As we keep saying, prices are information, Minette

Minette Batters seems to have a certain problem in absorbing information from the universe around her. It’s this failure to understand that prices are information again.

The price of animal feed wheat, relative to bread milling wheat, has risen. Ms. Batters therefore insists that something must be done to ensure that farmers continue to plant bread wheat:

Minette Batters, president of the National Farmers’ Union, warned that there was a "real danger in this world that farmers actually just decide to produce wheat to feed pigs and poultry, because they know they're going to be guaranteed a good price".

"That will leave the bread market short. We must be making sure that farmers are not just producing feed wheat, and that we are incentivising them in those decisions that will be made in the next few months."

That is, of course, entirely the wrong thing to be doing. The change in the relative prices is exactly the signal that we should not in fact be doing that.

We all get richer when economic assets are moved from lower valued uses to higher. Economic assets here include arable land, tractors, fertiliser, seed, the labour of farmers and so on. If the value brought in by those assets producing feed wheat is higher than that created by bread wheat then we don’t want to stop farmers switching, we positively lust after their doing so. For that is exactly what makes us all collectively richer. Our scarce economic resources are now producing more value - we’re richer.

If bread wheat is of lower value then we desire the bread wheat market to gain smaller supplies.

Of course, that Ms. Batters is of the National Farmers Union could be the explanation, just a preparation for another raid on our collective wallet. But we fear that it really could be just not grasping the importance of the information provided by prices. If feed wheat is now worth more relative to bread wheat we don’t want to plan - or force - farmers to produce more bread wheat, we want them to follow those price incentives and produce more of the more valuable varietal.

Surely this isn’t that difficult to understand?