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Archive for December 2012

Are roads good for farmers or is research best? FAO’s annual measures both apples and oranges

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The FAO’s annual State of Food Agriculture in 2012 is called ‘investing in agriculture for a better future’. As the FAO’s premier ‘flagship’ report for the year, it is dense, is heavy with agri-oriented macro-economics, and is equally heavy with data and unabridged explanations of the roles of public investment and measures of agricultural productivity.

This is only a very fleeting sampling of the content of this year’s SOFA (as it is rather irreverently abbreviated into, both within FAO and outside it) and here I have picked out some thought-provoking material from the chapter on ‘channelling public investment towards higher returns’. [The State of Food and Agriculture main page is here. For those in a hurry there is an executive summary. The full report [pdf] can be found here.]

The magnitudes in the left panel are returns to one monetary unit of different types of public spending in terms of the value of agricultural production or productivity expressed in the same monetary unit. The agricultural performance variable is measured slightly differently in each country: agricultural GDP in China, agricultural total factor productivity in India, and agricultural labour productivity in Uganda. The magnitudes in the right panel are the reductions in the population size of the poor per monetary unit spent in each area of spending. The respective monetary units are: one million rupees in India; 10,000 yuan in China; and one million Ugandan shillings in Uganda. Chart: FAO SOFA 2012

The magnitudes in the left panel are returns to one monetary unit of different types of public spending in terms of the value of agricultural production or productivity expressed in the same monetary unit. The agricultural performance variable is measured slightly differently in each country: agricultural GDP in China, agricultural total factor productivity in India, and agricultural labour productivity in Uganda. The magnitudes in the right panel are the reductions in the population size of the poor per monetary unit spent in each area of spending. The respective monetary units are: one million rupees in India; 10,000 yuan in China; and one million Ugandan shillings in Uganda. Chart: FAO SOFA 2012

Country studies in several regions have found – said SOFA 2012 – positive relationships between government expenditure on agriculture and growth in agricultural and total GDP, while confirming that the type of expenditure matters. “In Rwanda,” said SOFA, “1 dollar of additional government expenditures on agricultural research increases agricultural GDP by 3 dollars, but the effects were larger for staples such as maize, cassava, pulses and poultry than for export crops. In India, expenditures aimed at improving productivity in livestock had greater returns and were more effective in mitigating poverty than general public investment in agriculture.”

The magnitudes are the reductions in the number of poor people per monetary unit spent in each area of expenditure. The respective monetary units are: one million baht in Thailand (i.e. reduction of number of poor people per one million baht spent in different sectors); one million rupees in India; 10 000 yuan in China; and one million Ugandan shillings in Uganda. Chart: FAO SOFA 2012

The magnitudes are the reductions in the number of poor people per monetary unit spent in each area of expenditure. The respective monetary units are: one million baht in Thailand (i.e. reduction of number of poor people per one million baht spent in different sectors); one million rupees in India; 10 000 yuan in China; and one million Ugandan shillings in Uganda. Chart: FAO SOFA 2012

The FAO report quotes from and refers to substantial literature on public investment in agricultural research and development, which SOFA 2012 shows has been one of the most effective forms of public investment over the past 40 years. The FAO’s prescription (or should it be direction?) is that because R&D drives technical change and productivity growth in agriculture, it raises farm incomes and reduces prices for consumers. I do think bits like this (which do tend to litter recent SOFAs) ought to be balanced by other views from FAO’s abundant research on ‘technical change’ and ‘productivity growth’, concepts that for the majority of small cultivators and for the majority of poor consumers of food mean more varieties of processed food from a shrinking variety of cereals being made available at higher prices.

Regrettably, the FAO burbles on about how “the benefits multiply throughout the economy as the extra income is used to purchase other goods and services, which in turn create incomes for their providers”, and about how “the welfare effects are large and diffuse, benefiting many people who are far removed from agriculture, so they are not always recognised as stemming directly from agricultural research”.

Surely, a tome as magisterial as the SOFA is meant to be needn’t grasp at such emblematic straws? For most smallholder cultivating households, the portion of agricultural income in total household income varies widely, and varies within a year between seasons. It is in my view therefore quite impossible to speak of benefits multiplying throughout the economy and of immeasurable but present welfare effects. How and for who, a SOFA should tell us, but this one does not.

