WSJ - Food Inflation, Riots Spark (front page story)

[Driven1]

Food Inflation, Riots Spark
Worries for World Leaders
IMF, World Bank
Push for Solutions;
Turmoil in Haiti
By BOB DAVIS and DOUGLAS BELKIN
April 14, 2008; Page A1

WASHINGTON -- Finance ministers gathered this weekend to grapple with the global financial crisis also struggled with a problem that has plagued the world periodically since before the time of the Pharaohs: food shortages.

Surging commodity prices have pushed up global food prices 83% in the past three years, according to the World Bank -- putting huge stress on some of the world's poorest nations. Even as the ministers met, Haiti's Prime Minister Jacques Edouard Alexis was resigning after a week in which that tiny country's capital was racked by rioting over higher prices for staples like rice and beans.


As food prices soar, protests are breaking out around the world, including this riot Saturday in Port-au-Prince, Haiti.


Rioting in response to soaring food prices recently has broken out in Egypt, Cameroon, Ivory Coast, Senegal and Ethiopia. In Pakistan and Thailand, army troops have been deployed to deter food theft from fields and warehouses. World Bank President Robert Zoellick warned in a recent speech that 33 countries are at risk of social upheaval because of rising food prices. Those could include Indonesia, Yemen, Ghana, Uzbekistan and the Philippines. In countries where buying food requires half to three-quarters of a poor person's income, "there is no margin for survival," he said.

Many policy makers at the weekend meetings of the International Monetary Fund and World Bank agreed that the problem is severe. Among other targets, they singled out U.S. policies pushing corn-based ethanol and other biofuels as deepening the woes.

"When millions of people are going hungry, it's a crime against humanity that food should be diverted to biofuels," said India's finance minister, Palaniappan Chidambaram, in an interview. Turkey's finance minister, Mehmet Simsek, said the use of food for biofuels is "appalling."

James Connaughton, chairman of the White House's council on environmental quality, said biofuels are only one contributor to rising food prices. Rising prices for energy and electricity also contribute, as does strong demand for food from big developing countries like China.

But beyond taking shots at the U.S., there was little agreement this weekend on what should be done. Mr. Zoellick pushed the ministers to focus on the food issue in a dramatic Thursday news conference at which he held up a 2-kilogram (4.4-pound) bag of rice, which he said would now cost poor families in Bangladesh half their daily income. He kept up the pressure over the weekend. In a Sunday news briefing, he said, "We have to put our money where our mouth is now -- so that we can put food into hungry mouths."

But the weekend's meeting produced few concrete results. Mr. Zoellick recently urged rich nations to contribute another $500 million to the United Nation's World Food Program, but he said that the U.N. has received commitments for only about half the money.

Integrated Response

Meanwhile, the IMF's board of governors -- basically, the world's finance ministers, who run both the IMF and World Bank -- urged the IMF to work with the World Bank for "an integrated response through policy advice and financial support."


• The Outlook: Higher Food Prices May Be Here to Stay
• Haiti Seeks Leader to Tackle Food Prices
• Vote: Are you surprised by the food prices you're paying?On Sunday, the committee that oversees the World Bank noted that "large groups of poor people are severely affected by high food and energy prices across the developing world." The committee echoed the IMF committee's call for "timely policy and financial support to vulnerable countries" and urged rich countries to be more generous in "immediate support for countries most affected by the high food prices."

The World Bank plans to nearly double its agricultural lending to Africa next year to $800 million, and is urging members to ramp up relief for hard-pressed nations. The World Bank, IMF and big industrialized nations also are pushing for the completion of the Doha global trade talks, though cutting food subsidies in the U.S. and Europe under a trade deal would boost prices of food for impoverished importing nations.

Last week, British Prime Minister Gordon Brown urged the G7 nations -- the U.S., Britain, Canada, France, Germany, Italy and Japan -- to develop a comprehensive strategy for the food problem, encompassing trade, agricultural productivity, technology, biofuels and short-term aid for poor countries. In the past, Britain has taken the lead in pushing the G7 to write off the debts of the world's poorest nations.

