August 7, 2012 by Posted by Peter Rugh
By Chris Williams
More than 50% of counties in the United States are now officially designated “disaster” zones. The reason given in 90% of cases is due to the continent-wide drought that has been devastating crop production. 48% of the US corn crop is rated as “poor to very poor,” along with 37% of soy; 73% of cattle acreage is suffering drought, along with 66% of land given to the production of hay.
The ramifications of the drought go far beyond what happens to food prices in the United States. With the US producing half of all world corn exports, as corn and soy crops wilt from the heat, without coordinated governmental action we can expect a replay of the disastrous rise in food prices of 2008, which caused desperate, hungry people to riot in 28 countries. In that instance, food was available, but hundreds of millions of people couldn’t afford to buy it. Should food prices increase to anywhere near the levels of four years ago, it will be a catastrophe for the two billion people who are forced to scrape by on less than $2/day.
The poor in developing countries spend 80% of their income on food, much of it directly as grain, rather than as manufactured products like bread or cereal, and so any increase in the price of basic necessities immediately puts them in dire food distress. In the US, prices for a loaf of bread or a corn muffin are unlikely to see major increases because, in a nod to capitalist priorities, the cost of those products is largely determined by packaging, advertizing, transportation and storage costs – and ultimately the labor that is embodied in those activities, not the cost of growing the corn or other natural base material.
However, because about one-third of corn in the US goes to feed animals, the US dept. of agriculture predicts that the price of animal products such as beef, dairy products, chicken, eggs and turkey will increase by 4.5% or more, depending on just how bad the harvest turns out to be. There will be a similar impact on vegetable oil due to the dire predictions on soy production, though these effects will likely not be felt until early 2013. The UN’s Food and Agriculture Organization (FAO) publishes its monthly Food Price Index figures on August 9. Abdolreza Abbassian, a senior economist at the FAO commented, “It will be up… How much up is anyone’s guess”, ominously, he adds; “It would really surprise me if we didn’t see a significant increase.”
For the 1 in 5 children in the United States living in food insecure households and the millions of Americans living from hand to mouth, still trying to recover homes, jobs and a stable livelihood after the crash of 2008, let alone tens of millions of other poor people around the world, any rise in food costs will be a crushing, and for many, life-threatening, calamity.
With the possibility of food shortages, the vultures of finance, otherwise known as commodity speculators, will once again begin to circle the food markets, looking for a killing. As the financial markets were not re-regulated after the economic crisis of 2008, hedge funds and short-sellers will inevitably be on the look-out for additional profits by gambling on the price of food, exactly as they did four years ago.
Rather than any lack of actual food, most analysis indicates that the primary cause of the dramatic escalation in food prices that caused the 2008 food crisis was financial speculation in the food commodity sector. That is to say, a human tragedy manufactured by the laws of motion of capitalism, rather than the laws of nature.
The US dept of agriculture could and should be taking pro-active steps to ensure that there is no replay of 2008 as the number of people who became “food insecure”, which is to say starving, topped 1 billion worldwide. In the short-term, any crop failures need to be compensated by changing the allocation of US corn and preventing commodity speculation on food.
In the longer-term, measures to raise grain storage volumes, address infrastructure deficiencies through appropriate investment, re-evaluate inhumane, environmentally destructive and dangerously unhealthy industrialized livestock feeding practices and examine the location, sustainability and type of crops and monoculture farming, are all issues that need attention.
Up to now however, US secretary of agriculture, Tom Vilsack, has resisted calls to reduce or eliminate the federal mandate that sees more than one third of the US corn crop diverted to ethanol refineries to make “bio-fuel” to burn in car engines. The federal government has mandated that over 13 billion gallons of ethanol is made from corn this year, which would equate to 40% of this year’s crop. Supposedly adopted to reduce demand for “overseas oil” and associated geopolitical concerns after oil almost topped $150/barrel in 2008, the Obama administration raised the federal requirement to 36 billion gallons by 2022, with at least 15 billion coming directly from corn.
