Friday, May 6, 2011

Having A Hard Time Facing The Future

Report on Business Magazine (May 2011) is running an article this month called “How Do We Feed Seven billion People—and Counting?” In it, reporters interview various people, looking for their take on what is evolving into an international food crisis.
The range of opinions and suggestions is much broader than expected—mostly because several of the interviewees are pushing for more of the same discredited policies that we've been pursuing. Sometimes dressed in new rhetorical clothes, but the same solutions nonetheless.
Jeffrey Sachs, the director of the Earth Institute and special adviser to UN Secretary-General Ban Ki-moon, takes on one of the elephants in the room by saying simply that we can't afford to reach nine billion. And its true, we can't. We could, if we took agriculture and feeding people very seriously indeed, manage—just!—to feed nine billion. But it would be incompatible with the international economic order as it is currently constituted. And, as Sachs is quoted as saying:
“This crisis cannot be solved just by food aid or short-term tricks. We have to look at the basic issue: that politicians are locally oriented and cynical, that they make announcements they don't follow through on, and that they're in the pockets of lobbyists intent on preventing solutions.”
As long as the focus is on maximizing return on investment, and not on farmers making a living by feeding people, we will continue to starve both poor people and poor nations. It will be a brutal way to keep population pressure under control—after all, we are increasing by 80 million people a year at this point—but famine will be a very effective method of international social control. But famine does appear to be the weapon of choice at this time.

Abby Abassian is the senior grains economist at the FAO in Rome, and he mentions the other elephant in the room—if only obliquely. When asked “What caused the latest surge in food prices?” his reply is “In one word—weather. This is not like 2007 and 2008, where we had so many other factors mixed in.”
And weather is only going to become more of a problem. With global warming marking the end of the Holocene, we are going to see dramatic changes in the world's agricultural regions; starting in the tropics and moving rapidly into the temperate zones. Australia is already being battered by climate change with dramatic droughts, fires, and flooding leaving both industrial and sustainable farmers reeling. Abassian's solution to feeding people is disarmingly simple: “I would make farming an attractive business.” But he does betray his bias when he follows that up by saying “It is in the U.S. and Australia, but not in many other countries.” Farming is, in both America and Australia, a highly industrialized operation, and as such is attractive to large institutional investors like banks, and both countries have developed commodity markets. But it is not large industrial farms that are needed; we need more farmers growing more food per acre of land—the industrial model of maximum production per farmer is reliant on too many inputs, the price of which are rising rapidly. A responsive and functional food system needs an enormous number of small farmers feeding nearby people supported by a large scale international food system to help balance out surpluses and shortages. But with the international industrial food system in the driver's seat, small, sustainable farms will continue to be driven out of production and replaced by large scale “farms”.

The Chair of Agri-Food Innovation and Regulation, David Sparling, at the Ivey School of Business places more of his faith in de-regulated puts more of his faith in pure market solutions. When asked if protectionist trade barriers are the driver of the food crisis, he replies; “I think that all the trade regulations are inhibiting our ability to have food security. I think [the international community] needs to allow developing nations to access higher-value markets in Europe, Asia, and North America.” He does suggest that those countries with “serious internal hurdles” need “more scientific research [into] developing crops they could sell to the rest of the world.”
I admit, I'm baffled by this. Europe keeps a series of tariff and other barriers up in order to produce greater food security. By managing the flow of foods in and out of the EU, EU farmers are guaranteed prices for their crops. Prices that keep them farming. This may not be a perfect solution—certainly US and Canadian marketing groups see it as an impediment to their work of selling more foods in the EU—but it is keeping farmers on the land producing food (and, yes, wine lakes and butter mountains). Even here in B.C., the only category we actually produce enough food for local consumption is in dairy products; a regulated, quota-dependent market.
At the same time, I really don't understand how producing food specifically for export, “ developing crops they could sell to the rest of the world,” is supposed to provide the developing world with food security. Growing food for export does the developing world no good at all. Governments take out international loans to expand their agricultural sector, grow more food, and have to export all of it to maintain their balance of payments because of the loan. The cycle serves no one except the agribusiness corporations and consumers in the developed world. This was one of the major failings of the Green Revolution.

Abah Ofon, an agricultural commodities research analyst at Standard Chartered Bank in Singapore cuts through a lot of this nonsense. “We have always argued that the best solution to rising food prices is adequate supply of food.”
Fair enough. There may be disagreement on the best way or ways to get there, but the best way not to drown is to avoid trying to breathe water.

CEO of Viterra Inc., Mayo Schmidt points out that we are extremely reliant on harvests right now, as the world only has about 2½ months of grains in reserve. But then he goes on:
Saudi Arabia, which previously was self-sufficient in wheat, reduced production to save its water supplies. They’re becoming an importer, a buyer that the world hadn’t seen before. It’s new demand. So it really comes down to a combination of farming practices and seed technology—whether it’s hybrids or GMOs [genetically modified organisms]. We’ve already seen this in corn. In the last 15 years, the volume has almost doubled, in terms of yield per acre. Given the demand for corn right now for feed and fuel, can you imagine the tightness of supply if the GMOs hadn’t increased that supply?
Corn, at least the primary variety corn grown in the US, doesn't feed people. It feeds animals. Mr. Schmidt touches on two discreet points here; the first is the growing panic over the world's fresh water supply, and the demand for feed and fuel. The pro-GMO argument is pretty much nonsense.

Beef is a killer on both points. It takes between 13,000 and 15,000 litres of water to produce one kilo of grain-fed beef. It also takes about 7 kilos of feed to grow one kilo of beef. Poultry takes only 2- 2½ kilos of feed per kilo of meat, and carp and tilapia take only about 1½ kilos per kilo.

But about a third of US corn is now grown to supply the ethanol market. That is, a third of the acreage dedicated to corn is being used to create a fuel additive. Well, why not. It's useless for human food until its been through an animal.

Finn Poschmann, the VP of research at the C.D. Howe Institute, gets this ethanol idiocy.

Corn is very intense on the fertilizer side. The more you plant, the more fertilizer you have to buy. That drives up the demand and the price of fertilizer. That drives up the input prices for other producers as well.

On a country-by-country basis, there are certainly things that can be done. These mostly fall into the category of “don’t do dumb things.” Like, don’t subsidize ethanol production. It’s a superb additive for fuels. That’s fine, and the market will look after that. But we’ve been subsidizing a push into ethanol at a huge cost to society.

US corn production for ethanol will be about 40 percent of all US corn production in 2011, and that equates to about 15 percent of global corn production. It produces the equivalent of 0.6 percent of global oil requirements. It's crazy.

There are some good ideas in the article. Like empowering women and learning from our 10,000 year history of agriculture (I would suggest looking at many of the ways it has failed and the root causes of many of the famines since 1800), and cultivating crop diversity. But with peak oil already behind us in 2006 according to a recent report, (the IEA, after mocking peak oil theorists for years, has acknowledged that peak production of conventional oil occurred in 2006), we have to get seriously behind sustainable food production—and that means minimizing fossil fuel involvement. Cheap food is based on cheap fuel, and the cheap fuel is about gone.

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