Resources Research

Over the past 15 years, the world seed industry has consolidated through mergers and acquisitions. This graphic, extracted from a 2011 December USDA report, shows how the ‘Big 6′ got to the positions they now occupy (I have added colour to make it easier to distinguish each dominant conglomerate’s consolidation history).

Formation of the 'Big 6' seed-biotech-crop companies. Graphic from: Research Investments and Market Structure in the Food Processing, Agricultural Input, and Biofuel Industries Worldwide / ERR-130. Economic Research Service / U.S. Department of Agriculture (USDA) (Report Number 130, December 2011) (click for the full size png image, 652kb).

Over the past 15 years, the world seed industry has consolidated through mergers and acquisitions. This graphic, extracted from a 2011 December USDA report, shows how the ‘Big 6′ got to the positions they now occupy (I have added colour to make it easier to distinguish each dominant conglomerate’s consolidation history).

An excerpt from the USDA report has explained some of the features of changes to the seed industry which can be summarised as follows:

1. Among the largest firms in terms of total product sales, the close relationships between seed and agricultural chemicals industries have continued. This applies to the Big 6 firms in particular. These relationships may result partially from complementarity of product lines such as herbicide-tolerant seeds and chemical herbicides, or possibly from economies of scope in marketing as well. Chemical companies also realized GM crops with pest resistance traits would compete with the crop protection chemicals, which helped drive these companies’ interest first in biotechnology and eventually in seed, thus changing their business models to meet farmer demand for crop pest management as technological opportunities changed.

2. On the other hand, the “life science industry” model suggested a decade ago has not become the dominant paradigm. This model stemmed from the likelihood that technologies underlying pharmaceutical discovery were the same as those underlying gene discovery for seeds. Differences in business models and types of customer, however, prevented firms from combining both pharmaceuticals and agricultural biotechnology. Of the current Big 6 companies, only one — Bayer — has pharmaceuticals as its primary product line.

Detail from the graphic, 'Formation of the 'Big 6' seed-biotech-crop companies'

Even when Bayer expanded into the seed/biotechnology industry in 2002 with its acquisition of Aventis Crop Science, Aventis pharmaceuticals eventually became a component of Sanofi-Aventis pharmaceuticals, not Bayer. Monsanto, which entered pharmaceuticals in the mid-1980s with its acquisition of Searle, was briefly held by Pharmacia before the agricultural enterprise was spun off as the “new Monsanto”; Pharmacia retained the pharmaceutical business segments. When Novartis’s chemical and seed businesses were merged with Zeneca’s agricultural chemical business in 2000 to form Syngenta, the pharmaceutical portion of Novartis remained intact as a separate large pharmaceutical company. BASF and DuPont ended their relatively smaller pharmaceutical investments after 2000 and 2001, respectively, and Dow had already sold its pharmaceutical subsidiary Marion Merrell Dow to Hoechst in 1996.

3. Agricultural chemicals have been an important part of product sales for all the Big 6 companies. However, positions in markets for non-agricultural chemicals have not remained constant, with some companies shedding these nonagricultural products. Monsanto divested this portion of its business to Solutia in 1997. When Ciba-Geigy and Sandoz merged to form Novartis in 1996, nonagricultural chemicals were spun off to Ciba Specialty Chemicals, which eventually was acquired by BASF. In response to antitrust considerations, Bayer sold selected insecticides and fungicides to BASF in 2003. DuPont sold its polymers business in the early 2000s.

An interesting short video from FAO on water management and cultivating responses to indeterminate (or insufficient) water stocks. In southern India, the climate is becoming unpredictable and drought more common , says FAO – and this indeed is the case for peninsular India in general. Indiscriminate pumping from shallow aquifers shared by many farmers has caused abnormal drops in water levels, most notably in northern and north-west India, in the states of Punjab and Haryana which were the Green Revolution model states. When a well goes dry, a farmer loses his crop. In Andhra Pradesh, said FAO, 6,000 farmers have been trained in groundwater management by a project run by Indian NGOs and guided by the UN’s Food and Agriculture Organization. They have learned to monitor how much water is available underground at the start of the growing season. Then they only plant crops that need that much water.