The SOFA 2012 has added that “after agricultural R&D, the ranking of returns to other investment areas differs by country, suggesting that public investment priorities depend on local conditions, but rural infrastructure and road development are often ranked among the top sources of overall economic growth in rural areas”. Yes indeed they are, and I can say from experience in India that a better road (not a ‘good’ road, which is hard to find especially once a couple of monsoon months have had their way with roads) does local ‘mandis’ (farmers’ markets) much good.

The magnitudes are returns to one monetary unit of different types of public spending in terms of increased agricultural production or productivity measured in the same monetary unit. The agricultural performance variable is measured slightly differently in each country: agricultural GDP in China, agricultural total factor productivity in India, and agricultural labour productivity in Thailand and Uganda. Chart: FAO SOFA 2012

The magnitudes are returns to one monetary unit of different types of public spending in terms of increased agricultural production or productivity measured in the same monetary unit. The agricultural performance variable is measured slightly differently in each country: agricultural GDP in China, agricultural total factor productivity in India, and agricultural labour productivity in Thailand and Uganda. Chart: FAO SOFA 2012

“In Ethiopia, said the SOFA, access to all-weather roads reduced poverty by 6.9 percent and increased consumption growth by 16.3 percent. Returns to public investment in road infrastructure in Ethiopia were by far the highest of all categories. In Uganda, the marginal returns to public spending on feeder roads on agriculture output and poverty reduction was three to four times larger than the returns to public spending on larger roads.”

Well, yes and no is my view. Roads are used for non-agricultural purposes too, and tend more often than not to ‘open up’ (for better or worse) land use options along their length. If the incomes of agriculturally-dependent households became more varied because of family members being able to use new roads to find new wage opportunities (not necessarily agriculture-related) then how is one to apportion the additional benefit between being able to cart crop produce with less trouble than earlier, and between making use of a new informal labour transportation option that brings in extra wage earnings?

“Public goods in rural areas also tend to be complementary,” said SOFA 2012. In general yes, I agree. But then the SOFA cues the industrial-speak. “For example, in Bangladesh, villages with better infrastructure benefited more from agricultural research than villages with poorer infrastructure; they used more irrigation, improved seed and fertiliser, paid lower fertiliser prices, earned higher wages and had significantly higher production increases”.

This is an over-optimistic way of putting matters, and analogously, urban households that have access to a faster broadband service ‘benefit’ more from e-governance than households still using dial-up modems – but is there a demonstrable link to better or lower income? Moreover, ‘more’ and ‘better’ and ‘improved’ really is the language of industrial agriculture (and I can’t see lower fertiliser prices having been any more than a blip, certainly not a lasting condition).

The FAO’s SOFAs are always exceedingly valuable volumes, and provide much that sharpens our knowledge about food and agriculture, and they certainly widen our views about factors that can convincingly be linked with others which were hitherto ignored (or not attempted because of a lack of data). There is however to FAO first and to its many hundreds of thousands of ‘dependents’ (self included) next, the danger of following too enthusiastically (and uncritically) the ‘growth is good’ and hence more ‘growth is better’ train of advice. No doubt SOFA 2012 has passages that are likely more judicious, and we will examine these over the next few months.

Global trends to 2030 and the confusion of alternative worlds

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Global_Trends_2030-graph3The National Intelligence Council of the USA, earlier in 2012 December, released the latest Global Trends report, which is titled ‘Global Trends 2030: Alternative Worlds’. The Global Trends project is described as bringing expertise from outside (the American) government on factors of such as globalisation, demography and the environment. In the USA, the Director of National Intelligence serves as the head of what in America is called the ‘intelligence community’, overseeing and directing the implementation of the American National Intelligence Program and acting as the principal adviser to the President, the National Security Council, and the Homeland Security Council for intelligence matters related to national security. Specifically, the goal of the Director of National Intelligence is described as “to effectively integrate foreign, military and domestic intelligence in defense of the homeland and of United States interests abroad”.

Global_Trends_2030-icon1With that background, ‘Global Trends 2030: Alternative Worlds’ is the fifth installment in the National Intelligence Council’s series aimed at providing to the ruling regime of the USA “a framework for thinking about the future” by “identifying critical trends and potential discontinuities”. This 2012 report distinguishes between ‘megatrends’ (factors that will likely occur under any scenario) and ‘game-changers’ (critical variables whose trajectories are far less certain). Finally, to better explain the diversity and complexity of various factors, the 2012 report sketches out scenarios or alternative worlds.

