The Great Grain Drain: A Note from Aaron Edmonds

Hi Jennifer,

Globally grain stocks have shrunk to levels not seen since the early 1970s. Now to most this may seem like a seemingly unimportant fact. But this reality needs to be put into perspective.

In 1970 when the world was feeding itself out of the same sized grain inventories there were 3.7 billion people. Today there are over 6.5 billion people meaning the world is carrying near an extra 3 billion hungry mouths to 1970. We also now have a significant portion of the global crop being turned into biofuels – cereals and sugars for ethanol and oilseeds and tallows for biodiesel.

Once these biofuel plants are built they generally do not stop consuming feedstock. Shareholders do not make money from plants sitting idle. Other end users that have emerged are combustible stoves and water heaters in grain producing areas where low prices have encouraged feedstock substitution away from fossil fuels.

There are over 2 million corn stoves in North America alone that consume close to 25kg each per day in the cooler months – a total loss of 50,000 tonnes a day. What this serves to highlight is that grain prices have been too slow to appreciate to discourage waste in non food sectors. Once end using infrastructure is in place and consuming it generally will take significant grain price inflation to stop this consumption. Grain values in effect need to reach and in fact surplus energy parity values to prevent loss to biofuel end uses.

On the other end of the grain chain are the producers who are facing severe limitations in their ability to actually increase let alone maintain production. Depleting water aquifers, drought affected irrigation sources, competition for water and reduced rainfall are issues that are real and impacting on production output today.

And with an anticipated ‘grain boom’ there are also some such as myself who are predicting capacity constraints. For example, an inability for the fertilizer supply chain to be able to cope with demand from an agricultural sector keen to capitalise on rising prices. Potash fertilizer may be especially short moving forward. Hyperinflation in such inputs in itself is damaging to the output potential of third world cropping systems. Competition for land resources by staple food crops will be fierce and ‘illogical’ crop choices of the past (eg fruit crops) will be swept aside for fields of wheat, rice, corn and soybeans.

Output driven technologies such as transgenics will need to be embraced worldwide and embraced with fervour. Most would argue it is better to be fed than dead and anyone disagreeing with this is likely unwilling to be the first to go without as shortages unfold.

Environmentalism has failed for there is not one so called green group with a truly sustainable model of food production to promote today.

2007 will be a critical year for the world’s staple food supply. Because a willingness to try and produce our way out of an approaching deficiency in grain supplies may be overriden by constraints out of everyones hands – weather and water. There are already early signs that China’s 06-07 winter wheat areas are showing the effects of drought and areas within the Midwestern wheatbelt of the US have inadequate soil moisture levels. Here in Australia our summer crop plantings are well down from previous years. This developing crisis should concern everyone who eats food.

Regards,
Aaron Edmonds
2002 Nuffield Scholar
President Australian Sandalwood Network
www.australianuts.com

54 Responses to The Great Grain Drain: A Note from Aaron Edmonds

  1. Pinxi December 15, 2006 at 9:24 pm #

    He’s yr Malthusian Jennifer!!! Quick, string him up.

    Meanwhile I’m fretting over peak phosphorus.

  2. Jennifer December 15, 2006 at 10:45 pm #

    No Pinxi. It’s my understanding that Aaron believes we have the capacity to feed an increasing world population. He is just pointing out, as he often does, that to stay on track there is no time for complacency, misinformation, or the banning of new emerging technologies (eg GM food crops).

  3. Ian Mott December 15, 2006 at 10:57 pm #

    Whenever I see a sentence like, “Depleting water aquifers, drought affected irrigation sources, competition for water and reduced rainfall are issues that are real and impacting on production output today,” I have to ask, where are the numbers? And, what about the positives?

    Describing an issue as “real” and “impacting on production today”, are so vague and generalised that one can only assume that the authors intention is to piss in our pocket.

    I can find nothing in this piece but the kind of generalities and banalities that might shake up some punters bong water as he flicks between net porn and sport.

  4. biofuelsimon December 15, 2006 at 11:10 pm #

    What about the market for fuel. You don’t say anything about the price of alternative fuels to ethanol (say gasoline/crude) for example. Shareholders will not make any money from plants sitting idle, that’s true. Shareholders may loose thier investments, and if, in the long term the plants are not needed then they will go to.
    If you’re interested in biofuels and some of the issues around water and energy check out The Big Biofuels Blog

  5. Pinxi December 15, 2006 at 11:48 pm #

    I’m keen to hear what Aaron’s full system “truly sustainable model of food production” is.

    Motty you’ve got your signature blog URL wrong. delete the .au & the www

  6. Schiller Thurkettle December 16, 2006 at 2:30 am #

    Ethanol bites into world grain stocks
    Posted: 06 Dec 2006

    by Lester R. Brown

    Now that the year’s grain harvest is safely in the bin, it is a good time to take stock and look ahead. This year’s global harvest of 1,967 million tons is falling short of the estimated consumption of 2,040 million tons by some 73 million tons. This shortfall of nearly 4 per cent is one of the largest on record.

    Even more sobering, in six of the last seven years world grain production has fallen short of use. As a result, world carryover stocks of grain have been drawn down to 57 days of consumption, the lowest level in 34 years. The last time they were this low, wheat and rice prices doubled.

    (Full article with graphs at link below)

    http://www.peopleandplanet.net/doc.php?id=2895

  7. rog December 16, 2006 at 6:44 am #

    Generally ethanol production is heavily govt subsidised, taxpayers money is being used to skew food prices for enviro-politic benefits.

  8. Pinxi December 16, 2006 at 8:37 am #

    No taxes, indirect govt agency support or direct funds are used at all to support fossil fuels. None, zilch, nada, nix. Any substantial reports that indicate otherwise are pure fabrications by certified loonies and should be ignored or denied.

  9. rojo December 16, 2006 at 8:40 am #

    Are you sure ethanol is heavily subsidised, I think not. It does not however have an excise to pay until 2011.
    food prices should reflect their energy content relative to say oil. Farmers should not be the ones subsidising cheap food while oil and gas producers make a mint.

  10. Pinxi December 16, 2006 at 8:43 am #

    Phooey to grain shortages you alarmists, markets will fix it. Highest bidder buys. GM engineered high yeild biofuel grasses will be grown & sold by enterprising African outfits. Us fortunate lads will be fine.

    When we’re tired of pointing the finger of impending grain shortages at biofuels then we can point it at meateaters and fat people.

    Then when that finger also tires, we can recall that adequate foodstocks by themselves is an insufficient condition for preventing hunger & starvation. Sufficient food to meet the world’s needs has, to date, not ended pervasive hunger. There’s no reason today to believe it will in 2007 or 2009.

  11. Schiller Thurkettle December 16, 2006 at 9:57 am #

    Gosh Pinks,

    I almost very nearly think you’re possibly suggesting that Africans don’t have to ask “pretty please” to obese white Europeans before they adopt new technology.

    They could even, like (gasp!) adopt high-production agriculture! Oh, my!