Image: From FAO video, 'India's barefoot water scientists'

Here is some background on the legacy of irrigation in India, and the administrative functions that large irrigation projects provided the state, whether that state was colonial (as a dominion of Great Britain) or independent (Republic of India). “At the beginning of the eighteenth century, India  was the ‘irrigation champion’ of the world. While the colonial government initially neglected the maintenance and upkeep of the numerous but mostly small irrigation structures, it soon spotted the potential for large-scale canal irrigation as an economic enterprise and took to canal building as a business on a massive scale. In those days, there was much dissatisfaction with irrigation management among observers and investors who expected much higher financial return on irrigation investments.”

Image: From FAO video, 'India's barefoot water scientists'

This is written by By Tushaar Shah in the chapter, ‘Past, Present, and the Future of Canal Irrigation in India’, found in ‘India Infrastructure Report 2011 – Water: Policy and Performance for Sustainable Development’, (Oxford University Press 2011).

“Yet, in retrospect, around 1900, canal irrigation systems in India were arguably in a far better state than today in terms of their operation and maintenance (O&M), productivity impacts, and financial returns. If we look at the situation ten years ago, around 2000, while the new welfare state had kept alive the colonial tradition of big time canal construction, the management of canal irrigation had become pathetic in terms of all the criteria on which it excelled a century ago.”

Image: From FAO video, 'India's barefoot water scientists'

“The dominant view about the way out is that farmer management through water user associations can restore canal irrigation to its old glory. However, this may not be the correct thinking. Shah has argued that the larger socio-technical fundamentals in which canal irrigation can thrive in a smallholder agrarian setting were all mostly present around 1900 and are all mostly absent today.”

The colonial irrigation management was a high input-high output affair, said Shah. A vast authoritarian bureaucracy reaching down to the village level used forced labour to maintain canal network, managed water distribution, and undertook ruthless water fee recovery on all lands deemed to be irrigated.

Image: From FAO video, 'India's barefoot water scientists'

In the canal commands, the canal water ‘tax had to be paid regardless of whether or not use was made of the canal in a particular year or whether or not there was a reliable supply from the canal’ (Hardiman 2002: 114). This, according to Hardiman, encouraged, even forced, farmers to grow valuable commercial crops to generate cash. It also resulted in much litigation from dissatisfied zamindars who put pressure on canal managers to ensure water delivery and maintain canals. The amounts provided for O&M were substantial so that deferred maintenance was minimal.

As a commercial venture, the performance of canal irrigation has decidedly declined over the past 100 years. D.R. Gadgil, the pioneer of Indian economic planning, had argued that, in a poor agrarian economy like India, public irrigation investments should be judged on their social and economic returns rather than their financial returns. Soon after Independence, irrigation charges were drastically reduced; and even these declined to a small fraction. Have public irrigation investments in free India delivered the irrigation—and the socio-economic returns they were designed for as Gadgil had hoped?  Unfortunately, the answer to the question is ‘No’; and there lies the heart of the problem. The financial rot was the harbinger of a much deeper crisis of stagnation and decline in public irrigation systems whose social and economic returns turned out to be far smaller than imagined.

India’s meteorological department has issued its second long range forecast for the 2011 monsoon and has lowered its estimate. Rainfall will be 95% of the 50-year average in the June-September season, which are the monsoon months. In April, the Indian Meteorological Department predicted a monsoon that would be 98% of the long-term average. Normal precipitation is considered to be 96%-104% percent of the long-term average.

India’s agriculture-dependent population has been hoping for adequate rainfall to harvest good quantities of foodgrain and lentils for a second year and bring down inflation, which has led the Reserve Bank of India – the central bank – to raise rates for a 10th time in 15 months. Agriculture accounts for 14% of the economy and a reduced harvest can further lower rural incomes and send food inflation higher than it already is. Inflation in India is the highest among Asia’s major economies.

Bloomberg reported that the wholesale price index in India accelerated 9.06% in May after having increased 8.66% a month earlier, according to official data released on June 14. An index measuring wholesale prices of farm products including milk and lentils rose 8.96% in the week ended June 4 from a year earlier, according to the commerce ministry. India imported record quantities of sugar, lentils and oilseeds in 2009 following the weakest monsoon that year since 1972.

The IMD’s ‘long period’ is 1951-2000 and the department considers probabilities for the country (all-India) and four major regions: north-west India, central India, north-east India and south peninsula. “Over the four broad geographical regions of the country, rainfall for the 2011 Southwest Monsoon Season is likely to be 97% of its LPA over North-West India, 95% of its LPA over North-East India, 95% of its LPA over Central India and 94% of its LPA over South Peninsula, all with a model error of ± 8 %.”

