Catastrophic Fall in 2009 Global Food Production
By Eric deCarbonnel
Global Research, February 10, 2009
Market Oracle
After reading about the droughts in two major agricultural countries, China and Argentina, I decided to research the extent other food producing nations were also experiencing droughts. This project ended up taking a lot longer than I thought. 2009 looks to be a humanitarian disaster around much of the world
To understand the depth of the food Catastrophe that faces the world this year, consider the graphic below depicting countries by USD value of their agricultural output, as of 2006.
Now, consider the same graphic with the countries experiencing droughts highlighted.
The countries that make up two thirds of the world's agricultural output are experiencing drought conditions. Whether you watch a video of the drought in China, Australia, Africa, South America, or the US , the scene will be the same: misery, ruined crop, and dying cattle.
China
The drought in Northern China, the worst in 50 years, is worsening, and summer harvest is now threatened. The area of affected crops has expanded to 161 million mu (was 141 million last week), and 4.37 million people and 2.1 million livestock are facing drinking water shortage. The scarcity of rain in some parts of the north and central provinces is the worst in recorded history.
The drought which started in November threatens over half the wheat crop in eight provinces - Hebei, Shanxi, Anhui, Jiangsu, Henan, Shandong, Shaanxi and Gansu.
Henan
China's largest crop producing province, Henan, has issued the highest-level drought warning. Henan has received an average rainfall of 10.5 millimeters since November 2008, almost 80 percent less than in the same period in the previous years. The Henan drought, which began in November, is the most severe since 1951.
Anhui
Anhui Province issued a red drought alert, with more than 60 percent of the crops north of the Huaihe River plagued by a major drought.
Shanxi
Shanxi Province was put on orange drought alert on Jan. 21, with one million people and 160,000 heads of livestock are facing water shortage.
Jiangsu
Jiangsu province has already lost over one fifth of the wheat crops affected by drought. Local agricultural departments are diverting water from nearby rivers in an emergency effort to save the rest.
Hebei
Over 100 million cubic meters of water has been channeled in from outside the province to fight Hebei's drought.
Shaanxi
1.34 million acres of crops across the bone-dry Shanxi province are affected by the worsening drought.
Shandong
Since last November, Shandong province has experienced 73 percent less rain than the same period in previous years, with little rainfall forecast for the future.
Relief efforts are under way. The Chinese government has allocated 86.7 billion yuan (about $12.69 billion) to drought-hit areas. Authorities have also resorted to cloud-seeding, and some areas received a sprinkling of rain after clouds were hit with 2,392 rockets and 409 cannon shells loaded with chemicals. However, there is a limit to what can be done in the face of such widespread water shortage.
As I have previously written, China is facing hyperinflation , and this record drought will make things worse. China produces 18% of the world's grain each year.
Australia
Australia has been experiencing an unrelenting drought since 2004, and 41 percent of Australia's agriculture continues to suffer from the worst drought in 117 years of record-keeping. The drought has been so severe that rivers stopped flowing, lakes turned toxic, and farmers abandoned their land in frustration:
A) The Murray River stopped flowing at its terminal point, and its mouth has closed up.
B) Australia's lower lakes are evaporating, and they are now a meter (3.2 feet) below sea level. If these lakes evaporate any further, the soil and the mud system below the water is going to be exposed to the air. The mud will then acidify, releasing sulfuric acid and a whole range of heavy metals. After this occurs, those lower lake systems will essentially become a toxic swamp which will never be able to be recovered. The Australian government's only options to prevent this are to allow salt water in, creating a dead sea, or to pray for rain.
For some reason, the debate over climate change is essentially over in Australia.
The United States
California
California is facing its worst drought in recorded history . The drought is predicted to be the most severe in modern times, worse than those in 1977 and 1991. Thousands of acres of row crops already have been fallowed, with more to follow. The snowpack in the Northern Sierra, home to some of the state's most important reservoirs, proved to be just 49 percent of average. Water agencies throughout the state are scrambling to adopt conservation mandates.
Texas
The Texan drought is reaching historic proportion . Dry conditions near Austin and San Antonio have been exceeded only once before—the drought of 1917-18. 88 percent of Texas is experiencing abnormally dry conditions, and 18 percent of the state is in either extreme or exceptional drought conditions. The drought areas have been expanding almost every month. Conditions in Texas are so bad cattle are keeling over in parched pastures and dying. Lack of rainfall has left pastures barren, and cattle producers have resorted to feeding animals hay. Irreversible damage has been done to winter wheat crops in Texas. Both short and long-term forecasts don't call for much rain at all, which means the Texas drought is set to get worse.
Augusta Region (Georgia, South Carolina, North Carolina)
The Augusta region has been suffering from a worsening two year drought. Augusta's rainfall deficit is already approaching 2 inches so far in 2009, with January being the driest since 1989.
Florida
Florida has been hard hit by winter drought, damaging crops, and half of state is in some level of a drought.
La Niña likely to make matters worse
Enough water a couple of degrees cooler than normal has accumulated in the eastern part of the Pacific to create a La Niña, a weather pattern expected to linger until at least the spring. La Niña generally means dry weather for Southern states, which is exactly what the US doesn't need right now.
South America
Argentina
The worst drought in half a century has turned Argentina's once-fertile soil to dust and pushed the country into a state of emergency. Cow carcasses litter the prairie fields, and sun-scorched soy plants wither under the South American summer sun. Argentina's food production is set to go down a minimum of 50 percent, maybe more. The country's wheat yield for 2009 will be 8.7 million metric tons, down from 16.3 million in 2008. Concern with domestic shortages (domestic wheat consumption being approximately 6.7 million metric ton), Argentina has granted no new export applications since mid January .
Brazil
Brazil has cut its outlook for the crops and will do so again after assessing damage to plants from desiccation in drought-stricken regions. Brazil is the world's second-biggest exporter of soybeans and third-largest for corn.
Brazil's numbers for corn harvesting:
Harvested in 2008: 58.7 million tons
January 8 forecast: 52.3 million tons
February 6 forecast: 50.3 metric tons (optimistic)
Harvested in 2009: ???
Paraguay
Severe drought affecting Paraguay's economy has pushed the government to declare agricultural emergency. Crops that have direct impact on cattle food are ruined, and the soy plantations have been almost totally lost in some areas.
Uruguay
Uruguay declared an "agriculture emergency" last month, due to the worst drought in decades which is threatening crops, livestock and the provision of fresh produce.
The a worsening drought is pushing up food and beverage costs causing Uruguay's consumer prices to rise at the fastest annual pace in more than four years in January.
Bolivia
There hasn't been a drop of rain in Bolivia in nearly a year. Cattle dying, crops ruined, etc…
Chile
The severe drought affecting Chile has caused an agricultural emergency in 50 rural districts, and large sectors of the economy are concerned about possible electricity rationing in March. The countries woes stem from the "La Niña" climate phenomenon which has over half of Chile dangling by a thread: persistently cold water in the Pacific ocean along with high atmospheric pressure are preventing rain-bearing fronts from entering central and southern areas of the country. As a result, the water levels at hydroelectric dams and other reservoirs are at all-time lows.