  12. detribe December 16, 2006 at 10:07 am #

    “Sufficient food to meet the world’s needs has, to date, not ended pervasive hunger. There’s no reason today to believe it will in 2007 or 2009.”

    Pinxi you’re getting confused or deliberately creating a straw man. IMHO there no cogent argument that merely producing sufficient food globally or locally will solve hunger problems. The policy issues of relevance are different to your straw man, and your remarks do not address the compelling problem of future food security in the face of rising demans and limiting resources.

    Adequate food supply is clearly not a sufficient condition to avoid hunger, but it is certainly a necessary condition, and the food output needed to ensure adequacy and future food security is continually rising. Thus increased output over time are necessary to ensure adequate supplies continue to available. Your remarks do not adequate cover rising demand.

    Simply put, the food output of 1960 cannot feed todays 2 billion extra wealthier people, and the reasoning in 1960 that it wasnt worth attempting to meet future food demands, famously expressed by Paul Erhlich, was an attitude that was subsequenty proved to be wrong.

    During the Green revolutions, increased food did prevent millions (if not a billion) of cases of extreme hunger. It fed about 1 billion extra people in Asia and elsewhere, and was a neccessary part (but not suficient or sole part) of avoiding that hunger.

    IMHO its worth talking about the following in the context of the issues Aaron raises
    1. Rural incomes should hopefully rise
    2. Food supply will need to more than match increases in demand so that price increases do not pricing the poor out of the market.

    So let’s seriously (and not superciliously) discuss the many factors affecting rural incomes, including farm productivity and sustainability, and how to avoid demand being unsatisified by supply in the face of resource limitations, economic, population growth (neither of which are likely to stop growing tommorow ), competing demands such as fuels, and so on.

    Meanwhile your attempts at “satire” only seem to indicate that you the hold bizarrely erroneous versions of the opinions of others with whom you don’t immediately agree with.

  13. rog December 16, 2006 at 10:11 am #

    In the US, unlike petroleum products ethanol is exise free. Brazil has dropped subsidising ethanol production, Canada is offering huge incentives.

  14. Schiller Thurkettle December 16, 2006 at 10:51 am #

    “Sufficient food to meet the world’s needs has, to date, not ended pervasive hunger.” Now there’s a contradiction if I ever saw one. If it’s sufficient, nobody is hungry.

    Of course we could turn to the tired old argument that it’s all “distribution,” but the fact is, nobody will distribute if they aren’t paid to distribute.

    There’s the US, which distributes for free, but that’s really really bad because of the really bad GM crops they grow that make white people fat and happy but will through some alchemical alimentary dissimulation prove poisonous to others.

    Then there’s the tired old “subsidies” issue, which probably holds water for the illiterate. Do subsistence farmers go on hunger strikes because they don’t like what has happened to the March 2007 contract for corn on the Chicago Mercantile Exchange? Sheesh. What crap. If you are hungry, and plan on eating food, you grow as much as you possibly can.

    For Africa, it’s imperialism all over again, but since it’s ‘green,’ people can’t see it.

  15. Aaron Edmonds December 16, 2006 at 12:31 pm #

    Fertilizer crisis

    Take remedial measures (India)

    A country whose economic base rests on agriculture, any indifference towards the farm sector is most painful. There have been a spate of suicides by farmers in Maharashtra and some southern states. And in this situation, overlooking the problems of the farmers of State, can be termed a criminal act. Even Dr Manmohan Singh at the meeting of the National Development Council admitted that the country’s agriculture sector was facing severe crisis. It is not understandable why the state government is not taking effective measures to solve the problems of the farmers. The farmers in state are facing the problems of fertilizers and power shortage when the rabi sowing is on. According to reports, there is record sowing of rabi seeds, however, right at this time the farmers are facing problems in availability of fertilizers and irrigation water. It may be mentioned that the wheat and other rabi crops require two-time irrigation and the same is done after putting the urea fertilizers on the fields. The government claims that there is no shortage of power- water, and urea whereas the reality is something else. There is blackmarketing of urea fertilizer. In Ratlam there has been news of the urea fertlizers being looted from wagons. Farmers’ have become very resentful due to the lethargic attitude of the concerned government departments. The government has to take remedial measures so that the difficulties of the farmers are removed and the state gets a bumper crop.

    http://www.centralchronicle.com/20061211/1112282.htm

  16. Aaron Edmonds December 16, 2006 at 12:32 pm #

    Sugarcane farmers short of fertilizer

    Still reeling from a long drought, sugarcane farmers in Cirebon, West Java, are now faced with a fertilizer shortage.

    “It is feared fertilizer shortages will greatly affect sugarcane productivity,” said Anwar Asmali, head of the West Java chapter of the Indonesian Sugarcane Farmers Association.

    He said fertilizer demand at the beginning of the planting season this month reached about 4.60 million tons, but state-owned fertilizer company PT Petrokimia Gresik, the lone distributor of fertilizer in the province, was only able to provide 1.1 million tons.

    However, Anwar said the shortages were not the fault of Petrokimia, instead blaming the problem on the provincial government’s fertilizer distribution and allocation policies.

  17. Aaron Edmonds December 16, 2006 at 12:43 pm #

    Just because I know some of you need to read it in the news before you can be convinced on some of these points (see previous posts).

    Ian Mott was asking for evidence of water problems. There is a saying on the land Ian ‘Rain is grain’. So refer to ‘global grain stocks’!!!! Not rocket science.

    Pinxi as always an absolute pleasure:
    “I’m keen to hear what Aaron’s full system “truly sustainable model of food production” is.”

    My modelling on sustainable broadacre agricultural systems is in the public domain and I practise what I preach. See the following links:
    1. My Nuffield Scholarship in 2002-03. Oil prices were of no concern to anyone back then. So I was sounding alarm bells before they began to inflate.
    http://www.nuffield.com.au/report_f/2002/edmonds.pdf

    2. My farm itself. A work in progress taking out less productive country (sandy, drought prone, frost prone, waterlog prone sites) from annual crops and replacing with the only truly sustainable staple food production system we currently have in Australia – Australian sandalwood nuts (60% oil, 18% protein). And if you want to challenge that you better be armed with facts and alternative crops to boot.
    http://www.australianuts.com

  18. Aaron Edmonds December 16, 2006 at 2:44 pm #

    Fertilizer issue hots up (India)
    Chronicle News Service

    Indore, Dec 14: Crisis in availability of fertilizers has bewildered the farmers of Malwa region as their crops are ready. Agents are giving excuses that there is scarcity of fertilizers and in this way, they are involved in black marketing. Whereas the farmers are walking from pillar to post but to no avail. The distribution system of the government and administration has become futile.

    Mandsaur requires 21000 metric ton urea fertilizer According to our Mandsaur correspondent, the district has received only 12,766 metric ton urea in place of demand of 21000 metric ton fertilizer.

    Agriculture department spokesman said that in 62000 hectare land wheat crop, 48000 hectare gram, in 47000 hectare mustard crop and garlic, opium and other crops are standing in farms. But the administration was unable to provide fertilizers to the farmers in proper proportions.