The IMD also employs a six-parameter statistical forecasting system to prepare probability forecasts for five pre-defined rainfall categories. These are deficient (less than 90% of LPA), below normal (90-96% of LPA), normal (96-104% of LPA), above normal (104-110% of LPA) and excess (above 110% of LPA). The forecasted probabilities for the 2011 southwest monsoon season based on this system in percentage for the above 5 categories are 19%, 37%, 37%, 6% and 1%
respectively.

The department’s ‘Summary of the Update Forecasts for 2011 Southwest Monsoon Rainfall’ has said:

(1) Rainfall over the country as a whole for the 2011 southwest monsoon season (June to September) is most likely to be below normal (90-96% of LPA). Quantitatively, monsoon season rainfall for the country as a whole is likely to be 95% of the long period average with a model error of ±4%. The Long period average rainfall over the country as a whole for the period 1951-2000 is 89 cm.

(2) Rainfall over the country as a whole in the month of July 2011 is likely to be 93% of its LPA and that in the month of August is likely to be 94% of LPA both with a model error of ± 9 %.

(3) Over the four broad geographical regions of the country, rainfall for the 2011 Southwest Monsoon Season is likely to be 97% of its LPA over North-West India, 95% of its LPA over North-East India, 95% of its LPA over Central India and 94% of its LPA over South Peninsula, all with a model error of ± 8 %.

According to Reuters, government officials played down concerns that lower rainfall could fan inflation and dampen growth. “There is no need to press the panic button, as June rains are still above normal,” said Shailesh Nayak, the top civil servant in the ministry of earth sciences which controls the country’s weather office.

While rains could be slightly lower than normal in July, India’s chief forecaster said distribution was key. “There are chances the monsoon will pick up after July 15 once it covers the entire country,” said D. Sivananda Pai, director at the state-run National Climate Center. “Don’t go by the numbers, it is the distribution (of the rains) which we are still hoping to be good.” The weather office predicted 27 centimetres of rain in July compared with long-term average rainfall of 29 centimetres, and rains at 24 centimetres in August, when seeds start maturing, compared with long-term averages of 26 centimetres.

Weather office chief Ajit Tyagi remained optimistic. “Ninety five percent is a good forecast,” Tyagi said. “Had it been 90% of the long-term average then it would have been a cause for concern,” he said, adding that in the past slightly below normal monsoon rains had also seen adequate farm output because they were well distributed in the major crop growing regions.

Explaining climatic conditions over the equatorial Pacific and Indian Oceans, the department’s second long range said moderate to strong La Nina conditions that prevailed in the equatorial Pacific during mid-August 2010 to early February 2011 weakened during subsequent months and dissipated to neutral conditions around mid-May 2011. The latest forecasts from a majority of the dynamical and statistical models indicate strong probability for the present ENSO-neutral conditions to continue during the current monsoon season and the remaining part of 2011.

It is important to note that in addition to El Niño and La Niña events, other factors such as the Indian Ocean Sea surface temperatures (SSTs) have also significant influence on India monsoon. However, the latest forecasts do not suggest development of either a positive or a negative Indian Ocean Dipole event during the 2011 monsoon season. In the absence of strong monsoon forcing from both Pacific and Indian Oceans, intraseasonal variation may become more crucial during this southwest monsoon season and lead to increased uncertainty in the monsoon forecasts.

Huang Xiaohe, a farmer in Huarong county, Hunan province, carries water fetched from a canal to irrigate his cotton field, May 19, 2011. Huang said he has to carry water for irrigation three times a day, each time taking as long as one and a half hours. Photo: China Daily/Xinhua

The water in the Yangtze river, China’s longest, has dropped to its lowest ever recorded level. According to the latest census figures for the People’s Republic, the urban population now represents 49.68% of the country’s total population. Of the more than 600 cities, 400 are haunted by a lack of water and the problem is acute for 200 of them. If seasonal lack of water in the middle and lower reaches of the Yangtze further expands as it has in the past decade and becomes permanent, said the China Daily, “it will be impossible for North China, long plagued by drought, to rely on its southern counterparts to quench its thirst”. More than 1,000 reservoirs in Central China’s Hubei province dropped to such a low level that 500,000 people face a shortage of drinking water.

The newspaper said: “The government can never attach too much strategic importance to the water problem in the middle and lower reaches of the Yangtze River, given its position as one of the most important grain production bases, one of the most densely populated regions and the country’s most developed area. Records show that the seasonal water level in this part of the Yangtze has constantly reached the historical lows of at least 20 years every year in the last decade.”