Horn of Africa
Africa faces food shortages and famine . Food production across the Horn of Africa has suffered because of the lack of rainfall. Also, half the agricultural soil has lost nutrients necessary to grow plant, and the declining soil fertility across Africa is exacerbating drought related crop losses.
Kenya
Kenya is the worst hit nation in the region, having been without rainfall for 18 months. Kenya needs to import food to bridge a shortfall and keep 10 million of its people from starvation. Kenya's drought suffering neighbors will be of little help.
Tanzania
A poor harvest due to drought has prompted Tanzania to stop issuing food export permits. Tanzania has also intensified security at the border posts to monitor and prevent the export of food. There are 240,000 people in need of immediate relief food in Tanzania.
Burundi
Crops in the north of Burundi have withered, leaving the tiny East African country facing a severe food shortage
Uganda
Severe drought in northeastern Uganda's Karamoja region has the left the country on the brink of a humanitarian catastrophe. The dry conditions and acute food shortages, which have left Karamoja near starvation, are unlikely to improve before October when the next harvest is due.
South Africa
South Africa faces a potential crop shortage after wheat farmers in the eastern part of the Free State grain belt said they were likely to produce their lowest crop in 30 years this year. South Africans are "extremely angry" that food prices continue to rise.
Other African nations suffering from drought in 2009 are: Malawi, Zambia, Swaziland, Somalia, Zimbabwe, Mozambique, Tunisia, Angola, and Ethiopia.
Middle East and Central Asia
The Middle East and Central Asia are suffering from the worst droughts in recent history , and food grain production has dropped to some of the lowest levels in decades. Total wheat production in the wider drought-affected region is currently estimated to have declined by at least 22 percent in 2009. Owing to the drought's severity and region-wide scope, irrigation supplies from reservoirs, rivers, and groundwater have been critically reduced. Major reservoirs in Turkey, Iran, Iraq, and Syria are all at low levels requiring restrictions on usage. Given the severity of crop losses in the region, a major shortage of planting seed for the 2010 crop is expected.
Iraq
In Iraq during the winter grain growing period, there was essentially no measurable rainfall in many regions, and large swaths of rain-fed fields across northern Iraq simply went unplanted. These primarily rain-fed regions in northern Iraq are described as an agricultural disaster area this year, with wheat production falling 80-98 percent from normal levels. The USDA estimates total wheat production in Iraq in 2009 at 1.3 million tons, down 45 percent from last year.
Syria
Syria is experienced its worst drought in the past 18 years, and the USDA estimates total wheat production in Syria in 2009 at 2.0 million tons, down 50 percent from last year. Last summer, the taps ran dry in many neighborhoods of Damascus and residents of the capital city were forced to buy water on the black market. The severe lack of rain this winter has exacerbated the problem.
Afghanistan
Lack of rainfall has led Afghanistan to the worst drought conditions in the past 10 years. The USDA estimates 2008/09 wheat production in Afghanistan at 1.5 million tons, down 2.3 million or 60 percent from last year. Afghanistan normally produces 3.5-4.0 million tons of wheat annually.
Jordan
Jordan's persistent drought has grown worse, with almost no rain falling on the kingdom this year. The Jordanian government has stopped pumping water to farms to preserve the water for drinking purposes.
Other Middle Eastern and Central Asian nations suffering from drought in 2009 are: The Palestinian Territories, Lebanon, Israel, Bangladesh, Myanmar, India, Tajikistan, Turkmenistan, Thailand, Nepal, Pakistan, Turkey, Kyrgyzstan, Uzbekistan, Cyprus, and Iran.
Lack of credit will worsen food shortage
A lack of credit for farmers curbed their ability to buy seeds and fertilizers in 2008/2009 and will limit production around the world. The effects of droughts worldwide will also be amplified by the smaller amount of seeds and fertilizers used to grow crops.
Low commodity prices will worsen food shortage
The low prices at the end of 2008 discouraged the planting of new crops in 2009. In Kansas for example, farmers seeded nine million acres, the smallest planting for half a century. Wheat plantings this year are down about 4 million acres across the US and about 1.1 million acres in Canada. So even discounting drought related losses, the US, Canada, and other food producing nations are facing lower agricultural output in 2009.
Europe will not make up for the food shortfall
Europe, the only big agricultural region relatively unaffected by drought, is set for a big drop in food production. Due to the combination of a late plantings, poorer soil conditions, reduced inputs, and light rainfall, Europe's agricultural output is likely to fall by 10 to 15 percent.
Stocks of foodstuff are dangerously low
Low stocks of foodstuff make the world's falling agriculture output particularly worrisome. The combined averaged of the ending stock levels of the major trading countries of Australia, Canada, United States, and the European Union have been declining steadily in the last few years:
2002-2005: 47.4 million tons
2007: 37.6 million tons
2008: 27.4 million tons
These inventory numbers are dangerously low, especially considering the horrifying possibility that China's 60 million tons of grain reserves doesn't actually exists .
Global food Catastrophe
The world is heading for a drop in agricultural production of 20 to 40 percent, depending on the severity and length of the current global droughts. Food producing nations are imposing food export restrictions. Food prices will soar, and, in poor countries with food deficits, millions will starve.
The deflation debate should end now
The droughts plaguing the world's biggest agricultural regions should end the debate about deflation in 2009. The demand for agricultural commodities is relatively immune to developments in the business cycles (at least compared to that of energy or base metals), and, with a 20 to 40 percent decline in world production, already rising food prices are headed significantly higher.
In fact, agricultural commodities NEED to head higher and soon, to prevent even greater food shortages and famine. The price of wheat, corn, soybeans, etc must rise to a level which encourages the planting of every available acre with the best possible fertilizers. Otherwise, if food prices stay at their current levels, production will continue to fall, sentencing millions more to starvation.
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Showing posts with label food. Show all posts
Showing posts with label food. Show all posts
12 February 2009
9 October 2008
Grain shipments stalled in credit drought
The credit crisis is spilling over into the grain industry as international buyers find themselves unable to come up with payment, forcing sellers to shoulder often substantial losses.
Before cargoes can be loaded at port, buyers typically must produce proof they are good for the money. But more deals are falling through as sellers decide they don't trust the financial institution named in the buyer's letter of credit, analysts said.
"There's all kinds of stuff stacked up on docks right now that can't be shipped because people can't get letters of credit," said Bill Gary, president of Commodity Information Systems in Oklahoma City. "The problem is not demand, and it's not supply because we have plenty of supply. It's finding anyone who can come up with the credit to buy."
So far the problem is mostly being felt in U.S. and South American ports, but observers say it is only a matter of time before it hits Canada.
