I’ve seen the future and his name is Mad Max
In 1980, a new anti-hero came crashing into our movie screens. His name was Mad Max, and his story was one of social breakdown and revenge amidst a dying, desiccated landscape. He wasn’t as fierce as Jaws or as lovable Luke Skywalker, but he became a cult classic.
Now, we can argue whether people flocked to Australia’s greatest low-budget film success for the movie’s quasi post-apocalyptic mythology, or its blue-eyed lead named Mel Gibson or the engrossing chase scenes. (Most would say the chase scenes.) But the truth remains that Mad Max, whatever its merits (and there are many), effectively made use of the bleak, primordial side of the Australian landscape.
The question remains: Is Mad Max a true harbinger of the environmental future facing semi-arid Australia? Or, is its apocalyptic fantasy merely a fictive device to tell a story? Like most other Sci-Fi movies, it seems, Mad Max employs a fiction wrapped around a kernel of truth.
In a country known for all forms of extreme weather, much of Australia has been victim to drought since early this decade. In 2002, which was at one time the worst drought year since the 1950s, farm income fell by 70 percent and agricultural exports dropped by nearly 30 percent. (Someone says its effect is overblown.)
Bring me the head of El Nino
Even in good years, though, Australia’s water situation is best described as precarious. Among continents, only Antarctica is drier. Roughly 80 percent of Australia’s landmass receives less than 24 inches of rain, about the same as the Texas-Mexican border. Sand dunes cover 40 percent of the country. Moderately fertile soil is concentrated in the southeast and southwest corners, where a good chunk of the population is found. (The country also sports a great climatic variation: The northern shores boasts tropical climates, including rain forests and grasslands.)
Geographically, this huge landmass faces major problems attracting rain and moisture. Even the years not affected by El Nino, southern oscillation. For one, its location. Cold waters off its Western c
oast make that region arid and hot, permitting very little evaporation that leads to rain on the mainland. It is also quite flat, lessening chance of rains. Another moisture problem: No significant bodies of water that penetrate inland, keeping evaporation (and subsequent rainfall) at a minimum. Then, of course, when rain occurs, it turns mostly into runoff.
Don’t call it drought
Drought is such a constant problem in Australia a government commission advocates (opens .pdf) replacing it with the term dryness, which has more permanent, less seasonal connotations. Drought itself refers to a lack of water for normal users’ needs. Because people use water in so many different ways, no one can safely say when this dearth of rainfall affects them. What’s true is this decade has been very difficult for Australia. Especially in the rural areas.
After hearing from more than 1000 people at 25 public hearings, the panel concluded:
Too many farm decisions are made under stress and without adequate consideration of the needs of the family and in the absence of prior thought and planning. Family and business are intricately linked for the majority of farm families, but decision-making mostly occurs in separation and often at the expense of each other.
…dryness impacts on how farm families function through separation and isolation;
increased burdens of responsibility, belt-tightening and contribution of further labour to the farm, particularly by women and children. Issues surrounding succession planning cause great stress during times of dryness because of reduced cash flows and unmet expectations. While many male farmers say they are coping, they may not recognise or understand some of their coping mechanisms are placing great pressure on their families. While arguably tolerable for short periods, this has the potential to erode the composition of families and the development of children.
Is there a farmer in the house?
Which brings us to the topic at hand: How does all affect farmers? Previously, a lack of rain and profits made farmers so desperate, the media began reporting an increase in suicides. Things don’t appear that bleak. But still.
The New York Times reports.
Drought affects every agricultural industry based here, not just rice — from sheepherding, the other mainstay in this dusty land, to the cultivation of wine grapes, the fastest-growing crop here, with that expansion often coming at the expense of rice.
Drought has already spurred significant changes in Australia’s agricultural heartland. Some farmers are abandoning rice, which requires large amounts of water, to plant less water-intensive crops like wheat or, especially here in southeastern Australia, wine grapes. Other rice farmers have sold fields or water rights, usually to grape growers.
In the Murray-Darling River Basin, where 40 percent of the country’s produce originates and an area the size of Spain and France combined, the now departed Howard government once contemplated banning irrigation to ensure people had enough drinking water.
From the Australian government:
In its natural state the River Murray was quite different from the regulated river we have today. During severe droughts it was sometimes reduced to a chain of saline waterholes. In South Australia, sea water infiltrated upstream for a considerable distance from the mouth.
In most years, Adelaide draws more than 40% of its water from the Murray. During droughts such as that experienced in recent years, this dependence increases to more than 90%. Without our present system of river regulation, the population of Adelaide and many other cities and towns in the Murray Valley would be considerably smaller than they are today.
Since the completion of Hume Dam in 1936, a continuous flow has been maintained throughout the length of the Murray. Without storages and regulation, the Murray would almost certainly have ceased to run during the droughts of 1938-39, 1944-45, 1967-68, 1982-83 and 1997-98. The drought conditions experienced in the last few years have shown that even with storages and regulation, extended dry climatic conditions could stop the Murray from flowing.
Next up, we will look at how the country deals with this problem.
CAFOs: No longer just animal slums
The U.S. Environmental Protection Agency passed guidelines in late October allowing farmers with large feed lots to opt-out of a pollution permit process if they can assure the government they will not allow environmentally dangerous materials from running off into streams and lakes.
The EPA calls the new self-regulating requirements a “zero discharge standard” compelling farmers to develop management plans to prevent large feed lot runoff, such as nitrogen, phosphorous and dangerous bacteria. As an Associated Press story contends:
Operators would determine whether their facility is releasing or will release pollution into waterways based on the design of the facility and its operation. If they conclude no discharges will take place, they can operate without applying for a federal permit.
Anthony Schutz at the Agricultural Law blog says the rule indicates that farmers who decide that a discharge could occur should apply for a permit.
Those in violation of the rule could be fined up to $32,500 per day.
The National Pork Producers Council call the new rules “tough but fair.” They are not alone.
“The rule contains substantial improvements in water quality protection, and may improve water quality as a result. We are encouraged that the rule includes a number of incentives for livestock farms to operate at high levels of environmental compliance,” said Bob Stallman, President of [American Farm Bureau Federation].
Mr. Stallman also said that a positive aspect is that livestock farmers will have flexibility to evaluate their farm and determine whether or not to secure a permit. “Regardless of the farmer’s decision, there is no doubt they will have to meet challenging environmental standards,” he said.
