http://www.bbc.co.uk/news/magazine-26124989
Despite the major winter storms that hit most of the country, California is facing one of the worst drought on record. This has caused a major problem as California is the biggest agricultural state in the U.S.
Despite the lack of water for local families, one group of farmers are relentlessly using water to grow alfalfa hay which is then exported to China for cattle feed.
Although some argue that a hundred billion gallons of water (a very valuable and scarce resource) per year is being exported to China in the form of alfalfa hay, which could be used instead to supply for millions of families, farmers argue that they are simply just balancing the trade imbalance of the U.S.
Due to America's cheap water rights and trade imbalance with China, it makes growing hay for the foreign market not just viable, but extremely profitable.
Although exports are all part of an open global economy, benefiting both the exporters (the farmers who make large profits to the high foreign demand of hay) and the the importers (China, who receives relatively cheaper hay compared to growing it in their own country), water- a scarce and finite resource to many people in other parts of the world- is being treated as inexhaustible and infinite in the U.S.
Yes, lowering the trade deficit by exports to China is important for our economic stability. Water being scarce, makes hay more expensive to make. Therefore, farmers are making a great deal of money exporting hay to China, Japan, Korea, and other nations. However, farmers should be more considerate of the local families who need water. If we cannot provide the necessities for families domestically, we have no business exporting scarce resources.
ReplyDeleteI completely agree that when your own neighborhood is suffering from drought you should conserve water. But the farmers have an economic gain by selling hay. If they don't sell the hay it will lead to their loss.
ReplyDeleteMost of the economic decisions are made through self interest and very few are based on ethics.
While there is a drought in California, and conservation of water is important as a social problem, these farmers are stimulating the economy and contributing to GDP. So this becomes something of a potential reason for government involvement, a moral reason. Is economic stimulation more important that providing water to families? And this problem is not limited to only this period of time. California has frequent issues with drought and fire. Living in CA, I can recall other periods of drought and being told about water conservation and being concerned with the dry trees and brush possibly catching fire during the hot and dry summers.
ReplyDeleteSince we have started to live in a global economy then we should not care about the use of water in a single place and instead consider it to be a competitive advantage. If we in the US are able to produce a good at a cheaper price, of which water should be included in the cost of producing it based on purely accounting standards,then we should mark it up at the highest price to foreign markets and make a large profit. This profit can be put back into the US economy and have a positive impact on the economy here, while we are exhausting some resources the use of externality costs could make up for the price of using this resource.
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