    Similarly, in Ratlam, Ujjain, Khargone and Neemuch the farmers are facing the crisis of fertilizers.

    Government adopts double standard norms.

    According to Ratlam representative, the farmers who are hoping for a bumper crop, they are facing the shortage of fertilisers instead.

  19. rojo December 16, 2006 at 2:51 pm #

    Hi Aaron, great website and it is terrific to see entrepreneurial agricultural.
    I didn’t see what you expect the mature crop of nuts to yield/ha, nor their value.
    Do they taste nice?

  20. Aaron Edmonds December 16, 2006 at 3:25 pm #

    Depending on rainfall yields are variable. The industry is conservatively budgeting on 150kg/ha (0.5kg/tree @ age 5 from 300 trees/ha). Whilst there are few advanced orchards that have quantified yield, yields on mature trees can be significantly higher. But it is a system much more variable than what we are used to because it tailors production to the seasonal constraints. Rojo we now have over 120 grower member for our grower group, the Australian Sandalwood Network, and this is growing.

    Current nut values are from $30-60 depending on size. But longer term it would be more realistic to expect values around $4-5/kg. Still beats wheat and the beauty is you are only really removing biologically fixed (C and N) nutrients in the nuts, removing lower yields with higher incomes and lower associated logistical costs. Grows on acid and alkaline. 200mm to 600mm. Remove fertilizer from the system and you remove the ability of weeds to compete. It is a truly amazing system.

    So yields are less than conventional systems but most competing crops compare their best performing gross margins to ours. Sandalwood is targeted for the marginal areas to bring their productivity up.

    Taste is very neutral with maybe a slightly almond taste. Food manufacturers will work around this.

  21. Ian Mott December 16, 2006 at 10:00 pm #

    Wrong, Aaron, I was asking you to move from the general to the specific by outlining the actual relevance of your claimed aquifer depletion, etc. Blind Ferdinand will know that some aquifer depletion is present in some places so the claim that it is “real” and “impacting on output today” could also be made about the sun rising in the morning.

    What we have found in the Murray-Darling basin is that aquifers were rising for a while and posing a threat of salinity. And then two things happened, we had a drought, and farmers found out about this excess water and pumped it out for their crops. We lost a salinity problem but, apparently, gained a depleted aquifer.

    But not to be outdone, Qld DNRM had the gall to claim that salinity was still a problem in the Lockyer Valley at the same time that the aquifer was being depleted.

    But as your subsequent posts have made clear, yours was not a scientific report anyway. It was nothing more than promo material for this months wonder crop. Let me know when you have saved the planet.

  22. Luke December 16, 2006 at 11:28 pm #

    Sounds familiar

    The salinity hazard in the Lockyer catchment has always focussed on the intersect between Marburg sediments and the alluvial sequences (not in the alluvial system explicitly). Ian has a tend to mix his metaphors between irrigation salinity and dryland salinity. He should also be aware that their are 3 types of irrigation salinity (saltwater intrusion, impact on soil of using poor quality groundwater and rising watertables). The Lockyer Valley is somewhat unique in having a deterioration in groundwater quality due to salinity issues (due to over-extraction) in the alluvial landscape and immediately adjacent has a dryland salinity issues related to a history of tree-clearing in sensitive landscapes. I would agree that the use of groundwater pumping will minimise the risk of rising water-tables, but in the Lockyer Valley there has been issues with long-term accumulation in the soil profile due to the quality of the groundwater – many farmers moved to beetroot production (rather than beans etc) because they were adapting to increasing soil salinity levels (not from rising water-tables, but from use of poor quality groundwater).

    Once again can twist facts to match your opinion – but he has lost the detail of connecting facts to specific landscape conditions e.g. groundwater pumping can prevent rising watertable salinity (and is used in many irrigation areas), but can have impacts on root-zone salinity and/or river water quality, dependent on how you utilise that groundwater.

  23. Aaron Edmonds December 17, 2006 at 12:36 am #

    Love it when I hit a nerve. Sorry to discount your intelligence there big fella. Ian Australian aquifers contribute little food volume to global inventories. In fact an appendage on a bee comes to mind. You wont need a scientific report to verify this fact. You could however visit a soybean farmer who irrigates in Kansas out of the Ogillala or a corn farmer in Henan province in China and ask them for the scientific report that says they have a problem with their water reservoirs. You may get some blank looks … The rates at which these agriculturally important aquifers are depleting are quantified at the simplest level by simply asking farmers what depths they are pumping from today as opposed to 10 years ago. No doubt they wont have a scientific report to substantiate any wildy alarmist claims of falling wells?

    ‘Let me know when you save the planet’ Oh that was nasty. Now let me see. In the not too distant future we’ll likely see all cereal grain prices double, maybe even triple. Multiply that by a factor of three for an approximate inflation rate on animal protein prices in the future as well. Mate as a farmer its sounding pretty good for me. I’ll be sweet. Achieved 70% of normal yields this year in the worst drought in this areas history. Its the rest of you lot I’m worried about (for some stupid reason)! Mind you with all the support out there for contrarian thinking one might be better to let the scientific reports keep rolling in. Low behold those that view them as nothing more than a commentary on the flux of events.

  24. Ian Mott December 17, 2006 at 7:24 pm #

    As you have said before, Luke. So how come no-one ever mentioned these distinctions in the SEQ Regional vegetation Management Committee Meetings? There we got the official line that any removal of trees lifts aquifers and causes salinity. But nice to see you guys are polishing your patter.

    Again, Aaron, you give us generalities like “an appendage on a bee comes to mind” but if you want anyone to take your message of “hyperinflation in these inputs” seriously then you need to quantify some of this stuff in a manner that allows us to judge for ourselves.

  25. Aaron Edmonds December 17, 2006 at 8:11 pm #

    Fertilizer makers show record profitability

    10/12/2006, 3:57 PM CDT

    Leading fertilizer producers achieved record profits and profit margins in 2005.

    A study of the world’s 60 leading fertilizer producers published by Integer Research has revealed they have combined fertilizer revenues of $43 billion (U.S.) in 2004, and more than $50 billion in 2005.

    “This 16% increase is partly due to higher fertilizer sales prices, combined with increased global fertilizer consumption,” says Integer director Oliver Hatfield. “This shows that despite the high gas prices, which have affected overall production costs, there are still significant profits and increasing revenues.”

    The majority of fertilizer revenues are concentrated amongst the top 20 companies. They have combined fertilizer revenues of $35.8 billion, compared to the $14.6 billion for the remaining 40 companies. This constitutes just over 70% of total fertilizer revenues for the top 60 companies.

    “Based on fertilizer revenues, Yara is still the biggest fertilizer company in the world, and it continues to expand its business with significant developments in Brazil and China,” says Integer analyst Nora Gombos. “The five largest companies are still based in North America and West Europe. However, the other companies in the top ten have changed in the last few years. Eurochem of Russia has risen through the rankings into the top ten, moving Terra Industries into 11th position. This means that in the top ten, the number of companies based outside the established developed regions increased from three to four.

