people from starving by importing less and exporting more food. What part of this is difficult for you to understand?

Umm, you are aware that the countries in question are EXPORTING more food, because the foreigners can afford to pay more money for it, correct? That's why the famine is happening.

Of course you solve a famine by importing more food, or exporting less food. That is the exact opposite of what is happening here as a result of unrestricted market forces.

As for the stuff about higher prices starving people....

Ah yes, ignore facts by simply rolling your eyes at them. This is actually happening in real-life, and people are actually dying out there; it is not a neat little theory in an econ textbook. People are starving because they cannot afford the food that is being produced by their own farmers at increasing cross-border market prices.

You cannot lower prices by bringing in LESS food, dumbass, which is precisely what you're claiming should be done.

If you have some actual evidence that cross-border trade actually increases net food importing in these low-income countries, it would be nice to see it. Available examples seem to indicate the opposite; that it results in net increase of food exports, not imports.

Price-caps on foodstuffs is precisely the wrong way to handle a famine. At least if it's the price that's high (as opposed to a shortage), people can elect to forego other things that cost money to pay for food.

Do you understand that these people don't have those "other things" that they can "forego" to pay for food?

[Illuminatus Primus]

Is MoO suggesting people are spending money on frivolities before addressing their need to eat?

[Darth Wong]

Is MoO suggesting people are spending money on frivolities before addressing their need to eat?

He is suggesting that a starving peasant in Tanzania should stop spending money on Porsches and Land Rovers so he can afford food, and that's how we can solve famine in third-world countries that are exporting their food to Europe and America.

[K. A. Pital]

Clearly the higher import prices are a sign of a higher international price of food, which is precisely why domestic Russian grain producers are exporting their product more. I love the way you act as if all of the grain producers are independently choosing to do all of these things, as if they're not all responding to the same market conditions.

You're an idiot if you think I suggest that they do this out of some sort of great malice. This malicious, from a outside observer's point, behaviour, is nothing but the result of market forces at work, just like Great Irish Famine, it's nothing but the result of market "correction" of food prices due to increasing demand for agricultural lands.

What a great way to encourage people to grow food in the future

What's the fucking point of growing food if people are in famine? You're a callous fuck.

...and to solve the long-term problems represented by the famine.

What are the "long-term problems", idiot? The long-term problem is the rising world food prices, which is caused by your precious market forces and NOTHING but them, so fuck you. There's little our country, or even the much poorer Central Asia can do to stop the First World biofuel madness which drives the prices up.
"Oh, please, don't buy biodiesels, our people are starving!"
"Shut the fuck up, anti-market communists".

My argument wasn't remotely prefaced on what the government was doing--it was based on food and other goods having different price elasticities of demand, which can be measured and demonstrated fairly easily.

How the hell does this have any relation to the problem on hands? Oh right - you don't offer any solution beyond "well, let the greedy exporters export and the prices rise due to contraction of available food - after all, those who can't afford to buy it are a nuisance to the market equilibrium".

So what? The point is that you correct the long-term imbalance by paying them for their product.

What is this "long-term imbalance", moron? First World is going to pay more for biodiesels than Fahud Mahmoud or Ivan Vankin can ever pay for their basic substience. Of course, under "market policy", it's perfectly viable to let Mahmoud and Ivan die. Why not? After all, Mahmoud and Vankin are out of the demand curve, so fuck them, right? What is your plan for correction? "Please, don't buy biodiesels"? Idiot.

Well, why do you want to keep people from outbidding the foreigners?

Idiot, what "people" will outbid the foreigners? Poor Third World and Second World populations outbidding the First World? Ha-fucking-ha-ha. The majority in Russia as I have shown, can't even afford the current rise in prices and is forced to LOWER THEIR NUTRITION, as I have shown. Callous fuck, I'm merely exposing you for what you are.

You're pitting millions of rich against the billions of poor. Who will outbid whom? Are you seriously that retarded as not to understand that people with a 200-300 USD/month wage CANNOT outbid people with at least ten times their purchasing power? And that's at PERSONAL level. At the national and corporation level, that disparity between First and Third World is even worse. So no, price raise will not lead to "outbidding", since there won't be many people to "outbid" in the poor country. Idiot.

