Feeding 9 Billion in the Media - Courtesy of Al Jazeera and CNN

 

Feeding 9 Billion in Graphs - Courtesy of the Economist and UN FAO

Feeding 9 Billion

The United States Department of Agriculture should end its support programs for domestic agricultural production. 70% of agricultural support goes to 10% of the farmers, which is almost entirely comprised of oligopolistic, multinational corporations. Farmers in developing countries cannot compete against products produced on subsidized farms in developed countries. Farming is one of the few economic sectors where developing countries are considered to have comparative advantage. Meaning, agricultural products could be produced cheaper in developing countries, whilst developed countries could concentrate on manufactured products and intellectual property. On top of which, agricultural support programs in the United States go to subsidize corn-ethanol biofuel production, which crowds out the land, labor and resources available for food-slated corn production. Global food prices have hit records highs this year after hitting records highs only three summers ago. The population of the planet is estimated to reach nine billion in forty years. In order to feed nearly a third more of the population in four decades, the Green Revolution of agriculture of the 1970’s will have to be replicated. Agriculture support programs distort market realities, artificially raise prices, and raise the barriers to entry into the system for farmers in developing countries. Combined with incentives for food producers to switch to biofuel production, these policies do not help the world and benefit the few at the expense of the many. In this age of austerity, the budget for farming support for the United States Department of Agriculture should be significantly cut, if not eliminated. These policies impede the success of the Doha Development Round, conflict with the principles espoused by the North American Free Trade Agreement and impede, not encourage, global economic development. Ultimately, one has to ask, “Are there any good reasons to support agricultural subsidies?” The answer is, No.[1]

Republicans achieved the highest gains in seats in the House of Representatives in the November 2010 on heals of austerity and government reform. Since the election, the bi-partisan Debt Commission has presented the results of its study to both houses of Congress. One of their recommendations included cutting $3 billion in agricultural subsidies.[2] The United States Department of Agriculture (USDA) has been supporting farmers since the Great Depression, when a sharp decline in the demand for commodities pushed commodities prices below the costs of production and forced many farmers out of the profession. And although the world is still recovering for the economic catastrophes caused by the Great Recession of 2008, the agricultural market today is much different from the market faced by farmers and policymakers alike in the 1930’s.[3]   

            While Republicans and the Tea Party Caucus are quick to propose cuts for education, service projects, maternity care and public broadcasting, their free market rhetoric ends when it comes to criticizing the USDA’s agricultural subsidy programs.[4] These programs are widely considered my proponents of trade liberalization as distorting the true market price of commodities.[5] Further, the USDA goes beyond merely subsidizing agriculture production. Farmers receive insurance guarantees, marketing support, export subsidies, import tariffs on agricultural products from abroad, protection from competition and guaranteed price floors for commodities. Invariably, these policies go beyond elevating food prices domestically, they create a whole-host of negative ramifications throughout the world.

            And here, one can draw connections to the modern-day revolutions throughout the Middle East. Although the popularity of the many of theses protests, whether in Egypt, Yemen, Tunisia or Algeria, stemmed from the lack of political accountability in governance, protesters sight the rising cost of food as one of their main grievances.[6] Global food prices spiked earlier this year above the previous heights set during the summer of 2008. Although in developed countries, food prices reflect a very small percentage of commodities fluctuations, commodities prices account for roughly sixty to seventy percent of food prices.[7]    

            The current spike in food prices, specifically wheat, has been attributed principally to the poor harvests in the Untied States last summer as a result of higher than expected temperatures, droughts and fires in Russia last year and proposed export bans in India and China to meet domestic demand, there is a correlation in the increase of commodities prices and market distorting measures by the United States and other developed countries.[8]

            The developing world and agricultural importing countries have demanded diminished support for domestic agricultural production by the Untied States, the European Union and Japan.[9] Initially, the United States cozied up to the idea of reducing its domestic support of agriculture during the era of free trade fostered by the ratification of the North American Free Trade Agreement (NAFTA), but continual dissatisfaction from the outsourcing of jobs by the American public has led many politicians to shy away from the espousing free trade.[10]