Shishou city launched a project on May 4, together with neighboring Huarong county, Hunan province, to ease water shortages by drawing supplies from the Yangtze River into the Huarong River, which runs across the border of Hubei and Hunan provinces. The two Central China's provinces are in severe drought,and close to 300,000 people living by the Huarong River are short of water. Photo: China Daily/Xinhua

On May 18, the State Council, China’s cabinet, announced for the first time that “problems that demand prompt solutions exist” in the project’s resettlement of residents, ecological protection, and prevention and control of geological disasters. The project’s follow-up plan says that by 2020, those resettled as a result of the dam should expect to live the average life of residents in Hubei province and Chongqing municipality, which the reservoir spans. About 1.3 million people have been resettled since 1993, fewer than 20% of them outside the reservoir area. The rest had to move to higher ground. The plots there are smaller and, because the slopes are unstable, most are ill suited to farming. With limited access to arable land, compensation, preferential policies, education and transportation, many are still struggling in sheer poverty.

Now, China’s President Hu Jintao has urged local government officials to treat drought relief in rural areas as an “urgent task” as he wraps up a four-day inspection tour in central China’s Hubei Province Friday. According to Xinhua, Hu’s call comes in the midst of the worst drought in 60 years that hit the middle and lower reaches of the Yangtze River.

He Yan, a resident in Huarong county, Hunan province, stores water at her home May 19, 2011. The county has begun rationing water supply. Photo: China Daily/Xinhua

These areas are China’s important agricultural production bases. Hu asked government officials to provide fiscal and technological support to farmers and work to ensure they have enough drinking water. Efforts should be made to give full play to the role of reservoirs in offsetting the impact of the drought, Hu stressed when visiting the Danjiangkou Reservoir, which is part of China’s massive south-to-north water diversion project.

On Friday 03 June 2011, Vice Minister of Environmental Protection Li Ganjie told the press that the drought has caused the deterioration of water quality in several major lakes. The long-lasting drought has led to the sharp reduction of water levels in major lakes such as Poyang Lake, Dongting Lake and Honghu Lake. Monitoring statistics showed that water quality in these lakes saw a noticeable decline in March and April, compared to the same period last year, according to Li.

Wetlands and migrant birds in these regions have also suffered from the drought, the worst to hit the region in decades, said Li. Over 1,333 hectares of wetlands located east of Dongting Lake have dried up. The drought has left the Yangtze River, China’s longest river, with its lowest levels of rainfall since 1961.

Li denied that the drought was aggravated by the river’s Three Gorges Dam. He stressed that a shortage of rainfall tcaused the drought. The long-lasting drought has affected parts of Hubei, Hunan, Jiangxi, Anhui, Jiangsu and Zhejiang provinces, which are located near the middle and lower reaches of the Yangtze River. These areas have seen 40 to 60 percent less rainfall than usual.

The updated estimates for foodgrain and commercial crops have been released by India’s Ministry of Agriculture. This is the first revision for 2011.

There are updated estimates for rice, wheat, coarse cereals and pulses, and also for oilseeds, cotton, jute and sugarcane.

I have updated my running spreadsheet with the new data. From the 2008-09 year the spreadsheet contains the advance estimates (1st, 2nd, 3rd, 4th/final estimates).

The spreadsheet also has the final crop production data back until 1997-98. You’ll find more on the agriculture page.

Agrimoney has reported that London wheat for January delivery hit £198.40 a tonne on Thursday, beating the previous record for a spot contract of £197.50 a tonne set in September 2007.

“The peak came despite an uncertain performance by Chicago wheat, the global benchmark, which dipped in and out of negative territory in thin pre-holiday trade, and after disappointing US weekly export sales data. However, in London, prices continued to be boosted by data showing a doubling in UK wheat shipments in 2010-11, at a time when domestic demand has been lifted too by fresh capacity at plants converting the grain into ethanol.”

The buying was reflected too in wheat prices in Paris, where the January contract touched a two-year high of E250.00 a tonne, a two-year high and a “big psychological level for many in the market”, according to a grains analyst Agrimoney spoke to.

The market was finding that, despite the rises in prices of more than 80% in Paris since June, and more than 90% in London, “demand for wheat, and in particular milling quality wheat, has simply not been rationed”. And fundamentals both inside and outside the European Union “seem to offer little hope for a half to further price increases.

