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I'm just a bit confused about the proposed goal regarding the international trade of food. For example, suppose the U.S. decides to dedicate a big (bigger) chunk of available agricultural resources to corn for ethanol transportation fuel. That will obviously increase the price of corn-based products in the U.S., and if there is international trade in corn, or in any other food commodity in any way related to corn or that makes use of corn or is a replacement for corn (e.g. rice, wheat, etc.) in some application, then it will increase the price of those goods also.

On the other hand, there is a pretty consistent anti-NAFTA sort of viewpoint here on ET, I think, so the conflict is whether to propose isolationist and protectionist agricultural policies for each country or region, or to admit the global food marketplace and thus try to come up with a global policy.

In my view the U.S. is likely to enter an isolationist phase now, in the aftermath of Iraq and our generally successful policy over the last couple of decades of pissing off everybody else in the world and the resultant bad blood between us and practically everybody except our reliable lapdogs the U.K. So in that case perhaps regional solutions are acceptable? India grows its own staples, as do China, the E.U., etc., and only luxury foods enter international trade???

by asdf on Sun Apr 20th, 2008 at 08:17:13 PM EST
I'm just a bit confused about the proposed goal regarding the international trade of food.

So am I, if that makes you feel better.  (LOL)

We can't go on maintaining the status quo.  That way, IMNSHO, leads to mass starvation, mass migrations, and resource wars.  NAFTA or an imposed NAFTA-type solution isn't much better; we don't need Yet Another give away to the plutocrats and their lackies.  

If we do nothing we're going to wake up in the Malthusian Nightmare.  

What we should do is unclear, aside from the motto: a sustainable population fed from a sustainable agricultural system.  There isn't a plan, that I know of, that sets forth what needs to be done.  Admittedly, what we should do will almost certainly be modified by what we can do: politically, economically, socially, culturally, technologically.  But that's irrelevant.  Any plan can kick-start a discussion and even the worst plan can be turned into the best of plans once it's written down and subjected to serious and prolonged critique.

In a very real sense, we don't have a goal.  Yet.  Over the coming months we should be able to fash one out and then, hopefully, start sticking it in people's faces; people who can actually do something about the problems.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Sun Apr 20th, 2008 at 11:17:50 PM EST
[ Parent ]
I don't know if you read the relevant parts in the article I was linking to in my diary. Summarizes well what would be necessary :

In order to allow all farmers in the world to construct and cultivate sustainable ecosystems, capable of producing a maximum of good quality products without degrading the environment, it is absolutely necessary to put an end to the international agricultural prices war. It is necessary to break with the trade liberalization which tends to bring prices into line with the lowest offers from surplus exporters. It is above all necessary to guarantee sufficiently high and stable prices to farmers, in order for them to live from their work with dignity. To this end it is necessary to create a much more equitable and much more effective organization for international agricultural trade than the one which is currently in place. A new organization that would be based upon the following principles :

  • establish large regional common agricultural markets, by regrouping countries having similar levels of agricultural labour productivity (West Africa, Southern Asia, Western Europe, Eastern Europe, North Africa and the Middle East, North America, etc.) ;
  • protect these regional markets against all imports of low-priced agricultural surpluses by variable customs duties, thus guaranteeing high and stable enough prices to poor farmers from disadvantaged regions, so as to allow them to live from their work and to invest and expand their business operations ;
  • negotiate, product by product, international agreements fixing in an equitable manner an average purchase price on the international market, as well as the quantity and the export price allowed to each of these large markets, and if necessary, to each country.

The rise in agricultural prices will have to be gradual, so as to avoid negative consequences for poor consumers-buyers. In spite of this, it will probably be necessary to implement food aid policies. But, instead of founding these policies on low-cost food distribution, which maintains peasant misery and reduces domestic markets, it will be convenient to support the food purchasing power of poor consumers, so as to expand domestic markets. Therefore, food aid policies could rely on food stamps, financed by state budgets or international aid, distributed to the needy and for free for the poorest, and exchangeable for food (as in the United States).

Also, the larger book that exposes this solution in detail is partly available on googlebooks : A History of World Agriculture By Marcel Mazoyer, Laurence Roudart. A very interesting book, very informative about the history of agriculture, its various means of production, its evolution...

