The moralising on the supposed evils of converting grain to biofuel and pushing food prices to record levels in a soon to be hungry world has only just begun. It has been described as nothing less than a “crime against humanity” by UN expert, Jean Ziegler and these sentiments were also echoed by the IMF. The only thing missing were the “four horsemen of the apocalypse”, but give them time, they are only just warming up yet.
Just be sure to take it all with a grain of salt because that is a narrow minority urban view. Afterall, the majority of the world’s population are still farmers and fisher folk. And under the principles of universal sufferage and one vote one value, it is the farmers perspective of high food prices that should, but rarely does, prevail over the bleatings of minority urban panic merchants.
It should not be forgotten that in the entire sweep of human history prior to 90 years ago, almost all non-railway transport fuel was grown on farms and the trade-off between the use of grain for food or transport was a central element of all human commerce. A part of every farm was set aside as the “horse paddock” and part of every oat or corn crop was set aside for both family consumption and horse transport and traction purposes. The family’s ride into town was fueled by a stomach full of grass but it was the bag of oats, that was contentedly munched on while the shopping was done, that fueled the ride back home. Every farmer also knew that if they wanted the ploughing done on schedule then they would need a few more bags of supplemental grain to maintain the effort. And all the products the family had bought had been transported by animals whose sole source of fuel was grain that had been bought in the same market where the same grains (of slightly different quality) were sold as food for humans.
In fact, the traditional Amish communities are still doing it to this very day. And somehow, lumping them in with the likes of Pol Pot, Adolf and uncle Jo Stalin seems just a wee bit over the top, don’t you think? Especially when you look at their CO2 emissions per capita. And if the Amish are committing crimes against humanity for diverting human food for transport purposes then what does that say about Hindu farmers who, for religious reasons, allow perfectly good cows to die of old age, un-eaten by anyone?
More to the point, there is not the slightest doubt that the presence of this competing demand for agricultural output played a major role in maintaining food prices at levels much higher than these recent “record levels” that have been attributed to rising oil prices. And it was these very same high prices for agricultural produce that ensured that small scale family farming remained as a profitable occupation. It is what maintained most of the population, and the jobs, in rural and regional settlements where their ecological footprint was incapable of producing excess CO2. It took cheap oil, cheap food and the urban megopolis to pull off that stunt.
It was also these higher food and transport prices that played a major role in curbing mankinds propensity for the kind of conspicuous consumption that is having a major impact on the ecology of the planet. These higher prices ensured that houses remained at sensible sizes, used less resources, were easier to heat, cheaper to maintain and were built closer together. People could afford to buy them with just one income. This produced denser housing in more compact towns and cities where walking, bicycling and public transport were more viable. They formed stable, safe neighbourhoods where kids could walk to school and be monitored by a careing community. And despite the past lack of medical advances, people were fit, active and rarely obese.
The drift of population to the cities was much slower under high food prices and this slower pace of development was at a rate that planners could cope with. These smaller cities enjoyed greater utilisation of infrastructure, lower maintenance costs and fewer diseconomies of scale. It was, dare I say it, a much more ecologically sustainable pace of change.
So we need to be cautious about the underlying perspectives of those predicting catastrophic outcomes from high food prices. For it may well be the case that the simple lifestyle and market induced responses of ordinary folk to higher food and transport costs will do more to cut CO2 emissions than all the climate wallies combined.
Yet, many would agree that it is not good sense to be starving poor people all over the world for the sake of a target set by uncertain science and rampant green whimsy. But it must also be remembered that most of the worlds poor are rural poor, not urban poor. And it is only the minority urban poor who will be in serious trouble from higher prices.
For the rural poor this doubling and trebling of food prices is the good economic news that well informed development economists have been calling for for decades. The major cause of their poverty was the low cost of energy and the resulting artificially low break even price of industrially farmed commodities. These low priced industrial food stocks undermined the prices of third world farming produce to the point where the results of a days labour were insufficient to feed the farmers family for that day. This was further exacerbated by the dumping of subsidised food as “aid” to the expanding urbanised populations that needed to be placated to maintain any semblance of order.
In contrast, the major increase in energy costs has produced a major increase in the price of fertiliser which is obviously not good for those users. But in the third world this also means that the nitrogen in a cows turd has also undergone a major increase in value to a point where the effort expended in collecting that turd will be properly rewarded by the additional food it will grow and the major increase in price that food will command.
And while the increase in energy costs has raised the price of weedicide for the developed world, for most of the worlds farmers it has re-created the circumstances in which a day spent chipping weeds with a hoe will be rewarded with more than enough food to make it worth his while. The improved weed control improves the water use efficiency of their limited rainfall supplies. It can have the same effect on farm output as a 30% increase in rainfall.
The problem in third world agriculture was never one of lack of underlying capacity. Cheap commodities from cheap oil simply undermined the structure of their local economy to a point where the effort required to produce a surplus of food over their own needs was more than the extra food was worth and the people who might have bought that surplus were all in the city, too far away.
Those days are now gone. These farmers have been sent a very powerful price signal from the market place that their efforts are now valued more highly and are prepared to pay a much fairer price for what they produce. The additional spring in their step that this will produce will be akin to giving them an extra acre of land each and an extra 100mm of rain.
And those members of the starving, rioting urban poor who still retain their links to the rural community will soon discover that there are new, secure jobs back home providing services to those who, some for the first time in their lives, are enjoying an investable surplus and economic security based on their own effort, under their own control.
And after all they have endured under the tyranny of cheap oil and cheap food, who of us would not wish them all the very best in their endeavours. As Candide said to Pangloss after a lifetime of catastrophe, “that is all very well, but there is work to be done in the garden”.
Ian Mott
Jennifer Marohasy BSc PhD is a critical thinker with expertise in the scientific method.
Too much Byron hooch. So you’ll be off down to the farm to live sustainably with the chooks and veges in your new found browntopia. This I gotta see. So we won’t be seeing you online much. Will we be seeing Ian on the hoe doing a few weeks chipping, leading the wife and kids through the bliss and merriment of weed control in the summer heat?
Hordes of urban dwellers will walk away from their mortgages and return to mysteriously purchase blocks of land with their vast reserves of capital. No need for skills – you will suddenly learn to cultivate crops, spend your days gathering dung, to harmonise with the seasons while whistling philosophically as you deal with decadal droughts. And you won’t be needing insecticides – you can experience the joy of “cultural control” by squishing caterpillars with your increasing stronger fingers. Only to find the next high pressure cell dumping a gazillion Heliothis moths on your rustic plot from central Australian daisies.
