Techno-Phobes and Famine Fanatics

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Techno-Phobes and Famine Fanatics

One of the fundamental principles in economics is "the law of supply and demand."  It's a straightforward relationship.  Prices go up when demand increases and supply stays constant, or they go up if demand stays steady and supply drops. 

Applying this relationship in the face of rising food prices, some jump to the conclusion that massive food shortages must be afoot if we are to explain rising prices.  The flaw in this thinking is that simple demand/supply relationships are not the only factors that drive price.1 

Although the recent summer drought across much of the U.S. was responsible for a spike in some prices, this was a short-term phenomenon.  There are other longer-term factors at play.

When considering a box of corn flake cereal, for example, the biggest cost will not be the corn.  Components such as the price of gasoline to transport the box to a store and the product's packaging can have a greater impact on costs. 

In addition, as the economy becomes more and more global, a storm in China, or a growing middle class in India, or unrest somewhere on the globe, can affect food pricing as much as a drought in the Midwest — and because many of the factors affecting price can be controlled through innovation and technology, the trend of rising prices can be mitigated. 

The further development of these technologies will be driven by a doubling of the global demand for food by 2050 as a result of population growth and increased standards of living.  Some view this statistic as a warning of looming food shortages in the future.  However, innovators, whether companies or individuals, realize that it represents opportunities for creating wealth by developing economical new solutions that will help satisfy this doubled demand.  This has, of course, been happening already.

For 40 years, scientists have been making genetic improvements to plants through modern techniques and processes called "recombinant DNA" or "genetic modification."  This science enables molecular biologists to move genetic material and the associated traits very precisely from one species to another.  The plant varieties that have been developed through these efforts have already revolutionized agriculture.  Farmers have increased their profits, and food availability and security have been elevated worldwide. 

In recent years, genetic engineers have greatly expanded and improved techniques that offer even greater versatility and precision in genetic modification. 

Compelling evidence for the success of genetic modification was revealed this past summer in the midst of a record drought, one that was the worst in a century...

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