Global_Trends_2030-graph4From our Asian point of view, ‘Global Trends 2030: Alternative Worlds’ has a most interesting section describing the middle classes, which the report says almost everywhere in the developing world are poised to expand substantially in terms of both absolute numbers and the percentage of the population that can claim middle-class status during the next 15-20 years. “Even the more conservative models see a rise in the global total of those living in the middle class from the current 1 billion or so to over 2 billion people,” said the report.

All the analyses reviewed by the authors of the ‘Global Trends 2030: Alternative Worlds’ suggest that the most rapid growth of the middle class will occur in Asia, with India somewhat ahead of China over the long term. According to the Asian Development Bank, if China “achieves the new plan target of increasing household expenditures at least as rapidly as GDP, the size of its middle class will explode” with “75 percent of China’s population enjoying middle-class standards and $2/day poverty will be substantially wiped out”.

The report does not make an attempt to link the impact of the rise of this middle-class with either one of the ‘mega trends’ described or two of the ‘game-changers’ described, which speak in a halting manner about the effects of over-consumption and galloping resource grabbing.

Global_Trends_2030-icon2‘Global Trends 2030: Alternative Worlds’ has conceded that “establishing the threshold for determining when someone is middle class versus climbing out of poverty is difficult, particularly because the calculations rely on the use of purchasing power parity”. In India the debate about who is poor is 40 years old and remains intractable – thanks mostly to the intransigence of central planners who still refuse to link the current cost of basics with current low levels of real income.

Instead, ‘Global Trends 2030: Alternative Worlds’ has forecast that most new members of the middle class in 2030 will be at the lower end of the spectrum. “Their per capita incomes will be still rated as ‘poor’ by Western standards even though they will have begun to acquire the trappings of middle-class status. Growth in the number of those living in the top half of the range of this new middle class — which is likely to be more in line with Western middle-class standards — will be substantial, rising from 330 million in 2010 to 679 million in 2030.

Global_Trends_2030-graph2Much of the future global leadership is likely to come from this segment,” said the report, raising a number of worries. Firstly, I would be loath to see any kind of leadership – political, economic or social – come from this segment as such leadership will strengthen, not diminish, the consumption patterns destroying our environment. Second, it is less the chasing of ‘Western’ per capita incomes we need and more the re-education of the middle-class to emphasise the virtues of ‘less’ and ‘small’ that is urgently needed.

More to the point, ‘Global Trends 2030: Alternative Worlds’ has forecast that with the expansion of the middle class, income inequalities — and the report says these “have been a striking characteristic of the rising developing states” — may begin to lessen in the developing world. This is astonishingly misread. Approximately a generation of economic liberalisation (which has gone under various names in different large countries) in India, China, Russia, South Africa, Brazil and Indonesia have proven the opposite.

Global_Trends_2030-icon3The report goes on in this befuddled vein: “Even if the Gini coefficients, which are used to measure inequalities, decline in many developing countries, they are still unlikely to approach the level of many current European countries like Germany and Finland where inequality is relatively low”. Again, a decade of ‘austerity’ under various guises (longer in Britain in fact, under Thatcherism) in Europe has created inequalities approaching the true levels seen in the BRICS and similar countries, and these have been camouflaged by welfare measures that are fast-disappearing and by community action. So this ‘Global Trends 2030: Alternative Worlds’ is flat wrong on these matters.

However, the report has made an attempt to infuse some social science into what is otherwise good news for the global consumer goods multinationals (and of course for the fossil fuel barons). “That said, a perception of great inequality will remain, particularly between urban- and rural-dwellers, motivating a growing number of rural-dwellers to migrate to the cities to seek economic opportunities. Their chances of becoming richer will be substantially greater in cities, but the increasing migration to urban areas will mean at least an initial expansion in the slums and the specter of poverty,” said the ‘Global Trends 2030: Alternative Worlds’ report. More interesting is the warning the report has issued, which is that if new middle-class entrants find it difficult to cling to their new status and are pulled back toward impoverishment, they will pressure governments for change. “Rising expectations that are frustrated have historically been a powerful driver of political turmoil.” Hear, hear. Remember the 99 per cent.

