Off-late there has been a new kind of buzz about the open source and free software taking up the proprietary software structure. Each side has their own story to say. Who’s right? What works better for us? Do we really know which works better for us? Let’s have a look.
What the OPEN SOURCE GUYS have to say?
The free software movement guys seem to be inspired by the notion that software must be free and available to all for free as well. It relies on Open source to enable them to provide the community with the best possible software. The guys who represent them are the GNU for example. Richard Stallman who happens to be the founder for FSF (free Software Foundation) believed in the idea that open source was a technically superior way of developing software.
Now there’s a difference between these open source guys and the FSF guys. They differ in the context of distribution of this open source software. Now looking at the example of APACHE, a popular open source web Server program that was developed by a community, which entitled anyone to use their software, build upon it and sell it provided they acknowledge the contribution of APACHE community in the process. The basic aim of the community was that each individual wanted to show his technical prowess in the community by trying to write a superior code.
Coming to FSF, they hold an opinion that Open Source will enable large amount of people to benefit by the use of free software and free people from the clutches of big corporations who are bullish and want every last penny from the person who is using the software. Moreover they feel sharing of knowledge through code is going to enable almost anyone to understand the code and learn the intricacies of high level code design, in one word spreading of knowledge, which would otherwise not be possible if the individual is working in Microsoft and wanted to know how windows was designed.
To enable all this they have come out of something called the GNU GPL (General Public License). Unlike the licenses which come along with the proprietary software this enables people to use the software, make unlimited copies of it and pass it on. (The complete opposite of what proprietary software does and as if we give a damn about it!!! ;-)
What Microsoft and Closed Source Guys have to say?
Microsoft has a lot to worry about it? In fact it has drawn some of these open source folks behind closed doors of the courtroom as well. (More on this later). MS believes that for quality software to be produced you require the best people to be working on it. It says that to consistently and rapidly innovate one has to pump in huge amount of revenues to keep up the good work by remunerating the people who spend days and nights developing the software.
Besides they feel that software development is not the only thing, one has to provide product support to the customers who are going to buy it. It takes a dig at the Open source guys saying that the open source movement is run by this huge force of volunteers around the globe who work share their knowledge and code through the internet. Moreover, it ridicules the fact that there are guys who are working through the day say selling pizzas and writing code in the night to sustain themselves. Now say something goes wrong with your software you are searching for the guy who sells pizzas. They also feel that in this ever increasing economic requirement this kind of a system is going to fail. They also just seem to find it really tough to understand how open source is going to fetch revenues and sustain further innovation.
What Is Actually Happening and what I have to say?
In the recent years we have seen more and more companies are coming forward to promote open source. The companies are hiring geeks and also some non-geeks ;-) to develop open source software. This is really pushing this movement to greater extent.
The main aim being cheaper to develop because according to GNU GPL anyone can make use of previous work and develop upon it without reinventing the wheel.
Literally wiping out Piracy.
Because some are against Microsoft’s Monopoly and want to make the playing fields leveled. These are really fuelling this movement.
SILVER LINING:
Now the point that companies have started the investing in open source software the movement has been more organized in the sense that it has caught the attention of the industry and given it a sense of direction. The work which was done voluntarily is being done in a more organized way.
Let us touch upon one more point LINUX, the entity which is so much associated with open source, has been developing rapidly to take on MS proprietary OS’s. more and more companies are investing in Linux.
Some for tailor making it for their own requirements, Linux provides better safety has to be seen technically in number of ways, by no of ports it leaves open, the robust file system,
the huge pool of team whose working almost anywhere around the world can come up with solution for any problem in no time unlike MS windows where the design is known to only a selected few and if there’s a problem then only those guys can come up with a patch.
Linux comes cheaper. Say I buy MS windows I buy ten different packages. E.g. MS Office. Now this can weigh heavy on my pocket. Linux comes with all these features inbuilt and at a cost one-fourth.(some distributions even come for free).
With rapid development, Linux OS is no longer for the Geeks but with Desktop Environments like the Windows or the Mac, it’s certainly a force to reckon for the Apples and the MS’s.
Off-late the companies like Intel, AMD, Nvidia have come out to support these open source community so that they can develop the device drivers and software to be run on their architectures. Moreover Linux consumes lesser power and makes use of lesser system resources unlike Microsoft’s OS’s which come with a tag that one must have a minimum of the maximum that’s available in the market!!. Thus Linux making better use of available resources.