Even on the best of days, turning corn into ethanol is an idiotic thing to do. Many studies have shown that it takes more energy to turn the corn into ethanol than is recovered when the ethanol is burnt in a car engine. Not only that, but ethanol doesn’t have the energy density of gasoline, so cars running on a mixture of ethanol and gasoline have to burn more fuel to go the same distance and the blended mix costs more to transport. In any year, this is bad policy; in a year of extreme drought, it should be a criminal offense to waste food resources in this manner.
Additionally, in one of the more ridiculous circular irrationalities to emerge from the anarchy of capitalist decision-making, because growing crops in the West is heavily dependent on oil for fertilizer production and mechanization – to the extent that it takes 10 calories of oil to produce 1 calorie of food, and because ethanol derived from corn – which in turn is derived from oil, is increasing in price because the corn is dying, means that the cost of ethanol-blended gasoline in the US is also on the rise.
Immediate elimination of the biofuel mandate is a concrete step that Vilsack could be promoting, particularly after he predicted at a Whitehouse press briefing that the drought would cause “significant increases in prices” by the end of the year.
The large-scale effect of such a move on the price of corn is disputed, in part because “It turns out it’s really the price of gasoline and the profitability of selling ethanol” whereby the abstract and impersonal thing called “the market” determines whether corn will be distilled or sold as corn. Oil companies, which are required to blend ethanol into gasoline as part of the utterly inappropriately named, “renewable fuel standard” (RFS), are allowed to carry RFS credits over year to year and thus have 2.4 billion credits available to allow the continued acquisition of corn for ethanol refineries.
But it’s hard to imagine suddenly freeing up 40% of whatever remains of the US corn crop for livestock and human use having a negligible impact on corn prices, even accounting for the activities of the oil companies. As Gawain Kripke, director of policy and research for Oxfam America has argued, “The federal government can … put an end to the biofuel mandates, which are diverting food into fuel, and work to cut greenhouse gas emissions, which are leading to ever more erratic and extreme weather.” Vilsack should be arguing for such a policy shift; significantly, Lisa Jackson, head of the Environmental Protection Agency, has the power to make it happen without waiting on legislation.
This is especially necessary as some experts are beginning to worry about next year’s crop. For much of the US corn-belt, the main precipitation period has already passed. So, without some unseasonal weather events releasing massive amounts of rain, Mark Svoboda, a climatologist at the National Drought Mitigation Center, based at the University of Nebraska, has said what matters is getting enough rain for the beginning of next year’s crop, “This drought isn’t going anywhere…The damage is already done. What you are looking for is enough moisture to avert a second year of drought.”
Vilsack could also offer to annul small farmer debt to the banks. The only step he’s taken in this direction is to allow farmers an extra 30 days to pay insurance premiums –as if an extra month is going to make any difference if you’ve got no crops to sell. He could campaign for greater agricultural aid for farmers in the Global South, specifically to build food storage facilities.
Investment in this kind of food infrastructure to smooth out harvests saw drastic cuts in developing countries throughout the 1980’s and ‘90’s as international lenders demanded cuts to government spending in exchange for loans. In addition, such insurance was seen as unnecessary when “the market” would automatically adjust for any shortfall; similarly in the United States, grain reserves are low and unable to make up any deficit because of a reduction in grain storage.
Perhaps more importantly still, if Vilsack, and the Obama administration in general, had any concern for humanity and the world’s poor, they could begin an aggressive campaign to re-regulate financial speculation on food prices in international commodity markets; such an attack on the bankers, stockbrokers and speculators would, no doubt, prove wildly popular.
In practice, the myopic priorities of capitalism dictate the solutions on offer. Vilsack has enacted short-term palliatives which are highly likely to make the long-term situation far worse. The $383 million in emergency drought payments to farmers that was just voted for in Congress is appropriating the money directly from cuts to conservation programs designed to promote more sustainable farming practices.