            Ironically, the Tea Party’s austerity platform has yet to sincerely consider cuts to the USDA agricultural support programs, despite ranging from $10 to 30 billion per annum. Comparatively small when compared to the budgets of other governmental agencies, but cutting agricultural support programs in all its forms could add hundreds of billions of dollars of growth and trade to the world economy. Possible growth figures range from slightly over one hundred billion dollars to the tune of half a trillion dollars. Further, these support measures were and still remain one of the points of contention for the resolution to the Doha Development Round.[11] 

            The Doha Rounds of World Trade Organization (WTO) negotiations on the future of global trade began nearly a decade ago following the September 11^th terrorist attacks. Then-US Trade Representative and now president of the World Bank, Robert Zoellick, sought to rally support behind the Doha Round as a means to bulwark Al-Qaida’s threat to the world economic order.[12] Ten years later, the Doha Rounds have stalled since 2008 after continued disagreement over agricultural subsidies bogged down the talks. Zoellick’s attempt to rally the world around the need to stand tall against the Al-Qaida threat failed miserably.

            Aside from domestic politics and the various interest groups associated in the agricultural sector in the Untied States.  Popular support for the maintenance of agricultural subsidies remains strong amongst several policy makers for fear of sabotage of the world food markets by would-be terrorists. These appeals to fear may reside with segments of the greater public, but besides extorting the threats Global Jihadism play on the agricultural production, they are not rooted in any semblance of logical thought.[13]

            Playing up fears over food security are as much of a threat to trade liberalization as the agricultural subsidies themselves. Terrorist conspirators could arguably sabotage everything that is traded; yet we do not subscribe to these argumentum ad baculum when it comes to importing electronics or automobiles, why should we do so when presented with these same arguments in agriculture? The ludicrous nature of these polices is demonstrated best by the recent trade row between Brazil and the United States. In 2002, Brazil appealed to the World Trade Organization to force the United States to discontinue illegally subsidizing the American cotton farmer to the tune of 1.5 to 4 billion dollars per year.[14]

 After nearly eight years of appeals by the United States to World Trade Organization, the WTO allowed Brazil to impose retaliatory measures. When Brazilian trade officials warned American businesses operating in Brazil that over 100 American products would be receiving higher import tariffs by the Brazilian government, these businesses turned around and lobbied the American government to send a trade delegation to Brasilia. Crisis adverted. Brazil dropped retaliatory measures on American products and the United States ended its subsidies to the American cotton farmer – not exactly. Instead of dropping subsidies or at least diminishing subsidies, US trade officials negotiated an annual $147 million subsidy to the Brazilian cotton industry. This subsidy would continue until the United States could satisfy Brazil’s original dispute of artificially propping up the American cotton farmer.        

The ludicrousness of American agricultural policies is not limited by recent trade deals orchestrated with Brazil; the broader implications of market distorting policies on agriculture are present in the current food crisis. The Obama Administration continues the Bush-era policies to encourage, through subsidies, the allocation of maize production for biofuels. Much was touted about biofuels in the wake of September 11^{th. [15]}They were deemed necessary to remove the dependence of the United States on oil from the Middle East. Under the theory that “authoritarianism breeds terrorism,” funneling money to Middle East autocrats who oversee the production of a significant share of the world’s proven oil reserves was counterintuitive to national security. Our national security was preserved by rerouting money from Middle Eastern despots to the American corn farmer for corn-ethanol production.