Syria in 2013 and the opposition to war

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The mother of a Free Syrian Army fighter mourns as his body brought home during his funeral in Aleppo December 21, 2012. Photo: Reuters/Ahmed Jadalla

The mother of a Free Syrian Army fighter mourns as his body brought home during his funeral in Aleppo December 21, 2012. Photo: Reuters/Ahmed Jadalla

A newly elected government in the USA is as intent as its predecessors were on deepening war and conflict where it already exists, and on embarking on new campaigns of state aggression and violence. The conflict in Syria has been converted by the United States of America and its partner western aggressors from a civil movement for democratic rights into a bitter and bloody civil war that has killed more than 20,000 and has made refugees of more than half a million people.

Unnoticed almost in the clamour for war that resounds in the capitals of USA and its western allies is new evidence from a United Nations Independent International Commission of Inquiry which has stated, finally and plainly, that a sectarian civil war is raging in Syria. Its findings are based upon extensive investigations and interviews between September 28 to December 16, 2012. The Commission has detailed massacres and gross violations of human rights that have polarised Syria.

Investigators, headed by Carla del Ponte, the former chief prosecutor of the International Criminal Court, have interviewed more than 1,200 victims and refugees. The report produced is a devastating indictment of the United States and other western powers – said International Committee of the Fourth International (ICFI) – who have worked with Turkey, Saudi Arabia and Qatar to depose of Bashar al-Assad by recruiting and aiding a Sunni insurgency overwhelmingly made up of Muslim Brotherhood supporters, Salafist and Al Qaeda-style groups.

Map of the conflict areas and zones of uprising in Syria from Political Geography Now

Map of the conflict areas and zones of uprising in Syria from Political Geography Now

“The UN independent panel finds more breaches of human rights law by parties to Syrian conflict,” said the UN news service. The Commission has been mandated by the Geneva-based Human Rights Council to investigate and record all violations of international human rights law in Syria, where at least 20,000 people, mostly civilians, have been killed since the uprising against President Bashar al-Assad began in March 2011. The conflict is now in its 22nd month and apart from the enormous number of refugees has left an estimated 4 million people inside Syria needing urgent humanitarian assistance. “The Syrian Government has yet to allow the Commission to undertake investigations inside the country,” said the UN news report.

That lack of access may change in early 2013 if the movement Peace In Syria is successful. This initiative consists in calling a delegation of high-ranking personalities of the international public to go to Syria with the aim of opening a national dialogue between the main political and social forces involved in the ongoing armed conflict to pave a way for a political solution.

As highlighted by Monthly Review’s MRZine, the peace initiative has said: “We are highly concerned not only because the conflict has been acquiring a dangerous geo-political dimension. The legitimate and at the beginning also peaceful movement of the Syrian people – along with their Arab brothers – for democratic rights is also in danger of being converted into a sectarian civil war with massive regional and international involvement.”

Quick tabulation of the anti-war survey results from the Pew Research Center for the People and the Press

Quick tabulation of the anti-war survey results from the Pew Research Center for the People and the Press

Utterly unmindful of the calls for peace within the Middle East and outside, the government of the USA is just as brazenly ignoring the anti-war movement at home. The Pew Research Center for the People and the Press conducted a survey whose finding is that the American public continues to say that the USA does not have a responsibility to do something about the fighting there.

“And there continues to be substantial opposition to sending arms to anti-government forces in Syria,” said the survey report. “Only about quarter of Americans (27%) say the U.S. has a responsibility to do something about the fighting in Syria; more than twice as many (63%) say it does not. These views are virtually unchanged from March. Similarly, just 24% favor the U.S. and its allies sending arms and military supplies to anti-government groups in Syria, while 65% are opposed.”

Far more bluntly, Veterans For Peace has urgently called on the United States and NATO “to cease all military activity in Syria, halt all U.S. and NATO shipments of weapons, and abandon all threats to further escalate the violence under which the people of Syria are suffering. NATO troops and missiles should be withdrawn from Turkey and other surrounding nations. U.S. ships should exit the Mediterranean”.