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Mon Apr 21st, 2008 at 04:13:43 AM EST
[ Parent ]
Thanks for that info. I'll have a looksee at the book you suggested. Your diary is sensational (in the good sense!)
by Asinus Asinum Fricat (patric.juillet@gmail.com) on Mon Apr 21st, 2008 at 07:11:23 AM EST
[ Parent ]
linca:
Therefore, food aid policies could rely on food stamps, financed by state budgets or international aid, distributed to the needy and for free for the poorest, and exchangeable for food (as in the United States).

Why food stamps and not cash? I suppose they make it easier to predict the quantity of food needed?

by generic on Mon Apr 21st, 2008 at 08:51:34 AM EST
[ Parent ]
I suppose so as to avoid distorting the market. The whole idea is about being able to set up price controls on food...

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Mon Apr 21st, 2008 at 08:55:18 AM EST
[ Parent ]
Being a cynical kind of guy ...

State imposed food price controls when the State is controlled by an entrenched kleptoarchy, as in most of the developing world, carries the danger of only being another source of profit for the kleptoarchy.  They could use the regulations to buy from the peasant farmers at an imposed low price and sell at a less than global market but still high price to the urban consumer.  

Or they could use the crises to steal, at gunpoint, the food from the peasant farmer to deliver, at a price, to the urban consumer.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Mon Apr 21st, 2008 at 10:28:06 AM EST
[ Parent ]
Do kleptocracies really need state imposed food price controls to do that ?

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Mon Apr 21st, 2008 at 10:31:36 AM EST
[ Parent ]
Nope.

But imposing Food Price Controls to "solve" internal hunger and starvation allows them a propaganda point for internal and external political 'cover.'

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Mon Apr 21st, 2008 at 10:48:49 AM EST
[ Parent ]
Yes I did read it.

I'm not convinced, yet.

Examination of the sources (published 1986-2003) of the article reveals their analysis is based on what may be termed 'the previous regime.'  "Previous" is used to indicate the global food system may be - unclear at this point - shifting to a new equilibrium.  

Their analysis, thus their proposed solution, is spot-on for the system as it existed from 1963-2004 (say.)  Subsidized grain from the First World was removed from the consumer grain markets of the First World and dumped into the Third World.  This effectively, as Professors Mazoyer and Roudart state, "... small farmers in the developing countries have had to face competition of food staples coming from international markets at ever-lower prices.  As a consequence, they also have had to sell their output at ever-lower prices." [Page 4]

But we're not in that situation as of this writing.  

Over the past several years the coarse grain harvests have been stabilizing  yet the consumption of coarse grains have increased leading to a draw down of the world's grain reserves from 180 day supply (1995 - IIRC) to a 54 day supply (Apr 2008.)  Concurrently, the price of coarse grains have sharply increased over the past year.  As the prices have increased the economic basis of Professor's Mazoyer and Roudart argument has changed.

It is no longer the peasant farmers who are bearing the brunt of First World policies, their selling prices are increasing.  It is the urban population of the developing world who are bearing the burden: they cannot afford to buy food at the current global market price.  Worse, food prices are now reaching levels such that, as was reported yesterday (no cite,) the Philippine government can no longer afford to purchase food for its population at current prices.

Facing too high, from their inhabitants ability to pay, prices certain food producing nations, such as Indonesia and Turkestan, have imposed export restrictions to privilege internal demand to avoid unrest.  Worse, 'unique' government policies (the US in particular)  the source of the former (?) "grain glut" are reducing exports.  Climatic factors, e.g., drought in Australia, is lowering their wheat harvest.  Together these are lowering the amount of coarse grains offered on the global market.

In this climate the establishment of regional areas, protected by economic regulations to restrict movement of coarse grains is madness.  It would tend to eliminate shipment of grains from surplus areas to deficit areas.  

Exactly the wrong action to take.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Mon Apr 21st, 2008 at 10:19:05 AM EST
[ Parent ]
The first question is, is the agricultural system shifting to a new equilibrium ? Their analysis of food price goes back much longer than a few decades ; rather, back from around the beginning of the 19th century. Prices spikes have happened regularly since that time, last in the 70's. Is the current crisis similar or more long term ?

