Fair enough: what you are arguing is that one standard method of cost accounting explains why twinkies are cheaper. Other (non-standard? economically suspect?) methods, like focusing only on production costs, or including opportunity costs (all those carrots that were not produced and sold [and rotted] because farmers have incentives to grown corn instead) would give a different explanation.
But let me reiterate in that friendly but direct way :) I think you missed the point of the article: the evil in current US subsidies is not that they cause Twinkies to be cheaper (they don't, you say): it is that they create structures in which it makes more sense for farmers, agro-business and consumers to make unhealthy and environmentally dangerous decisions which may have some economic rationality but are far outweighed by the environmental and biological impacts. I think the major advantage of a voice like Pollan's is that he widens a stagnant and dismal debate about the economic dis/advantage of subsidies out of economics and into the values (if not cost-accounting) of ecological and health risks. ck On Wed, Apr 25, 2007 at 01:52:40PM +0000, Rishab Aiyer Ghosh wrote: > On Wed, Apr 25, 2007 at 08:25:56AM -0500, Christopher M. Kelty wrote: > > Also, my understanding, though very limited of EU subsidies is that > > they are primarily focused on small and medium size farms, not the > > megafarms of the US... but that may be propaganda? > > most definitely not; EU subsidies go mainly to large farmers, although the > largest EU farms may be smaller than the largest US ones. > > goods with a longer shelf life can be sold for less because the cost of those > items that get spoiled and remain unsold does not need to be recovered from > the subset of goods that are actually sold. > > to put it another way, the price a fresh carrot that is actually sold must > include the price of all carrots that rotted before they were sold. > > so twinkies (and canned carrots) will always be cheaper than fresh carrots. > > the exception is when skewed capitalisation and a skewed market structure > forces sellers of fresh produce to sell below market prices in order not to > lose their entire crop, as is usually the case in india at the level of > individual farmers, and is propagated upwards. > > -rishab >