Regulations state that large animal or poultry operations, called Concentrated Animal Feeding Operations, or CAFOs, are now bound by regulations under the Clean Water Act. The EPA originally issued rules regulating these operations in 2003, but they were overturned by a court in 2005. These new guidelines will go into effect in February.
File under industrial farming
The U.S. government defines a CAFO as an agricultural facility that houses and feeds a large number of animals in a confined space for at least 45 days during a 12-month period. This large density creates economies of scale — producing the highest output at lowest cost. As the Center for Disease Control points out, CAFOs are just another step in the specialization of agriculture in the U.S. that now function as “links in the chain of animal production, housing and feeding cattle and poultry.”
While the EPA has been charged with regulating these operations, no government agency has consistent data on the number of CAFOs — or their growth — within the US. A recent Government Accounting Office report (opens .pdf) estimates that in 2002 some 12,000 large-scale feeding sites were operating, feeding and killing an estimated 890 million animals. In 1982, approximately 257 million animals were housed in 3,600 feedlots.
The excrement factor
The overriding issue facing CAFOs is waste. According to the GAO, a “large dairy farm” with 700 cows creates 16,000 tons of excrement and urine annually, about the same amount as Lake Tahoe, California, population 24,000. Taking it one step further: A “very large hog farm raising as many as 800,000 hogs” — which there are at least two in the US — could create more than 1.6 million tons of manure per year, which is more than 150 percent of excrement produced by the 1.5 million residents of Philadelphia, Pennsylvania, says the GAO.
Why not use all this waste for fertilizer? The problem is, GAO concludes, that many CAFOs are concentrated in clusters around the US, making it difficult to find available cropland to fertilize.
With so much manure concentrated in a single area, residents near CAFOs have long complained about the bad odor and a high concentration of flies. The CDC reports that infectious compounds from swine and poultry waste have migrated into soil and water near some CAFOs. However, the affect on human health is unknown.
CDC catalogs possible emissions from CAFO-based manure. A short list includes, antibiotics, which could have a hand in creating antibiotic-resistant pathogens; increased levels of ingredients for fertilizer — ammonia, nitrogen and phosphorous — which reduces oxygen levels in nearby surface waters, prompting the growth of certain algae. Scientists have also found higher levels of parasites, bacteria and viruses, a leading cause of disease.
Another issue: large amounts of pesticides and antibiotics are needed to mitigate the spread of disease compounded by crowded living conditions. These also could seep into ground water.
How dangerous?
In a recent report, the GAO chides the EPA for failing to identify or assess how possible pollution from CAFOs could impair human health or the environment. (The oversite agency also reprimands the EPA lacking any plan to protect air and water quality around CAFOs.)
Since 2002, at least 68 government-sponsored or peer-reviewed studies have been completed that examined air and water quality issues associated with animal feeding operations and 15 have directly linked air and water pollutants from animal waste to specific health or environmental impacts. EPA has not yet assessed the extent to which these pollutants may be impairing human health and the environment because it lacks key data on the amount of pollutants that are being emitted from animal feeding operations. As a first step in developing air emissions protocols for animal feeding operations, in 2007, a 2-year nationwide air emissions monitoring study, largely funded by industry, was initiated. However, as currently structured, the study may not provide the scientific and statistically valid data it was intended to provide and that EPA needs to develop air emissions protocols. Furthermore, EPA has not established a strategy or timetable for developing a more sophisticated process-based model that considers the interaction and implications of all emission sources at an animal feeding operation.
Guess what the greens think
It’s safe to say that environmental groups are less than enthusiastic by the EPA’s new rules (of the EPA’s stewardship). Tom Philpott writing in the blog Gristmill before the rules were released, wrote:
Is the EPA leadership incompetent or malicious?
The agency’s steady stream of oversights, lapses, and rotten decisions…demands a reckoning. The answer appears to be a kind of toxic mix of the two: a malicious desire to please industry interests over public ones, leavened by a dose of sheer idiocy.
From the same AP article quoted above:
“This regulation allows these industrial meat farms to avoid the Clean Water Act altogether by certifying that they have taken voluntary action to avoid discharges,” said Eric Schaeffer, a former EPA enforcement official who now is director of the Environmental Integrity Project, an advocacy group.
Because feedlot owners are allowed to determine whether they should seek a pollution permit “it literally puts the foxes in charge of their gigantic henhouses, as well as hog and dairy confinement operations,” said Schaeffer.
An Obama administration and trade, agriculture issues
I’ve been busy lately covering international reaction and opinion to the 2008 Presidential election. Now that’s finished, I can’t seem to get away from the topic. For the sake of familiarity, let’s see what the international agriculture community is saying about the election of one certain Barack Obama.
In Brazil, the foreign minister called for restarting the Doha round of international trade talks before Obama is to take office in January.
Not because Obama may have a protectionist streak, Celso Amorim told Reuters. Having a deal in place would spare a new president of trying to deal with complex trade issues. It also may jump-start the lagging world economy, he said.
From Reuters:
“It will facilitate things for President-elect Obama if we are able to finalise the modalities by the end of this year. It would relieve him of very difficult choices at the start of his government,” Amorim told Reuters during a visit to Geneva.
“It would be only fair to complete the job.”
Amorim brushed aside the notion that a Democratic president would be more protectionist, noting that Obama would be interested in helping the global economy and be more multilateral. This idea has been supported by Australian Trade Minister Simon Crean, who floated the idea of getting together during the Nov. 15 meeting in Washington of major industrialized countries to discuss global economic issues.
“What the global financial crisis does is to give us the capacity to raise to a leadership level… the importance of the relationship of trade to helping the macro-policy setting and the economic stimulus that all world leaders are committed to finding at the (Washington) meeting,” Crean told Reuters while visiting Geneva.
Speaking out against yet another ministerial-level meeting was the South African government, whose trade minister said if the differences were too much to overcome in July, what will make November any different?
Let’s stay with Australia, where farmers are not so sanguine about Obama’s victory in the U.S.
“It’s fair to say McCain would have been better for Australian farmers,” said outgoing trade manager of the country’s National Farmers Federation. “Obama’s commitment to extending the US biofuels and farm subsidies, for instance, are worrying, and he is definitely more protectionist than McCain.”
“And the Democrats delivered a dreadful Farm Bill (for Australia).”
Mitchell said that the possibility of re-starting the dead Doha trade talks hinges on the U.S. making significant changes to its subsidy support network.