The proponents of the Washington consensus are already using the crisis to ask for more liberalisation - yet the countries suffering right now are those that liberalized too much, whereas those that built a buffer between the global market and the consumer have no problems.

Economic regulations would not, in the proposed system, eliminate shipments between regional areas ; they'd be replaced by food aid (with stamps and all that). Restarting liberalization now would spell disaster once prices go back down.

The food riots are as much a wider economic problem - wage kept down to give good margins to the entrepreneurs, compensated by subsidies on food. Food prices rising can be solved by more food liberalization - how much of it is possible ? - or by raising wages...

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Mon Apr 21st, 2008 at 10:41:54 AM EST
[ Parent ]
... is the agricultural system shifting to a new equilibrium ?

I don't know.  Ask me again in about 5 years.  The last few years could be a blip with the system returning to the basic trendlines of the last 50 years.  More likely, given the shift in fundamental factors (Climate Change, decreasing productivity of marginal lands, shifting grains from food to biofuel, & etc,) a new equilibrium is in the offing.  Further, population increase is a steady input leading to a positive feedback loop lowering the food per capita statistic.  

But I don't know one is in the offing, I merely think one is.

Re: Washington Consensus

This thing is dead.  For the reasons you give and without the financial resources to force countries to comply US hegemony over the world's economic system will slowly decline.  

Economic regulations would not, in the proposed system, eliminate shipments between regional areas ; they'd be replaced by food aid (with stamps and all that). Restarting liberalization now would spell disaster once prices go back down.

Correction noted.  OK, I'll go with that.

I do note, tho', the underlying assumption - from both of us - of the existence of a surplus to distribute.  I'm not going anywhere with this, just calling it to the foreground.

Re: Food Riots

That's the floating brown stuff in the punch bowl.

TSP wrote a diary outlining the situation in Egypt.  So let me use that as the example.  With the majority of the urban population living on marginal purchasing power any perturbation carries the danger of demonstrations turning into riots turning into social unrest turning into armed civil combat.  There is already low-level urban conflict (terrorism, sic) sporadic in Egypt.  The seeds of armed combat exist.  What hasn't - yet - happened is a change in attitude among enough of the populace from resigned acquiescence or despair to active hostility to the Murbarck (sp?) government.  

Ok, how to prevent that?

Four ways:

(1) raise food production -- I doubt it
(2) lower demand by lower the population -- I doubt it
(3) increase the average pay to match rising food prices -- I doubt it
(4) do all of these and more (such as empower women) -- I doubt it

I doubt each of these because they go completely counter to the established cultural, technological, political and economic basis, structures, and trends.  

The Egyptian government may be able to stave-off a serious, widespread, challenge to its power by shifting lands from export products (flowers-to-Florence) to food production for internal use.  But at some point, at some level of population, even that won't be enough.  

This

is why.

The constant increase in population is sucking-up the world's resources and the world's ability to support that increase in population.  It. Can't. Continue.

Insane, short-sighted, policies such as liberalization, food-to-biofuel, are exacerbating the situation by removing the 'capital' we need to get from here to there and bringing the tipping point closer, faster.

Sorry. I seem to have mounted my soap box and am ranting away.  (Again.)

To cut to a conclusion: Agricultural Reform is intimately intertwined with other factors.  With de-population being, IMO, the most important.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Mon Apr 21st, 2008 at 11:54:07 AM EST
[ Parent ]
Stay on the soapbox - you're doing good ;-)

You can't be me, I'm taken
by Sven Triloqvist on Mon Apr 21st, 2008 at 12:41:54 PM EST
[ Parent ]
Thanks.  Sometimes it seems all I post is snark with a side-order of Doom-&-Gloom.  

Just found a report of a speech given by the US Ag Secretary yesterday talking about the spread of African stem rust - a dwarf wheat disease - in the developing world.  This at a time when the US wheat stocks are at a 60 year low, the global stocks at a 30 year low.  Throughly depressing.

Excuse me while I go to bed and pull the covers over my head.  ;-)

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Mon Apr 21st, 2008 at 05:07:00 PM EST
[ Parent ]
But then Mazoyer keeps warning that development  of third world agriculture is necessary because at one point it'll be actually needed to feed the growing population - perhaps we are reaching this stage earlier than expected (and perhaps not : is it Peak Food already ?).