The situation in Haiti underscored some of the problems afflicting the world's poorest countries. Haiti has enough food in the marketplace to feed its populace, but prices have increased beyond the means of many of the urban poor to pay for it, said Michael Hess, an administrator in the U.S. Agency for International Development's Bureau for Democracy, Conflict and Humanitarian Assistance. "People are making two bucks a day," he said. "And we're seeing food prices go up around the world."

Wave of Protectionism

In the Philippines, the world's biggest importer of rice, a shortage of the grain has become acute. The government is considering a moratorium on converting agricultural land to construction of housing developments and golf courses. The government also is urging fast-food restaurants to offer half-portions of rice to slash the country's rice bill.

Aggravating the problem, in some countries food inflation has prompted a wave of protectionism. Countries usually impose trade barriers to imports to protect local industries and try to boost exports. But food-trade protectionism works the opposite way. Recently at least a dozen of 58 countries surveyed by the World Bank have reduced tariffs to food imports and erected barriers to exports in hopes of restraining food prices domestically and moving toward "self-sufficiency."


India, home to more than half the world's hungry, is restricting grain exports, including a ban on the export of non-basmati rice. Taxes on edible oils, corn and butter have been decreased or eliminated.

Egypt similarly halted rice exports for six months as of April 1. The price of cereals and bread there has climbed by nearly 50% over the past 12 months. Eleven people have died in the past two months in incidents related to lengthening bread lines. The shortage compelled President Hosni Mubarak to order the army to bake additional loaves.

The global effect of export barriers, however, is to drive food prices even higher than they would be otherwise. Such policies "distort global prices," said Mr. Simsek, the Turkish finance minister, in an interview. Rather than erect barriers, he said, Turkey plans to pick up the pace of constructing irrigation canals near dams in Anatolia, in southeastern Turkey.

Arvind Subramanian, a former senior IMF researcher, said that when countries adopt restrictive trade policies regarding food, "it becomes a bizarre kind of beggar-thy-neighbor. You're not trying to sell more to the other guy; you're trying to keep more in your own country."

With the international financial institutions working on a slow track, countries have been cutting their own deals. Ukrainian President Viktor Yushchenko said on Tuesday that he had agreed to let Libya grow wheat on 247,000 acres of land in the Ukraine. In exchange, Libya promised to include the former Soviet republic in construction and gas deals.

Brazil recently invited Egypt's minister of commerce to discuss a possible trade deal which would have a strong agriculture component. China also cut its first free-trade deal with a rich country, picking New Zealand, a major food exporter, and is talking about a pact with Australia, another big agricultural producer.

Meanwhile, Uganda plans to sell more coffee, milk and bananas to India. "Our problem is too much food and little market," Uganda President Yoweri Kaguta Museveni told reporters, according to news reports,

About 18 of the countries sampled by the World Bank also are boosting consumer subsidies and instituting price controls. That prompted a warning from U.S. Treasury Secretary Henry Paulson to "resist the temptation of price controls and consumption subsidies that are generally not effective and efficient methods of protecting vulnerable groups." He said, "They tend to create fiscal burdens and economic distortions while often providing aid to higher-income consumers or commercial interests other than the intended beneficiaries."

Better-Targeted Subsidies

Instead, the World Bank's Mr. Zoellick urged countries to look at better-targeted subsidies -- such as providing food in exchange for work, or increasing school-lunch programs for poor families, so that children can take food home to their families.

During informal conversations and interviews, ministers mainly agreed that the U.S. policies on biofuels were especially harmful. U.S. ethanol is made from corn, which, ministers said, could be exported to feed the hungry, and benefited from tariffs that block Brazilian ethanol, which is produced much more efficiently from sugar cane.

The White House's Mr. Connaughton said the U.S. is working on developing "second generation" biofuels that would use varieties of grass or agricultural wastes -- not food -- as source material. "That's where we need to get to go," he said.