In Japan, worries have surfaced whether an Obama administration will bring about the same “trade friction” that characterized the Clinton years in the White House. However, the economic and political realities within both countries have changed, the Japan Times pointed out.
Japan accounted for a large portion of the U.S. trade deficit in Clinton’s time, “But that is no longer the case today,” the official said.
Washington and Tokyo still have economic concerns to deal with, including Japan’s protected agriculture market, but they are unlikely to pose the same problems they did in the Clinton era and drastically alter relations, the official added.
Meanwhile independent experts say one Obama strategy that could affect Japan is his take on denuclearizing North Korea and leading international counterterrorism efforts in and near Afghanistan.
Another country adopting a wait-and-see attitude while confidently expecting similar treatment is India. From the Financial Express:
According to Lalit Mansingh, former Indian envoy to the US, “The real strategic partnership between India and the US will begin with a new government in Washington and New Delhi next year. “Trade and investment, defence and agriculture—all those areas, which were sidetracked by nuclear deal—would now come to the fore, said Mansingh.
“We should probably try to facilitate a better understanding between Pakistan and India and try to resolve the Kashmir crisis so that they can stay focused not on India, but on the situation with those militants,” Obama had said. K Subrahmanyam, strategic analyst, however, suggested that India should not overreact. “Obama is a flexible intellectual. Let’s wait and watch”.
However, the leader of an export organization is remaining cautiously pessimistic.
The Federation of Indian Export Organisations (FIEO), while welcoming his victory, offered a note of caution on the economic policies of the President-elect in view of his anti-outsourcing stance and curb on H1B visas.
“If the US increases the agriculture subsidy as stated by Mr Obama in his speech then it will give a jolt to agro exports from India and other Third World countries,” Mr Ganesh Kumar Gupta, President FIEO, said.
How to turn back the greying of farmers?
Farmers are getting older, and throughout much of the rich world, young people are not picking up their mantle. To fight this trend, the Greek government recently announced it will double from EUR 20,000 to 40,000 the amount of subsidies it provides to young farmers. The EUR 305 million program could go to any Greek farmer under the age of 40, providing the Athens government to hope nearly 10,000 sprightly folks could benefit from the funds.
It’s a problem as old as the hills: As rich countries age, says the Population Reference Bureau of the U.S., the proportion of farmers more than 65 are becoming ever more common.
For example:
- In Japan, 16 percent of the total population is over 65, but a whopping 45 percent of farmers is at that age, a major jump in the past three decades;
- In 1970, five percent of Korean farmers were over 65. In 1998, that number reached 6 percent at a time when the country’s over 65 population “only” doubled from three percent to six percent;
- A little more than a decade ago, the amount of U.S. farmers older than 55 stood at 61 percent. In 1954, less than four out of every ten farmers were working at that age. The share of farmers younger than 35 dropped from 15 percent in the 50s to 8 percent in 1997;
- Roughly 8 percent of farms in the European Union are managed by people under 35. And more than half of land holdings are run by farmers more than 50.
Old man look at my life
One reason older farmers are staying on, says the Economic Research Service, is people are living longer. Better health means farmers can work to an advanced age. The depopulation of rural areas in many countries is another issue. Here’s just one example, but in the Australian outback, the outmigration of youth for jobs on the coasts, where the urban areas are located, has become so pronounced the age of rural population as a whole is rapidly increasing.
Land economics also plays a part. Unless you come from a farming family with land to lend, people aren’t jumping into a field with long hours, backbreaking work and relatively low pay. As Melissa Snyder, a farmer in Canada, points out, not only does farming have a low ceiling for profitability, but “[p]urchasing an existing farm operation or establishing a new farm operation takes a huge capital investment as well as the passion to make it happen.”
Throughout history in the United States, the traditional path to farming was through a family business. This pipeline has largely dried up.
From the ERS:
A person’s decision to enter farming is conditioned by the relative attractiveness of farm versus nonfarm earning opportunities and by the ease of entry into farming as a business. When the nonfarm economy is robust, as it has been for the past decade, young people may opt for the higher, more stable incomes available off the farm. On the other hand, boom times in the nonfarm economy may actually encourage entry into farming.
While access to capital is important, a new farmer must also know how to farm and how to manage a farm business in the current regulatory environment. Those who grew up in the farm business can obtain this specialized knowledge from their family experience as well as from outside education. Novice farmers must acquire this expertise through hired work on farms or education. Federal or State extension programs may target technical assistance to beginning farmers.
I’ll argue these problems are merely components of a larger issue: the rise of market-driven economies throughout agriculture production. To remain successful, farmers must capture a greater economy of scale, forcing them to purchase more land.
From the Population Reference Bureau:
Vertical integration — the extension of a company’s control to all the economic steps in the production of a product from raw material to retail purchase — also is increasing in poultry, hog, and dairy production, once the domain of family farms. It may well be that many more farms operated by families will give way to agroindustrial enterprises managed by professional managers. In this event, the number of full-time farmers will continue to diminish, and the average age of farmers may decline as well.
Back to the EU
Countries in the EU, like rich countries anywhere, hope that by giving young people financial help, more will join the ranks of farmers. It’s far from a perfect solution. In fact, hand outs may hurt young farmers. In an admittedly older post (April 2007) over at CAP Health Check, Jack Thurston argues that the current EU farm subsidies arrangement system is overwhelmingly bad for young farmers. For one, what he calls “blanket” and “untargeted” farm subsidies increases the price of land (by as much as 40 percent in some estimates), an especially risky proposition for one entering the field.
This makes it up to 40 per cent for young farmers to buy or rent land. High land values are one of the main reasons why European farmers face higher costs than farmers elsewhere in the world. And it’s not just land that is more expensive. Farm equipment companies, agri-chemical companies and other suppliers drive up prices because they know their customers are getting handouts from the government.
Other issues are at work. EU production quotas, which have been relaxed due to food price issues; the over-production in some crops caused by subsidies dropping market value.
Here’s the long and short of it:
Ultimately, what many farmers gain from subsidies, they lose by facing lower prices and higher costs of doing business. This is particularly true for young farmers and new entrants who have to take out giant loans to buy land, and borrow more still if they want to ‘buy in’ to the subsidy game. Is it any wonder that the average age of European farmers far higher than in other sectors of the economy or that only 8 per cent of European farmers are younger than 35?
Perhaps a better solution to pique interest and knowledge is found through beefed-up agricultural education. In the Philippines, where the average age of farmers hovers at 55, a move has begun to inject money into agricultural education in the hopes of sparking interest among young people to become “surplus oriented” farmer-entrepreneurs.