Maybe in many places the socio-economico-political system won't be able to adapt to these new conditions - and then some sort of revolution might become likely. In semi-developed countries, famine won't be accepted by the population.

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Mon Apr 21st, 2008 at 04:42:56 PM EST
[ Parent ]
And if, indeed, we are reaching "Peak Food", then indeed food production in the third world needs to be ramped up faster than slower ; in which case higher grain prices will still help capital build up...

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Mon Apr 21st, 2008 at 04:44:19 PM EST
[ Parent ]
When even the ag-economists at the World Bank (a scruffy lot) start talking about needing a agricultural revolution on the order of the introduction of dwarf wheat ... things are grim.  

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre
by ATinNM on Mon Apr 21st, 2008 at 05:37:40 PM EST
[ Parent ]
What about applying the Antiquity agricultural revolution in the third world ?

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Mon Apr 21st, 2008 at 06:00:04 PM EST
[ Parent ]
I need to find out what that means before I can say.

Is that from the Mazoyer and Roudart book?

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Mon Apr 21st, 2008 at 06:22:58 PM EST
[ Parent ]
Yes, it's from the book. Mazoyer identifies various major agricultural systems, with increasing productivity :

Slash-and-Burn, which came first ; then Hydraulic system (think the Nile) ; the  diverse Inca system which uses the variety of ecosystems around the Andes mountains with local specialisation and redistribution ; both of those systems are more or less a side track, not applicable everywhere.

Then comes "light tooled animal pulled agriculture", which corresponds to the Ard : it was created after the Mediterranean forest disappeared, uses fallow land. IIRC, the lack of capital access in the Third World means that many farms still have not accessed this technical level.

Later systems are "heavy tooled animal pulled agriculture", corresponding to the introduction of the plough to till the heavy soils of Northern Europe. It requires access to iron, stronger animals, and corresponds to the triennial crop rotation.

Afterwards would come the disappearance of fallow land with nitrogen enriching plants introduced into the rotation, and then various waves of mechanisation.  

Un roi sans divertissement est un homme plein de misères

by linca (antonin POINT lucas AROBASE gmail.com) on Mon Apr 21st, 2008 at 08:02:22 PM EST
[ Parent ]
And when are you writing that peak food diary ?

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Mon Apr 21st, 2008 at 06:02:43 PM EST
[ Parent ]
You know, I'd forgotten about that.  (he wrote sheepishly)

I'll get to work on it.

She believed in nothing; only her skepticism kept her from being an atheist. -- Jean-Paul Sartre

by ATinNM on Mon Apr 21st, 2008 at 06:13:59 PM EST
[ Parent ]
seconded.

Don't fight forces, use them R. Buckminster Fuller.
by rg (leopold dot lepster at google mail dot com) on Mon Apr 21st, 2008 at 06:37:26 PM EST
[ Parent ]
Can you make this, and the top-level comment, into (a) diar(y/ies)?

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Tue May 6th, 2008 at 07:46:34 AM EST
[ Parent ]
The principles satisfice admirably. To what extent would a governing international body need to limit or to prohibit futures trade? I don't actually advocate prohibition, as someone will argue (erroneously) that derivatives are necessary investment vehicles. Rather, I can imagine that time (e.g. expiry, seasonal term) and brokerage license constraints could regulate surplus hoarding and waste by conglomerates.

Pardon me, if I'm all washed up, but I've been immersed in New Deal-era history. Finance got a free pass on regulation, while the proto-G8 leaders nattered on about regulating (i.e. re-inflating) price levels world-wide by tariff and domestic production controls.

The US is at that point again in the pirates' parlay. I wrote a bit how central planners intend to regulate debt production here. It would be nice to anticipate opposition from finance industry, also dependent on subisidies.

Diversity is the key to economic and political evolution.

by Cat on Thu May 1st, 2008 at 01:12:03 PM EST
[ Parent ]
On the other hand, there is a pretty consistent anti-NAFTA sort of viewpoint here on ET, I think, so the conflict is whether to propose isolationist and protectionist agricultural policies for each country or region, or to admit the global food marketplace and thus try to come up with a global policy.
I'd go for the global policy route. We need the same on Climate Change.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Tue May 6th, 2008 at 07:48:58 AM EST
[ Parent ]

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