Moreover Linux companies have started Commercial distribution of Linux OS. These companies do not charge for these licenses, but charge money only for support and services they would be providing. Thus helping in penetration of Open Source Movement.
FINAL WORDS!!!!
Well a lot has been said and done about open source… I feel that with this movement one thing that truly comes out is spread of knowledge. Now say with Linux a guy anywhere around the world with a computer of minimal resource can learn and develop software. The Open source Movement suppresses monopoly so ultimately prices come down, user is benefitted and so are different other people get to do same work even though they are not in MS and employment is generated in some way and improves technical innovation due to competition. The Linux OS does have to improve with respect to windows but so has windows as well. Looking at one more aspect is that a site called sourceforge.net has almost 80,000 open source software’s available for download. Now that counts, Open source Movement has come of age.
Life on Earth Is Beautiful… and so is Earth.
LINUX consumes lesser Power.. Go GREEN.. GO LINUX
SAVE THE PLANET.
Monday, May 26, 2008
Saturday, May 24, 2008
OIL on the BOIL
All ideas are purely that of author’s and co-authors it does not intend to hurt anyone’s dumbness
After the Space race in the post world war era, one race that’s still on is the race for crude, dude. Crude oil is one of the most important raw material to meet energy requirements of mankind. Crude oil is drilled out of various locations across the planet earth. So what exactly did I want to say? Let’s have a look at the possible reasons for soaring oil prices. In the process we take a look back at the history, jump right back and look at the present factors, in the process we’ll try growing wiser by some useful analysis.
HISTORY:
A century and a half ago when the industrial revolution really picked up in the present western economic power-houses, most of these countries met their requirements either through their own oil fields or got it done through their colonies and some other countries willing to open up their oil fields to these rapidly increasing economies. Post world war as the economic scenario changed, and the world was freed from the clutches of the imperialism, more and more countries were vying for sustainable economy. At the same time rapid industrialization had begun in most of the world. This required large energy requirements. The countries which had huge oil reserves were mostly the third world countries which had anything but oil. These countries were looking to achieve economic independence and growth through this essential commodity.
This resulted in formation of what we know as the OPEC (Oil Producing and Exporting Countries) OPEC was formed in 1960 with five founding members Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Two of the representatives at the initial meetings had studied the Texas Railroad Commission's methods of influencing price through limitations on production. By the end of 1971 six other nations had joined the group: Qatar, Indonesia, Libya, United Arab Emirates, Algeria and Nigeria.
Throughout the post world war era OPEC was not such a key player in controlling the oil prices until in 1971 the Texas Railroad commission set proration at 100%. This meant that Texas producers (Texas, Oklahoma and Louisiana) were not limited to the amount of oil produced. More importantly it meant the ability to control the oil prices shifted from the US to OPEC. In 1973 Yom-Kippur war started by Egypt and Syria attacking Israel. Most of the western countries supported Israel, this lead to the Arab countries to impose an oil embargo to these western countries. This led to uncertainty and sent the oil prices sky high. The Iran-Iraq war led to further spiraling of the prices due to almost reduction of production by almost 2-2.5 million barrels per day in that year. Further the price controlling of the US in the mid 1970’s led to the condition where US consumers were paying 50 percent more for the imported oil than the domestic production. In effect the domestic petroleum industry was subsidizing the US consumer.
Did the policy achieve its goal? In the short term, the recession induced by the 1973-1974 crude oil price rise was less because U.S. consumers faced lower prices than the rest of the world. However, it had other effects as well.
In the absence of price controls U.S. exploration and production would certainly have been significantly greater. Higher petroleum prices faced by consumers would have resulted in lower rates of consumption: automobiles would have had higher miles per gallon sooner, homes and commercial buildings would have been better insulated and improvements in industrial energy efficiency would have been greater than they were during this period. As a consequence, the United States would have been less dependent on imports in 1979-1980 and the price increase in response to Iranian and Iraqi supply interruptions would have been significantly less.
OPEC has seldom been effective at controlling prices, while often referred to as a cartel, OPEC does not satisfy the definition. One of the primary requirements is to enforce member quotas. The only enforcement mechanism that ever existed in OPEC was the Saudi Spare capacity. With enough spare capacity to be able to increase production to sufficiently offset impact of low prices on its own revenues, Saudi could enforce discipline by threatening to increase production to crash prices.
During the 1979-1980 period of rapidly increasing prices, Saudi Arabia's oil minister Ahmed Yamani repeatedly warned other members of OPEC that high prices would lead to a reduction in demand. His warnings fell on deaf ears.