The world’s poor will suddenly triple their production and begin exporting. They’ll have so much food – they won’t know what to do with it. Their new found infrastructure will ship this produce across the globe.
And how much are our prices we pay for beef, for example, a factor of new found costs of production and value or profiteering by supermarkets. So have farmers sent a powerful message or been given a personal message from Woolies and Coles??
http://www.austbeef.com.au/public/PropertyProductDisplay.asp?PID=N10693&RURL=/postings/15403/news/News10693.html
http://www.austbeef.com.au/Postings/15403/Content/ABA%20Grocery%20Submission.pdf
And there is 40% of the world’s land under cultivation – all this will suddenly become organic – need for fertilisers, weedicide and pesticide removed overnight – whole farming systems will be reborn.
In fact high prices will make it rain. Hallelujah !!
It’s gonna be a wonderful bran nue dai in the big new browntopia.
This story reminds me of a bugbear I always have had. If NGO’s want to contribute to local economies in the third world.
They should supply a water buffalo or donkey (ass) depends on what area they want to contribute to. These animals don’t depend on expensive or unobtainable fossil fuel to plough the paddocks or paddies.
Which brings me to another story.
Years ago in Aceh, Indonesia. If you happened to be driving down the road and by chance ran over a child, then you would pay the family around $ 10,000 in compensation.However if you were driving down the road and ran over and killed a water buffalo you paid $ 30,000. It was much easier to replace a child than a working water buffalo.
Ian,
What we lack is an unhampered market, and in OZ that seems a something like Alice’s.
That said, I would be careful about interpreting high food prices as a rational market phenomenon; I interpret it as inflation from loose monetary policy (ie inflation).
Hell, I am a recalcitrant Austrian, what would I know about economics.
I CANNOT believe that I am saying this, but Lucy wrote down what I was thinking. Here are a couple of other key points:
(1) No one (to my knowledge) has ever said anything remotely like that about the Amish. In referring to the idiocy of burning our food, the comments have been directed at policymakers and agri-business lobbyists that have garnered huge subsidies for this bio-fuel madness.
(2) The number of “farmers” in the industrialized world has decreased while the crop yields and amount of land under cultivation has remained about the same. I don’t think that this trend is going to change.
I do think that the market will eventually straighten this out. I just hope that we don’t have food riots in every major city before that happens.
http://depriest-mpu.blogspot.com/2008/04/food-to-burn.html
Peak corn, your time has come.
What we have now done is couple food pricing to energy pricing. That is not good. The costs have always been linked but not the prices.
Another issue is modern industrialized farming makes it virtually impossible for the little guy to get in the game, much less compete. They are getting out in record numbers now. You need huge tracts of unimpeded land for the machinery to work efficiently. And vast amounts of hydrocarbon based fertilizers to feed the crops.
And lastly, we have had a few decades of warmer temperatures, the modern industrialized farming techniques which developed in the last 30 years, are likely not that resistant to cold. Nor are the crops which have been “genetically tuned” for yield at the expense of everything else. It’s a set-up for ‘large systems failure’, in this case the food supply. The yields of 150-200 bushels per acre of corn are likely to drop with colder climate — The need for more land under cultivation will surely increase to feed the world. Are we headed back to 50 bushel per acre corn yields?
Ian is correct:
“These low priced industrial food stocks undermined the prices of third world farming produce to the point where the results of a days labour were insufficient to feed the farmers family for that day. This was further exacerbated by the dumping of subsidised food as “aid” to the expanding urbanised populations that needed to be placated to maintain any semblance of order.”
Ian is really on to something here, folks. Something that Australian farmers have known for a long time.
Farm productivity in Australian (US, Canada too) has soared 300% since 1960, but the income level for the farmer is the same and the profit level has declined by 66%. Modern farming in Australia is surviving only by borrowing from the future, ie depleting the farm’s natural resources that the market has no price markers for.
Also, don’t get too worked up about grain price starving people. The total International agriculture market for ALL production is only about 1% of global production. If people are starving it isn’t because of lack of food, rather the lack of working distribution system, free market or otherwise.
Total farm debt in Australia in 2006 was $51 billion. total farm income was $35 billion.
In 2006 farmers in Australia (US, Canada) were getting the same prices for their produce as they did in 1969, but in 2006 dollars!!!!!! Aussie farmers, like their 3 rd world counter parts are being driven off the land in droves.
Note: Don’t confuse the 30% inflation sine 2006 at the duopoly of Coleswoolie as a “real” rise in the price of food. Farms ain’t seen a penny of it.
So the next time you hear some Urban Myth about the high price of food today, send them to Ian Mott.
I have never understood farmers. I have heard them whinge and whinge about being private enterprise and blah and blah, I have watched poor business performers subsidised and good business performers un rewarded. People screaming Corporatisation stealing farms.
Why they as an industry haven’t launched their own retail outlets buggers my belief, they keep doing the niche and boutique shit. All screaming branding and continually being forced into mutual competition.
Yet when it was about finance and their crops and farm supplies they can rip right in and have a crack and take shares in a major play.
There is absolutely no issue for the farm gate to co op as long as they supply to all outlets at a similar price. They need to observe fair trade and they are allowed to compete. Arms length and not chinese walls would do the trick.
There is no reason why they have to be the be all and end all of a consumers shopping needs but they can enter the price end of the market.
They sell food and farm product but why as seller always price dictated. Blaming systems and government never produced a crop that Iever saw.
I was a rural bank manager for a while. So I get sick of their victim stances at times because they can be just as ruthless in business as any sweat shop owner I ever met.
The ag industy’s biggest issue they seem to go in fad cycles. They go all trendy on farm issues and rush to the next big thing.
Why the just don’t experiment with some small models and then look at a large feasabilty.
But what would I know about bush needs in services and their delivery.
Interesting show on television last night (do they have television in the country yet? We have colour TV in the city) on 60 mins about some bee mite that is destroying bee colonies in countries like USA and now NZ, which in turn makes pollination difficult/more expensive for farmers.
One quote I recall from the show was that *if and when* the mite reaches Australia, food prices will double.
—
I’ve yet to see any good study comparing the many influences on the price of food. Be nice to put the alleged increase due to biofuel production in context.
I remember seeing a special where this farmer in Germany had converted a couple hundred acres of his farm into a solar farm. This means that he no longer grows food there. Will this farmer, one day an ecological hero, now be declared as a genociadal maniac by the left. Will they only be happy when we live in socialist cave communities.
