FOOD CRISIS: ‘The greatest demonstration of the historical failure of the capitalist model’

Ian Angus, April 28, Socialist Voice

“If the government cannot lower the cost of living it simply has to leave. If the police and UN troops want to shoot at us, that’s OK, because in the end, if we are not killed by bullets, we’ll die of hunger.” — A demonstrator in Port-au-Prince, Haiti

In Haiti, where most people get 22% fewer calories than the minimum needed for good health, some are staving off their hunger pangs by eating “mud biscuits” made by mixing clay and water with a bit of vegetable oil and salt.[1]

Meanwhile, in Canada, the federal government is currently paying $225 for each pig killed in a mass cull of breeding swine, as part of a plan to reduce hog production. Hog farmers, squeezed by low hog prices and high feed costs, have responded so enthusiastically that the kill will likely use up all the allocated funds before the program ends in September.

Some of the slaughtered hogs may be given to local Food Banks, but most will be destroyed or made into pet food. None will go to Haiti.

This is the brutal world of capitalist agriculture — a world where some people destroy food because prices are too low, and others literally eat dirt because food prices are too high.

Record prices for staple foods

We are in the midst of an unprecedented worldwide food price inflation that has driven prices to their highest levels in decades. The increases affect most kinds of food, but in particular the most important staples — wheat, corn, and rice.

The UN Food and Agriculture Organization says that between March 2007 and March 2008 prices of cereals increased 88%, oils and fats 106%, and dairy 48%. The FAO food price index as a whole rose 57% in one year — and most of the increase occurred in the past few months.

Another source, the World Bank, says that that in the 36 months ending February 2008, global wheat prices rose 181% and overall global food prices increased by 83%. The Bank expects most food prices to remain well above 2004 levels until at least 2015.

The most popular grade of Thailand rice sold for $198 a tonne five years ago and $323 a tonne a year ago. On April 24, the price hit $1,000.

Increases are even greater on local markets — in Haiti, the market price of a 50 kilo bag of rice doubled in one week at the end of March.

These increases are catastrophic for the 2.6 billion people around the world who live on less than US$2 a day and spend 60% to 80% of their incomes on food. Hundreds of millions cannot afford to eat.

This month, the hungry fought back.

Taking to the streets

In Haiti, on April 3, demonstrators in the southern city of Les Cayes built barricades, stopped trucks carrying rice and distributed the food, and tried to burn a United Nations compound. The protests quickly spread to the capital, Port-au-Prince, where thousands marched on the presidential palace, chanting “We are hungry!” Many called for the withdrawal of UN troops and the return of Jean-Bertrand Aristide, the exiled president whose government was overthrown by foreign powers in 2004.

President René Préval, who initially said nothing could be done, has announced a 16% cut in the wholesale price of rice. This is at best a stop-gap measure, since the reduction is for one month only, and retailers are not obligated to cut their prices.

The actions in Haiti paralleled similar protests by hungry people in more than twenty other countries.

• In Burkino Faso, a two-day general strike by unions and shopkeepers demanded “significant and effective” reductions in the price of rice and other staple foods.
• In Bangladesh, over 20,000 workers from textile factories in Fatullah went on strike to demand lower prices and higher wages. They hurled bricks and stones at police, who fired tear gas into the crowd.
• The Egyptian government sent thousands of troops into the Mahalla textile complex in the Nile Delta, to prevent a general strike demanding higher wages, an independent union, and lower prices. Two people were killed and over 600 have been jailed.
• In Abidjan, Côte d’Ivoire, police used tear gas against women who had set up barricades, burned tires and closed major roads. Thousands marched to the President’s home, chanting “We are hungry,” and “Life is too expensive, you are killing us.”
• In Pakistan and Thailand, armed soldiers have been deployed to prevent the poor from seizing food from fields and warehouses.

Similar protests have taken place in Cambodia, Cameroon, Ethiopia, Honduras, Indonesia, Madagascar, Mauritania, Niger, Peru, Philippines, Senegal, Thailand, Uzbekistan, and Zambia. On April 2, the president of the World Bank told a meeting in Washington that there are 33 countries where price hikes could cause social unrest.

A Senior Editor of Time magazine warned:

“The idea of the starving masses driven by their desperation to take to the streets and overthrow the ancien regime has seemed impossibly quaint since capitalism triumphed so decisively in the Cold War…. And yet, the headlines of the past month suggest that skyrocketing food prices are threatening the stability of a growing number of governments around the world. …. when circumstances render it impossible to feed their hungry children, normally passive citizens can very quickly become militants with nothing to lose.”[2]

What’s Driving Food Inflation?

Since the 1970s, food production has become increasingly globalized and concentrated. A handful of countries dominate the global trade in staple foods. 80% of wheat exports come from six exporters, as does 85% of rice. Three countries produce 70% of exported corn. This leaves the world’s poorest countries, the ones that must import food to survive, at the mercy of economic trends and policies in those few exporting companies. When the global food trade system stops delivering, it’s the poor who pay the price.

For several years, the global trade in staple foods has been heading towards a crisis. Four related trends have slowed production growth and pushed prices up.

The End of the Green Revolution: In the 1960s and 1970s, in an effort to counter peasant discontent in south and southeast Asia, the U.S. poured money and technical support into agricultural development in India and other countries. The “green revolution” — new seeds, fertilizers, pesticides, agricultural techniques and infrastructure — led to spectacular increases in food production, particularly rice. Yield per hectare continued expanding until the 1990s.

Today, it’s not fashionable for governments to help poor people grow food for other poor people, because “the market” is supposed to take care of all problems. The Economist reports that “spending on farming as a share of total public spending in developing countries fell by half between 1980 and 2004.”[3] Subsidies and R&D money have dried up, and production growth has stalled.

As a result, in seven of the past eight years the world consumed more grain than it produced, which means that rice was being removed from the inventories that governments and dealers normally hold as insurance against bad harvests. World grain stocks are now at their lowest point ever, leaving very little cushion for bad times.

Climate Change: Scientists say that climate change could cut food production in parts of the world by 50% in the next 12 years. But that isn’t just a matter for the future:

• Australia is normally the world’s second-largest exporter of grain, but a savage multi-year drought has reduced the wheat crop by 60% and rice production has been completely wiped out.
• In Bangladesh in November, one of the strongest cyclones in decades wiped out a million tonnes of rice and severely damaged the wheat crop, making the huge country even more dependent on imported food.

Other examples abound. It’s clear that the global climate crisis is already here, and it is affecting food.

Agrofuels: It is now official policy in the U.S., Canada and Europe to convert food into fuel. U.S. vehicles burn enough corn to cover the entire import needs of the poorest 82 countries.[4]

Ethanol and biodiesel are very heavily subsidized, which means, inevitably, that crops like corn (maize) are being diverted out of the food chain and into gas tanks, and that new agricultural investment worldwide is being directed towards palm, soy, canola and other oil-producing plants. This increases the prices of agrofuel crops directly, and indirectly boosts the price of other grains by encouraging growers to switch to agrofuel.

As Canadian hog producers have found, it also drives up the cost of producing meat, since corn is the main ingredient in North American animal feed.

Oil Prices: The price of food is linked to the price of oil because food can be made into a substitute for oil. But rising oil prices also affect the cost of producing food. Fertilizer and pesticides are made from petroleum and natural gas. Gas and diesel fuel are used in planting, harvesting and shipping.[5]

It’s been estimated that 80% of the costs of growing corn are fossil fuel costs — so it is no accident that food prices rise when oil prices rise.

* * *

By the end of 2007, reduced investment in the third world, rising oil prices, and climate change meant that production growth was slowing and prices were rising. Good harvests and strong export growth might have staved off a crisis — but that isn’t what happened. The trigger was rice, the staple food of three billion people.

Early this year, India announced that it was suspending most rice exports in order to rebuild its reserves. A few weeks later, Vietnam, whose rice crop was hit by a major insect infestation during the harvest, announced a four-month suspension of exports to ensure that enough would be available for its domestic market.

India and Vietnam together normally account for 30% of all rice exports, so their announcements were enough to push the already tight global rice market over the edge. Rice buyers immediately started buying up available stocks, hoarding whatever rice they could get in the expectation of future price increases, and bidding up the price for future crops. Prices soared. By mid-April, news reports described “panic buying” of rice futures on the Chicago Board of Trade, and there were rice shortages even on supermarket shelves in Canada and the U.S.

Why the rebellion?

There have been food price spikes before. Indeed, if we take inflation into account, global prices for staple foods were higher in the 1970s than they are today. So why has this inflationary explosion provoked mass protests around the world?