The World Bank also has blamed the boom in biofuels for the rise in global food prices. That has put Mr. Zoellick in a ticklish position. Before taking his job at the World Bank, he was U.S. Trade Representative, and defended U.S. agricultural positions. In his Thursday news briefing, he didn't mention the U.S. by name, but he praised sugar-based ethanol of the sort made in Brazil and questioned whether tariffs to block the fuel -- such as the U.S. uses -- make "economic sense."

http://online.wsj.com/article/SB120813134819111573.html?mod=hps_us_whats_news

[second_pancake]

We need to all become more self-reliant.  Depending on our governments to feed us is what causes these atrocities, not the use of food product for "bio-fuel."  It's horrible this is happening, but hopefully this will turn into a positive as more people begin growing their own food to save on food costs, or out of necessity, and more people use alternate modes of transportation to prevent fuel consumption...regardless of the kind of fuel being used.

[gatorback]

We need to all become more self-reliant.  Depending on our governments to feed us is what causes these atrocities, not the use of food product for "bio-fuel."  It's horrible this is happening, but hopefully this will turn into a positive as more people begin growing their own food to save on food costs, or out of necessity, and more people use alternate modes of transportation to prevent fuel consumption...regardless of the kind of fuel being used.

What does jacksonville do to foster the use of "alternate modes of transportation"?  I know other cities give tax credits for electric cars. 

As far as "depending on our governments to feed us", I'm sorry, with that Farm Bill we are paying them not to feed us and give huge subsisides to farms ie the Farm Bill.

[Charleston native]

These kind of incidents only add fuel to the fire of conservatives like me who feel that environmentalism is anti-humanity. This food riot will merely be one of the many that will occur as long as food prices rise because of the idiocy of bio-fuels. Gator, you're exactly right about the food subsidies.

[second_pancake]

These kind of incidents only add fuel to the fire of conservatives like me who feel that environmentalism is anti-humanity. This food riot will merely be one of the many that will occur as long as food prices rise because of the idiocy of bio-fuels. Gator, you're exactly right about the food subsidies.

Everything in moderation.  "Environmentalism" is not anti-humanity. People jump on the bandwagon with an idea without thinking about the greater impact, and it's usually the NON-environmentalists that do the jumping.  They see there is money to be made somewhere and with no regard for anyone other than themselves and their own fiscal worth, they create a multitude of problems.

I cringed when I saw the media grab a hold of the new 'green trend'.  Yes, there has to be a positive impact on a grand scale, but "positive" is the operative word here.  Having 'green' shoved in everyone's faces day in and day out will do for environmentalism what the Atkin's diet did for low-carb lifestyles; kill it.

This is why I preach self-sufficiency.  If it can't be done right, then ^&%^ it and do things yourself.

[Charleston native]

Pancake, you'll be surprised to know that I agree with what most of you said. I guess that when I feel a movement becomes too extreme, I have to counteract it by being more extreme myself. Using food for energy should've been seen as a very bad idea because of the ramifications produced that we are now seeing. The idea itself was very extreme...now we're seeing the results, and I'm afraid we'll see more.

[Midway ®]

Pancake, you'll be surprised to know that I agree with what most of you said. I guess that when I feel a movement becomes too extreme, I have to counteract it by being more extreme myself. Using food for energy should've been seen as a very bad idea because of the ramifications produced that we are now seeing. The idea itself was very extreme...now we're seeing the results, and I'm afraid we'll see more.

I also agree with you that the diversion of food for Ethanol production is bad for the economy, but your basic premise that the biofuel imperatives are being pushed by "environmentalists" is incorrect. A sea change as large as this does not occur as a result of environmental imperatives counter to the wishes of the Bush Administration.

The Hidden Agenda behind the Bush Administration's Bio-Fuel Plan
Buy Feed Corn: They’re about to stop making it…

by F. William Engdahl

Global Research, July 25, 2007


That bowl of Kellogg’s Cornflakes on the breakfast table, or the portion of pasta or corn tortillas, cheese or meat on the table is going to rise in price over the coming months as sure as the sun rises in the East. Welcome ladies and gentlemen to the new world food price shock, conveniently timed to accompany our current world oil price shock.

