food prices


Harvard and other major American universities are working through British hedge funds and European financial speculators to buy or lease vast areas of African farmland in deals, some of which may force many thousands of people off their land …

No one should believe that these investors are there to feed starving Africans, create jobs or improve food security

Much of the money is said to be channelled through London-based Emergent asset management, which runs one of Africa’s largest land acquisition funds, run by former JP Morgan and Goldman Sachs currency dealers.
… Emergent’s clients in the US may have invested up to $500m in some of the most fertile land in the expectation of making 25% returns.

Africa land grab and hunger map (click to enlarge enough to read)

“These agreements – many of which could be in place for 99 years – do not mean progress for local people and will not lead to food in their stomachs. These deals lead only to dollars in the pockets of corrupt leaders and foreign investors.”

“The scale of the land deals being struck is shocking”, said Mittal. “The conversion of African small farms and forests into a natural-asset-based, high-return investment strategy can drive up food prices and increase the risks of climate change.

Research by the World Bank and others suggests that nearly 60m hectares – an area the size of France – has been bought or leased by foreign companies in Africa in the past three years.

“Most of these deals are characterised by a lack of transparency, despite the profound implications posed by the consolidation of control over global food markets and agricultural resources by financial firms,” says the report.

“We have seen cases of speculators taking over agricultural land while small farmers, viewed as squatters, are forcibly removed with no compensation,” said Frederic Mousseau, policy director at Oakland, said: “This is creating insecurity in the global food system that could be a much bigger threat to global security than terrorism. More than one billion people around the world are living with hunger. The majority of the world’s poor still depend on small farms for their livelihoods, and speculators are taking these away while promising progress that never happens.” (The Guardian)

Africa biofuels land grab map (click to enlarge enough to read)

THIS NEW scramble for African land has visited a multitude of problems on ordinary Africans and set the stage for ecological crisis and widespread hunger.

As many critics have pointed out, African governments have falsely claimed that land available for sale is unused. As journalist Joan Baxter writes:

Some defend the investors’ acquisition of land in their countries, saying it is “virgin” or “under-utilized” or “uncultivated” or “degraded” land…This suggests they know precious little about the importance of fallows and the resilience and diversity of agroforestry systems, or about sustainable agriculture and the knowledge base of their own farmers.

Communal land, small farmers and even entire villages are often displaced in the drive for land purchases. The Oakland Institute think-tank released a report on the African land grab, which points out:

Experts in the field, however, affirm that there is no such thing as idle land in…Africa…Countless studies have shown that competition for grazing land and access to water bodies are the two most important sources of inter-communal conflict in [areas] populated by pastoralists.

According to Michael Taylor, a policy specialist at the International Land Coalition, “If land in Africa hasn’t been planted, it’s probably for a reason. Maybe it’s used to graze livestock or deliberately left fallow to prevent nutrient depletion and erosion. Anybody who has seen these areas identified as unused understands that there is no land…that has no owners and users.”

In other words, as activist Vandana Shiva puts it, “We are seeing dispossession on a massive scale. It means less food is available and local people will have less. There will be more conflict and political instability and cultures will be uprooted. The small farmers of Africa are the basis of food security. The food availability of the planet will decline.”

In fact, because much of its food is produced for export, sub-Saharan Africa is the only region in the world where per capita food production has been declining, with the number of people that are chronically hungry and undernourished currently estimated at more than 265 million.

Nations with large amounts of land sold or leased to foreign owners are often food importers, and their inability to feed their own populations is exacerbated by the displacement of food producers who grow for local use. The UN Conference on Trade and Development (UNCTAD) reports that Africa has lost 20 percent of its capacity to feed itself over the past four decades. Ethiopia alone has 13 million people in immediate need of food assistance, yet its government has put over 7 million acres of land up for sale.

And worsening hunger is still to come. …

Large-scale land acquisition poses massive ecological threats to the African environment. The dangers are numerous: hazardous pesticides and fertilizers cause water contamination from their runoff, the introduction of genetically modified seeds and other problems. Land previously left to lie fallow is now threatened with overuse from intensified agricultural development, a trend further exacerbated by speculative investment and the drive for short-term profits.

