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Hysterics and Manipulation

When the UN’s Food and Agriculture Organization (FAO) announced its latest round of increases in the cost of food, analysts were nearly breathless in their recommendations for solutions that involved—what else?—more international “cooperation,” under the tender ministrations and control of the UN.

The FAO’s April 2011 Food Price Index was 36 percent above its level in April 2010, its Cereal Price Index was 71 percent higher than a year ago, its Meat Price Index was nearly 15 percent higher, its Dairy Price Index was up 12 percent, and its Oils Price Index was up 49 percent from a year earlier.

Inside those indexes were even more startling numbers: wheat prices have jumped 69 percent in a year, corn prices are 74 percent higher, and soybeans have increased 36 percent from April 2010 to April 2011.

Following a joint World Bank-International Monetary Fund (IMF) development committee meeting in Washington, DC on April 16th, World Bank President Robert Zoellick said that, based on these numbers, the world is “one shock away from a full-blown crisis.” And from the weekly news digest of the International Centre for Trade and Sustainable Development (ICTSD)—another non-governmental organization (NGO) that works closely with the UN—came this cry of anxiety:

The magnitude of the food crisis problem is alarming. Since June 2010, 44 million additional people are now living below the poverty line set by the World Bank: US$1.25 per day. The call for action is due to the concerns that another 10 million people may end up among the ranks of the poverty-stricken if food prices climb by a further 10 percent, and another 34 million would suffer a similar fate if prices of staples were to rise by 30 percent…

At the global level, concerted action and cooperation can mitigate further harmful effects due to price increases.

The Carnegie Endowment for International Peace was quick to jump into the fray with its suggestions and recommendations to help “solve” the crisis: “Increased investment in agriculture, more research and development…diminished incentives for biofuels [ primarily] in the United States and Europe, and limits on export restrictions, as well as agricultural trade reforms…will make markets work better.” The World Bank was more transparent. In its April 1st issue of News and Broadcast, they proclaimed that “We need global action to ensure we do a better job of feeding the hungry before we face the future challenges of feeding the expected 9 billion people in the world in 2050.” World Bank VP Bernard Hoekman was even clearer: “We’d like to see all these markets become much more interconnected…”

Others outside of the direct control of the UN and its Anglo-American affiliates and interests also expressed their concerns and many were predicting a full-blown food crisis. Nicholas West and Zen Gardner, writing in their Activist Post said “we can see it getting worse every time we buy groceries. Basic food commodities like wheat, corn, soybeans, and rice have been skyrocketing since July 2010…these are only expected to continue as food production shortfalls really begin to take their toll this year and beyond.” They blame food shortages on extreme weather conditions such as in Russia which devastated that country’s wheat crop to the point where they limited exports in order to make sure its own people had enough to eat. Huge floods in Australia and Pakistan are impacting food production there. And heavy winter snows have just shown up in the epic flooding of the Mississippi River with its expected impact on the production of foodstuffs in Louisiana, Mississippi, Arkansas, and east Texas.

They also blame the food crisis on the decline in the purchasing power of the dollar which has lost 15 percent of its value just since last June. And even that doesn’t fairly represent the case as the dollar index used compares the dollar to a basket of other currencies which are losing purchasing power as well.

Noting the impact rising oil prices have on the costs of food production, from plowing fields to fertilizers, from pesticides to harvesting and hauling, West and Gardner see nothing but higher prices as the cost of a barrel of oil continues to move higher.

Forbes magazine pointed out in January that food prices have reacted to restrictions in supply placed on such basics as wheat by Russia and Argentina in their efforts to keep sufficient supplies for their own citizens. And YaleGlobal Online magazine noted that ’s increasing demand for soybeans and other oil seeds absorbed all that exporting nations could provide. And as reduces its holdings of American debt securities, it is increasing its stockpile of essential foodstuffs and commodities as a better way to preserve the purchasing power of its reserves as well as to provide a buffer for its citizens in the event of a full-blown food crisis and resultant shortages. The New York Times noted that as export restrictions are applied, this removes significant incentive to producers to expand their harvests, thus further reducing supply.

The Economic Collapse blog outlined 20 signs of the coming food crisis which included the following:

  • The world is losing topsoil faster than it is being replenished
  • An increasing number of countries are running out of water, including Saudi Arabia which is expected to be unable to produce a wheat crop starting next year
  • Water tables are being depleted in China and India to the extent that 300 million people are being fed with grain that can only be  grown with water pumped from underground aquifers
  • Diseases such as Ug99 (stem rust) are rapidly reducing huge parts of the world’s food supply. According to Wikipedia, an epidemic of stem rust “is currently spreading across Africa, Asia, and most recently into the Middle East and is causing major concern due to the large numbers of people dependent on wheat for sustenance.” It has spread to Kenya, Ethiopia, the Sudan and Yemen and the virus is becoming more virulent as it spreads.
  • Japan’s recent earthquake and tsunami has rendered vast (and increasing) agricultural areas of that unhappy country unusable.