"We've got a nightmare in front of us and a lot of people are concerned it's going to get a lot worse," said Anthony Temple, a grain marketing expert based in Vancouver.
The port troubles occur as financial institutions worldwide experience an unprecedented level of failures; even the strongest global banks are taking shelter in government bailouts. Tuesday, the U.K was expected to invest as much as £45-billion ($87.01-billion) in three of the country's biggest banks, while the U.S. government rushed to put in place its US$700-billion rescue package for beleaguered financial market players. Ottawa has so far resisted pleas for direct financial aid for exporters.
Access to credit is key to the survival of maritime trade and insiders now say the supply is being severely restricted. More than 90% of the world's trade by volume goes by ship.
The Baltic Dry Goods Index, the main measure of shipping rates, is down 74% from its high back in May when trade with China was still strong.
"The credit crisis has made banks nervous and the last thing on their minds is making fresh loans," Omar Nokta, an analyst at investment bank Dahlman Rose, said in an interview with Reuters.
While shipping has always been a cyclical industry whose fortunes rise and fall with the global economy, analysts said the current crisis over the drying up of credit is something they have never seen before.
Jason Myers, head of the Canadian Manufacturers and Exporters, said exporters across Canada are getting caught up in the turmoil as customers delay payments, forcing them to shoulder the cost.
"What some companies are saying is we can't pay you until our customer pays us, so it becomes a question of who bears the financial risk and the cost," Mr. Myers said. "We're hearing about it more and more."
What that means is that manufacturers are getting hit as revenue slows and long-time customers disappear from the order book altogether. As profits decline, investment in product development starts to fall, too, he said.
The Canadian Wheat Board, one of the world's biggest grain marketers, has yet to refuse a customer because of poor credit, according to a spokesperson. "As of this moment we haven't run into that problem," said Maureen Fitzhenry.
Officials at Viterra, Canada's leading grain handler, were not immediately available for comment.
The meltdown in financial markets has resulted in a dramatic slowdown in maritime trade, with major ports in Canada and the United States preparing for sharply reduced activity after several of the busiest years on record.
Statistics from the Port of Vancouver have yet to officially register a drop but at Long Beach and Los Angeles, among the biggest U.S ports, imports have already declined 9% this year.
Before cargoes can be loaded at port, buyers typically must produce proof they are good for the money. But more deals are falling through as sellers decide they don't trust the financial institution named in the buyer's letter of credit, analysts said.
"There's all kinds of stuff stacked up on docks right now that can't be shipped because people can't get letters of credit," said Bill Gary, president of Commodity Information Systems in Oklahoma City. "The problem is not demand, and it's not supply because we have plenty of supply. It's finding anyone who can come up with the credit to buy."
So far the problem is mostly being felt in U.S. and South American ports, but observers say it is only a matter of time before it hits Canada.
"We've got a nightmare in front of us and a lot of people are concerned it's going to get a lot worse," said Anthony Temple, a grain marketing expert based in Vancouver.
The port troubles occur as financial institutions worldwide experience an unprecedented level of failures; even the strongest global banks are taking shelter in government bailouts. Tuesday, the U.K was expected to invest as much as £45-billion ($87.01-billion) in three of the country's biggest banks, while the U.S. government rushed to put in place its US$700-billion rescue package for beleaguered financial market players. Ottawa has so far resisted pleas for direct financial aid for exporters.
Access to credit is key to the survival of maritime trade and insiders now say the supply is being severely restricted. More than 90% of the world's trade by volume goes by ship.
The Baltic Dry Goods Index, the main measure of shipping rates, is down 74% from its high back in May when trade with China was still strong.
"The credit crisis has made banks nervous and the last thing on their minds is making fresh loans," Omar Nokta, an analyst at investment bank Dahlman Rose, said in an interview with Reuters.
While shipping has always been a cyclical industry whose fortunes rise and fall with the global economy, analysts said the current crisis over the drying up of credit is something they have never seen before.
Jason Myers, head of the Canadian Manufacturers and Exporters, said exporters across Canada are getting caught up in the turmoil as customers delay payments, forcing them to shoulder the cost.
"What some companies are saying is we can't pay you until our customer pays us, so it becomes a question of who bears the financial risk and the cost," Mr. Myers said. "We're hearing about it more and more."
What that means is that manufacturers are getting hit as revenue slows and long-time customers disappear from the order book altogether. As profits decline, investment in product development starts to fall, too, he said.
The Canadian Wheat Board, one of the world's biggest grain marketers, has yet to refuse a customer because of poor credit, according to a spokesperson. "As of this moment we haven't run into that problem," said Maureen Fitzhenry.
Officials at Viterra, Canada's leading grain handler, were not immediately available for comment.
The meltdown in financial markets has resulted in a dramatic slowdown in maritime trade, with major ports in Canada and the United States preparing for sharply reduced activity after several of the busiest years on record.
Statistics from the Port of Vancouver have yet to officially register a drop but at Long Beach and Los Angeles, among the biggest U.S ports, imports have already declined 9% this year.
31 July 2008
Starved and Stuffed -- Eaten Up
Eaten Up
Raj Patel’s book Stuffed and Starved predicted the current global food crisis - spiralling food prices, starvation and obesity. Ed Pilkington meets the soothsayer of agro-economics and talks about what will happen when all the food finally runs out
By Ed Pilkington
29/07/08 "The Guardian" -- - -There is a passage towards the end of Raj Patel’s book, Stuffed and Starved, which elevates its author to the rank of soothsayer. He wrote it at the beginning of 2007, well before the roar of anger about rising food prices that resounded across the planet and that he so uncannily and accurately predicted.
The passage begins with Patel’s summary of earlier sections of the book in which he depicts the wasteland, as he calls it, of the modern food system. It is a system that destroys rural communities, poisons poor city dwellers, is inhumane to animals, demands unsustainable levels of use of fossil fuels and water, contributes to global warming, spreads disease and limits our sensuousness and compassion. As if that litany wasn’t enough, he then adds this: “Perhaps most ironic, although it is controlled by some of the most powerful people on the planet, the food system is inherently weak. It has systemic and structural vulnerabilities that lie close to the surface of our daily lives. All it takes to expose them is a gentle jolt.”
When he wrote that passage, Patel had in mind his native Britain and its occasional history of food crises. There was the oil crisis of 1973 that prompted panic-buying in the shops. Or 2000, when protesting truckers blockaded the oil refineries and the shelves again came close to emptying. Those events inspired Patel to contemplate a startling question: “What would have happened,” he wrote, “had all the food on the shelves run out?”
He left that question dangling in the book. But he got thinking about it again as he was on a tour of Australia last August promoting the book. As he travelled from Perth to Melbourne and then Sydney he kept being asked the same question: how did the drought that by then was already biting hard on Australian farmers as well as on consumers who were suffering rising prices, fit into his critique of modern food production? As he faced his audiences, it began to look to Patel, in a tentative, creeping way, that the gentle jolt he had written about was really happening.
“What was weird was that the stories I was hearing about drought and farmers in desperation were very similar to the stories that had been told to me in India a couple of years before. They were all about small independent farmers up to their eyeballs in debt. They had borrowed hugely to make a go of it, and then there’d been a shock - in Australia it was drought, in India it might be harvest failure, in Britain foot-and-mouth. It only takes one small shock.”
And then the agricultural slurry really hit the fan. The first intimations of something truly out of the ordinary came in Mexico in early 2007, before he had finished writing Stuffed and Starved. There were reports of unrest in some of the larger cities about rising food prices, partly related to the decision of the US government to divert huge quantities of corn to ethanol production, in an attempt to reduce dependence on foreign oil. Then early this year some eight months after Patel had finished writing about the risk of gentle jolts - the so-called “silent tsunami” began. Food prices appeared to be out of control, spiralling up by 68% in the case of rice in the first four months of this year alone. Wheat and corn almost doubled in a year.
Such hikes on the costs of the basics of life hit the urban poor in the cities of the developing world hardest, and the misery was soon made manifest in the form of unrest. Impromptu protests grew into angry marches and then erupted into food riots. In Haiti six people died and the prime minister was ousted from power. Two days of rioting ensued in Egypt and 24 people died in Cameroon. The pattern repeated itself right across the developing world, from Guyana and Bolivia to Ivory Coast, Surinam and Senegal, Yemen, Uzbekistan, Bangladesh and South Korea. Wild events in turn prompted wild official responses. Vietnam introduced a night curfew on harvesting machines to stop illegal raiding of the fields; any Filipino caught hoarding rice was threatened with life in jail, Malaysia cancelled all public building works and switched instead to stockpiling food. Even the rich western world was hit. Food prices in the UK have risen almost 7% year on year, shaking the government’s economic confidence. And if any doubts remained about the severity of this crisis, Wal-Mart, the supermarket goliath that stands at the pinnacle of the modern food system, announced it was imposing a four-bag limit for rice on its cash-and-carry customers to stop a run on supplies.
For millions of people around the world the soaring prices have spelt disaster - the World Bank has put the number of people who have been pushed into hunger at 100 million. But for one person, the impact has been strangely and paradoxically counter-factual. When Stuffed and Starved - Patel’s first book - came out last August, he and his publishers imagined it would at best enjoy a specialist readership among globalisation activists attuned to issues of corporate greed and exploitation. But the food crisis has turned it from being a niche read into the literary equivalent of a crystal ball. As a result, the demand has in Patel’s words “gone bonkers”. Reprints have been ordered in Britain, the US and Spain, deals done for editions in Italy, China and South Korea and half a dozen translations are under discussion. “If I had been this popular at school I’d be a different man today,” he quips. His analysis of the crisis, as the author of the book that predicted it all, is now hotly sought after. Or as Patel, who has the savvy Londoner’s gift for self-deprecation, puts it: “Spank me, and call me Cassandra!”
We meet for lunch in a restaurant within a Big Mac’s throw from Capitol Hill in Washington. It’s trivial I know, but it’s impossible not to be curious - a little intimidated even - about what Patel will order from the menu. He points out in his book that the livestock industry is responsible for 18% of greenhouse gas emissions, more than cars. So will he go for the hanger steak?
He asks for a pizza with goat’s cheese and mushrooms, but when I ask whether his choice was politically or ethically motivated, he laughs. “I haven’t had a steak in my life. Growing up in a Hindu household, I clamoured for hamburgers like any other kid and my parents said: ‘Oh, if you must.’ But they drew the line at steak.”
Patel sees in himself, and his eating habits, a tale in microcosm of the globalisation he writes about. His family on his mother’s side were civil servants in Kenya, and tin miners in Fiji on his father’s side. They both were drawn to the mother country, arriving in London in the 60s, where they met. It later became a cliche, but they were among the first to open up “Mr Patel’s corner shop”, working 18-hour days in an era before 24-hour supermarkets. The earliest memories of their son, who was born in 1972, are of playing among the fags, mags and sweets in the shop in Golders Green. It would be too neat, I hazard, to suggest that his parents were forced to close down the shop because of competition with the supermarkets? “My dad did very well for himself,” he replies, speaking with a high-velocity stammer. “But they were certainly driven out. You can’t compete any more, the corner shop is a dying industry.”
Despite those difficulties, the Patels did proud by their son, sending him to a north London grammar school, then to Oxford where he studied PPE, and finally to Berkeley in California. Along the way, he became interested in, and engaged with, the anti-globalisation movement. He was among the thousands who protested in Seattle against the World Trade Organisation (WTO) in 1999, and it was there that he came face to face with what he calls the “march of the farmers’ movement” in the form of arguably the world’s largest network of independent organisations, La Via Campesina, which represents around 150 million farm workers and smallholders across the globe. “I was struck by their sophisticated and detailed critique of the WTO. Seven years before Seattle they had already translated the draft text of the Dunkel report [on trade] into Kannada and were distributing it in the fields.”
He began delving more deeply into the subject of trade, food policy and agricultural resistance as an analyst at Food First, a radical thinktank in Oakland, where an idea for a book emerged. It began life as a meditation on choice, or the lack of it - Coke v Pepsi, McDonald’s v Wendy’s. Its working title was Choice Cuts. Over the next three years he travelled to research the book from South Africa, Europe and South Korea to Brazil, Mexico and the US. In the process the thesis grew bigger in scope and more refined. Its focus was no longer just a lack of consumer choice, it embraced an entire world food system that can consign 800 million - more than one in 10 people on earth - to hunger while simultaneously inflicting obesity on an even greater number, 1 billion people. Hence the book’s new, and in his opinion better, title.
His analysis shows how communities around the planet have been disempowered by a system that appears to offer an abundance of cheap food, but in reality dictates unhealthy and limited choices to an overworked and underpaid workforce that cannot afford any better. “The figure that often stuns people outside the US when I tour with the book is that 20% of American fast-food meals are eaten in cars. People are incredulous and ask: is that because Americans so love their cars? But living here you see how hard people work, for a pittance, with no healthcare, no decent education, not even a hint of a pension - so it’s not surprising that the one hot meal you eat a day you eat off your lap. That’s where the food system becomes a lifestyle.”
Much of the broad argument in Stuffed and Starved will be familiar to those who have followed the debate on globalisation - how the liberalisation of trade has created a vast global market for heavily subsidised American and European agricultural products at the expense of local growers in the developing world; how relentless pressure to drive down food prices over 30 years has seen rich ecosystems replaced by monocultures that rely on oil-powered machines, chemical fertilisers and pesticides to drive up yields; and how international corporations and supermarkets that control the flow of technologies and of food itself have been the beneficiaries. It is a portrait of the agro-economics of the madhouse. “While we think our food is made for us, we are in fact being made for our food,” he says.
Take India, which he describes as a storm of contradictions. “India has the most people in the Forbes top 10 billionaires list, but in the past decade the average calorie intake of the poorest has fallen. There are levels of hunger we haven’t seen since the British left, combined with the world’s highest levels of type 2 diabetes from the pressure of eating too much of the wrong kinds of food.”
Or take the UK, where food producers are now less than one per cent of the workforce. The government may be committed to reducing global warming emissions, but meanwhile a quarter of all trucks on UK roads are carrying food and the average British family is driving 136 miles a year to buy it.
Or America. This is the country whose farmers, food giants and supermarkets benefit most from the global system. Such is the might of US food corporations that the double arches of McDonald’s are more widely recognised as a symbol than the cross. Wal-Mart is the largest private employer not only in the US, but also in Mexico where Walmex takes in three out of every 10 pesos Mexicans spend on food. Yet amid such largesse 35 million Americans don’t know where their next meal is coming from. “You are hearing these amazing stories of working American families adopting coping strategies that I learned about in development sociology - skipping meals, growing their own fruit and vegetables, giving up on meat. That’s happening right here right now.”
Which brings us back to the current food crisis. What surprised him, he says, is not that the food system felt a gentle jolt - after all, he predicted it - but that it has been pummelled all at once by a perfect storm of troubles. “We could have seen it coming because of the biofuels policy, which has always struck me as absurd, or the rising price of oil, or increased consumption of meat, or weird things happening with climate. But all these things happened at once, and that sent food prices through the roof.”
And this time, there were none of the safeguards of grain stores, strategic food reserves, or import barriers that used to protect vulnerable economies from the vagaries of world markets. They had all been removed in the liberalisation craze of the past few decades.
His prognosis is that in the short term at least the crisis will carry on biting. Major institutions such as the World Bank persist, he says, in responding to events with the same failed policies of liberalisation of markets. “There’s no reason why food prices should come down significantly. And if they don’t, and there’s no real impetus for governments to redistribute spending power, people will continue to take to the streets.”
In the medium term, he’s confident that change is in the air. He detects a growing seriousness and willingness to embrace new ideas in some unexpected quarters. The reason we are chatting in a DC restaurant is that Patel has just that morning been giving testimony before a Congressional committee investigating the World Bank’s approach to food and development. With representatives from the World Bank, UN, Monsanto and other monoliths listening in, he told the committee that industrial agriculture could no longer be relied upon to feed the world and that we need a shift towards less fossil-fuel dependent farming and a return to rich ecosystems based on natural crop rotations and organic fertilisers. “Those are the kinds of things that are anathema to the World Bank and development analysts at the moment, and Congress normally doesn’t want to hear them. That they called on someone like me is very weird, but very heartening.”
In the longer term, though, even the current food crisis may seem mild. The world population is set to rise from about six billion today to nine billion by 2050. Global warming is likely to disrupt growing patterns and extend drought across Africa and the American south-west. Water resources for irrigation will be depleted. If we are already in a perfect storm, then we lack the terminology to describe what lies ahead.
I put it to him that any attempt to change world food production is like a game of poker with extraordinarily high stakes: it not only has to meet the massive yield of industrial farming - and say what you like about the modern food system, the one thing it has done is churn out mountains of the stuff relatively cheaply - it also has to raise it to support three billion extra hungry mouths. Can his alternative model achieve that?
“We’ve got an energy problem, a fuel problem, a water problem and global warming all coming at us,” he replies. “Monoculture is heavily C02-emitting, water and fossil-fuel dependent. Clearly we can’t carry on as we are. We can and we must meet this challenge with something new. So the question is what?”
That’s not entirely an answer to my question. There is a slightly starry-eyed quality to Stuffed and Starved that is also striking about its author in the flesh. When he talks of alternative farming techniques that offer a way forward, the examples he chooses come from Cuba, Venezuela and a project in Oakland that follows in the footsteps of the Black Panthers. That’s hardly going to play well with sceptical American policy-makers.
The other element that is lacking from his prognosis is any role for science and technological innovation in the search for solutions. Where technology does appear it is in the role of villain - GM crops are a ruse by Monsanto and others to secure corporate profits at the expense of the rural poor.
But isn’t there a place for responsibly directed science in steering us through the coming maelstrom? Couldn’t GM, for instance, prove to be crucial in developing drought-resistant crops as global warming tightens its grip?
“I’m big on science, married to a neuroscientist, I love it,” he insists, protesting perhaps a little too much. “I like the way Cuban science approaches the problem. They say you can have GM crops if you can prove there’s no better way of doing things. So they don’t have GM crops, because there always is a better way.”
Not exactly a ringing endorsement for the value of science. But then that is not where Patel’s heart lies. For that you have to look to politics, and political resistance. The soothsayer’s next book, he says, will be a look at the individuals and communities who are refusing to bow down to the current global system. He will soon be starting another journey to meet them. On his list: the slum-dwellers of Durban and the homeless Americans who run the University of the Poor. He sees in them a lesson for us all. “We are victims,” he says as he polishes off his pizza and prepares to fly back to San Francisco where he now lives. “If we are choosing between Coke or Pepsi, Burger King or McDonald’s, that’s not choice. We should stop feeling guilty about that. We should start feeling angry”.
Ed Pilkington is the Guardian’s New York correspondent. He is a former national and foreign editor of the paper, and author of Beyond the Mother Country.
Raj Patel’s book Stuffed and Starved predicted the current global food crisis - spiralling food prices, starvation and obesity. Ed Pilkington meets the soothsayer of agro-economics and talks about what will happen when all the food finally runs out
By Ed Pilkington
29/07/08 "The Guardian" -- - -There is a passage towards the end of Raj Patel’s book, Stuffed and Starved, which elevates its author to the rank of soothsayer. He wrote it at the beginning of 2007, well before the roar of anger about rising food prices that resounded across the planet and that he so uncannily and accurately predicted.
The passage begins with Patel’s summary of earlier sections of the book in which he depicts the wasteland, as he calls it, of the modern food system. It is a system that destroys rural communities, poisons poor city dwellers, is inhumane to animals, demands unsustainable levels of use of fossil fuels and water, contributes to global warming, spreads disease and limits our sensuousness and compassion. As if that litany wasn’t enough, he then adds this: “Perhaps most ironic, although it is controlled by some of the most powerful people on the planet, the food system is inherently weak. It has systemic and structural vulnerabilities that lie close to the surface of our daily lives. All it takes to expose them is a gentle jolt.”
When he wrote that passage, Patel had in mind his native Britain and its occasional history of food crises. There was the oil crisis of 1973 that prompted panic-buying in the shops. Or 2000, when protesting truckers blockaded the oil refineries and the shelves again came close to emptying. Those events inspired Patel to contemplate a startling question: “What would have happened,” he wrote, “had all the food on the shelves run out?”
He left that question dangling in the book. But he got thinking about it again as he was on a tour of Australia last August promoting the book. As he travelled from Perth to Melbourne and then Sydney he kept being asked the same question: how did the drought that by then was already biting hard on Australian farmers as well as on consumers who were suffering rising prices, fit into his critique of modern food production? As he faced his audiences, it began to look to Patel, in a tentative, creeping way, that the gentle jolt he had written about was really happening.
“What was weird was that the stories I was hearing about drought and farmers in desperation were very similar to the stories that had been told to me in India a couple of years before. They were all about small independent farmers up to their eyeballs in debt. They had borrowed hugely to make a go of it, and then there’d been a shock - in Australia it was drought, in India it might be harvest failure, in Britain foot-and-mouth. It only takes one small shock.”
And then the agricultural slurry really hit the fan. The first intimations of something truly out of the ordinary came in Mexico in early 2007, before he had finished writing Stuffed and Starved. There were reports of unrest in some of the larger cities about rising food prices, partly related to the decision of the US government to divert huge quantities of corn to ethanol production, in an attempt to reduce dependence on foreign oil. Then early this year some eight months after Patel had finished writing about the risk of gentle jolts - the so-called “silent tsunami” began. Food prices appeared to be out of control, spiralling up by 68% in the case of rice in the first four months of this year alone. Wheat and corn almost doubled in a year.
Such hikes on the costs of the basics of life hit the urban poor in the cities of the developing world hardest, and the misery was soon made manifest in the form of unrest. Impromptu protests grew into angry marches and then erupted into food riots. In Haiti six people died and the prime minister was ousted from power. Two days of rioting ensued in Egypt and 24 people died in Cameroon. The pattern repeated itself right across the developing world, from Guyana and Bolivia to Ivory Coast, Surinam and Senegal, Yemen, Uzbekistan, Bangladesh and South Korea. Wild events in turn prompted wild official responses. Vietnam introduced a night curfew on harvesting machines to stop illegal raiding of the fields; any Filipino caught hoarding rice was threatened with life in jail, Malaysia cancelled all public building works and switched instead to stockpiling food. Even the rich western world was hit. Food prices in the UK have risen almost 7% year on year, shaking the government’s economic confidence. And if any doubts remained about the severity of this crisis, Wal-Mart, the supermarket goliath that stands at the pinnacle of the modern food system, announced it was imposing a four-bag limit for rice on its cash-and-carry customers to stop a run on supplies.
For millions of people around the world the soaring prices have spelt disaster - the World Bank has put the number of people who have been pushed into hunger at 100 million. But for one person, the impact has been strangely and paradoxically counter-factual. When Stuffed and Starved - Patel’s first book - came out last August, he and his publishers imagined it would at best enjoy a specialist readership among globalisation activists attuned to issues of corporate greed and exploitation. But the food crisis has turned it from being a niche read into the literary equivalent of a crystal ball. As a result, the demand has in Patel’s words “gone bonkers”. Reprints have been ordered in Britain, the US and Spain, deals done for editions in Italy, China and South Korea and half a dozen translations are under discussion. “If I had been this popular at school I’d be a different man today,” he quips. His analysis of the crisis, as the author of the book that predicted it all, is now hotly sought after. Or as Patel, who has the savvy Londoner’s gift for self-deprecation, puts it: “Spank me, and call me Cassandra!”
We meet for lunch in a restaurant within a Big Mac’s throw from Capitol Hill in Washington. It’s trivial I know, but it’s impossible not to be curious - a little intimidated even - about what Patel will order from the menu. He points out in his book that the livestock industry is responsible for 18% of greenhouse gas emissions, more than cars. So will he go for the hanger steak?
He asks for a pizza with goat’s cheese and mushrooms, but when I ask whether his choice was politically or ethically motivated, he laughs. “I haven’t had a steak in my life. Growing up in a Hindu household, I clamoured for hamburgers like any other kid and my parents said: ‘Oh, if you must.’ But they drew the line at steak.”
Patel sees in himself, and his eating habits, a tale in microcosm of the globalisation he writes about. His family on his mother’s side were civil servants in Kenya, and tin miners in Fiji on his father’s side. They both were drawn to the mother country, arriving in London in the 60s, where they met. It later became a cliche, but they were among the first to open up “Mr Patel’s corner shop”, working 18-hour days in an era before 24-hour supermarkets. The earliest memories of their son, who was born in 1972, are of playing among the fags, mags and sweets in the shop in Golders Green. It would be too neat, I hazard, to suggest that his parents were forced to close down the shop because of competition with the supermarkets? “My dad did very well for himself,” he replies, speaking with a high-velocity stammer. “But they were certainly driven out. You can’t compete any more, the corner shop is a dying industry.”
Despite those difficulties, the Patels did proud by their son, sending him to a north London grammar school, then to Oxford where he studied PPE, and finally to Berkeley in California. Along the way, he became interested in, and engaged with, the anti-globalisation movement. He was among the thousands who protested in Seattle against the World Trade Organisation (WTO) in 1999, and it was there that he came face to face with what he calls the “march of the farmers’ movement” in the form of arguably the world’s largest network of independent organisations, La Via Campesina, which represents around 150 million farm workers and smallholders across the globe. “I was struck by their sophisticated and detailed critique of the WTO. Seven years before Seattle they had already translated the draft text of the Dunkel report [on trade] into Kannada and were distributing it in the fields.”
He began delving more deeply into the subject of trade, food policy and agricultural resistance as an analyst at Food First, a radical thinktank in Oakland, where an idea for a book emerged. It began life as a meditation on choice, or the lack of it - Coke v Pepsi, McDonald’s v Wendy’s. Its working title was Choice Cuts. Over the next three years he travelled to research the book from South Africa, Europe and South Korea to Brazil, Mexico and the US. In the process the thesis grew bigger in scope and more refined. Its focus was no longer just a lack of consumer choice, it embraced an entire world food system that can consign 800 million - more than one in 10 people on earth - to hunger while simultaneously inflicting obesity on an even greater number, 1 billion people. Hence the book’s new, and in his opinion better, title.
His analysis shows how communities around the planet have been disempowered by a system that appears to offer an abundance of cheap food, but in reality dictates unhealthy and limited choices to an overworked and underpaid workforce that cannot afford any better. “The figure that often stuns people outside the US when I tour with the book is that 20% of American fast-food meals are eaten in cars. People are incredulous and ask: is that because Americans so love their cars? But living here you see how hard people work, for a pittance, with no healthcare, no decent education, not even a hint of a pension - so it’s not surprising that the one hot meal you eat a day you eat off your lap. That’s where the food system becomes a lifestyle.”
Much of the broad argument in Stuffed and Starved will be familiar to those who have followed the debate on globalisation - how the liberalisation of trade has created a vast global market for heavily subsidised American and European agricultural products at the expense of local growers in the developing world; how relentless pressure to drive down food prices over 30 years has seen rich ecosystems replaced by monocultures that rely on oil-powered machines, chemical fertilisers and pesticides to drive up yields; and how international corporations and supermarkets that control the flow of technologies and of food itself have been the beneficiaries. It is a portrait of the agro-economics of the madhouse. “While we think our food is made for us, we are in fact being made for our food,” he says.
Take India, which he describes as a storm of contradictions. “India has the most people in the Forbes top 10 billionaires list, but in the past decade the average calorie intake of the poorest has fallen. There are levels of hunger we haven’t seen since the British left, combined with the world’s highest levels of type 2 diabetes from the pressure of eating too much of the wrong kinds of food.”
Or take the UK, where food producers are now less than one per cent of the workforce. The government may be committed to reducing global warming emissions, but meanwhile a quarter of all trucks on UK roads are carrying food and the average British family is driving 136 miles a year to buy it.
Or America. This is the country whose farmers, food giants and supermarkets benefit most from the global system. Such is the might of US food corporations that the double arches of McDonald’s are more widely recognised as a symbol than the cross. Wal-Mart is the largest private employer not only in the US, but also in Mexico where Walmex takes in three out of every 10 pesos Mexicans spend on food. Yet amid such largesse 35 million Americans don’t know where their next meal is coming from. “You are hearing these amazing stories of working American families adopting coping strategies that I learned about in development sociology - skipping meals, growing their own fruit and vegetables, giving up on meat. That’s happening right here right now.”
Which brings us back to the current food crisis. What surprised him, he says, is not that the food system felt a gentle jolt - after all, he predicted it - but that it has been pummelled all at once by a perfect storm of troubles. “We could have seen it coming because of the biofuels policy, which has always struck me as absurd, or the rising price of oil, or increased consumption of meat, or weird things happening with climate. But all these things happened at once, and that sent food prices through the roof.”
And this time, there were none of the safeguards of grain stores, strategic food reserves, or import barriers that used to protect vulnerable economies from the vagaries of world markets. They had all been removed in the liberalisation craze of the past few decades.
His prognosis is that in the short term at least the crisis will carry on biting. Major institutions such as the World Bank persist, he says, in responding to events with the same failed policies of liberalisation of markets. “There’s no reason why food prices should come down significantly. And if they don’t, and there’s no real impetus for governments to redistribute spending power, people will continue to take to the streets.”
In the medium term, he’s confident that change is in the air. He detects a growing seriousness and willingness to embrace new ideas in some unexpected quarters. The reason we are chatting in a DC restaurant is that Patel has just that morning been giving testimony before a Congressional committee investigating the World Bank’s approach to food and development. With representatives from the World Bank, UN, Monsanto and other monoliths listening in, he told the committee that industrial agriculture could no longer be relied upon to feed the world and that we need a shift towards less fossil-fuel dependent farming and a return to rich ecosystems based on natural crop rotations and organic fertilisers. “Those are the kinds of things that are anathema to the World Bank and development analysts at the moment, and Congress normally doesn’t want to hear them. That they called on someone like me is very weird, but very heartening.”
In the longer term, though, even the current food crisis may seem mild. The world population is set to rise from about six billion today to nine billion by 2050. Global warming is likely to disrupt growing patterns and extend drought across Africa and the American south-west. Water resources for irrigation will be depleted. If we are already in a perfect storm, then we lack the terminology to describe what lies ahead.
I put it to him that any attempt to change world food production is like a game of poker with extraordinarily high stakes: it not only has to meet the massive yield of industrial farming - and say what you like about the modern food system, the one thing it has done is churn out mountains of the stuff relatively cheaply - it also has to raise it to support three billion extra hungry mouths. Can his alternative model achieve that?
“We’ve got an energy problem, a fuel problem, a water problem and global warming all coming at us,” he replies. “Monoculture is heavily C02-emitting, water and fossil-fuel dependent. Clearly we can’t carry on as we are. We can and we must meet this challenge with something new. So the question is what?”
That’s not entirely an answer to my question. There is a slightly starry-eyed quality to Stuffed and Starved that is also striking about its author in the flesh. When he talks of alternative farming techniques that offer a way forward, the examples he chooses come from Cuba, Venezuela and a project in Oakland that follows in the footsteps of the Black Panthers. That’s hardly going to play well with sceptical American policy-makers.
The other element that is lacking from his prognosis is any role for science and technological innovation in the search for solutions. Where technology does appear it is in the role of villain - GM crops are a ruse by Monsanto and others to secure corporate profits at the expense of the rural poor.
But isn’t there a place for responsibly directed science in steering us through the coming maelstrom? Couldn’t GM, for instance, prove to be crucial in developing drought-resistant crops as global warming tightens its grip?
“I’m big on science, married to a neuroscientist, I love it,” he insists, protesting perhaps a little too much. “I like the way Cuban science approaches the problem. They say you can have GM crops if you can prove there’s no better way of doing things. So they don’t have GM crops, because there always is a better way.”
Not exactly a ringing endorsement for the value of science. But then that is not where Patel’s heart lies. For that you have to look to politics, and political resistance. The soothsayer’s next book, he says, will be a look at the individuals and communities who are refusing to bow down to the current global system. He will soon be starting another journey to meet them. On his list: the slum-dwellers of Durban and the homeless Americans who run the University of the Poor. He sees in them a lesson for us all. “We are victims,” he says as he polishes off his pizza and prepares to fly back to San Francisco where he now lives. “If we are choosing between Coke or Pepsi, Burger King or McDonald’s, that’s not choice. We should stop feeling guilty about that. We should start feeling angry”.
Ed Pilkington is the Guardian’s New York correspondent. He is a former national and foreign editor of the paper, and author of Beyond the Mother Country.
18 June 2008
Kunstler on Iowa
A catastrophe for Iowa farmers will not be just a catastrophe for Midwestern Americans. In the Iowa floods, we'll see more evidence of how the problems of weird weather (climate change) combine and ramify the problems associated with peak oil. In this particular case they lead to an inflection point sometime around the 2008 harvest season, which will also be our time of political harvest.
These are not your daddy's or granddaddy's floods. These are 500-year floods, events not seen before non-Indian people starting living out on that stretch of the North American prairie. The vast majority of home-owners in Eastern Iowa did not have flood insurance because the likelihood of being affected above the 500-year-line was so miniscule -- their insurance agents actually advised them against getting it. The personal ruin out there will be comprehensive and profound, a wet version of the 1930s Dust Bowl, with families facing total loss and perhaps migrating elsewhere in the nation because they have no home to go back to.
Iowa in 2008 will be an even slower-motion disaster than Hurricane Katrina in 2005. Beyond the troubles of 25,000 people who have lost all their material possessions is a world whose grain reserves stand at record lows. The crop losses in Iowa will aggravate what is already a pretty dire situation. So far, the US Public has experienced the world grain situation mainly in higher supermarket prices. Cheap corn is behind the magic of the American processed food industry -- all those pizza pockets and juicy-juice boxes that frantic Americans resort to because they have no time between two jobs and family-chauffeur duties to actually cook (note: reheating is not cooking).
Behind that magic is an agribusiness model of farming cranked up on the steroids of cheap oil and cheap natural-gas-based fertilizer. Both of these "inputs" have recently entered the realm of the non-cheap. Oil-and-gas-based farming had already reached a crisis stage before the flood of Iowa. Diesel fuel is a dollar-a-gallon higher than gasoline. Natural gas prices have doubled over the past year, sending fertilizer prices way up. American farmers are poorly positioned to reform their practices. All that cheap fossil fuel masks a tremendous decay of skill in husbandry. The farming of the decades ahead will be a lot more complicated than just buying x-amount of "inputs" (on credit) to be dumped on a sterile soil growth medium and spread around with giant diesel-powered machines.
Like a lot of other activities in American life these days, agribusiness is unreformable along its current lines. It will take a convulsion to change it, and in that convulsion it will be dragged kicking-and-screaming into a new reality. As that occurs, the US public will have to contend with more than just higher taco chip prices. We're heading into the Vale of Malthus -- Thomas Robert Malthus, the British economist-philosopher who introduced the notion that eventually world population would overtake world food production capacity. Malthus has been scorned and ridiculed in recent decades, as fossil fuel-cranked farming allowed the global population to go vertical. Techno-triumphalist observers who should have known better attributed this to the "green revolution" of bio-engineering. Malthus is back now, along with his outriders: famine, pestilence, and war.
We're headed, it seems, toward a fall "crunch time," and that crunching sound will not be of cheez doodles and taco chips consumed on the sofas of America. I think we're heading into a season of hoarding. As the presidential campaign moves into its final round, Americans may be hard-up for both food and gasoline. On the oil scene, the next event on the horizon is not just higher prices but shortages. Chances are, they will occur first in the Southeast states because oil exports from Mexico and Venezuela feeding the Gulf of Mexico refineries are down more than 30 percent over 2007.
Perhaps more ominous is the discontent on the trucking scene. Truckers are going broke in droves, unable to carry on their business while getting paid $2000 for loads that cost them $3000 to deliver. In Europe last week, enraged truckers paralyzed the food distribution networks of Spain and Portugal. The passivity of US truckers so far has been a striking feature of the general zombification of American life. They might continue to just crawl off one-by-one and die. But it's also possible that, at some point, they'll mount a Night-of-the-Living-Dead offensive and take their vengeance out on "the system" that has brought them to ruin. America has only about a three-day supply of food in any of its supermarkets.
The yet-more-ominous thing here is that shortages of food and oil are two fiascos that are pretty clearly predictable for the second half of the year. That's bad enough without figuring in the "unknowns" that could kick up American hardship a few more notches.The hurricane season just got underway -- obscured for the moment by the bigger weather story in Iowa. The fate of the banks is a train wreck still waiting to happen. As it occurs -- also heading into the high political and hurricane seasons -- we could find ourselves not only a nation wet, hungry, and out-of-gas, but also completely broke. I'm sorry that Tim Russert will not be here to talk us through it all.
These are not your daddy's or granddaddy's floods. These are 500-year floods, events not seen before non-Indian people starting living out on that stretch of the North American prairie. The vast majority of home-owners in Eastern Iowa did not have flood insurance because the likelihood of being affected above the 500-year-line was so miniscule -- their insurance agents actually advised them against getting it. The personal ruin out there will be comprehensive and profound, a wet version of the 1930s Dust Bowl, with families facing total loss and perhaps migrating elsewhere in the nation because they have no home to go back to.
Iowa in 2008 will be an even slower-motion disaster than Hurricane Katrina in 2005. Beyond the troubles of 25,000 people who have lost all their material possessions is a world whose grain reserves stand at record lows. The crop losses in Iowa will aggravate what is already a pretty dire situation. So far, the US Public has experienced the world grain situation mainly in higher supermarket prices. Cheap corn is behind the magic of the American processed food industry -- all those pizza pockets and juicy-juice boxes that frantic Americans resort to because they have no time between two jobs and family-chauffeur duties to actually cook (note: reheating is not cooking).
Behind that magic is an agribusiness model of farming cranked up on the steroids of cheap oil and cheap natural-gas-based fertilizer. Both of these "inputs" have recently entered the realm of the non-cheap. Oil-and-gas-based farming had already reached a crisis stage before the flood of Iowa. Diesel fuel is a dollar-a-gallon higher than gasoline. Natural gas prices have doubled over the past year, sending fertilizer prices way up. American farmers are poorly positioned to reform their practices. All that cheap fossil fuel masks a tremendous decay of skill in husbandry. The farming of the decades ahead will be a lot more complicated than just buying x-amount of "inputs" (on credit) to be dumped on a sterile soil growth medium and spread around with giant diesel-powered machines.
Like a lot of other activities in American life these days, agribusiness is unreformable along its current lines. It will take a convulsion to change it, and in that convulsion it will be dragged kicking-and-screaming into a new reality. As that occurs, the US public will have to contend with more than just higher taco chip prices. We're heading into the Vale of Malthus -- Thomas Robert Malthus, the British economist-philosopher who introduced the notion that eventually world population would overtake world food production capacity. Malthus has been scorned and ridiculed in recent decades, as fossil fuel-cranked farming allowed the global population to go vertical. Techno-triumphalist observers who should have known better attributed this to the "green revolution" of bio-engineering. Malthus is back now, along with his outriders: famine, pestilence, and war.
We're headed, it seems, toward a fall "crunch time," and that crunching sound will not be of cheez doodles and taco chips consumed on the sofas of America. I think we're heading into a season of hoarding. As the presidential campaign moves into its final round, Americans may be hard-up for both food and gasoline. On the oil scene, the next event on the horizon is not just higher prices but shortages. Chances are, they will occur first in the Southeast states because oil exports from Mexico and Venezuela feeding the Gulf of Mexico refineries are down more than 30 percent over 2007.
Perhaps more ominous is the discontent on the trucking scene. Truckers are going broke in droves, unable to carry on their business while getting paid $2000 for loads that cost them $3000 to deliver. In Europe last week, enraged truckers paralyzed the food distribution networks of Spain and Portugal. The passivity of US truckers so far has been a striking feature of the general zombification of American life. They might continue to just crawl off one-by-one and die. But it's also possible that, at some point, they'll mount a Night-of-the-Living-Dead offensive and take their vengeance out on "the system" that has brought them to ruin. America has only about a three-day supply of food in any of its supermarkets.
The yet-more-ominous thing here is that shortages of food and oil are two fiascos that are pretty clearly predictable for the second half of the year. That's bad enough without figuring in the "unknowns" that could kick up American hardship a few more notches.The hurricane season just got underway -- obscured for the moment by the bigger weather story in Iowa. The fate of the banks is a train wreck still waiting to happen. As it occurs -- also heading into the high political and hurricane seasons -- we could find ourselves not only a nation wet, hungry, and out-of-gas, but also completely broke. I'm sorry that Tim Russert will not be here to talk us through it all.
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