    “This is a trend that may continue, with nitrogen producers from Russia, Ukraine and the Middle East taking advantage of the high fertilizer prices, and relatively low gas costs. China is becoming more influential in the global fertilizer market,” Gombos says.

    http://www.agriculture.com/ag/story.jhtml?storyid=/templatedata/ag/story/data/1160686658101.xml&….

  26. Pinxi December 17, 2006 at 11:16 pm #

    detribe don’t come the raw prawn with me, you know my position better than to reduce it so.

    If we were to forecast the biggest failure point in this approach to saving the world as Motty put it so succinctly, then I’d nominate blinkered arrogance. Not very different from the well-meaning but short-sighted dumb greenies really. I applaud Aaron’s entrepreneurial spirit & eagernessa and I genuinely wish him the best. I still find it ironically amusing though that Aaron rants against greenies when outwardly, his approach would be taken as a naive greenie approach by many. Malthusians raise yr hands.

    As regards food stocks to feed the masses, I still recall Aaron’s words:
    _______
    “… awareness, the family planning options and the choice that we have but unfortunately they don’t.” Exactly my point so Governments must act on their behalf and they don’t.

    I’ll give you a simple analogy. I am a sheep farmer (hypothetical). If I overgraze my paddocks, I have to provide supplementary feeding. What do I do if there is no supplementary feed available (affordable). I have to greatly reduce my stock numbers. The sheep have no say as they don’t know they are about to die if the farmer does not ‘intervene’.

    …There is 6.3 billion of us today, which 2.3 billion are you going to eliminate…”
    ______

    Poor starving people, lacking choice -> govts act on their behalf like they’re unwitting sheep –>> Reduce … STOCK … numbers. When I asked if Aaron was recommending culling/genocide, he did thankfully say no. But his explanation “I am talking about controlling population by reducing the birth rate” was unconvincing considering the culling sheep in drought analogy.

    But at least he was honest about his bias: “…It is Australian food security I am interested in.” So let’s not confuse this self-promotion with a well-considered desire to feed the the world’s starving & malnourished.

    Merry Christmas & happy 1st world overindulgence to you all. I hope you found Chrissy trees that arent green.

  27. Aaron Edmonds December 18, 2006 at 8:42 am #

    There is no implication of population ‘culling’. The question is put what happens if there is NOT enough food to go around? And further to this the question still remains, which 2.3 billion will put their hand up to go without?

    So I raise the issue and propose we do something about it. Either do everything in our power to raise food output and/or acknowledge we need to formulate policy designed to discourage population growth (this would not include culling?).

    Pinxi you say ‘Phooey to grain shortages you alarmists, markets will fix it. Highest bidder buys.’ Since you are well aware that expensive food will ‘cull’ population in its own right, I put it to you who is more Malthusian?

  28. Pinxi December 18, 2006 at 10:57 am #

    Aaron pls rethink and hopefully reject your heartless analogy of a 3rd world govt decision (assuming that they have policy control) what to do about malnourished impoverished people and a farmer’s decision what to do with starving sheep in a drought. (offer his sheep contraception & educate the ewes?) You were right to declare that your interest is Australian food security, not international food security. I’ll listen to you on the national arena and markets for nuts.

    As for reducing worldwide hunger, it’s far from being as simple as increasing total global food supplies to exceed global nutritional needs. Starvation occurs even when sufficient and cheaply produced food is available, even amid dumping & food stores etc. Political will, corruption, ethnic differences & access can be factors.

    How could the poor masses in the 3rd world afford, even at cost price, agricultural output from 1st world land, labour, inputs & machinery? 1st world farm produce cannot save the 3rd world from longterm hunger. Even trying to do so may reinforce the status quo of dependence on handouts. Many 3rd world farmers can’t currently afford GM seeds or fertilisers or take risks with foreign world seed & input providers. Yes sufficient agric output is needed but equal priority is needed for good governance and to encourage the development of local & often smallscale enterprise, industry & self-sufficiency (ie earned entitlements for basic needs) in 3rd world locations, plus fair trade. This is not a priority in the 1st world industrial models. Spreading those models further in the 3rd world only ensures that the masses still don’t improve their entitlements to food, and with the growth of open markets, the highest bidder will win and drive the type and usage of agricultural output, be it for food basics, luxury food or biofuel. Inequalities will remain and become further entrenched.

  29. Lamna nasus December 18, 2006 at 12:17 pm #

    Corn used for fuel in North America has not the slightest effect on hunger in Africa.. unless you dump grain surpluses on African markets, destroying local farmers livelyhoods in the process..

    The price of corn is low because of over production supported by biotechnology’s much trumpeted ‘green revolution’and political short term expediency. Many water shortages are caused by over extraction to support intensive agricultural practises, as occured in the UK this summmer.

    Preventing the endlessly spiraling human population is the problem you would be better utilised taxing your massive intellect over rather than dreaming up anti-environmental rhetoric for the GM lobby… the third world starves because of politics, not non-GM technology.

    Decreasing poverty reduces the birthrate….

  30. Aaron Edmonds December 18, 2006 at 12:59 pm #

    Pinxi you take the analogy too literally and are missing the point. A farmer in the midst of drought can reduce numbers by selling to other farmers in more fortunate situations. He can also control his breeding program by choosing not to cross ewes. But leaving action too late generally results in nature forcing his hand.

    “As for reducing worldwide hunger, it is far from being as simple as increasing total global food supplies to exceed global nutritional needs”

    Im sorry but it (increasing output) is a major first step. The last thing you want to do is let grain prices hyperinflate (as a result of overseeing stock drawdown) to levels that make them attractive to black market trade. This further encourages proliferation of corruption and further deteriorates the assumption that such a commodity can freely move from seller to buyer. It also encourages raiding of standing crops and hoarding. As you have highlighted those going without now are those who cannot afford now. As a crude example you now have a flourishing black market trade in nut commodities in the US (a 1st world nation) because nut (almonds, pecans, walnuts etc) commodities have hyperinflated in price, anywhere from 200-300%. This appreciation has turned these commodities into tradeable black market commodities and that is where there is a rule of law. If you want to check just google search ‘nut+thieves+california+2006′.

    But to just say let the markets sort it out is more Malthusian than anyone posting on this thread? Doing nothing is more extreme than attempting to do something.

    Let alone consider that truly sustainable (perennial and legume based) agricultural systems are likely to produce less than half the STAPLE food volume of what the current petrochemical based systems do now …

    The original intention of this thread was to highlight we have a problem unfolding and to inspire constructive conversation on where to for the future in food security planning (and if you like that includes debate on population policy).

  31. Aaron Edmonds December 18, 2006 at 1:17 pm #

    ‘Corn used for fuel in North America has not the slightest effect on hunger in Africa..’

