Tuesday, September 04, 2007

national hoarding

What are the odds that this blog has influenced Russian domestic policy? I would estimate somewhere around 0%. I did read with interest though when a little birdie told me about an article in the Financial Times entitled, Moscow Considers Wheat Export Ban.

Russia is considering a ban on cereals exports in a move that exacerbates fears that wheat prices, already at an all-time high, could surge further on reduced supplies, European cereal traders said.

Russia, the world’s fifth largest wheat exporter, is concerned about rising local bread prices and inflation ahead of legislative elections in December.

The first interesting aspect of this article is the way it seems to suggest that the Russians are learning from past mistakes. In a previous post I suggested that USSR's inability to *grow* enough grain, not Russia's inability to buy it, led in part to the instability that brought about the collapse of that nation. Maybe some Russian policy maker somewhere in Moscow came to the same conclusion and wants to avoid making the same mistake twice.

Something else to take from this article is the ripple effect the food export ban is having worldwide.

The discussion of an export ban is also fueling panic buying by some food-importing countries, such as Egypt and India...

What we don't need to add to the geopolitical soup of the 21st century is a sprinkle of spicy countries unable to produce enough food to feed their people.

And it turns out Russia isn't alone in their coming limitations on food export.

Moscow’s concern comes as other food-exporting countries, such as Ukraine and Indonesia, try to rein in foreign sales amid rising prices.

So we see this has the makings of a trend. And I think it's worth mentioning that post peak oil we're likely to see a whole host of other export limitations. The current Bush administration might call it, "A necessary step to increase national security through the limitation of the sales of important resources to other countries." I might call it national hoarding. Whatever it's called it's not surprising to see it start with a basic commodity like grain, and there's little doubt that we're going to see such restrictions on oil exports in the future. It might even spark a war or two.

It's also important to note that the article explains that global wheat inventories are at a 26 year low. This is because we have more mouths to feed and also because of poor weather conditions in many of the wheat producing regions of the world. Climate change and unsustainable agricultural practices are already having an impact on our ability to feed ourselves as a species. I'm hoping it won't have to get harder for us here in America (producer of an above average percentage of global greenhouse gasses and a large amount of grain) to feed ourselves before we start to make change.

When civilizations collapse one often sited aspect is a disconnect between the leaders and problems facing those in the rest of society. As the world's reigning superpower we are undoubtedly leading, albeit in the wrong direction. And I would argue we're doing so because of a huge disconnected from the hunger and unrest pervasive throughout the rest of the world.

For instance our neighbor to the south, Mexico, has seen rioting because of a rise in their dietary staple, the corn tortilla. The media is even calling them The Tortilla Riots. This is a direct result of farmers selling corn to the U.S. for ethanol production. But do we hear about this in mainstream America? Nope. What we hear is politicians, choking on hubris, telling us that we can keep the SUV's running on ethanol. Such is the dangerous disconnect that could lead, this time around, to a collapse not just of an individual society but to a larger collapse including the much touted globalized economy. The possible decision by the Russians to stop selling grain abroad appears to support the idea that at least someone in that country is paying attention to a potiential political spark that could destabilize that country, a basic need that left unmet would mean an angry population. I dare say that the leaders of government in the U.S. seem largely unaware of anything other than the needs of their corporate sponsors.

But is that a bit harsh? After all many of us know someone who works at Wal-Mart and uses that paycheck to buy food. Where would they get their food if the global economy collapsed? The truth is we have allowed a small percentage of the population to gut this country of it's ability to do for itself; systematically destroying the ability of citizens and local communities to take care of their own needs, especially in terms of agriculture. As a people, we've sat idly by watching the whole makeover on television as we've been transformed from a nation of producers into a nation of consumers.

We are as much to blame as Monsanto. OK maybe not quite as much to blame as them but still it has happened on our watch and now we must do something about it. Just as the USSR found itself unable to provide food for its people and faced an angry populace, we too are in for a rough ride when the economics of growth run up against the unarguable limits of energy and resources. And it appears our leaders are in the driver's seat, pedal to the floor as we approach the cliff. It is us the people that must address this concern and we must address it from the local level up.

This article should be a wake up call, another ring in the chorus of alarm clocks begging us to wake up from the American dream and recognize that the way we live is unsustainable and that we can change now because we have the foresight and courage to do so, or we can wait until the change is unmercifully thrown upon us.

1 comment:

Anonymous said...

I liked this post today. It runs counter to standard thinking in economics, which says that - as prices increase, production will increase, there will be more supply available to meet demand and prices will fall. But instead we have higher prices stimulating less supply , which will only put further upward pressure on prices.
I was recently in a conference bar with the head of the "oil and gas" division of the EIA. While he was hesitant to give any ground that geological peak oil will occur any sooner than 30 years out, he was very concerned about the 'voluntary withdrawal' of supplies by nations who will "take care of their own" first and horde supply for future price increases...interesting to see that the same is holding for grain!