Paul Collier’s The Bottom Billion was my pick for best economics book last year (not written by a dear friend), it was smart, hard-hitting and unconventional. Collier hasn’t lost his touch as a great comment, more like an op-ed, on the food crisis over at Martin Wolf’s Economic Forum illustrates.
The remedy to high food prices is to increase food supply, something
that is entirely feasible. The most realistic way to raise global
supply is to replicate the Brazilian model of large, technologically
sophisticated agro-companies supplying for the world market…. There are still many areas of the world that
have good land which could be used far more productively if it was
properly managed by large companies…Unfortunately, large-scale commercial agriculture is unromantic. We
laud the production style of the peasant: environmentally sustainable
and human in scale. In respect of manufacturing and services we grew
out of this fantasy years ago, but in agriculture it continues to
contaminate our policies. In Europe and Japan huge public resources
have been devoted to propping up small farms. The best that can be said
for these policies is that we can afford them. In Africa, which cannot
afford them, development agencies have oriented their entire efforts on
agricultural development to peasant style production. As a result,
Africa has less large-scale commercial agriculture than it had fifty
years ago. Unfortunately, peasant farming is generally not well-suited
to innovation and investment: the result has been that African
agriculture has fallen further and further behind the advancing
productivity frontier of the globalized commercial model.
Read the whole thing. Many more oxen are gored.
OpEd I would say: it bears a remarkable similarity to the piece he wrote for the Time (London version) on April 15th.
http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article3746593.ece
He’s consitent, that’s for sure….
As a counter point you might want to look at http://www.grain.org/articles/?id=39
It cites some interesting facts and reaches some different conclusions such as:
…Hedge funds and other sources of hot money are pouring billions of dollars into commodities to escape sliding stock markets and the credit crunch, putting food stocks further out of poor people’s reach.[8] According to some estimates, investment funds now control 50–60% of the wheat traded on the world’s biggest commodity markets.[9] One firm calculates that the amount of speculative money in commodities futures – markets where investors do not buy or sell a physical commodity, like rice or wheat, but merely bet on price movements – has ballooned from US$5 billion in 2000 to US$175 billion to 2007
…In Asia, the World Bank constantly assured the Philippines, even as recently as last year, that self-sufficiency in rice was unnecessary and that the world market would take care of its needs.[12] Now the government is in a desperate plight: its domestic supply of subsidised rice is nearly exhausted and it cannot import all it needs because traders’ asking prices are too high.
…The truth about who profits and who loses from our global food system has never been more obvious.
…the small clique of corporations that control the world’s fertiliser market can charge what they want – and that’s exactly what they are doing. Profits at Cargill’s Mosaic Corporation, which controls much of the world’s potash and phosphate supply, more than doubled last year.[13] The world’s largest potash producer, Canada’s Potash Corp, made more than US$1 billion in profit, up more than 70% from 2006.
…On 14 April 2008, Cargill announced that its profits from commodity trading for the first quarter of 2008 were 86% higher than the same period in 2007.
…Bunge, another big food trader, saw its profits of the last fiscal quarter of 2007 increase by US$245 million, or 77%, compared with the same period of the previous year. The 2007 profits registered by ADM, the second largest grain trader in the world, rose by 65% to a record US$2.2 billion. Thailand’s Charoen Pokphand Foods, a major player in Asia, is forecasting revenue growth of 237% this year.
…an ideologically driven elite has forced countries to wrench open markets and let the free market run, so that a few megacorporations, investors and speculators can take huge payoffs. Many countries have lost that most basic power: the ability to feed themselves.
But what do they know anyway.
Well at least Mr. Collier admits (although indirectly) that large-scale commercial agriculture, relying on “increased fertilizer inputs” among other things, is not sustainable…
One can already see what is going to happen, and we are seemingly helpless to stop it.
Governments the world over will attempt to cap prices- and the crisis will worsen.
Doug, by which measures are organic farms more efficient? Not in output per acre. And while it may be true in a few cases that organic farming produces higher crop output, it’s not universal.
Plus you are discounting the scientific advances of factory farms. It was the big boys who created the knowledge base for current organic farming. Just because you’re organic doesn’t mean you mimic the technology of the ’20s.