Surging prices caused several reactions among consumers: better insulation in new homes, increased insulation in many older homes, more energy efficiency in industrial processes, and automobiles with higher efficiency. These factors along with a global recession caused a reduction in demand which led to falling crude prices. Unfortunately for OPEC only the global recession was temporary. Nobody rushed to remove insulation from their homes or to replace energy efficient plants and equipment , much of the reaction to the oil price increase of the end of the decade was permanent and would never respond to lower prices with increased consumption of oil.
The crude oil prices spiked during the Iraq’s invasion of Kuwait, both important oil producers. Then in the 1990’s the prices rose due to increase in economy of the US and energy demands of developing countries. Declining Russian production also led to increase in global oil prices.
During the start of the 21st century the prices soared higher due to Iraq war and the reduction in global oil production and also the US inventories (future stock) reaching a 20 year low. This lead to large scale speculations and global rise of crude oil prices.
OIL TRADE:
How is oil traded? Basically it’s traded in the US dollars. The NYMEX (New York Mercantile Exchange ) allows trading of all consumer commodities. Here the prices are basically driven by speculations as in a stock market. So if I get to know that US is going to invade Iraq and say the union in Venezuela’s oil production companies are off to a strike, I know the supply will decrease, the demand is always increasing so I buy oil now hoping prices will increase and when the war is just nearing I will sell it and make profit. So that’s how global oil prices are driven on speculations. Moreover the decision by OPEC to cut the production and drive global oil prices to meet their revenues and other decisions drive the oil prices.
ANALYSIS:
So now we know how everything got into place. Let us just figure out what factors are employed to drive the oil prices low or high.
As we know OPEC countries try to limit production to attain a stable oil price. If they increase production then supply exceeds demand and the prices go down. So we keep this in mind.
Next we move to appreciation of dollar with respect to other countries’ currency. This leads to decrease in purchasing power of the OPEC countries as they make all their transactions of oil in dollars. So the crude oil prices go up. Or they start trading in Euro or Yen as was seen in recent years by Iraq and now recently by Iran due to US recession and global appreciation of currencies’ against the dollar.
The oil prices are basically driven by speculation and which are very much based on future demand and supply. If there are scenarios which may disrupt future oil supplies like the war on Iraq by US in 2003. This led to total closing down of production in Iraq and this lead to decrease in global crude oil supply by almost 1.5-2 million barrels per day. This led to increase in global crude oil prices.
Then a terrorist attack like the recent one on Pakistan’s ex-Prime Minister Benazir Bhutto led to the global crude oil price increase as it was thought to have caused instability in the middle East which is the global leader in oil production.
The current rice in global oil prices can be attributed to the increased demand from the developed countries like India and China whose energy consumption has increased over years due to rapid Industrialization and Urbanization. The demand has gone up but not the supply.
Moreover as demand increases more and more the crude oil level in the ground goes down. This leads to decrease in production. Also new technological advances have to be made to achieve the same production capacity.
Then there are varied levels of thickness of the crude oil present across the globe. Not all crude is suitable for producing the various petrochemicals. Then the global refineries are also structured in a different way as to be able to handle a particular kind of Crude oil level.
Currently in countries like India, the government is trying to contain the oil prices at the cost of Oil marketing companies. This is leading to losses for these companies. In an election year to appease the public government is trying to reduce the effect of increase in global crude oil prices. And the oil companies are made to subsidize for the public leading to losses. Moreover these companies are running out of funds to explore new oil fields, improve process to produce cheaper petrochemicals and to have process models to achieve the environmental norms which come expensive.
SUMMARY:
All this factors lead to increase of global oil prices in their own ways. So what comes out of this?? Well one thing that mankind has surely got to think is to move towards non-conventional sources of energy. Moreover conservation of energy should be done. Use of public transport should be encouraged, as it makes dutiful use of energy. Each one can contribute to decrease in consumption of energy in small ways.
