Thursday, September 18, 2008

Why not use food as leverage for oil?

Did you know that over the summer Iran bought one million tons of wheat from the United States?

It’s been 27 years since Iran bought grain from us. Iran has suffered a very bad drought which reduced their wheat harvest by a third and forced them to look elsewhere to make up the shortfall. The fact that Iran is coming to the U.S. to buy wheat shows they have no where else to go for this commodity. They're searching the world for wheat. They're buying it from the U.S. because it's the only place they can get it right now.

The problem for the Arab world is they don’t have “good dirt”; that is fertile soil. Good dirt has become as valuable as oil to those that don’t have it. I believe good dirt will have strategic value on a par with oil; and it should be used by the United States just as oil is used by the Mid East camel riders and newly aggressive Russia as Putin strives to rebuild the Soviet Union. As Lennart Bage, president of a U.N. fund for agriculture development says, "Now fertile land with access to water has become a strategic asset."

If you don’t believe this consider increasing export restrictions around the globe which are used to keep food and grain within the borders of producing countries. For example, India curbs exports on rice and the Ukraine halts wheat shipments altogether. The number of grain-exporting regions has dwindled. Only Europe imported grain before World War II. In the 1930’s South America produced twice as much grain as North America. There was a time when the old Soviet Union exported grain, of course then they had the Ukraine in their orbit. Even Africa was self-sufficient but that’s not the case today as European farmers were replaced with natives as tyrannical rulers expelled white land owners. Today, only three major grain exporters remain: North America, Australia, and New Zealand. It is no surprise that global food supplies are at all time lows. Increasing land devoted to corn for ethanol production also reduces arable land available for food production and we all know the consequences of that.

Realization of the problem has now occurred to arid nations and they are scrambling to secure farmland. For example Saudi Arabia is at the mercy of the food producing countries just as they are obliged to them with respect to oil because Saudi has little ability to produce its own food. The Financial Times reports the Saudis are “scouring the globe for fertile lands in a search that has taken Saudi officials to Sudan, Ukraine, Pakistan and Thailand." Saudi Arabia is not the only one scrambling for “good dirt”; there are many others.

Chris Mayer, editor, Capital & Crisis says “The UAE has been looking to lock down acreage in Sudan and Kazakhstan. Libya is looking to lease farms in the Ukraine. South Korea has been poking around in Mongolia. Even China is exploring investing in farmland in Southeast Asia. While China has plenty of cultivable land, it does not have a lot of water.

Joachim von Braun, the director of the International Food Policy Research Institute has written "This is a new trend within the global food crisis. The dominant force today is security of food supplies."

Food prices around the world reflect this increasing shortage of food supplies. While the mainstream press focuses on the impact of biofuels such as ethanol as the reason, very little is written about what may be the most important thing of all: a growing shortage of quality fertile land. Perhaps it can be called the “good dirt crisis”. (After all nothing gets proper attention unless it is labeled a “crisis.”).

The world is losing and wasting fertile soil faster than it can be replaced. For the most part it took the earth millions of years to produce it and, just like climate change, the planet has its own schedule to deal with this as well.

A simple Google search reveals that “quality soil is loose, clumpy, filled with air pockets, and teeming with life. It's a complex micro ecosystem all its own. On average, the planet has little more than three feet of topsoil spread over its surface.” The Seattle Post-Intelligencer calls it "the shallow skin of nutrient-rich matter that sustains most of our food."

Again, Chris Mayer says “Until the final decades of the 20th century, the amount of new farm acreage added to the mix by clearing land offset the losses on a global basis. In the 1980s, the amount of land under cultivation began to fall for the first time since humble early humanity began to farm the rich land around the Tigris and Euphrates. It continues to fall today.”

John Reganold, a soils scientist at Washington State University agrees: “Globally, it's clear we are eroding soils at a rate much faster than they can form.” And the National Academy of Sciences says in the United States “we're losing it 10 times faster than its being replaced.” The U.N. says that on a global basis, the rate of loss is 10-100 times faster than that of replacement.

In any case, it seems safe to say that good dirt is in short supply. Actually fertile land is scarcer than oil. There is plenty of oil around the world; it’s only those who want to keep supplies low for political or commercial reasons that deprive us of the ability to have the supply exceed the demand. However this is not the case with the all important resource necessary to supply food to the world’s growing population.

If those leading America in the future had fortitude to do so, food could be used as part of a geopolitical strategy to make our country secure and as a counterweight to oil extortion. This may seem crass to liberals but our enemies do not share their sensitivities. We cannot continue to defend ourselves without using all our weapons in a world where our enemy only recognizes strength. Imagine a world where Arabs, Putin and Chavez don’t have the political leverage they have now and power that increases with the price of oil.

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