What’s not in it for us?
With the dearth of young farmers, what is the (rich) world missing? For one, an EU report notes that young people on average run more profitable farms. Perhaps that’s because they are also more willing to adopt innovative solutions, which can be read as “envrionment-friendly.”
What problems will arise if no on picks up the mantle of food production for the next generation? This brings us to the sub-text of this debate: The fall of the family farmer in rich(er) countries. Granted, part of this may be old-fashioned sentimentalism and worries over the over-economization of our rural environment. Yet it’s an argument that holds sway with a lot of city folk.
“Farming is not a run-of-the mill economic activity,” a very non run-of-the-mill economist Jacques Chirac once told the World Congress of Young Farmers. Food stuffs are not ordinary products, he continued, and they are tied in with debates about politics, globalization, trade and culture. With the food chain increasingly interconnected, you don’t have to be as reactionary as the former French president to ask: Can we afford to trust what has become to be known as “food sovereignty” to be handled solely by large companies?
New food poll leaves us wanting more
During the past few days, I’ve received various iterations of a poll regarding the effects of the high cost of food and energy from 26 countries around the world. It was sponsored by the BBC and undertaken by a host of other organizations.
Like all large polls on timely issues, there’s a few caveats here. First, much of the reporting was completed during July, when food prices (most likely) reached their highest point, potentially skewing answers to the negative. Secondly, and this is a quibble, Africa, the most food insecure continent, is imperfectly represented. Only people living in Nigeria and Kenya were polled from Sub-Saharan Africa — and I say this knowing full well that nearly one in five Africans is a Nigerian — while six EU countries were included in the poll, along with the three NAFTA countries.
Quibbles aside, the report is a fascinating read, the largest, most up-to-date survey of its kind. The most important thing is that it wants us begging for more.
As the press write ups point out, clear majorities of people in every country polled — excluding China — claim they have been affected “a great deal” or “a fair amount” by rising food and energy prices. (Of those stubborn Chinese, 52 percent of respondents claimed they were affected “a little.”)
Of people polled from developing countries, nearly everyone admitted they have been affected “a great deal.” That includes 98 percent of those polled in the Philippines, along with 96 percent in Kenya and Indonesia and 95 percent of Nigerians.
Secondly, the report questioned whether people were eating less due to rising food prices. A surprising quarter of Americans and British admitted so, along with 61 percent of Kenyans and nearly six in ten Nigerians. The highest rate goes to Filipinos and Panamanians, where 63 percent acknowledged taking in fewer calories due to higher food prices. Surprisingly, 34 percent of Chinese said they were eating less food, putting into question their answers regarding how much they are affected.
Let’s get back to caloric intake. Jokes aside about American obesity and their penchant for super-sized fizzy drinks, we must ask the question: are all calories eaten equally? The simple answer is a big fat No. My point is lessened because I have to use extremely old data, but we find that the richer the country, the more calories people eat. That’s not rocket science. In 1995, Nigerians ate an average of 2,312 calories while people from the Philippines took in 2,375. On the other hand, the French brought in 3,465 calories per day and Canadians chowed down 3,482.
The more complicated answer is, well, more complicated. Just because a country has a low caloric intake doesn’t necessarily mean more people are going hungry. Rather, it has to do with their population. The World Health Organization argues countrywide caloric intakes are averages that have to take into account the number of children within the population. If a country has a disproportionately high number of younger people — a common feature of poorer countries — the average daily caloric needs fall because children may need more calories per pound, but they don’t need nearly as many calories as adults. More children skews the average needs downward.
One interesting point: Looking at many disparate countries through only caloric averages, the New Internationalist argues (as it did in 1985) countries may not necessarily regress toward the mean of caloric consumption. In fact, just the opposite may happen: Averages cloud the fact that undernourishment and over-consumption are more marked than suggested.
A subset of this issue concerns people changing their diet due to rising prices. This is important because one of reasons food prices shot up was increased demand for certain types of food in developing countries that were becoming richer. Those upwardly mobile sectors, the argument goes, demanded different (read: more expensive) foods: namely, meats, higher protein cereals and other expensive items. This demand temporarily outstripped supply and prices rose. If you believe this theory, then, would its reverse be true? Of those who originally changed their behavior and ate a more globalized diet, how many would simply change back and eat local foods again if imported food became more expensive?
The report doesn’t go into that level of depth, but some interesting facts surfaced. First, a majority of respondents in only a handful of countries admitted to changing their diets: Panama with 71 percent; Mexico, 57 percent; Egypt, 67 percent; Kenya, 64 percent, and Philippines with 63 percent. On the other hand, a whole host of countries — Brazil, Costa Rica, Russia, Lebanon, UAE, Nigeria, Indonesia, Pakistan, India and South Korea — reported just the opposite: A majority of respondents claimed their diets remained much the same.
What we don’t know is why. Of those eating new foods, how many of them are upwardly mobile people moving back to local foods? Or, are poorer people stepping down even further on the food chain, perhaps foregoing imported rice for the local stuff? On a country level, what about places that were once dependent on imports for their foodstuffs? Are they now moving back towards buying supplies from local or regional farmers? Finally, for those who didn’t necessarily change their diet, is it because their local food network is better developed than others?
As I said, this report is something of a breakthrough, finished in lightning fast time for any global survey. Those responsible should be commended. However, it may be time for others to step up and start filling in the details.
The long and the short of rising fertilizer prices
As harvests begin to dribble in throughout the northern hemisphere, farmers looking ahead to next season’s prices have begun to notice a disturbing trend: fertilizer prices remain high at a time when modest demand should be driving costs downward. While it’s true that fertilizer rates have come down from a few months before, places like corn-belt in the United States, and throughout Europe and Canada, the story remains the same: prices remain high compared to last season.
Part of the problem, experts say, is that synthetic fertilizers take a lot of energy to make. Prices for potash, nitrogen and rock phosphate, key fertilizer ingredients, are still increasing. The reasons behind the high cost of fertilizer are many, however. The devaluation of the U.S. dollar, along with rising energy costs, freight costs, higher steel and equipment prices, a shortage of specialized labor and a “historical lack of investments in the fertilizer industry,” argues the International Fertilizer Industry Association.
Demand is also up. As farmers around the world have cranked up input use more than 30 percent since 1996 (driven by a more than 50 percent increase in developing countries), the next five years should show a 3.1 percent annual growth for fertilizer consumption, the IFA says. Supply, however, will only grow by about 2.7 percent per year. The group did not remark how this would affect prices in the medium- to long-term.