SMALL STEPS LEAD TO BIG CHANGES
Say when I was typing all this stuff trying to consume a lot of energy from my body, I put my computer into a power saver mode with lower performance and lower energy consumption because I know I do not require high processing capabilities when I’m using a word processing applications. So somewhere down the line I reduced the global power consumption in a small way. Moreover, the funny side of all this is that I actually designed a low power multiplier unit for my final year project , so I’m contributing to reduction in global warming, and power consumption and in some way I reduce the global oil requirements in a very small way.. when I mean small I MEAN very very small but if everyone does that IN THEIR OWN WAY I guess IT WILL BE BIG TIME
DROP BY DROP MAKES AN OCEAN
All ideas are purely that of author’s and co-authors it does not intend to hurt anyone’s dumbness
After the Space race in the post world war era, one race that’s still on is the race for crude, dude. Crude oil is one of the most important raw material to meet energy requirements of mankind. Crude oil is drilled out of various locations across the planet earth. So what exactly did I want to say? Let’s have a look at the possible reasons for soaring oil prices. In the process we take a look back at the history, jump right back and look at the present factors, in the process we’ll try growing wiser by some useful analysis.
HISTORY:
A century and a half ago when the industrial revolution really picked up in the present western economic power-houses, most of these countries met their requirements either through their own oil fields or got it done through their colonies and some other countries willing to open up their oil fields to these rapidly increasing economies. Post world war as the economic scenario changed, and the world was freed from the clutches of the imperialism, more and more countries were vying for sustainable economy. At the same time rapid industrialization had begun in most of the world. This required large energy requirements. The countries which had huge oil reserves were mostly the third world countries which had anything but oil. These countries were looking to achieve economic independence and growth through this essential commodity.
This resulted in formation of what we know as the OPEC (Oil Producing and Exporting Countries) OPEC was formed in 1960 with five founding members Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Two of the representatives at the initial meetings had studied the Texas Railroad Commission's methods of influencing price through limitations on production. By the end of 1971 six other nations had joined the group: Qatar, Indonesia, Libya, United Arab Emirates, Algeria and Nigeria.
Throughout the post world war era OPEC was not such a key player in controlling the oil prices until in 1971 the Texas Railroad commission set proration at 100%. This meant that Texas producers (Texas, Oklahoma and Louisiana) were not limited to the amount of oil produced. More importantly it meant the ability to control the oil prices shifted from the US to OPEC. In 1973 Yom-Kippur war started by Egypt and Syria attacking Israel. Most of the western countries supported Israel, this lead to the Arab countries to impose an oil embargo to these western countries. This led to uncertainty and sent the oil prices sky high. The Iran-Iraq war led to further spiraling of the prices due to almost reduction of production by almost 2-2.5 million barrels per day in that year. Further the price controlling of the US in the mid 1970’s led to the condition where US consumers were paying 50 percent more for the imported oil than the domestic production. In effect the domestic petroleum industry was subsidizing the US consumer.
Did the policy achieve its goal? In the short term, the recession induced by the 1973-1974 crude oil price rise was less because U.S. consumers faced lower prices than the rest of the world. However, it had other effects as well.
In the absence of price controls U.S. exploration and production would certainly have been significantly greater. Higher petroleum prices faced by consumers would have resulted in lower rates of consumption: automobiles would have had higher miles per gallon sooner, homes and commercial buildings would have been better insulated and improvements in industrial energy efficiency would have been greater than they were during this period. As a consequence, the United States would have been less dependent on imports in 1979-1980 and the price increase in response to Iranian and Iraqi supply interruptions would have been significantly less.
OPEC has seldom been effective at controlling prices, while often referred to as a cartel, OPEC does not satisfy the definition. One of the primary requirements is to enforce member quotas. The only enforcement mechanism that ever existed in OPEC was the Saudi Spare capacity. With enough spare capacity to be able to increase production to sufficiently offset impact of low prices on its own revenues, Saudi could enforce discipline by threatening to increase production to crash prices.
During the 1979-1980 period of rapidly increasing prices, Saudi Arabia's oil minister Ahmed Yamani repeatedly warned other members of OPEC that high prices would lead to a reduction in demand. His warnings fell on deaf ears.
Surging prices caused several reactions among consumers: better insulation in new homes, increased insulation in many older homes, more energy efficiency in industrial processes, and automobiles with higher efficiency. These factors along with a global recession caused a reduction in demand which led to falling crude prices. Unfortunately for OPEC only the global recession was temporary. Nobody rushed to remove insulation from their homes or to replace energy efficient plants and equipment , much of the reaction to the oil price increase of the end of the decade was permanent and would never respond to lower prices with increased consumption of oil.
The crude oil prices spiked during the Iraq’s invasion of Kuwait, both important oil producers. Then in the 1990’s the prices rose due to increase in economy of the US and energy demands of developing countries. Declining Russian production also led to increase in global oil prices.