Curiously it’s ominously similar in many respects to the early 1970’s when prices for oil and food both exploded by several hundred percent in a matter of months. That mid-1970’s price explosion led President Nixon to ask his old pal, Arthur Burns, then Chairman of the Fed, to find a way to alter the CPI inflation data to take attention away from the rising prices. The result then was the now-commonplace publication of the absurd "core inflation" CPI numbers--sans oil and food. Stephen Roche was the young Fed economist who was assigned the statistical manipulation job by Burns.

The late American satirist, Mark Twain once quipped, "Buy land: They’ve stopped making it…" Today we can say almost the same about corn or all grains worldwide. The world is in the early months of the greatest sustained rise in grain prices, for all major grains including maize, wheat, rice that we have seen in three decades. Those three crops constitute almost 90% of all grains cultivated in the world.

Washington’s calculated, absurd plan

What’s driving this extraordinary change? Here things get pretty interesting. The Bush Administration is making a major public relations push to convince the world it has turned into a "better steward of the environment." The problem is that many have fallen for the hype.

The center of his program, announced in his January State of the Union Address is called ’20 in 10’, cutting US gasoline use 20% by 2010. The official reason is to "reduce dependency on imported oil," as well as cutting unwanted "greenhouse gas" emissions. That isn’t the case, but it makes good PR. Repeat it often enough and maybe most people will believe it. Maybe they won’t realize their taxpayer subsidies to grow ethanol corn instead of feed corn are also driving the price of their daily bread through the roof.

The heart of the plan is a huge, taxpayer subsidized expansion of use of bio-ethanol for transport fuel. The President’s plan requires production of 35 billion gallons (about 133 billion liters) of ethanol a year by 2017. Congress already mandated with the Energy Policy Act of 2005 that corn ethanol for fuel must rise from 4 billion gallons in 2006 to 7.5 billion in 2012. To make certain it will happen, farmers and big agribusiness giants like ADM or David Rockefeller get generous taxpayer subsidies to grow corn for fuel instead of food. Currently ethanol producers get a subsidy in the US of 51 cents per gallon ethanol paid to the blender, usually an oil company that blends it with gasoline for sale.

As a result of the beautiful US Government subsidies to produce bio-ethanol fuels, and the new legislative mandate, the US refinery industry is investing big time in building new special ethanol distilleries, similar to oil refineries, except they produce ethanol fuel. The number currently under construction exceeds the total number of oil refineries built in the US over the past 25 years. When finished in the next 2-3 years the demand for corn and other grain to make ethanol for car fuel will double from present levels.

Not just USA bio-ethanol. In March Bush met with Brazil’s President to sign a bilateral "Ethanol Pact" to cooperate in R&D of "next generation" bio-fuel technologies like cellulosic ethanol from wood, and joint cooperation in "stimulating" expansion of bio-fuels use in developing countries, especially in Central America, and creating a "bio-fuels OPEC-like" cartel market with rules that allows formation of a Western Hemisphere ethanol market.

In short, the use of farmland worldwide for bio-ethanol and other bio-fuelsâ€"burning the food product rather than using it for human or animal foodâ€"is being treated in Washington, Brazil and other major centers, including the EU, as a major new growth industry.

Phony green arguments

Bio-fuelâ€"gasoline or fuel produced from refining food productsâ€"is being hyped as a solution to the controversial Global Warming problem. Leaving aside the faked science and the political interests behind the sudden hype about dangers of global warming, bio-fuels offer no net positive benefits over oil even under best conditions. Its advocates claim that present first generation bio-fuels "save up to 60% of carbon emission." As well, amid rising oil prices at $75 per barrel for Brent marker grades, governments such as Brazil’s are frantic to substitute homegrown bio-fuels for imported gasoline. In Brazil today 70% of all cars have "flexi-fuel" engines able to switch from conventional gasoline to 100% bio-fuel or any mix. Bio-fuel production has become one of Brazil’s major export industries as well.

The green claims for bio-fuel as a friendly and better fuel than gasoline are at best dubious, if not outright fraudulent. Depending on who runs the tests, ethanol has little if any effect on exhaust-pipe emissions in current car models. It has significant emission, however, of some toxins including formaldehyde and acetaldehyde, a suspected neurotoxin which has been banned as carcinogenic in California.

