World food crisis?

Today Oxfam issued a report on rising food prices.

www.bbc.co.uk/news/world-13597657

Full Text here:

www.oxfam.org.uk/resources/papers/d...e-010611-en.pdf










And yet the free market woos and the vested interests continue to insist that their nostrums will solve the problem:


Aye, do more of the same, because it is working so well

First of all: the word "crisis" is just another big word. In this case your title implies that we would have a decline on food. And then many quotes address the economic properties of food distribution. An economic crisis has a different definition. And I think we can't talk about a food crisis if we measure it through economic decline... I could accept we are having an economic crisis, but a food crisis is just bullshit. There is enough food in the world to feed every mouth. It's just not distributed evenly because of economic reasons.

The article specifically states that there is enough food in the world, Pseudos. It also points to projections which suggest that may not continue: and acknowledges that projections are uncertain at best.

But the fact is that many people do not have enough to eat. I think most people would consider that a crisis in their lives: though it is true that if it is a chronic condition the word is probably misused. I take it you did not read the article . And maybe did not notice the question mark in the title?

I have only been judging your quotes.. And saw the question mark when I pressed "add reply"

Question: Why do you post information without making a statement yourself on which we can debate? I'd rather read your thoughts backed up by the article. And I would love your thoughts to be statement on which I can reply with my opinion. And if you don't want to make statements, then could you at least ask questions we can think about?

Now you just make me feel stupid for not reading the article.

Well I did try to accommodate you, Pseudos. I linked a short news report as well as the full text, because I know you find it hard to read long articles.

But I take your point: perhaps it would be better to give a point of view: the trouble is that my point of view is of far less worth than oxfam's, because they know a great deal more about it than I do. I will try.

So: there are a number of problems identified.

1. In the long term, climate change is predicted to have a big effect on food production possibilities. We need to get some international agreement on how to tackle that: but according to the article, even if we reached that tomorrow there are already a lot of bad consequences from what we have already done which we will have to work through. That damage is already done. We need to find out what is going to happen because of that, if possible, and find solutions

2. It is not likely we will take action to deal with those consequences before they arise: because we are not dealing with the things which have already happened and which are causing people to go hungry right now.

3. So to me it seems that we should start from where we are. That is, we should try to change the things which lead to hunger in a world with enough food.

4. It is hard to be sure what those things are. Oxfam points out a few of them: many are to do with our economic system, as you say. That is not static in its effects. At present it is worse because of things not directly related to food production. Food is a commodity. It used to be traded as food. But with the economic crisis it is now traded as a speculative investment. That means that the price rises and it is divorced from its function in much the same way that houses became divorced from the idea of "somewhere to live". Given that we cannot get rid of international financial dealings it might be an idea if we prevented certain items from being traded in that way. But of course that would be resisted as an interference with the market which would inevitably lead to bad outcomes. So the market liberals would say. I had the impression that commodities markets were more separate in the past, but I do not know enough to positively assert that. In any case it does not seem to me to be impossible to regulate the market so that the only people who can trade are people who are in the business of producing or preparing food. There are probably immense difficulties in that, but it seems essential to me to treat the necessities of life differently form non-essentials. Perhaps ther are other ways and you have some ideas?

5. Land is the same. It seems to me that the figures for land ownership are shocking. In places where there is not enough to eat it is criminal that big foreign investors can buy large tracts which they do not even farm, sometimes. In Norway, for different reasons, they had a project whereby anyone could buy land; but only if they committed to moving there and working it: otherwise it was not sold. Something like that might work.

6. Microbanks seem to have a good track record in India and they provide small amounts of capital for the poor, who have no access to the usual channels of credit. That seems worth exploring. It is predicated on the idea that local small farmers are more efficient at producing food for consumption at home. That is disputed by the big investors, as my last quote shows. But that trades on the ambiguity in the words. And to say that supply and demand will balance is false in any reasonable time frame; and doubly false if one imagines that international trade will lead to balance in the local area: that is the problem and it has always been the problem. Hence my statement: do more of the same as it is working so well. That will never work.