During the start of the 21st century the prices soared higher due to Iraq war and the reduction in global oil production and also the US inventories (future stock) reaching a 20 year low. This lead to large scale speculations and global rise of crude oil prices.
OIL TRADE:
How is oil traded? Basically it’s traded in the US dollars. The NYMEX (New York Mercantile Exchange ) allows trading of all consumer commodities. Here the prices are basically driven by speculations as in a stock market. So if I get to know that US is going to invade Iraq and say the union in Venezuela’s oil production companies are off to a strike, I know the supply will decrease, the demand is always increasing so I buy oil now hoping prices will increase and when the war is just nearing I will sell it and make profit. So that’s how global oil prices are driven on speculations. Moreover the decision by OPEC to cut the production and drive global oil prices to meet their revenues and other decisions drive the oil prices.
ANALYSIS:
So now we know how everything got into place. Let us just figure out what factors are employed to drive the oil prices low or high.
As we know OPEC countries try to limit production to attain a stable oil price. If they increase production then supply exceeds demand and the prices go down. So we keep this in mind.
Next we move to appreciation of dollar with respect to other countries’ currency. This leads to decrease in purchasing power of the OPEC countries as they make all their transactions of oil in dollars. So the crude oil prices go up. Or they start trading in Euro or Yen as was seen in recent years by Iraq and now recently by Iran due to US recession and global appreciation of currencies’ against the dollar.
The oil prices are basically driven by speculation and which are very much based on future demand and supply. If there are scenarios which may disrupt future oil supplies like the war on Iraq by US in 2003. This led to total closing down of production in Iraq and this lead to decrease in global crude oil supply by almost 1.5-2 million barrels per day. This led to increase in global crude oil prices.
Then a terrorist attack like the recent one on Pakistan’s ex-Prime Minister Benazir Bhutto led to the global crude oil price increase as it was thought to have caused instability in the middle East which is the global leader in oil production.
The current rice in global oil prices can be attributed to the increased demand from the developed countries like India and China whose energy consumption has increased over years due to rapid Industrialization and Urbanization. The demand has gone up but not the supply.
Moreover as demand increases more and more the crude oil level in the ground goes down. This leads to decrease in production. Also new technological advances have to be made to achieve the same production capacity.
Then there are varied levels of thickness of the crude oil present across the globe. Not all crude is suitable for producing the various petrochemicals. Then the global refineries are also structured in a different way as to be able to handle a particular kind of Crude oil level.
Currently in countries like India, the government is trying to contain the oil prices at the cost of Oil marketing companies. This is leading to losses for these companies. In an election year to appease the public government is trying to reduce the effect of increase in global crude oil prices. And the oil companies are made to subsidize for the public leading to losses. Moreover these companies are running out of funds to explore new oil fields, improve process to produce cheaper petrochemicals and to have process models to achieve the environmental norms which come expensive.
SUMMARY:
All this factors lead to increase of global oil prices in their own ways. So what comes out of this?? Well one thing that mankind has surely got to think is to move towards non-conventional sources of energy. Moreover conservation of energy should be done. Use of public transport should be encouraged, as it makes dutiful use of energy. Each one can contribute to decrease in consumption of energy in small ways.
SMALL STEPS LEAD TO BIG CHANGES
Say when I was typing all this stuff trying to consume a lot of energy from my body, I put my computer into a power saver mode with lower performance and lower energy consumption because I know I do not require high processing capabilities when I’m using a word processing applications. So somewhere down the line I reduced the global power consumption in a small way. Moreover, the funny side of all this is that I actually designed a low power multiplier unit for my final year project , so I’m contributing to reduction in global warming, and power consumption and in some way I reduce the global oil requirements in a very small way.. when I mean small I MEAN very very small but if everyone does that IN THEIR OWN WAY I guess IT WILL BE BIG TIME
DROP BY DROP MAKES AN OCEAN
Monday, May 12, 2008
WHY MICROSOFT WANTED TO EAT YAHOO!!!
Well there was a lot of buzz off late about Microsoft trying to have yahoo for luncheon and increase it’s pie in the online advertising world. Amidst all this no one knows whether it was a publicity stunt aimed at showing Microsoft prowess to gulp down a giant, or was it a mutual understanding between Gates and Yang to boost Yahoo’s shares above their present value.
While everything boiled down to nothing, and Yahoo feels it can concentrate on its work. something that may have been missed out could be why exactly does Microsoft need to take it to their opponent and who the opponent is? Google, the giant of the internet world. Been around for just ten years now and already claims a 75% share of the internet advertising space to 5% of Microsoft’s.