Ethanol is not some benign substance as we are led to think from the industry propaganda. It is highly corrosive to pipelines as well as to seals and fuel systems of existing car or other gasoline engines. It requires special new gas pumps. All that conversion costs money.

But the killer-diller about ethanol is that it holds at least 30% less energy per gallon than normal gasoline, translating into a loss in fuel economy per gallon of at least 25% over gasoline for an Ethanol E-85% blend. No advocate of the ethanol boondoggle addresses the huge social cost which is beginning to hit the dining room tables across the US, Europe and the rest of the world. Food prices are exploding as corn, soybeans and all cereal grain prices are going through the roof because of the astronomicalâ€"Congress-drivenâ€"demand for corn to burn for bio-fuel.

This year the Massachusetts Institute of Technology issued a report concluding that using corn-based ethanol instead of gasoline will have no impact on greenhouse gas emissions, and would even expand fossil fuel use due to increased demand for fertilizer and irrigation to expand acreage of ethanol crops. And according to MIT "natural gas consumption is 66% of total corn ethanol production energy," meaning huge new strains on natural gas supply, pushing prices there higher.

The idea that the world can "grow" out of oil dependency with bio-fuels is the PR hype being used to sell what is shaping up to be the mist dangerous threat to the planet’s food supply since creation of patented genetically manipulated corn and crops.

US farms become bio-fuel factories

The main reason US and world grain prices are soaring in the past two years and now pre-programmed to continue rising at a major pace, is the conversion of US farmland to become de facto bio-fuel factories. In 2006 US farmland devoted to bio-fuel crops increased by 48%. None of that land was replaced for food crop cultivation. The tax subsidies make it far too profitable to produce ethanol fuel.

Since 2001 the amount of maize used to produce bio-ethanol in the USA has risen 300%, trend increasing going forward. In fact, in 2006 US maize or corn crops for bio-fuel equaled the tonnage of corn used for export. In 2007 it is estimated it will exceed the corn for export by a hefty amount. The US is the world’s leading corn exporter, most going for animal feed to EU and other countries. The traditional USDA statistics on acreage planted to corn is no longer a useful metric of food prices as all marginal acreage is going for bio-fuel growing. The amount available for animal and human feed is actually declining.

Brazil and China are similarly switching from food to bio-fuels with large swatches of land.

A result of the bio-fuel revolution in agriculture is that world carryover or reserve stocks of grains have been plunging for six of the past seven years. Carryover reserve stocks of all grains fell at the end of 2006 to 57 days of consumption, the lowest level since 1972. Little wonder that world grain prices rose 100% over the past 12 months. This is just the start.

That decline in grain reserves, the measure of food security in event of drought or harvest failureâ€"an increasingly common event in recent yearsâ€"is pre-programmed to continue going as far ahead as the eye can see. Assuming modest world population increase annually of some 70 million people over the coming decade, especially in the Indian subcontinent and Africa, the stagnation or even decline in the tonnages of feed corn or other feed grains including rice that is harvested annually as growing amounts of bio-ethanol and other bio-fuels displaces food grain, in fact means we are just getting started on the greatest transformation of global agriculture since the introduction of the agribusiness revolution with fertilizers and mechanized farming after World War II. The difference is that this revolution is at the expense of food production. That preprograms exploding global grain prices, increased poverty and malnutrition. And the effect on gasoline import demand will be minimal.

Prof. M.A. Altieri of Berkeley University estimates that dedicating all USA corn and soybean production acreage to bio-fuels would only meet 12% of gasoline and 6% of diesel needs. He notes that though one-fifth of last year’s corn harvest went to bio-ethanol, it met a mere 3% of energy needs. But the farmland is converting at a record pace. In 2006 more than 50% of Iowa and South Dakota corn went to ethanol refineries. Farmers across the Midwest, desperate for more income after years of depressed corn prices, are abandoning traditional crop rotation to grow exclusively soybeans or corn with dramatic added impact on soil erosion and needs for added chemical pesticides. In the US some 41% of all herbicides used are already applied to corn. Monsanto and other makers of glyphosate herbicides like Roundup are clearly smiling on the way to the bank.

