Andrew Arbuckle: Carving out a view on the complexities of supply and demand

THERE are several problems resulting from over-eating during the festive period. Most of them involve having to lose weight and are therefore quite boring, so will not be discussed.

I shall also move swiftly over the bad dream I had after taking on board too much turkey, as I am sure no-one will want to know about the nightmares that can be brought on by just thinking about reform of the Common Agricultural Policy.

Imagine you are stuck up to your neck in bureaucratic goo and political fudge in some glass palace in Brussels. Around you various policy pillars are tilting ominously, weighed down by clinging vines and creepers labelled "greenie policies". In the nightmare, even when you realise this is all an allegory, you still cannot escape.

But let us leave that behind for now, because that particular issue still has months and months to run before there is any real clarity on how farm support in Europe will be shaped in the future.

So if these issues are cast to the side temporarily, what is the problem for those of us who have over-indulged in recent weeks? For me it is the guilt complex that wings its way towards me when I think of others with no similar access to oodles of food.

Although I have been to parts of the world where hunger and starvation are regular visitors, I have never personally experienced any long-term shortage of food.

I know the empty feeling that comes after the farm collie has found out it can open the piece bag hanging on the fence post, wherein the carefully constructed cheese sandwich is hidden.

If this happens in some far out field on the farm, then a hungry afternoon is on the cards.

But that hunger caused by a sneaky dog does not equate with the long-term lack of adequate food experienced by millions of people in various parts of the world.

The big issue for the world in 2011 is the increasing shortage of food - or perhaps that should be the increasing realisation that there is less food about.

Those who study the dismal science of economics know food prices are all about supply and demand, and frankly production of most of the staple foods in the world have slipped a little in recent times.

But the fact that wheat prices have doubled recently due to the fact that the number of days' stock held in the world has reduced by a few days would appear to have more to do with commodity speculation.

Part of the reason for the food price hike is that two of the big players in today's world, China and India, know that they must have plenty of food to ensure their populations are contented.

When these big boys come into the market this leaves the less well-off countries with shortages of food and consequential unrest.

How does all this affect food producers in the world?

Food shortages should be good news for farmers leaving them with increased incomes. However, those who control the price of oil and fertilisers are too smart to allow the food-producing peasants too make too much money. Fuel and fertiliser prices nowadays closely track any increase in commodity price.

And within the UK, the major retailers are either powerful or smart enough to ensure they increase their margins on food products, knowing the primary producer is either a weak seller or tends to over-production, both factors helping them to make record profits.

So while we will continue to have more than adequate supplies of food in this part of the world, do not expect farmers to benefit greatly from this situation.