Famine.
For us Americans, the word conjures images of heart-rending scenes from distant shores: the kind of images a sad-eyed Sally Struthers busts our chops about on late-night cable TV.
Famine is an abstract concept, a specter haunting not us, but distant ancestors and exotic-looking people in faraway lands. Of course, as Richard Manning drives home in his book Against the Grain, famines have riddled human society since the rise of agriculture 10,000 years ago. Teasing sustenance out of the land is tricky work; sometimes things go wrong.
Since the rise of industrial agriculture after World War II, no industrialized nation has experienced a proper famine. That’s why it was so jarring when William Doyle (CEO of the Potash Corp. of Saskatchewan, the world’s largest fertilizer company) raised the possibility in an interview with Bloomberg published yesterday.
Reacting to global grain stocks at their lowest levels since the USDA began keeping score in 1960, Doyle declared:
If you had any major upset where you didn’t have a crop in a major growing agricultural region this year, I believe you’d see famine.
This, even as industrial ag worldwide hits on all cylinders, cranking out more food than ever.
We keep going to the cupboard without replacing and so there is enormous pressure on agriculture to have a record crop every year. We need to have a record crop in 2008 just to stay even with this very low inventory situation.
As a result of tight supplies and surging demand, prices are on the rise. Bloomberg reports that soybean, corn, and wheat — the holy trifecta of industrial food production — are all trading at all-time highs. Wheat prices have doubled in the past year; soy has nearly done so as well. High raw-material costs are bleeding into prices at the grocery store — and fueling inflation in the broader economy. Reports Forbes:
Consumer inflation rose faster than expected in January, as the sharpest yearly increase in food prices in almost two decades pushed overall yearly inflation to a high not seen in more than two years.
What’s going on? Doyle, the fertilizer guy, points to the boom in biofuels and the shift to more meat-heavy diets in India and China as the factors behind surging grain use.What’s Doyle’s plan to fix the situation? More industrial agriculture. Bloomberg paraphrases:
Planting more crop land in Brazil and boosting yields from existing fields in China and Russia, where agricultural productivity has lagged behind the U.S. and Canada, may be needed to avoid food shortages, Doyle said.
“Planting more crop land in Brazil,” of course, means plowing up either virgin rainforest or savanna, destroying carbon sinks, blotting out biodiversity, and upsetting smallholder-farmer livelihoods in one swoop. As for “Boosting yields from existing fields in China and Russia,” well, that just means dumping more agrichemicals onto the land.
I have a different plan. Let’s stop using so damned much resource-intensive grain. Here’s how.
- Pull the plug on the government-mandated biofuel boom.
- Give the world a new paradigm for meat consumption by (a) eating much less, and (b) shifting from grain-heavy to pasture-heavy livestock systems.
- And for good measure, let’s reinstate a government-financed grain storage system — you know, as an insurance policy against famine.
In the meantime, there is good news within the gloom — if you hold shares in agribusiness companies. As investors digested news of tight grain stocks and ramped up ag production, they’ve been bidding up shares of the companies that sell farmers chemicals.
In trading on Tuesday, reports Bloomberg:
Potash, based in Saskatoon, Saskatchewan, rose C$7.90, or 5.3 percent, to a record C$157.25 … in Toronto Stock Exchange trading. Mosaic Co., the world’s largest producer of phosphate fertilizer, rose $6.18, or 6 percent, to $109.55 in New York. Agrium Inc., the largest retailer of crop nutrients in the U.S., rose C$3.22, or 4.9 percent, to C$69 in Toronto.
Awesome!