All of which fits nicely into the Malthusian end times predicted for years by the ultimate “food insider” to the United Nations, Lester Brown. A career environmentalist, Brown is the founder of Earth Policy Institute, and with the help of a $500,000 grant from the Rockefeller Brothers Fund, founded the WorldWatch Institute which is “devoted to the analysis of global environmental issues.”

Brown has authored more than 50 books on such issues and helped pioneer the concept of sustainable development. As noted author Steven Yates explained, “sustainable development” is an

innocent sounding phrase [that] came to carry with it the implication that there are too many people living and working in an environment of finite resources to permit “unsustainable” economic freedoms. Behind the idea of sustainable development is the idea that we have a choice: adopt “voluntary” central planning (with the UN at the helm) to integrate economics and ecology within a globalist perspective or face ecological disaster a few decades down the pike.

Brown’s themes over the years have involved

  • Population control
  • Soil erosion
  • Deforestation
  • Water resources depletion
  • Melting glaciers
  • Energy depletion, and
  • Peak oil

In his 2004 book “Outgrowing the Earth”, Brown concludes that “Our ability to provide enough food is at stake, and depends not only on efforts within agriculture but also having a[n international] energy policy that stabilizes climate, a worldwide effort to raise water productivity, the evolution of land-efficient transport systems, and population [control] policies.”

Brown’s current effluences include hysterical warnings about the world population growing at twice the rate of growth of food to feed it: “Because the world population has nearly doubled since 1970, we are…adding 80 million people each year. Tonight there will be 219,000 additional mouths to feed at the dinner table, and many of them will be greeted with empty plates. Another 219,000 will join us tomorrow night. At some point, this relentless growth begins to tax both the skills of farmers and the limits of the earth’s land and water resources.”

He worries that wheat yields are no longer rising in France, Germany and the United Kingdom. And that the conversion of cropland to non-farm use is further reducing food supplies: “Suburban sprawl, industrial construction, and the paving of land for roads, highways and parking lots are claiming cropland in the Central Valley of California, the Nile River basin in Egypt, and in densely populated countries that are rapidly industrializing, such as China and India.”

In 2011, new car sales in China are projected to reach 20 million—a record for any country. The U.S. rule of thumb is that for every 5 million cars added to a country’s fleet, roughly 1 million acres must be paved to accommodate them. And cropland is often the loser.

Brown’s solutions are predictable: “Unless governments…shift expenditures from military uses to investing in climate change mitigation, water efficiency, soil conservation, and population stabilization, the world will in all likelihood be facing a future with both more climate instability and food price volatility. If business as usual continues, food prices will only trend upward.”

In Foreign Policy magazine’s May/June 2011 publication, entitled “The Food Issue,” Brown holds forth once again on his tired tirade. Today’s food price hikes, he wails, “are driven by trends that are both elevating demand and making it more difficult to increase production: among them, a rapidly expanding population, crop-withering temperature increases, and irrigation wells running dry.” Another factor in creating food shortages is the effort by various countries to negotiate long-term contracts with food exporters, effectively taking those supplies off the market to other countries who need them. This, says Brown, increases the chances for armed conflict:

Many of the land deals have been made in secret, and in most cases, the land involved was already in use by villagers when it was sold or leased. Often those already farming the land were neither consulted about nor even informed of the new arrangements. And because there typically are no formal land titles in many developing-county villages, the farmers who lost their land have had little backing to bring their cases to court.”

He calls this “food nationalism” which must be resolved through the and the Food and Agriculture Organization. But they don’t have enough power to intervene effectively at the moment and so, unless “we…move at wartime speed to stabilize the climate, we may not be able to avoid runaway food prices. If we cannot accelerate the shift to smaller families and stabilize the world population sooner rather than later, the ranks of the hungry will almost certainly continue to expand. The time to act is now—before the food crisis of 2011 becomes the new normal.”