Ethanol from maize production inherently limits the amount of corn for food consumption. Last year twelve billions of gallons of corn ethanol were produced in the United States, which made a vast share of the biofuel production in the country. Currently, the government mandates that gasoline contain ethanol. Roughly between thirty to forty percent of the maize production in the United States is used for corn-based ethanol.[16] Unlike the Brazilian ethanol market based largely off sugar cane, the US ethanol market conflicts with a food staple for energy production. Brazilian sugarcane is more efficient than corn ethanol in terms of energy production; it uses less land and does not compete with food.[17] In order to preserve the indigenous corn-ethanol market, the United States placed a tariff of $0.54-a-gallon on Brazilian sugarcane-based ethanol. There are no such tariffs on imported gasoline, for example. Not only are corn-based biofuels less efficient than gasoline, more expensive than sugarcane and compete with food production land, the subsidization of corn-based biofuels by the United States raises the overall price of corn. Corn prices no longer reflect than price set by supply and demand, but reflect a higher price as a result of market distorting policies by the USDA.

Beyond any Brazilian-American trade disputes, there are serious policy implications from shifts to protectionism that have been witnessed in the United States since September 11. Every policy enacted has to pass the national security test. The difficulty with certifying whether or not something poses a threat to national security is that it is difficult to ascertain a common definition of national security across a broad range of interests. It may be in the interests of the American corn farmer for energy production to be done domestically via corn-ethanol, it may be in the interest for the American cotton farmer to maintain its market share of the global market at the expense of West African cotton producers and it may be advantageous for corn, rice, maize, soy and wheat farmers to receive disproportionate protection from the volatility of the commodities market, but is it advantageous for the American people? Is it advantageous for the world?

As stated previously, the benefits to limiting or eliminating agricultural support in developed countries float between a couple hundred billion to a half trillion dollars in increased growth of trade. These figures are disputed, as is determined by the breadth of their range. Mainly, because the arguments against the figures deal with what can be defined and what cannot be defined as a subsidy. Since, developed countries, like the United States, offer a broad range of support programs to agricultural producers beyond mere “subsidies” it is difficult to predict if x is cut, then y will occur when the proposed x cuts do not deal with full spectrum issues, i.e. total agricultural support, as opposed to subsidies, or direct payments in USDA terms.

Keeping this in mind, it is nonetheless tantamount that the United States, as well as the European Union and Japan reconsider their hostility towards diminishing and ending market distorting agricultural support programs. Farmers from developing countries cannot compete against a glut of subsidized agricultural products from the United States and other developed countries. The dire nature of the global food crisis requires governments of developed countries to restart and resurrect the Doha Talks.

The realities are such that there are no logical arguments for broad range agricultural support.[18]  The population of the world will reach nine billion by the year 2050 at current fertility rates. The Green Revolution in agriculture of the 1970’s will have to be repeated again in order to feed more people in the coming decades. Agriculture is a culprit and a victim of climate change. Methane emissions from cattle contribute the majority of agriculture’s 14% share of the total greenhouse gas emissions.[19] Climate change, by creating more extremes in weather cycles, is going to put pressure on future agriculture yields. A few multinational corporations that work as an oligopoly in the agriculture market are holding back reform in agriculture policy. The idea that domestic agricultural production needs subsidies in order to combat national security threats is a falsehood and grave misleading of the public. In this age of globalization, the tenuous holds to some American cultural phenomenon like the small, hard-working farmer need be relegated with the likes of the American steelworker. If Republicans and the Tea Party Caucus are sincere on austerity that they should start by curbing funding of these policies do not embody the free market spirit. The removal of agricultural subsidies and the shrinking of agricultural support programs; import tariffs, export subsidies, insurance guarantees and marketing aid, are a place where environmentalists, human rights advocates, free market libertarians and global trade advocates can unite. We should take advantage of this opportunity and remove this 20^th century policy from our globalized world.