What the group points out is that a scarcity of resources — nitrogen, phosphoric acid, potash and urea — is not the cause for the shortfall in supply.
From the IFA’s annual conference, which took place in mid-May:
There are sufficient raw material resources to meet, for several generations, the needs of the fertilizer industry and the nutrient requirements of farmers and breeders worldwide, using current production technology and advanced exploration and extraction technologies. However, these resources are not immediately available, as considerable time and large investments are required in order to access and develop economic reserves.
As more fertilizer factories are rushed online and oil prices fall from record highs reported a few months back, farmers hope that fertilizer prices may start to drop off. However, that may not happen until February or March. If it happens at all. Some farmers in Canada are expecting prices to double in the coming months.
This uncertainty has left some governments to take matters into their own hands. In Kenya, which has a short rainy season quickly approaching, the government has begun stockpiling inputs in an attempt to keep prices low for local farmers. An agriculture minister in Pakistan has threatened to confiscate fertilizer stocks and sell them to farmers at reduced prices if the country’s fertilizer industry goes ahead with planned increases. The two largest fertilizer users, China and India, spend an awful lot of money — in 2007, $3.7 and $5.3 billion respectively — subsidizing fertilizer producers and prices to help farmers bring soil fertility levels up to levels with the rest of the world. Indonesia previously asked farmers to move to organic fertilizers as world prices increased. Now the government will provide funds for farmers to create their own inputs.
Things brings up an interesting point from the IFA: Countries with subsidy schemes for fertilizer generally are less affected by the steep price hikes; an argument underscored in Malawi, where the government went against the World Bank and USAID and began providing subsidized, i.e. cheaper fertilizer for its farmers with generally excellent results.
The birth of origin labeling in the United States
Mandatory food labeling took effect in the United States on October 1, forcing retail establishments to designate the country of origin to a host of meat, fresh vegetable and fruit products.
The law, called the Country of Origin Labeling, or COOL, originally stems from the 2002 Farm Bill, but Congress delayed its implementation except for wild and farm-raised shellfish and fish. This year’s Farm Bill, passed over the veto of President George Bush in late May, called for the expansion of COOL into the following food categories: beef and veal, lamb, pork, chicken, goat, perishable agricultural commodities, peanuts, pecans, ginseng, and macadamia nuts.
The rules stipulate that all food retailers — those selling more than $230,000 worth of perishable agriculture commodities — must label these products with a stamp, mark or whatever denoting its country of origin. The Packer quotes a USDA official claiming the total bill for implementing the measure could run around $2.5 billion.
As USDA points out, food service establishments are specifically exempted from the program. (So don’t go betting where your Quarter Pounder with Cheese hails from.)
Retail outlets have six months to come into compliance. At that time, USDA could begin fining stores not properly labeling the perishable goods. However, the Packer noted in 2007, USDA surveyed nearly 1,600 stores to gauge compliance of the shellfish and fish labeling rules and found 540 of those showed violations. In fact, retail outlets with violations often had more than one. By rule, retailers had 30 days to correct the infraction. Not one was fined.
Why COOL?
Following the 2006 E. Coli outbreak involving freshly bagged spinach, if there ever was a time for product labeling, it is now. The Food and Drug Administration has largely failed in its duty to ensure safety of the country’s food, says a government overseer. This comes at a time when Americans are eating more fresh produce than ever before. As it reads, COOL has two primary responsibilities in this area: providing product information to consumers and marketing opportunities for producers.
From the BND, serving Southwestern Illinois and St. Louis.
“If a food safety problem is identified in a particular imported product, as happened with jalapeno and serrano peppers from Mexico earlier this year, then consumers will be able to avoid that product,” says Jean Halloran, Director of Food Policy Initiatives for Consumers Union, nonprofit publisher of Consumer Reports. “On the other hand, some people like to buy certain imported products, like New Zealand lamb or Holland tomatoes. Still others just want to buy local produce. Either way, the new labels will give consumers important new information.”
USDA points to anecdotal evidence that food retailers have pushed off the responsibility of labeling to producers, forcing products to have labels before they enter the store. USDA admits its rules run pretty loose with labeling designations, allowing firms to use such marketing terms as: Pride of New York, Jersey Fresh, Vermont Seal of Quality, Massachusetts Grown, Ohio Proud, Kentucky Proud, and New Mexico Grown with Tradition.
Loopholes aplenty
Most commentators of COOL have found it to be chock full of loopholes and inconsistencies.
USDA itself has pointed out two separate issues.
1. Fruit salads with different types of melons
2. Salad mixes with various types of lettuce
In the first case, melons of different varieties (watermelon, honeydew and cantaloupe) have different grade standards, so they will not be subject to country-of-origin requirements when they are mixed together.
Secondly,
Because there are separate U.S. Grade Standards for iceberg lettuce and romaine lettuce, this type of salad mix will not be required to be labeled with country of origin information. While the Agency previously used this example in the preamble of the August 1, 2008, interim final rule and concluded that such a salad mix would be subject to COOL, based on questions received during recent outreach sessions, the Agency now believes the use of U.S. Grade Standards in determining when a perishable retail item is considered a processed food item provides a bright line to the industry.
One of the major loopholes regards processed foods. Again, back to USDA rules:
[Agricultural Marketing Service] has defined a processed food item as a retail item derived from a covered commodity that has undergone specific processing resulting in a change in the character of the covered commodity, or that has been combined with at least one other covered commodity or other substantive food component (e.g., chocolate, breading, or tomato sauce). Specific processing that results in a change in the character of the covered commodity includes cooking (e.g., frying, broiling, grilling, boiling, steaming, baking, roasting), curing (e.g., salt curing, sugar curing, drying), smoking (hot or cold), and restructuring (e.g., emulsifying and extruding).
Q. Do processed food items require country of origin labels?
A. The COOL law contains an express exclusion for an ingredient in a processed food item. Thus, retail items that meet the definition of a processed food item do not require labeling under the COOL interim final rule. However, many imported items are still required to be marked with country of origin information under the Tariff Act of 1930 (Tariff Act). For example, while a bag of frozen peas and carrots is considered a processed food item under the COOL interim final rule, if the peas and carrots are of foreign origin, the Tariff Act requires that the country of origin be marked on the bag. Likewise, while roasted peanuts, pecans, and macadamia nuts are also considered processed food items under the COOL interim final rule, under the Tariff Act, if the nuts are of foreign origin, the country of origin must be indicated to the ultimate purchaser. This also holds true for a variety of fish and shellfish items. For example, salmon imported from Chile that is smoked in the United States as well as shrimp imported from Thailand that is cooked in the United States are also required to be labeled with country of origin information under the Tariff Act.