Isn’t it wonderful how Luke/creep can let his imagination run to the riotously absurd so he can then position himself as some sort of fount of common sense with his rebuttals of his own bull$hit. What it does make clear is the extent to which he and many other metrocentrics can go maintain the status quo in the face of overwhelming evidence of the existing failures. But one is always left wondering why, on earth, do they feel this need to do so?
Any reduction in the rate at which new third world urban slums are formed is good news for the planet. Just as any reduction in the rate of growth in our major cities is good news for planners, good news for existing residents and road users and good news for local environments.
It is especially good news for those seeking permanent reductions in CO2 emissions because the commuting time in the average country town is only a fraction of that for the metropolitan fringe.
Any return of any small proportion of past migrants to urban slums is good news, not just in economic, environmental and greenhouse terms, but also in social terms. Just as any return of country kids to their home towns is good news for maintaining health services, teacher numbers and the viability of local services.
Any phenomena that returns any portion of young single males to the more watchful eyes of parents, uncles, aunts and former teachers, is very good news in the battle against third world HIV, for example.
But yes, all the experts will tell you that in the industrialised world the family farm is dead. But that view is heavily dependent on the continuation of the low cost of energy and the commensurate low breakeven point for industrialised food production. They have not adjusted their assumptions to fit the changed circumstances.
And it is sad that it appears necessary to point out that the fact that family farms may no longer be facing extinction does not mean that industrial agriculture will cease altogether. It simply means that many of the “prickle farms” and smaller holdings that have been heavily dependent on outside sources of income will now become less dependent. Those that were marginally viable will now become viable. Those that were incapable of setting aside contingency reserves will now be able to do so.
Even the lawn mowing cow on the two acre house block has more than doubled in value. And when its time eventually comes, it will now provide about $5000 worth of meat for the freezer where it used to provide only $2000.
But of course, the greens and their departmental minions have invested a great deal in long term strategies for the acquisition of private lands through the exploitation and abuse of the concept of farm viability. And there is not the slightest doubt that the accross the board improvements in farm viability all over the world are a major setback to these fellonious little plans.
I live in a rural community, having moved from the city some 20yrs ago.
It seams to me we are again adjusting to high prices in the super market to growing food for local farmers markets.
Fruit trees were ripped out for the attraction of growing grapes for wine, the value in that has been devastated by drought and reduction in water allocation for irrigation, 1/3 of license allocation.
Vines are now being removed or are dying.
Small acreage, once a non starter, are again growing veges of much higher quality than that of super markets, at cheaper prices.
The newer ex city owners of food growing land, didn’t figure on hard work when they bought land, unlike grape growing vegs. are a lot more hands on work.
New owners are now finding it difficult to have a job and pay the morgages on land that does’nt make enough return to pay for borrowings, let alone a change of land use ie growing a tree, orange, takes 12 years.
When pressed they sell their water allocation first, their land is now non productive and they then rely on small rural incomes, kids leave school earlier.
I’m now paying $6 for 2,5 kilo of veges that are crisp and tasty from a guy who had to stop such trade with the advent of super markets.
Now he is at it again and I think making money on about 10 acres, and the work entailed.
The for sale signs are increasing and land prices are on the drop.
fluff4
Ian,
Your early paragraphs opening to this topic are fairly disturbing, as are many of those that follow:
“It should not be forgotten that in the entire sweep of human history prior to 90 years ago, almost all non-railway transport fuel was grown on farms and the trade-off between the use of grain for food or transport was a central element of all human commerce.”
Are you suggesting that it is still valid to reserve a portion of agricultural produce to provide fuel? The paradigm is all wrong.
Agricultural produce has not been used as a fuel source for, as you suggested, 90 years. The energy required to provide the fuel needs of today simply cannot be viable produced from agricultural produce alone – and still ensure sufficient food. At best you might expect some supplementation of fuel supplies accompanied by a proportional reduction in fodd production capacity.
Further “In fact, the traditional Amish communities are still doing it to this very day. And somehow, lumping them in with the likes of Pol Pot, Adolf and uncle Jo Stalin seems just a wee bit over the top, don’t you think?”
So far the only rhetoric lumping the Amish with Pol Pot et al – was from you, by denial. Is that what is called a ‘straw man’?
Some additional claims that did not sit right included:
“In contrast, the major increase in energy costs has produced a major increase in the price of fertiliser which is obviously not good for those users. But in the third world this also means that the nitrogen in a cows turd has also undergone a major increase in value to a point where the effort expended in collecting that turd will be properly rewarded by the additional food it will grow and the major increase in price that food will command.”
You might want to go spend some time in the developing world – cow turd has always been used (and any other turd you can find around the place) and will grow no more additional food than it does already – yes, the person growing the food might be able to demand a higher price for it but your whole argument seems to be based on an assumption that the developing world is populated exclusively by mud-spattered farmers.
Oh yes, you did address this with a throw-away line of breathtaking inaccuracy:
“But it must also be remembered that most of the worlds poor are rural poor, not urban poor. And it is only the minority urban poor who will be in serious trouble from higher prices.”
So, first you divide the poor into rural and urban, claim that urban are the minority in number, and that only a minority of these will be in serious trouble. Would you care to clarify the basis for those assumptions? Even a comparison on urban to rural populations in the developing world would be a start.
This could be followed by a determination of how many ‘urban poor’ could be considered of sufficient destitution to be really hurt by a small percentage rise in basic staples.
How many teeming millions in the cities might this be? How many would be too many?
The recent worldwide jump in food prices is the result of a combination of a variety of factors. Fuel and fertilizer price increases, rising demand from developing countries, bio-fuel consumption, weather events, credit market fallout, environmental regulations, taxation, subsidies, trade restrictions, commercial monopolies and and speculation have all contributed. We in the developed countries have grown accustomed to cheap food but are now facing a global marketplace being increasingly dominated by demand from a newly affluent middle class from developing countries. They are used to spending a much larger portion of their income on food and they generally accord it much more social value than we do.
While better prices for farmers are overdue, how quickly and how much they will benefit remains to be seen. Significantly increased production will require ongoing price increases above and beyond ongoing cost increases to create the confidence for new investment This will take time. Meanwhile growing demand won’t wait. Billions of dollars in increased food aid looks set to soon be going into already tight grain markets Further price increases appear probable with obvious implication for speculators. The result can only be even more demands for aid as those just getting by now can no longer do so.
Added to this will be the financial costs and unforeseen consequences of carbon emission reduction measures.
While there are numerous uncertainties in all this it already appears to be unfolding and it won’t take long before it becomes obvious or not. One thing seems clear. We are going to have to get used to paying much more for food.
It will be particularly interesting to see just how much urban consumers will be willing to pay for the costs of their green ideology.