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[1]http://aic.ucdavis.edu/research/farmbill07/aeibriefs/20070515_sumnerRationalesfinal.pdf

[2]http://online.wsj.com/article/SB10001424052748703805004575606643067587042.html

[3] http://www.downsizinggovernment.org/agriculture/subsidies

[4] http://www.politico.com/news/stories/0111/48097.html#ixzz1C3grT2kL

[5] http://reason.org/news/show/is-there-a-global-food-crisis

[6] http://marketplace.publicradio.org/display/web/2011/02/18/pm-high-food-prices-cause-concern-in-middle-east-/

[7] http://www.npr.org/blogs/money/2011/02/16/133744524/why-are-food-prices-going-crazy

[8] http://www.npr.org/blogs/money/2011/02/16/133744524/why-are-food-prices-going-crazy

[9] http://www.cfr.org/trade/doha-trade-talks/p10555

[10] http://prospectjournal.ucsd.edu/index.php/2010/04/nafta-and-u-s-corn-subsidies-explaining-the-displacement-of-mexicos-corn-farmers/

[11] http://www.reuters.com/article/2009/08/16/us-trade-doha-forecast-idUSTRE57F0KD20090816

[12] http://www.cfr.org/india/food-crisis-could-solve-doha-round/p16614

[13] http://www.cato.org/pub_display.php?pub_id=12771

[14] http://www.npr.org/templates/transcript/transcript.php?storyId=131192182

[15] http://www.nytimes.com/2005/01/22/opinion/22patterson.1.html

[16] http://www.npr.org/2011/02/25/134054231/what-recession-its-boom-time-for-nebraska-farms

[17] http://www.cato.org/pub_display.php?pub_id=12623

[18] http://freakonomics.blogs.nytimes.com/2008/07/24/the-illogic-of-farm-subsidies-and-other-agricultural-truths/

[19] http://animals.howstuffworks.com/mammals/methane-cow.htm

Bibliography

Daniel A. Summer, Farm Subsidy Tradition and Modern Agricultural Realities, Paper prepared for American Enterprise Institute project on Agricultural Policy for the 2007 Farm Bill and Beyond

Timothy A. Wise, The Paradox of Agricultural Subsidies: Measurement Issues, Agricultural Dumping, and Policy Reform. GDAE Working Paper No. 04-02: The Paradox of Agricultural Subsidies, May 2004

Cato Handbook for Policymakers, 7^th Edition, Section 18. Agricultural Policy.

C. Fred Bergsten, “Resurrecting Doha Round.” Foreign Affairs, December 2005 – WTO Edition.

Kym Anderson, Will Martin, and Ernesto Valenzuela, “ The relative importance of global agricultural subsidies and market access.” World Bank,World Trade Review (2006), 5: 3, 357–376

Rick Rellinger, “NAFTA and U.S. Corn Subsidies: Explaining the Dispacement of Mexico’s Corn Farmers.”  Prospect: Journal of International Affairs at UCSD. San Diego, April 2010

 Suggested Reading

Daniel A. Summer, Agricultural Trade Policy: Letting Markets Work Washington D.C.: AEI Press, 2005.

“World Food,” Financial Times Special Report, Financial Times, 25 October 2010

“The 9 billion-people question: A special report on feeding the world”  The Economist 24 February 2011

"Fariness in the Workplace and Fairness in Compensation" - Senator Dick Durban on Meet The Press

I used to respect Wisconsin. I admired Russ Feingold. He was one of the few senators to be outspoken about the Wars in Iraq and Afghanistan. He also worked with Senator John McCain on Campaign Finance Reform. But the spirit of La Follette's Progressives seems to be extinct in Wisconsin. The Tea Party movement that so eloquently swept the country in the Midterm elections has put people in power  in Madison who are not only inane, but impervious to any sense of reason.

The egregious actions of Governor Scott Walker against the rights of public sector workers to collectively bargain combined with the tax cuts passed by the Wisconsin legislature for multinational corporations demonstrate the full platform of the modern day Republican Party. This platform is fundamentally based on the dual subjugation of the middle class and further empowerment of the ultra elite in the nation.

The Tea Party Express unlike the movements of unemployed youth in Tunisia or Egypt was not predicated on social change, but on a retrenchment of the status quo, the status quo that was fundamentally delivered by the Reagan Revolution. Deregulation and limited taxation continued to be heralded by the right in this country as the “spoonful of sugar” for the American economy. They deny that Alan Greenspan's and Milton Friedman’s economic policies of limited government had anything to do with the current economic crisis.