But is it only the advertising which Microsoft is interested in ? it’s not just about Google which Microsoft is worried, it’s hard to overstate how important it is for the company to conquer the online advertising market. Microsoft is phenomenally profitable today with the amount of money it is making through the office packages, .Net platform and its operating systems. But there are companies which are offering such features across the web which people with almost any computer can just log onto the internet and access. Now this all comes free of cost. Like say the Picasa by Google. These free programs require advertisers to finance their sustainability as a free to use product. For example I am providing a free calculator program on my website. To run my website I need to pay a certain amount of revenue to the authorities running the world wide web. Then if multiple people use it I need to install multiple servers to meet the demands of ever increasing online traffic. When I’m offering everything for free where do I generate the money from? Yes, here’s where the advertiser’s come into picture. More the advertiser’s I have, more the money I’ll be able to make up for all those free services. Now advertiser’s don’t just go and advertise on any site. Google is the world’s most used search engine, millions of people use Google to run some search or the other. So Google is obviously more preferred place for advertisements. Now Microsoft’s live search is no match for Google’s search engines prowess. And in this world where Google has become a household name, Microsoft has to come up with something which is much better than Google if it has to have a larger pie of the online business. So it wanted to acquire yahoo for getting revenues out of the online business and come up using the yahoo brand name which is second to Google’s but enjoys only 15% share as compared to 75% of Google.
So is this what Microsoft was looking for? Most probably yes, Microsoft’s closed Source policy, failure of Vista has just started to take its toll on the company. But Microsoft is too big a company to bog down, and going by it’s huge workforce of talented pool of people, and it’s new initiatives in the web space something big is just around the corner.
While everything boiled down to nothing, and Yahoo feels it can concentrate on its work. something that may have been missed out could be why exactly does Microsoft need to take it to their opponent and who the opponent is? Google, the giant of the internet world. Been around for just ten years now and already claims a 75% share of the internet advertising space to 5% of Microsoft’s.
But is it only the advertising which Microsoft is interested in ? it’s not just about Google which Microsoft is worried, it’s hard to overstate how important it is for the company to conquer the online advertising market. Microsoft is phenomenally profitable today with the amount of money it is making through the office packages, .Net platform and its operating systems. But there are companies which are offering such features across the web which people with almost any computer can just log onto the internet and access. Now this all comes free of cost. Like say the Picasa by Google. These free programs require advertisers to finance their sustainability as a free to use product. For example I am providing a free calculator program on my website. To run my website I need to pay a certain amount of revenue to the authorities running the world wide web. Then if multiple people use it I need to install multiple servers to meet the demands of ever increasing online traffic. When I’m offering everything for free where do I generate the money from? Yes, here’s where the advertiser’s come into picture. More the advertiser’s I have, more the money I’ll be able to make up for all those free services. Now advertiser’s don’t just go and advertise on any site. Google is the world’s most used search engine, millions of people use Google to run some search or the other. So Google is obviously more preferred place for advertisements. Now Microsoft’s live search is no match for Google’s search engines prowess. And in this world where Google has become a household name, Microsoft has to come up with something which is much better than Google if it has to have a larger pie of the online business. So it wanted to acquire yahoo for getting revenues out of the online business and come up using the yahoo brand name which is second to Google’s but enjoys only 15% share as compared to 75% of Google.
So is this what Microsoft was looking for? Most probably yes, Microsoft’s closed Source policy, failure of Vista has just started to take its toll on the company. But Microsoft is too big a company to bog down, and going by it’s huge workforce of talented pool of people, and it’s new initiatives in the web space something big is just around the corner.
Why food prices are rising across the Globe?
FACTORS:
Rough weather:
Among the cyclical factors that have been at work are the random weather conditions that have reduced the harvests in key producing countries. World wheat production declined in 2006 because of a 60% reduction of output in drought-hit Australia. Flooding in part of south Asia and pest inflation and cold weather in Vietnam reduced harvests as well in 2007, particularly for rice.
Among the cyclical factors that have been at work are the random weather conditions that have reduced the harvests in key producing countries. World wheat production declined in 2006 because of a 60% reduction of output in drought-hit Australia. Flooding in part of south Asia and pest inflation and cold weather in Vietnam reduced harvests as well in 2007, particularly for rice.
Depreciating currencies:
Depreciation of the US dollar against major Asian rice exporters had the effect of raising dollar prices. The steep decline of the US dollar against all major currencies in the past one year and its declining to record lows have contributed to increase in prices of soft commodities including wheat, whose prices are denominated in US dollars.