Indeed, cuts to those programs are three times what is allocated for emergency drought relief, leading a coalition of environmental groups to write a letter to all members of Congress stating their opposition:
“Using disproportionate cuts to conservation to fund disaster assistance undermines the successful conservation programs that are currently being utilized… Disproportionately cutting conservation dollars to pay for disaster aid is shortsighted, and the long-term investment in conservation should not be usurped by the short-term thinking to address severe drought.”
Rather than downsize the powerful corn-to-ethanol industry, much of it situated in Obama’s home state of Illinois which has the third largest production capacity (Iowa, a campaign-defining state for Obama in 2008 and a swing state this time around, produces the most ethanol), Vilsack has instead sacrificed 3.8 million acres of conservation land for grazing and the production of hay in order to circumvent livestock owner’s anger directed at ethanol producers.
Most absurdly, considering this is, after all, the 21st century, at the same press conference where Vilsack predicted food price increases, he offered his own personal solution to the drought crisis: “I get on my knees every day, and I’m saying an extra prayer now. If I had a rain prayer or a rain dance I could do, I would do it.”
So, while there is a clear and easily achievable solution at hand – reallocation of corn from ethanol distillation to food production, the agriculture secretary of the world’s biggest corn exporter believes a more useful way of spending his time is in genuflecting to an all-powerful, invisible deity in the sky.
In the medium term, rather than being driven by profit, for the good of animal and human welfare, the industry practice of feeding corn to cattle in huge, enclosed feeding lots to speed the fattening process needs urgent re-examination. To enhance profit margins, successively larger animals have been selected for so that over time, the animals themselves have changed. The larger a single animal is, the larger the profit ratio you obtain from chopping it up.
Cows in giant feed lots are typically around 1200-1300 lbs rather than the more usual 900-1000lb. A cow in the open field would have to eat a simply enormous amount of grass or hay to fatten when its overall body mass is almost 30% larger. Hence corporations have created a cow that can’t survive except through being force-fed high-energy corn meal.
Apart from the misallocation of corn, the knock on effects of that decision for animal and human welfare, the incubation and mutation of pathogens, the disposal of huge volumes of toxic animal waste laden with antibiotics and growth hormones concentrated in small areas, all feed in to the incredibly wasteful, dangerous and unsustainable nature of capitalist agriculture.
At a time when the reality of anthropogenic climate change has become so hard to ignore even some famous climate skeptics have given up protesting, drought is going to be an increasing factor that agricultural planners need to take into account. Therefore, cutting money from programs designed to manage the land more sustainably is a suicidal policy.
As climate blogger Joseph Romm pointed out in an article in Nature, assuming business-as-usual, which is exactly what is going to happen without a mobilization of the people that dwarfs the revolts of 2011, there will be a cascading series of destabilizing changes which will all negatively impact our ability to grow food:
“Precipitation patterns are expected to shift, expanding the dry subtropics. What precipitation there is will probably come in extreme deluges, resulting in runoff rather than drought alleviation. Warming causes greater evaporation and, once the ground is dry, the Sun’s energy goes into baking the soil, leading to a further increase in air temperature. That is why, for instance, so many temperature records were set for the United States in the 1930s Dust Bowl; and why, in 2011, drought-stricken Texas saw the hottest summer ever recorded for a US state. Finally, many regions are expected to see earlier snowmelt, so less water will be stored on mountain tops for the summer dry season.”
Even worse, the recent results of 19 different climate models predict that drought will become a permanent feature of large areas of the North American continent:
“If climate change pushes the global average temperature to 2.5 degrees Celsius above pre-industrial era levels, as many experts now expect, [almost all of Mexico, the midwestern United States and most of Central America] will be under severe and permanent drought conditions.
Future conditions are projected to be worse than Mexico’s current drought or the U.S. Dust Bowl era of the 1930s that forced hundreds of thousands of people to migrate.”