A fire burns after what activist said was shelling by forces loyal to Syria's President Bashar al-Assad at Ain Terma area in Ghouta, east of Damascus December 18, 2012. Picture taken December 18, 2012. Photo: Reuters/ Karm Seif/ Shaam News Network

A fire burns after what activist said was shelling by forces loyal to Syria’s President Bashar al-Assad at Ain Terma area in Ghouta, east of Damascus December 18, 2012. Picture taken December 18, 2012. Photo: Reuters/ Karm Seif/ Shaam News Network

The organisation draws upon the experiences of military veterans in working for the abolition of war. “We have not entered into this work without consideration of many situations similar to the current one in Syria,” said the organisation, and added, “No good can come from U.S. military intervention in Syria. The people of Libya, Iraq, Afghanistan, Pakistan, Yemen, Somalia, the former Yugoslavia, Vietnam, and dozens of other nations in Latin America and around the world have not been made better off by U.S. military intervention.”

But the USA, its aggressor western allies and NATO are intent on prosecuting war in Syria and gathering for greater, bloodier conflict. On December 17, Israel’s Haaretz reported that US cargo airplanes carrying military equipment landed in Jordanian airports over several days and that US military forces in the country have been significantly built up. The USA, Germany and the Netherlands have dispatched Patriot anti-missile systems and hundreds of troops to Turkey’s border and are seeking a pretext to use them. Hence last week, US officials accused the Syrian government of firing Scud missiles against opposition groups near Maara, north of Aleppo near the Turkish border, a claim Syria denied as “untrue rumours”. [See Al Jazeera’s live diary of events in Syria for more.]

It is now left to the citizens of the USA and its western allies – citizens who are no less bludgeoned daily by the austerity measures imposed by their governments while their criminally-minded banking and corporate elite frame and set policy both national and international – to derail the war machine. A number of good reasons for doing so can be found in the work of the UN Independent International Commission of Inquiry, whose new 10-page update – the latest in a series of reports and updates produced by the Commission since it began its work in August 2011 – paints a bleak picture of the devastating conflict and continuing international human rights and humanitarian law violations taking place in Syria.

The full 10-page update can be viewed here – it describes the unrelenting violence resulting in many thousands of dead and wounded, and also focuses on arbitrary detention and disappearances, huge displacement and the massive physical destruction in Syria. It describes how World Heritage sites have been damaged or destroyed, as well as entire neighbourhoods of several of the country’s biggest cities. Civilians continue to bear the brunt as the front lines between Government forces and the armed opposition have moved deeper into urban areas. The Commission of Inquiry will present its fourth report to the UN Human Rights Council in March 2013.

At end 2012, total grains consumption falls, says IGC

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IGC-201212-graphsFor its final Grain Market Report for 2012, the International Grains Council (IGC) has revised slightly its grains supply and demand forecasts for 2012-13 “as harvests have been completed in some countries, but the outlook is largely unchanged”.

Total grains production is expected to fall by 5% year-on-year, said the Report for 2012 November, “and despite a contraction in consumption for the first time in 14 years, stocks are set to fall by 45mt to 324mt”.

The IGC Grains and Oilseeds Index is down by 2% from a month earlier but as the Report has said “this masks divergent underlying trends… the soyabean and rice sub-indices have declined by 7% and 1% respectively”. [You can get the Grain Market Report for 2012 November here (pdf), and the data tables for the crops in this zip file.]

In the wheat market, the Report has said that speculation about dwindling Black Sea supplies and the prospect of export curbs in Ukraine have dominated, yet flows from the region have defied expectations.

“This has limited price upside from weather-related worries for 2012-13 crops currently being harvested in the southern hemisphere, and conditions for the recently planted winter wheat in the north,” said the Report. Given high prices, the total wheat harvested area for 2013-14 is set to increase by 2%, although the IGC has warned that conditions for parts of the US crop are a concern.

Maize prices outperformed other grains with improved US export hopes and less than favourable planting conditions for South American crops which are critical given tight supplies. In contrast, rice prices have been relatively stable, but Asian markets were pressured by new crop supplies and mostly limited activity.

Written by makanaka

December 23, 2012 at 17:53

Countries awash with carbon

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Even though countries are burning unprecedented amounts of oil and gas, the estimates of how much is left continue to grow, thanks to high prices and new technologies that have enabled companies to find and extract new resources. Graphic: Nature

Even though countries are burning unprecedented amounts of oil and gas, the estimates of how much is left continue to grow, thanks to high prices and new technologies that have enabled companies to find and extract new resources. Graphic: Nature

More than ever, these charts by Nature, the science magazine, show, countries are providing themselves with energy from (what they continue to believe are abundant supplies of) fossil fuels.