Going global with bio-fuels

The Bush-Lula pact is just the start of a growing global rush to plant crops for bio-fuel. Huge sugarcane, palm oil and soy plantations for bio-fuel refining are taking over forests and grasslands in Brazil, Argentina, Colombia, Ecuador and Paraguay. Soy cultivation has already caused the deforestation of 21 million hectares in Brazil and 14 million ha in Argentina, with no end in sight, as world grain prices continue to rise. Soya is used for bio-diesel fuel.

China, desperate for energy sources, is a major player in bio-fuel cultivation, reducing food crop acreage there as well. In the EU most bio-diesel fuel is produced using rapeseed plants, a popular animal feed. The result? Meat prices around the globe are rising and set to continue rising as far ahead as the eye can see. The EU has a target requiring minimum bio-fuel content of 10%, a foolish demand that will set aside 18% of EU farmland to cultivate crops to be burned as bio-fuel.

Big oil is also driving the bio-fuels bandwagon. Prof. David Pimentel of Cornell University and other scientists claim that net energy output from bio-ethanol fuel is less than the fossil fuel energy used to produce the ethanol. Measuring all energy inputs to produce ethanol from production of nitrogen fertilizer to energy needed to clean the considerable waste from bio-fuel refineries, Pimintel’s research showed a net energy loss of 22% for bio-fuelâ€"they use more energy than they produce. That translates into little threat to oil demand and huge profit for clever oil giants that re-profile themselves as "green energy" producers.

So it’s little wonder that ExxonMobil, Chevron and BP are all into bio-fuels. This past May, BP announced the largest ever R&D grant to a university, $500 million to the University of California-Berkeley to fund BP-dictated R&D into alternative energy including bio-fuels. Stanford’s Global Climate and Energy Program got $100 million from ExxonMobil; University of California-Davis got $25 million from Chevron for its Bio-energy Research Group. Princeton University’s Carbon Mitigation Initiative takes $15 million from BP.

Lord Browne, the disgraced former CEO of BP declared in 2006, "The world needs new technologies to maintain adequate supplies of energy for the future. We believe bioscience can bring immense benefits to the energy sector." The bio-fuel market is booming like few others today. This all is a paradise for global agribusiness industrial companies like Cargill, ADM and Monsanto, Syngenta.

All this, combined with severe weather problems in China, Australia, Ukraine and large parts of the EU growing areas this harvest season, guarantee that grain prices are set to explode further in coming months and years. Some are gleefully reporting the end of the era of "cheap food." With disappearing food security reserves and disappearing acreage going to plant corn and grains for food, the bio-fuel transformation will impact global food prices massively in coming years.

Another agenda behind Ethanol?

Uh Huh. The dramatic embrace of bio-fuels by the Bush Administration since 2005 has clearly been the global driver for soaring grain and food prices in the past 18 months. The evidence suggests this is no accident of sloppy legislative preparation. The US Government has been researching and developing bio-fuels since the 1970’s. The bio-ethanol architects did their homework we can be assured. It’s increasingly clear that the same people who brought us oil price inflation are now deliberately creating parallel food price inflation. We have had a rise in average oil prices of some 300% since the end of 2000 when George W. Bush and Dick Halliburton Cheney made oil the central preoccupation of US foreign policy.

Last year, as bio-ethanol production first became a major market factor, corn prices rose by some 130% on the Chicago in 14 months. It was more than known when Congress and the Bush Administration made their heavy push for bio-ethanol in 2005 that world grain reserves had been declining at alarming levels for several years at a time when global demand, driven especially by growing wealth And increasing meat consumption in China, was rising.

As a result of the diversion of record acreages of US and Brazilian corn and soybeans to bio-fuel production, food reserves are literally disappearing. Global food security, according to FAO data, is at its lowest since 1972. Curiously that was just the time that Henry Kissinger and the Nixon Administration engineered, in cahoots with Cargill and ADMâ€"the major backers of the ethanol scam todayâ€"what was called The Great Grain Robbery, sale of huge volumes of US grain to the Soviet Union in exchange for sales of record volumes of Russian oil to the West. Both oil and corn prices rose by 1975 some 300-400% as a result. Just how that worked, I treated in detail in: A Century of War: Anglo-American Oil Politics.