Moreover, it is a magician's explanation of the financial crisis based on promoting home ownership for the poor and government regulation of the mortgage market that breeds the reasoning behind ending collective bargaining in the public sector. In other words, it was not the ill-advised business practices of the executives of General Motors that necessitated the government sponsored bailout, but wage, benefits and pension demands of the United Autoworkers Union.

With this reasoning, we can see why Governor Walker and the Republican-controlled Wisconsin State Senate are so impervious to negotiation. It does not matter that the Wisconsin teaching unions are willing to compromise on benefits and compensation, the real elephant in the room is the communistic, socialist workers unions that are weighing down on the Wisconsin budget, not the hundreds of millions in tax cuts passed earlier this year by the State Senate.

Understanding the Republican mentality it is no surprise that the next victims following the ousting of Russ Feingold, the Democratic governor and legislature are the public sector employees. Everyone knows that teachers and other public sector employees serve no purpose in Wisconsin’s society. And what the Republican party has demonstrated is the true nature of their party platform; taking benefits away from the middle class and giving more benefits to the ultra elite. I leave you with Paul Krugman's Op-Ed piece in the New York Times last weekend:

In any case, however, Mr. Ryan was more right than he knew. For what’s happening in Wisconsin isn’t about the state budget, despite Mr. Walker’s pretense that he’s just trying to be fiscally responsible. It is, instead, about power. What Mr. Walker and his backers are trying to do is to make Wisconsin — and eventually, America — less of a functioning democracy and more of a third-world-style oligarchy. And that’s why anyone who believes that we need some counterweight to the political power of big money should be on the demonstrators’ side. 

"The God That Fails" - David Brooks

Last month, we celebrated the fiftieth anniversary of President Dwight D. Eisenhower’s farewell address in which he warned us of “the acquisition of unwanted influence, whether sought or unsought, of the military-industrial-complex.”

That speech joined the litany of famous speeches given by presidents that are forever remembered, and seldom heeded. However, not all comments made by presidents or in our case, secretaries of state, become part of the library of high level remarks.  

In 2007, GQ Magazine interviewed former Secretary of State Colin Powell. In that interview, Powell criticized the aggravation of our fears in the post- 9/11 world. He states:

What is the greatest threat facing us now? People will say it's terrorism. But are there any terrorists in the world who can change the American way of life or our political system? No. Can they knock down a building? Yes. Can they kill somebody? Yes. But can they change us? No. Only we can change ourselves. So what is the great threat we are facing?

He continues:

Yes! We are taking too much counsel of our fears.

This doesn't mean there isn't a terrorist threat. There is a threat. And we should send in military forces when we have a target to deal with. We should also secure our airports, if that makes us safer. But let's welcome every foreign student we can get our hands on. Let's make sure people come to Disney World and not throw them up against the wall in Orlando simply because they have a Muslim name. Let's also remember that this country was created by immigrants and thrives as a result of immigration, and we need a sound immigration policy.

Let's show the world a face of openness and what a democratic system can do. That's why I want to see Guantánamo closed. It's so harmful to what we stand for. We literally bang ourselves in the head by having that place. What are we doing this to ourselves for? Because we're worried about the 380 guys there? Bring them here! Give them lawyers and habeas corpus. We can deal with them. We are paying a price when the rest of the world sees an America that seems to be afraid and is not the America they remember.

The only thing that can really destroy us is us. We shouldn't do it to ourselves, and we shouldn't use fear for political purposes—scaring people to death so they will vote for you, or scaring people to death so that we create a terror-industrial complex.

Powell goes on to outline a solution for the “terror” problem:

It should not be just about creating alliances to deal with a guy in a cave in Pakistan. It should be about how do we create institutions that keep the world moving down a path of wealth creation, of increasing respect for human rights, creating democratic institutions, and increasing the efficiency and power of market economies? This is perhaps the most effective way to go after terrorists.