Yet deals transferring vast tracts of land are typically taking place far removed from local farmers and villagers with virtually no accountability. As Khadija Sharife writes on the Pambazuka Web site:

The deals involving these concessions are often cloaked in secrecy, but African business has learned that they are usually characterized by allowing free access to water, repatriation of profits, tax exemptions and the ability for investors to acquire land at no cost whatsoever, with little or no restriction on the volume of food exported or its intended use, in return for a loose promise to develop infrastructure and markets

In many cases, farmers and pastoralists have worked this land for centuries. However, governments are claiming this land is idle in order to more easily sell or lease it to private investors. (New African Land Grab)

I found this a particularly telling passage from (Mis)investment in Agriculture: The Role of the International Finance Corporation In Global Land Grabs (PDF) a publication of the Oakland Institute.

Proponents of the land deals will dismiss my concerns and claim that this type of foreign investment will benefit the local people by providing jobs and creating infrastructure. They will also say that the land being offered is “unused.” These are hollow arguments. Investors have been quoted as saying they will employ 10,000 people and use high-tech, high-production farming techniques. The two promises are completely incongruous. As a farmer, I can tell you that high-tech, high production devices are appealing precisely because they reduce labor. Investors will not hire significant numbers of people and simultaneously scale-up their production techniques. And if they choose the former, they are likely to create low-paying jobs and poor working conditions. I may be making assumptions, but they are based on history—a history dating back to colonialism and one that has exploited both natural resources and people.

Particularly disconcerting is the notion that the “available” land is “unused.” This land is in countries with the highest rates of malnutrition on the only continent that produces less food per capita than it did a decade ago. In most cases, this land has a real purpose: it may support corridors for pastoralists; provide fallow space for soil regeneration; provide access to limited water sources; be reserved for future generations; or enable local farmers to increase production. The fact that rich and emerging economies do not have or do not respect pastoralists or use land for age-old customs does not mean we have a right to label this land unused.

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The world’s wealthiest speculators set up a casino where the chips were the stomachs of hundreds of millions of innocent people. They gambled on increasing starvation, and won.

Johann Hari writes: How Goldman gambled on starvation. As he describes:

It starts with an apparent mystery. At the end of 2006, food prices across the world started to rise, suddenly and stratospherically. Within a year, the price of wheat had shot up by 80 per cent, maize by 90 per cent, rice by 320 per cent. In a global jolt of hunger, 200 million people – mostly children – couldn’t afford to get food any more, and sank into malnutrition or starvation. There were riots in more than 30 countries, and at least one government was violently overthrown. Then, in spring 2008, prices just as mysteriously fell back to their previous level. Jean Ziegler, the UN Special Rapporteur on the Right to Food, calls it “a silent mass murder”, entirely due to “man-made actions.”

Most of the explanations we were given at the time have turned out to be false. It didn’t happen because supply fell: the International Grain Council says global production of wheat actually increased during that period, for example. It isn’t because demand grew either: as Professor Jayati Ghosh of the Centre for Economic Studies in New Delhi has shown, demand actually fell by 3 per cent. Other factors – like the rise of biofuels, and the spike in the oil price – made a contribution, but they aren’t enough on their own to explain such a violent shift.

… through the 1990s, Goldman Sachs and others lobbied hard and the regulations were abolished. Suddenly, these contracts were turned into “derivatives” that could be bought and sold among traders who had nothing to do with agriculture. A market in “food speculation” was born.

Here’s how it happened. In 2006, financial speculators like Goldmans pulled out of the collapsing US real estate market. They reckoned food prices would stay steady or rise while the rest of the economy tanked, so they switched their funds there. Suddenly, the world’s frightened investors stampeded on to this ground.

So while the supply and demand of food stayed pretty much the same, the supply and demand for derivatives based on food massively rose – which meant the all-rolled-into-one price shot up, and the starvation began. The bubble only burst in March 2008 when the situation got so bad in the US that the speculators had to slash their spending to cover their losses back home.