    I can’t believe you actually believe that. CBOT corn was trading at US$2/bushel back in January. Today it is trading at US$3.70/bushel. This is because some 60 million tonnes of corn has been converted to corn in the US alone this year. Food going to fuel is food not diluting food values. You have zero credibility with such a simplistic uneducated comment. Economics 101 – increase demand = increase price.

    Increasingly expensive food is not good for Africa.

    How can you decrease poverty globally when you have a stockmarket bubble likely to burst, inflation rates (the real ones not the ones quoted in the mainstream media) running rampant (Ian will ahte that loose commentary), houses prices across the planet floating on loose monetary policy (same for the stockmarkets), and resource finiteness further fueling inflationary pressure. We have seen the best the world can achieve in terms of living standards. Get with the real world!

    The price of corn was low because it was perception based (from food markets and government policy) when at the very least it should have been based around energy parity. Ie one BTU of corn = one BTU of oil or gas. Now we’re short on energy corn is being eyed as a cheaper feedstock. So value food appropriately or lose it to the combustible engine.

  32. Pinxi December 18, 2006 at 1:29 pm #

    Yes I realise the intention Aaron, as I’ve pointed out similarlay impending food shortages myself some time not long ago & was shot down by unbelievers (high grain yields this year they cried) or uncarers. hence I was using satire as detribe complained, to take off the position of many here who argue that free markets will develop solutions to all problems such as potential resource shortages & 3rd world hunger. There’s no basis for believing that markets alone, nor productivity increases alone, are anywhere near an adequate solution, and without broadscale awareness and action on that basis, little progress will be made to improve the conditions of the have nots. Even if birth rates declined substantially, what reason do you have to believe that maximising 1st world crop productivity will feed the world’s hungry in the near or the long term? What is your distributional mechanism?

    What approach to population control do you recommend & by whom? Are you promoting vegetarianism to stretch food resources further, or is it a matter of the populous 3rd world needing to control their population so we can enjoy guilt-free our grain-fed prime steaks?

    The reality with the current system of governance & markets Aaron is that the markets WILL perform their allocational function, crops will go to the highest bidder which may well be 1st world food, industry & fuel concerns. This is already a problem in the 3rd world where output goes onto global markets.

    I’ve already said that sufficient food to meet requirements is obviously a requirement, that’s a no brainer so let’s move beyond it. It’s not as simple as baking a pie big enough to feed everyone as you would realise. In recent times the world has had sufficient and affordable food resources to feed everyone, but still pervasive malnutrition continues. ‘Affordable’ food, like poverty, is a relative concept, much as I hate to say it. Food as cheap as we could make it & ship it would still be unaffordable in the 3rd world. Our govt can’t ‘afford’ to meet the ODA average OECD nations because of national priorities – increasing our standard of living which is already very high. Poor people lack the means & opportunities to make a living or even earn an income to make a living and that situation will become more entrenched until & unless resources are devoted to effectively address that lack and foster local development. 1st world trade barriers, subsidies, dumping & WTO agric conditions have had real effects on 3rd world smallscale farmers. While you’re spreading your message, please spread the important associated message that political and civil will & action (including change in international organisations and trade arrangements) is required to bring about conditions where the poorest have entitlements and opportunities for livelihoods. 1st world industrial models will not be the agency that creates these conditions.

  33. Lamna nasus December 18, 2006 at 1:54 pm #

    ‘nut (almonds, pecans, walnuts etc) commodities have hyperinflated in price, anywhere from 200-300%’ – Aaron

    Yup that’s definatly an interesting one.. if you drive down the road in southern Kenya you can pay the same amount for a 3kg bag of cashew nuts from road side hawkers as you would for a supermarket pack back home… buy a couple of bags and the price drops again…. interesting

    Coffee… low import duties on the low margin beans but high import duties on the high margin processed coffee products… very interesting

    The Economist December 9TH – 15TH 2006 UK Edition… Four full pages dedicated to attacking the Organic food market, the Fair Trade food market and the locally produced food market….

    The only bits worth reading..

    ‘So what should the ethically minded shopper do Things that are far less fun than shopping,alas.’

    I see… could the Economist leader perhaps be a little more.. specific?…

    ‘These changes will come about only through difficult, international, political deals that the world’s governments have so far failed to do.’

    Really? Soooo.. I’m supposed to stop making political trouble by using the ethical power of my consumer spending to upset the status quo and leave it to the ‘failed’ experts am I?…

    I resolve to make an effort to buy twice as much Organic food, Fair Trade food and locally produced food… its clearly starting to work if mainstream free market publications now regard it as enough of a threat to attack it.. 2007 is going to be most enjoyable..

    Apparently organic cotton demand’s going through the roof too…

  34. Lamna nasus December 18, 2006 at 3:05 pm #

    ‘Economics 101 – increase demand = increase price.
    Increasingly expensive food is not good for Africa. ‘

    Really Aarron? Perhaps you would like to explain to the uneducated masses why the US is selling corn to Africa… most of the uneducated would assume that in order for the poor in Africa to feed themselves, African farmers should be growing its own food…

    Indeed by your logic the looming oil crises will be the doom of third world poor not environmentalists… unless of course you are going to attempt to blame environmentalists for the failure to devote the surface of the earth to GM intensive cropping; which is a complete waste of time because bio-fuels cannot replace petroleum, no matter how much you plant… the demand is simply too great..

    Economics 102 – manipulated demand = manipulated price.

    Business 101 – a cartel is the most profitable business model and any market will gradually contract to a small number of major players since market forces favour greater purchasing power and economies of scale.

    It never fails to amaze me that frightfully well educated chaps can naivly assume that after decades of being watched gorging themselves at the trough and failing to deliver on their promises to the world’s poor, they can still wheel out exactly the same piffle year after year under a new cover…

    ‘The price of corn was low because it was perception based (from food markets and government policy)’ – Aaron

    Thats odd because most people would think that the markets and government policy were not a ‘perception’ so much as a.. reality… I guess reality is what you make it eh?

    ‘How can you decrease poverty globally when you have a stockmarket bubble likely to burst, inflation rates (the real ones not the ones quoted in the mainstream media) running rampant, houses prices across the planet floating on loose monetary policy (same for the stockmarkets), and resource finiteness further fueling inflationary pressure. We have seen the best the world can achieve in terms of living standards. Get with the real world!’ – Aaron

    I’m already there, thank you Aaron and I do not envy the mess my neices and nephews are going to inherit… however your admission that the market is actualy destroying economies and disabling the opportunity to end poverty might get you taken off Jen’s guest list…..

    I take it we are approaching the time when the frightfully well educated start looking round for somebody else to blame for the mess they have made… after all this problem appears to be the result of letting frighfully well educated people like yourself tell the uneducated masses what to do.. and if your predeccessors were such a utterly useless lot, why on earth should anyone listen to you?…..