Where did this most salient critique of the dangers of letting our society become too controlled by our own fear? Here, perhaps, in an expose by investigative reporters from the Washington Post, coined “Top Secret America.”

The top-secret world the government created in response to the terrorist attacks of Sept. 11, 2001, has become so large, so unwieldy and so secretive that no one knows how much money it costs, how many people it employs, how many programs exist within it or exactly how many agencies do the same work.

Some 1,271 government organizations and 1,931 private companies work on programs related to counter-terrorism, homeland security and intelligence in about 10,000 locations across the United States.

Last year, the government spent $80 billion on civilian and military intelligence activities, an increase of 7 per cent over the year before, and an additional $42.6 billion on the Department of Homeland security.

Further, commenting on this point in an Op-Ed published shortly after the failed terrorist attempt on the Christmas Day 2009, David Brooks highlights the most prominent foiled terrorist plots were foiled not by the Patriot Act, nor by the Transportation Security Administration, but by citizen initiative. Brooks’ argument is founded on a Libertarian belief in the spirit of the individual, but it nonetheless demonstrates our ability to be plagued by fear.

Essentially, Brooks is asking the question, “Are We Safer,” which, incidentally, is the same question asked by PBS and “Frontline” in an episode that aired last month.  It is a very difficult question to answer, but given the information of foiled terrorist plots since 9/11, certainly one can find it difficult to defend the need for the vast bureaucracies dedicated to our domestic safety, if not them, then at least the exorbitant amount of funds appropriated to them. Certainly then, the question is what is the value of our safety? If there is no cost, no limit to our nation’s spending in the defense of security, then there are no flaws with the current state of affairs.

Some might call my beliefs repulsive and inhumane, but is it that absurd to seek cost-effectiveness with our domestic security. Is everything that was exposed by the Washington Post and “Frontline” really necessary? Are we in fact safer? Hopefully, the answer is as opaque and obscure as the mission statement of the counter-terrorist industry. We should always remain cognoscente of the warnings of President Eisenhower. And remember:

The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together.

“I don’t deserve any of this. And neither do you.” - Justin Hudson

A recent NYT article highlighted a commencement speech given by a student at a “gifted” school. His speech criticized one topic that I have struggled with, entitlement. Am I entitled to be where I am today? 

As I ponder how the sequence of events that have allowed me to reach the point where I am today, I ask if I can credit myself for everything that I have accomplished. And although the response is should be more nuanced than the limits of this letter, the reality is that I am and all of us are “victims” of chance.  Why have I had the opportunities those others in my community can only dream of?

I didn’t choose to move to Florida when I was young and it follows that I had no bearing of my mastery of English given that my environment enriched my knowledge of language and not my own “hard-work”. Similarly, although one could call my city under-developed and crime-infested, I was not in control over the arrangement of school districts.

Where it not for a freeway, my elementary education could have been much different. I could have been entirely different. I was able to attend kindergarten through sixth grade in the next town over, a predominantly upper middle class, white-collar community. Can I really claim that my hard work or motivations are the only reasons I have been able to attend college? It’s tough to say.

Equality of opportunity, as it where, is a figment of the imagination, even in our societies. We pride ourselves on our top institutions of higher education, yet many of the children in our neighborhoods cannot read.

Our educational system is as much at fault as us, the citizens, are. And it comes back to what I opened this letter with, the culture of entitlement. Do we deserve our accomplishments? My studies have taught me to be a realist. In fact, isn’t our world fueled by greed? Gordon Gekko says, 

“Greed clarifies, cuts through, and captures, the essence of the    
evolutionary spirit.”

But, greed absent from equity fuels the gap between the “entitled” and the disenfranchised. I am a strict believer in equality of opportunities. Greed is not fair; our education system is not fair when the hare has a five-minute head start on the tortoise.

Epicurus

“Is God willing to prevent evil, but not able? Then he is not omnipotent.

Is he able, but not willing? Then he is malevolent.

Is he both able and willing? Then whence comet evil?

Is he neither able nor willing? Then why call him God?”