A newsflash from Omsk. Cheese prices rose. Incidentally, also less cheese is on the retail shelves according to our trade concilium. But what is going on? Simple - a NEW equilibrium of the market, not only in PRICE, but also in QUANTITY - a lesser quantity with a higher price is what we enjoy. Wonderful.

That is precisely what your policy of price-caps will do.

What do I want - adequate nutrition for my citizens or having a large part of them fall out of the demand curve? Idiot.

The foreigners are under no such pressure to keep their bids low, so your policy will compound the problem rather than correct it.

What will correct the problem? "Please, we're starving, STOP BUYING OUR FOOD AND BIODIESEL FOR YOUR FUCKING CARS" written in large letters on Capitol Hill?

As for your idea of a "complete export ban," go right ahead. Heck, why don't you create a command economy? That is what Russia is known for, after all.

Yeah. I mean, it's nothing bad happening now and market self-correction will not lead to starvation... except millions people in Central Asia are already in hunger, malnourished and starving ... and Russia is not far behind. But price rises never led to famine! Massive influx of import foods saved the PEONS!! Except it didn't in Bangladesh Famine 1974, Great Irish Famine, 10 Famines of Tsarist Russia which claimed millions of lives, famines in Africa, Asia and elsewhere... Wait, what am I saying? Even Stalin used that approach, he exported grain when his peons starved! I understand, that's not bad! That's just playing to the market forces!

[LadyTevar]

Allowing the price to rise means that the people involved in the export business make more money.

Indeed so; during the Great Irish Famine and the Tsarist Russia famines, grain traders massively increased their wealth which also coincided with mass spread of hunger.

I was wondering if someone would mention the Irish Potato Famine. One of the contributing causes was Exports. Beef and Grain farmers were exporting nearly all their harvest to England, where they got nearly double the amount of money.

The smaller farmers and serfs were left to live as best they could, unable to afford what little beef and grain remainded in Ireland. Thus, they came to rely on the Potato crop, because one potato can turn into 2-5 new plants, depending on its 'eyes'. This over-dependence on the potato, which become nearly incestuous from the planting and seeding of 'sibling' plants, is why thousands starved when the Potato Blight hit.

Yet, even with the blight on the potato and people going hungry, beef and grain farmers continued to send their crop to England for the higher profit. Thus the saying "God put the Blight on the Potato, but England put the Hunger on Ireland."

I will have to assume the Famine in Russia ran similarly. Unfortunately, it seems history is repeating itself.

[K. A. Pital]

Repeat for MoO as he's dense:

Over half of Russians - 52% - are forced to reduce their nutrition expenses due to prices rising, according to a VTSIOM polling on Wednesday.

...

Only 5% spend less than a quarter of their income on food. 29% of polled spend 25-49% of food, while 60% spend over 50% of income on food, and 18% spend most or all of income on food (75% of income or more) ...

Seems 52% of Russians don't have Land Rovers to sell out before buying food. Ouch, it seems the price rise didn't lead to increased food availability through imports - now, did it? And you seriously suggest those people "outbidding" the First World? You're mad.

[Darth Servo]

Is MoO suggesting people are spending money on frivolities before addressing their need to eat?

Its not all that unusual. I've seen morons spending their welfare checks on cigarettes. Granted, thats in the US, not a third-world shithole.

[Master of Ossus]

Repeated because half the people here are complete fucking retards:

How do you increase the quantity of food being put into a country while simultaneously reducing the price paid for food? You can't do it. If you lower the price, the quantity drops. If you raise the price, the quantity increases. I'm sorry you feel this is callous or indifferent, but any policy designed to combat a famine has to recognize that this is the fundamental issue. I'm sorry you guys don't like these options, but there they are. Well-wishing isn't going to get Russia to stop exporting foods.

An interesting side-note, though, to the Irish Potato Famine is that according to most data, Irish consumption of potatoes paradoxically increased during the famine itself, which is a pretty stunning example of the power of market forces.

[Master of Ossus]

Umm, you are aware that the countries in question are EXPORTING more food, because the foreigners can afford to pay more money for it, correct? That's why the famine is happening.

Of course you solve a famine by importing more food, or exporting less food. That is the exact opposite of what is happening here as a result of unrestricted market forces.