As Professor Ghosh points out, some vital crops are not traded on the futures markets, including millet, cassava, and potatoes. Their price rose a little during this period – but only a fraction as much as the ones affected by speculation. Her research shows that speculation was “the main cause” of the rise.

So it has come to this. The world’s wealthiest speculators set up a casino where the chips were the stomachs of hundreds of millions of innocent people. They gambled on increasing starvation, and won. … What does it say about our political and economic system that we can so casually inflict so much pain?

As Hari begins his story:

By now, you probably think your opinion of Goldman Sachs and its swarm of Wall Street allies has rock-bottomed at raw loathing. You’re wrong. There’s more. It turns out that the most destructive of all their recent acts has barely been discussed at all. Here’s the rest. This is the story of how some of the richest people in the world – Goldman, Deutsche Bank, the traders at Merrill Lynch, and more – have caused the starvation of some of the poorest people in the world.

Read the entire article, which explains what happened more clearly and in greater detail: How Goldman gambled on starvation.

________

To my regular readers, apologies for being absent lately. We are having a major reorganization at my work, and at the same time, major activity with the farms in Ghana. This may keep me fairly busy for another week or two, but for now the major portion of my work on these projects is done.

nomonsanto

Green washing = Public relations designed to convince people that biotech, genetically modified foods and agricultural chemicals, are environmentally friendly.

Poor washing = Efforts to convince people we must accept a program such as genetic engineering to increase yields to end hunger, reduce costs, and improve livelihoods of farmers and poor people. Poor washing has created calls for a “new” Green Revolution, especially in Africa, although there is little evidence that genetic engineering and agricultural chemicals, or moving farmers off their land, will realize any of these claims. There is mounting evidence of genetic engineering doing serious harm. Forcibly displaced populations always suffer harm.

From Voices From Africa: African Farmers and Environmentalists Speak Out Against A New Green Revolution In Africa PDF:

In June 2008, the United Nations held a High-Level Conference on Food Security that gained much prominence in the midst of the food crisis and became a key venue to promote genetically engineered food as a solution to world hunger.

Despite the overwhelming opposition to genetic engineering and chemical-input based agriculture, the biotech industry—with assistance from rich donor nations, multilateral institutions, and the philanthropic community—has used the food price crisis to gain support for GM crops. The result of the biotech industry’s well-financed publicity blitz based on “green washing” (biotech is environmentally friendly) and “poor washing” (we must accept genetic engineering to increase yields to end hunger, reduce costs, and improve livelihoods of farmers), have been calls for a “new” Green Revolution, especially in Africa.

… AGRA is the biggest grantee of the Gates Foundation. With over $262 million committed, AGRA is poised to become one of the main institutional vehicles for changing African agriculture.

Key positions in AGRA are all held by people who owe their careers to Monsanto and the biotech industry:

In 2006, the Gates Foundation appointed Dr. Robert Horsch as the Senior Program Officer in the Global Development Program, which directly supervises the AGRA initiative. Horsch came to the foundation after 25 years on the staff of the Monsanto Corporation

Another major player hailing from the St. Louis biotech hub is Lawrence Kent of the Danforth Center, an institute that is heavily funded by Monsanto. … Unsurprisingly, on January 8, 2009, St. Louis Post Dispatch reported that the Gates Foundation has awarded a $5.4 million grant to the Donald Danforth Plant Science Center, to “help the center secure the approval of African governments to allow field testing of genetically modified banana, rice, sorghum and cassava plants that have been fortified with vitamins, minerals and proteins.”

Lutz Goedde, another hire from the biotech industry, is the former CEO and President of Alta Genetics, and is credited with making Alta the world’s largest privately owned cattle genetics improvement and artificial insemination company. All three are working for the Gates Foundation, funding projects aimed at the developing world.

No African farmers, none, have been consulted for the foundation’s agricultural strategy. None of the reviewers or the external advisory board members is a farmer from Africa.