The answer is that since the 1970s the richest countries in the world, aided by the international agencies they control, have systematically undermined the poorest countries’ ability to feed their populations and protect themselves in a crisis like this.

Haiti is a powerful and appalling example.

Rice has been grown in Haiti for centuries, and until twenty years ago Haitian farmers produced about 170,000 tonnes of rice a year, enough to cover 95% of domestic consumption. Rice farmers received no government subsidies, but, as in every other rice-producing country at the time, their access to local markets was protected by import tariffs.

In 1995, as a condition of providing a desperately needed loan, the International Monetary Fund required Haiti to cut its tariff on imported rice from 35% to 3%, the lowest in the Caribbean. The result was a massive influx of U.S. rice that sold for half the price of Haitian-grown rice. Thousands of rice farmers lost their lands and livelihoods, and today three-quarters of the rice eaten in Haiti comes from the U.S.[6]

U.S. rice didn’t take over the Haitian market because it tastes better, or because U.S. rice growers are more efficient. It won out because rice exports are heavily subsidized by the U.S. government. In 2003, U.S. rice growers received $1.7 billion in government subsidies, an average of $232 per hectare of rice grown.[7] That money, most of which went to a handful of very large landowners and agribusiness corporations, allowed U.S. exporters to sell rice at 30% to 50% below their real production costs.

In short, Haiti was forced to abandon government protection of domestic agriculture — and the U.S. then used its government protection schemes to take over the market.

There have been many variations on this theme, with rich countries of the north imposing “liberalization” policies on poor and debt-ridden southern countries and then taking advantage of that liberalization to capture the market. Government subsidies account for 30% of farm revenue in the world’s 30 richest countries, a total of US$280 billion a year,[8] an unbeatable advantage in a “free” market where the rich write the rules.

The global food trade game is rigged, and the poor have been left with reduced crops and no protections.

In addition, for several decades the World Bank and International Monetary Fund have refused to advance loans to poor countries unless they agree to “Structural Adjustment Programs” (SAP) that require the loan recipients to devalue their currencies, cut taxes, privatize utilities, and reduce or eliminate support programs for farmers.

All this was done with the promise that the market would produce economic growth and prosperity — instead, poverty increased and support for agriculture was eliminated.

“The investment in improved agricultural input packages and extension support tapered and eventually disappeared in most rural areas of Africa under SAP. Concern for boosting smallholders’ productivity was abandoned. Not only were governments rolled back, foreign aid to agriculture dwindled. World Bank funding for agriculture itself declined markedly from 32% of total lending in 1976-8 to 11.7% in 1997-9.”[9]

During previous waves of food price inflation, the poor often had at least some access to food they grew themselves, or to food that was grown locally and available at locally set prices. Today, in many countries in Africa, Asia and Latin America, that’s just not possible. Global markets now determine local prices — and often the only food available must be imported from far away.

* * *

Food is not just another commodity — it is absolutely essential for human survival. The very least that humanity should expect from any government or social system is that it try to prevent starvation — and above all that it not promote policies that deny food to hungry people.

That’s why Venezuelan president Hugo Chavez was absolutely correct on April 24, to describe the food crisis as “the greatest demonstration of the historical failure of the capitalist model.”

What needs to be done to end this crisis, and to ensure that doesn’t happen again?
Part Two of this article will examine those questions.

Ian Angus is the editor of Climate and Capitalism

---

Footnotes

[1] Kevin Pina. “Mud Cookie Economics in Haiti.” Haiti Action Network, Feb. 10, 2008. http://www.haitiaction.net/News/HIP/2_10_8/2_10_8.html

[2] Tony Karon. “How Hunger Could Topple Regimes.” Time, April 11, 2008. http://www.time.com/time/world/article/0,8599,1730107,00.html

[3] “The New Face of Hunger.” The Economist, April 19, 2008.

[4] Mark Lynas. “How the Rich Starved the World.” New Statesman, April 17, 2008. http://www.newstatesman.com/200804170025

[5] Dale Allen Pfeiffer. Eating Fossil Fuels. New Society Publishers, Gabriola Island BC, 2006. p. 1

[6] Oxfam International Briefing Paper, April 2005. “Kicking Down the Door.” http://www.oxfam.org/en/files/bp72_rice.pdf

[7] Ibid.

[8] OECD Background Note: Agricultural Policy and Trade Reform. http://www.oecd.org/dataoecd/52/23/36896656.pdf

[9] Kjell Havnevik, Deborah Bryceson, Lars-Erik Birgegård, Prosper Matondi & Atakilte Beyene. “African Agriculture and the World Bank: Development or Impoverishment?” Links International Journal of Socialist Renewal, http://www.links.org.au/node/328

ALBA Summit in Venezuela Responds to World Food Crisis and Bolivian Crisis

James Suggett, April 24th, Venezuelanalysis.com

Mérida, April 24, 2008 (venezuelanalysis.com)-- Venezuelan President Hugo Chávez convened an extraordinary meeting of member nations of the Bolivarian Alternative for the Americas (ALBA) in Caracas early Wednesday morning to discuss the world food crisis and the political crisis in eastern Bolivia.

At the meeting, Nicaraguan President Daniel Ortega, Bolivian President Evo Morales, Cuban Vice President Carlos Lage, and Chávez signed a series of accords to promote mutual agricultural development, create a joint food distribution network, and create a $100 million ALBA food security fund.

“The food crisis is the greatest demonstration of the historical failure of the capitalist model,” President Chávez declared.

Highlighting the most recent report by the United Nations World Food Program which called the food crisis a “silent Tsunami” and demanded an internationally coordinated response, Chávez said, “ALBA announces its willingness to assume responsibility, ALBA responds immediately… here we are.”

Cuban Vice President Carlos Lage commented that the crisis is part of an “unjust international economic order” in which “the logic is profit and not the satisfaction of peoples` needs.”

Lage further denounced the fact that the United States spends $500 billion per year on the Iraq War while the U.N. had to plea last month for $500 million donations in order to meet its emergency food quotas.

Social unrest has burgeoned in over thirty countries following an 80% increase in world food prices over the last three years, according to the World Bank. U.S. President George W. Bush authorized $200 million in global emergency food aid April 14th, while Venezuela, which has faced food shortages recently, sent 364 tons of meat, chicken, ham, milk, lentils, olive oil, and vegetables to its neighbor Haiti, which has experienced violent riots over rising food costs.

President Morales affirmed Wednesday that “it is the responsibility of presidents to act in concert to guarantee the food security of our peoples.”

Morales also criticized the diversion of farmland for the production of biofuels, which is widely recognized to have contributed to rising food prices, in a speech at the inauguration of the United Nations Permanent Forum on Indigenous Issues in New York Monday.

“If we do not bring an end to the capitalist system, it will be impossible to save the Earth,” Morales concluded.

The agricultural development agreement signed by ALBA nations Wednesday will focus on rice, corn, oil for human consumption, beans, beef, and milk, and the improvement of watering systems. To avoid price speculation by private intermediaries, the heads of state agreed to create a public food distribution network with regulated prices. To fund these projects, the presidents agreed to create a $100 million fund in the Bank of ALBA, which is still in formation.

The four leaders also signed a joint statement Wednesday, expressing solidarity with Bolivia, where there is a secessionist movement led by elite landowners in the natural resource-rich lowland Bolivian provinces of Santa Cruz, Tarija, Beni, and Pando.

ALBA countries pledged “unrestricted support for the process of sovereign and democratic changes” in Bolivia, and harshly denounced the separatist movement, calling it a “frank violation of the constitution and Bolivian laws.”

The declaration was read publicly by Vice President Lage and advocated open dialogue to solve the crisis in Bolivia. It rejected foreign interference, but at the same time called on the international community to “act quickly and decisively in solidarity with the people and the government of Bolivia to consolidate political, economic, and social stability in the region.”

Chávez made clear his suspicion that the “empire wants to halt South American integration and they have chosen, now, Bolivia as a target [because] they do not want the grand fatherland of Latin America and the Caribbean to be born.”

In February it was revealed that the U.S. Embassy in Bolivia had pressured Peace Corps volunteers and Fulbright scholars to spy on the activity of Cubans and Venezuelans working in Bolivia. A report by Bolivia-based independent journalist Ben Dangl the same month revealed evidence that the U.S. is channeling funds from the U.S. Agency for International Development (USAID) to the secessionist groups.

In New York Monday, Morales said the separatist referendum planned for May 4th was “a bridge point for the Empire here in Bolivia disguised by the euphemism of autonomy.”

