Food, Finance & Climate
Triple Crisis, A Three-Fold Opportunity
At the end of 2007, Al Gore and IPCC were honoured with the Nobel Peace Prize for waking up the world to the climate catastrophe we face as a consequence of fossil fuel based industrial production and consumerism.
By early 2008, the food crisis had emerged as an emergency.
Industrialized agriculture and globalized food systems have been put forth as sources of cheap and abundant food. However, food is no longer cheap. The era of cheap food and cheap oil is over. The food crisis, mainly triggered by rising prices that emerged in 2007 and 2008 has led to food riots in many countries. From 2007 to 2008 the price of wheat increased by 130 per cent. The price of rice doubled during the first three months of 2008. Biofuels, speculation, destruction of local food economies, and climate change have all contributed to the rise in food prices. Climate change is aggravated by industrialized, globalized agriculture based on fossil fuels, and the resulting climate crisis in turn impacts food security in numerous ways, including intensified floods such as those Iowa experienced in 2008 and intensified and extended droughts like the one Australia witnessed in 2007. Globalization has also led to the destruction of local food economies and increased control by corporations like Monsanto and Cargill over our food systems. Global integration of agriculture in effect means global control over the world's food supply.
Food prices started to rise as a result of connecting India's domestic market to global markets, especially the edible oil and wheat import markets. At first, in the early days of globalization, the agribusinesses that dominate trade lowered prices to grab markets. The dumping of soy in the 1990s is a prime example. Now that global corporations like Cargill have created import dependency, they are increasing prices. Additionally, speculation through futures trading is driving prices upwards. Climate change and the diversion of foods to biofuels are also adding an upward pressure on international prices. The increase in international prices highlights the need to focus on food sovereignty. It makes both political and economic sense to focus on self-reliance in food and agriculture.
While millions go hungry, corporate profits have increased. Cargill saw profits increase by 30 per cent in 2007; Monsanto's profits increased by 44 per cent. These profits will increase as corporate monopolies deepen. Monsanto increased the price of corn seed by $100 per bag to $300 per bag. For a 1,000-acre farm in the US, this means an increased cost of $40,000.
The second half of 2008 has been characterized by the financial meltdown. Trillions have been spent by governments to bail out failing banks and financial institutions. Yet the bail outs aren't working. Like Humpty Dumpty who had a great fall and "all the kings' horses and all the kings' men could not put Humpty Dumpty together again", the financial collapse is symptomatic of deeper cracks which can't be fixed by band aids of bail outs.
If the symptoms are treated as the disease, then the solutions offered for each crisis will make the other crisis worse.
Industrial biofuels were treated as a cure for peak oil and climate change, yet they fuelled the food crisis by diverting corn and soya to ethanol and biodiesel. It takes 1.5 gallons of gasoline to produce one gallon of ethanol. For each fossil fuel unit of energy spent producing corn ethanol, the return is 0.778 units of energy, 0.688 units for switch grass ethanol, and 0.534 for soybean diesel. Pimentel and Patzek were criticized by the US government for including the energy used for building new refineries. However, these are new energy investments that do generate emissions, and Pimentel and Patzek are right to include them when calculating the overall energy balance.
In 2006 the US used 20 per cent of its corn crop to produce 5 billion gallons of ethanol, which only substituted for 1 per cent of its oil use. If 100 per cent of the corn crop were used to make ethanol, it would be able to substitute for 7 per cent of the total oil used. Even if all US soy and corn were converted to fuel it would only substitute for 12 per cent of the gasoline and six per cent of the diesel. To satisfy the entire current oil demand of the US with biofuels would take 1.4 million square miles of corn for ethanol or 8.8 million square miles the US. All the solar energy collected by every green plant in the US in 2006 - including agriculture, forests, and lawns - is only half as much as the fossil fuel energy consumed in that year. This is clearly not a solution to either peak oil or climate chaos.
Biofuels also fuelled the speculation in agriculture commodities, which is linked to the food crisis and the financial crisis.
Solutions that came out of the World Summit on the Food and Climate Crisis in June 2008 were focused on increased supply of chemical fertilizers and hybrid seeds. However, chemical fertilizers are a major cause of global warming. According to the 2007 IPCC report, nitrogen fertilizers account for 38 per cent of greenhouse gas emissions from agriculture. And nitrogen oxide is 300 times more lethal than carbon dioxide as a greenhouse gas.
The three crises of food, finance and climate are interconnected, as is the solution to them.
An agriculture that is based on chemicals and genetically engineered organisms is an agriculture that needs finance and credit for buying costly external inputs. Credit leads to debt, and debt is leading to farmers' suicides. According to official data, more than 160,000 farmers have committed suicide in India since 1997, when the seed sector was 'liberalized", and seed monopolies allowed to emerge.
An agriculture that is based on chemicals and credit is an agriculture that is controlled by giant corporations. Five gene giants control the world's seed and agrichemical supply. Five grain giants control the food supply. When corporations control agriculture, seed and food become commodities. Commodities maximize corporate profits. Profit becomes the main objective of agriculture, not care of the earth, of species, of human beings. As a commodity, food goes where it makes more money. It goes to run cars, not feed people. The World Bank has said that 75% of the rise in food prices comes from diversion of food to biofuel. The remaining 25% comes from speculation by hedge funds and investment banks, the same forces that caused the financial meltdown. If not controlled, they can lead to a food meltdown and famine on a large scale. The Agribusiness Accountability Initiative (AAI) stated that "massive commodity market speculation….has pushed the prices of wheat, foods out of the reach of hundreds of millions of people around the world." According to the FAO, as of April 2008 corn volatility was 30 per cent and soya bean volatility 40 per cent beyond what could be accounted for by market fundamentals. This is not about supply and demand, it is about betting on a global casino. As Michael Masters and Adam White have stated "When Index speculators pour large amounts of money into the commodities market and buy large amounts of futures contracts, prices go up. When they pull large amounts of money out and sell large amounts of future contracts, prices go down."
The financial crisis, the food crisis, the climate crisis have common roots, an economy based on debt - debt to nature, debt of farmers, debt of citizens. It is an economy ruled by fictions - the fiction of a corporation as a legal person, the fiction of derivatives and futures and collateral debt obligations, the fiction that corporations like Monsanto "invent" seed which is their "intellectual property", the fiction that soil fertility comes from fertilizer factories and the fiction that food as a commodity can nourish and feed people.
All three crises which have common roots also have a common solution. The solution is living according to the laws of Gaia, recognizing that the real wealth is nature's wealth, and in nature's economy there is abundance and justice and food for all.
Ecological agriculture based on nature's ecological laws is the solution to the food crisis, the climate crisis, the debt crisis.
Biodiverse ecological agriculture provides higher nutrition and food per acre than industrial agriculture. It reduces emissions and mitigates climate change, while also helping adapt to it. And it frees farmers of debt and suicides.
When we turn to biodiversity and the earth, we don't need credit, capital and chemicals. GMO free, chemical free, debt free agriculture is the solution to the triple crisis. The triple crisis offers us a threefold opportunity to strengthen our movement and make the transition from chemicals and GMOs to biodiversity, from corporations to real people, from fictitious finance on Wall Street to the real wealth that farmers working with nature and Terre Madre.