Pressure's On

The pressure's indeed on--the World Bank is reporting global food price increases, increases due to global warming and oil price increases.




The April Food Price Watch report says "Global food prices have increased by 8% in the last four months since December 2011, and in March 2012 were only 6% below their February 2011 historical peak. All key food prices have increased, except for rice."

Cold weather in extreme cold in Europe, the Russian Federation, and other countries is blamed for upward pressure on wheat prices, while hot and dry conditions in South America have affected sugar, maize, and soybeans. There is a little good news in that a slowdown in maize-to-ethanol conversion in the US is helping put a brake on price rises, as is aa lower value for the Euro.Also, record prices in 2010-2011 have encouraged more planting, which should help offset weather/climate induced shortfalls.
The report also points out some dramatic domestic price changes around the world:

Wheat price increases between March 2011 and March 2012  reached 92% in Belarus and 56% in Moldova, while they declined by 30% in El Salvador, 19% in Kyrgyzstan, and 16% in South Africa. The price of maize rose by 82% in Malawi, 80% in Ethiopia, and 71% in Mexico. The largest maize declines occurred in Honduras (31%), Somalia (20%), and El Salvador (19%). Rice prices in the same period rose by 125% in Uganda, 54% in Tanzania, and 38% in Rwanda. In turn, Bolivia saw its rice prices decline by a more modest 21% and Bangladesh's declined by 18%.

So while there have been some declines in prices, the rises have more than outweighed them. But once again, the shortfalls in production, while worrying, and the price increases, while scary, do not mean that there isn't enough food in the world. Famine is not an automatic byproduct of these shortfalls. Starvation will result from a lack of purchasing power, not a lack of food.
And, to repeat:

 Models that just treat supply and demand are not consistent with the actual price dynamics. There is a consistent firm upward pressure on food prices from the increased demand from ethanol conversion programs, but the big driver of food prices is "specifically due to investor speculation."

Jolly Olde...Well, Not So Much.

Bewl Water reservoir, near Lamberhurst, Kent, photo from The Guardian website

 by Gareth Fuller/PA

England is still swinging, but the pendulum only seems to be going from bad to worse and back again. Southern England has been in the grip of a drought for a few years now, as the condition of the reservoir above attests. Now it has started raining across the region, but not the spring rains needed to replenish the groundwater and then the aquifers. Rather, massive storms are slamming into the south, bringing projected dumps of up to 40mm of rain during the day--much of which will run off the drought-hardened soils rather than soaking in. Even if it does soak in, it won't be enough to ease the drought: these rains would have to continue for weeks to begin replenishing the underground aquifers.
The consequences for food production, according to The Guardian are significant:

Farmers, particularly arable farmers and vegetable growers, face a difficult summer as decisions have already been taken on what to grow this year. Further restrictions such as curbs on abstracting groundwater will become more likely if the drought continues. Price rises are likely for thirsty crops such as soft fruit and vegetables, while the price of beer is also expected to increase.

And you know if the price of beer rises, the Conservative government of David Cameron is going to take even more of a bollocking than usual. Because the UK has also slipped into a double dip recession because of the current austerity programme.  Also from the Guardian:

Britain's leading foodbank network, the Trussell Trust, says every single day it is handing out emergency food parcels to parents who are going without meals in order to feed their children, or even considering stealing food to put on the table, as the government's austerity measures start to bite.

The number of people to whom it had issued emergency food parcels had doubled in the last 12 months and was set to increase further as rising living costs, shrinking incomes and welfare cuts take their toll, the trust said, as it published its annual report, which is fast becoming a barometer of social deprivation.

Two foodbanks a week opened up in the UK over the last 12 months to meet an explosion in demand from families living on the breadline, the trust said. The charity currently oversees 201 foodbanks run on a franchise basis across the UK, up from 100 in 2010-11.