  35. Aaron Edmonds December 18, 2006 at 3:36 pm #

    Almond thieves get bolder and the payoff isn’t peanuts.
    4 Dec 2006

    SACRAMENTO, Calif. If you think the squirrels in your backyard are bold, stealing nuts, birdseed, and fruit, consider two men in California suspected of stealing two (m) million dollars worth of nuts.
    The two have been arraigned in Sacramento on charges of receiving stolen property. They could each face up to a year in state prison if convicted.

    Prosecutors say the men were arrested last month after police raided two Sacramento-area warehouses and found 136-thousand pounds of almonds and walnuts squirreled away, stolen from Central Valley growers.

    Nut thieves have gotten bolder in the past year as prices have shot up, especially for almonds, a major California cash crop.

    The men did not enter a plea and will be back in court next month.

    http://www.kcautv.com/Global/story.asp?S=5767332&nav=1kgl

  36. Aaron Edmonds December 18, 2006 at 3:41 pm #

    FUEL SOURCE PRICE EFFECTIVE COST TO PRODUCE 1,000,000 BTU’S
    DRY SHELLED CORN 2.20/bushel $4.54
    ELECTRICITY 8.9 cents/ KWH $25.80
    NATURAL GAS $1.26/1000cubicft $16.52
    FUEL OIL $1.07/gallon $8.62
    LP GAS 95 cents/gallon $10.85
    WOOD $125/cord $12.54
    WOOD PELLETS $197.50/ton $15.82

    http://www.goldengrainstove.com/fuel.htm

  37. Aaron Edmonds December 18, 2006 at 4:25 pm #

    Wheat prices soar as farmers dump production
    [ 16 Dec, 2006 0126hrs ISTTIMES NEWS NETWORK ]

    LUCKNOW, INDIA: The near 33 per cent rise in prices of wheat in a year have not only forced the lower income groups to loosen the knots of their crumpled dhoti but the effect is pretty evident on the purse strings of the middle income families too. And the ripple effect of the rise has made the matters worse.

    As per the version of Mandi functionaries and retail store owners, wheat prices have soared by Rs 3 per kilo on an average (Rs 300 per quintal) in a year.

    “Wheat comes in different qualities. The fuller bigger grain and the broken, smaller one. The price for both has gone up. In the last year, the prices varied between Rs 9 to Rs 10 per kilo depending on the quality. Now, the price has gone up to Rs 10.70 to Rs 13 per kilo,” said Pandey Ganj Vyapar Mandal head, Lalta Prasad Tiwari.

    Naturally, the prices of wheat products have also shot up. Roti has become dearer by a rupee and its various versions, ‘rumalis,’ ‘naans’ or for that matter, ‘paranthas’ now fetch six to seven per cent more than their cost a year before.

    The bread is now costlier by some Rs 2 per pack. Although store and restaurant owners are not very forthright in assigning figures to this rise, for reasons best understood, they add hesitantly that the rise has spread to all related things which have become dearer by some 10 to 15 per cent.

    The price of the packaged flour has also seen a directly proportionate increase. A 10 kilo pack which was available for Rs 120, now sells at Rs 150, Rs 3 per kilo more than a year ago.

    It is evident that the price rise is because of short supply of wheat in the market but reasons behind it merit mention.

    “The production of wheat has gone down. Farmers do not want to grow it. The crop requires a lot of care, more money and time. After all the effort, they are offered Rs 6 per kilo by government. With 80 per cent farmers being poor, they cannot keep their crop for a better price. They sell to government at a lower price. In search of greener pastures, farmers are now growing sugarcane and peppermint instead,” Tiwari said.

    “Hoarding also creates an artificial scarcity and accordingly, the price goes up. Government officials and rich farmers hoard the better quality of the grain to sell it in the market for lucrative return,” he added.

    It could be a pizza generation but wheat continues to be the staple diet. And with Indian households not going without it, the further rise in prices, which market readers predict, will have to be taken with a pinch of salt.

    http://timesofindia.indiatimes.com/Cities/Lucknow/Wheat_prices_soar_as_farmers_dump_production/

  38. Lamna nasus December 18, 2006 at 4:34 pm #

    So just try to get this straight –

    ‘If you take wheat for example, it needs to be planted every year and this requires a lot of energy’ – Aaron

    But Aaron also thinks that more corn needs to be produced…. except presumably this also requires a lot of energy…. so that it can be sold to poverty stricken Africans for food although quite how they are going to pay for it is all a bit vague…

    But Aaron has decided not to produce wheat or corn but Australian nuts despite the fact that California is over run with almond thieves which is a different nut to the one that Aaron grows….

    And dry shelled corn is really cheap fuel….but bio-disel cannot replace petroleum under current demand patterns and anyway it is needed to feed starving Africans….

    Your strand of logic appears to be getting a bit tortuous, Aaron….

  39. Lamna nasus December 18, 2006 at 4:44 pm #

    So the Indian farmers are dumping wheat as a crop because they have been getting a better price for sugar cane and peppermint. According to the report the fixed price dictated by the Indian government is at fault, not non-GM technology or environmentalists or US bio-fuel….. not really seeing how this is supporting your thread opening post Aaron….

  40. Ian Mott December 18, 2006 at 5:56 pm #

    Sorry, Aaron, but a 16% increase in the dollar value of fertiliser sales world wide, made up of half cost increases and half volume increases does not amount to hyperinflation. This term is normally applied to situations where prices double each successive year, if not each month.

    The same applies to 30% increases in wheat or nuts. Not quite normal but not unusual fluctuations in commodity prices. And this anecdotal stuff about nut thieves is nothin unusual. Thieves routinely target goods of higher value. Recently it has been bananas, other times sheep or cattle. And we can all remember times when you couldn’t give them away.

    But thanks for the breakdown of inputs to BTU’s. Where did they come from?

  41. Aaron Edmonds December 18, 2006 at 9:48 pm #

    Really its quite simple unless you like to complicate yourself Lamna. Really the world can be quite a simple place and the only thing tortuous is your inability to connect the dots of logic. So just for you Lamna I’ll rehash and I’ll admit my resolve is weakening.

    READ
    The world is overseeing a dangerous drawdown in global stocks which is occurring for a number of reasons:
    1. Use for biofuels and this is as a result of grain being valued to cheaply by food markets.
    2. Poor adaptation to variability in seasons outside of ‘average’. Droughts in the US and Australia left annual crop yield severely deficient of normal (9.5mmt wheat crop as opposed to 25mmt last year in Aust).
    3. Loss of land due to environmental degradation and inflation of input costs.

    Just so you are clear on the operation I am involved in even though I’m sure you probably don’t give two hoots:
    My operation is taking all unproductive sites (sandy soils, waterlog prone, frost prone, drought sensitive) and converting them to profitable and sustainable systems using sandalwood (produces an oil and protein rich nut and yes we are having trouble with thieves given they are valued at $30,000 a tonne). Because I run a large acreage (5000acres) I cannot convert overnight so settle for 50 hectares a year. In any case I need the equity from my grain crops to fund this conversion. Aaron never said “Aaron has decided not to produce wheat or corn but Australian nuts despite the fact that California is over run with almond thieves which is a different nut to the one that Aaron grows”. Aaron will clarify because Lamna is as confused as his name sounds. The rest of my farm is under conventional grain production techniques.