If you’ve got that, here is a short list of oft-quoted products excluded from the COOL labeling requirements: teriyaki flavored pork loin, roasted peanuts, breaded chicken tenders, marinated chicken breasts, a salad mix that contains lettuce and carrots, and a fruit cup that contains melons, pineapples, and strawberries.
The Wheel of Meat
Meats provide another issue. If a packer or supplier, USDA says, processes meats or muscle meat products from a variety of countries, it must give that meat a mixed origin claim, such as: Product of U.S., Canada and Mexico. According to the newspaper BND, this has not gone over well with some consumer groups or members of Congress.
The American Farm Bureau Federation has protested the loophole, as have 30 U.S. Republican and Democratic senators, including presidential candidate Sen. Barack Obama.
“It is not the intent of Congress that all U.S. product or such product from large segments of the industry be combined with the multiple countries of origin category nor was it dictated by statute,” states a letter from the senators to Secretary of Agriculture Ed Schafer. “The purpose of COOL is to clearly identify the origin of meat products, providing consumers the most precise information available. This interim final rule, if left without clarification and proper guidance on this issue, has the real possibility of undermining the program….”
So far, the USDA hasn’t tightened the rule.
In the Grand Island Independent, John Hansen, President of Nebraska Farmers Union, feels the rule is too strict, claiming that if one imported animal is processed the same day as U.S. beef, all products will get a multiple origin tag.
Farmers market, here I come?
Finally, at the Seattle PI, a blog called Secret Ingredients, written by Andrew Schneider, an investigative reporter for the paper, argues that all the labels in the world won’t be worth anything if no one actually follows up on the veracity of these claims.
In theory, the labels are suppose to help FDA and USDA investigators find the source of tainted produce or meats more quickly when there is a disease outbreak.
But two government investigators I spoke with this week questioned who would be ensuring the accuracy of the information on the label?
“The flour or grain could say “Produced in Brazil,” when it actually came from China,” explained one of the food detectives. “It could take weeks to determine where it really came from. Meanwhile, consumers will continue to eat the salmonella- or E. coli-contaminated food.
“Meanwhile, I’m buying all I can at my farmer’s market,” he added.
As the EU scales back biodiesel, will Africa pick up the slack?
An Interview with Laurens Rademakers on the EU’s possible new renewable energy requirements and how a bioenergy pact with the global south may be a win-win.
Sometime in early October, the European Parliament is expected to scale back the continent’s use of homegrown biodiesel. If the measure passes — as is likely — it will, in effect, relegate European-grown biodiesel like rapeseed to the backdrop in the continent’s fight for finding alternatives to oil and combatting global climate change.
The vote also marks the culmination of an approximately 10-month fight against these temperate forms of biodiesel, which became enmeshed in the struggle against rising food prices. How could rich countries lavishly subsidize farmers, the argument goes, to grow crops for fueling automobiles on perfectly good farmland when a dearth in the world’s food supply has elevated food prices everywhere? In the EU, this argument had a much greater effect on the political process than in the United States, which largely sees biodiesel as an alternative to oil. (See this post.)
The measure the European Parliament will likely adopt calls to maintain the 2020 target that stipulates 10 percent of vehicle fuel must come from renewable energy sources. Instead of leaning on traditional biofuels, however, two-fifths of the target should come from other forms of green technology, like hydrogen cars, solar and wind power.
In my mind, the measure doesn’t consider how Europe is going to ween itself from oil, which an inordinate amount is burned for transport. (As one biodiesel proponent pointed out, “[I]f all cars were to become electric overnight this would not increase by a comma the use of renewables in Europe…”)
So how will the difference be made up? By the EU’s own reasoning, it will have to import up to 20 percent of the biofuels it uses to make its set requirements. One faction in this debate has looked at crops grown in tropical climates, plants like miscanthus and jatropha, which are more efficient than rape seed and corn (which is the principal ingredient in ethanol in the United States.) There’s more to the debate than plant efficiency. If these plants are as good as advertised, they may provide a key for rural development, an ongoing issue in Africa, where even after decades of rapid urbanization, nearly seven out of ten Africans remain in rural areas.
With all this in mind, I spoke to Laurens Rademakers on biofuels in Europe and Africa and how things may be changing very soon.
Laurens Rademakers is a natural resource management consultant with a emphasis on extractive industries in Central Africa. He is the managing director of the Biochar Fund, which Rademakers describes as “a social profit organisation which aims to help poor farmers at the tropical forest frontier to improve their food security and energy security, while reducing deforestation.”
A Hungry Mob: What do you think of the upcoming European Parliament vote that will change EU biodiesel requirements?
I hope MEPs will lower the biodiesel targets and eventually phase the fuel out, because producing liquid fuels from biomass is not the most interesting way to use farm land - not in Europe nor in other countries. It is much more efficient to use farm land to produce biomass that can be used to co-generate power and heat. MEPs should encourage a transition to electric transport, so that biomass can become a baseload power source coupled to intermittent renwables like wind and solar.
Electric transport has many advantages over vehicles powered by internal combustion engines. A transition to electric transport would make the use of biomass much more interesting. Using biomass in co-gen plants gives you much more bang for the buck, both in terms of emissions reductions, conversion efficiencies and productivity.
Next up was an argument, pointed out at length here, that we need to live with potentially inefficient technologies in order to build, like a stepping stone, towards better practices.
AHM: What do you think about the argument that biodiesel requirements towards EU-grown crops like rapeseed are a necessary evil to create the incremental technological evolution towards more sustainable homegrown methods in the future?
This is a flawed way of reasoning. There is absolutely no connection between the biodiesel processes used to make fuel from vegetable oils (i.e. transesterification), and the thermochemical or biochemical processes needed to make green diesel out of lignocellulosic biomass - so-called next-generation biofuels.
The idea that we Europeans should promote the production of a low-yielding oilseed crop only to put the oil in our tank, is almost unbearable given the fact that there’s a multitude of far smarter alternatives. If we really have to produce inefficient liquid biofuels like biodiesel, then at least let us make them from oilseeds that can be grown on marginal land by small farmers who would stand to benefit from it - like jatropha.