So Motty wants to recommit us to the grand era of idyllic agrarian socialism. The resurrection of Pax Browntopia to new nation statehood.
You’ll be born again. Your time has come.
It ain’t gonna happen – terms of trade issues are relentless. Need for nitrogenous fertiliser input is constant. Population drift is relentless. Look at the statistics – if the region isn’t in a mining boom region, city or pleasant coastal locale – the population trend is down.
Promises of tending prickle farms are going to lure the kids back? Developing up farm businesses only to be creamed by supermarket cartels.
It’s innovate or bust time. Costs money – needs financial backing. Needs good management and fresh ideas.
Why do we need family farms – cannot corporates of the likes of Twynam and Heytesbury do it all and more efficiently.
It seems the more Australian agriculture is organised on the basis of agribusiness, the greater output it is capable of generating and greater capability of generating output for export. Dealing with national or international food traders will be standard operations.
Meanwhile the Murray Darling lingers in a parlous state with bad karma forecast – hope they’re wrong. Dead wrong. High food prices don’t generate rainfall.
http://theland.farmonline.com.au/news/nationalrural/agribusiness-and-general/general/article/767423.aspx
“The head of the Murray Darling Basin Commission, Wendy Craik, said today farmers and irrigators in the Basin should prepare for the worst as low autumn inflows and poor forecasts point to another season of potentially zero allocations in the southern half of the Murray Darling Basin.
Meanwhile, Bureau of Meteorology modelling from the Indian and Pacific oceans are showing preliminary signs the drought-inducing El Nino weather pattern could make a come-back as early as the end of this year, or during 2009. “
http://adl.brs.gov.au/socialatlas/ – brew you own rural social statistic maps from various options
On population change 2001-2006:
The population increased in urban areas, but decreased in rural areas. The annual average population–growth rate was highest in major urban centres (1.6%) and regional centres (1.1%). Population growth was low in small towns (0.6%), and decreased in rural areas (-1.9%).
Lowest value of change SLAs Population decrease was experienced in most inland and central parts of Australia, through western Queensland, New South Wales, Western Australia, Victoria, and western Tasmania. A number of remote areas (with relatively low populations) experienced high levels of population decrease. The largest percentage decreases in non–remote areas included Wyalkatchem east of Perth (decrease of 12.2%), Carrathool in central New South Wales (9.9%), Yarriambiack in the Wimmera (8.8%), Rosslea in Townsville in north Queensland (8.7%), Moree in northern New South Wales (9.8%), and Lockhart in southern New South Wales (6.7%).
Highest values of change SLAs
Moderate levels of population growth were experienced along the east coast and surrounding Adelaide and Perth. High levels of population growth occurred in southeast Queensland, around Bowen and Mackay in Queensland, in areas surrounding Melbourne, Perth, Adelaide, and Cairns. The highest growth occurred in areas on the Gold Coast as many people moved for lifestyle and opportunities. The population of the expanding areas on the Gold Coast of Pacific Pines–Gaven and Kingsholme–Upper Coomera, plus Capel near Bunbury in Western Australia, more than doubled. Other large increases occurred in the Gold Coast areas of Tweed (A) – Tweed Coast (40.6%), Robina (42.9%), Oxenford-Maudsland (45.5%), Hope Island (48.8%) and Varsity Lakes (74.8%). Increases of greater than 20% also occurred in the Sunshine Coast, around Canberra, Melbourne, Perth, and Adelaide.
Yes, Al Creep, hordes of American urban dwellers are indeed walking from their mortgages, either
1. due to the loss of ability to pay (you know subprime loans, honeymoon interest rates etc) or
2. simply because, shock horror, the mortgage exceeds the value of the house by such a wide margin,that on top of the first point, that not to walk would be insane.
So in the USA you have approximately 9m. or 10% of mortgages out of the money.
Then on top of the dud mortgages, there’s dud credit card debt and dud car loans, which many pundits say is barely a quarter provisioned for by the banks.
http://www.economist.com/world/na/displaystory.cfm?story_id=11016296
So what you might say.
http://www.economist.com/finance/displaystory.cfm?story_id=10974135
Which brings it all a bit closer to home.
The point being, the new found homeless, you would imagine, would be an angry lot. In the US they are invariably armed.
And BTW Al Creep those links on your opening blast are on the money and would you believe I had a line weaners in a cattle sale last week and was so disgusted with final bids, I had them trucked home. There where, obviously, people at that sale who accepted the appalling prices offered, that being a bit over half of what you’d expect. Which, I might add, is still way too low.
With market players, such as supermarket chains, say, “C” & “W” dominating the local meat supply
the local guy is relegated well and truly to a price taker. But beware messing with the local guy’s livelyhood, he just might shut up shop.
Who knows, a bit of mass starvation, might do the world a favour.
The Land May 1, 2008 had a letter – no link available-
On beef statistics – and other fanciful conclusions
SIR: I draw readers’ attention to some fascinating information in a story in last week’s The Land ….p7.
The top right-hand corner shows the cost breakdown of processing beef from supplier to checkout with cost data.
The resulting $1.50 per kg gross profit is calculated after incurring the following costs:
*Cost of live animal $3.80 a kilo. Note that it states live animal. At, say, 350kg this would be $1330 a head. If, in fact, they actually meant to say dressed weight, then the waste has been double counted further down.
*Slaughtering and boning $0.90/ kg, or $315 a head.
*Waste $1.53 plus $0.72/kg, equals $2.25/kg. If you divide this by the purchase price of $3.80, this gives a dressing percentage of 40.7%
*Tansport and storage $0.15/kg.
*Butcher’s labour to prepare and pack is stated as $1.40/kg. At a more realistic dressing percentage of at least 55%, or 192kg, this equates to $269 per body.
This raises the following questions:
*Are there any cattle producers receiving any thing like $3.80/kg liveweight or are we receiving at most $1.80 to $2.20 for a well finished British or Euro cross steer?
*Are any abbotoirs obtaining more than $300 a head for slaughtering and boning?
*Where is the income for hides, offal and byproducts accounted for?
*What breed of finished steer dresses as low as 41%?
*Considering that the average butcher can cut and pack a body in under 30 minutes, are butchers paid more than $500 an hour?
The company spokeswoman, in the associated article, states: “If beef is sold at the supermarket for $10/kg, the profit made is $1.50/kg.”
What is the real margin on eye fillet at $32/kg, scotch fillet at $26/kg, Rump and T-bone at $22/kg, and was the $10 based on low quality mince and stewing cuts?
Australian farmers produce some of the highest quality beef in the world.
Do you think they get a fair price for their product?