Its not much better worldwide. A report published in the magazine Science suggests "Models that link yields of the four largest commodity crops to weather indicate that global maize and wheat production declined by 3.8 and 5.5%, respectively, relative to a counterfactual without climate trends.[...] Climate trends were large enough in some countries to offset a significant portion of the increases in average yields that arose from technology, carbon dioxide fertilization, and other factors." So even when there's good news (increases in average yields) the bad news tends to outweigh it (enough to offset a significant portion).
It might be nice to have a test case for some of the problems we're facing--like the continued uncertainty in the price of oil.  We've passed Peak Oil at this point, but what that means seems to be confused. Neil Reynolds takes on the Club of Rome and Peak Oil in today's Globe and Mail, writing:

The book’s most alarming prediction, of course, dealt with oil – which, it said, would be irretrievably depleted by 2022 – a mere decade from now – at the latest. Yet, “the World Energy Council reports that global proven recoverable reserves of natural gas liquids and crude oil amounted to 1.2 trillion barrels in 2010,” Mr. Kenny says. “That’s enough to last another 38 years at current usage. Add in shale oil, and that’s an additional 4.8 trillion barrels, or a century and a half’s worth of supply at present usage rates. Tar sands, including some huge Canadian deposits, add perhaps six trillion barrels more.”

It should be noted that  "global proven recoverable reserves" is a terribly elastic figure. The Saudis, as one example, have been fudging the books on what their "recoverable reserves" are for almost two decades.It also helps to toss natural gas into the mix--there are large reserves around the planet--so much so that the current price is below the cost of recovery. But what Peak Oil theory said was that once we've passed the halfway point on recovery--which we have--the oil that was left would become more and more difficult to retrieve. And as prices rose, companies would go to greater and greater lengths to retrieve that oil. Its expected (under the theory, that as oil climbs in price, exploration/late production will increase while demand drops off. Once demand has dropped off, prices will begin to decline. Once prices at the pump decline, exploration/pumping will slow while demand rises again. Prices will suddenly spike until more production is brought back on line. There will be tremendous oscillation in prices and availability of oil. There will always be oil, its just that most of us won't be able to afford products made from it.
Energy has become dearer, and so we see the mining of bitumen in the Tar Sands of Alberta, a process that is only economically viable when the price of oil is over $80/bbl. And with energy prices currently sitting at $104/bbl for West Texas Crude, we see both the crazy push to mine the Tar Sands and the rise of fracking to release shale oil (another process like mining the Tar Sands that only happens without proper oversight and when oil prices are high).
But what happens when the oil stops? Actually, it doesn't even have to stop, all it has to do is become too expensive for use in agriculture.  And actually, we have a case study of this: Cuba. As an article in Slate points out:

Unable to afford the fertilizers and pesticides that 20^th-century agriculture had taken for granted, the country faced extreme weather events and a limit to the land and water it could use to grow food. The rest of the world will soon face many of the same problems: In the coming decade, according to the OECD, we’ll see higher fuel and fertilizer costs, more variable climate patterns, and limits to arable land that will drive cereal prices 20 percent higher and hike meat prices by 30 percent—and that’s just the beginning. Policymakers can find inspirational and salutary ideas about how to confront this crisis in Cuba, the reluctant laboratory for 21^st-century agriculture.

Cuban officials faced the crisis clumsily. They didn’t know how to transform an economy geared toward sweetening Eastern Europe into one that could feed folk at home. Agronomists had been schooled in the virtues of large-scale industrial collective agriculture. When the “industrial” part became impossible, they insisted on yet more collectivization. The dramatic decline in crop production between 1990 and 1994, during which the average Cuban lost 20 pounds, was known as “the Special Period.” Cubans have a line in comedy as dark as their rum.

It finally took land reform to fix many of the problems. The Cuban state was still not ready to give up its control over the land, but realized that allowing management to devolve to the farm level might not be a bad thing. With that devolution, farmers also got usufruct rights--that is, the legal right of using and enjoying the fruits or profits of something belonging to another. In fact, Cuban peasants have been able to boost food production without scarce and expensive imported agricultural chemicals by first substituting more ecological inputs for the no longer available imports, and then by making a transition to more agroecologically integrated and diverse farming systems. A report on this, called the Campesino-to-Campesino agroecology movement of ANAP in Cuba is available online (amazingly, the full text of the report is available for free download). It should also be noted that Cuba pursued its self-sufficiency goals with the aid of one of the best educated populations around (Cuba has 2 percent of Latin America’s population but 11 percent of its scientists). Various scientists were put to work with the farmers to maximize production without industrial farming inputs.
It may not be perfect, but Cuba has managed to supply a significant amount of its own food. In a report from Miguel A. Altieri and Fernando R. Funes-Monzote:

The production of vegetables typically produced by peasants fell drastically between 1988 to 1994, but by 2007 had rebounded to well over 1988 levels [...]. This production increase came despite using 72 percent fewer agricultural chemicals in 2007 than in 1988. Similar patterns can be seen for other peasant crops like beans, roots, and tubers.
Cuba’s achievements in urban agriculture are truly remarkable—there are 383,000 urban farms, covering 50,000 hectares of otherwise unused land and producing more than 1.5 million tons of vegetables with top urban farms reaching a yield of 20 kg/m2 per year of edible plant material using no synthetic chemicals—equivalent to a hundred tons per hectare. Urban farms supply 70 percent or more of all the fresh vegetables consumed in cities such as Havana and Villa Clara.

So the future isn't entirely threatening, its just different.A lot more of us will be peasants again--a designation I, for one, am willing to embrace.

Corporate Food Sells Local

It's a funny ol' world. This ad comes from Hellman's--a company owned by Unilever, one of the larger corporate behemoths straddling our globe. The ad is practically a PSA for Canadian farmers and Canadian food with the seeming contradiction of being put out with one of the global food giants it decries.  Yet, owning local as well as international producers, it's clear that Unilever won't suffer no matter what we as consumers do. Unless wegrow our own food and purchase from local farmers at a local market or through a CSA, the multinationals are still going to make out like bandits. But all that being said, still a good commercial.

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.”

Organic Community

Since the 1990s, we've seen an explosion in the availability of organic produce in grocery stores across North America. The question is, obviously, just how organic is this food?

Profit margins in the food business have been flat for decades in the grocery biz, with profit growth coming from squeezing growers and upping prices rather than from increased sales. The one bright spot has been in organic food sales. Organics have been posting growth rates of twenty to thirty percent yearly since the 1970s. Impressive, but still too small a market share to be noticeable until the 90s.

One of the reasons for this is that organic could mean different things in different places. Standards for the organic label varied from state to state and province to province. As Sally Miller details in her book Edible Action: Food Activism and Alternative Economics, "organic" was a dialogue between growers and customers, often mediated by distributor co-operatives. This is borne out by my experience as a grower; we marketed directly to the end consumer, and quickly found that we weren't selling vegetables as much as we were establishing relationships with consumers. People came to our stall not only for fresh and pesticide-free food, but for contact with the growers, for narratives about the food, and generally for a sense of community.

Tough Times Ahead

     The headline on the front page of the 08 February 2011 Globe and Mail reads "A Warning to Canada: Start Growing", and opens with:

Canada has lost its statue as a food-producing superpower and needs a drastic overhaul of its agricultural policy if it hopes to compete in world markets and feed more of its own people.
The country, hobbled by out-of-date policies and a continuing battle for scarce government dollars, has dropped from third-largest global exporter of food to No. 7 at a time when we can least afford it: Climate change and population growth are putting enormous pressure on the food system while diet-related healthcare costs are weighing on the national economy.

     The article is by Jessica Leeder, the full time "global food reporter" at the G&M. Leeder also reported on the cuts at NSERC a while back. And I've gotta say, she's doing a bang-up job of reporting on global food issues. But that the G&M has felt it necessary to appoint a full time reporter shows that we're about five years past the tipping point on the issue.
The problems we face here in Canada can, according to Leeder, be boiled down to three points:

• Farm incomes have stagnated over the last two decades, debt levels are "soaring", even with direct government subsidies tripling to $8 billion over the same time period.
• "Food processors have also struggled, squeezed by demanding retailers who have been lured by higher margins they can reap by selling cheaper imported food."
• "Consumers, in turn, have grown used to spending only a fraction of their income on food and demand cheap prices--at any cost."

Funnily enough, these three problems look familiar. They look exactly like the problems being encountered by other producers and manufacturers in a globalized neo-liberal economic regime.