Hoarding of Food grains:
Precautionary demand for food stocks in many countries is contributing to food grain price increases. Public food grain agencies and private traders in many countries are replenishing their depleted stocks in wake of a surge in international prices of wheat and rice. There have been many instances of raid on private traders who are accused of hoarding food grains to push up prices and create opportunities for making windfall profits in the domestic markets. Such options to contain price hike are difficult to implement and have increased prices in the domestic markets of many countries including that of Bangladesh and the Philippines.
Precautionary demand for food stocks in many countries is contributing to food grain price increases. Public food grain agencies and private traders in many countries are replenishing their depleted stocks in wake of a surge in international prices of wheat and rice. There have been many instances of raid on private traders who are accused of hoarding food grains to push up prices and create opportunities for making windfall profits in the domestic markets. Such options to contain price hike are difficult to implement and have increased prices in the domestic markets of many countries including that of Bangladesh and the Philippines.
Policy Response:
Sustained policy responses (export bans, price floors, etc) of key rice exporting countries include China, Pakistan, Vietnam and India have increased price volatility and uncertainty in the international rice market. Export bans and price controls imposed by some countries have reduced supplies in the world rice markets and increased uncertainty over future rice supplies, contributing significantly to the surge in rice prices especially since the end of 2007. Although Kazakhstan, Uzbekistan and Ukraine also imposed similar bans on wheat exports, the latter two have withdrawn the bans recently. Nonetheless this contributed to volatility in the wheat prices. Lack of efficient logistics system and infrastructure for food grain marketing and distribution in several countries tightened the market further as experienced by Afghanistan, Bangladesh, Nepal, Philippines and Tajikistan.
Sustained policy responses (export bans, price floors, etc) of key rice exporting countries include China, Pakistan, Vietnam and India have increased price volatility and uncertainty in the international rice market. Export bans and price controls imposed by some countries have reduced supplies in the world rice markets and increased uncertainty over future rice supplies, contributing significantly to the surge in rice prices especially since the end of 2007. Although Kazakhstan, Uzbekistan and Ukraine also imposed similar bans on wheat exports, the latter two have withdrawn the bans recently. Nonetheless this contributed to volatility in the wheat prices. Lack of efficient logistics system and infrastructure for food grain marketing and distribution in several countries tightened the market further as experienced by Afghanistan, Bangladesh, Nepal, Philippines and Tajikistan.
Rising Energy Cost:
Rising energy prices and energy intensity of the agricultural sector have increased the cost of critical inputs like fertiliser, fuel and power. World energy prices have increased rapidly on recent years. Both irrigation and fertilisers are critical inputs to the production of high-yielding varieties of food grains, and these are energy intensive.
Rising energy prices and energy intensity of the agricultural sector have increased the cost of critical inputs like fertiliser, fuel and power. World energy prices have increased rapidly on recent years. Both irrigation and fertilisers are critical inputs to the production of high-yielding varieties of food grains, and these are energy intensive.
Bio-fuel:
The diversion of cereal use from food to produce alternative fuel (bio-fuel) is increasing as the oil prices become higher. Since 2000, cereal use for food and feed has increased by 4 and 7% respectively, while cereal demand for industrial purposes like bio-fuel has jumped by more than 25%.
The diversion of cereal use from food to produce alternative fuel (bio-fuel) is increasing as the oil prices become higher. Since 2000, cereal use for food and feed has increased by 4 and 7% respectively, while cereal demand for industrial purposes like bio-fuel has jumped by more than 25%.
Diversion Of Land:
Land is also being diverted to urban/industrial uses and competition for scarce freshwater resources between agriculture, industry and household has adversely affected the supply as societies undergo urbanization and industrialisation. Water scarcity will be increasing challenging for China and India, where irrigation water consumption as a total share of consumption is going to decline by 5-10% by 2050 as compared to 2000.
Land is also being diverted to urban/industrial uses and competition for scarce freshwater resources between agriculture, industry and household has adversely affected the supply as societies undergo urbanization and industrialisation. Water scarcity will be increasing challenging for China and India, where irrigation water consumption as a total share of consumption is going to decline by 5-10% by 2050 as compared to 2000.
Weak Policies:
Policy interventions such as food grain support prices, input subsidies, involvement of public agencies in food grain imports, marketing and distribution tend to be ineffective over medium term and inhibit supply increases. Such subsidies have contributed to wasteful use of water resources, degradation of land and imbalance in fertiliser use.
