Reading Time: 6 minutesI recently said that the words of those who criticize Laudato Si’ have no substance. Now I’ll try to be more specific. Laudato Si’ is a rebuke of current practices, including agribusiness, but it is not the only warning voice. In this post, agribusiness meets reality.
The human population will reach 9 billion people by 2050, even if we manage to slow the birthrate. The world has never had this many people before. We have to plan according to the facts we have. I will argue that if our goal is to support the projected number of people, our first priority should be food and water. But so far, agricultural policies are not moving in that direction.
Arable land is decreasing
Currently, we don’t have enough farm land to feed 9 billion people. It is estimated that we need to increase agricultural land by 65-85 million hectares over the next decade. At 160-210 million acres, this is equivalent to approximately 50% of all U.S. cropland. It may not seem like much compared to the total area being farmed globally, (1,410 million hectares) but arable land is decreasing. We are losing 10-12 million hectares each year to urbanization and desertification. Much of this loss is due to agricultural policies.
Agribusiness as Economic Warfare
The United States is operating on an agribusiness model for agriculture. How did this happen? After World War II, Secretary of Agriculture and Mormon apostle, Ezra Benson, wanted to drive young men off of farms and into low-paying industrial jobs in the North. His plan was for the business of agriculture to be carried out by a few big players. In other words, policy-makers used agribusiness as economic warfare. To accomplish these changes, Benson’s faction tore down FDR’s New Deal protections for farmers. One result of their efforts was the disappearance of parity, which assured farmers a living wage.
What is Parity?
Under the policy of parity, the U.S. government bought excess crops for a fair price and waited for a shortage, or higher prices. Then the government would sell the excess. This provided a living wage to farmers and also resulted in a profit for the taxpayer. Today, instead of parity we have subsidies, courtesy of the taxpayer. We also have shortages.[mfn]Hauter, Wenonah, Foodopoly: The Battle Over the Future of Food and Farming in America, The New Press, 2012.[/mfn]
According to AEW Capital Management, from 1975 to 2005 major agricultural commodity prices were stable, based on the marginal cost of production. In the event of a poor crop in a particular commodity, buffer inventories could meet demand. In that event a year or two of average crops would replenish inventories. This changed in 2005.
“In the face of rapid demand growth, global stocks of key crops have been depleted to the point where there is no longer any practical buffer. Globally, stocks of coarse grains and oilseeds have been at historically low levels for the past five to six years. After 2005, if there was a poor crop (or even just an average one), someone somewhere in the world simply did not obtain that commodity. In short, in order to balance supply and demand, demand has to be rationed, and the only way this occurs is through pricing.”
Seeking Alpha
The effects of harmful policies on U.S. farmers are now being felt by farmers around the world. This is a problem for many reasons. Small farms improve the land and protect the ecosystem. Agribusiness, on the other hand, depletes the land. And by establishing monocultures it invites new types of pests and diseases. It also destroys the jobs associated with small farms. Finally, agribusiness can be a violent business.
IMF, World Bank, and Other Culprits in Ukraine
The fight over agricultural land is acknowledged as a major motivation for the conflict in Ukraine. And the culprits aren’t limited to U.S. companies. Germany is in on it. So is Finland and China. And their questionable activities are promoted by the World Bank and the IMF. But there are those who argue that it’s the other way around; the conflict caused the dispute over farmland. A Reuter’s article implies that military turmoil dictates that governments open farmland to foreign investment:
“Ukraine, known as Europe’s bread basket, has the eighth largest agricultural area in use globally and is the world’s third largest exporter of corn and sixth largest grain grower, potentially making it a prime target for foreign investment.
“But the government has been wary of allowing foreign land sales, fearing rural unrest, and the value of its 32 million hectares (79 million acres) of farmland has been limited by its division into small plots with relatively low productivity.
“However economic turmoil emanating from the conflict between pro-Russia rebels and government forces in the east has intensified the need for change, said Heinz Strubenhoff, agribusiness investment manager for the World Bank’s International Finance Corporation in Ukraine.
“Opening the farm sector, a key driver of the economy, to outside investors has long been backed by the World Bank and International Monetary Fund (IMF), and Strubenhoff believes changes will now happen sooner rather than later.
“’It’s time to think about privatization. They need to prepare everything to allow for farm land sales (to foreign and domestic investors) in three to four years,’ Strubenhoff told the Thomson Reuters Foundation.
“Currently, farm land cannot be bought or sold in Ukraine, but companies can sign onto long-term leases with small holders.”
