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The Forum > Article Comments > Today’s food price spikes are the tip of the iceberg > Comments

Today’s food price spikes are the tip of the iceberg : Comments

By Frank Rijsberman, published 9/10/2012

Without investment in research our agricultural industries won't be up to the challenge of feeding the globe.

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Why must it be "publicly funded" research?

There are hundreds of companies, including the big multinationals, which would gladly fund research leading to increased agricultural productivity. But they are vilified and hounded by those who think the poor of the world should live on scraps and handouts.
Posted by DavidL, Tuesday, 9 October 2012 9:25:44 AM
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DavidL makes an excellent point.. high prices should result in additional spending and effort by companies and farmers who want to take advantage of those higher prices. Government investment should really be confined to areas where there has been a market failure. Has there been a market failure, if so in what areas?

For that matter how much has government investment contributed to the increase in yields the writer noted, and why the slowdown? This slowdown has been noted before but I don't think its been linked to any reduction in government spending in the area.

Lot of questions but no answers in the article.
Posted by Curmudgeon, Tuesday, 9 October 2012 9:49:19 AM
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DavidL,

It's all very well to espouse the validity of increased yields riding on the back of multinational involvement in agriculture. But what of the unsustainable nature of such practice? Take a peek at India where multinationals have profited for over 40 years from the Green Revolution. You will be confronted with massively degraded soil, polluted and depleted groundwater, loss of biodiversity, huge debt carried by peasant farmers and a steadily decreasing yield, as the soil, devoid of its organic base, can no longer support this model.
Posted by Poirot, Tuesday, 9 October 2012 9:59:33 AM
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I would think this article screams private research rather than public as its an area where entrepreneurs are needed. Increasing yields is important but we also need more focus on why some governments (Russia, many of the old soviet states and some developed SE Asian nations) drive up the price of foods during times of low output.

Never forget that greed is a significant factor in global food prices.
Posted by Cheryl, Tuesday, 9 October 2012 10:49:31 AM
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Poirot
Look - how do you make the connection between multinational involvement in agriculture and pollution and all the bad things you say has happened in India? You could also point to multinational involvement in Australian agriculture which has not had the same effects, or Canada, or New Zealand for that matter. If you look closely you will realise that any of the effects you are complaining about, if they exist, has more to do with the social system and government regulation. In any case, you do realise that yields have increased in India as well in recent decades, quite dramatically..

Cheryl
this business about the ex-soviet bloc countries driving up food prices.. um, is there any source for that.. food prices had been declining in real terms for decades until the recent spike. Wasn't aware that those countries were able to drive up prices. I've been through some analysis which doesn't mention that.. The big story has always been heavey EU subsidisation of its farmers. So any source??
Posted by Curmudgeon, Tuesday, 9 October 2012 12:34:10 PM
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Curmudgeon
Market failure provides a good framework to consider this issue. There are some genuine and significant ones: for example subsidies for biofuels, export bans and import tariffs, and the massive regulatory and political barriers that GM foods have to overcome before they are adopted. Of course, the solution to these is to address the distortion, not to introduce subsidies.

I think there is also a case for government investment in agricultural research, where there are genuine knowledge spill-overs – especially in improving yields in developing countries, where the need is greatest and the barriers to profitable commercialisation of innovation can be largest (the green revolution was not finance by agribusiness but governments and the Rockerfeller Foundation).

By and large you are right, though – high prices will encourage farmers and agribusiness to find more productive ways of doing things. In the long term, agricultural productivity growth has tended to outstrip productivity growth more broadly, and government is only a small part of that story.
Posted by Rhian, Tuesday, 9 October 2012 3:22:07 PM
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Curmudgeon,

It about the most sustainable way to grow food, especially in the third world. It's no use degrading the soil and depleting the water table in the first instance, if that means that future production and biodiversity cannot be sustained.

http://www.npr.org/templates/story/story.php?storyid=104708731
Posted by Poirot, Tuesday, 9 October 2012 3:31:33 PM
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Curmudgeon,

It was a UN report released back in 2009 about price fixing in international food markets. I've looked in my clips but can't find it so I'm not solid on my assertion re Russia and Ukraine, etc - grain crops.

I found this below which looks at how speculators have been manipulating the price.

http://www.spiegel.de/international/world/deadly-greed-the-role-of-speculators-in-the-global-food-crisis-a-549187.html
Posted by Cheryl, Wednesday, 10 October 2012 9:54:26 AM
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Cheryl
Oh, okay, the bit about speculators going into the market when food prices rose is not surprising .. that happens with every market.. if you look down the report you cite there's a bit in there about certain countries imposing export controls and controls on their farmers.. that may be what the UN report was talking about, but I'll look for it some point.. tnks for that..

Poirot
I see a bit of what you were getting at. Now go back and look at the story you cite. This part "But consider this: India has about three times the population of the U.S., but 30 times more organic farmers than the U.S." That sounds almost convincing until you realise that key stats have been left out of the story.. in the US and Aus, farms would be gigantic compared to those of India - or at least I would imagine that to be the case. That means you may well find that there is more organic farm land in the US, say, than there is in Inida.

