The main culprit is rising government intervention, which has made costs soar even in periods of low energy prices and an unsustainable level of restrictions that has made it impossible for farmers to continue planting and producing grain.
Typically, cereal farms in economies with high levels of government intervention were already loss making in 2019, according to the Center for Commercial Agriculture.
"Average losses for the typical farms from Argentina, Australia, Indiana, and Kansas were $46, $1, $94 and $16 per acre, respectively during the five-year period. German farms had the highest direct cost, operating cost, and overhead cost per hectare," As such, German farms were also uneconomical.
While most average farms yielded a loss even in prepandemic periods, the highest economic profit earned was $68 per acre for the typical Russian farm.
In Europe, farmers have seen rising minimum wages and increasing direct and indirect taxes, on top of soaring energy costs driven by the multiplying cost of CO2 emissions even before oil and natural gas rose due to the war.
Excessive regulation and cost-driven government nudging have limited farmers' ability to successfully face external challenges.
If there is a risk of food shortage, it comes from years of limiting the farmers' possibilities and continuously raising their production costs with unnecessary direct and hidden taxes.
https://mises.org/wire/government-intervention-fueling-food-shortages
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