The Omnivore’s Dilemma is a great book. But the topic at hand is feeding the world. The real problem is that while we can debate the merits of small-scale farming here in the U.S., large agrobusiness is the only real hope for Africans. This isn’t about convincing a national chain to source chicken breasts from 1,000 small farms. It’s not about “guilt-free” meals. It’s about providing the raw quantities of food needed for Africa to survive.
An irony I haven’t seen commented on is that farm subsidies in rich countries used to be blamed for artificially lowering world food prices, making it impossible for poor countries to compete. Shouldn’t those who held this view be happy to see high prices?
“Small organic farms have been repeatedly shown to be more efficient than factory farms.”
So, is it your opinion that market forces will lead to smaller organic farms, in place of the large corporate farms that have previously been favored?
David, by analogy, autarkies are the most efficient economy. After all, only an autarky is entirely self-reliant.
I think I’ll still define efficiency as output/input as opposed to the implied output / (external input).
By the way, your link is quite dissapointing as it doesn’t even buttress your claim that organic yields higher a output / (external input) ratio. If you want to make a counterintuitive claim, and you want to be taken seriously, then when you put in a link to support your claim, link to a study, a paper, something that actually makes an empirical argument. Not to a summary of four snippets of rants about the evils of capitalism. Seriously, that could have been a Rick Roll and it would’ve been equally as supportive of your argument.
Between Martin Wolf’s article and Paul Collier’s response, there is a lot to chew on (so to speak).
First off, to those who think there is speculative hoarding by hedge funds or other bogeymen, I strongly suggest checking out the graphs in Martin Wolf’s article. Stored food supplies are falling, not rising like one would expect pretty much by definition if hoarding was going on. (I am too lazy to log out of FT to find out if you need to be registered with FT to read the article or not, but registration is free, albeit mildly time consuming per the norm in such situations).
Second, decreased poverty (anyone’s definition of poverty) in China and elsewhere is enabling (and producing, not necessarily the same thing) poor people to eat improved diets. People who used to eat one meal a day can now eat two. Those who used to eat two meals a day can and do eat three per day. Those who used to eat more or less strictly vegetarian diets for money reasons can now afford to eat meat, and more and more often. This is definitely a good development for those with the improved diets.
Also, increasingly in the “rich” countries the “poor” (hardly poor by the definitions of truly poor countries) members of society are increasingly fat due to food being nominally cheap either via wages or handouts of one sort or another. Middle class citizens are also increasing their caloric intake to levels beyond what is healthy for them (i.e. they too are getting fat).
Since more and more countries are finally adopting freer markets and becoming richer (or less poor, depending on framing), these increased caloric intakes will continue for decades, maybe even generations, depending on how fast poorer countries develop economically.
As a result the demand side part of the equation is simply going to grow and grow and grow for a lot longer than many people seem to realize. This means that food supply simply has to increase or some disturbing results will ensue. Perhaps there will be mass starvation in some countries that remain poor. Perhaps governmental or freelance agents will engender some form of genocide as a local “solution”.
To put it simply, any policy that stands in the way of long term productivity increases is simply obscenely immoral and ought to be spotlighted as such and those arguing for such policies need to be taught how they are wrong, and if they persist in their ways they ought to be shamed and shunned at the very least.
Odin, organic farming, according to at least one study, yields three times the food on a per acre basis: http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=1091304
And, given peak oil (and, by extension, peak natural gas) and the declining availability of potassium and phosphorus from mines, we’re going to be farming organic eventually, anyway. I know that economists tend to wave these issues away — the almighty market will provide — but I’m not sure the pricing signals will leave enough time for any sort of alternatives to be developed without all of us suffering from significant pain.
http://www.noble.org/Ag/Soils/NitrogenPrices/Index.htm
http://www.energybulletin.net/6994.html
http://en.wikipedia.org/wiki/Fertilizer#Health_and_sustainability_issues
Doug: if that is true, then why is organic food much more expensive than the regular stuff. Are all organic farmers evil gougers, or are these studies missing something?
In any event making natural gas is merely a problem of having enough energy. I find it hard to believe that will be a problem for more than a few decades.
Collier singlehandedly recycles every unsubstantiated talking point of the USDA-Agribusiness Complex.
If there’s a problem with people “romanticizing” things, it’s with Chandlerian/Galbraithian technocrats who romanticize large-scale production (especially in agriculture).