    What you can’t see is not my problem Lamna. I cannot take responsibility for everyones ignorance. You have the facts now do with them what you will. Goodbye. Incidently if you have suggestions how we deal with these problem how about posting something constructive? Now to Ian ….

  42. Aaron Edmonds December 18, 2006 at 10:04 pm #

    Ian the ‘hyperinflation’ in fertilizer prices began two years ago when you could have purchased urea, DAP based fertilizers and potash for half of what they are now. (Wish I knew how to post charts?) And the fertilizer price rises I am referring to in the original post are yet to occur. Potash in particular I am anticipating a significant price rise in 2007 based on supply relative to demand. And probably urea will surprise in its ability to inflate.

    Ian I bought some December 06 wheat futures in January of this year for US$3.84/bu. In October of this year they hit a 10 year high of US$5.60/bu (unfortunately I was not still holding). That represents a 68% rise and would most definately qualify as hyperinflation. Wheat futures (Mar 07) are now trading at US$4.90/bu. But comeon this is not normal …

    Actually almond prices were around $9000/tonne a few years ago and and are now trading well in excess of $30,000/tonne. That is not normal.

    With all due respect you can live without bananas and sheep but when it comes to staple foods there is no substitute. Oh I need my sleep.

    BTW if any of you actually are involved with any projects that are physically (yes that means work) looking to achieve food security and sustainability goals would love nothing more than to network. The world is not short of ideology but it’s decidedly short of passionate people who speak through their actions in this area.

  43. Aaron Edmonds December 18, 2006 at 10:07 pm #

    IAN link is attached to the BTU comparison table. I am trying to quote my sources now ok … It is from a corn burning stove manufacturer of coarse. Here it is again:

    http://www.goldengrainstove.com/fuel.htm

  44. Aaron Edmonds December 19, 2006 at 12:01 am #

    WELL BLOW ME DOWN WITH A FEATHER …. THIS NEWSPIECE OUT OF INDIA ….

    Rice prices skyrocket: Govt intervention sought
    Tuesday December 12, 2006

    There has been a steep hike in rice prices. It poses a big problem for the ordinary people. Many factors are being attributed to this hike- one due to shortfall in production, the stocks have become less. Earlier, when Chhattisgarh was in Madhya Pradesh there use to be no shortage of the staple commodity. But after it (known as rice bowl) becoming an independent state, Madhya Pradesh has to depend on other states for procuring rice. Parts of MP where rice is produced include Dabra in the Gwalior region, Badi in Raisen, Babai and Piparia in Hoshangabad and in Seoni and Balaghat districts. The shortfall is also the result of a weak crop at these places. It’s a matter of concern that the rate of basmati rice has touched between Rs 3,000 and Rs 5,000 a quintal. Likewise dubraj and Kali Moonch have also become costlier by about Rs 200. The traders put blame on this price hike to the multinational companies. The MNCs were indulging in reckless retail trade and stocking rice and other cereals at high price. This has led to increase in prices of rice. The price of wheat too had gone up earlier. It is a fact that once the prices go up, they do not easily come down. After the entry of private parties in this trade, hoarding of the essential items has increased. The situation is such that today the prices of rice have gone up, after some time the wheat too will become a rare commodity. It is a matter of concern and the government should resolve this issue before it causes much harm. The private companies buy rice from farmers at cheaper rates and sell it at high cost after packing it. Rice sowing also needs improvement. The government should keep an eye on the prices of essential commodities.

    http://www.centralchronicle.com/20061212/1212282.htm

  45. Aaron Edmonds December 19, 2006 at 12:16 am #

    JUST TO HIGHLIGHT THE CHAOS SHORTAGES ENCOURAGE
    ———————————————-
    Food grain shortage looms large (India)
    Source: The Sangai Express

    Imphal, November 24: Following the prolonged imposition of economic blockade along the National Highways coupled with lack of concern on the part of the State Government, rice stock in the FCI godown of Sangaiprou has severely depleted and is unlikely to last no longer than the current month.

    On the other hand, even as construction of the 2500 metric ton capacity FCI godown at Jiribam has been completed, the Chief Operation Manager of NF Railway located at Maligaon has refused the official request of the FCI officials to send the rice quota of the State by railways to the Jiribam godown.

    Despite the FCS Minister and MLA of Jiribam constituency Th Debendra taking up the issue with the Railway authority, the NF Railway officials have remained unresponsive.

    FCI Imphal officials have confirmed that due to the on and off economic blockades imposed by different bodies along NH-39, the rice stock in the Sangaiprou FCI godown has depleted to an alarming position and the present stock would be hard to meet the requirements of the current month.

    Another official lamented that even as the weather conditions were perfect to bring in the due quota of PDS items including rice to build up a buffer stock in addition to providing the present requirements, the PDS items could not be transported due to the economic blockades on the highways.

    The existing little stock was also brought together with other private transporters amidst tight escort provided by security forces, he added.

    In the aftermath of the 52 day long economic blockade imposed last year and following the pressure exerted by people to develop the Imphal-Jiribam road, a godown of 2500 metric ton capacity was constructed by CPWD near the Jiribam railway station and was handed over to FCI Imphal.

    After the godown was handed over to FCI Imphal, FCI officials had asked the Chief Operation Manager of NF Railway, Maligaon to send the due State quota of rice and other PDS items by train to the Jiribam godown but till date no response has been forthcoming from the Railway officials, disclosed the official.

    Recalling that till 2001, the rice quota of Manipur was transported by railways up to Jiribam, the official taking serious note of the matter, wished the State Government would take up the issue with the Union Government concerning the refusal of the Railway officials to transport the foodgrains by railways when the godown is just near the Jiribam railway station.

    He also drew the attention of the FCS Minister who is also the elected representative of Jiribam constituency.

    Saying that plans are afoot to build a larger godown at Jiribam once the rail line to Jiribam is upgraded to broad gauge, the officials opined that the fear of a possible food grain shortage due to frequent economic blockades on National highways could be negated if adequate food grains are stocked at the Jiribam godown after bringing in the foodgrains by railways till Jiribam.

    http://www.e-pao.net/GP.asp?src=3..251106.nov06

  46. Pinxi December 19, 2006 at 8:38 am #

    The total global ‘pie’ is currently big enough but competing demands mean some bidders miss out. It’s a shortage of ability to access and purchase food, a lack of abililty to compete in markets that’s the problem. ***Increasing supply doesn’t necessarily end this problem due to the rebound effect – more supply and hence cheaper crops can increase their demand (used as substitutes for other more expensive fuel or production inputs). Just considering supply & demand treats the problem as a market problem when there are other contributung problems that simply increasing supply doesn’t rectify.