AGRA and the Gates Foundation speak about “land mobility” which means moving farmers off their farms so the land can be used for large scale mechanized agriculture. But there is no mention of where these people will go and live, and how they will be reemployed. What this means is thousands of displaced people moving to slums around the cities, which will grow and will be filled with unemployed people. This is politically and socially destabilizing. It breeds crime and political violence. This kind of policy also hits women particularly hard, because in western models such as corporate agriculture, their traditional rights to land are ignored. Women are the majority of agricultural workers, and will become even more impoverished and disenfranchised, not that it will bother AGRA or Gates or Monsanto, as they say:

Over time, this will require some degree of land mobility and a lower percentage of total employment involved in direct agricultural production.

People in Africa are taking action and speaking out.
From: A Statement by Friends of the Earth—Africa at the Annual
General Meeting held at Accra, Ghana, 7-11 July 2008
:

Members of FoE Africa from Ghana, Togo, Sierra Leone, South Africa, Nigeria, Mauritius, Tunisia and Swaziland met for five days in Accra, Ghana reviewing issues that confront the African environment. A particular focus was placed on the current food crisis and agrofuels on the continent.

FoE Africa groups deplored the characterization of Africa as a chronically hungry continent; and rejected the projection of the continent as an emblem of poverty and stagnation and thus as a continent dependent on food aid.

FoE Africa reiterated the fact that the agricultural fortunes of the continent have been dimmed by externally generated neoliberal policies including Structural Adjustment Programmes imposed on the continent by the World Bank, IMF (International Monetary Fund) and other IFIs.

FoE Africa expressed disgust at the manner by which the burden for solutions to every crisis faced by the North is shifted onto Africa. Examples include the climate change and energy crises wherein the burden has been inequitably placed on the continent. Africa is forced to adapt to climate impacts and she is also being targeted as the farmland for production of agrofuels to feed the factories and machines in the North.

FoE Africa resolved as follows:

1. Africa contributed very little to climate change and the North owes her an historical debt to bear the costs of adaptation without seeking to further burden the continent through so-called carbon finance mechanisms.

2. Africa must no longer be used as a dumping ground for agricultural products that compete with local production and destroy local economies.

3. Africa must not be opened for contamination by GMOs through food aid and/or agrofuels.

4. Africans must reclaim sovereignty over their agriculture and truncate attempts by agribusiness to turn the so-called food crisis into money-making opportunities through price fixing, hoarding and other unfair trade practices.

5. We reject the promotion of conversion of swaths of African land into monoculture plantations and farms for agrofuels production on the guise that some of such lands are marginal lands. We note that the concept of marginal lands is a cloak for further marginalizing the poor in Africa through their being dispossessed and dislocated from their territories.

6. Africa has been subsidizing world development for a long time and this has to change and African resources must be used for African development to the benefit of local communities.

FoE Africa calls on all communities of Africa to mobilize, resist and change unwholesome practices that entrench servitude and exploitation on our continent.

Signed:
FOE Ghana; FOE Togo; FOE Nigeria; FOE Cameroon; FOE Sierra Leone; FOE Tunisia; FOE Swaziland; FOE South Africa; FOE Mauritius

There is much more in the report, you can read the whole document here: Voices From Africa: African Farmers and Environmentalists Speak Out Against A New Green Revolution In Africa PDF

ricemadagascar

Rice fields in Madagascar

Glenn Ashton of the The South African Civil Society Information Service has written a telling article about the new colonial land grabs in Africa titled Madagascar: the new land grab.

Just when colonialism was considered dead and buried, along comes neo-colonialism in its latest guise. Allied with its close relatives globalisation, free marketeering and lack of transparency, it is currently launching a new offensive on the disempowered population of this continent. …

Neo-colonialism is now garbed in new clothes. Powerful interests are presently seeking and gaining access to land in government-to-government deals as well as through private capital. These arrangements ostensibly offer to manage land that is not being economically utilised in order to improve food security. But for whom? …

The global food security focussed NGO, GRAIN, issued a report on this phenomenon in October 2008, where they cited more than 100 examples of this new neo-colonial land grab. These land grabs are primarily by nations that have insufficient natural capital or space – such as the desert-bound nations of the Middle East and overpopulated nations such as China and South Korea. They seek to improve the food security of those nations while undermining the ability of host nations to access similar benefits, through the alienation of prime agricultural land. The ecological impacts can also be significant.