The Conflict in Ukraine is a smokescreen for the theft of farmland
However, the corporate drive for foreign farmland is actually a motivation for conflict rather than an outcome of it. The Oakland Institute recently reported that German lawmakers are calling the conflict in Ukraine a smokescreen for the seizure of high-quality cropland by foreign firms funded by the World Bank and the European Bank for Reconstruction and Development. Birgit Bock-Luna, who heads the office of Niema Movassat, told RIA Novosti (Sputnik News) that “a group of representatives had officially inquired with the German government on the actions of Germany’s state-run banking group Bankengruppe KfW. [It is believed that] this banking group is behind the seizure of Ukraine’s arable lands, some of the best in Europe.”
Ukraine has a temporary ban prohibiting the sale of farmlands to foreign entities until January 2016. But German agricultural concerns – AGRARIUS AG, germanagrar CEE GmbH, KTG Agrar SE, Agroton and Alfred C. Toepfer International (ADM) – seize land using leasing schemes and generous loans from German and global money lenders.
And according to Bock-Luna, the Ukrainian government that came to power in Kiev after the coup has been actively giving away farmland in return for loans from international creditors.
“The previous Ukrainian administration was opposed to further relaxation of agricultural laws, but this changed after the coup, with the help of the World Bank and the European Bank for Reconstruction and Development,” she added.
Governments Buy or Lease Farmland in Other Countries
There is growing interest in farmland in other parts of the world as well. A 2011 Al Jazeera article cites a 2008 report by Grain, an international non-governmental organization working on behalf of small rural food producers. According to Grain, China, Egypt, Japan, South Korea, Saudi Arabia, India, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates are all buying or leasing fertile land in other countries where food is not always abundant.
“Cambodia, which receives aid from the World Food Program, has leased rice fields to Qatar and Kuwait, while Uganda has granted concessions on its wheat and maize fields to Egypt, and interested parties from Saudi Arabia and the United Arab Emirates are making approaches to the Philippines.”
In addition, some land purchases in Ukraine, Senegal, Nigeria, Russia, Brazil and Paraguay, by banks and financial institutions, are of a speculative nature.
It is disturbing that instead of a discussion about the implications of these practices for the future, the critics of Laudato Si’ give us warmed-over economic theory. They would like us to believe they merely object to the degree of agricultural change that has been suggested. However, it’s obvious that their goal is to head off change completely.
Agribusiness Meets Reality in the 2016 Election
Animal husbandry is another part of the problem. Livestock competes with humans by consuming a large percentage of the crops humans produce. But the global consumption of meat is increasing due to higher standards of living in developing countries. This must be reversed. If everyone ate as much meat as Americans, we would need several earths to support everyone.
President Obama was trying to decrease livestock farming recently when he suggested that Americans should eat less meat. This is the kind of change we need. However, the Republicans objected to Obama’s suggestion and the Democrats were not as supportive as they should have been. Hilary Clinton is considered the frontrunner in the upcoming presidential election. However, the Clintons have a poor record in the areas that will be the most sensitive in the future: Bill Clinton signed off on NAFTA and the WTO, and currently the relationship between Hilary Clinton and Monsanto is too close for comfort.
The foreign agribusiness concerns that support the Clinton foundation are even more worrisome, largely because they are displacing African farmers.[mfn]Pearce, Fred, The Land Grabbers:The New Fight Over Who Owns the Earth, Beacon Press, Boston, 2012[/mfn] We can’t afford eight more years of these policies.
Conclusion
Agribusiness is so focused on profit it has created a self-serving loop of cheap commodities for processed food and animal feed. The result is that it produces crops overseas for its own use. The corporate model as we know it won’t solve these problems. It is inefficient, destructive, overindulged, irresponsible, disorganized and stupid. Corporate agriculture helps no one but itself.
This farming model not only destroys jobs, communities and the land, it pollutes water. If the rivers and oceans are further degraded, we won’t be any better off regardless of the additional crops we are able to grow. Furthermore, putting increased acreage into crops will only increase the possibility of environment degradation. Finally, if the livelihood of millions of people disappears through agribusiness technology and automation, they will starve regardless of corporate schemes to increase yield.
The next 30 years will demonstrate what the human race is made of. So far, the only course of action our business leaders can think of is to take us to war. Apparently their plan is to fight each other to the death for the last scrap of land. We need planning based on the facts and with the aim of finding a civilized way to cope with a serious problem.
Gresham College: Food Oppression