True, but ones that cannot be corrected (and, in fact, will be exacerbated) by the policy of putting price caps on food products.

Ah yes, ignore facts by simply rolling your eyes at them. This is actually happening in real-life, and people are actually dying out there; it is not a neat little theory in an econ textbook. People are starving because they cannot afford the food that is being produced by their own farmers at increasing cross-border market prices.

This would be a slight variation on Stas Bush's "That's not an argument" claim. The point is that you cannot correct this problem with price caps, which has been my position on this since the start.

If you have some actual evidence that cross-border trade actually increases net food importing in these low-income countries, it would be nice to see it. Available examples seem to indicate the opposite; that it results in net increase of food exports, not imports.

Uh... I view imports and exports as being exactly the same. Perhaps I would have been more technically correct in referring to "net exports," but I don't really draw a distinction there.

Do you understand that these people don't have those "other things" that they can "forego" to pay for food?

Sorry, but no. I'm sure they have other essentials that they're still paying for, like housing, fuel, etc. As I said, before, their options suck, but that's not a sufficient reason to take away their sucky choices by capping prices. Even having sucky choices to make is better than having one sucky option forced upon you by someone else.

[Master of Ossus]

Repeat for MoO as he's dense:

Over half of Russians - 52% - are forced to reduce their nutrition expenses due to prices rising, according to a VTSIOM polling on Wednesday.

...

Only 5% spend less than a quarter of their income on food. 29% of polled spend 25-49% of food, while 60% spend over 50% of income on food, and 18% spend most or all of income on food (75% of income or more) ...

Seems 52% of Russians don't have Land Rovers to sell out before buying food. Ouch, it seems the price rise didn't lead to increased food availability through imports - now, did it? And you seriously suggest those people "outbidding" the First World? You're mad.

Find where I claimed they were buying Land Rovers--I was saying that you have to give them the option of giving up other essentials. And as for outbidding the First World, why is that mad? The First World has more money, but the First World isn't starving, so its marginal utility of food is MUCH, MUCH lower than the marginal utility of food in Russia. This is the same reason why diamonds cost more than water, even though water is an essential and life-sustaining product, and the same reason why all Russian fresh water isn't exported to the US and Europe.

[K. A. Pital]

FOM poll from October shows even worse results:

Two thirds (64%) report that they are forced to abandon buying everyday foods. The products which are rejected are meat (40%), meat products (36%), milk and milk products (37%), fruit (27%), fish (22%), fish products (19%).

How do you increase the quantity of food being put into a country while simultaneously reducing the price paid for food? You can't do it.

1) Why do you need to increase the quantity of food as opposed to produce the same amount and sell at the same affordable price? The hunger you speak of is not due to lack of foods, but due to lack of their availability to people.

If you lower the price, the quantity drops

And why is that? If they are not operating at a loss, then the agriculture does not have an incentive to reduce production.

If you raise the price, the quantity increases.

NO. Horseshit. There can be a simultaneous price raise and reduction of quantity. That means the curve itself is shifting. In fact, it goes just the other way round - price increases because there's less food in the world. There's less food because of demand for biofuels. Where is the mechanism for "correction"?

Please don't tell me that a price raise which causes 50-60% of the population to consume less food is at the same time causing more food to be available in the country. An increase in food supply must lead to lowering prices. Otherwise, it's pointless since the majority cannot afford it anyway. So who is "outbidding" then? In which case, no "increase" will arise in the first place - since low-income agents are no longer potential buyers, the revenue from the higher price remains the same, it just sucks more blood out of the richer agents. No increase in quantity - a decrease, however, can pretty much easily occur if the prices are cutting demand off.

If only 20 million can say, afford cheese, will the other 120 million see an increase in cheese supply for them? Surely not. Whoops.

Irish consumption of potatoes paradoxically increased during the famine itself, which is a pretty stunning example of the power of market forces.

The death of a million people is a stunning example of market forces? Sorry, but I'll have my export ban right now if it can save me from becoming a part of your "stunning example". After all, a reduction in capitalist profits is not the same level of damage as death of a million people. Sorry, but this is the XXI century. The Green Revolution has already happened and the agriculture operates efficiently enough even in an isolated country, are it's agricultural powers sufficient for feeding all those people.