Since the GRAIN report was published, the land grab has continued apace. The recent acquisition of a reported 1.3 million hectares (ha) of land in Madagascar by the South Korean company Daewoo Logistics Corporation on 99-year lease has raised eyebrows around the world. This land represents around half of that island nation’s arable land.

In Madagascar a reported 70% of the population suffer from food shortages and malnutrition. Nearly 4% are fed through aid programmes. Besides this, more than 50% of the population is below the age of 18. What hope is there for local youth when South African farmers are reportedly being recruited to run the highly mechanised and automated farms under the Daewoo lease? …

China is also actively seeking new land. Given its massive population and constrained access to farmland, China has moved aggressively into Africa with land interests in Zimbabwe, Mozambique, Nigeria, Uganda, Cameroon and Tanzania. …

Even the World Bank is continuing its role as a neo-colonial consensus agent by actively pursuing and financing access to ‘under-utilised land’ around the world through its International Finance Corporation.

Of course much of the land is “under-utilised” because African countries were following World Bank recommendations and requirements. Malawi used to provide free seeds and fertilizer to its farmers.

The results were impressive, but the subsidies ran afoul of the pro-market policies of the World Bank and International Monetary Fund (IMF), which argued that subsidies were “crowding out” commercial sales and constituted undue government interference in the economy. Under considerable pressure from these financing institutions, the programme was phased out. The IMF also insisted that Malawi sell much of its national grain reserve to pay off the debts of the state-owned maize marketing agency.

Most Malawian farmers, however, were too poor to pay commercial rates for fertilizer and seeds. As a result, maize yields plunged. When drought struck in 2001 neither farmers nor the government had adequate grain stores to see them through, and more than a thousand people are estimated to have died. Then after the failed 2005 harvest left 5 million of Malawi’s 13 million people on the brink of starvation, the newly elected government of President Mutharika defied the donors and launched the subsidy scheme with its own funds.

Without the seeds and fertilizer, the land was “under-utilized.” People starved because they could not farm. This has been World Bank and IMF policy throughout Africa. As Ashton points out:

… international finance instruments run by the then G5 (now expanded to the G8), such as the World Bank and the International Monetary Fund used aid and so-called development finance instruments to further their interests.

It has been established by repeated research over decades that the smaller the farm the greater the yield. For more information read the article Small is Bountiful, and check the references listed at the end. There are economies of scale with big agriculture. Big agriculture allows the proceeds to be concentrated among a few people unrelated to the people actually living on the land. It is generally harmful to the land, due to the use of toxic chemicals needed to sustain monocultures, and due to unsafe genetic engineering. It is harmful to the people who live in its vicinity, depriving them of their livilihood and damaging their health.

Ashton continues:

Perhaps more sinister is the recent news of leasehold rights being acquired for approximately 400,000 hectares of land in the Southern Sudan from the family of former warlord Gabriel Matip. In a deal struck by US financier Philippe Heilberg, who has used a British Virgin Islands subsidiary of his Jarch Group to facilitate the deal, private interests have intervened directly in disputed territories. Co-directors of the group reportedly include ex-CIA operatives. Given the ongoing instability in that nation and the forced eviction of millions in the neighbouring Darfur region, this sort of land acquisition is perhaps a harbinger of an unsavoury trend in who gets to control the land in disputed territories.

I wrote about this in an earlier post: Jarch Colonial Holdings, and quote Heilberg: “You have to go to the guns, this is Africa”. His intentions are clear. The Jarch management contains people with connections to both the current and the previous US administrations. You can see their management listed on the Jarch LLC website.

Ashton concludes:

Activities to increase agricultural growth in Africa have also been severely compromised by questionable alliances. For instance AGRA, the African Union endorsed ‘Association for a Green Revolution in Africa,’ has seen the undemocratic and unsolicited intervention of supposedly neutral funders such as the Bill and Melinda Gates foundation. The relationship between these funders and pro-genetically modified food interests (in what is now termed bio-colonialism) has served to actively undermine local agricultural collectives, NGOs and projects that aim to promote and share proven solutions to food insecurity and malnutrition.