The support for homegrown biodiesel in Europe is nothing more than a lavish subsidy for wealthy European farmers who don’t really need to be made richer than they already are. Let’s not forget that the EU spends tens of billions of euros on supporting its own farm sector. Our subsidies may have made sense right after the Second World War, when there was a real risk of food insecurity. But 50 years later, there’s not a single rational argument in favor of continuing this practise.
It’s sad to see that biofuels, and the false argument that first-generation fuels are a stepping stone to next-generation fuels, have become a way to perpetuate the lavish subsidy regime that only benefits large, wealthy, agro-industrial farmers in the Union.
I first came across the work of Mr. Rademakers after he proposed a bioenergy pact with the global south in this letter to EurActiv. He argued that nations in the tropical belt could produce more efficient, more sustainable crops for biofuels than Europe. To make this pact come about, the EU needed to “reduce trade barriers for biofuels, support technology transfers and courageously couple its own green energy policies to development assistance for Africa and Latin America.”
AHM: What would a bioenergy pact with the global south look like?
Well, such a pact could be based on different steps and concepts. Let me first say that the production of bioenergy ranks rather low on a long list of energy, land-use, and socio-economic priorities. There are more important issues, like trade reform, like promoting conservation and energy efficiency, or like protecting tropical rainforests and their ecosystem services.
That said, we would encourage a pact that would have the following elements:
1. The EU would begin by transferring agricultural and bioenergy knowledge, science and technology to the South. These transfers are needed to help farmers there make the most of their natural resources, both in terms of food and fuel production.
2. The EU would also encourage the creation of intermediate products and high-value bio-products. Farmers and producers in the South should not get stuck in the old paradigm which says that they should only export raw materials as commodities to producers in the North, who then get to make much bigger profits by adding value.
3. An equally important step would be to phase out farm subsidies in the EU, as well as subsidies for biomass energy and bioproducts. That way, farmers and producers in the South can compete in earnest, by exporting products like torrefied biomass pellets or green platform chemicals. Trade reform must be agreed on within the context of the WTO Doha round, which seems to be lingering on in a rather comatose state.
4. Last but not least, a comprehensive sustainability framework would be created that allows consumers to assess the social and environmental sustainability of the bioproducts they use.
If all these phases and ideas are implemented, farmers in the South would be looking at a more balanced and fair relation with the wealthy West. They could then help us achieve our renewable energy targets, while using the revenues they make from exporting bioproducts to invest in making their own farming practises more sustainble.
In the end, bioenergy must be looked at on an almost “planetary” scale: in which region does the use of land for the production of biomass have the least negative social, environmental and economic impacts? Formulated positively: where can the production of biomass help the largest number of people in the most efficient way? That’s the primordial question. And policies should be built around the answers to this question.
AHM: What about the present problems of growing biodiesel crops in Africa? For instance, food security in low-income, high-import countries? Or, the gold-rush attitudes of biodiesel firms as reported by Der Spiegel:
“In none of these places are the needs of local residents taken into account. In Ghana, BioFuel Africa wrested away land clearing and usage rights from a village chief who could neither read nor write…The weekly newspaper Public Agenda felt reminded of the ‘darkest days of colonialism.’ …In Tanzania, while there are hopes, there is also plenty of reason to be skeptical about promises that everything will improve.”
Look, all technologies and production processes can result in abuses. Bioenergy as such is just a way of using sunlight, soil, water and seed for a particular purpose. Doing this has no ideological agenda, people have been doing it since the invention of fire. Most people on the planet rely on biomass for their daily energy needs.
So let’s not blame bioenergy for these abuses. Let’s blame the current modes of production at work in the global capitalist economy, as well as the way in which African elites treat their own populations. It is the social and economic relations which determine whether extractive industries are to the benefit or to the detriment of people.
To make farming (whether for food, fuel, fibers or forest products) work, you need to play things in a fair way. Land reform and land rights for small farmers are critical for agriculture in Africa. We must also encourage much more transparency in large extractive industry contracts in which governments and large companies are involved.
It is good of our media to draw attention to the abuses in agriculture, forestry, mining or the oil industry in developing countries. But there’s nothing inherently wrong with agriculture, mining or forestry as such, I think we can all agree on this. So let’s separate these issues: the social, political and economic realities in which these activities occur, and the use of natural resources as such.
AHM: What do you think about the argument that the EU must move quickly on securing alternatives to oil and halting climate change, while the same time claims exist that it may take until 2015 until biodiesel plants can be grown commercially in many African countries?
I wouldn’t encourage the production of oil crops for export or biodiesel in Africa, except for local use. For example, it would make a lot of sense for many farmers in Sub-Saharan Africa to use locally-produced biodiesel to transport their farm products to market. High oil prices are having a catastrophic influence on these farmers, who already find it difficult to merely survive. But growing first-generation biodiesel crops for export to Europe is not efficient. It is much better to grow high-yielding energy crops to convert them in high energy solid biofuels (like torrefied
pellets), and export these for use in co-generation power plants the electricity of which is used in electric transport. The African farmers would use the profits from their sales to invest in their own livelihoods. Bioenergy is an excellent opportunity for them to escape the trap of relying
on one or two cash crops only. Bioenergy diversifies their opportunities. Obviously, everything said here should only be encouraged as long as it is part of what was described earlier as a ‘bioenergy pact’.
So to answer your question: let the EU phase out biodiesel targets, and instead encourage the production of energy crops that yield far more bang for the buck, both in terms of biomass productivity, biomass conversion efficiency and greenhouse gas reductions. These crops, like Miscanthus, to give just one example, can be grown right now, today, with minimal investments. It doesn’t take 5 to 10 years to establish this type of crops. It takes 1 year. I have worked together with a farmers group from Côte d’Ivoire, who want to grow miscanthus, torrefy and pelletize the grass, and ship it to Europe, where it would be used in power plants. They can do it today, and they can’t wait to do it. This is the way forward, I think. Not liquid biofuels.
Price fixing in the U.S., market concentration throughout the world
The Wall Street Journal reports the U.S. justice department is investigating two price fixing schemes by food distributors: a group of egg breeders and California tomato producers. This scrutiny comes on top of other federal probes into price fixing of the fertilizer industry, the cheese and milk trades and a now closed investigation amongst citrus growers.