In 1984, yearling steers broke $1/kg. In real money terms that now equates to $8/kg. Our input costs, fuel, fertilizer, and overheads are skyrocketing.
Are our returns keeping pace?
Who is making the big profits in the beef trade?
Are farmers and consumers being fairly treated by the big players or is there a misuse of market power ?
…………
Can somebody answer my questions?
Pat Tubnor
“Norman Park”
Freemans Reach
Grendel asks, “Are you suggesting that it is still valid to reserve a portion of agricultural produce to provide fuel? The paradigm is all wrong.”
I was making it clear that it has always been “valid” as you put it, for a farmer to sell his produce to any buyer, be it for human food or for animal food or for animal fuel. And nothing has changed.
And it is breathtakingly myopic to suggest that a farmer who devotes less of his resources to feeding people might somehow have less moral standing than the vast majority of people who don’t feed anyone at all (other than a constant supply of bull$hit).
And I raised the issue of the Amish for the very good reason that no-one to date has bothered to connect the intellectual dots that indicate that if diverting food to non-human food consumption is a crime against humanity then the Amish are clearly included in this supposedly criminal net.
I also mentioned the Hindus for the very good reason that they are a very large portion of the world community who choose not to use their very large cattle herd to feed humanity. One could just as appropriately mention artists, musicians, journalists and academics who could devote much of their time to producing food for others but have chosen not to. Are they guilty of crimes against humanity as well?
This latest targeting of the food for fuel issue is just the latest permutation of the old green/left vegan chestnut that the very act of eating meat was akin to taking grain from the mouths of the poor. It sounds plausible to completely ignorant folk like Paul McCartney who are apparently under the belief that most of the worlds cattle (and, can you believe it, Sheep) are fed on grain.
The facts are that only a small portion of beef consumption and zero mutton and lamb comes from grain fed animals. Even those animals from feedlots spend most of their life eating pasture with only a few months spent fattening on grain before going to market. Meat, with the exception of industrial pig and chicken, is the protein we derive from land that is not cultivated.
Those who wring their hands in anguish over the implications of higher priced food and the diverting of american and european surplus grain to fuel production have no understanding of the way markets work. They are in complete denial of the role these surpluses and their subsidies have played in the poverty and mortality of hundreds of millions of people all over the less developed world.
And Grendels little venture into the logistics of cow turds demonstrates that he has completely missed the point. If the value of the food produced is less than the cost of labour in collecting it, then the cow turd will not be collected at all. The most illiterate farmer in the world can grasp this simple fact but the Grendels of this world cannot see past their somewhat dated, ersats morality.
According to wikipedia, “The 2005 Revision of the UN World Urbanization Prospects report described the 20th century as witnessing “the rapid urbanization of the world’s population”, as the global proportion of urban population rose dramatically from 13% (220 million) in 1900, to 29% (732 million) in 1950, to 49% (3.2 billion) in 2005. The same report projected that the figure is likely to rise to 60% (4.9 billion) by 2030.[1].”
Clearly, the assumptions behind the predicted 60% urbanisation rate by 2030 require major review. And given the high rates of urbanisation in developed countries, we can assume with absolute certainty that the majority of the worlds poor are rural poor.
Only a departmental drone like Luke/creep would rattle off a bunch of past statistics as some sort of evidence in a discussion about how recent fundamental market changes will alter the direction we take in the future.
Brilliant stuff mate. Steady as she goes now. Just pretend it will all be the same, just like the junk lenders, the stock market punters and the real estate dreamers did.
“And I raised the issue of the Amish for the very good reason that no-one to date has bothered to connect the intellectual dots that indicate that if diverting food to non-human food consumption is a crime against humanity then the Amish are clearly included in this supposedly criminal net.”
The Amish way of life does NOT divert food to non human consumption. They grow the crops required to systematically sustain their current way of life. This includes growing crops for food AND crops to feed the animals they use to provide the motive power for their ploughs. In a very real sense therefore all their efforts are directed back into food production.
That example still hasn’t stopped being a straw man!
“If the value of the food produced is less than the cost of labour in collecting it, then the cow turd will not be collected at all. The most illiterate farmer in the world can grasp this simple fact but the Grendels of this world cannot see past their somewhat dated, ersats morality.”
Hmm, no clearly I got the point – the value of the food does not matter to the rural poor. They eat first and sell second. The cost of the labour to collect is immaterial compared to having the energy (from food) to do the work. Secondly, poor farmers usually don’t have the option to set a value on their labour – they do the work regardless because they have no other option.
I’d also like to see evidence that the ‘poor farmers’ in your example broadly are the beneficiary of higher prices.
The surplus you mention is artifical as large agribusinesses target their production towards the needs of the market. Sorghum is a prime example – a massive surplus this year, but that does little to alleviate shortfalls in staples as sorghum is primarily used as cattle feed.
“we can assume with absolute certainty that the majority of the worlds poor are rural poor”
Firstly – you can’t assume anything of the kind, and regardless of this if 3.2 billion people are living in urban areas and 2 billion of these are in the developing world, current data suggests that 1% of these 2 billion will be what we might term ‘wealthy’ another 10% (a generous assumption at best) would be above the poverty line. So more than 1 billion urban poor will have difficulty buying foods as prices rise. Why is this not a problem?
Of course we are alraedy seeing it happen. A 60% rise in the price of corn has seen a staple of mexican life, the tortilla, become a luxury instead of a staple, and herein lies the problem.
It is the cost of food staples that is rising dramatically – if it were other less essential food items then I agree that most people would cope, but a rise in the cost of the basic food items is a geniune cause for hardship.
What sophistry Grendel, “The Amish way of life does NOT divert food to non human consumption. They grow the crops required to systematically sustain their current way of life. This includes growing crops for food AND crops to feed the animals they use to provide the motive power for their ploughs. In a very real sense therefore all their efforts are directed back into food production.”
Do you seriously expect us to believe that there is no other commerce in Amish communities than the production and sale of primary produce? Give us a break. On your logic all other services provided to a farmer can be excused on the same basis. You are all over the place.
And 90% of urban people in less developed world are under the poverty line? Bull$hit fella. Stop plucking numbers out of your bum. You demanded I provide references to you but you then toss in any number that suits your argument.
And spare us such ill-defined concepts as an “artificial surplus”. A surplus over consumption is a surplus available for sale. But one minute you are claiming agribusiness has diverted all the surplus to produce fuel and next you claim they will wipe out the surplus with their over-production. So which is it?
And do tell us what the average mexican farmer is doing this season in response to the shortage of corn? He is planting more, tending more, and will eventually harvest more.