On 20 December, Reuters had reported (this is via Futurespros) that Chicago wheat futures rose more than 1 percent on Monday, taking the monthly gains to around 18% as weather concerns in top exporters United States and Australia continued to underpin the market.

“Chicago Board of Trade March wheat rose 1.45% to $7.64 a bushel.  CBOT front-month wheat has risen nearly 18% so far in December, the biggest monthly gains since July when the grain market jumped more than 40% as a severe drought ravaged crops across the Black Sea region. CBOT wheat is on track to post its first annual gain in three years after dropping 42% in the past two years, helped by a drought which decimated the Russian crop and halted exports and rains which reduced the quality of Australian wheat.”

Pair of bullock carts on the Allahabad-Delhi highway

The government of the USA has planned for India to become an important consumer of US agricultural exports and of US crop science. India is also planned as a host country for an agricultural research agenda directed by American crop-seed-biotech corporations. This is to be achieved through a variety of programmes in India, some of which began their preparation two years ago.

This agenda, labelled US-India cooperation by India’s current UPA-2 government and by the USA’s current Barack Obama administration, has the support of the American farm sector as its aim, not the support of India’s farmers and cultivators. The clear and blunt objective is to increase US agricultural exports and to widen as quickly as possible the trade surplus of the US agricultural sector.

This agenda has become clear following the three business and industry meetings held during the visit of US President Barack Obama — the ‘US-India Business and Entrepreneurship Summit’ in Mumbai on November 6, the ‘India-US: An Agenda for Co-Creation’ with the Confederation of Indian Industry (CII) in New Delhi on  November 8, and the ‘US-India Conclave: Partnership for Innovation, Imperative for Growth and Employment in both Economies’ with the Federation of Indian Chambers of Commerce and Industry (FICCI) in New Delhi on November 9.

The US agri-business view has been projected in India by the US-India Business Council, a business advocacy group representing American companies investing in India together with Indian companies, with the shared aim of deepening trade and strengthening commercial ties.

A vendor of sweet lime juice and his cart, Mumbai

In a document titled ‘Partners in Prosperity, Business Leading the Way, Advancing the US-India commercial agenda as the foundation for strategic partnership’ (November 2010) the business council stated: “India requires an ‘Ever-Green Revolution’ — a new programme which would engage the country’s rural sector, providing water utilisation and crop management ‘best practices’ to promote greater food security — this time based on technology to increase efficiency and productivity. The effort to vitalise India’s agriculture sector should be driven by business, and the first step is improving India’s farm-to-market global supply chain.”

This business-driven trade in agricultural goods and services was given formal shape two months ago during the inaugural meeting of what is called the India-US Agriculture Dialogue, on September 13-14, 2010 in New Delhi. India’s Foreign Secretary Nirupama Rao and USA’s Under Secretary (Energy, Economic and Agricultural Affairs) in the US State Department, Robert Hormats, co-chaired the ‘Dialogue’. Under this agreement India and the USA have set up three working groups for: ‘strategic cooperation in agriculture and food security’, ‘food processing, agriculture extension, farm-to-market linkages’, and ‘weather and crop forecasting’.

A hamlet off the Grand Trunk Road, Uttar Pradesh

The ‘Agriculture Dialogue’ is designed to be the implementing process for the India-US Memorandum of Understanding for Cooperation in Agriculture and Food Security, signed almost a year ago by Obama and Singh. On November 24, 2009 they had agreed on a Memorandum of Understanding on Agricultural Cooperation and Food Security that will, according to the US State department, “set a pathway to robust cooperation between the governments in crop forecasting, management and market information; regional and global food security; science, technology, and education; nutrition; and expanding private sector investment in agriculture”.

‘Agriculture Dialogue’ is the new name given to a US-India plan for trade and investment in agriculture which saw its genesis on July 18, 2005, when Singh and then US President George W Bush announced the ‘US–India Knowledge Initiative on Agricultural Education, Teaching, Research, Service, and Commercial Linkages (AKI)’. At the time, apart from officials from government on both sides representing agriculture and crop bureaucracies, Indian and American universities and the private sector were on the AKI board.

The Indian agri universities were the Govind Ballabh Pant University of Agriculture and Technology (Pantnagar, Uttaranchal), the Tamil Nadu Agricultural University (Coimbatore, Tamil Nadu) and the Indian Veterinary Research Institute (Bareilly, Uttar Pradesh). India’s private sector was represented by Venkateshwara Hatcheries Ltd, Masani Farms (its owner was a National Horticultural Board director), ITC Ltd’s Agribusiness chief executive and Wal-Mart India. The American private sector was represented by Archer Daniels Midland Company and Monsanto.