    “The MNCs were indulging in reckless retail trade and stocking rice and other cereals at high price. … The price of wheat too had gone up earlier. It is a fact that once the prices go up, they do not easily come down. After the entry of private parties in this trade, hoarding of the essential items has increased. …The private companies buy rice from farmers at cheaper rates and sell it at high cost after packing it.”

    revisit comments in post above about markets & businesses; even sufficient food for everyone is inadequate without addressing the lack of entitlements & access to basic requirements for poor people because while-ever we have economic growth and alternative uses, there will always be competing demand and highest bidders win, losers keep losing,

  47. Aaron Edmonds December 19, 2006 at 10:10 am #

    I agree Pinxi it (increasing supply) doesnt solve the problem and you make a very good point. But I still think overseeing drawdown is far more dangerous to stability of the global economy. Once food shortages bite into middle class communities it starts to get serious. You would think the US government which subsidises its ethanol industry heavily would be well aware of the effects of this policy on global food security? I don’t have the answers for the whole world and I don’t think anyone does. So what do we do? Just join a throng of knockers on a chat forum? Can’t believe the negativity out there. Lucky I’ve a thick skin.

    Australia is in a fortunate position because of our land resource relative to population but as a part of the conventional system I see the unfolding oil situation and weather variability as challenges we cannot ignore planning for. Good luck.

  48. detribe December 19, 2006 at 1:48 pm #

    China-Grain-Biofuels
    18.dec.06
    Associated Press
    Elaine Kurtenbach
    SHANGHAI, China — The state-run newspaper People’s Daily quoted Yang Jian, director of the development planning department under the Agriculture Ministry, as saying China will restrict the use of corn and other edible grains for producing biofuel, adding, “We have a principle with regard to biofuel: it should neither impact the people’s grain consumption, nor should it compete with grain crops for cultivated land.”
    Yang emphasized that his ministry opposes using edible grains as raw material for biofuel.
    He noted that the government was, however, encouraging farmers to grow sorghum, cassava and other non-grain crops on marginal land to supply biofuel processors.

  49. detribe December 19, 2006 at 2:08 pm #

    Pinks
    “I’ve already said that sufficient food to meet requirements is obviously a requirement, that’s a no brainer so let’s move beyond it. It’s not as simple as baking a pie big enough to feed everyone as you would realise. In recent times the world has had sufficient and affordable food resources to feed everyone, but still pervasive malnutrition continues. ‘Affordable’ food, like poverty, is a relative concept, much as I hate to say it. Food as cheap as we could make it & ship it would still be unaffordable in the 3rd world. Our govt can’t ‘afford’ to meet the ODA average OECD nations because of national priorities – increasing our standard of living which is already very high.”

    Good to see initial statement that are accurate enuf for me to agree with, BUT, wots this about food exports being too DEAR for the poor to afford , when the main issue is they ARE TOO CHEAP and they price poor farmers out of the market!? The reason why exporters like Argentina and Brazil sell so much is they make food very cheaply (along with the subsidised exporters).

  50. detribe December 19, 2006 at 2:24 pm #

    “The total global ‘pie’ is currently big enough but competing demands mean some bidders miss out.”

    Yes Pinks more stuff that as you put it its a no-brainer

    “It’s a shortage of ability to access and purchase food, a lack of abililty to compete in markets that’s the problem. ***Increasing supply doesn’t necessarily end this problem due to the rebound effect – more supply and hence cheaper crops can increase their demand (used as substitutes for other more expensive fuel or production inputs).”

    Ye, Pink more no-brainer stuff, but who is arguing that increasing supply meets SHORT TERM distribution problems?

    “Just considering supply & demand treats the problem as a market problem when there are other contributung problems that simply increasing supply doesn’t rectify.”

    Well yes Pinks, and agree ability to access entitlements is important, but what are the main factors promoting success in earning just entitlements? ( like productivity increases perhaps?

  51. Pinxi December 19, 2006 at 2:36 pm #

    I always knew that Aaron, detribe & Pinxi had a lot in common. It’s a valid point too about vocalists v’s doers. I just wanted to say to Aaron that he should practice how he chooses his words (& human-sheep govt-farmer analogies) to avoid pub brawls.

    detribe with the question of dumping prices locals out of their own production v’s they can’t afford 1st world crops, you touch on an area I nearly raised earlier but decided it was too complicated for my already long-winded posts. In quick response to you I can say that I was referring to correctly priced 1st world output. Dumping subsidised products (as with trade barriers) creates additional peverse & distortionary effects and can vary by area & crop. In this space we can’t go much beyond generalisations. In addition, still trying to keep it in a nutshell I can point to locally specific conditions & degree of inequality. Where an industrialising country has growing divisions between urban growth areas & urban slums & rural poor you can have the latter going without while you can have food being shipped from rural to urban areas where the highest bidders are; you can also have a structural change in the crops demanded (the new wealth doesn’t want traditonal staples eg potatos) so more volative markets. This has led some govts to try to control prices or markets, or subsidise food for the poor, or restrict movements between rural & urban areas. Some other local govts (eg in Brasil) have taken up the idea of basic rights and provided subsidised food staples for everyone -rich or poor. A similar kind of measure is the work for food policy (eg India) where if an area is facing a potential famine then people can work on public projects in exchange for food transfers. It would have complicated matters too much above but I nearly pointed out that subsidies and bilateral trade agreements can sometimes benefit poor people in 3rd world countries but the main point is these are add-on measures in an already distorted system and dependency on compensatory measures or aid (whether its genuine or dumping in disguise) is not a solution.

    Having said all that, I 1st read your post assuming you were addressing the 3rd world farmer, but perhaps you meant 3rd world ag exports underpricing 1st world farmers (particularly where they’re industrialised & organised to store & ship large quantities with reliable quality eg soy beans)? If so, it fits, it doesn’t go against the grain (heh) of my comments in earlier posts above. It’s already been stated that 3rd world exports (esp standard cash crops) can be sold on international markets, doesn’t necessarily benefit to the strugglers or the subsistence workers, especially where there are industrial operations, FDI & a high degree of inequality as there is in latin america.

  52. Pinxi December 19, 2006 at 2:44 pm #

    re global economic security Aaron, there are already plenty of volatilities in the economic system itself

  53. Aaron Edmonds December 20, 2006 at 12:25 pm #

    Agree Pinxi but lets not see how food insecurity affects it concurrently. Sadly I don’t think we’ll be able to avoid it and there is somewhat of a perfect storm approaching. Loose monetary policy on an unprecendented scale, equity bubble, housing bubble, deflation of the currency all commodities are traded in, weather variability and general jostling for resources in a regionally unsettling manner.

  54. Aaron Edmonds December 27, 2006 at 10:14 pm #

    Urea price has recently concluded a 30% rise over a succession of 2 months. Well on the way to a inflationary move we might prefix with hyper don’t you think Ian? Of course in anticipation of these fertilizer price rises and still being in the business of growing grain, I have 2 years worth of fertilizer on hand to avoid these price jumps. Commodity markets are great supporting arguements when it comes to futurising … But the future for sandalwood just became a little clearer ;)

Website by 46digital