But its difficult to say as you will note that the size of this Indian farm is not mentioned.. However, as they talk about a village seed bank it can't be very large at all.. That may in itself be part of the problem.. sections of the farm have not been rotated out of prouduction, as sometimes happens in farming here, or different crops grown. So its difficult to say what's happening but doesn't seem to have anything to do with international corporations.
Posted by Curmudgeon, Wednesday, 10 October 2012 12:47:41 PM
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Curmudgeon,

"...but doesn't seem to have anything to do with international corporations."

You couldn't be more wrong on that one. I won't bang on - suffice to say if you poke about a bit on the net, you'll soon uncover just how much multinational (seed and fertilizer) companies have affected India's farmers and their environment.

I will leave you with this from Dr Vandana Shiva, who's at the forefront of the fight by Indians to regain some autonomy.

http://www.theecologist.org/News/news_analysis/1547185/reclaiming_the_seed.html
Posted by Poirot, Wednesday, 10 October 2012 1:38:55 PM
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Periot

No, no.. had a look at your link.. although I don't contest some (note some) of the trends, your writer has almost entirely mistaken what they mean and what effects they are having. What on earth is wrong with monoculture crops in agriculture for example? If the poor Indian farmers devised new grain varieties as she says (which is unlikely), even poor farmers would have some redress if another organisation has gone and patented it. Bound to be some organisation that would fund the challenge and that's what she should focus on - if what she says is true, but I suspect its not.

As both that link and the earlier link you cited have major problems I hope you can see the problems of believing any of this hard-left green material which you seem to favour.. As I said before major corporations have just as much influence in the US and Canadian and European markets but conditions in those markets are totally different from that of India and each other - ergo, major corporations are not the problem.
Posted by Curmudgeon, Wednesday, 10 October 2012 4:02:22 PM
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Curmudgeon,

I disagree.

The bottom line here is sustainability. In the case of India, the Green Revolution initially solved the hunger problem and promised to continue doing so. Successive Indian governments have embraced the globalisation of agriculture. They've signed deals with the World Bank, the IMF and the WTO and have been obligated by these agreements to let the trade flow.

Forty years on, as I've mentioned, this practice has led to severe and widespread land degradation, poisoned and depleted groundwater reserves, farmer suicides, loss of biodiversity and knowledge, and massive shifts of the rural population to urban shanty towns, etc.

Multinational corporations play a critical role in this unfolding dilemma. They, in concert with government, have relieved Indian farmers of their autonomy. They have usurped control over seeds which are now required to be purchased prior to each planting. Farmers are forced into massive debt to buy seeds, fertilizers and equipment like pumps to make a living - they are encouraged to plant monocultures. At one time the Indian government provided free electricity to farmers so they could work their pumps 24/7. The upshot of this practice was to wash away nutrient and soil base, which was promptly replaced with another batch of nutrient from a multinational supplier. Not only was the government growing food (which was often stockpiled to inflate the price) the multinationals were guaranteed sales as the over-watering washed away nutrient. Aquifers, therefore, were either run dry or filled with nutrient or pesticide residue...

I hope you'll read this link which I've posted numerous times, but can't find anything more explanatory. It's by the same woman, physicist Dr Vandana Shiva, who, by the way, is no crackpot Greenie. She is an intelligent, highly educated and eloquent spokesman for the people of India who cannot speak for themselves.

http://news.bbc.co.uk/hi/english/static/events/reith_2000/lecture5.stm

NASA on northern India's disappearing groundwater:

http://www.nasa.gov/topics/earth/features/india_water.html
Posted by Poirot, Thursday, 11 October 2012 12:19:12 AM
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Shiva is an anti-technology, anti-development ideologue whose track record includes opposition to the distribution of food aid to starving Indians because it included GM maize (the same maize regularly consumed by Americans and Canadians). She also opposes golden rice as a means to address vitamin A deficiency.

The data show that the green revolution contributed enormously to improvements in welfare in India. Poverty and malnutrition have fallen, food production has risen steadily faster than population, and in many years India is a net exporter of grains.
http://data.worldbank.org/country/india

The country’s food security has improved vastly since the days when eco-alarmists like Paul Ehrlich said we should give up on even trying to ameliorate famines in countries like India.

Yes, there have been problems with over-allocation of water and over-use of fertilisers in some areas. But these are due to poor policies, not rapacious multinationals. And they do not mean that the country as a whole is on the verge of ecological collapse.
Posted by Rhian, Thursday, 11 October 2012 12:12:18 PM
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Fair enough for your point of view, Rhian...after all, ideologues come in all shapes and sizes.

India is an burgeoning ecological disaster - and globalisation and multinational practice is up to its neck in it.
Posted by Poirot, Thursday, 11 October 2012 12:21:37 PM
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