In other words, we are only beginning to glimpse the outlines of a situation that will become far worse without drastic ameliorative action in the near-term future. Climate change, caused primarily by the burning of fossil fuels, is creating extended droughts that threaten to undermine agriculture and, thereby, our ability to feed ourselves. Rather than a swift redirection of societal priorities – toward energy conservation, renewable technologies and sustainable farming practices, instead there’s a continuation and extension of the policies that got us here in the first place.
Nothing can explain this paradox between, on the one hand, the prolongation of unsustainable food production practices that don’t even feed people successfully, and on the other, the way in which the natural world functions as an inter-connected whole, other than to examine the factors that drive a society artificially divided into antagonistic classes with opposing priorities.
We live under a system that is inexorably leading to greater and greater climatic dislocations, due to its inherently anti-ecological dynamic that is predicated on exponential growth and the prioritization of short-term measures in the interest of profit.
We see the same irrational process played out in India, which is suffering from a 20% shortfall in precipitation, with some states recording 70% reductions from historic averages. 60% of India’s 1.2 billion people work in agriculture, which accounts for 20% of Indian GDP. But less rain doesn’t just affect farmers directly.
Less rain leads to less hydroelectric power, which means farmers have to use their own pumps to obtain water from underground aquifers for crop irrigation to save their harvest. Those pumps run on electricity. So at a time when there was less electricity available because of drought, there was an increased demand for electricity to overcome the drought, a factor contributing to the massive blackout in India.
Additionally, pumping groundwater has led to aquifers dropping in some areas by between60-200 meters, requiring bigger, more powerful pumps for deeper wells to continue the unsustainable practice of tapping groundwater supplies at such volumes.
This is despite the fact that while 90% of water use in India is for agriculture, only about 10-15% ends up reaching the crops, as most of it evaporates on the ground before it gets to them. Rather than investing in sustainable agricultural practices to combat the problem, the Indian government bought heavily into the Western-backed Green Revolution of the 1960’s, and promoted the planting of water-intensive crops such as rice.
According to Upmanu Lall, director of the Columbia Water Center at Columbia University’s Earth Institute, “the whole water and energy problem [in India] is dire, and it’s caused by government policy.” He gives the example of the Punjab, which has an annual rainfall of .40-.80 meters, but now grows rice, which requires 1.8 m of annual rainfall.
The intersection of energy, water and food with capitalist development is illustrated in India in stark form. But the solution, abstracting the limitations imposed by class society, is once again quite simple, in that crops should be grown where the climate makes most sense, not where they will make the most money or merely to add to foreign cash reserves or national status. However, rather than taking those kind of measures or addressing climate change, India is building more coal and nuclear plants and is one of the country’s most resistant to taking effective action on climate change.
Around the world, the evidence is mounting that, apparently, there are no circumstances, even ones as cataclysmic as drastic changes to planetary climate that take precedence over the need to accumulate capital by the tiny segment of society that actively benefits from the process.
If we are to survive at all, given all of the above, it seems impossible to avoid the conclusion that to survive on a planet that looks remotely like the one we were born on, we must confront the system that produces a society at odds both with itself and the natural world for the same reason – class stratification.
That means the building of an organized resistance in every workplace, community, school and farm all across the world. The exploitation and oppression that is meted out to the vast majority of the world’s population as a consequence of the way system works, is the mirror image of the exploitation of the biosphere which, ultimately, forms the basis for life; a scientific fact the capitalists seem capable of ignoring. We can’t afford to let them get away with it.
That’s why we have to organize, in order to say: for the good of humanity and the rest of the biosphere upon which we depend, you need to go.
Chris Williams is a long-time environmental activist and author of Ecology and Socialism: Solutions to Capitalist Ecological Crisis (Haymarket, 2010). He is chair of the science dept at Packer Collegiate Institute and adjunct professor at Pace University in the Dept of Chemistry and Physical Science. His writings have appeared in Z Magazine, Counterpunch, The Indypendent, Dissident Voice, International Socialist Review, Truth Out, Terraspheres.com, Socialist Worker, ZNet and Climate and Capitalism.
This piece first appeared at Climate & Capitalism.