The primary theme in much of Brown’s rantings, that of “climate change”—the now politically-correct expression that has replaced “global warming”—has been sufficiently exposed as fraudulent to cause a careful reader of Brown to question his other themes as well. Just two weeks before the Copenhagen Summit on climate change was to be held in November, 2009, thousands of computer files and emails were hacked from the Climatic Research Unit’s computers and published worldwide. Some of the emails showed that some of the scientists involved in studying global temperatures were skeptical of the data, and were possibly manipulating the data to make it conform to the assumption that human activity had a major impact on the environment. One of the scientists, Kevin Trenberth, stated in an email to an associate: “The fact is that we can’t account for the lack of warming at the moment and it is a travesty that we can’t.” The Journal reported that the emails showed that scientists had withheld scientific data to ensure that only politically correct conclusions about global warming were reached.

A recent Gallup poll reviewed in The New American showed the significant aftereffects of Climategate. According to Gallup, “World residents’ declining concern about climate change may reflect increasing skepticism about global warming after Climategate…” and that such skepticism “demonstrates the obstacles that remain before the world [read: UN and its supporters like Lester Brown] can agree on a climate policy. Gallup’s data show that fewer Americans…feel threatened by global warming today than they did in recent years.” As author Joe Wolverton noted:

The shrinking plurality of those who consider global warming a serious threat is likely attributable to the revelations made in the wake of the recent Climategate . It is difficult to peddle fear when the peddlers are outed as nothing more than old-fashioned snake-oil hustlers…

When food prices began to spike late last year, world-government promoters like Lester Brown raised the volume of their rants in hopes that the so-called “food crisis” would become another major theme to promote world governance. As explained by Anthony Wile of The Daily Bell:

Global warming promotes the idea that temperatures have increased around the world due to too much manmade carbon dioxide…

Proponents of global warming or climate change wish to use the concept to introduce a…Draconian regulatory regime that will control peoples’ usage of energy via Smart Meters and other devices. The global warming promotion is thus a Trojan Horse leading to additional oversight of how people use energy and lead their lives.

Wile calls these proponents the Anglo-American axis which has been working for decades to consolidate countries and governments into a global . Through the use of fear-based themes, like global warming or climate change, the axis served two purposes: to control an expanding world population, and to consolidate further their already massive wealth and power. Says Wile, “These themes [are] promoted through an intricate array of think tanks, universities and government [and non-government] organizations that first presented the concepts and then provided authoritarian solutions…The Anglo-American power axis is currently in retreat, its authoritarian promotions giving way to increasingly failed attempts at manipulation…”

Lester R. Brown

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Another Failed Insider Meme

The “food crisis” is turning out to be one of those “failed fear-based themes.” Eric Blair, writing for the Activist Post, put the effort to promote this theme into a timely perspective. Last September, when Blair noted the exponential rise of food prices, he wrote:

Never let a good crisis go to waste. The international bankers are taking advantage of the “food crisis” by driving up food prices in what is shaping up to be a classic case of a manufactured bubble.

It is also looking like a clear model of “Problem–Reaction–Solution” methodology. Create the food inflation problem (of course profiting all the way up), force an enraged reaction among the public, and take more sovereignty away with the solution of global food regulation.

That the insiders’ food crisis “meme” has failed was shown by Veronique de Rugy, a writer for Reason Magazine and a weekly contributor to Bloomberg TV. In February she appeared on Bloomberg to destroy three myths about the current food crisis:

Myth #1: Because of the financial meltdown, and its repercussions on aid, the scale of hunger that we see now is unprecedented; more people face starvation related to disasters than ever before.

Fact: In fact, while unacceptably high, starvation deaths per year have been declining for the past 60 or 70 years. Better publicity, grain market integration, and work by aid agencies have decreased human deaths during each food crisis since the late 1950’s.

Even the FAO, in an underpublicized study, estimates that a total of 925 million people were undernourished in 2010 compared with 1,023 million in 2009.

Myth #2: Congress says farm subsidies insure a [sufficient] food supply for the U.S. and for the world.

Fact: U.S. farm subsidies have exacerbated the balloon in world food prices. In fact, economists have found that abolishing domestic subsidies would actually lower world prices for these crops.

De Rugy notes an underpublicized World Bank study which analyzed the effects of removing subsidies in agriculture altogether, and found “that poverty rates would fall in virtually all of the developing countries…as a simple consequence of the lower world prices for farm products [that would result].”

Myth #3: Farm subsidies are necessary to bolster farmers’ incomes in order to alleviate poverty in the United States.

Fact: Despite the fact that farm households are doing as well as or better than other households, farm households are still targeted for billions of dollars in government payments.

De Rugy makes the further point that the more money a farm household makes, the larger is the subsidy from the government.