This is perhaps the most dangerous manifestation of neo-colonialism as it operates behind a veil of philanthropy while (wittingly or unwittingly) undermining democratic structures and interests. The obscene profits accrued by capital over recent decades, instead of being taxed and distributed by state organs, are now in the hands of ill-informed and often ideologically biased do-gooders. For instance, given the technocratic origins of the Gates fortune, it is logical that undue emphasis will be placed on similar technocratic agricultural solutions.

These ‘solutions’ are imposed through slick public relations and the support of corporate aligned agri-business interests such as Africa-Bio and A New Harvest, both of which are linked to GM corporations such as Monsanto, the worlds biggest seed company and genetically modified seed distributor.

There is an urgent need to examine these new neo-colonial thrusts. Careful and objective analysis must be undertaken as to how food and land sovereignty is being compromised through naïve interaction with the new global powers of finance and trade. The interests of global capital need to be tempered by intervention and through more pragmatic approaches that take account of the historical relationships between land, community, food security and economic development.

It is ironic that while Africans have fought to cast aside colonial oppression and its concomitant heritage, we have instead opened gates (pun intended) to a new wave of colonial interests that threaten, yet again, to bypass the marginalised whilst enriching a well-connected minority.

It would be tragic to cast aside Africa’s recently won freedom for a yoke of a different design.

Under democratic governance the people who live on the land would determine how their land is used. As Vandana Shiva writes:

In a democracy, the economic agenda is the political agenda.

The US claims to support and foster democracy. This is a test. In fact, it is probably THE test. Without food, none of us survive.

Added January 31:

From the GRAIN website:

THERE ARE FOUR MAIN PARTS TO THIS LAND GRAB BRIEFING:

1. A summary and announcement – available online here:
http://www.grain.org/nfg/?id=610

2. The full report is available here:
http://www.grain.org/briefings/?id=212
Also available in PDF format:
http://www.grain.org/briefings/?id=212&pdf

3. The Annex to this briefing is a table with over 100 cases of land grabbing for offshore food production as presented in this report. It is available in a separate PDF file:
http://www.grain.org/briefings_files/landgrab-2008-en-annex .pdf

4. GRAIN has released a Google Notebook with full-text news clippings collected during the research for this briefing as a support to those who want to read more.
http://tinyurl.com/landgrab2008

The notebook is only available online, and the news clippings are not in any order, but it can easily be searched. We are doing this because this is not always an easy subject to research on the internet, if you want a broad picture. People may add further clippings to the notebook as they wish, to further build this collective resource – if you would like to participate, please send an email to landgrab@grain.org . GRAIN will not be maintaining nor be responsible for it. Most of the articles are at present in English. (A backup copy is available in PDF format from here: http://www.grain.org/m/?id=209 )

Jamaal Montasser took this shot of a man ploughing a field with cattle while on a work placement with Ghana’s ministry of agriculture.

Henry Saragih, the International Coordinator for La Via Campesina. Has written an open letter to the Secretary General of the Food and Agriculture organization (FAO). La Via Campesina is an organization of millions of small farmers and landless workers in more than 60 countries around the world. Mr. Sarigih has described the current food crisis succinctly and accurately:

This current food crisis is the result of many years of deregulation of agricultural markets, the privatization of state regulatory bodies and the dumping of agricultural products on the markets of developing countries. According to the FAO, liberalized markets have attracted huge cash flows that seek to speculate on agricultural products on the “futures” markets and other financial instruments.

There is lots more, read the letter.

Hulpverlening Amerika komt op gang

Relief Americas is under way
(I believe this image is by Patrick Kicken www.kicken.com)

Reports such as these, or pieces of them have been coming in for awhile. Kate Smith and Rob Edwards have done as complete and concise a summary as I have found. I have picked out some key points:

A perfect storm of food scarcity, global warming, rocketing oil prices and the world population explosion is plunging humanity into the biggest crisis of the 21st century by pushing up food prices and spreading hunger and poverty from rural areas into cities.
. . . The increasing scarcity of food is the biggest crisis looming for the world.
. . .
As well as being rural, the profile of the new hungry poor is also urban, which is new. There is food available in the markets and shops – it’s just that these people can’t afford to buy it. This is the new face of hunger.” The food shortages will also affect western industrialised nations.