7. The same considerations apply to water: an increasingly valuable resource. Look at what I just said!! Water can't get any more valuable in any real sense: but it can in the sense that economists mean: trading on the ambiguity once again. This is a problem all by itself: they steal the terms of the debate from under our noses.

8. Waste in the rich countries is shocking. I am guilty of this and I have for the last few months been trying to ensure that I use all of the food that I buy. It is surprisingly difficult. That is not an excuse: it is an observation. But it means that if I am typical then I am distorting demand: and that will never do, because supply and demand must always balance: it is basic economics. Of course one can only subscribe to that nonsense if you again trade on the meaning of the word demand: because a person who is starvng to death apparently does not generate demand for food, in this looking glass world. Anyway I can't change the looking glass: but I can at least reduce demand in this part of the world (though they do their damndest to make that hard). Maybe if we all do that the supply will go elsewhere: it won't, imo, because that is not the nature of the problem. But testing their hypothesis does no harm that I can see: and who knows? they might be right

That is a little part of what I think on this subject. I do not know if that helps you. And as to how best to introduce topics in the forum: well I will say that part of my presentation of reports and stuff is my puny atttempt to avoid writing the kind of long post which you objected to before. I don't naturally do brief, because I find things complicated. I am trying though!

1. it is disputable if we humans are really the source of global warming. I believe global warming is not entirely our fault. Somehow I have this feeling it is a hoax to get people to "think green" and buy solar panels etc for "a better planet" (I have seen the documentary: the great global warming swindle)
3. i agree
4. What is essential in foods? rice and grains you might say: but most of it ends up in cereal and stuff. (also food producing businesses) The non essential products as I would describe those. So I can not say all food is a commodity. I would only describe rice and grains as commodity food. And that should be regulated or some sort to get it all over the world. Not as a demand (in terms of: we need to make cereal!) But as a common good for everyone. But I don't understand it: The food producing countries are the poorest ones with the most hunger. Why are they not farming their own food?
5. land ownership. Ah, I guess that's what is happening in poor countries. They don't own their lands anymore and thus are not allowed to grow food for themselves. That should change. The land owners should be obliged to serve a percentage of food for the local communities.
6. i don't understand what you try to say here.
7. Maybe this is not related to what you mean with this point: but, I don't understand why people start living in a place without water.
8. We live in a culture of waste. I don't think much change is possible in that area. I don't think the individual at the dinner table can change the demand by wasting less food. Maybe we could, by not eating cereal. Or to make cereal ourselves. The process of making grain into cereal industrially seems to me the most waste producing process. If we could eat less of the prepared foods and more of the original commodity foods (which we can transform ourselves), then we might reduce the waste produced by factories.
www.youtube.com/watch?v=pJ6ek9UOvxA

I hope an answer like this is more in line with your desire on this forum But I think addressing so many topics which relate to the one topic of the food crisis takes a lot of energy. And I can't be precise in what I say on all those issues. It is very time consuming and makes me loose track of the point I try to make. And I think you keep loosing your point too, at least, I can't find it in a multi topical text or article. I hope you understand what I mean...

Even if you are correct that does not mean we should not address the part we do play. Or do you deny that we play any part at all?

ETA:


Food as a commodity refers to the international trade in food, Pseudos. At least as I was using the word. Food for eating is not a commodity. It is a consumeable


If you are going to determine what a landowner is going to do with his land, in what sense is he the owner? This solution will not meet with the approval of free marketeers. So why not go the whole hog and take it off those who do not use it?


That support for small farmers is better than support for international financiers and for great big farmers in the west. And that the market is not global in any meaningful sense if you are trying to argue that supply and demand will balance: even if that is correct it will not balance locally if trading is international


They don't


Didn't watch your video beyond half way cos I can't see the point in it. But you won't mind that because it is your own approach to media that don't suit you

I do not see at all how we cannot change the culture of waste: we throw away about 30% of the food we buy in the west, according to some estimates. 30% is a lot and it is wasted by people at those very dinner tables. But it does require that individuals do something instead of preaching hopelessness and carrying on as before.