Morales also asked for international support to end what he called “slavery” in Bolivia, following recent denunciations by sugar cane laborers on large estates in the Santa Cruz province that over 8,000 children work in the fields without pay.

Chávez, whose administration has redistributed over 2 million hectares (4.94 million acres) of mostly state owned land and some from large estates and increased government financing for agricultural production by 728% over the past three years, proposed Wednesday that Bolivian agricultural development be a priority of ALBA, “with the permission and the pardon of Nicaragua, which is also on the priority list.”

He also said ALBA countries are lucky to have responded so quickly to the present food crisis, but are now “obligated to amplify, make more dynamic and profound” these regional food security initiatives.

ALBA is a fair trade block created by Cuba and Venezuela in 2005 as an alternative to the Free Trade Agreement for the Americas (FTAA) promoted by the U.S. government. Since then, Bolivia, Nicaragua, and Dominica have joined the block.

BOLIVIA: ALBA Closes Ranks Around Morales

Humberto Márquez, April 23, IPS

CARACAS, Apr 23 (IPS) - A Bolivarian Alternative for the Americas (ALBA) summit warned Wednesday of the danger of Bolivia "exploding" as a result of the "separatist plan behind the (May 4) autonomy referendum" in the eastern province of Santa Cruz.

Bolivian President Evo Morales received the backing of the alternative trade bloc in a statement signed in Caracas with his counterparts Hugo Chávez of Venezuela and Daniel Ortega of Nicaragua, as well as Cuban Vice President Carlos Lage.

The leaders of Dominica, the fifth ALBA partner, were unable to attend the emergency meeting convened by Chávez.

The statement expressed the presidents’ "staunch rejection of the destabilisation plans that seek to undermine peace and unity in Bolivia" and the "separatist attempt" based on "a referendum that clearly violates Bolivia’s constitution and laws."

Wealthier eastern provinces where Bolivia’s natural gas is concentrated are pressing for greater autonomy and local control over the administration of natural resources and the taxies levied on them.

Bolivia, South America’s poorest country, is basically divided between the western highlands, home to the impoverished indigenous majority, and the much better off eastern provinces, which account for most of the country's natural gas production, industry and gross domestic product (GDP). The population of eastern Bolivia tends to be of more European (Spanish) than indigenous descent.

The ALBA leaders said they would not recognise any attempt by provinces in Bolivia to break off from the federal state and hurt the country’s "territorial integrity." They also demanded that the political crisis in that country be resolved by its citizens, "without foreign meddling of any kind."

The statement was an allusion to alleged involvement in the situation by the U.S. government of George W. Bush.

ALBA called on "the international community and especially that of Latin America and the Caribbean to act in a timely and decisive manner in solidarity with Bolivia."

"They demanded greater attention to the matter by the United Nations, based on statements by the special rapporteur for indigenous peoples, Rodolfo Stavenhagen," María Teresa Romero, an international relations professor at Venezuela’s Central University, told IPS.

The possibility of appealing to the Organisation of American States (OAS) has been left aside because Cuba was expelled from that regional body in the early 1960s.

Stavenhagen said he was "concerned by the intention of the authorities of Santa Cruz to hold a unilateral referendum on regional autonomy, at the margin of" the Bolivian constitution.

The special rapporteur called on regional leaders in eastern Bolivia "not to allow the human rights of the indigenous people of the region of Santa Cruz to be infringed in the name of the legitimate aspiration to regional autonomy."

Santa Cruz and three other of the nine regions into which Bolivia is divided have adopted "autonomy statutes" in open defiance of the government of Morales, the country’s first-ever indigenous president.

In early December, the constituent assembly, which is rewriting the constitution with the aim of giving greater participation in decision-making to the country’s historically neglected indigenous people, met despite a boycott by the rightwing opposition, and the pro-government majority approved a draft constitution.

But the governments of Santa Cruz, Beni, Pando and Tarija complain that they do not feel represented by the draft constitution.

Analysts have warned of the possibility of clashes between pro-autonomy sectors and the social organisations and trade unions that back Morales, as occurred in late November in the city of Sucre, when those opposed to the new constitution staged violent protests.

Romero praised the "prudent silence" kept by some of Bolivia’s neighbours, which she said has helped "prevent the aggravation of the crisis by meddling in such a polarised question as regional autonomy."

Morales said he appreciated the solidarity expressed in Caracas, and said that groups seeking regional autonomy "have always been enemies of us, the social movements," an attitude that he said is "sometimes more hot air and media coverage than anything else."

Chávez convened the emergency summit meeting after Cuba’s ailing former president Fidel Castro warned of the possibility of "another Latin American tragedy caused by the real threat of disintegration of Bolivia," which along with Venezuela and Cuba founded ALBA in 2004 as an alternative to the U.S.-sponsored proposal for a Free Trade Area of the Americas (FTAA), known by its acronym ALCA in Spanish.

"What can we do?" the Venezuelan leader asked on Tuesday night, before explaining that he had come up with the idea of "a special ALBA meeting to try to prevent, from the outside, what many people at this point see as inevitable: an ‘explosion’ in Bolivia."

On Wednesday, he said the destabilisation plan "is also against Brazil and is aimed at destabilising the entire Southern Cone, because if the empire (the United States) destabilises Bolivia, the most likely outcome would be that Bolivia’s natural gas exports to Brazil, Argentina and Chile would come to a halt."

"By targeting Bolivia, the geopolitical heart of South America, the empire and its allies are demonstrating that they don't want the integration of South America."

Chávez wondered if it was merely a coincidence that U.S. Ambassador to Bolivia, Philip Goldberg, served as a diplomat in Bosnia and Kosovo.

"What the empire wants is a Kosovo-isation of Bolivia," he said, referring to the Bush administration’s support for the former Serbian province’s autonomy moves followed by the declaration of independence, which has gained weak international recognition.

The ALBA leaders also signed a new agreement on cooperation in food security in which they complained about the high international food prices and the use of food crops to produce biofuels.

The agreement encourages the members of the alternative trade bloc to adopt measures like the improvement of irrigation systems to boost the production of food products like corn, rice, beans, beef and milk.

Chávez urged that priority be put on Bolivia in the design of new projects aimed at developing the member countries’ potential for food production.

World's new crisis: soaring food prices

Lesley Wroughton, Washington, and Jewel Topsfield, April 15, The Age

THE World Bank has issued an urgent call to rich nations to help stem rising food prices, warning that social unrest in poor countries is spreading and that 100 million people are at risk of being plunged deeper into poverty.

"We have to put our money where our mouth is now, so that we can put food into hungry mouths. It is as stark as that," said World Bank president Robert Zoellick, as he called for more contributions to the $500 million World Food Program.

The plea, issued after a meeting of aid officials in Washington, follows a dramatic surge in world prices for staple foods — rice, for example, has shot up by 75% in just two months — and resulting food-related riots in Haiti, Indonesia, the Philippines and Cameroon in the past week.

World leaders were quick to respond to Mr Zoellick's plea, with Australian Prime Minister Kevin Rudd among those pledging to put world food security on their political agendas.

Mr Rudd said his world tour, from which he returned at the weekend, had changed his vision for Australia's global agenda. "One of the things that I discussed with various world leaders was (that) we have an unfolding food crisis around the world," Mr Rudd told ABC.

"We had 10 major sets of food riots across the world. So if you want something which should be close to our global agenda, therefore our national agenda, (it is) how do we contribute to better food security around the world."

But a pledge by British Prime Minister Gordon Brown to raise the issue at the next G8 summit of world leaders failed to impress Mr Zoellick. "Frankly speaking, that G8 meeting is in June and we cannot wait," he said, after the meeting involving the IMF and the World Bank's Development Committee. "We estimate that a doubling of food prices over the last three years could potentially push 100 million people in low-income countries deeper into poverty."

Anger over food prices led to last week's riots in Haiti, in which at least five people were killed and the country's prime minister was ousted.

Developing countries claim that rich countries, in their rush to tackle global warming, are helping to drive up food prices by encouraging the use of crops to produce biofuels rather than to feed people. Most of the rise in global corn production from 2004 to 2007 went to biofuels in the United States.

According to the 2008 World Development Report, more than 240 kilograms of corn — enough to feed one person for a year — is required to produce 100 litres of ethanol, enough to fill the tank of a sports utility vehicle.

Other contributing factors to rising food prices are the high price of oil (which increases costs of food production and distribution), population growth in Asia and drought in wheat-producing countries including Australia and Kazakhstan.