. . .

(The World Bank) points out that global food prices have risen by 75% since 2000, while wheat prices have increased by 200%. The cost of other staples such as rice and soya bean have also hit record highs, while corn is at its most expensive in 12 years.

The increasing cost of grains is also pushing up the price of meat, poultry, eggs and dairy products. And there is every likelihood prices will continue their relentless rise, according to expert predictions by the UN and developed countries.

High prices have already prompted a string of food protests around the world . . .
. . .
If prices keep rising, more and more people around the globe will be unable to afford the food they need to stay alive, and without help they will become desperate. More food riots will flare up, governments will totter and millions could die.
. . .
The rise in global temperatures caused by pollution is also beginning to disrupt food production in many countries. According to the UN, an area of fertile soil the size of Ukraine is lost every year because of drought, deforestation and climate instability.
. . .
The UN Intergovernmental Panel on Climate Change has predicted that, over the next 100 years, a one-metre rise in sea levels would flood almost a third of the world’s crop-growing land.
. . .
The world’s grain stocks are at their lowest for 30 years . . .
. . .
Another key driver is the soaring cost of oil . . .
. . . oil makes crop fertilisers more expensive . . .
. . . fertiliser prices have risen 150% in the past five years.
. . .
The global drive for a new green fuel to power cars, lorries and planes is worsening world food shortages and threatening to make billions go hungry.
. . .
The biofuels surge makes things worse by adding high demand on top of already high prices and low stocks . . . Ethanol and biodiesel produced in the US and European Union don’t appear to be delivering on green promises either, making them very controversial.
. . .
It’s very hard to imagine how we can see the world growing enough crops to produce renewable energy and at the same time meet the enormous demand for food.
. . .
The idea that you cut down rainforest to actually grow biofuels seems profoundly stupid . . .
. . .
You could feed a person for a whole year from the grain that produces just one tank of fuel for a sports utility vehicle (SUV).

The US grows 60% of the world’s export crop of maize. At present one-sixth of the US grain harvest is going into the tanks of cars. So far the US has no serious programs in place to increase fuel efficiency or invest in public or alternative forms of transportation. And the US is talking about tripling the use of grains for biofuel. This isn’t just a problem for the rest of the world. It will soon be a huge problem for the US with its suburban sprawl. With fuel prices going up, will people be able to afford to get to work? How much will they have to give up eating in order to drive?

At the same time this is happening, the developed countries are still keen to ram trade deals down the throats of the developing world that are highly destructive to the support and development of local agriculture. Growing food locally, and eating food grown locally, wherever people can do this, is the best way to fight back against these global shortages. Most current research indicates this is the healthiest way to eat as well. But when local farmers in the developing world are being undersold at home by heavily subsidized crops from the developed world, it is not possible to support and sustain local agriculture.

Food import surges following “liberalization” of trade are devastating farmers and agricultural production in the developing world.

GENEVA, Mar 7 (IPS) – Food import surges have had devastating consequences for the rural poor and local economies in Africa. Such surges have taken place with alarming frequency in the past decade or two.
. . .
Import surges follow in the wake of liberalisation of trade. Liberalisation brings into play multiple factors that are often beyond the control of importing countries. These include firstly the domestic support and dumping policies of exporting countries. The products in which import surges occur most frequently are also the products which receive the highest subsidies from the EU and the U.S.

Other factors are: currency fluctuations in third countries; dumping of food aid when it is not required; and policy whims of exporting countries, such as destocking exercises which cause surges on the world market.

. . .

In Ghana rice imports increased from 250,000 tonnes in 1998 to 415,150 tonnes in 2003. Domestic rice, which had accounted for 43 percent of the domestic market in 2000, captured only 29 percent of the domestic market in 2003. In all, 66 percent of rice producers recorded negative returns, leading to loss of employment.

Tomato paste imports from the EU increased by a staggering 650 percent from 3,300 tons in 1998 to 24,740 tons in 2003. Farmers lost 40 percent of the share of the domestic market and prices were extremely depressed.
. . .
When Ghana reduced its rice tariffs from 100 to 20 percent as a result of the structural adjustment policies enforced by the World Bank, rice imports doubled.

