Oxfam on Corn/Climate/Hunger: One-Horned Analysis Lacks Farm Bill Macro Solutions
By Brad Wilson at Sep 06, 2012
I've started tweeting, and I've been running into a lot of articles that misunderstand these the savage dilemmas underlying these issues, and no articles that do understand them. I hate criticizing Oxfam, which works so hard to bring the crisis to our attention, but it's essential that, especially in the context of crisis, we understand what's truly happening, what's truly needed, and what policies we can start supporting, right now, as the US Farm Bill is being discussed. That's why I'm harshly criticizing Oxfam in this blog.
This responds to the following sources: a new Oxfam report, an article and a video reporting on it:
Tracy Carty, “Extreme Weather, Extreme Prices: The costs of feeding a warming world,” Oxfam Issue Briefing, September 2012, http://www.oxfamamerica.org/publications/extreme-weather-extreme-prices, (pdf: http://www.oxfamamerica.org/files/Extreme-Weather-Extreme-Prices.pdf).
James West, “MAP: Extreme Weather Supersizes Global Food Price Tags,” Mother Jones, 9/5/12, http://www.motherjones.com/environment/2012/09/extreme-weather-driving-global-food-shock
“Extreme Weather, Extreme Prices,” ClimateDesk, YouTube, http://www.youtube.com/watch?v=cBFoL3R74Ds&feature=player_embedded
Grabbing Savage Dilemmas by Only One Horn
In a new report, Oxfam emphasizes that climate change, in affecting farm prices, causes crises and magnifies crises! Yes, that’s very true. It’s great for Oxfam to address this!
But the Report, and a related YouTube video and article in Mother Jones are weak at accurately describing the issue (as are most online articles1). Tragically, this is often true about Oxfam.
We must understand that Fair trade price standards must NOT be viewed as "extreme." Recent years of fair trade price levels (ie. 6 years, corn, rice, sometimes cotton, wheat,) followed long-term chronic low prices, 6 decades of them.2 For Oxfam and the other sources, however, there is no realistic standard of what’s high, what’s low, and what’s fair trade. The default standard is that anything much higher than what the global poor can afford is “extreme.” In fact, according to this standard, fair trade farm prices are “extreme” and must be ended. This is not at all realistic, as it doesn’t include the factor of costs of production. The global poor often live on only $1 to $2 per day! Oxfam’s default standard, therefore, massively exploits the world’s farmers.
This lack of adequate standards then puts Oxfam on the wrong side of the debate, on the same side as the mega-corporations that benefit from the massive exploitation of export dumping on the global poor who are mostly rural, mostly in desperate need of fair trade farm prices.
From a US point of view, export dumping can be defined as exports below costs (ie. the US chosing to lose money one farm commodity exports, 1981-2006), but also below fair trade standards (ie. the same US choice, 1953-2012, except for a for a few higher years here and there, for some groups of crops).2
The video gives a simple example for analysis: 55 pounds of corn meal rising in cost from $18 to $40, a $22 increase. That’s a bushel (56 lbs.) Here in eastern Iowa, I find that, through 6/30/12, the farm value of that corn has been $6.34. If you raise that by the extreme amount of 140%, (ie. 240% of it, as suggested, way beyond anything we’ve seen in the so-called price spikes,) this adds $8.88, not $22.00. That’s corn at $15.22, (which is still less than several top “record high prices,”). We have had corn prices here above $8 for a while in July and August. What about 140% above that (240% of it.)? That’s $19.20, less than $1.30 above the all time record. That adds another $3.98 for $12.86, still well below the estimates in the article.
The report and articles give no hint of how my extreme prices, (let alone theirs’?) would impact the production of food (and put ethanol & CAFOs out of business!) There’s a lot of land out there, 950 million acres by some estimates.3 There’s no remote doubt that we’d have shortages very far into the extreme extimates of Oxfam and it’s sources. We’d quickly return to the oversupply that we had for decades! And once a lot of additional land was brought into production, it would likely stay there a long while, returning us to export dumping the long running underlying cause of all of these problems.
In general, beware of "Baseline" modeling on such issues.4 Newcomers unfamiliar with the realities of farm markets often get it wrong, in ways similar to the flaws I’m showing in the Oxfam report. Often missing, for example, is the impact of higher farm prices on production, which I’ve examined above.