[K. A. Pital]

And as for outbidding the First World, why is that mad?

Are you seeing this in practice, or are you seeing millions in hunger, idiot? What good is your theory? It doesn't correlate with practice. I don't see an increase in availability of food because of the rising prices.

The First World has more money, but the First World isn't starving, so its marginal utility of food is MUCH, MUCH lower than the marginal utility of food in Russia.

And? The marginal utility of FOOD is even greater for Uzbekistan and Tajikistan and Kazakhstan because their populations have dipped 30% or more into hunger, it's certainly much greater to them than Russia. Why can't they outbid the First World? Tell me why this paradise bullshit of yours isn't happening, but people starving is happening.

Why is marginal utility of food so great to a billion people who are in hunger, but the West is consuming 40 times the amount of food a Third Worlder consumes? Why is it so that even Western FOOD FOR LIVESTOCK buyers outbid those who direly need foods from their agriculture for substience?

Tell me, please.

[brianeyci]

So let me get this straight. This is MoO's argument:

1. Russia imports food for its survival.

2. Russia decides to cap prices of food.

3. This will result in less food in Russia, because food importers will send even less food because there's less profit in Russia.

4. If Russia did it the other way, allowed prices to raise as much as biodiesels, then food importers would see more profit in Russia and be willing to send more food there increasing the amount of food.

Well, it seems like an ironclad argument. Problem is as Stas Bush puts it, there is no lack of food being imported into Russia. It is just too expensive. People just can't afford it. It seems a textbook case of false dilemma fallacy: raising prices increases food supply and lowering prices decreases food supply. That may be true for total supply, but when Stas and Mike talk about supply then mean the amount that people can actually buy, not the amount languishing in food stores purchasable only by the rich.

Why don't economists read history? Price controls have worked in history before to increase supply (which again to sane people means the amount the average citizen can buy and not the amount that rich fucks can buy) and decrease suffering. It appears as Master doesn't believe in price controls at all.

And who the fuck are you MoO to dispute Stas's statistics? 60% on food? what a joke, so the choice is eat or go homeless? You fucking prick. What the fuck is wrong with price controls and gradual changes in economy?

[Master of Ossus]

FOM poll from October shows even worse results:

Two thirds (64%) report that they are forced to abandon buying everyday foods. The products which are rejected are meat (40%), meat products (36%), milk and milk products (37%), fruit (27%), fish (22%), fish products (19%).

Right. That's not surprising since those are the high-quality calories that people give up first during famines.

1) Why do you need to increase the quantity of food as opposed to produce the same amount and sell at the same affordable price? The hunger you speak of is not due to lack of foods, but due to lack of their availability to people.

It's the SAME PROBLEM. You cannot maintain the quantity of food produced while lowering the price unless there is an exogenous shock in demand. And this is FOOD, so there is essentially no elasticity in terms of demand.

And why is that? If they are not operating at a loss, then the agriculture does not have an incentive to reduce production.

Because it gets shipped elsewhere, you retard. Are you deliberately ignoring the whole point of this thread, or are you simply incapable of synthesizing various statements that you yourself have made?

If you raise the price, the quantity increases.

NO. Horseshit. There can be a simultaneous price raise and reduction of quantity. That means the curve itself is shifting. In fact, it goes just the other way round - price increases because there's less food in the world. There's less food because of demand for biofuels. Where is the mechanism for "correction"?

Do you seriously not understand that raising the price increases quantity on the supply curve and decreasing the price lowers quantity on the supply curve? Or are you just too stupid to recognize that price and quantity are functions of each other?

Please don't tell me that a price raise which causes 50-60% of the population to consume less food is at the same time causing more food to be available in the country.

It is! Raising the price is precisely what has allowed the quantity of food and the price of food to equilibrate even at this level. If not for the price increase, then even more food would have been exported and even less would have been imported, which compounds the problem further. You seem to be under the impression that price is purely a function of quantity, but this is not true: price and quantity are functions of each other.

An increase in food supply must lead to lowering prices.

Not if there's an exogenous shift in the demand function, which there has been--the international demand for food products has increased, as you yourself have pointed out.

Otherwise, it's pointless since the majority cannot afford it anyway. So who is "outbidding" then?