Infochange India, which provides news and analysis on development news and social justice in India, has carried the rest of my article on the Obama visit to India here.

This is a big one from the FAO. The Second Report on the State of the World’s Plant Genetic Resources for Food and Agriculture is a mega tome. At just under 400 pages, this very dense report is packed into eight chapters which occupy half the pages. The other half is made up of annexures and appendices. Even then, it’s just part of the entire SOWPGR2 package, for there is a synthesis report, the Global Plan of Action for the Conservation and Sustainable Utilization of Plant Genetic Resources, there is a thematic background studies section with seven studies, there are the country reports (over 100!) and there is a picture gallery. It’s an entire curriculum.

It’s been a while coming – the first report was published by FAO 14 years ago and much has changed since then. For one thing, climate change was quite uncommon in common discourse. This is hugely important because the genetic diversity of the grains, legumes, vegetables and fruits that we grow and eat – referred to as plant genetic resources for food and agriculture, or PGRFA – are the foundation of food production, and the biological basis for food security, livelihoods and economic development.

The synthesis report says that PGRFA are crucial for helping farmers adapt to current and future challenges, including the effects of climate change. FAO’s Second Report on the State of the World’s Plant Genetic Resources for Food and Agriculture provides a comprehensive overview of recent trends in PGRFA conservation and use around the world.

It is based on information gathered from more than 100 countries, as well as from regional and international research and support organizations and academic programmes. The report documents the current status of plant genetic resources diversity, conservation and use, as well as the extent and role of national, regional and international efforts that underpin the contributions of PGRFA to food security. It highlights the most significant changes that have occurred in the sector since 1996, as well as the gaps and needs that remain for setting future priorities.

The core messages:
• PGRFA are essential raw materials for helping farmers respond to climate change. Plant breeding capacity needs to be strengthened and breeding programmes must be expanded to develop varieties with traits needed to meet this challenge.
• Loss of PGRFA has reduced options for the agricultural sector. The major causes of genetic erosion are land clearing, population pressures, overgrazing, environmental degradation and changing agricultural practices.
• Local PGRFA diversity found in farmers’ fields or in situ is still largely inadequately documented and managed. There is now a growing awareness of the importance of this diversity and its contribution to local food security.
• There has been progress in securing PGRFA diversity in a larger number of national genebanks. However, much of the diversity, particularly of crop wild relatives (CWR) and underused species relevant for food and agriculture, still needs to be secured for present and future use.
• Rapid scientific advances, especially in information technology and molecular biology, have introduced new techniques for PGRFA conservation and use. Their wider application offers new opportunities to increase efficiency of the conservation–production chain.
• Significant policy developments have changed the landscape of PGRFA management. Many more countries have adopted national programmes, laws and regulations for biodiversity following the adoption of the Convention on Biological Diversity (CBD) and the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA).
• Better communication, collaboration and partnerships are needed among institutions dealing with PGRFA management – from conservation to plant breeding and seed systems. These are the key factors for an integrated conservation and utilization strategy and delivering sustainable solutions to build a world without hunger.

Women in a camp for flood victims in the Balochistan province of southwestern Pakistan cook bread using the fortified wheat flour rations they have been provided by WFP. Picture: World Food Programme/Copyright: Amjad Jamal

A news bulletin from the World Food Programme (WFP) describes in first person the steady rebuilding of lives taking place in Pakistan. More than two months after the devastating August floods, Amjad Jamal, a WFP spokesman in Pakistan, describes how millions of people are at work reclaiming their lives with the help of a massive food assistance effort.

If we were to drive across Pakistan today, from the Swat Valley in the north to Sindh or Balochistan in the south, what would we see? In the Swat Valley where the floodwaters have all dried up or receded, you would see people rebuilding their homes and replanting the many fruit orchards for which it’s famous. In Punjab, the “bread basket” of Pakistan, you’d see whole villages under construction, with a frenzy of activity in the fields as people rush to get their wheat crop planted in time. In Sindh and the sparsely populated Balochistan, there’s still a lot of standing water, with people unable to return to their homes and living in flood camps.