All of which shows, once again, the failure of the “food crisis” meme to gain traction. Anthony Wile noted in November that “global warming was to have been identified as the culprit [for high food prices], giving rise, logically to two scarcity-based memes: declining food production, and potable water.”

The UN itself was supposed to have been the designated messenger for this scary information. As an instrument of control, the UN is at the fulcrum of the global governance that the Anglo-American elite wants to install. Fear-based promotions are at the heart of elite manipulations that propel society toward a more comprehensive NWO [New World Order].

[But] the internet’s truth-telling has blown up global warming and now the next two fear-based promotions [the food crisis being driven by declining food production and lack of sufficient water] are dangling in the ether…

One of the most important drivers of high food prices that nearly every commentator and analyst, whether promoting the “food crisis” meme or not, agrees upon is ethanol subsidies. One of the unintended consequences of the mandates built into the Clean Air Act of 1992 was the discovery that MTBE (methyl tertiary butyl ether) which was required to be added to gasoline to reduce emissions is that it contaminated ground water. In 2005, ethanol became the primary substitute for MTBE. At the time, corn was around $2 a bushel, and farmers took to the subsidies like bees to honeysuckle. The economic impact was simple, and profound. By taking land that was producing corn for human and livestock consumption and devoting it to ethanol production, the price of corn began to rise. With import tariffs restricting importation of ethanol, and subsidies encouraging national production, by 2008 corn prices had risen by 35 percent, most of which was attributed to this distortion imposed on the market by the government.

With subsidies of $.45 a gallon and tariffs of $.54 a gallon, “U.S. ethanol policy contradicts every principle of sound economics,” according to Nouriel Roubini.

The problem, says Roubini, is that corn-based ethanol “saves little if any carbon and produces little if any gain in energy compared to petroleum…Even the most optimistic studies give corn ethanol only a tiny advantage over petroleum, nowhere near large enough to justify the scale of current subsidies.” At present, government subsidies for ethanol production total $7 billion a year, or about $1.90 a gallon, which makes it more profitable for farmers to grow corn for ethanol than for human or animal consumption. The reduced production of corn for such consumption raises the price. The math is simple: because corn is used to feed chickens, cows and pigs, these higher prices translate directly into higher prices for chicken, beef, pork, milk, cheese, and so on.

Even those promoting the food crisis theme in order to justify more government interference are opposed to continued subsidies for ethanol. Jean Ziegler, special UN reporter on food, concluded that while the argument for biofuels, in her opinion, in terms of energy efficiency and climate change is legitimate, the effects of growing food for fuel on the world’s hungry population are “absolutely catastrophic,” and she considers the use of arable land for that purpose a “crime against humanity.” Time magazine admits that production of ethanol “sucks up grain and cropland that could be used for food. In America, 40% of the corn crop is currently diverted to make fuel for cars.” Noted Times writer Bryan Walsh, “diverting corn and other crops to biofuels will only act to raise prices.”  That might be worth it, says Walsh, “if biofuels provided substantial environmental and economic benefits, but there’s significant research showing that corn ethanol’s carbon footprint isn’t much better than that of oil. Nor has ethanol done much to wean the U.S. off foreign oil.” Mark Clayton, writing in the Christian Science Monitor, said that if ethanol subsidies were allowed to continue, corn prices could rise another 72 percent in the next few years which would continue to put pressure on the world’s hungriest countries.

In an interview with the Wall Street Journal Larry Pope, CEO of Smithfield Foods, the world’s largest pork processor, was asked why his bacon prices were so high that his mother couldn’t afford to buy it. Pope explained that “60 to 70 percent of the cost of raising a hog is tied up in grains. The main ingredient is corn, and the secondary ingredient is soybean meal. The cost of corn has gone from a base of $2.40 a bushel to today at $7.40 a bushel…which means [that] every product that uses corn has risen, too.”

When Pope was asked why the big upswing in the cost of corn, Pope blamed it on the Bush Administration: the president “came forward with—what do you call it?—the edict that we were going to mandate 36 billion gallons of alternative fuels by 2022.” Today 40% of the corn crop in the US is devoted to ethanol production. Pope said rising costs have forced him to close six processing plants and one slaughter plant, but “once those measures are done, we have no choice but to pass those price [increases] down” to consumers, even his mother.

The consumer is the loser, says Pope, “who’s going to have to pay more for the product, and the livestock farmer who’s going to have to buy high-priced grain that he can’t afford because he’s [already] stretching his own lines of credit…It’s a dynamic that we can’t sustain.”

GOP analyst Thomas Segal said that what is most disheartening about the current “food for fuel” mandate is “when we realize that ethanol has only increased our energy independence by 1.1% and reduced our greenhouse emissions by 1/19th of 1%—and for that reduction [we] have paid an extra $3.6 billion for gasoline at the pump.”

Another writer admitting that ethanol subsidies are distorting the market and raising food prices is Michelle Chen. Writing for the Huffington Post she exclaimed that such subsidies are “the modern face of famine. A plan to cure a fuel crisis through industrial farming has potentially driven a humanitarian crisis of far great proportions.” And then she admits that “no policymakers wish to confront the [real] fundamental crisis: access, distribution, and the need for equity-minded agricultural methods that can truly sustain both producers and communities.” This is liberal-speak for finally recognizing that the solutions to the food crisis are not more government involvement, but less. “Access” and “distribution” are problems that only free markets can provide, and they will only be provided through “equity-minded” methods, such as ownership of and protection of those rights under the law.  Remember those villagers who thought they owned the land they had been working for years, only to discover that they had no rights to that land at all? The food crisis can only be solved when land owners truly own their land and can be assured that they can keep the fruits of their labors.

The Economist magazine got it right. Aside from the grave distortions to food production caused by ethanol subsidies,

The main reasons for high prices are temporary: drought in Russia and Argentina; floods in Canada and Pakistan: export bans by countries determined to maintain their own supplies, whatever the cost to others; panic buying by importers spooked into restocking their grain reserves.

Influences outside agriculture make matters worse: a weaker dollar makes restocking cheaper in local currencies; and dearer oil pushes up the cost of inputs (it takes vast amounts of energy to make nitrogen fertilizer, so fertilizer prices track oil prices.)

The solution to high prices for food, according to the Economist, is high prices. In order to feed the 9 billion people in the year 2050, production must be increased through better use of existing agricultural land: “All these things require higher returns to farmers, which will [in turn] attract higher investment [by private capital]. Returns to farmers must rise…”

This newspaper believes that a big part of the answer is removing trade barriers and cutting subsidies. Lowering tariff walls around rich countries would increase poor farmers’ exports…Countries should scrap targets for biofuels which favor an expensive, environmentally damaging business that needlessly distorts food markets. America’s ethanol subsidy is a particularly egregious offender. Even opening up retailing to foreigners can help: companies such as Wal-Mart are good at getting food onto supermarket shelves rather than leaving it to rot in the fields…governments can help a lot by getting out of the way…

Corn

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Summary and Conclusion

Despite Lester Brown’s plaintive and repetitive cries that the sky is falling unless the UN does something, market prices have begun to fall, in some cases quite markedly. MarketWatch on May 23rd noted that “Corn prices drop on improved supply view,” reflecting a prediction by the U.S. Agriculture Department that there would be more corn production by September than originally estimated.

Their estimates “put the average farm price for corn in a range of $5.50 to $6.50 a bushel,” down at least 16 percent from the peak of $7.78 a bushel in April. Wheat for July delivery is at $7.58 a bushel, down 7 percent from its recent high, while soybean prices have fallen 5 percent from its recent high. This is being reflected in the latest update from FAO, dated May 5th, which reported that its overall Food Price Index is down 2 percent from its peak in February due to declines in dairy, sugar, and grain prices. Its Oils/Fats Price Index has fallen 7 percent from January due “primarily from a strong recovery in production and rising inventories of palm oil in Southeast Asia.” And its Sugar Price Index is down 17 percent from its January record, “prompted by prospects of increased market availability, as the new crushing season begins in Brazil, and larger than anticipated production in Thailand.”
American consumers were never grievously impacted by the rise in commodity prices worldwide, and with the recent declines in the price of oil and gasoline, those consumers are focusing their attention elsewhere.

All of which explains the sudden paucity of alarmist rantings about the food crisis, as hopes of riding this crisis towards more international controls by the insiders continues to fade.

As the Fed completes its quantitative easing, the dollar is getting stronger, softening the blow of high commodity prices to international customers. The increasing pressure to disclose the sweetheart deals cut by the Fed during the financial crisis is weakening its credibility, and as more become aware of the scam and the fraud that surrounds the government’s ethanol subsidies, the “memes” of the insiders to turn perceived crisis into opportunity for more government regulation continue to fail.

The battle is far from over, of course. Complacency on the part of constitutional activists at this time would be fatal to the cause. But it’s comforting to note the failure, for the moment at least, of the insiders to seize the food price “crisis” and turn it into another excuse for more international regulation and control over the planet’s citizens.

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