The First World nations that imported the Russian exports. Are you honestly this stupid? I'm just repeating the factual information that you yourself have posted in this thread, but I'm drawing the correct inferences from it.

In which case, no "increase" will arise in the first place - since low-income agents are no longer potential buyers, the revenue from the higher price remains the same, it just sucks more blood out of the richer agents. No increase in quantity - a decrease, however, can pretty much easily occur if the prices are cutting demand off.

Prices do not "cut demand off," they simply reallocate quantity. I understand that the distinction is somewhat subtle, but your understanding of economics is clearly insufficient to understand international markets.

If only 20 million can say, afford cheese, will the other 120 million see an increase in cheese supply for them? Surely not. Whoops.

Ugh. This is a horribly false analogy. If the 20 million who can afford cheese buy cheese then the prices of other foodstuffs will decrease since those people will gorge themselves on cheese. This is precisely the fact pattern that you yourself presented in this thread by noting that people in Russia were moving away from "luxury food items" like meats and dairy products, and presumably shifting their consumption towards low-quality calories like cereals.

The death of a million people is a stunning example of market forces?

No, the fact that people were willing to consume more of a product that had become dramatically more expensive is a stunning example of market forces.

Sorry, but I'll have my export ban right now if it can save me from becoming a part of your "stunning example". After all, a reduction in capitalist profits is not the same level of damage as death of a million people. Sorry, but this is the XXI century. The Green Revolution has already happened and the agriculture operates efficiently enough even in an isolated country, are it's agricultural powers sufficient for feeding all those people.

Look, your nation's leaders seem to be under the same delusion that you are in their assumption that price controls and export bans will solve the problem, so unfortunately we may soon see a sort of "experiment" that will show which one of us was correct. I wouldn't really care, except that these measures will actually kill people down the road, and I don't think that's a reasonable thing to be doing. Good luck to all the starving Russians, and to those who will be crippled by the very measures intended to assist them.

[Master of Ossus]

Well, it seems like an ironclad argument. Problem is as Stas Bush puts it, there is no lack of food being imported into Russia. It is just too expensive. People just can't afford it. It seems a textbook case of false dilemma fallacy: raising prices increases food supply and lowering prices decreases food supply. That may be true for total supply, but when Stas and Mike talk about supply then mean the amount that people can actually buy, not the amount languishing in food stores purchasable only by the rich.

I agree: the problem is that their definition of supply is wrong. Supply is not a fixed number, but a range of possible options.

Why don't economists read history?

Price controls have worked in history before to increase supply (which again to sane people means the amount the average citizen can buy and not the amount that rich fucks can buy) and decrease suffering. It appears as Master doesn't believe in price controls at all.

I don't. Your definition of supply is wrong. It is nonsensical because it does not allow for the very sort of analysis you are attempting to do. You cannot dissociate quantity supplied from price and then argue about which causes the other. The equilibrium point is reached simultaneously.

And who the fuck are you MoO to dispute Stas's statistics? 60% on food? what a joke, so the choice is eat or go homeless? You fucking prick. What the fuck is wrong with price controls and gradual changes in economy?

I haven't ONCE disputed one of his statistics, you moron, I've drawn the correct inferences from those statistics. Like you, he is too stupid to understand the figures that he cites.

And the problem with the price controls that Stas Bush has advocated is the very issue that I've brought up since the start: you cannot raise quantity supplied by lowering the price. This leads to a classic shortage situation.

[brianeyci]

In other words you see no difference in the amount of supply actually available in the country, and the amount that a person can actually buy (person being the average Russian and not a rich citizen.)

You fucking retard.

Who the fuck cares about shortage of overall supply? It's the amount that a Russian on his lower income can buy which matters. If there is a shortage of overall supply but more people are getting on average more food, then what the fuck is the problem? Ohhhhhhh market forces are being stifled. Market forces are supposed to serve the people, not the other way around. When they don't, time for market forces to take it up the ass. What part of that don't you understand?

What the fuck is wrong with this scenario? Country A wants to stop all the food from leaving its country and going to country B, because it needs food. So it puts in a parital export ban or high export taxes so more of the food stays in the country and is forced to be sold at a cheaper price to its citizens. More citizens get more food.