“Renewables such as solar and wind power are growing faster than any other source of energy, but are barely making a dent in fossil-fuel consumption,” said the Nature text accompanying these graphics. “The scale of the challenge will only grow as the expanding global population requires more energy. This tour of global and regional energy trends makes clear that even with aggressive action to reduce energy consumption and curb emissions, fossil fuels will be around for a very long time.”

A decade ago, it was the tar sands of Canada and Venezuela. More recently, hydraulic-fracturing technologies have opened up oil and gas resources in the United States. Across the globe, proven oil and gas reserves are 60% higher today than they were in 1991. Graphic: Nature

A decade ago, it was the tar sands of Canada and Venezuela. More recently, hydraulic-fracturing technologies have opened up oil and gas resources in the United States. Across the globe, proven oil and gas reserves are 60% higher today than they were in 1991. Graphic: Nature

Nature also has a clickable guide to the world’s energy use which you can use to find out which countries were using up Earth’s resources fastest in 2011 (they’ve charted the numbers from the BP Statistical Review of World Energy 2012) and which ones were taking a lead on renewable energy.

At current consumption rates, fossil fuel reserves would last for about 60 years — and that could be extended by new discoveries and unconventional deposits. Coal reserves have not increased in size, but the supply will last for at least a century at current rates of consumption. Graphic: Nature

At current consumption rates, fossil fuel reserves would last for about 60 years — and that could be extended by new discoveries and unconventional deposits. Coal reserves have not increased in size, but the supply will last for at least a century at current rates of consumption. Graphic: Nature

Written by makanaka

December 10, 2012 at 12:59

Understanding how food prices are gathered in India

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The main price types and their collection agencies and departments

The main price types and their collection agencies and departments

It isn’t easy, not with 468 cities and urban agglomerations whose populations are more than 100,000 – how many of their markets can be reliably covered? There are 236 with populations of between 100,000 and 200,000.

From there to 300,000 there are 79, from there to 400,000 there are 35, from there to 500,000 there are 22, to 600,000 and then to 700,000 there are 13 each, then up to a million there are 17, from there to two million there are 34, from there to five million there are 11, and five million and above there are eight.

How can any agency deal with such a spread, variety in typologies of urban growth, speed of growth, differences in income strata, and hope to be somewhat uniform and at least reasonably regular in the collection of price data? No one agency can, and not even a set of them can.

Still, to understand how prices are arrived at (“discovered” is the term the commodities futures markets like to use, but such use is far from innocuous and more than hurtful for the low-income households) and how they change over time we have to make use of what is available.

In India, price data is broadly classified into two categories: prices relating to bulk transactions and prices for small transactions (what the price collection agencies call ‘bulk transactions’ include wholesale prices and farm harvest prices).

What the price collection landscape in India looks like

What the price collection landscape in India looks like

Retail (or consumer) prices are small transactions – what the rural and urban (and migrant) household pays for a local food basket, for electricity, health care, education, clothes, transport, communication, durables and various services including banking.

So there are what the price monitoring and collection agencies call “customarily collected” prices and these are for items which are included in the typical consumer basket of goods of segments of population that have been terms industrial workers, agricultural labourers and rural labourers – and this is because there are separate consumer price indices computed every month for these three categories.

Several departments and agencies of the Government of India are involved in the collection of prices and their redistribution. Perhaps the most important but also the most frustrating (to find and use) is the Price Monitoring Cell of the Department of Consumer Affairs. It is important because the PMC collects and disseminates wholesale and retail prices of selected essential food items. It is frustrating because the website that delivers the data is frequently down. That’s apart from data gaps. But we have to work with what we have.

Occupy the EU, and merry christmas

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TNI-map-of-EU-resistance-2012Let’s look at a few, very few, trifling almost, pieces of evidence. As austerity cuts swept Europe, the numbers of the wealthy in Europe with more than US$1 million (€772,000) in cash rose from 2.6 million in 2008 to 3.2 million people in 2011. Together they were worth US$10.1 trillion (€7.8 trillion) in 2011.

Don’t look away yet. The five biggest banks in Europe made profits of €34 billion in 2011. Executive pay for the CEOs of the 100 largest companies on the London stock exchange rose by 49% in 2010, compared with 2.7% for the average employee.