The report deserves some credit for at least mentioning the part where poor global farmers get some benefits from higher farm prices. Virtually all reporting, as in the article and video, neglect this, even though it’s the biggest factor of all.
The report then says that the poor farmers of the world have difficulty capitalizing on the benefits of higher farm prices. Also true. In fact, however, the decades of dumping (LOW prices) have created the crisis of hunger/starvation that we now see with HIGHER prices. It's a dilemma caused by the low prices. The "Undernourished" are 80% rural.5 Least Developed Countries are 72% rural.6 They need fair trade farm prices, but decades of dumping led to the dilemma where they can't capitalize on the quick change to fair trade. It's a "food poverty crisis."7 If not for the poverty, the recent prices would not be a factor, (and I'm not talking about mere increases from living on $1 per day to $5 or $10).
"Solutions" in which US/LDC/global farmers subsidize us all below fair trade prices for decades, below costs for a quarter century are not valid. This is what caused the dilemma of food poverty, it isn't a solution. People need enough income! Then they need to pay fair trade prices to LDC farmers. This then is a savage dilemma based upon a false paradigm, where one horn, recent higher prices, is strongly addressed, but not the other, bigger horn, long term low farm prices, and not the overall context and it’s savage dilemmas.
The report and articles lack any discussion of the big US farm bill (and global trade) policies that can hugely address this, and Oxfam does not sign onto these policies. This is a mega knowledge (paradigm) problem extending far beyond Oxfam, all across mainstream media, and it's global. The report is good to point to the local/sustainable side of solutions, but omits the specific macro level solutions, such as NFFC's "Food from Family Farms Act" and NFU's "Market-Driven Inventory System."8 Most US farm bill movement sectors also fail to see these policies, which are also the key ways to address the problems of the US Food Crisis (ie. cheap corn).
The issue is crucial in importance, Oxfam is relentless in bringing such things to our attention, (great!) yet this bad work defames Oxfam.
1. Brad Wilson, “False on the Food Poverty Crisis: 25 Online Examples,” ZSpace, 4/18/11, http://www.zcommunications.org/false-on-the-food-poverty-crisis-25-online-examples-by-brad-wilson.
2.USDA-Economic Research Service, “Commodity Costs and Returns,” http://www.ers.usda.gov/data-products/commodity-costs-and-returns.aspx; Brad Wilson, The Hidden Farm Bill, Secret Trillions for Agribusiness, ZSpace, 6/16/12, http://www.zcommunications.org/the-hidden-farm-bill-secret-trillions-for-agribusiness-by-brad-wilson.
3. Daryll E. Ray, Food Demand and Population Growth: Can Agriculture Keep Up? Presented at Daryl F. Kraft Lecture, University of Manitoba, Winnipeg, February 23, 2010, http://agpolicy.org/present/2010/KraftLectureFeb2010.pdf
4. Daryll E. Ray, “Errors in methodology can affect policy conclusions,” APAC, U of Tenn., Policy Pennings #280, 12/16/05, http://agpolicy.org/weekcol/280.html.
5. UN-FAO, "Livestock in the Balance," 2009, p. 3, http://www.fao.org/publications/sofa-2009/en/. (PDF: http://www.fao.org/docrep/012/i0680e/i0680e00.htm)
6. UN-ESA, web page, http://esa.un.org/unup/unup/index_panel1.html.
7. See For Further Reading, below.
8. Brad Wilson, “Primer: Farm Justice Proposals for the 2012 Farm Bill,” ZSpace, 5/11/12, http://www.zcommunications.org/primer-farm-justice-proposals-for-the-2012-farm-bill-by-brad-wilson
For Further Reading:
Brad Wilson, "WTO Africa Group with NFFC, Not EWG," ZSpace, http://www.zcommunications.org/wto-africa-group-with-nffc-not-ewg-by-brad-wilson.
Brad Wilson, "Unique US Role in Fixing the LDC Food Poverty Crisis," La Vida Locavore, http://www.lavidalocavore.org/diary/4655/unique-us-role-in-fixing-the-ldc-food-poverty-crisis
Brad Wilson, "Food Sovereignty as Government Intervention: The View of Via Campesina and US Family Farmers," La Vida Locavore, http://www.lavidalocavore.org/diary/5097/food-sovereignty-as-government-intervention-the-view-of-via-campesina-and-us-family-farmers.