What do you have to say about that, huh? Nothing? You fucking piss. In some perfect world where every citizen had equal purchasing power your theory would be sound, but there are imbalances in purchasing power and price controls fix that. What the fuck is wrong with a price control that gradually gets lifted as Russians slowly advance on the curve to match Americans? And what the fuck is wrong with a permanent price control, as long as people get fed? Absolutely-fucking-nothing you ass.

[K. A. Pital]

Right. That's not surprising since those are the high-quality calories that people give up first during famines.

Of course that's not surprising. A fine market correction. Except the price will not be going down any time soon, only going up, since the fuel use of agricultural lands is demanded more and more. How the Second World and Third World going to feed it's people, tell me please?

It's the SAME PROBLEM. You cannot maintain the quantity of food produced while lowering the price unless there is an exogenous shock in demand. And this is FOOD, so there is essentially no elasticity in terms of demand.

Really? What if I cut off the lovely killer foreign demand by administrative controls?

Because it gets shipped elsewhere, you retard.

And where does it get shipped if exports are controlled through administrative measures, either tariffs or a full ban?

Do you seriously not understand that raising the price increases quantity on the supply curve

Unlike you, I understand both that and the fact that both curves are also mobile towards each other in all directions. The supply curve is moving down and right, which is negating the "supply increase" and making it nonexistent. But the price rises all the same.

If not for the price increase, then even more food would have been exported and even less would have been imported, which compounds the problem further.

In unregulated environment, yes. How does that solve the problem? It doesn't. Your laissez-faire bullshit is a non-solution, a social darwinist rant about letting the unable bidders bite the dust.

The First World nations that imported the Russian exports.

So the price rise in Russia did not lead to Russian citizens outbidding First World on foods, but instead to a decrease of food consumption by over half of Russians. As I said, the rich are outbidding the poor, despite food having a far higher marginal utility to the poor.

Prices do not "cut demand off," they simply reallocate quantity.

Oh, I do understand. More grain for Mr. Butler to feed his pig, more corn for Mr. Asshole to feed his car. Less grain for Mr. Ivan to eat. "Relocation of quantity" is a codeword for "fuck those who can't compete with rich fuckers".

If the 20 million who can afford cheese buy cheese then the prices of other foodstuffs will decrease since those people will gorge themselves on cheese.

Why would they buy cheese alone, moron? It is simply an example that illustrates that price rising leads to the majority of population being unable to afford a product. Eventually, in the extreme case, it will mean a large fraction of the population to be not able to afford basic substience grain products. This is already happening in Central Asia. So fuck you with your "shift your consumption".

No, the fact that people were willing to consume more of a product that had become dramatically more expensive is a stunning example of market forces.

That's a Giffen good situation. A good that is essential for survival will see an increase in consumption (if possible) when it's price rises. A Giffen good is a market anomaly.

Look, your nation's leaders seem to be under the same delusion that you are in their assumption that price controls and export bans will solve the problem, so unfortunately we may soon see a sort of "experiment" that will show which one of us was correct. I wouldn't really care, except that these measures will actually kill people down the road, and I don't think that's a reasonable thing to be doing.

I'm seeing right now how SUV owners kill Central Asians with demand for biofuels.

Good luck to all the starving Russians, and to those who will be crippled by the very measures intended to assist them.

Why would it be starving? Russia's grain production (90 million tons) is enough to support it's own populace, even if it's still less than in 1990. Explain to me why should we be starving if we stop exporting our grain to you and sell it on domestic markets instead.

[K. A. Pital]

Grain exports = (usual) 12 million tons per harvest.
Ton of grain production cost, Russia average = 3000 roubles.

Needed state expense to cover a total loss of exports by producing the grain (I count exports as completely lost, although partly they would be compensated by the domestic market, even if with smaller profit): = 36 billion roubles.

60 billion roubles were spent on the celebration of St.Petersburg 300-year Jubilee.

Oh, I can see starving people somewhat rejoicing if Russia decides to pay, say, some 60 billion roubles to compensate for export loss out of taxpayer's pockets. After all, what good is a state which cannot provide food security against rich First World fuckers to it's population?