Don't disagree it takes energy. Learning about things does. And I do not think I lose my point: I try to be careful to construct a logical argument, as best I can. It is just that things are not simple. We have different styles and I am afraid that though I try to accommodate you I cannot go so far as to pretend that a slogan is an argument, if that is what you mean

Edited by FionaK - 1/6/2011, 21:33

ETA again: Friend found this for me: it is in a format you might like so I thought I would link it.

http://darryl-cunningham.blogspot.com/2010...ate-change.html

There is a sort of joke which refers to the black market during the second world war, when food was rationed. A tin of pilchards was acquired and it was sold from hand to hand, many times. The person who bought it last opened it to eat the contents, and they had gone off. He went back to the person who sold it to him and complained. The seller said: "did you not understand? pilchards are not for eating: they are for selling"

That is the problem I was trying to outline. Speculation on the commodities market has been identified as one of the reasons for price volatitility and it has real consequences for the food supply in poor countries

There has always been a commodities market: To put it simply, producers and sellers and consumers alike have an interest in stability of price. If you grow food it is better for you to have an idea of what that food will fetch at market, because your decisions about what to grow have to be taken a long time before the sale. You do not want to find that in January you decided to grow cabbages because the price of cabbage was X: but by harvest time the price is X-Y and your return is not enough to feed your family or buy seed or tools for the following year. Similarly, if you are buying food to sell on, even in processed form, you want the price to be reasonably stable so that you can set a price which you can maintain for a reasonable period. Fresh seasonal fruit still varies in price a lot over the year: and we accept that to some extent, because we all understand why it happens. In the past you just didn't get strawberries in January, you got them in season at a reasonable price. Now we are led to expect that things like that will be available out of season but the price is much higher. Strawberries are not essential, and so that does not matter in the scheme of things: but if the same thing happens with staples it matters a lot. People have always rioted over high prices for bread: "Let them eat cake" did not really solve the problem.

So it is rational to have a commodities market. When that is working well the grower agrees a price with the seller before the crop is even planted: this is called "futures". The grower knows what he is going to get (absent disaster) and may accept a slightly lower price for the security of knowing what his income will be. The seller can make his plans knowing what he will pay for supply (and may pay a slightly higher price for that security too). And you and I can relax because our bread will cost much the same in January as it does in July, so we, too, can plan our budget. The driver is increased predictability for all involved and the item is essentially treated as a consumeable throughout

Speculators do not see the item as a consumeable: they turn it into pilchards. Their interest is not in price stability but in price volatility. They bet on which way the price will go and they make their money on the accuracy of the prediction. This has been partly facilitated by a move to deregulation of trade, and we have seen this in other types of investment too. A financial derivative developed: companies bundle a lot of "futures" (both food and non-food futures) together into a single "financial instrument" and they trade those. These are not companies who grow, or sell food for a living: they are Goldman Sachs and their ilk. Because these "funds" comprise different kinds of items (which spreads the risk) they are an attractive investment for the same people who formerly speculated in currency with results we have seen. Currency is not very secure now because of the "sovereign debt" crisis. But such investors can switch to other things, and they have.

it is a little difficult to understand this because financial derivatives are complicated. But imagine there is a company which buys 10 "futures" and 2 of them are food futures. It now sells that bundle to a financial company like Goldman Sachs, for a profit. Goldman Sachs now sells the whole bundle on again: for a profit. Why would there be a profit? Well above I said that the seller accepts a slightly lower price in return for the security of return. It follows that the market price of the item will be higher most years when the harvest is actually gathered. So the profit comes from the difference. It may not. There can be a better than expected harvest, and the price does not reach the contracted price agreed in the contract for the "future". Or many crops may fail and the price goes way over what is expected. That is the "risk" which justifies the profit. The reason for bundling different kinds of item is to reduce the risk: it is not likely that crops will be abundant, and the price of oil and aluminium, or whatever, will also fall at the same time. It can happen: but the risk is not so great.

At the end of the chain the traditional buyer still needs the food because that is what he sells. So he must now buy from the financial company which ended up with food as part of its portfolio: and which now has two or more layers of profit added to the price. Arguably this has always happened and did not matter: the change has been in the amount of money which has been devoted to this: and that is down to deregulation and to reluctance of investors to put their money into real estate and currency, for obvious reasons. It is a fundamental of economics that too much money chasing too few goods leads to price rise: and that is what we have seen.