Policy interventions such as food grain support prices, input subsidies, involvement of public agencies in food grain imports, marketing and distribution tend to be ineffective over medium term and inhibit supply increases. Such subsidies have contributed to wasteful use of water resources, degradation of land and imbalance in fertiliser use.
ANALYSIS:
Well so what’s with all this? Looking at all the factors which have contributed to the existing food problems and by how much is difficult to gauge. Looking at the hoarding aspect, one can easily conclude that it can affect the prices locally in a given area but that to affect the global market would not be such a nice thing to blame for. The diversion of land has also contributed to some extent in the total decline in the supplies. But is it so?
One study shows that farmers across the world have produced a record 2.3 billion tonnes of grain in 2007, up 4% on the previous year. Since 1961 the world’s cereal output has tripled, while the population has only doubled. Stocks are their lowest value in 30 years but the bottomline is that there is enough food produced in the world to feed the population.
Aftermath of food crisis, the prices have gone up further because of policies of certain governments imposing ban on export of grains. The recent news of rice and wheat exporting countries to form a union like the OPEC will only lead to speculations driving food prices and would ultimately lead to spiralling up of the global food grain prices. (everyone knows how speculations lead to driving up global oil prices, imagine the same about food!!)
Amidst all this where is the climate phenomenon. Going by a recent report, it was evident that global warming has something to do with the low yields and supply side problems in food grains. The inter governmental panel on climatic changes (IPCC) suggested that due to rising global temperature, leads to a condition where over the years the precipitation level declines. Moreover there is moisture evaporation from the soil which is so very important for a good yield.
The need for alternative sources of energy to combat the greenhouse emitting fuels is pushing the demand for grains for alternatives like bio-fuels. This has increased the demands or should we say the diversion of cereals for production has reduced the supply, tough line to draw. In general it has affected the supply. Looking at the brighter side it does bring down some other factors which lead to low yields. The rising energy costs are certainly driving the price of food grains upwards.
Well so what’s with all this? Looking at all the factors which have contributed to the existing food problems and by how much is difficult to gauge. Looking at the hoarding aspect, one can easily conclude that it can affect the prices locally in a given area but that to affect the global market would not be such a nice thing to blame for. The diversion of land has also contributed to some extent in the total decline in the supplies. But is it so?
One study shows that farmers across the world have produced a record 2.3 billion tonnes of grain in 2007, up 4% on the previous year. Since 1961 the world’s cereal output has tripled, while the population has only doubled. Stocks are their lowest value in 30 years but the bottomline is that there is enough food produced in the world to feed the population.
Aftermath of food crisis, the prices have gone up further because of policies of certain governments imposing ban on export of grains. The recent news of rice and wheat exporting countries to form a union like the OPEC will only lead to speculations driving food prices and would ultimately lead to spiralling up of the global food grain prices. (everyone knows how speculations lead to driving up global oil prices, imagine the same about food!!)
Amidst all this where is the climate phenomenon. Going by a recent report, it was evident that global warming has something to do with the low yields and supply side problems in food grains. The inter governmental panel on climatic changes (IPCC) suggested that due to rising global temperature, leads to a condition where over the years the precipitation level declines. Moreover there is moisture evaporation from the soil which is so very important for a good yield.
The need for alternative sources of energy to combat the greenhouse emitting fuels is pushing the demand for grains for alternatives like bio-fuels. This has increased the demands or should we say the diversion of cereals for production has reduced the supply, tough line to draw. In general it has affected the supply. Looking at the brighter side it does bring down some other factors which lead to low yields. The rising energy costs are certainly driving the price of food grains upwards.
SOLUTION:
Well in this globalised world there is only one thing which could lead to stable prices, i.e. awareness among developed governments to accept development of the third world countries. Increase amount of trade between countries and interdependence would help stabilize the situation. Refraining of governments from forming bodies(like the OPEC) and letting speculations drive important commodities for sustainment of human lives. The cause of environment changes should be well addressed and agricultural productions should be made modern and scientific to meet the requirements of bio-fuels as well. Modern agriculture practices should be implemented and developed nations should come forward to support the major producers with research and technological data to help sustain the growth over the period of time. This is only going to reduce global food problems and also lead to sustainable growth. At the microcosm governments should try preventing activities like hoarding as well. Thus these steps if taken could greatly help in reduction of the global food problems and carve out a path for free trade and sustainable co-existence.
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