The price of wheat has jumped 120% in a year, resulting in the price of bread doubling in many poor countries.

The World Bank has warned that food prices will remain elevated this year and next year and will probably stay above 2004 levels until 2015. "We estimate that the effect of this food crisis on poverty reduction worldwide is in the order of seven lost years," Mr Zoellick said.

He said that almost half of $500 million that the World Food Program recently requested in additional pledges for food aid had been committed, but the May 1 deadline for raising the money would not be met.

The parliamentary secretary for international development assistance, Bob McMullan, said yesterday Australia was one of the largest donors through the World Food Program, giving $61.7 million last year.

"We have responded positively when the World Food Program asked us to do a little more in Afghanistan and Zimbabwe and we will look sympathetically at this most recent approach," Mr McMullan told ABC.

National Farmers Federation chief executive Ben Fargher said that despite the impact of the drought over the past five years, Australia was well positioned to respond to the world food crisis. "If countries overseas are looking for food security, one of the best things they could do is reduce barriers to the export of our produce to them," he said.

He said Australia also needed to have the world's best research and development policies to get more crop per drop, and improved rail and road infrastructure to ensure produce can reach overseas markets as efficiently as possible.

World food security will be discussed at a session on Australia's future security and prosperity at this weekend's 2020 Summit. Panel member Alan Dupont, director of the Centre for International Security Studies at the University of Sydney, said a key role for Australia could be to raise global awareness about the links between climate change and the food crisis.

He said Australia could also help developing nations affected by food shortages with technological solutions — such as the greater productivity of hybrid grains — and it could lead the way in the creation of strategic stockpiles of food.

With REUTERS

Roberto Perez: 'Bio-fuels', agribusiness & the food crisis

Will capitalism survive climate change?

Walden Bello, March 29, Bangkok Post

There is now a solid consensus in the scientific community that if the change in global mean temperature in the 21st century exceeds 2.4 degrees Celsius, changes in the planet's climate will be large-scale, irreversible and disastrous. Moreover, the window of opportunity for action that will make a difference is narrow - that is, the next 10 to 15 years.

Throughout the North, however, there is strong resistance to changing the systems of consumption and production that have created the problem in the first place and a preference for ''techno-fixes,'' such as ''clean'' coal, carbon sequestration and storage, industrial-scale biofuels, and nuclear energy.
Globally, transnational corporations and other private actors resist government-imposed measures such as mandatory caps, preferring to use market mechanisms like the buying and selling of ''carbon credits,'' which critics say simply amounts to a licence for corporate polluters to keep on polluting.

In the South, there is little willingness on the part of the southern elite to depart from the high-growth, high-consumption model inherited from the North, and a self-interested conviction that the North must first adjust and bear the brunt of adjustment before the South takes any serious step towards limiting its greenhouse gas emissions.

Contours of the Challenge

In the climate change discussions, the principle of ''common but differentiated responsibility'' is recognised by all parties, meaning that the global North must shoulder the brunt of the adjustment to the climate crisis since it is the one whose economic trajectory has brought it about.

It is also recognised that the global response should not compromise the right to develop of the countries of the global South.

The devil, however, is in the details. As Martin Khor of Third World Network has pointed out, the global reduction of 80% in greenhouse gas emissions from 1990 levels by 2050 that many now recognise as necessary, will have to translate into reductions of at least 150-200% on the part of the global North if the two principles - ''common but differentiated responsibility'' and recognition of the right to development of the countries of the South - are to be followed.

But are the governments and people of the North prepared to make such commitments?

Psychologically and politically, it is doubtful that the North at this point has what it takes to meet the problem head-on.

The prevailing assumption is that the affluent societies can take on commitments to reduce their greenhouse gas emissions but still grow and enjoy their high standards of living if they shift to non-fossil fuel energy sources.

Moreover, how the mandatory cuts agreed multilaterally by governments get implemented within the country must be market-based, that is, on the trading of emission permits.

The subtext is: techno-fixes and the carbon market will make the transition relatively painless and (why not?) profitable, too.

There is, however, a growing realisation that many of these technologies are decades away from viable use and that, in the short and medium term, relying on a shift in energy dependence to non-fossil fuel alternatives will not be able to support current rates of economic growth.

Also, it is increasingly evident that the trade-off for more crop land being devoted to biofuel production is less land to grow food and greater food insecurity globally.

It is rapidly becoming clear that the dominant paradigm of economic growth is one of the most significant obstacles to a serious global effort to deal with climate change.

But this destabilising, fundamentalist growth-consumption paradigm is itself more effect rather than cause.

The central problem, it is becoming increasingly clear, is a mode of production whose main dynamic is the transformation of living nature into dead commodities, creating tremendous waste in the process.

The driver of this process is consumption - or more appropriately overconsumption - and the motivation is profit or capital accumulation: capitalism, in short.

It has been the generalisation of this mode of production in the North and its spread from the North to the South over the last 300 years that has caused the accelerated burning of fossil fuels like coal and oil and rapid deforestation, two of the key man-made processes behind global warming.

The South's Dilemma

One way of viewing global warning is to see it as a key manifestation of the latest stage of a wrenching historical process: the privatisation of the global commons by capital. The climate crisis must thus be seen as the expropriation by the advanced capitalist societies of the ecological space of less developed or marginalised societies.

This leads us to the dilemma of the South: before the full extent of the ecological destabilisation brought about by capitalism, it was expected that the South would simply follow the ''stages of growth'' of the North.

Now it is impossible to do so without bringing about ecological Armageddon. Already, China is on track to overtake the US as the biggest emitter of greenhouse gases, and yet the elite of China as well as those of India and other rapidly developing countries are intent on reproducing the American-type overconsumption-driven capitalism.

Thus, for the South, the implications of an effective global response to global warming include not just the inclusion of some countries in a regime of mandatory reductions in greenhouse gas emissions, although this is critical: in the current round of climate negotiations, for instance, China, can no longer opt out of a mandatory regime on the grounds that it is a developing country.

Nor can the challenge to most of the other developing countries be limited to that of getting the North to transfer technology to mitigate global warming and provide funds to assist them in adapting to it, as many of them appeared to think during the Bali negotiations.

These steps are important, but they should be seen as but the initial steps in a broader, global reorientation of the paradigm for achieving economic well-being.

While the adjustment will need to be much, much greater and faster in the North, the adjustment for the South will essentially be the same: a break with the high-growth, high-consumption model in favour of another model of achieving the common welfare.

In contrast to the Northern elite's strategy of trying to decouple growth from energy use, a progressive comprehensive climate strategy in both the North and the South must be to reduce growth and energy use while raising the quality of life of the broad masses of people.

Among other things, this will mean placing economic justice and equality at the centre of the new paradigm.

The transition must be one not only from a fossil-fuel based economy but also from an overconsumption-driven economy.

The end-goal must be adoption of a low-consumption, low-growth, high-equity development model that results in an improvement in people's welfare, a better quality of life for all, and greater democratic control of production.

It is unlikely that the elite of the North and the South will agree to such a comprehensive response. The farthest they are likely to go is for techno-fixes and a market-based cap-and-trade system. Growth will be sacrosanct, as will the system of global capitalism.

Yet, confronted with the Apocalypse, humanity cannot self-destruct.

It may be a difficult road, but we can be sure that the vast majority will not commit social and ecological suicide to enable the minority to preserve their privileges.

However it is achieved, a thorough reorganisation of production, consumption and distribution will be the end result of humanity's response to the climate emergency and the broader environmental crisis.
Threat and Opportunity

In this regard, climate change is both a threat and an opportunity to bring about the long postponed social and economic reforms that had been derailed or sabotaged in previous eras by the elite seeking to preserve or increase their privileges.

The difference is that today the very existence of humanity and the planet depend on the institutionalisation of economic systems based not on feudal rent extraction or capital accumulation or class exploitation, but on justice and equality.

The question is often asked these days if humanity will be able to get its act together to formulate an effective response to climate change. Though there is no certainty in a world filled with contingency, I am hopeful that it will.

In the social and economic system that will be collectively crafted, I anticipate that there will be room for the market.

However, the more interesting question is: will it have room for capitalism? Will capitalism as a system of production, consumption and distribution survive the challenge of coming up with an effective solution to the climate crisis?

Walden Bello is Senior Analyst at Focus in the Global South, a programme of Chulalongkorn University's Social Research Institute.

Biofuel boom costs Indonesians dear

Step Vaessen, January 19, Al Jazeera

Indonesia is struggling with a potential food crisis, because of rapidly increasing prices of one of its staple food items.

The cost of soya bean has doubled on the world market in recent months, making imports of the commodity increasingly expensive.

The main cause of the price rise in Indonesia is shifting production in the US.

Biofuels phenomenon

A US energy bill signed into law last September, encouraged a massive increase in the production of biofuels like ethanol.

Soya bean and corn, once used mostly for food, are now being converted into fuel.

That means soaring prices for Indonesia's "food of the poor".

Take the case of Tukino. His family has been running a home factory for the last 34 years, making bean curd, one of Indonesia's most popular dishes.

Bean curd is a staple of Indonesian dietBut never before has soya bean been so expensive.

The price has doubled during the past few weeks.

Analysts say this is because US farmers are replacing the crop in order to grow corn for biofuel instead.

Tukino says: "We are really suffering from this. We are sweating here everyday just to make ends meet.

"I am trying to run a business but if this situation continues a lot of people have to be laid off."

Bean-curd factories like the one run by Tukino's family went on strike for three days to protest against the price increase.

But after consumers began to complain, they decided to operate again.

Nutritious and cheap

Bean curd has kept many poor Indonesians healthy for a very long time.

It is very nutritious and it used to be very cheap, but now Indonesia's favourite food is becoming very expensive and hard to get. And this is already creating unrest.

To calm down sentiments, bean curd and tempeh, another popular soya bean dish, are being sold again on the market, much to the relief of many Indonesians.

But while the price is still the same, the sellers have made the portions much smaller.

One resident of Jakarta said: "My children don't want to eat anything when there is no tempeh or bean curd. They simply don't feel well if I don't serve it to them.

"Normally I could buy it at a food stall, but there hasn't been enough in the market for quite a while."

Farmers' view

The Indonesian Farmers Union says the country should become self-sufficient again and start growing soya bean as it used to do in the past.

Henry Saragih, from the Indonesian Farmers Union, says: "This is a basic need which is now very hard to get.

"This is not only turning in to a social crisis, but this could also cause hunger and malnutrition."

The government admits that it should have worked harder to achieve self-sufficiency.

Sutarto Alimoeso, an agriculture ministry official in charge of food crops, told Al Jazeera: "This is an international problem, we cannot stop free trade.

"But we should indeed have protected our farmers more. There is not a single country that doesn't protect its own farmers. We should have been braver."

For the time being the Indonesian government has decided to control the price of soya bean by asking the state food company to buy stock overseas.

This could prevent a deepening food crisis in the country for now.

Still, in the long term, other measures may have to be found.

Climate Change Debate Fuels Greenwash Boom

Pratap Chatterjee, December 11, CorpWatch

On the Indonesian island of Bali, thousands of senior government officials are negotiating a plan to slow global warming. The meeting, which will focus on how to limit the greenhouse gas emissions that cause climate change, will run for the first two weeks of December and include 192 countries. This year’s conclave is the 13th in a series launched by the United Nations Framework Convention on Climate Change that came into force in 1994.

The coal, gas and oil companies that are major producers of greenhouse gases are finally taking notice of these high-level political discussions, and many have mounted spirited public relations exercises to defend themselves, and even win endorsements of their products.

For example, the weekend before negotiations began, Neste Oil announced plans to build the world's largest bio-diesel facility a few hundred miles northeast of Bali, in the Tuas industrial zone on the island of Singapore. The Finnish company is betting that widespread concern, as well as mandatory limits on greenhouse gases generated by fossil fuels such as coal and petroleum, will increase demand for vegetable-based fuels.

Neste’s proposed $800 million plant will use palm oil, which is readily available throughout the region. The company has pledged to buy palm oil certified by the Roundtable on Sustainable Palm Oil and to use proprietary NExBTL technology that produces fuel with lifecycle greenhouse gas emissions 40 to 60 percent less than those of conventional diesel fuel.

"We have a very clear principle that we are aware of the source of all raw materials used in our biodiesel, including palm oil ... and that it is produced by sustainable methods," Neste CEO Resto Rinne told reporters, explaining that he expected this market to expand substantially. "In Europe alone, [annual] production will be well over 10 million tons by the end of the decade, and our share of this production will be some 800,000 tons."

Some environmental groups charge that Neste's claims are "greenwash": misleading public relations masking unsustainable practices. Greenpeace, for example, explains that the new plant in Singapore is likely to cause more environmental problems, not fewer, by increasing demand for new palm oil plantations that displace environmentally sensitive forests or wetland areas. In addition to destroying endangered habitats, the scheme could exacerbate global warming.

"Certification does not stop the rainforests from disappearing, for there is no doubt that the increase in demand for palm oil will lead to further destruction of rainforest. There is absolutely no way to grow enough sustainable palm oil for all the producers," said Harri Lammi, the program director for Greenpeace Finland. The week before the climate meeting got underway in Bali, his group attempted to highlight Neste's environmental record by blockading its ships in waters off of Finland.

The clash between Neste and Greenpeace highlights one of the key ideological debates over climate change: Business and politicians believe that a "technological" fix such as alternative fuels can solve the problem and also generate profits; many environmental groups believe the real solution to global warming lies in reducing consumption.

Guaranteed Markets, But Are They Guaranteed Green?

The arguments of the alternative fuel lobby are finding significant political backing. Earlier this year the European Union agreed to binding targets: By 2020, ten percent of its transportation industry’s annual 300 million ton fuel consumption must come from alternatives such as biodiesel. China has predicted that it can switch 15 percent of its transport fuel consumption to biofuels, and India has set an ambitious target of 20 percent by 2020.

Even U.S. President George Bush in his January 2007 State of the Union address pledged to “increase the supply of alternative fuels by setting a mandatory fuels standard to require 35 billion gallons of renewable and alternative fuels in 2017 -- and that is nearly five times the current target."

Palm oil is one of the three key biofuels that governments and corporations are promoting as alternatives to fossil fuels. (The others are soy and rapeseed.) An edible vegetable oil obtained from the fruit of the oil palm tree, palm oil has been used as a popular cooking oil in West Africa for centuries. In recent years, it has become a key component of processed foods ranging from KitKat candy bars to Pringles potato chips to Oreo cookies.

The biggest producers of palm oil are Indonesia and Malaysia, where the crop has been grown on plantations established by British colonists in 1917. It was first exported for use as an industrial lubricant and as a base for Sunlight and Palmolive soaps.

The new green boom in biofuels has accelerated the demand for plantations, which in turn has led to widespread forest and peatland clearing. Indeed, a 2007 United Nations Environment Program report earlier this year, found that oil palm plantations are now the leading cause of forest destruction in Indonesia and Malaysia. And more is to come: The Indonesian government wants to put 10 million hectares of land into oil palm cultivation by 2015, up from the current total of 6 million hectares. In Malaysia, palm oil producers are targeting the island province of Sarawak for major expansion.

Local groups have spoken out strongly against this new trend. Meena Raman, head of Friends of the Earth Malaysia, said "Agrofuels is a disaster in the making. Their production, development and trade largely stem from unsustainable energy demand in industrialized countries. We are strongly urging our government to reconsider its decision of turning Malaysia into a major agrofuel producing country, as it is leading to further destruction of our forests and violations of the customary rights of indigenous peoples."

A new Greenpeace report, "Cooking the Climate," points out that razing of forests to create the oil palm plantations is, in itself, a major cause of greenhouse gas emissions. The environmental organization calculates that the burning and drying of carbon-rich peatlands on the Indonesian island of Riau releases about 1.8 billion tons of greenhouse gases a year. The removal of the forests also eliminates one of the planet's crucial air-filtration systems.

A British government report estimated that clearing land for agro-fuel cultivation creates two to nine times more greenhouse gases than the cleaner-burning fuel saves.

Fossil Fuels in Green Packaging

Another company ratcheting up the green rhetoric on climate change is General Electric (GE). Its television advertisement for "clean coal" technologies portrays scantily-clad models working in a coal mine, while an announcer sums up the message: "Thanks to emissions reducing technology from GE Energy, harnessing the power of coal is looking more beautiful every day."

The ad is part of GE's "ecomagination" campaign to promote "green" products such as lower-energy houses, wind turbines, solar power and water-purification systems, as well as a range of new coal technologies.

The company has joined the U.S. Climate Action Partnership, a coalition of industry and environmental groups that claim to be concerned about global warming. "The time has come for constructive action that draws strength equally from business, government, and non-governmental stakeholders," said Jeffrey Immelt, CEO of Connecticut-based GE, in a statement timed for the day before George Bush's backing of alternative technologies.

While some of the technologies GE sells -- such as wind and solar power -- are indeed carbon neutral, others -- such as its "clean coal" integrated gasification combined-cycle coal power plants -- are questionable.

The term "clean coal" refers to a variety of new technologies under development: chemically washing the fossil fuel of minerals and impurities, burning it at higher pressure and temperature, and increasing efficiency by trapping and burning waste gases that would otherwise have escaped out the smokestack. Another "clean coal" technology is "carbon capture and sequestration," or CCS, which captures coal plant emissions before they enter the atmosphere, and stores them underground.

Many environmental activists note that these "clean coal" technologies are only marginally more efficient and far more expensive. Others, such as CCS, are still on the drawing board and may never work. (In fact, GE has yet to convince any of its clients to buy these new "clean coal" plants, according to California-based Rainforest Action Network, or RAN.)

"Why waste billions of dollars to research an uncertain technology when safer, cleaner energy solutions already exist?” asks Matt Leonard of RAN. “Even if we could capture coal's dangerous emissions, why create such massive waste streams in the first place? All fossil fuels, including coal, are running out. The longer we keep relying on them, the worse off our environment, climate, and society will be."

Immelt has admitted that the new promotion campaign was based on tapping public opinion and profits. "I can't lay claim to be a big environmentalist or nature lover here,” the GE head told NBC television this May. “I know that when society changes its mind, you'd better be in front of it, and not behind it. And this is an issue on which society has changed its mind. I came to the conclusion that technology that my company makes can help make it [the climate situation] better, and I can make money doing it, and I can do something good."
Do Nothing, Collect Praise

Other companies have managed to win environmental praise for effectively doing nothing. A case in point is the much heralded $45 billion purchase of Texas state utility TXU by private equity firm Kohlberg, Kravis and Roberts and Texas Pacific Corporation. The buyers won backing from Washington DC-based environmental groups Environmental Defense and the Natural Resources Defense Council in exchange for scrapping plans to build eight of 11 proposed coal plants.

Not everybody is convinced. RAN executive director Michael Brune is skeptical of the scheme, pointing out that TXU could easily shelve its concessions in the future. "The commitments by TXU's new owners should be binding, not voluntary, and the three Texas coal plants TXU still intends to build are three plants too many," he said.

Warning: Greenwash Ahead

The cases of TXU’s non-binding concessions in Texas, GE’s amorphous “clean coal” promises, and Neste’s palm oil strategy in South Asia illustrate a widening trend: As the climate change issue becomes mainstream, more and more companies are jumping on the public relations bandwagon. If these examples serve as models, they will try to win endorsements for agreeing to do nothing, promise things that they cannot guarantee, and take advantage of the debate to profit from environmentally unfriendly technologies.

Activists attending the Bali gathering say that the real answer to climate change will not be generated by profit-motivated corporations, but by the concrete commitments of political leaders backed by the force of law. Raman of Friends of the Earth International, puts it simply: "We need Northern countries to develop stringent policies to reduce their energy consumption and attempt to find solutions to their energy needs locally."

The western appetite for biofuels is causing starvation in the poor world

George Monbiot, November 6, Guardian

It doesn't get madder than this. Swaziland is in the grip of a famine and receiving emergency food aid. Forty per cent of its people are facing acute food shortages. So what has the government decided to export? Biofuel made from one of its staple crops, cassava. The government has allocated several thousand hectares of farmland to ethanol production in the district of Lavumisa, which happens to be the place worst hit by drought. It would surely be quicker and more humane to refine the Swazi people and put them in our tanks. Doubtless a team of development consultants is already doing the sums.

This is one of many examples of a trade that was described last month by Jean Ziegler, the UN's special rapporteur, as "a crime against humanity". Ziegler took up the call first made by this column for a five-year moratorium on all government targets and incentives for biofuel: the trade should be frozen until second-generation fuels - made from wood or straw or waste - become commercially available. Otherwise, the superior purchasing power of drivers in the rich world means that they will snatch food from people's mouths. Run your car on virgin biofuel, and other people will starve.

Even the International Monetary Fund, always ready to immolate the poor on the altar of business, now warns that using food to produce biofuels "might further strain already tight supplies of arable land and water all over the world, thereby pushing food prices up even further". This week, the UN Food and Agriculture Organisation will announce the lowest global food reserves in 25 years, threatening what it calls "a very serious crisis". Even when the price of food was low, 850 million people went hungry because they could not afford to buy it. With every increment in the price of flour or grain, several million more are pushed below the breadline.

The cost of rice has risen by 20% over the past year, maize by 50%, wheat by 100%. Biofuels aren't entirely to blame - by taking land out of food production they exacerbate the effects of bad harvests and rising demand - but almost all the major agencies are now warning against expansion. And almost all the major governments are ignoring them.

They turn away because biofuels offer a means of avoiding hard political choices. They create the impression that governments can cut carbon emissions and - as Ruth Kelly, the British transport secretary, announced last week - keep expanding the transport networks. New figures show that British drivers puttered past the 500bn kilometre mark for the first time last year. But it doesn't matter: we just have to change the fuel we use. No one has to be confronted. The demands of the motoring lobby and the business groups clamouring for new infrastructure can be met. The people being pushed off their land remain unheard.

In principle, burning biofuels merely releases the carbon the crops accumulated when growing. Even when you take into account the energy costs of harvesting, refining and transporting the fuel, they produce less net carbon than petroleum products. The law the British government passed a fortnight ago - by 2010, 5% of our road transport fuel must come from crops - will, it claims, save between 700,000 and 800,000 tonnes of carbon a year. It derives this figure by framing the question carefully. If you count only the immediate carbon costs of planting and processing biofuels, they appear to reduce greenhouse gases. When you look at the total impacts, you find they cause more warming than petroleum.

A recent study by the Nobel laureate Paul Crutzen shows that the official estimates have ignored the contribution of nitrogen fertilisers. They generate a greenhouse gas - nitrous oxide - that is 296 times as powerful as CO2. These emissions alone ensure that ethanol from maize causes between 0.9 and 1.5 times as much warming as petrol, while rapeseed oil (the source of more than 80% of the world's biodiesel) generates 1-1.7 times the impact of diesel. This is before you account for the changes in land use.

A paper published in the journal Science three months ago suggests that protecting uncultivated land saves, over 30 years, between two and nine times the carbon emissions you might avoid by ploughing it and planting biofuels. Last year the research group LMC International estimated that if the British and European target of a 5% contribution from biofuels were to be adopted by the rest of the world, the global acreage of cultivated land would expand by 15%. That means the end of most tropical forests. It might also cause runaway climate change.

The British government says it will strive to ensure that "only the most sustainable biofuels" will be used in the UK. It has no means of enforcing this aim - it admits that if it tried to impose a binding standard it would break world trade rules. But even if "sustainability" could be enforced, what exactly does it mean? You could, for example, ban palm oil from new plantations. This is the most destructive kind of biofuel, driving deforestation in Malaysia and Indonesia. But the ban would change nothing. As Carl Bek-Nielsen, vice chairman of Malaysia's United Plantations Berhad, remarked: "Even if it is another oil that goes into biodiesel, that other oil then needs to be replaced. Either way, there's going to be a vacuum and palm oil can fill that vacuum." The knock-on effects cause the destruction you are trying to avoid. The only sustainable biofuel is recycled waste oil, but the available volumes are tiny.

At this point, the biofuels industry starts shouting "jatropha". It is not yet a swear word, but it soon will be. Jatropha is a tough weed with oily seeds that grows in the tropics. This summer Bob Geldof, who never misses an opportunity to promote simplistic solutions to complex problems, arrived in Swaziland in the role of "special adviser" to a biofuels firm. Because it can grow on marginal land, jatropha, he claimed, is a "life-changing" plant that will offer jobs, cash crops and economic power to African smallholders.

Yes, it can grow on poor land and be cultivated by smallholders. But it can also grow on fertile land and be cultivated by largeholders. If there is one blindingly obvious fact about biofuel, it's that it is not a smallholder crop. It is an internationally traded commodity that travels well and can be stored indefinitely, with no premium for local or organic produce. Already the Indian government is planning 14m hectares of jatropha plantations. In August, the first riots took place among the peasant farmers being driven off the land to make way for them.

If the governments promoting biofuels do not reverse their policies, the humanitarian impact will be greater than that of the Iraq war. Millions will be displaced, hundreds of millions more could go hungry. This crime against humanity is a complex one, but that neither lessens nor excuses it. If people starve because of biofuels, Ruth Kelly and her peers will have killed them. Like all such crimes, it is perpetrated by cowards, attacking the weak to avoid confronting the strong.

www.monbiot.com

Nuclear, ethanol on Bush-Howard agenda

Anne Davies and Sarah Smiles, August 27, The Age

US PRESIDENT George Bush will invite Australia to be part of two initiatives aimed at guaranteeing future energy supplies: his global nuclear partnership and an initiative to produce ethanol from wild grasses.

Both issues will be raised by Mr Bush at bilateral talks ahead of the APEC meeting next week, senior officials said.

Prime Minister John Howard will today outline his objectives for APEC in an address to the Lowy Institute. The timing of the September 8-9 meeting is politically important — the election could be announced as early as a week or fortnight later.

The US, through the Global Nuclear Energy Partnership, is already driving a major research effort to develop a new generation of fast-cycle reactors that would produce far less hazardous waste than conventional nuclear reactors. The group includes many countries involved in the nuclear fuel cycle, including Russia, China and France.

Its broader aim is to eventually secure the entire fuel cycle and confine production and reprocessing to members of the group, thus reducing the threat of nuclear proliferation.

Australia and Canada, the world's largest uranium producers, have so far stalled on joining because of domestic concerns about obligations to take back nuclear waste and store it.

They have also been concerned about being locked out of a core group inside the partnership that is allowed to process uranium, say diplomatic sources.

Canadian Prime Minister Stephen Harper and Mr Howard are likely to compare notes in a bilateral meeting around APEC.

A senior official said last week that the US would not pressure Australia to take back nuclear waste if it joined the group.

"We want Australia to be part of the research effort. It doesn't mean Australia would have to take back nuclear waste," the official said. Documents reveal that the Department of Foreign Affairs and the Department of Energy have worked on a bilateral nuclear partnership with the US, which would see closer research ties and more involvement by Australia.

Hans Blix, the head of the Weapons of Mass Destruction Commission who is visiting Melbourne, said there were "attractive features" in the partnership initiative, which aims to reduce proliferation by confining uranium production to a small group of countries.

Yet he said it remains a "hypothetical" plan and noted that the US has been averse to taking back fuel.

"GNEP is pretty much far in the future, there are many things that need to be clarified and worked out before they can get to such a scheme. It presupposes new types of reactors … the type of reactors we don't have yet," Dr Blix told The Age.

Ethanol will also be a major area of discussion. The US has announced a program to boost ethanol production to 35 billion gallons by 2017, in a bid to reduce its dependence on foreign oil by 20 per cent.

Also see related article in Sydney Morning Herald.

Buy Feed Corn, They're About to Stop Making It

The Hidden Agenda Behind Bush's Biofuel Plan

F. WILLIAM ENGDAHL, August 31, Counterpunch

That bowl of Kellogg's Cornflakes on the breakfast table, or the portion of pasta or corn tortillas, cheese or meat on the table is going to rise in price over the coming months as sure as the sun rises in the East. Welcome ladies and gentlemen to the new world food price shock, conveniently timed to accompany our current world oil price shock.

Curiously it's ominously similar in many respects to the early 1970's when prices for oil and food both exploded by several hundred percent in a matter of months. That mid-1970's price explosion led President Nixon to ask his old pal, Arthur Burns, then Chairman of the Fed, to find a way to alter the CPI inflation data to take attention away from the rising prices. The result then was the now-commonplace publication of the absurd "core inflation" CPI numbers--sans oil and food. Stephen Roche was the young Fed economist who was assigned the statistical manipulation job by Burns.

The late American satirist, Mark Twain once quipped, "Buy land: They've stopped making it" Today we can say almost the same about corn or all grains worldwide. The world is in the early months of the greatest sustained rise in grain prices, for all major grains including maize, wheat, rice that we have seen in three decades. Those three crops constitute almost 90 per cent of all grains cultivated in the world.

What's driving this extraordinary change? Here things get pretty interesting. The Bush Administration is making a major public relations push to convince the world it has turned into a "better steward of the environment." The problem is that many have fallen for the hype.

The center of his program, announced in his January State of the Union Address is called '20 in 10', cutting US gasoline use 20 per cent by 2010. The official reason is to "reduce dependency on imported oil," as well as cutting unwanted "greenhouse gas" emissions. That isn't the case, but it makes good PR. Repeat it often enough and maybe most people will believe it. Maybe they won't realize their taxpayer subsidies to grow ethanol corn instead of feed corn are also driving the price of their daily bread through the roof.

The heart of the plan is a huge, taxpayer subsidized expansion of use of bio-ethanol for transport fuel. The President's plan requires production of 35 billion gallons (about 133 billion liters) of ethanol a year by 2017. Congress already mandated with the Energy Policy Act of 2005 that corn ethanol for fuel must rise from 4 billion gallons in 2006 to 7.5 billion in 2012. To make certain it will happen, farmers and big agribusiness giants like ADM or David Rockefeller get generous taxpayer subsidies to grow corn for fuel instead of food. Currently ethanol producers get a subsidy in the US of 51 cents per gallon ethanol paid to the blender, usually an oil company that blends it with gasoline for sale.

As a result of the beautiful US Government subsidies to produce bio- ethanol fuels, and the new legislative mandate, the US refinery industry is investing big time in building new special ethanol distilleries, similar to oil refineries, except they produce ethanol fuel. The number currently under construction exceeds the total number of oil refineries built in the US over the past 25 years. When finished in the next 2-3 years the demand for corn and other grain to make ethanol for car fuel will double from present levels.

Not just USA bio-ethanol. In March Bush met with Brazil's President to sign a bilateral "Ethanol Pact" to cooperate in R&D of "next generation" bio-fuel technologies like cellulosic ethanol from wood, and joint cooperation in "stimulating" expansion of bio-fuels' use in developing countries, especially in Central America, and creating a "bio-fuels OPEC-like" cartel market with rules that allows formation of a Western Hemisphere ethanol market.

In short, the use of farmland worldwide for bio-ethanol and other bio- fuels_burning the food product rather than using it for human or animal food_is being treated in Washington, Brazil and other major centers, including the EU, as a major new growth industry.

Phony green arguments

Bio-fuel -- gasoline or fuel produced from refining food products -- is being hyped as a solution to the controversial Global Warming problem. Leaving aside the faked science and the political interests behind the sudden hype about dangers of global warming, bio-fuels offer no net positive benefits over oil even under best conditions. Its advocates claim that present first generation bio-fuels "save up to 60per cent of carbon emission." As well, amid rising oil prices at $75 per barrel for Brent marker grades, governments such as Brazil's are frantic to substitute homegrown bio-fuels for imported gasoline. In Brazil today 70 per cent of all cars have "flexi-fuel" engines able to switch from conventional gasoline to 100per cent bio-fuel or any mix. Bio-fuel production has become one of Brazil's major export industries as well.

The green claims for bio-fuel as a friendly and better fuel than gasoline are at best dubious, if not outright fraudulent. Depending on who runs the tests, ethanol has little if any effect on exhaust- pipe emissions in current car models. It has significant emission, however, of some toxins including formaldehyde and acetaldehyde, a suspected neurotoxin which has been banned as carcinogenic in California.

Ethanol is not some benign substance as we are led to think from the industry propaganda. It is highly corrosive to pipelines as well as to seals and fuel systems of existing car or other gasoline engines. It requires special new gas pumps. All that conversion costs money.

But the killer-diller about ethanol is that it holds at least 30 per cent less energy per gallon than normal gasoline, translating into a loss in fuel economy per gallon of at least 25 per cent over gasoline for an Ethanol E-85per cent blend. No advocate of the ethanol boondoggle addresses the huge social cost which is beginning to hit the dining room tables across the US, Europe and the rest of the world. Food prices are exploding as corn, soybeans and all cereal grain prices are going through the roof because of the astronomical -- Congress-driven -- demand for corn to burn for bio-fuel.

This year the Massachusetts Institute of Technology issued a report concluding that using corn-based ethanol instead of gasoline will have no impact on greenhouse gas emissions, and would even expand fossil fuel use due to increased demand for fertilizer and irrigation to expand acreage of ethanol crops. And according to MIT "natural gas consumption is 66per cent of total corn ethanol production energy," meaning huge new strains on natural gas supply, pushing prices there higher.

The idea that the world can "grow" out of oil dependency with bio- fuels is the PR hype being used to sell what is shaping up to be the mist dangerous threat to the planet's food supply since creation of patented genetically manipulated corn and crops.

US farms become bio-fuel factories

The main reason US and world grain prices are soaring in the past two years and now pre-programmed to continue rising at a major pace, is the conversion of US farmland to become de facto bio-fuel factories. In 2006 US farmland devoted to bio-fuel crops increased by 48 per cent. None of that land was replaced for food crop cultivation. The tax subsidies make it far too profitable to produce ethanol fuel.

Since 2001 the amount of maize used to produce bio-ethanol in the USA has risen 300 per cent, with the trend increasingly going forward. In fact, in 2006 US maize or corn crops for bio-fuel equaled the tonnage of corn used for export. In 2007 it is estimated it will exceed the corn for export by a hefty amount. The US is the world's leading corn exporter, most going for animal feed to EU and other countries. The traditional USDA statistics on acreage planted to corn is no longer a useful metric of food prices as all marginal acreage is going for bio-fuel growing. The amount available for animal and human feed is actually declining.

Brazil and China are similarly switching from food to bio-fuels with large swatches of land.

A result of the bio-fuel revolution in agriculture is that world carryover or reserve stocks of grains have been plunging for six of the past seven years. Carryover reserve stocks of all grains fell at the end of 2006 to 57 days of consumption, the lowest level since 1972. Little wonder that world grain prices rose 100 per cent over the past 12 months. This is just the start.

That decline in grain reserves, the measure of food security in event of drought or harvest failure -- an increasingly common event in recent years -- is pre-programmed to continue going as far ahead as the eye can see. Assuming modest world population increase annually of some 70 million people over the coming decade, especially in the Indian subcontinent and Africa, the stagnation or even decline in the tonnages of feed corn or other feed grains including rice that is harvested annually as growing amounts of bio-ethanol and other bio-fuels displaces food grain, in fact means we are just getting started on the greatest transformation of global agriculture since the introduction of the agribusiness revolution with fertilizers and mechanized farming after World War II. The difference is that this revolution is at the expense of food production. That preprograms exploding global grain prices, increased poverty and malnutrition. And the effect on gasoline import demand will be minimal.

Prof. M.A. Altieri of Berkeley University estimates that dedicating all USA corn and soybean production acreage to bio-fuels would only meet 12 per cent of gasoline and 6 per cent of diesel needs. He notes that though one-fifth of last year's corn harvest went to bio-ethanol, it met a mere 3 per cent of energy needs. But the farmland is converting at a record pace. In 2006 more than 50 per cent of Iowa and South Dakota corn went to ethanol refineries. Farmers across the Midwest, desperate for more income after years of depressed corn prices, are abandoning traditional crop rotation to grow exclusively soybeans or corn with dramatic added impact on soil erosion and needs for added chemical pesticides. In the US some 41 per cent of all herbicides used are already applied to corn. Monsanto and other makers of glyphosate herbicides like Roundup are smiling on the way to the bank.

Going global with bio-fuels

The Bush-Lula pact is just the start of a growing global rush to plant crops for bio-fuel. Huge sugarcane, palm oil and soy plantations for bio-fuel refining are taking over forests and grasslands in Brazil, Argentina, Colombia, Ecuador and Paraguay. Soy cultivation has already caused the deforestation of 21 million hectares in Brazil and 14 million hectares in Argentina, with no end in sight, as world grain prices continue to rise. Soya is used for bio- diesel fuel.

China, desperate for energy sources, is a major player in bio-fuel cultivation, reducing food crop acreage there as well. In the EU most bio-diesel fuel is produced using rapeseed plants, a popular animal feed. The result? Meat prices around the globe are rising and set to continue rising as far ahead as the eye can see. The EU has a target requiring minimum bio-fuel content of 10 per cent, a foolish demand that will set aside 18 per cent of EU farmland to cultivate crops to be burned as bio-fuel.

Big oil is also driving the bio-fuels bandwagon. Prof. David Pimentel of Cornell University and other scientists claim that net energy output from bio-ethanol fuel is less than the fossil fuel energy used to produce the ethanol. Measuring all energy inputs to produce ethanol from production of nitrogen fertilizer to energy needed to clean the considerable waste from bio-fuel refineries, Pimintel's research showed a net energy loss of 22 per cent for bio-fuel -- they use more energy than they produce. That translates into little threat to oil demand and huge profit for clever oil giants that re-profile themselves as "green energy" producers.

So it's little wonder that ExxonMobil, Chevron and BP are all into bio-fuels. This past May, BP announced the largest ever R&D grant to a university, $500 million to the University of California-Berkeley to fund BP-dictated R&D into alternative energy including bio-fuels. Stanford's Global Climate and Energy Program got $100 million from ExxonMobil; University of California-Davis got $25 million from Chevron for its Bio-energy Research Group. Princeton University's Carbon Mitigation Initiative takes $15 million from BP.

Lord Browne, the disgraced former CEO of BP declared in 2006, "The world needs new technologies to maintain adequate supplies of energy for the future. We believe bioscience can bring immense benefits to the energy sector." The bio-fuel market is booming like few others today. This all is a paradise for global agribusiness industrial companies like Cargill, ADM and Monsanto, Syngenta.

All this, combined with severe weather problems in China, Australia, Ukraine and large parts of the EU growing areas this harvest season, guarantee that grain prices are set to explode further in coming months and years. Some are gleefully reporting the end of the era of "cheap food." With disappearing food security reserves and disappearing acreage going to plant corn and grains for food, the bio- fuel transformation will impact global food prices massively in coming years.

Another agenda behind Ethanol?

Uh Huh. The dramatic embrace of bio-fuels by the Bush Administration since 2005 has clearly been the global driver for soaring grain and food prices in the past 18 months. The evidence suggests this is no accident of sloppy legislative preparation. The US Government has been researching and developing bio-fuels since the 1970's. The bio-ethanol architects did their homework we can be assured. It's increasingly clear that the same people who brought us oil price inflation are now deliberately creating parallel food price inflation. We have had a rise in average oil prices of some 300 per cent since the end of 2000 when George W. Bush and Dick Halliburton Cheney made oil the central preoccupation of US foreign policy.

Last year, as bio-ethanol production first became a major market factor, corn prices rose by some 130 per cent on the Chicago commodities in 14 months. It was more than known when Congress and the Bush Administration made their heavy push for bio-ethanol in 2005 that world grain reserves had been declining at alarming levels for several years at a time when global demand, driven especially by growing wealth And increasing meat consumption in China, was rising.

As a result of the diversion of record acreages of US and Brazilian corn and soybeans to bio-fuel production, food reserves are disappearing. Global food security, according to FAO data, is at its lowest since 1972. Curiously that was just the time that Henry Kissinger and the Nixon Administration engineered, in cahoots with Cargill and ADM_the major backers of the ethanol scam today_what was called The Great Grain Robbery, sale of huge volumes of US grain to the Soviet Union in exchange for sales of record volumes of Russian oil to the West. Both oil and corn prices rose by 1975 some 300-400per cent as a result. Just how that worked, I treated in detail in: A Century of War: Anglo-American Oil Politics.

Today a new element has replaced USSR grain demand and harvest shortfalls. Bio-fuel demand, fed by US government subsidies is literally linking food prices to oil prices. The scale of the subsidized bio-fuel consumption has exploded so dramatically since the beginning of 2006 when the US Energy Policy Act of 2005 first began to impact crop planting decisions, not only in the USA, that there is emerging a de facto competition between people and cars for the same grains. Lester Brown recently noted, "We're looking at competition in the global market between 800 million automobiles and the world's two billion poorest people for the same commodity, the same grains. We are now in a new economic era where oil and food are interchangeable commodities because we can convert grain, sugar cane, soybeans_anything_into fuel for cars. In effect the price of oil is beginning to set the price of food."

In the mid-1970's Secretary of State Henry Kissinger, a protégé of the Rockefeller family and of its institutions stated, "Control the oil and you control entire nations; control the food and you control the people." The same cast of characters who brought the world the Iraq war, the global scramble to control oil, who brought us patented genetically manipulated seeds and now Terminator suicide seeds, and who cry about the "problem of world over-population," are now backing conversion of global grain production to burn as fuel at a time of declining global grain reserves. That alone should give pause for thought. As the popular saying goes, "Just because you're paranoid doesn't mean they aren't out to get you."

F. William Engdahl is author of the forthcoming book, Seeds of Destruction: The Hidden Agenda of Genetic Manipulation, Global Research Publishing, and author of A Century of War: Anglo-American Oil Politics and the New World Order, Pluto Press. He may be reached via his website, www.engdahl.oilgeopolitics.net.