Large-scale agribusiness is indeed more efficient in terms of output per man-hour; but small-scale, intensive production is actually MORE efficient in terms of output per acre. Those presently unemployed in the Third World, sitting in shanty towns or begging in the gutters, would be better off back on the land they were evicted from by quasi-feudal landed oligarchs in collusion with cash-crop agribusiness interests.
Most of the problem of starvation results, not from underproduction, but from maldistribution of purchasing power. That’s because land formerly used to support the rightful owners, who were living and working on it, is now used instead by the landed oligarchs and agribusiness interests to raise cash crops for the export market. And those formerly living on it, who were able to support themselves, now have no source of purchasing power to buy it.
To repeat, it’s not a problem of underproduction, any more than was the Irish potato famine (which occurred at a time when English landlords were exporting wheat from Ireland). Most Third World starvation results from the reenactment of the Enclosures on a global scale.
It’s also asinine to romanticize Green Revolution techniques, when for the most part they are only viable in the presence of massively subsidized irrigation and other inputs, and are useful only for the privileged classes engaged in large-scale, subsidized production on stolen land. For the vast majority of ordinary producers, traditional drought- and pest-resistant varieties are far more productive for farming that actually internalizes its own costs instead of operating on the taxpayer tit.
KC, you have overstated your case in two areas. They wouldn’t matter for your conclusions, only some people are bound to stop reading as soon as they spot an error.
A lot of the people who would be better off as peasant-proprietors were not “rightful owners”, sometimes because they always were tenants and sometimes because they had a different cultural connection with land, one not recognised by modern systems (which is why they had no standing as claimants when it was first appropriated in our sense of the term). There’s a complete spectrum all the way from legal machinery not counting them, all the way to people who never had a claim (why should ex-slaves end up better off than crowded out natives in British Guiana?). Injustice was done, just not always that particular injustice.
Ireland did have a food shortage during the potato famine; the fact that exports continued doesn’t disprove it, it only shows that things were even worse than nature hitting a distorted economy had made them. Your description does apply in most poor areas today, but since it doesn’t account for your example after all, some people will assume that the main reason for that suffering applies to this suffering after all.
You might want to look at “Sanity“, by G.K.Chesterton, which I just found linked from Distributism. It goes into these areas, and also fills in the gaps Belloc left in “The Servile State” about the role of big business structures.
Kevin Carson said,
That implies that abundant supply of very cheap surplus labor is needed to supply the man hours needed to make the methods you mention work.
Which probably works in situations like substenance farming. I’m not sure how well that would scale up to areas where labor is limited and it produces more doing something beside hoeing weeds in the raised beds of an organic plot.
Might be possible but probably not as simple a situation as you paint it to be.
I think that this: http://www.ers.usda.gov/data/wheat/YBtable04.asp
might be one of the tables folks are looking for. I think the important columns are the ones labeled “world production” and “world ending stocks.” They show that, for at least wheat, the world is consuming more wheat than is being produced, and that global production is pretty flat around 20 billion bushels/year, +/-15%. It looks like about 20% of the crop is left-over by the following harvest time, but that surplus has been shrinking for 7 of the last 8 years.
Greg, industrial farming is predicated on cheap fossil fuels. Note that it’s not just cheap energy — fossil fuels provide the raw materials for many herbicides, pesticides, and fertilizers. As the price of fossil fuels rises, the viability of industrial farming will decline.
PML, Kevin Carson,
When applied to developing nations I agree with what your saying and that is what my original comment said.
The question is how well such systems would work in areas with decent property rights and no surplus labor (say the US).
In that situation I don’t think the intensive system Kevin described in his first post would be so workable.
PM Lawrence,
In the US surplus labor does not necessarily = labor available to work the field all day.
If we had surplus ag labor we would not have to bring in labor from foreign countries to pick the crops.
No doubt US property rights took a kick in the balls when big government and the liberal justices on the supreme court teamed up to produce the Kelo ruling.
That does not change the fact that as imperfect as they may be an individual’s right to own property in the US is better protected then many other countries.
P.M. Lawrence,
You are meandering all over the place.
I’m pretty convinced the vast majority of US citizens have zero interest in moving away from the TV and taking up gardening.
Furthermore, even if they are, I see exactly zero evidence that they would increase the total supply of ag commodities available on the world market.
Which was what the original post, and my comment, were about.
Very interesting to read.I enjoyed well while reading.I will recommend my friends to read this one for sure.
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