International Cat Speculators Since 2006

Saw this on Contra Celsum just now.

Oxfam’s chief executive, Dame Barbara Stocking, claimed this week in a BBC interview that there will “absolutely not be enough food” to feed the world’s population in a few decades’ time.

Such certainty about the future is remarkable, so I downloaded Oxfam’s new “report” with interest.
Once I got past the fundraising banners, I found a series of assertions that there is a food crisis caused by failures of government “to regulate, to correct, to protect, to resist, to invest, which means that companies, interest groups and elites are able to plunder resources and to redirect flows of finance, knowledge, and food”. Oxfam is calling for “a new global governance” — effectively the nationalisation of the world food system.

Got that?

Those greedy capatlists are taking all the resources and leaving the poor out in the cold. Somehow. So the governments of the world must be rallied to fix the problem. You know, through messing with markets and stuff.

(Well, right there things are a bit funny because I’d have thought the surest way in the world to make a buck was to grow food and sell it to a hungry guy. All government has to do is get out of the way. )

But anyway, this “government will fix it” attitude contracted nicely with an article I saw earlier in the day.

“Canada has the third-largest endowment of arable land per capita in the world, after Australia and Kazakhstan,” notes Martin. “We have, depending on the set of numbers you look at, nine per cent of the renewable fresh water supply in the world.” Put those two facts together, add one of the greatest commodity booms in history, and money should be pouring into Canadian food production.

But Martin found something startling when he compared the ratio of investment in agriculture with the depreciation of existing assets. Over the last decade, as China boomed and food prices soared, there was no rush to invest. “The ratio in Canada in eight of the last 10 years is less than one. So there’s less new investment coming into the food industry than there is depreciation.”

In the United States, by comparison, the worst year in the last 10 saw 40 per cent more investment than depreciation.

So Canada is in the crapper with regards to food production.

Why? Well, it’s those evil capitalists hogging all the resources. Um, no.

The causes of the stagnation are many, Martin says. A big one is a regulatory system that stifles innovation. Martin recalls testifying at a parliamentary committee alongside a wheat breeder from the University of Saskatchewan. “He went through a whole list of wheat varieties that he came up with that are much higher yielding than the wheat varieties in Canada. He couldn’t get them registered in Canada but they got registered in Montana and we now have to compete with them.”

Then there’s “supply management,” the 1970s-era policy which effectively turned dairy and poultry production into an industry-controlled cartel protected by import tariffs. It’s good for existing dairy and poultry producers because it keeps prices high and stable. And it has made the lucky people with production quotas a lot of money: the quota for a single dairy cow can go for $30,000 and estimates of the total value of production quotas range between $30 billion and $50 billion.

So what’s the catch? Canadian consumers pay far more for dairy and poultry products than they would in a free market. Supply management also makes it difficult or impossible for producers to achieve the economies of scale needed to drive costs down. Perhaps worst of all, it impedes trade liberalization.

Basicially, the farmers are making a lot of money off goverment subsidies and using some of that money to influence politicans to keep the subsidies in place.

In the meantime, every else suffers.

But there’s a good example: us, New Zealand.

“Look at us,” Larry Martin suggests, “and look at New Zealand, sitting out there in the middle of the ocean, not close to anything.” In the world of food, New Zealand is a “superpower.” And yet, thanks to daring reforms in the 1980s, New Zealand’s farmers owe almost none of their income to government support. “You think, ‘if we could do even half of what they have done wouldn’t we be in great shape?’”

So little ole NZ is a superpower in food production. It’s true – farmers here are completely unsubsidised. (Though the Greens are constantly making up imaginary charges that our farmers are not paying. Apparently not paying your imaginary charges means you’re subsidiesd.)

Given we produce so much food here with no goverment intervention, and at the same time Canada is doing so badly with quite a bit of intervention it would seem that Dame Barbara Stocking’s idea of putting government in charge of food may be a bad idea. But not just a bad idea, it looks to be the very thing that is going to cause massive global starvation that she claims to fear.

Back to Contra Celsum.

 In 1968 the celebrity ecologist Paul Ehrlich promised that “hundreds of millions of people will starve to death in spite of any crash programmes embarked upon now. At this late date nothing can prevent a substantial increase in the world death rate.” (The world death rate fell in the 1970s.) The environmentalist Lester Brown has made a career out of calling the top of the food-supply market every time there is a price spike: in 1974, he said “farmers can no longer keep up with rising demand”; in 1981, “global food insecurity is increasing”; in 1989, “population growth is exceeding farmers’ ability to keep up”; in 1994, “seldom has the world faced an unfolding emergency whose dimensions are as clear as the growing imbalance between food and people”.

Bad news sells. For charities, that means more $$ in the coffers.

The truth is that even as the human population has doubled since the 1960s, calories per person have increased by about one third. Of course, those calories are not all in the right place, and Oxfam is right that it is a scandal that obesity and hunger coexist on the same planet, but the solution is plain: get fertiliser to poor African farmers and get their goods to market so both they and their customers can afford to eat. If Oxfam were really serious about malnutrition, it would stop writing reports about corporate greed, climate change and the need for world governance and start trucking nitrates.
The gap between the stated goals and the on-the-ground (in)action of Oxfam ought to make people reconsider what the actual goal of Oxfam really is.
Are they about ending hunger, or continuing Oxfam?

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