Experts have claimed the global food price crisis of 2008 — which has also hit the U.S. — has been caused by higher oil prices leading to increases in transportation costs along with a spike in demand from developing countries for high-priced commodities at a time when many harvests have been of either poor or moderate growth. In the U.S., the problem of rising food prices is exacerbated by the increased concentration in the food industry over the past three decades, which has greatly decreased competition.
From the story:
“When big guys get bigger, it makes collusion easier,” said Peter Carstensen, a University of Wisconsin law professor who has testified in Congress on competition in the food industry.
Under U.S. law, it’s a crime for competitors to collaborate on production or prices. However, many farm groups and cooperatives are allowed to work together under antitrust exemptions such as the 1922 Capper-Volstead Act. The act, one of a web of loopholes carved out over the years, was originally meant to help small farms bargain with big processors. Egg and tomato producers say their cooperation is shielded by these exemptions. In stepping up enforcement in food, prosecutors are signaling a new willingness to test these exemptions’ limits.
Through reporting and research, reporter John R. Wilke claims the United Egg Producers, a group with more than 250 members with little international experience, began exporting farm fresh table eggs at the tail end of 2006 to countries in the Middle East and Europe at below market costs. These exports, accounting for about 24 million eggs, or two percent of U.S. output, decreased domestic supplies enough to drive up prices nearly 40 percent during the previous year.
The big quote comes from Gene Gregory, the group’s executive director: “[I]t is amazing how one or two percent can have an effect on the rest of your domestic price.”
Simply amazing.
Tomatoes, too?
The federal government’s price-fixing probe on tomatoes expanded after the FBI began investigating a consultant to a large tomato processor who allegedly attempted to bribe buyers at six major food companies to purchase tomato products above market prices.
This summer, the tomato industry faced an unfounded scare that fresh tomatoes could be contaminated with salmonella. Nonetheless, tomato prices increased 16 percent on the year while other food in the U.S. climbed six percent, the WSJ points out.
The site ConsumerAffairs.com has evidence of a possible price gouging scheme in New York City that has gone unnoticed by state officials.
Truman Lewis reports:
Milk prices have been a particularly sore point with many consumers, especially in New York City where shoppers have been paying $4.49 or more for a gallon of milk. Earlier this year, the New York City Council issued a report charging that high milk prices were due to “significantly decreased” oversight of New York State’s Milk Price Gouging Law, resulting in citywide milk prices that are above the state-determined legal threshold.
In July, Danielle of New York City complained that she was charged $5.99 for a gallon of milk at the Amish Market on 9th Avenue. Maryellen said she also paid $5.99 at the Broadway Farms Grocery on West 85th St. Kim of Manhasset, Long Island, said she paid $4.19 at a BP station in Levittown.
Cynthia of Brooklyn told ConsumerAffairs.com, also in July, that she sent her son to the Produce and Meat Market on Livonia Avenue in Brooklyn to get ready-to-feed infant formula for her newborn baby. On July 23, the formula was $7.99. Two days later, it was $9.99, she said.
Market concentration
Let’s get back to market concentration for a moment, which appears also involve the other side of the food price debate by driving earnings down for developing world farmers. In its 2004 report, The State of Agriculture Commodities Markets, the Food and Agriculture Organization at the UN argued that international food markets are best described as having high levels of vertical integration. This is especially true for those looking to purchase high-value crops and processed products. For example, 40 percent of world’s coffee is traded by four firms. Half of the chocolate is sold by no more than six companies. Three global agencies control most of the largest markets for crushed soybeans.
The report notes:
Increasingly, these large companies dominate world agricultural commodity markets and wield direct and increasing influence on what is produced, and how.
However, this doesn’t have to be a bad thing. Think about quality consistency, more collaboration for farmers growing these crops in the realm of product development; finally, there is better financial assistance for those in this global food chain.
This may be true for those producers who are part of the new food chain. What about the rest?
This vertical integration in developing countries usually begins with ridding the state budgets of government-sponsored marketing boards, the organizations that transport and sell commodities abroad. (Here is a post I wrote in another life explaining marketing boards in the developing world.)
Once the marketing board is out of the way, it’s usually time for the multinationals to move in with their economic muscle to produce, ship and warehouse commodities abroad. The problem is, they often don’t have time for the little guys. The report provides the example of Kenya, where the huge flower and fruit trade has been a boom to the country. However, as exports increased throughout the 1990s and into this decade, the share of farmers with small plots of land contributing to those sales decreased.
The same story goes to the next link in the food chain: Supermarkets. This is an increasingly profitable and concentrated market where 30 different firms control about a third of the world’s grocery purchases. Like multinational producers, these super-supermarkets prefer to work with only a few selected suppliers. If you’re in, you’re golden. For those outside looking in, which are usually the smallest holders, life can become exceptionally more difficult.
Yet the FAO can’t tell how this integration has affected the prices farmers are getting for their commodities — because it is difficult to judge what an “appropriate” price may be.
Food prices and the U.S. bailout
On the Ask an Expert page at the UK site This is Money, one reader questioned whether the estimated $700 billion bailout for the beleaguered U.S. financial system would make it worse for those affected by high food prices.
“Yes,” came the (I think) unexpected response from Andrew Oxlade, editor of This is Money. “This is the very feint silver lining to the current clouds. The weaker the economy, the less demand there is for oil and other commodities.”
He points out that food prices are linked to the price of oil, an important ingredient in many fertilizers and pesticides — and a reason that these products have increased on average by 50 to 100 percent over the past three years. (I’d also add that the high cost of oil drives up transport and insurance prices, more costs that are passed on to consumers.)
Oxlade points out that oil has plunged from its $145 high to hovering around $90 before the big bailout was announced. However, all may not be so rosy on the oil front. Oil prices shot up to $120 just a day after the U.S. Congress put the estimated $700 billion loans together. The question is why. Was it because oil is traded on the dollar and the ballooning U.S. deficit driving down that currency? Or, are people worried this massive plan won’t jumpstart the global economy? On the opposite tack, do people think that the economy will start growing again, driving up oil speculation.
On top of economic woes, there is recent violence in crude-producing Nigeria, which creates a glut in supply. In the U.S., Hurricanes Gustav and Ike shut down U.S. processing plants, which are slowly getting back online due to power shortages.
Of course, the oil price hikes may be only a short-term situation.
Oxlade has also given himself an out: The markets of the Far East — especially China — will continue to grow, putting more demand on meat and other high-priced commodities. Thus, food prices will continue to escalate, but at a slower rate.
Unless, of course, they don’t.