Monday, June 13, 2005

If only all environmental problems were this easy

Sustainablog wants to know how to prevent shortages in the supply of organic milk. The weblogger writes, "I can't think of a better way for this industry to draw more producers and investors."

I can. Raise the price. Yes, I know organic food already carries a stigma from high prices, but rationing organic milk according to willingness-to-pay is no worse than other ways of allocating a scarce resource. The higher price sends a signal to farmers to produce more organic milk. If you were an English professor who writes about environmental issues, you might strongly suspect this is one of those doctrinaire economist religious chants (and I'd be sympathetic -- I was made to learn those chants in school). But this one is true. If you don't believe it from an economist, ask an organic dairy farmer. I feel 100 percent sure she or he will corroborate this (and please post a comment if I'm mistaken).

No comments: