No good deed ever goes unpunished. Asians are quickly discovering the wisdom of this idiom, as they suddenly confront staggering shortages in basic food items. The price of rice has gone up exponentially in the past few weeks, crossing US$1,000 a tonne, despite the absence of any discernible decrease in global production nor a concurrent increase in consumption. <...> Agricultural produce has been the source of much abuse by the Europeans, whose Common Agricultural Policy (CAP - surely an acronym that deserves an "R" as its second letter) is uniquely responsible for keeping a billion people in dire poverty. The American response has been both through their own subsidies, and by increasing the alternative uses of agricultural crops such as ethanol for corn that is heavily subsidized in the name of energy self sufficiency. CAP ensures that vast farms producing overly expensive produce in Europe are sustained at taxpayer expense, leaving fallow the fertile lands of Africa and many parts of Asia as excess production is dumped on global markets. These countries cannot export to Europe or the United States due to the tying of agricultural trade with unrelated items, creating astounding tariff and non-tariff barriers to trade. <...> There is however another culprit here, one that gets away scot-free usually. As most regular readers of this column know, I am referring to the root cause of the current mess of inflation amid excessively depressed interest rates, the US dollar. More simply, the idiot central bankers of Asia who squander their responsibility at the altar of conformity by purchasing billions of dollars worth of useless financial assets have done their region a great disservice. <...> Locking up savings in a currency that has terminally declining purchasing power means that Asian authorities have less fiscal and monetary policy leeway to regulate the dynamics of their own economies. This is what causes structural inflation, that is, the achievement of a new level in prices, as different from a cyclical increase in prices, which has in turn manifested in food prices.
Agricultural produce has been the source of much abuse by the Europeans, whose Common Agricultural Policy (CAP - surely an acronym that deserves an "R" as its second letter) is uniquely responsible for keeping a billion people in dire poverty. The American response has been both through their own subsidies, and by increasing the alternative uses of agricultural crops such as ethanol for corn that is heavily subsidized in the name of energy self sufficiency.
CAP ensures that vast farms producing overly expensive produce in Europe are sustained at taxpayer expense, leaving fallow the fertile lands of Africa and many parts of Asia as excess production is dumped on global markets. These countries cannot export to Europe or the United States due to the tying of agricultural trade with unrelated items, creating astounding tariff and non-tariff barriers to trade. <...>
There is however another culprit here, one that gets away scot-free usually. As most regular readers of this column know, I am referring to the root cause of the current mess of inflation amid excessively depressed interest rates, the US dollar. More simply, the idiot central bankers of Asia who squander their responsibility at the altar of conformity by purchasing billions of dollars worth of useless financial assets have done their region a great disservice. <...>
Locking up savings in a currency that has terminally declining purchasing power means that Asian authorities have less fiscal and monetary policy leeway to regulate the dynamics of their own economies. This is what causes structural inflation, that is, the achievement of a new level in prices, as different from a cyclical increase in prices, which has in turn manifested in food prices.
uniquely responsible for keeping a billion people in dire poverty
Without defending subsidised exports (or the current structure of the CAP)in any way, I'd all the same like to see the calculations there.
It's also plain nonsense to put America in second position as having simply "responded" to European abuses. Chan Akra might recall that Europe is not, for example, a rice producer of any importance. Complaining about the rice market and immediately calling Europe to the bar is somehow unconvincing... When locusts move on, they leave nothing behind
Have the UN report on European rice.
FAO - TWENTY-FOURTH FAO REGIONAL CONFERENCE FOR EUROPE
Rice is not a major food crop in Europe. However, rice consumption has steadily increased during the last decade. The cost of rice production in Europe remains relatively high making competition with imported rice difficult. In addition, concern over the negative effects of rice production on the environment and biodiversity has continued to increase. However, the rice-based production systems in Europe have a number of opportunities for sustainable development.
US rice exports account for half of their production
<Quick back of envelope calculation>
so roughly US exported rice has ten times the market size than EU exported rice. Life should consist in at least fifty percent pure waste of time, and the rest doing what you please.
After a lot of dredging around, in which Eurostat was f---ing useless and the FAO not much good, I found a note from EC Trade (pdf) that contains a good summary re EU rice.
With an average yearly production of approximately 2 million tonnes out of a total world production of about 400 million tonnes and an average yearly consumption of 2 million tonnes out of global consumption of over 400 million tonnes, the EU is neither a leading world producer nor a major consumer of rice. Asia is both the leading producing area and the major consumer.
Here's the import/export balance:
Rice is imported mainly from India, Thailand, USA, and Pakistan, and exported to Turkey, Switzerland, UA Emirates, Norway... and small amounts to Mediterranean countries other than Turkey.
Rice-sector reform of the CAP has recently resulted in increased imports, reduced exports. The USDA's Rice Yearbook 2008 (pdf) gives EU 25 exports at 150,000 tons a year, with US exports at 3.3 to 3.4 million tons a year (table p. 88). So a ratio of roughly 1:23. When locusts move on, they leave nothing behind
They have squiffed their squib. A doo run-run-run, a doo run-run
13. As rice plants originate from sub-tropical and tropical zones, they are easily damaged by low temperatures at any growth stage from germination to ripening. The cool weather and strong winds during stand establishment in Mediterranean climate areas may cause partial stand loss and seedling drift, which lead to poor crop establishment. In many temperate areas, emergence rate quite often does not exceed 30-40 percent of the planted seeds.14. This low rate of crop emergence is due primarily to the effect of anaerobic conditions during germination that occurs under low temperatures. To avoid low temperatures during crop establishment stage, therefore, some growers end up with delays in crop planting. However, a delay in crop establishment leads to the occurrence of reproductive stages of the crop during periods of low temperatures during the autumn that causes the death of pollen cells at the meiosis stage and subsequent grain sterility. Damage to rice yield caused by spikelet sterility could be one of the most severe in some years.
13. As rice plants originate from sub-tropical and tropical zones, they are easily damaged by low temperatures at any growth stage from germination to ripening. The cool weather and strong winds during stand establishment in Mediterranean climate areas may cause partial stand loss and seedling drift, which lead to poor crop establishment. In many temperate areas, emergence rate quite often does not exceed 30-40 percent of the planted seeds.
14. This low rate of crop emergence is due primarily to the effect of anaerobic conditions during germination that occurs under low temperatures. To avoid low temperatures during crop establishment stage, therefore, some growers end up with delays in crop planting. However, a delay in crop establishment leads to the occurrence of reproductive stages of the crop during periods of low temperatures during the autumn that causes the death of pollen cells at the meiosis stage and subsequent grain sterility. Damage to rice yield caused by spikelet sterility could be one of the most severe in some years.
Chan Akra might recall that Europe is not, for example, a rice producer of any importance.
He's aware of that. But he claims CAP is partly responsible keeping a billion people in dire poverty for two reasons:
The largest consumers of rice being in Asia, a few minor weather disturbances caused exports to decline and as prices rose as a consequence, quickly caused a domino effect of trade bans and other barriers, accentuating the problem. The Philippines is the worst affected by the mess, but others like Indonesia are also suffering. Rice may be an Asian problem, but the unnecessarily complex system of trade agreements in place is clearly a legacy of corrupt European governments, who bear all the moral shame in this matter.
Rice may be an Asian problem, but the unnecessarily complex system of trade agreements in place is clearly a legacy of corrupt European governments, who bear all the moral shame in this matter.
Europan aid policies are probably damaging African agriculture more than the CAP, which tends to support imports from the poorest countries. In the long run, we're all dead. John Maynard Keynes