Poultry imports have surged in Ghana, 300% in Cameroon, and 650% in Cote d’Ivoire in this 21st century.

There are countless more such cases which FAO and others have documented: dairy, maize and sugar in Kenya; rice and vegetable oils in Cameroon; onions and rice in the Philippines; rice and soy in Indonesia; maize, sugar and milk in Malawi; rice, dairy and maize in Tanzania; poultry in Jamaica; oilseeds in India; onions and potatoes in Sri Lanka; tomato paste in Senegal; soy and cotton in Mexico; rice and poultry in the Gambia; rice in Haiti and so forth.
. . .
These cases, documented by the FAO, should lead negotiators to exercise caution in the current Doha talks on the special safeguard mechanism. Import surges are already happening, even before yet another round of liberalisation as is under negotiation in the current Doha Round.

Effective measures should be made available to developing countries if food security and rural livelihoods are to be given priority.

Of recent Doha talks, and Economic Partnership Agreements, EPAs, Ken Ukaoha writes:

Like the Millennium bug, the most dreaded 31st December 2007 deadline ‘fever’ for the conclusion and possible signing of the EPAs has come and gone without the expected casualties.
. . .
. . . thumbs up for the West African negotiators, especially for the ECOWAS Commission.
Credit must essentially be given to the Nigerian government and to the West African civil society that kept mounting irresistible mobilization and pressure on the regional institutions to look towards no other direction but to a development friendly EPA.
. . .
At least, and essentially for our EU colleagues, the lesson may not be forgotten in a moment; and the lesson is that ‘times have changed’. It is no longer a Master-servant (colonial) relationship where the under-dog could always easily be cowed into swallowing hook and sinker all demands and claims that are placed on the table.

Mr. Ukaoha seems optimistic that the EU and ECOWAS have an opportunity to move forward in a fashion that actually is development friendly and mutually beneficial. I hope he may be right. There are huge economic storms brewing, and environmental storms with profound economic effects headed our way.

It turns out the food or fuel competition over corn may be a much more serious and immediate problem than anyone realized. Lester R. Brown of the Earth Policy Institute writes:

World May Be Facing Highest Grain Prices in History

Investment in fuel ethanol distilleries has soared since the late-2005 oil price hikes, but data collection in this fast-changing sector has fallen behind. Because of inadequate data collection on the number of new plants under construction, the quantity of grain that will be needed for fuel ethanol distilleries has been vastly understated. Farmers, feeders, food processors, ethanol investors, and grain-importing countries are basing decisions on incomplete data.

The U.S. Department of Agriculture (USDA) projects that distilleries will require only 60 million tons of corn from the 2008 harvest. But here at the Earth Policy Institute (EPI), we estimate that distilleries will need 139 million tons . . . half the 2008 harvest projected by USDA.
. . .
This unprecedented diversion of the world’s leading grain crop to the production of fuel will affect food prices everywhere. As the world corn price rises, so too do those of wheat and rice, both because of consumer substitution among grains and because the crops compete for land. Both corn and wheat futures were already trading at 10-year highs in late 2006.

The U.S. corn crop, accounting for 40 percent of the global harvest and supplying 70 percent of the world’s corn exports, looms large in the world food economy. Annual U.S. corn exports of some 55 million tons account for nearly one fourth of world grain exports. The corn harvest of Iowa alone, which edges out Illinois as the leading producer, exceeds the entire grain harvest of Canada. Substantially reducing this export flow would send shock waves throughout the world economy.
. . .
And this soaring demand for corn comes when world grain production has fallen below consumption in six of the last seven years, dropping grain stocks to their lowest level in 34 years.
. . .
The grain it takes to fill a 25-gallon tank with ethanol just once will feed one person for a whole year. (emphasis mine)
. . .
Soaring food prices could lead to urban food riots in scores of lower-income countries that rely on grain imports, such as Indonesia, Egypt, Algeria, Nigeria, and Mexico.


Already, the price of Mexico’s staple food, corn tortillas, has increased 400%.

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