What signs are there that conditions for the flood victims are beginning to improve? Recovery efforts are well underway in the northern parts of the country where people are working hard to get back on their feet. We’re expecting a poor harvest this season, but have high hopes for the one afterwards next summer as the flood waters have left behind a lot of fertile soil.

A family in a flood camp in the Balochistan province of southwestern Pakistan. Picture: World Food Programme/Copyright: Amjad Jamal

What is the biggest remaining challenge to helping people impacted by the floods get back on their feet? Our single biggest challenge is still the sheer number of people affected. Getting help to six million people per month in a country as vast as Pakistan isn’t just costly, it’s complicated. Whereas in Swat Valley it means helping people in isolated mountain valleys store up food for the winter, in the plains of Punjab it means helping them rebuild their irrigation canals and in the southern region of Sindh, reclaiming entire farms from the floodwaters.

In what part of the country is that challenge greatest? The situation in Sindh is particularly worrisome as much of the province is still under water and the farmers there have by and large missed the September planting season. In Balochistan too, the huge distances and widely scattered population are making it difficult to get to everyone. The logistical challenges there are compounded by the near constant threat of insecurity along the border with Afghanistan.

Of all the things you’ve seen or heard over the past few weeks, what has made the biggest impression on you? I was recently in Balochistan where it’s extremely difficult to work because you need a security detail to do practically anything, and met a man of about my age at camp for flood victims who was there with his children. When I asked about his wife, he told me that she had died of a heart attack at the sight of their house crumbling under the floodwaters. He’d promised his children that as soon as the waters receded, they’d go back and rebuild it just like it was before the floods.

Continuing a trend that began earlier in the year, La Niña conditions strengthened through the summer of 2010, evidenced by a streak of cool water across the equatorial Pacific Ocean. This map reveals a broad swath of cool water stretching from South America to New Guinea. The ocean is not, however, uniformly cool. Pockets of warm water are mixed with the cool, particularly in the western Pacific. Warmer waters in this region can lead to increased rainfall, and La Niña conditions may have played a role in the devastating floods in Pakistan during the Northern Hemisphere summer of 2010. Over the eastern Pacific Ocean, cooler waters lead to less moisture along the coasts of North and South America. So as more rain pounds some parts of the globe, La Niña conditions can deepen drought in others. NASA Earth Observatory

The International Grains Council released its monthly Grain Market Report on 2010 September 23. In this report the IGC said that global grain prices advanced again in September, those for wheat having returned to the peaks reached in early August. While the initial trigger for the steep upturn in wheat and barley values in recent months was the fast deteriorating outlook for these crops in the Black Sea region, much of the more recent bullishness is attributed to concerns about smaller than anticipated US maize (corn) yields, as well as substantial new grain buying activity by importers.

The market commentary of the report said: “Another feature is the difficult harvest weather in some countries, affecting milling wheat and malting barley quality. US soyabean prices partly mirrored the upturn in maize, but were also supported by concerns about South American crop prospects and continued heavy buying by China. Asian rice prices moved higher, largely because of the impact of the flood emergency in Pakistan. The recent surge in world grain prices, while not on the same scale as in 2007-08, again prompted concerns about its impact on global food prices as well as the increased volatility in the major commodity exchanges. One measure of such volatility is the day-to-day change in futures values which, even allowing for the events of three years ago, is significantly greater than earlier in the decade. Given the generally adequate supply situation for wheat and other grains, despite recent crop concerns, many have expressed surprise at the ferocity of recent market responses.”

Grains outlook for 2010-11 – This year’s sharply reduced crops in the CIS and Europe will contribute to a fall of 1.2% in global grain supplies, reversing three successive years of stock building. World production in 2010-11 is forecast at 1,741m. tons, (1,787m.), 4m. below the previous month’s projection. This follows downward revisions, for maize in the US and wheat in the CIS region, more than offsetting improved prospects in Australia. Significant reductions in wheat and barley output will outweigh another rise in maize, although prospects for the latter crop are downgraded slightly. The difficult growing and harvesting conditions in parts of North America, Europe and the CIS have affected supplies of high-quality milling wheat and malting barley.

Grain consumption in 2010-11 is projected to increase by 0.6%, to 1,780m. tons, but this represents a marked slowing compared with previous years as the overall rate of expansion in industrial use, especially for ethanol in the US, is scaled back. In the animal feed sector, maize use is expected to be boosted, while that of wheat will likely hold steady, but this will be more than offset by reductions in barley and other grains. With global grains consumption expected to exceed output after three surplus years, global carryover stocks in 2010-11 are projected to fall by 39m. tons, to 353m., mostly because of declines in the world’s exporters, notably Russia and the US. However, the total carryover will remain significantly above the lows seen earlier in the past decade.