Rather than refer to my comments as b$llsh$t how about you do some research of your own for once?
I still haven’t seen you produce anything other than rhetoric or attacks on commentors to support your points.
Sophistry? Please. Stop extrapolating my points beyond what they are. I was merely pointing out that you had created a meaningless straw man by imputing that others would consider the Amish as criminals for continuing to live what has so far been a highly sustainable way-of-life.
I think that better income for farmers is laudable, but market economics are driven by demand. If we shift demand to grains that are used in biofuel production then capacity for production, and in fact throughout the entire supply chain is shifted somewhat in this direction. This means that capacity for food production is reduced. Not only has the production of staple grains been reduced but demand has increased.
Yes, the price goes up, obviously – the market drivers of supply and demand ensure this, but there is a point at which the situation gives for many people, a tipping point in prices where their personal income increases do not match the cost of food staples. Is that not what is at issue here?
Sophistry is suggesting (without evidence) that “it is only the minority urban poor who will be in serious trouble from higher prices.”
wjp – Woolies reckon this …
http://www.austbeef.com.au/public/PropertyProductDisplay.asp?PID=N10670&RURL=/postings/15403/news/News10670.html
Woolworths Refutes Australian Beef Association Claims
Published: 28 Apr 2008
News ID: 10670
Woolworths strongly reject the unsubstantiated and inaccurate claims made by Representatives of the Australian Beef Association during the ACCC Grocery Price Inquiry
Hearing.
Woolworths does not buy any cattle from saleyards. The vast majority of beef is purchased from feedlots on three month forward contracts or directly from farmers who undertake Supplementary grain feeding. Any suggestions that Woolworths is party to collusion in Cattle saleyard is a fabrication.
Woolworths only purchase beef from grain fed British breed steers, to exacting quality Specifications. We do not buy old cattle of cow meat.
There are many steps involved in putting beef on the supermarket shelf and costs are incurred at every point in the process. On average, if the customer pays $10.00 per kilo for beef at the checkout, the supply chains costs are:
$4.80 Cost of live animal from feedlot or farm
$0.10 Transportation to abattoir
$0.90 Animal is slaughtered and boned
$0.10 Transportation to processing plant
$0.10 Ageing, storage and pre-preparation of carcass
$0.10 Transportation to stores
$1.40 In-store butchers prepare and pack cuts
$0.70 Refrigeration and display
$8.20 Costs incurred prior to sale
$1.70 Gross margin to Woolworths before payment of store wages, rent, lighting, tax, advertising etc.
In 2006, the ACCC conducted a thorough investigation into the beef and lamb retail supply Chain and found that the Australian beef supply chain for domestic retail was competitive. The ACCC also recognised that the major supermarkets chains accounted for a relatively small proportion of total Australian beef production.
The ABA also suggested that Australian consumers are paying $3-4 Million too much per year for beef. Given that Woolworths’ total annual beef sales are less that $1 billion a year, yet according to the ABA we are a dominant factor in the industry, how exactly are these saving to be realised?
However, Woolworths does agree with on point made by the ABA. A common system of quality grading for cattle would simplify things for the entire beef supply, from farm right through to customer.
Contact: Clare Buchanan 02 885 1032/0404 829033
So claim and counter claim
Al Creep poses an interesting dilemma.
“Why do we need family farms – cannot the corporates the likes of Twynam and Heytesbury do it all and more efficiently.”
There he is, undies on the outside, championing the green agenda, yet in a breath, blows it all away by suggesting multi-national mega corporations will be our saviour.
What’s it to be? Hmmm….
Ian Mott? Didn’t he play guitar for Cold Chisel?
Well wjp – see you’ve just categorised me as a greenie.
I’m just asking. Don’t get me wrong – I like agriculture, I like family farms – but here on the right wing blog I’m told market forces and economic righteousness rule OK. So one has to ask the question. Are corporates more efficient?
Certainly these guys are easier to deal with than certain firebrands. Much more professional.
The proportion of our incomes we spend of food has been falling for decades. Cheap food has been great for cities terrible for rural areas. We are experiencing a correction which was always going to happen as long as the world population continues to grow.
The fact is that we have not been producing enough to feed the populaton for years. people who carnt afford the rising prices will starve.
Al Creep: So here we are, at the family farm, time to send some livestock to market.
I have heard (allegedly) on multiple occasions and of course seen the sale process when it would appear that the vendor’s best interests are not being served. After all this, the agent is the seller’s representative and yet large processors seem to be able to dictate prices through their buyers, who, it appears bid on behalf of several processors, thus limiting the physical presence of potential purchasers.
It might work for a while, but ultimately, like any business deal, profitability determines ongoing supply.
Ya can’t rob Peter to pay Paul forever!
It’s all well and good for, say, Woolworths to say they don’t buy from saleyards, but part of the chain is they buy from outfits that buy from the saleyards that, allegedly, have similar supply agreements as all of Woolworths suppliers that require franchise type fees to supply the said chain.
And the genius of it all is, they have negative stock ie its sold before its paid for. So I suppose we’re just mugs, trying to make an honest living in a dishonest world….
Ian Mott, great post.
As a prickle farmer I can relate to what you say.
It was a shame that in Australia the era of cheap fuel and transport arrived around the same time the country was cut into the soldier settlement blocks which quickly became unviable.
Riding a horse to school, I got free fuel from the school horsepaddock whereas most of my classmates rode bikes.
Thanks Drongo. If the diversion of land to grow fuel is a crime then what does that say about the diversion of land to grow grapes and to produce alcohol. And wouldn’t that also apply to that green/left darling, hemp. For the switch to paper and fibre production from timber to hemp would also require land currently used to grow food.
It would also mean that the decision to exclude the mountain cattlemen from the victorian national parks, for the crime of eating grass, reducing fire risk and producing food, is also a crime against humanity. As is buying farmland for inclusion in national parks and, indeed, setting aside any part of an existing farm for non-food production purposes.
Gosh, imply that urban tree hugging, techno, retro, designer water swilling, wine quaffing, private parts piercing, folks might be promoting and funding a crime against humanity? Some people are just soooh beyond the pale, don’t you think daaarling?
Grendel seems to live in an imaginary world where the Amish don’t build houses, schools, or churches, nor make furniture, tools or vehicles, or any of the other elements of normal commerce. And this allows him to pretend that all their land is devoted to food production and all their efforts are expended on same. Instead of the “noble savage” we now have the “noble pilgrim”, or rather, the “noble luddite”.
What rural based readers will recognise in both El Creepo and Grendels posts is an entrenched belief that the market is good when it produces low prices for the commodities they buy but the same market is bad when the same competitive mechanisms produce higher prices for urban consumers.