[Sea Skimmer]

I don’t see what the issue is; if Russia needs to keep more food at home then it can pass whatever laws it needs to make that happen; it sure as shit isn’t the rest of the worlds fault if said government does nothing. A completely unregulated market does not work, we’ve know that just about forever, and I don’t think any nation of significance today actually has one. The US and Euro sure as shit don’t, epically when it comes to our absurdly subsidized food industries.

BTW, most ethanol production outside of Brazil is not being used as fuel replacement, its being used as an air pollution reducing oxygenate to replace MTBE, which happens to have turned out to be a very bad water pollutant in its own right.

[Master of Ossus]

In other words you see no difference in the amount of supply actually available in the country, and the amount that a person can actually buy (person being the average Russian and not a rich citizen.)

You fucking retard.

Who the fuck cares about shortage of overall supply? It's the amount that a Russian on his lower income can buy which matters.

So your solution to this problem is to reduce the price which... reduces the supply which... RAISES THE PRICE of what's left. Brilliant!

If there is a shortage of overall supply but more people are getting on average more food, then what the fuck is the problem? Ohhhhhhh market forces are being stifled. Market forces are supposed to serve the people, not the other way around. When they don't, time for market forces to take it up the ass. What part of that don't you understand?

Your whole scheme! It's paradoxical, you idiot. You cannot reduce the price without reducing quantity supplied (barring an exogenous shift in the supply curve), nor can you reduce prices by reducing supply. It's not an issue of market forces being stifled, you fucking idiot. It's an issue of market forces barring precisely the sorts of Lalaland scenarios you're advocating.

What the fuck is wrong with this scenario? Country A wants to stop all the food from leaving its country and going to country B, because it needs food. So it puts in a parital export ban or high export taxes so more of the food stays in the country and is forced to be sold at a cheaper price to its citizens. More citizens get more food.

Perhaps in the very short term, but meanwhile suppliers are exiting the market at the margin because of the reduced price of food. This may surprise you, but successful price regulation in the food industry has always operated by RAISING prices in the past, so as to stabilize supply. Demand is so inelastic that it's just not worth bothering with.

What do you have to say about that, huh? Nothing? You fucking piss. In some perfect world where every citizen had equal purchasing power your theory would be sound, but there are imbalances in purchasing power and price controls fix that.

Bullshit. You're the one who's living in a theory-free paradisical world that bears absolutely no resemblance with reality.

What the fuck is wrong with a price control that gradually gets lifted as Russians slowly advance on the curve to match Americans? And what the fuck is wrong with a permanent price control, as long as people get fed? Absolutely-fucking-nothing you ass.

Well, have fun as Russia stops growing food because people like you are too stupid to understand market forces. I suppose nothing's wrong with your idiocy. Except for the whole "killing people" thing.

[Stark]

At what level will internal Russian prices come into equilibrium with the prices on international markets? Will they have to rise all the way to that level? Since as the local price goes up, it becomes more attractive to sell locally, how high would the price have to go to ease the food prices in Russia and how long would this feedback take to happen?

[Sturmfalke]

It's paradoxical, you idiot. You cannot reduce the price without reducing quantity supplied (barring an exogenous shift in the supply curve), nor can you reduce prices by reducing supply. It's not an issue of market forces being stifled, you fucking idiot. It's an issue of market forces barring precisely the sorts of Lalaland scenarios you're advocating.

While it is true that a reduction in price would reduce the quantity produced, how can you be sure that the remaining food supply will be less than what is available to the people at the moment?
Without further analysis you can't say wheteher

[total production] - [decrease in supply because of price cap] < [total production] - [exports]

If that is not true, i.e. the food remaining for consumption after a export ban and price caps is more than the food available before, the situation has improved.
Your argument is that the exclusion of foreign demand will decrease production, but how do you know that it will decrease production to a level lower than that prior to the increase in demand?

If that measures are necessary to prevent people from dying the government should do it (supposed there is no other way). It is not the government's duty to defend the free market, the government's duty is to its people.

Well, have fun as Russia stops growing food because people like you are too stupid to understand market forces. I suppose nothing's wrong with your idiocy. Except for the whole "killing people" thing.

Russia apparently produced enough food prior to the situation now, and the problem is that demand in other countries increased and lead to increasing prices in Russia. If you take away the foreign demand, the new equilibrium should resemble the old one - producing sufficient food for local consumption was profitable back then, why would it be inprofitable under the new circumstances?