Today a new element has replaced USSR grain demand and harvest shortfalls. Bio-fuel demand, fed by US government subsidies is literally linking food prices to oil prices. The scale of the subsidized bio-fuel consumption has exploded so dramatically since the beginning of 2006 when the US Energy Policy Act of 2005 first began to impact crop planting decisions, not only in the USA, that there is emerging a de facto competition between people and cars for the same grains. Lester Brown recently noted, "We’re looking at competition in the global market between 800 million automobiles and the world’s two billion poorest people for the same commodity, the same grains. We are now in a new economic era where oil and food are interchangeable commodities because we can convert grain, sugar cane, soybeansâ€"anythingâ€"into fuel for cars. In effect the price of oil is beginning to set the price of food."

In the mid-1970’s Secretary of State Henry Kissinger, a protégé of the Rockefeller family and of its institutions stated, "Control the oil and you control entire nations; control the food and you control the people." The same cast of characters who brought the world the Iraq war, the global scramble to control oil, who brought us patented genetically manipulated seeds and now Terminator suicide seeds, and who cry about the "problem of world over-population," are now backing conversion of global grain production to burn as fuel at a time of declining global grain reserves. That alone should give pause for thought. As the popular saying goes, "Just because you’re paranoid doesn’t mean they aren’t out to get you."


F. William Engdahl is author of the forthcoming book, Seeds of Destruction: The Hidden Agenda of Genetic Manipulation,  Global Research Publishing, and author of A Century of War: Anglo-American Oil Politics and the New World Order, Pluto Press. He may be reached via his website, www.engdahl.oilgeopolitics.net.

F. William Engdahl is a frequent contributor to Global Research.  Global Research Articles by F. William Engdahl

[gatorback]

Isn't Allen Greenspan saying we need to add a $3.00 per gallon tax on gas?  If this is true, I'm all for it. 

[Charleston native]

I also agree with you that the diversion of food for Ethanol production is bad for the economy, but your basic premise that the biofuel imperatives are being pushed by "environmentalists" is incorrect. A sea change as large as this does not occur as a result of environmental imperatives counter to the wishes of the Bush Administration.

Oh, no doubt that Bush has been pushing for this biofuel initiative, but the article you quoted actually supports the premise that environmentalism helped create the incentive for it. Think about it; the green movement really started picking up large notoriety around the world's governments earlier this decade. Bush, in order to create a legacy as someone who cares for the environment, had to establish some sort of program that demonstrated to the world that the US was concerned about man-made glo-bull climate change. The result was the government's subsidies for biofuels, mainly ethanol.

I believe that if the environmentalist push didn't become so mainstream and "necessary", idiotic initiatives such as this would've been minimized or not even commenced. The pertinent question for now is, can we prevent future food price increases, and if so, how can we do it?

[Midway ®]

No, I think that you are still trying to make the case that the environmentalists drive decisions in the Bush administration. That is simply not supported by facts, and is a real stretch of the imagination.

They do not care about or do anything to burnish their "environmental legacy". They simply don't care about that kind of thing.

It's all done for profit. That's the common denominator that drives all decisions by Bush & co.

Thats how it was for Prescott Bush, Thats how it is for George H. W. Bush, and his sons and all of the assorted cousins and other members of that "Dynasty".

At least with the Astors & Carnegies we got some railroads and assorted foundations. With the Bushes, we haven't seen anything yet except private deals with the Saudis and other assorted middle east kingdoms.