And it is all justified on this absurd notion that any increase in food prices will mean people starve. In most cases in the developed world, an increase in food prices will, at best, produce a slight reduction in alcohol, tobacco and fast food consumption. And given the association between low income and obesity, there is a strong chance that many may simply cut back on food and maintain the indulgences. And still they will try to blame it on the farmer.
El Creepo likes to mix in developing world attributes to developed world scenarios in the hope of portraying it all as absurd. And for what purpose?
It really seems like the message they have a real problem with is the possibility that circumstances might improve for farmers and their families. The thought that a ray of hope might be there for that fearful portion of farm kids that suicide at almost twice the rate of urban kids is disturbing to them. The prospect of a proportion of farmers kids choosing to remain on the farm seems to rattle their dags a bit. And the possibility of smaller holdings going back into food production as part of a mixed residential/farming enterprise is not welcome news because it ain’t bad news.
This would only be a problem to them if they had invested a great deal in depriving the bush community of hope with a view to acquiring land on the cheap. Which they clearly have done.
The real irony in all this is that nothing will do more to improve environmental outcomes than farms with an investible surplus.
“Grendel seems to live in an imaginary world where the Amish don’t build houses, schools, or churches, nor make furniture, tools or vehicles, or any of the other elements of normal commerce. And this allows him to pretend that all their land is devoted to food production and all their efforts are expended on same. Instead of the “noble savage” we now have the “noble pilgrim”, or rather, the “noble luddite”.”
Once again please stop extrapolating my views into your own imaginary world.
Lets boil it all down.
I asked for evidence and numbers – all you deliver are insults. Put up the data you base your underlying assumptions on – i.e. that fewer people will starve due to higher food prices than will benefit from higher prices to farmers.
I’m more than happy for you to be right by the way – but that is yet to be demonstrated.
No Grendel, I have already provided the data but you chose not to retain the information. You then started plucking numbers from every orofice to fit your argument but, when asked, not only conspicuously failed to substantiate, but then had the gall to accuse me of the very thing that you were doing.
As I have already pointed out, 50% of all humanity is non-urban and given that most of the developed world (the rich) is highly urbanised it becomes self evident that much more than 50% (a large majority) of the less developed world is non-urban. And being non-urban, they are either employed as, or family of, farmers, fisherfolk, or people providing services directly to them (locally).
This basic knowledge forms part of the suite of information that the average year 5 student is expected to have on board but you continue to posture as if it is yet to be proven. Have you never seen a single documentary on third world conditions? Have you had your head in a paper bag for the past four decades?
You also wrongly claimed that all Amish economic activity is directed at food production but when the obvious evidence to the contrary was provided you ducked for cover.
Much more to the point, Grendel, you have avoided the larger issues. That is, an increase in price produces an increase in supply. Any diversion in supply produces an increase in price. So any perspective that assumes that a diversion in supply will not produce a response by other suppliers is a perspective of the economically illiterate.
And that is not meant as an insult, Grendel, it is a reasonable conclusion based on the facts.
Meanwhile, back at the ranch:
http://www.dailyreckoning.com.au/farmers-say-rain-go-away/2008/05/13/
……..
Fantastic piece Ian … maybe we do have more in common than I realise. Even stimulated some new train thoughts for me. Good stuff!
Food will always be used for fuel and as Ian has described it always has. Your problem folks is not expensive food, it is expensive oil and it is going to get a lot more expensive. A nice time to get ‘re-acquainted’ with your rural roots for any hope of managing food price inflation.
And folks you haven’t seen anything until you have seen the effects of hyperinflating meat and animal protein prices on OECD economies. That’s when you’ll truly see what food inflation is. Time to get long the meats, they are going to move to ‘unfamiliar’ levels.
You could always go to the farm gate and buy a 1kg of wheat for 40c – FOB price of course.
Thanks, Aaron, hope to read where it takes you.
I am in two minds about this term “food inflation” because it carries the standard metrocentric implication that it is somehow bad and something that needs to be restricted. In the current circumstances the rise in food prices marks a fundamental correction in the resource allocation mix. Specifically it marks a change in the composition of the basket of goods and services that is, or should be, used to determine the broad rate of inflation.
So to single out the element (food) that is increasing in value as being subject to inflation is to ignore the other elements that are likely to reduce in either value and volume.
It is a bit like measuring the affordability of houses by reference to the total increase in house values without taking into account the increase in the size of houses, the number of bedrooms and bathrooms, and the type of fittings. Clearly, a house of the size bought by our parents 40 years ago, with the fittings used in that house, would be a lot more affordable (if councils would let you even build it) than the supposedly unaffordable ones we have today.
So we should not fall into the trap of using metrocentric terminology to describe what is essentially a market correction. The rises in food prices are a partial return to the proper valuation of energy, land, rural labour, capital and enterprise to levels that reflect their actual availability, their true demand and supply relationship.
Ian, lets go back to the beginning.
Jean Ziegler’s comments were directed at the issue of rising food prices and the impact of this on the capacity of the world’s poor. Your article seemed to suggest that this is not really an issue as most of the world’s poor live in rural areas and therefore would benefit from rising food prices.
Is that a correct summation?
You further stated: “the majority of the world’s population are still farmers and fisher folk”. I disagree. We know that urbanisation is around 50%, but equally those who live in Rural areas, while not “urbanised” are not all fishermen and farmers – many small towns, hamlets and farming villages maintain the expected range of local services to support the major agrarian of fishing activities. I would suggest you’re your initial claim of a “majority” of the world’s population as farmers or fisher folk is demonstrably erroneous. I do note that in a later comment you amended this to include “people providing services directly to them (locally)”.
It is certainly true that in Africa and in Asia the levels of urbanisation are below 50% and that broadly speaking most people in Africa and Asia are going to be involved in the production of food and the increase in prices will be an economic benefit to them.
This issue of concern outlined by Jean Ziegler was not the rural poor but the impact of rising food prices on those who cannot afford a rise in food prices.
You approach seems to have been one of – “well, is this the lesser of two evils?”
“A person is considered poor if his or her consumption or income level falls below some minimum level necessary to meet basic needs.”
(http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTPOVERTY/EXTPA/0,,contentMDK:20153855~menuPK:435040~pagePK:148956~piPK:216618~theSitePK:430367,00.html)
In order for the rural poor to benefit, the increased value of their crops must exceed that minimum level – I haven’t seen than demonstrated in your post, just assumed.
My concern is that this approach ignores the minority in favour of the majority, but we are in fact dealing with hundreds of millions of people in taking such a sweeping approach.
