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This may all come as a surprise to Zac Goldsmith. He wrote on this page yesterday that “farm-gate prices have dramatically fallen and in some instances farmers are paid less than the cost of production”. And, of course, the evil supermarkets are to blame.
But supermarkets are just another form of technology. As Paul Krugman, the distinguished economist, pointed out in yesterday’s New York Times: “Wal-Mart has been able to reduce prices largely because it has brought genuine technological and organisational innovation to the retail business.” Tesco claims about the same share of retail spending in the UK as Wal-Mart does in the US and for very much the same reason: their mastery of logistics thanks to computerisation.
Because of that the 98 per cent of us who are not farmers gain. This is as it should be: ever-greater quantities of ever-cheaper food are what have driven the growth of civilisation over the centuries. Moving from 100 per cent of the people scraping away in the fields to only 2 per cent is what has allowed some of us to become international financiers, editors of ecology magazines or the legatees of billionaires.
Mr Goldsmith also offered this stunning fact about farmers: “Over the past 30 years their incomes have almost halved and last year alone they fell by 7.5 per cent. Consequently, many farmers have gone out of business.” This is also as it should be. However crude or unfair it might seem, falling income and prices for their produce is the universe’s way of telling farmers that they ought to be doing something else.
There is nothing special about farming: manufacturing output, for instance, has been increasing in recent decades even as the number of manufacturing workers is falling. As productivity improves, we simply need fewer workers, and thus people are freed from one particular type of toil to go and do something else.
Falling prices? Falling incomes? Going out of business? My apologies, but we are simply being told that we still have too many farmers.
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