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That avocado is worth how much? | Moment's Notice

 

Last updated 6/30/2021 at 8:08pm



We have all heard of blood diamonds, but how about green gold?

Gangs and organized crime groups are stealing this green gold across South Africa and Mexico, and from New Zealand to Spain. Green gold = avocados. Individual growers say they are losing as much as 48 tons a day (four truckloads). Land is being seized or farmers are being forced to pay protection charges. Truck drivers are being kidnapped.

People must really like their avocado toast.

Global demand for avocados has driven up the price over the last several years, and when values rise, the lure for criminal behavior rises with them. In fact, organized crime and gangs have been moving away from some of the complex, illegal trades, like drugs, in favor of more established markets and businesses.

It means less investment in illegal infrastructure and, more importantly, the flexibility to respond to changing tastes and demand.

Classic economics says that we make rational decisions in our best interests and thus the cost of the means of production (labor, materials, etc.) drives value and price. We know that’s not true.

We are not rational beings who evaluate what we need and obtain only that but rather irrational individuals subject to the direction of marketers and influencers. Emotional appeal drives markets and prices are set by what people are willing to pay.

Our human need to feel good after a purchase, not just have a need met, drives our consumption. With changing tastes and the speed by which our whims can be fulfilled these days, we are spending more and expecting more variety.

We are driven by the very irrational concept of perceived value, from cars to kale, based on how desirable (aka expensive, unique, or new) something is.

Avocados were not a mainstream food staple until the 1990s, after a marketing firm created a campaign with the NFL that associated guacamole with celebrity athletes. Most of us had never heard of an acai bowl until 2016 or ate quinoa until the early 2000s.

In a few years, we may have sliced artichokes or an artichoke puree on every plate instead of green gold. The dramatic swings in the perceived value of one item over another does not always result in criminal acts, but today even our agriculture markets do not reflect rational decisions of economic actors.

The global food system of the 21st century is driven by what a few well-off consumers buy more or less of in a given year.

It feels like the old rules for luxury goods apply to just about everything. Prestige is as relevant to the fruits or vegetables we buy like it used to apply to owning diamond rings. We need to eat healthier foods, and we want it to be something we saw on Instagram.

We are buying so much more than we used to (we buy 10 times more clothing today than we did in the 1990s, and most of it ends up in landfills), so producers and markets are having to pivot constantly.

Think about how the “utility” of a product has changed not only how we shop, but how the market must react. From the smallest farmer to the largest agricultural conglomerate, it’s about rapid response to peak demand, not sustainability or community health.

Don’t get me started on how the pandemic shined a big ol’ Mr. Obvious light on the limitations of the supply chain …

Why does a rash of avocado thefts lead to a treatise on behavioral economics? Well, the world still struggles to promote ethical sourcing of natural diamonds. The headlines long since faded, now replaced by green gold.

Despite the fact that diamonds can be produced in a laboratory without the human or environmental cost of a natural diamond, the perceived value of mined diamonds sustains an $81 billion industry.

 

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