Looking at the world generally we can see that urbanisation is as follows:
(for my sources I am using the World Bank PovertyNet and the UN office of Population)
Northern America – 81%
Latin America and the Caribbean – 78%
Europe – 72%
Other Developed (Australia, New Zealand and Japan) – 69%
Developing Asia/Oceania – 39%
Africa – 38%
Naturally the global population base is not spread equally across these areas.
Northern America – 332 million (269m urban)
Latin America and the Caribbean – 557 million (432m urban)
Europe – 731 million (526m urban)
Other Developed (Australia, New Zealand and Japan) – 152 million (104 m urban)
Developing Asia/Oceania – 3.821 billion (1.49 billion urban)
Africa – 38% – 922 million (349 m urban)
As a rough guide to how many of these might be poor we can use slum dwelling as an indicator. Three of those groups have a considerable number of their population living in urban slums:
Latin America – 27% of urban dwellers reside in slums (116 million people)
Developing Asia/Oceania – 35% of urban dwellers reside in slums (546 million people)
Africa – 51% of urban dwellers reside in slums (177 million people)
A total of around 840 million urban dwellers who live in slums.
I’d suggest a fairly high percentage of slum dwellers could be considered as “poor” certainly poor enough that a rise in food prices hurts.
My contention was never that rising prices in food are bad for farmers, but that if there are areas on which we can place downward pressure on demand (i.e. biofuels) then doing so would ease the pressure on the urban poor.
Your post makes the assumption that ALL rural and fishing people will benefit – I’d suggest that is an unlikely outcome. There are areas the soil degradation has advanced to the point where agriculture has regressed to subsistence levels, because that is all the land can produce. I’d like to be able to quantify that further but I can’t – if you have better information perhaps you can present that.
The issue of poverty is a large one. Around a billion people live in extreme poverty (less than $1 USD a day)
A further 1.8 billion live in moderate poverty (basic subsistence living) on $1-$2 USD a day)
That is a total of 2.8 billion people in either extreme or moderate poverty, either going hungry each day or only managing at a basic subsistence level. Estimates are that around 800 million people go hungry each day with a further 2 billion right on the edge of this. I wonder just how many of that 2 billion will get tipped in one direction or another.
Would you care to provide an evidence based estimate?
“Lead a horse to water ..” Grendel.
You have presented some useful numbers but your analysis is distinctly one sided. At best you can identify about 840 million urban dwellers who live in slums. But the living in a slum (whatever that is) is only a sign of comparative poverty. Many slum dwellers earn a steady income, have discretionary spending, are far from starving, but do so because the cost of non-slum housing is beyond their means or, more likely, the supply of non-slum housing does not meet demand.
Using your own numbers,
“Developing Asia/Oceania – 3.821 billion (1.49 billion urban) Africa – 38% – 922 million (349 m urban)” leaves us with 2.904 billion non-urban residents in Africa and Asia. Add the 125 million non-urban latin americans and we get 3.029 billion non-urbanites.
But lets take a closer look. In Developing Asia the non-urban population is 2.331 billion while you can only identify 546 million urban slum dwellers, (4.27 to 1) some of whom are not necessarily at risk of starvation. In Africa the non-urban population is 573 million while you can only identify 177 million urban slum dwellers (3.24 to 1).
You chose not to glean this information from the data you retrieved. And to top it all off, you then gave stats that completely undermine your position. You tell us that;
“Around a billion people live in extreme poverty (less than $1 USD a day). A further 1.8 billion live in moderate poverty (basic subsistence living) on $1-$2 USD a day). That is a total of 2.8 billion people in either extreme or moderate poverty, either going hungry each day or only managing at a basic subsistence level”.
But you looked no further into the data. For when we deduct your 840 million urban slum dwellers from the 2.8 billion people who live on less than US$2 a day, we are still left with at least 1.96 billion non-urban poor people.
Those people clearly do not reside in any of the OECD nations and they clearly do not reside in the non-slum parts of African and Asian urban areas. By elimination, the only place they can be found is in the non-urban parts of Africa, Asia and Latin America.
At the very best, only 28% of people in extreme or moderate poverty in the world are in urban areas. It is more likely to be less than 20%.
Your claim that many in non-urban areas are not farmers is also unfounded. The CIA World Fact book indicates that 40% of all people in the workforce are involved in agriculture. They clearly are not part of the urban half of the population so, by elimination, they MUST form 80% of the non-urban population.
So at very best, only 600 million (20%) of the non-urban population could be engaged in occupations other than farming. This non-farming cohort would include salaried government officials etc.
Accordingly, I can state that there is not the slightest room for doubt that the overwhelming majority of the worlds poor are farmers. And the benefit delivered to that poor farming majority, in the form of increased prices for their produce (whether or not all or part is consumed by themselves), will far outweigh the adverse impact on the poor non-farming minority.
To shape world food policy in a way that favours the minority urban, non-farming poor, at the expense of the farming majority, is metrocentric discrimination of the worst kind.
And if this metrocentricity has been a core element of UN food and anti-poverty policy over the past half century then it is the United Nations, itself, that is guilty of a serious crime against humanity.
I quite agree that policy should not be shaped one way. But isn’t the point that normal market transactions for food are being reshaped by the addition of biofuels as a consumer of former food production capacity?
So what, Grendel? Go back and read my article without your ideological blinkers on. Especially read the part where local farmers can and will respond to the higher prices by increasing their major farm input, their own labour and that of sons and daughters returning from city slums, to produce more food.
The notion that output from a farm is fixed and already operating at maximum capacity is way off the mark. The primary driver of farm productivity in the third world is the motivation of the farmer and his family.
If the market has been corrupted by cheap food from cheap energy then they are only motivated to produce for themselves with a mild surplus as buffer. But when the market puts a higher value on their produce, and their own urban markets remain open to them, then they can and will increase production to meet that market.
The hardship of the urban poor minority will only be temporary because the farmers will respond to fill the gap left by food diverted to fuel. Prices may drop back a bit but not to the levels of the corrupted markets of the past.
To take other steps, to either prevent the diversion of food to fuel, or to deliver subsidised food to third world urban poor, will only prolong the suffering and market failures of the past.
I must say that this has been a really thought provoking thread. It has never occured to me that cheap oil and the cheap food from it has played a major role in keeping third world dictators in power. The cheap food, and especially food aid, enabled them to keep the urban poor on their side. This provided a buffer between themselves and the majority in the countryside that they neglected and exploited with impunity.
Higher prices for food will empower the rural majority in a way that will ensure they are taken more seriously and be served properly. That is good news and a long time comming.