Sunday, April 27, 2008

Big Food Crisis Links Roundup

The past couple of months, we are suddenly hearing a great deal of panic over rising worldwide food prices and the spectre of global scarcity. Here is a collection of worthwhile reading material on the subject, from a variety of angles.

March 6:

Jon Markman at MSN Money explains why "it's a good time to invest in agricultural stocks."

Most unusual about this phenomenon, according to BMO Financial Group strategist Don Coxe, is that until now, food crises in world history were regional concerns that arose from crop failures, war or pests. Once global trade of grains got going in the 19th century in a major way, food shortages in one country were ameliorated by imports, he said. What's happening now is a lack of supply everywhere at once.

Markman blames urbanization, income growth leading to increased meat consumption, and increased ethanol production... and recommends buying stock in Monsanto.

March 11:

The BBC covers rising food prices in Egypt.

March 14:

Rising wheat prices and their effect on one Kansas bakery, via The Ethicurean.

March 19:

Tom Philpott at Grist warns of a potential fungal disaster: wheat stem rust.

March 20:

Blog Food and Fuel America points out that, while input costs are increasing for the big food-processing corporations such as General Mills, somehow their profits are managing to rise significantly. How can this be? (I’ve read in several places that Cargill’s profits are up by more than 80% also.)


The AP's Katherine Corcoran, covering rising world food prices, assures us:

In the long term, prices are expected to stabilize. Farmers will grow more grain for both fuel and food and eventually bring prices down. Already this is happening with wheat, with more crops to be planted in the U.S., Canada and Europe in the coming year.

Of course, this supply-will-adjust-to-demand argument assumes an infinite wealth of available land. For now, she does not deny the situation is dire.

Food costs worldwide spiked 23 percent from 2006 to 2007, according to the FAO. Grains went up 42 percent, oils 50 percent and dairy 80 percent.

Economists say that for the short term, government bailouts will have to be part of the answer to keep unrest at a minimum. In recent weeks, rising food prices sparked riots in the West African nations of Burkina Faso, where mobs torched buildings, and Cameroon, where at least four people died.

March 21:

Tom Philpott takes on the financial and food crises together and gets seriously sensible:

The first thing I'd do is end the government's absurd, expensive, and myriad biofuel subsidies, which are jacking up food prices while providing little if any environmental benefit. According to one reckoning, the federal government has committed $92 billion between 2006 and 2012 to prop up biofuel production. Attracted by this government-guaranteed market, the very same investment banks and hedge funds that brought us the mortgage debacle are now buying and selling corn and soy futures, snatching profits while consumers gape at the price of grocery staples.

Pulling the plug would cause grain and soy prices to drop, bringing down food prices but hurting farmers. To limit the latter effect, the government could step in and buy excess grain and hold it, replenishing stocks that have fallen to all-time lows. That would keep farmers in business while also improving food security.

With the massive savings that would result, the government should invest in local and regional food-production infrastructure, which has been systematically dismantled by agribusiness over the past half-century. Such a program would not only provide consumers with a ready alternative to industrial food, but would also re-establish food as an engine for building wealth within communities -- and lessen its ecological footprint.

April 9:

David Streitfeld at the NYT reports that high grain prices are motivating farmers to pull millions of acres of land out of the Conservation Reserve Program, which pays farmers to leave uncultivated habitat for birds and other wildlife.

“We’re in a crisis here. Do we want to eat, or do we want to worry about the birds?” asked JR Paterakis, a Baltimore baker who said he was so distressed at a meeting last month with Edward T. Schafer, the agriculture secretary, that he stood up and started speaking “vehemently.”

The Guardian covers potential risks to global stability posed by soaring food prices.

April 16:

John Vidal of The Guardian writes an excellent short piece summarizing the new International Assessment of Agricultural Science and Technology for Development [IAASTD] report and its relevance for the current food crisis.

Sixty countries backed by the World Bank and most UN bodies yesterday called for radical changes in world farming to avert increasing regional food shortages, escalating prices and growing environmental problems.

But in a move that has led to the US, UK, Australia and Canada not yet endorsing the report, the authors said GM technology was not a quick fix to feed the world's poor and argued that growing biofuel crops for automobiles threatened to increase worldwide malnutrition.

April 18:

Gretchen Gordon at Food First points the finger at deregulation for the food system crisis. Another terrific piece.

The impact of all this deregulation was to replace local market access for the majority of small producers with global market access for a few global producers. Thanks to non-existent anti-trust enforcement and rampant vertical integration, we’ve reached a level of concentration in our global agriculture system that would make Standard Oil blush. Three companies—Cargill, Archer Daniels Midland, and Bunge—control the vast majority of global grain trading, while Monsanto controls more than one-fifth of the global market in seeds. Consumers from Sioux City to Soweto are more and more dependent on fewer and fewer producers. By eliminating the breadth and diversity of the system, we’ve eliminated its ability to withstand shock or manipulation.

April 21:

From the NYT business section… biotech takes advantage of growing desperation.

In Britain, the National Beef Association, which represents cattle farmers, issued a statement this month demanding that “all resistance” to [GE] crops “be abandoned immediately in response to shifts in world demand for food, the growing danger of global food shortages and the prospect of declining domestic animal production.”


Take-home message? Industrial agriculture and the unregulated free market, dominated by a few big food corporations, have created the dire emergency that some of us have long anticipated. There's an opportunity here: the public, even in relatively wealthy countries, is suddenly paying attention to the food system, and may be open to new ideas and structures. But there's also a very great danger that the big players will convince a fearful populace that they must place their trust in the hands of "the experts" or face famine, and use the crisis merely to ramp up their own profits and wreak more destruction. Let us come down firmly and loudly in favor of opportunity.


April 27:

Grasshopper Planet by Devilstower at Daily Kos.


Anonymous said...

Hi, long time no read!

What few commentors fail to realize is that because of the unsoundness of the US dollar and other currencies, really huge money entities (think hedge funds, sovereign wealth funds...) are going into commodities.

There actually is a record crop of rice this year. But due to destroying the value of the US currency by attaching debt to it, "investors" (call them hoarders) are moving into commodities instead.

And yes, they are greedy enough to starve the poor in the process of seeking "enhanced return on their investments."

Here is a Wall Street Journal link:

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