"Things cost more than they used to"; or, The Pit, redux

We're looking at major price hikes in staple foods right now--skyrocketing hunger rates in southeast Asia, looming food riots in Haiti. According to some UN numbers cited in an NYTimes article, the price of wheat has risen 130% since March of 2007, and soy has risen 87% during the same period so that now 60-80% of consumer spending in developing countries goes to food. The same story says the World Bank notes that food prices have risen 83% over the last three years. Another article reports that the price of rice has doubled over the last three months and predicts it will rise "dramatically" over the next two months. These problems, of course, run deeper than the inflation we see at our grocery stores--inflation that's largely motivated by transportation costs according to the excessive leaps in gas prices (see post 31 Jan 2008)**.

So what's motivating the food crisis? The media is a hodge-podge of narratives for the the problem: Biofuels are subtracting goods from circulating as foods so that they can fuel our cars. Global warming is creating droughts that are killing off food production. The human population is growing beyond our farming capacities. They narratives are hard to parse out and often may not coincide in one account of the food crisis, but each thread bears a little thought:

1) The goods taken out of food circulation for biofuels are mostly corns, which are not really factoring in to the food crises we see in rice and wheat commodities. Now, long term, the loss of edible corn to biofuels could have some significant drawbacks for industrialized foodstuffs--imagine how many commercial food products in your pantry list high-fructose corn syrup as a significant ingredient, and you'll get a sense of the stakes--but those eventual problems aren't really related to the food crises we have at hand. (And that's to say nothing of the inefficiency of corn-based biofuels. An NYTimes article reports that Brazilian sugar-based ethanol can produce eight times the yield of U.S. corn ethanol with zero impact on food prices. Screw you, Iowa.)

2) Global warming is indeed a germane issue, and it's not one I want to dismiss. As a 21 April 2008 article reports, "More than 10 million people in parts of Thailand's rice bowl region have been hit by drought, the government said Monday, causing further concerns as prices of the staple grain soar." Surely over time global warming will produce drastic changes in the way we farm and eat, and just as surely it is being felt in the case of Thai rice. But this still doesn't explain the total picture of the food crises.

3) The human population is booming, and like global warming it's a problem that cannot continue to go unchecked. "The growth in world population is 78.5 million people each year, and by 2050, the global population will have risen from six to nine billion," UN food agency chief Jacques Diouf says. But that doesn't fully explain the drastic leaps in food commodity prices that we've seen in the last couple of months, as the population growth rate hasn't spiked inordinately during that period.


So while there's truth to each of these narratives of the food crisis, none really explains the total picture of the drastic, punctual leaps in food prices. Try this one on for size: market speculation. Say Beat Balzli and Frank Hornig, "But classic supply and demand theory offers only a partial explanation. Sudden price hikes since last January have been alarming. The UN estimates that at least $500 million (€312 million) in immediate aid will be needed by May 1 to avoid serious famines. Agricultural scientists at the world body's Educational, Scientific and Cultural Organization (UNESCO) have presented a report on the world food crisis. And criticism is growing that hedge funds, index funds, pension funds and investment banks bear part of the blame." And that's to say nothing of the rest of the article, which is pretty alarming.

I don't guess ethics are even relevant here. If we allow unchecked profit motive to generate "security contractors" who outsource their labor to developing nations, it only makes sense that futures markets can deepen the poverty and suffering of millions and millions of people they'll never meet.

The market has decided. And it has decided that you, young woman in Mauritania; that you, hungry family in Ethiopia; that you, impoverished farmer in Indonesia; and that you, starving children in Cameroon--it has decided that all of you are simply fucked: voiceless, hungry, and in many cases dying.


**NB: About the inflation rate, is it true that it doesn't factor in fuel and staple foods? I'd heard on NPR that this was the case, a provision in the government's inflation math that would avoid short, presumably temporary, spikes in a given price that might exaggerate inflation figures (you can imagine some bovine virus that would make milk $10/gallon that might misrepresent the state of the economy if it figured in to the inflation numbers). If that's the case, though, the current numbers on inflation are ridiculously underestimated, as our increases in gas and now evidently food prices are not temporary fluctuations so much as they are lasting trends cutting deep into the pockets of those who can least afford the increases.

***

Update: A 5 June 2008 NYTimes story reports that the speculation has broadened from the food commodities themselves to the infrastructure that supports them--farmland itself, fertilizer, grain elevators, etc.

The Outsource Outsources

Not terribly surprising when I stop & think about it, but what I read about Blackwater USA today frightened me. It's old news that they provide paramilitary services so we can keep a draft at bay and that those services are provided outside the boundaries of the Geneva Conventions (whichever ones the Bush administration still observes, anyway). What Mother Jones reports, though, is that Blackwater is skimping on the $10K/month they usually pay an US civilian to play shoot-em-up in Iraq. Why pay that kind of money when you can get a Chilean--not some rifle-toting peasant, mind you, but a formally trained commando--to do the job for $1K/month? Let's let the market decide:

"As profit margins in the private security industry have narrowed—Blackwater clears just 10 percent on its primary State Department contract, [Blackwater CEO Erik] Prince testified—the CEO has increasingly looked beyond American shores. More and more of his foot soldiers now come from Third World countries, and his corporate network is aggressively pitching for business from foreign governments."

The nativists might actually see this (if Fox news deigned to report it) and be outraged that swarthy foreign operatives might be lying in wait to undermine our military efforts. And undermine they might, cause you can bet your ass that some of these "professional commandos" are practiced in the arts of human rights violations. But they'll probably fit right in with their Blackwater cohorts, and anyway I'm not inclined to worry much about their nationality. Facts is facts: a hired gun is a hired gun.

Let's just set aside the casual approach with which most media and the vast majority of Americans approach contracting out our military services--not to mention the casual avoidance of thought about the war itself. Are we really going to send people to work, fight, and die in Iraq for $34/day? That is, by the way, less than a grad student makes per year at UF, and grad students here are poor enough. When will people wake up to the fact that this war is openly an experiment in predatory neoliberalism and that we've got to put a stop to both? What will it take for our fellow voters come to that realization--to draft our youth to fight alongside Chilean Blackwater ops?

And anyway, if Blackwater is laying plans to stick around for a while, what will they do if and when the US leaves Iraq and terminates that contract with them? Prince says he's looking to get into the peace-keeping business, and he soothes naysayers by promising that he won't contract with hostile foreign governments. After all, doing so would imperil his US business relations. But how else might an idle private army occupy itself? Strike breaking? Dissenter intimidation?

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Update: A 5 June 2008 piece in The Nation reports that Blackwater has received a contract with the Pentagon's Counter Narcoterrorism Technology Program Office to fight drug trade-related terrorists and especially to train counternarcotics police in Afghanistan. Working for the imbroglio against drugs could be Blackwater's biggest job ever. Moreover, Blackwater is eying "a move into the world of privatized intelligence services" for Fortune 500 companies, offering "'surveillance and countersurveillance, deployed intelligence collection, and rapid safeguarding of employees or other key assets'". Impressive.