[Driven1]

Brazil's Lula: food riots are wake-up call

BRASILIA, April 16 (Reuters) - Foods riots in Haiti and elsewhere are a wake-up call for the world to fight harder against poverty and reduce agricultural trade barriers, Brazilian President Luiz Inacio Lula da Silva said on Wednesday.
"It was necessary to watch dramatic scenes for the international community to wake up to the urgency of finding a definitive solution to the challenge of poverty," Lula said during a lunch with visiting Indian President Pratibha Patil.
Protests in Haiti over high prices for rice, beans and other staples ousted the government on Saturday.
Rising food prices showed that the world "was poorly equipped to face and solve the worst evil of our times," namely hunger, Lula said.
Food riots also underlined the need for an agreement in the so-called Doha round of global trade negotiations, Lula said. Rich countries need to reduce farms subsidies and trade barriers to allow poor countries to generate income with food exports, Lula said on Wednesday during a conference of the United Nation's Food and Agriculture Organization in Brasilia.
Either the world solves the unfair trade system, or "every time there's unrest like in Haiti, we adopt emergency measures and send a little bit of food to temporarily ease hunger."
If Europe doesn't open its market to farm imports, "someone will have to assume the historic responsibility," Lula warned.
Across the globe, bread, milk and other foods have become more expensive, fueling inflation in some countries.
Patil, whose 3-day visit to Brazil was her first foreign trip since taking office last year, praised Lula's flagship social welfare program "Zero Hunger."
Experts blamed price increases on strong Asian demand, adverse climate in some producer countries and increased use of corn to produce fuel in the United States.
The UN's Food and Agriculture Organization warned this week during a conference in Brasilia that rising prices threatened to increase malnutrition in Latin America.

http://www.guardian.co.uk/feedarticle?id=7467753

[Charleston native]

No, I think that you are still trying to make the case that the environmentalists drive decisions in the Bush administration. That is simply not supported by facts, and is a real stretch of the imagination.

They do not care about or do anything to burnish their "environmental legacy". They simply don't care about that kind of thing.

It's all done for profit. That's the common denominator that drives all decisions by Bush & co...

I agree, profit is the significant contributing factor. However, I'm not saying the environmentalists drive decisions for the Bush administration. What I am saying is that Bush is capitalizing on the mania that environmentalists such as Goracle perpetrated in the nation's culture and in politics. You may be trying to absolve the environmentalist movement from wrongdoing, but you can't deny the facts. Bottomline, if the climate change theory didn't induce such dramatic knee-jerk reactions among politicians, Bush and/or the government may not have been able to create these subsidies...in other words, there would be no mandate to do something like that.

[Midway ®]

I think that you are allowing your hatred of Al Gore to get in the way of your reasoning.

Ethanol is not foremost an "environmental" solution. It represented something to do with excess corn that the market was glutted with at the time, which resulted in extraordinarily low prices, in some cases lower than the cost of production. Keep in mind this all started back before there were such high demands on the world food supply. This gasohol thing has been around for quite a while now. Its a bad idea on many levels, and the proponents of E85 knew that. Not the least of which is the lower energy content per unit of volume for this fuel. (Translation 30% less mileage).

But, the proponents of E85 decided that the best way to sell everyone on the idea, even though it was known to be and obviously downright stupid, was to cloak it in a green coat. They know that it's not green, because early on, all the studies indicated that after processing, it took around 1.5 gallons of petroleum equivalent to produce 1 gallon of ethanol. (you should keep in mind though, that Brazil is an entirely different equation because they use sugar cane, which is a much more efficient feedstock).

That had the desired effect, in that the public bought into the idea as good, prices of corn went up, and everyone lived happily ever after.

You really are putting the cart before the horse here, mixing up cause and effect.

[gatorback]

It's exciting to see  the dialog on the subject I've been writing my congressmen about for the past month.  Bottom line, as I've been saying for the past month is tell Nancy to stop the subsidies for ethonol.  It's not right yet I can see why we would "go for it."

[Charleston native]

I think that you are allowing your hatred of Al Gore to get in the way of your reasoning...

It has nothing to do with hatred. It has everything to do with the fact that he and people of his ilk have sold this hoax long enough for people to use climate change as a reason to initiate stupid initiatives like ethanol production. Can you honestly tell me that the public and policy makers would've been sold on the ethanol idea for merely excess corn in the market? They used the climate change theory as an excuse to sell it. You even said yourself that they coated it with the green movement. I know it's a question of the-chicken-or-the-egg-first; my point is that if it wasn't for the panic produced by the green movement, the initiative would not have gained much support. Like you said, the public bought into the idea as good...that's because of the heavy emphasis on being green.