Yes, I’m coming to the Occupy anthem, but first: there are between 15,000 and 30,000 estimated lobbyists in Brussels – more than in Washington. Some operate as “professional consultants” and under other titles and relatively few have registered with the EC voluntary lobbyist register. 68% of European lobby groups represent business interests. Trade unions make up 1-2%.

This is courtesy the very excellent and incendiary update to the EU Crisis Pocket Guide, first brought out by the Transnational Institute. [The update is in English, and the pocket guide is also available in Italian and in Spanish.)

TNI-EU-banks_bailout-2012TNI’s EU Crisis Pocket Guide tells us: how a private debt crisis was turned into a public debt crisis and an excuse for austerity; the way the rich and bankers benefited while the vast majority lost out; the devastating social consequences of austerity; the European Union’s response to the crisis: more austerity, more privatisation, less democracy; and contains ten alternatives put forward by civil society groups to put people and the environment before corporate greed.

Indeed, as Triple Crisis has warned, the GDP figures published in the Eurostat press release on the 15th of November 2012 for the Economic and Monetary Union (euro area) marked the confirmation of a double-dipped recession (with negative growth in quarters 2 and 3 of 2012). Gross domestic product was 0.6 per cent lower in the third quarter of 2012 compared with 12 months earlier. The return of recession is symbolic of the failure of the austerity programmes, which have been striking down economic activity throughout the EU and EMU. It should give rise to some thoughts as to why the austerity programmes are not working to bring down budget deficits without damaging economic activity.

But back to TNI and the Pocket Guide, which has said that in spite of the crippling costs of bailing out the banks, the EU still has not agreed, let alone put into operation, any major bank reforms. Four years on, only a few new rules to reduce some particularly risky practices by banks and financial markets, exposed by the financial crisis, have become operational.

TNI-occupy_the_EU-2012What’s the remedy? There are a goodly number and here are but a few, as offered by the TNI’s very competent heads: (1) Bring the financial sector back under public control and do this by banning speculative financial instruments like Credit Default Swaps and food speculation, reintroduce rules that separate retail/utility banking from investment banking, impose size limits on banks so none can become “too big to fail”, stop new financial products unless proved safe and socially useful, ban hedge funds and other risky speculators who only make money from money, re-introduce controls on capital flows. (2) Tax the rich, the speculators and the polluters, impose tax on international financial transactions, increase taxes on the rich to at least the same as pre-1980 levels, end subsidies for fossil fuel industries, close down tax havens, establish a maximum pay ceiling and ban bonuses, introduce a Basic Income available to all.

Verso-Crisis_Eurozone_smFor more background, there is the book, ‘Crisis in the Eurozone’ (Verso), and this has described the credit crunch, which led (coaxed or demanded) that governments around the world step in to bail out the banks. “The sequel to that debacle is the sovereign debt crisis, which has hit the eurozone hard. The hour has come to pay the piper, and ordinary citizens across Europe are growing to realize that socialism for the wealthy means punching a few new holes in their already-tightened belts.”

In this book, a leading member of the Research on Money and Finance group, Costas Lapavitsas argues that European austerity is counterproductive. The book shows that cutbacks in public spending will mean a longer, deeper recession, worsen the burden of debt, further imperil banks, and may soon spell the end of monetary union itself.

For whom do the FAO and its director-general work?

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A farmer accompanies his cattle through the fields of Uttara Kannada district, in the state of Karnataka, south India.

A farmer accompanies his cattle through the fields of Uttara Kannada district, in the state of Karnataka, south India.

For farmers small and large?  For the tens of millions of food-consuming households, poor or just getting by?  For the governments and bureaucracies of small countries who want to import less and grow more?  For the organic cultivators on their small densely bio-diverse plots?  Or for the world’s large food production, trading, and retail corporations, whose influence is wide and whose power is vast? [This is an extract from the full article at Monthly Review’s MRZine.]

FAO director-general Jose Graziano da Silva

There is the continuing if travel-stained hope — held by so many of us, those who work at humble stations in the food and agriculture sector — that, of all those whom the director-general of the Food and Agriculture Organization (FAO of the United Nations) does work for, it is not that last.  But, since 2011 June, when José Graziano da Silva became the head of the FAO, the signs have been otherwise, and they are growing stronger with each passing month.

