Friday, April 11, 2008
InterPress News Service provided coverage of the news conference in New Delhi on Wednesday in which Jacques Diouf, director general of the United Nations Food and Agriculture Organisation (FAO), described spiralling food prices as an "emergency" that demanded concerted global attention. "In the face of food riots around the world like in Africa and Haiti, we really have an emergency." Lennart Bage, president of the International Fund for Agricultural Development (IFAD) and Kandeh K. Yumkella, director general of the U.N. Industrial Development Organisation (UNIDO), also addressed the food problem. The three U.N. agency heads, who were in the Indian capital for a global conference on the development of agro-industries as a means to fight poverty and create jobs. They advocate increased agricultural investment in water and infrastructure to help small farmers increase productivity.
Diouf, who blamed the crisis primarily on the steady migration of rural populations to the cities, in turn affecting food production, said he was looking to a summit in Rome in the first week of June to address this as well as factors that had to do with the developed world, such as the diversion of farmland to produce biofuels and speculation in the futures markets. Yet other factors that contributed to the spike in prices, Diouf said, were adverse weather conditions, such as an unexpectedly severe cold spell in China, droughts in Australia and Kazakhstan and floods in India and Bangladesh. According to Diouf, the world was now down to 405 million tonnes of cereal stocks, or 8-12 weeks worth of supplies for the world's populations. "The rise in prices of food commodities all over the world is not going to ease in the short term in view of supply-demand situation," he said. "We have seen riots in Egypt, Cameroon, Haiti and Burkina Faso," Diouf said. "There is a risk that this unrest will spread in countries where 50 to 60 percent of income goes to food." Indonesia, Ivory Coast, Mauritania, Mozambique and Senegal have also seen unrest over the last few weeks that was attributed to food and fuel prices. Global food prices have been rising steadily since 2002 and since January have risen 65 percent. In 2007 alone, according to the FAO's world food index, grain prices have soared 42 percent. Diouf refused to comment directly on India restricting rice exports, which was said to have caused rice prices in Thailand, the world's biggest exporter of the Asian staple, to shoot up. But he said it was natural for countries to protect their national interests. According to Diouf, rising income levels of people in rapidly developing economies like China and India was driving a "demand for more milk and more meat" that translated into higher demand for cereals. "I welcome economic growth in India and China, but I also hope they will invest in agriculture because these two countries account for 2.2 billion people out of six billion," Diouf said.
According to InterPress, UNIDO's Yumkella focussed on the shortage in food processing technology, suggesting that technology must be transfered to developing countries so that they can increase shelf life of basic foods." According to Yumkella, "agro-industry," i.e. food processing, helps preserve foodstuff, add value and reduce post-harvest losses while enabling products to be transported across long distances, including to the rapidly expanding cities: "Agro-industry generates demand for agricultural products and holds vast potential for off-farm rural employment." Urbanization, rising incomes and more women joining the labour market in many countries increase demand for processed food: worldwide, processed food and beverages now account for 80 percent of all food and drink sales. One visible response to this trend was the rapid expansion of supermarkets in many developing countries, especially in South-east Asia and in Latin America. Yet, said Yumkella, there were impediments standing in the way of small farmers trying to benefit from this trend such as customs tariffs, non-tariff barriers, standards and certification requirements. Yumkella also highlighted the global warming issue which will impose "great stresses on the world's ability to feed ever-growing populations. This challenge brings new threats to arable land areas, livestock rearing and fisheries through droughts, water shortages and pollution of land, sea and air."
I find it ironic that as the world faces a crisis in basic food availability, the UN persists in encouraging food processing -- which undoubtedly wastes more food than it saves, provides multi-national agro-industry with huge profits, and continues to drive rural subsistence farmers off the land and into the cities.
I am supposed to go to Haiti in the next month or so to work on my Village to Village water and health project. Haiti has long been a dangerous place for travel: 12 Americans were kidnapped (with accompanying violence) last year alone. But when I asked my wise group of 4th - 6th grade students in First Congregational Church's Jesus and His Kingdom of Equals class whether I should go, even with the personal risk, their answer was unequivocal: Jesus would. So now, to complicate matters, Haiti is experiencing food riots. Rising food prices are more than my surprise at the price of a loaf of bread. Yesterday's post
BBC has an excellent site with video, charts, graphs and lots of facts on rising food prices and supply problems. BBC Food Prices Some of the best material highlights (full size images should appear in pop-up windows if you click on them).