International Grains Council wheat and maize export prices

Global trade in grains is expected to fall in 2010-11, mainly because of reduced wheat shipments. At 237m. tons (239m.), the total is 5m. above the August forecast, following upward revisions for the EU, Russia and sub-Saharan Africa. Export forecasts for several countries, including Australia, Canada and the US, have been lifted, with total availabilities still seen as ample in a year which will see a huge shift in trade away from the drought-afflicted Black Sea region. In all, wheat and coarse grains shipments from Kazakhstan, Russia and Ukraine will fall by 27m. tons compared with 2009-10, with around half of this shortfall likely to be sourced in the United States.

The US Department of Agriculture’s ‘Grain: World Markets and Trade’ September 2010 report is also out. It noted wheat trade changes in 2010-11 in this way:

Selected Exporters: Australia is down 500,000 tons to 15.5 million based on logistical constraints. Canada is boosted 2.0 million tons to 17.5 million due to larger exportable supplies. EU is lowered 3.0 million tons to 21.0 million on reduced exportable supplies and quality concerns, particularly for German wheat. Iran is raised 450,000 tons to 500,000 due to greater exportable supplies and opportunities opened by reduced supplies in Russia. Kazakhstan is up 500,000 tons to 6.5 million on higher Russian import demand. Russia is raised 500,000 tons to 3.5 million based on exports shipped before the ban. United States is boosted 1.0 million tons to 34.0 million on strong demand, particularly for higher quality wheat.

International Grains Council rice and soyabean export prices

Selected Importers: Nigeria is up 400,000 tons to 4.0 million due to expected consumption growth. Russia is raised 1.4 million tons to 2.0 million due to increased demand for milling wheat caused by drought-reduced production.

The USDA report recorded trade changes in 2009-10 as “large late-season adjustments reflect reported shipments”. These are – Selected Exporters: Canada is up 500,000 tons to 19.0 million. The United Arab Emirates is raised 450,000 tons to 950,000. Selected Importers: Indonesia is down 450,000 tons to 5.4 million. Iran is up 600,000 tons to 3.6 million. Turkey is lowered 300,000 tons to 3.2 million.

Rice world markets and trade – Despite weather problems in China and Pakistan, global crop prospects remain excellent said the USDA report. Record world production is expected to not only meet rising demand but also maintain global stocks at the highest level since 2004.

International Grains Council world grain estimates

Prices – though quotes from all origins are up somewhat from last month, Vietnam’s increase is the most dramatic. With 2010 contracts already at a record 6.2 million tons, Vietnam raised the minimum export price of 5% broken to $450 per ton FOB, essentially halting new sales and, for the first time, pushing above higher-quality U.S. #2/4 quotes ($445 per ton FOB). Vietnamese quotes are now only $30 below Thai 100B quotes, a stark departure from the $120 spread just 2 months ago. As sales stall in Vietnam, Thai sales are expected to increase as the government finally releases intervention stocks. U.S. long-grain sales are also expected to pick up on newfound competitiveness and a record crop. By contrast, the medium-grain trade is somewhat on hold as the California crop has yet to be harvested. In addition, many tenders in major markets have yet to be announced.

The USDA report forecast trade changes for 2011. These are – Pakistan’s exports are slashed 750,000 tons to 2.9 million as floods have reduced the crop and damaged infrastructure. Afghanistan’s imports are reduced 100,000 tons to 200,000, as Pakistan is by far the largest supplier due to proximity and relative prices. Iran’s imports are cut 300,000 tons to 1.2 million on the expectation that imports from Pakistan will fall. Thailand’s exports are down 500,000 tons to 9.0 million because the government stock release is happening much later in the year than originally anticipated. Vietnam’s exports are raised 450,000 tons to a record 6.2 million on contracts to date. By contrast, imports are dropped 100,000 tons to 400,000 on a slowdown of border trade with Cambodia. Indonesia’s imports are doubled to 500,000 tons as relatively high domestic prices have caused a surge in trade with neighboring countries. Iran’s imports are dropped 150,000 tons to 1.2 million on the pace of shipments. Nigeria’s imports are lowered 100,000 tons to 1.7 million on slower-than-expected imports from Thailand.