I am no expert in any of this: for those of you who dont mind reading papers it is better explained here:

www.iatp.org/iatp/publications.cfm?refid=104414

But I hope that what I have said is not too big a distortion of the position: and answers your question.



I am not sure what a "Nirvana style argument " is.

I agree that there are other possible solutions: and if those who own the land have values other than money then compromise can be reached. But bear in mind that these landowners often do not even farm the land. They are holding it as an investment for the future: that is, the commodity is the land itself. As someone said "Invest in land: they are not making any more of it". At least some of the potentially productive land is held by international investment firms, as was noted in my first link. They can afford to sit on it and wait till the price rises: it can be a long term investment. One can argue that they might as well make some money from it while they hold it, and indeed many do that: but they do not necessarily do that by growing food, or leasing to others who will grow food. If you make law such as you describe the incentive, from a free marketeers' point of view, is reduced.

But you are correct: I do not believe that compromise is possible in the current climate: the mindset of the free marketeer is fundamentally opposed to regulation of their activities. They believe (or say they believe) that such interference is bad for everyone in the long run. They will oppose, from what they see as the moral high ground. That attitude would have to change or be changed. I have said many times that I think that the history of civilisation is the history of regulation: and we can do that because we have done it before. But I do not think we can do it at present because of the hegemony of the neoliberal philosophy: it would need a fundamental change in our understanding of what is important. Since the neoliberals are faith based no logical argument is likely to sway them: they can be overridden, but where is the political will to do it?

Of course it follows that the change required will have happened, if regulations such as you describe are passed into law: and by that stage we can perhaps find the middle way you seek. I could hope so: but I am not optimistic.


Seems fair: I will note in passing that there has never been a country which got rich in a free market, so far as I know. Within societies with a free market approach the rich get richer and the poor get poorer: that does not change if you apply those same ideas globally. The plutocrats argue that it was the free market which led to their wealth: I do not think that is true. They are asking the poor to do what they find useful after having achieved their position. I see no reason to believe that can be done, even in principle


Indeed. I did say that it is not easy, insofar as I have tried to implement it. But I do not think that is a reason we should not try. My family had the same attitude as yours: they did not waste food, and they found the idea shocking. We tend to laugh at the wisdom of old people: we are not a very respectful society in that way. And it is true that the world has changed in many ways which render their experience irrelevant. But that is not so true as appears on the surface, IMO. In any case, it can do no harm that I can see: and it might do some good. It is something I can try to do: and there are not many of those

www.bbc.co.uk/news/world-africa-13688683

Another news report on this topic: An American body points to the impact of "hedge funds" which have bought up an area of Africa as big as France in 2009 alone.

Some local people welcome the new owners because they provide employment and an income higher than they could command before. The Investment companies claim that they are benefitting local people and comply with legal requirements in acquiring the land. The Oakland Institute disagrees

What does seem to be agreed is that the companies are very often growing crops for biofuel and not for food

www.guardian.co.uk/world/2011/jul/0...rab-kenya-delta


Apparently the Kenyan Government is selling large tracts of land and their right to do so rests on the fact that the people who live there do not have legal title to it. Formal title deeds are probably not in place if people just live where they have always lived: but it seems to me that there is a need for some kind of "custom and practice provision": a responsibility for government and corporations to recognise that possssion is indeed at least some part of the law, if not 9 tenths of it.

Edited by FionaK - 3/7/2011, 09:29

http://formyhour.com/cost-of-weekly-food-i...erent-countries

This is really interesting. It does not give a lot of information I would like to have: there is no attempt to relate the cost to income, for example. There is no explanation for the very wide difference between american families: but I assume such differences would also be found in other countries if more than one example was given.

But the kinds of food eaten and the prevalence of fizzy drinks both impressed me. I see this comes from a book and I am going to try to get hold of it. Worth doing this IMO

http://www.scientificamerican.com/article....-food-shortages

A long opinion piece about the world food situation and what should be done about it. This person is not so intrested in the economics, though the role of using grain to make fuel is discussed: but what struck me was his assertion that there is already an actual shortfall in food production, so the problem is not just one of distribution, even for now.


Hadn't realised we were quite that close to the edge