TOP IMPORTERS AND EXPORTERS OF WHEAT
THE PRICE INCREASES IN CORN, RICE, SOY, AND WHEAT PRICES DURING THE LAST YEAR
Thursday, April 10, 2008
I went to purchase some bread for a student potluck last night. The store's bakery had posted apologies about the price of bread, citing the rise in wholesale wheat prices. I knew prices were going up -- to be expected when the falling value of the dollar encourages exports, I thought. But I was shocked to pay almost $ 4 for a loaf of bread. So I began to wonder -- why? Is the effect of biofuels showing up already in food prices? What's happening?
Here's what I found in my brief review on how much bread I paid for bread. The United Nations Food and Agriculture Organization (FAO) Food Price Index during the last month is about 50% higher for all foods than a year ago -- led in large part by even greater increases in meat and grain prices, including rice, corn and wheat, "supported by a persistent, tight supply and demand situation'' Bloomberg report Unlike crude oil, wheat prices have not yet hit inflation-adjusted highs -- that honor is left for the period of Soviet Union's desperate wheat purchases during the 1970s. But they have increased 50% in the last 6 months.
The NY Times reported that the world’s wheat stockpiles have fallen to their lowest level in 30 years, and stocks in the United States have dropped to levels unseen since 1948. The Food and Agriculture Organization of the United Nations estimates that world wheat production will rise this year to nearly 664 million tons, from about 655 million tons — not enough to replenish stocks and push down prices. In December, the organization noted that high international grain prices were causing food shortages, hoarding and even riots in some places. The NYT reports:
The United States Department of Agriculture’s 10-year forecast, released Tuesday, sees the wheat shortage as temporary. Stockpiles were predicted to fall this year to 312 million bushels, from 456 million bushels, before rebounding to about 700 million bushels by the end of the decade.Higher prices “will encourage additional acreage and production,” the report said. Wheat plantings will rise to 65 million acres in the 2008-9 season, from 60.4 million this year, the Agriculture Department said, though it predicted the number would then fall because of competition from other crops. NYTimes story
So, we can expect a year or so of relief from these prices. And then? "Competition from other crops" -- does that mean biofuels? I'm still looking for an answer, so stay tuned.
Monday, April 7, 2008
Many of us teach some material concerning the Klamath River basin controversies. For those who don't, the Klamath River basin in southeastern Oregon and northern California has been a case study in conflict over competing uses for water, complete with federal marshals doing battle with irrigators determined to exercise their water rights even at the risk of prosecution. BuRec and other resource agencies have been forced to protect threatened and endangered fish species, leaving less water available for irrigation in dry years and heightened tensions among farmers and other stakeholders including commercial fishermen, Native Americans, conservationists, hunters, anglers, and hydropower producers.
National Research Council has a new book, which
"assesses two recent studies that evaluate various aspects of flows in the Klamath basin: (1) the Instream Flow Phase II study (IFS), conducted by Utah State University, and (2) the Natural Flow of the Upper Klamath Basin study (NFS), conducted by the U.S. Bureau of Reclamation (USBR). The book concludes that both studies offer important new information but do not provide enough information for detailed management of flows in the Klamath River, and it offers many suggestions for improving the studies. The report recommends that a comprehensive analysis of the many individual studies of the Klamath river basin be conducted so that a big picture perspective of the entire basin and research and management needs can emerge."
|Read this FREE online!|
Full Book | PDF Summary | PDF Report Brief
Weathering the storm of bad economic news over the past few months has been trying. I've found myself quickly reaching for the tuner nob at the first mention of "marketplace report" or anything akin thereto to avoid the latest in the unrelenting stream of dire economic updates. Throughout, I have tried to comfort myself by imagining that a recession would carry with it a silver lining -- a reduction in GHG emissions. Experience suggests that a sure route to dramatic GHG reductions is economic downturn (see the former U.S.S.R.) and, conversely, that explosive economic growth frequently spikes GHG emissions (see China). Indeed, the fact that the Bush Adminstration climate change strategy, see http://www.whitehouse.gov/news/releases/2002/02/20020214.html, focuses on reducing "greenhouse gas intensity" (the ratio of greenhouse gas emissions to economic output) as opposed to overall GHG emissions seems driven by a recognition of the close connection between economic output and GHG emissions.