What effect does this have on the way the 190-odd member states of the UN deal with agriculture and food, with nutrition and food security, with making food affordable?  A great deal.  These are questions the member states of the FAO (and of the UN) have faced since 1945, with the end of World War Two.  If you read this passage, it helps illustrate how little has changed from one point of view, and how much has, from another, far more insidious and destabilizing point of view:

. . . [S]ome of the basic problems that have afflicted humanity since the beginning of society remain unsolved.  Large parts of the world still suffer from hunger, and the threat of famine is ever present.  Today we are confronted by a new challenge in human history which, if not faced, could sweep away the little progress we have so far achieved — this is the upward surge of world population at a rate never experienced before.

That was the fourth director-general of the FAO, B. R. Sen of India, and he said these words during his inaugural address at the First African Regional Conference held in Lagos, Nigeria, on 3 November 1960.

Sen appealed “… to our Member Governments not only to discuss their problems, but also to avail themselves of the knowledge and skills FAO has acquired over many years in the fields of agricultural development and food production and distribution.”  He said: “While the increase of agricultural productivity must remain the sine qua non of economic development of the less developed regions, the importance of education, public health and institutional factors must be recognised in any plan of balanced economic development.”

The FAO 'real' food price index. What will a private sector 'political commitment' do to these trends?

The FAO ‘real’ food price index. What will a private sector ‘political commitment’ do to these trends?

As you see, it has been over 50 years and few of the deficits recorded then have been banished.  How could they have been?  In the years — the decades — since 1960, many a development theory has been advanced only to be discarded . . . but not before the worst of them were thrust upon poor folk and choiceless urban dwellers, as they are now.

Only the armory of the food giants today is far more potent than it ever has been.  And still more powerful will they become, if championed by the FAO as they currently are.  Graziano da Silva at the end of 2012 November said that the private sector can make an important contribution to the fight against poverty and hunger and promote sustainable food production and consumption.  Where did he say this?  At the FAO Headquarters, to participants whose associations represent more than five thousand companies, during the first in a series of planned dialogues on what the FAO is calling “private sector involvement in poverty- and hunger-reduction initiatives.”

This is deeply worrying.  Food companies, global grain traders, commodities exchanges, multi-national food retail chains, and large processed-food corporations have been using all the means they could muster to influence the FAO during the 2001-10 decade.  Now, under Graziano da Silva, the gates have opened wide in a manner that was still resisted during the tenure of his immediate predecessor, Jacques Diouf (1994-2011), and could hardly be countenanced during the tenure of Edouard Saouma (1976-1993).  What would those who came before — A. H. Boerma (1968-1975), B. R. Sen (1956-1967), P. V. Cardon (1954-1956), N. E. Dodd (1948-21), and J. B. Orr (1945-1948) — have thought of such a swerve marketward?

Indigenous and organic cereals displayed in Bangalore, Karnataka

Indigenous and organic cereals displayed in Bangalore, Karnataka

The signs came early.  In 2011 October, for the World Food Day of that year, Graziano da Silva in an article wrote of “boosting investments in agriculture and food security” but didn’t say whether he meant public investment or private.  What he did do was extol what he believes are the benefits of “boosting cash flows into economically stagnant rural communities,” as the FAO release of that day explained.  The director-general’s words were: “Cash transfers and cash-for-work programmes work in the same way as rain on dry soil, allowing these communities to bloom once again.”

It was a turn of metaphor that, when similarly used by him in an article about eleven months later, infuriated 109 farmers’ and peasants’ movements and associations.  Graziano da Silva and Suma Chakrabarti, the president of the European Bank for Reconstruction and Development (EBRD), wrote an article published in the Wall Street Journal on 6 September 2012.  In the article, they called on governments and social organizations to embrace the private sector as the main engine for global food production.

mrzine_logo“The language used by Graziano da Silva and Chakrabarti is offensive,” said the signatories to the common statement issued by the 109 organizations.  “Phrases like ‘fertilize this land with money’ or ‘make life easier for the world’s hungry’ call into question the FAO’s ability to do its job with the necessary rigor and independence from large agribusiness companies and fulfill the UN mandate to eradicate hunger and improve the living conditions of rural people.”[You can read the rest on MRZine.]

Written by makanaka

December 5, 2012 at 16:35