Ultimately, however, I haven't found much comfort in the idea that a recession could reduce domestic GHG emissions. I suspect that this is so because in my heart of hearts I think that any short-term reduction in GHG emissions caused by a recession would likely be outweighed by the increased GHG emissions that will result if a recession derails the adoption of meaningful domestic GHG-reduction measures.
A recession would likely pose at least two problems for the adoption of a meaningful domestic program to reduce GHG emissions. First, a recession makes it less likely that a federal measure requiring deep GHG reductions will be enacted. In the past week, both EPA, see http://www.epa.gov/climatechange/economics/economicanalyses.html, and the American Council for Capital Formation, see http://www.accf.org/nam.html, have released analyses of the Lieberman-Warner cap-and-trade bill that forecast that the bill will have negative eonomic impacts. Putting aside arguments that these analyses overstate costs and undercount benefits, opponents of federal climate change legislation are going to have a receptive audient to their claims about the devastating economic impacts of climate change legislation in the context of a recession. During a recession, these opponents don't have to win on their argument that climate change legislation will hurt the economy doesn't have to prevail -- all they need to do is sow a seed of doubt. Second, even assuming that votes could be found to pass a perceived-to-be-costly GHG-reduction measure against the backdrop of recession, I fear that concerns about the economy would result in a very weak measure. Finally, a recession could also play havoc with the baseline caps that have already been incorporated into the Regional Greenhouse Gas Initiative and the Lieberman-Warner bill because any cap calculated prior to a recession will be bloated with "hot air" during a recession. And a recession could imperil the flow of financial support to renewable energy research and development.
So for now I'm left looking for a silver lining to the bad economic news. If you think of anything, let me know.
Regwatch reported on Friday that EPA is delaying greenhouse gas emission regulations by publishing an advance notice of proposed rulemaking:
As Reg•Watch recently reported, EPA staff had drafted preliminary documents describing the dangers associated with greenhouse gas emissions. This so-called endangerment finding would set in motion a series of regulatory actions. Staff also drafted a regulatory proposal that called for limits on vehicle emissions. In a letter to EPA Administrator Stephen Johnson, Rep. Henry Waxman (D-CA) wrote, "According to EPA staff, the proposal to regulate CO2 emissions from motor vehicles was 'about 300 pages;' and had 'extensive analysis about ... the costs and benefits.' " According to Waxman, Johnson was "personally involved in the decision making." He signed off on the document finding greenhouse gas emissions endanger public welfare and endorsed his staff's proposal for a reduction in vehicle emissions. Yesterday, Johnson announced his intent to publish an Advanced Notice of Proposed Rulemaking, which will do nothing more than gather comments on the issue of greenhouse gas regulation. Critics are calling the move a stall tactic. Indeed, it appears as though the White House pressured EPA to abandon its draft regulation, despite the diligent efforts of EPA staff. Instead, the Advanced Notice will provide all interested parties an opportunity to rehash arguments which are already well-documented and which EPA fully understands.
Given EPA's track record, the ANPR means that EPA will finalize regulations somewhere between 5-7 years and never, if simply allowed to play its standard games. Of course, these are not standard games -- but apparently White House inspired games. And White House involvement gave rise to Waxman's oversight hearing and the lawsuit filed by states and NGOs to require EPA action to comply with Massachusetts v. EPA.
So, inquiring minds want to know, does a ANPR satisfy the requirement for EPA to act. Who knows? Only time (and the Supreme Court) would tell. However, we'll never know because Congress and a new White House will act long before the courts have a chance to tell us. Without a doubt Congress in national GHG legislation will attempt to avoid application of the rest of the Clean Air Act to GHGs such as carbon dioxide. It will be a bit of a delicate exercise though because many other GHGs are already regulated under 112 as hazardous air pollutants or under Title VI as ozone-depleting substances.
The provisions regarding CAA applicability and preemption of state and local law will prove to be some of the most interesting and intricate legal issues in tailoring the GHG emissions cap-and-trade legislation. This is one reason why some straight-forward command & control regulations might make sense. For example, ban operation of any new fossil-fuel burning electric generating plant without carbon capture and sequestration or equally effective carbon removal. That avoids any problem with NSR, NSPS, or MACT. Then, apply a cap and trade system to accomplish the equivalent of the lead phasedown for existing plants.