Posts tagged with: Drought

More than a billion dollars has already been pledged to relieve victims of the drought-turned-famine ravaging the Horn of Africa. The stricken countries—Somalia in particular—do not have the technology and the infrastructure to deal with a major drought, and so in what is becoming a regular occurrence, the West is stepping in with aid.

Meanwhile back at the ranch, Texas and Oklahoma are suffering record droughts that are wiping out crops and taxing cattle businesses. Ranchers cannot rely on the forage feeding their herds are used to, and other sources of feed have become too costly; Texas A&M is advising cattlemen that this drought is so severe they will probably be better off selling their entire herds and rebuilding in a better year.

Unless you live in Al Gore’s head, these droughts have not been caused by governmental policy. But governmental policy causes much of the associated suffering. The PowerBlog has been covering the legacy that decades of colonialist humanitarian policy have left in East Africa. U.S. and European agricultural policy continue to cripple farmers in Kenya, Somalia, and Ethiopia.

Fortune, as it turns out, has a sense of irony: the same protectionism that is inducing atrophy overseas is hurting ranchers in America. The Bush-era free trade agreements that the Obama Administration refuses to allow a vote on, and other treaties which it might pursue if it weren’t beholden to big labor, would give the beef industry breathing room—foreign markets for beef could tip the cost-benefit scales back in cattlemen’s favor.

Southwestern cattlemen do benefit from a relatively large market in the United States: there are parts of the country where cattle are economically viable this year, so the Texas plains won’t be littered with sun-bleached skulls next year, but whole herds are still headed to the auction block because the Teamsters and other organizations won’t allow otherwise.

In South Korea for example, the market for U.S. beef could increase by as much as $1.3 billion if the 40 percent tariff now in place fell away, but that free trade agreement is sitting in the bottom of a drawer in the Resolute Desk. South American trade agreements also languish at the behest of unions, while the United States’ NAFTA games threaten existing economic activity.

I’ve not even mentioned U.S. ethanol policy, dust regulations, and the host of other laughable environmental protections that lose most of their humor value during a drought-of-the-century. The greatest statesmen counter the vicissitudes of Fortune by their leadership. Modern progressives, on the other hand, have managed to augment her swings.

Economies across the globe are struggling, and rising food prices are not going to make life any easier.  The Acton Institute raised concern for rising food prices, especially corn, in 2007, when Ray Nothstine wrote a commentary on, and at the time, record prices for corn, resulting in revolts in Mexico due to rapidly rising prices for tortillas.  The commentary brought to light unintended consequences of ethanol and its subsidy, including rising food prices.

And again, with food prices on the rise, and the subsidy for ethanol up for renewal, the debate has been given new life.

Corn prices are dramatically rising and are currently more than $6 per bushel.  Compare that to a few years ago in 2005, when corn was less than $2 per bushel.  Also, in November of 2010, corn prices reached a two year high.  However, corn is not the only food stock on the rise.  The past year wheat on Chicago Board of Trade was up 74 percent, and both soybean and cotton futures have already jumped.  Although, these rising food prices have had an adverse effect across the world, and according to the World Bank, since June of 2010, the rising food prices have pushed 44 million more people into extreme poverty in developing countries.

The debate over the cause of rising food prices, especially corn has centered around whether current adverse weather conditions are the culprit, or if it can actually be contributed to ethanol subsidies from the United States.

Weather conditions have recently been less than ideal for growing crops in many parts of the world.  Last year drought in Russia and Argentina, along with torrential rains in Australia and Canada caused numerous problems for farmers, and crop production was less than expected.  Furthermore, a cool wet summer in the United States resulted in a delayed harvest.  China’s current wheat crop is being threatened by a drought which may result in even higher food prices especially because China produces more wheat than any other country.  It is estimated approximately 42 percent of China’s winter wheat crop has been hurt by the drought.

While the unfavorable weather conditions have contributed to rising food prices, critics of the ethanol subsidy claim that the subsidy has played a major role in the rising food prices.  The ethanol subsidy, which is up for renewal, places a 54 cent tariff on imported ethanol and a 45 cent tax credit for every gallon of ethanol blended with gasoline.  Current federal law also mandates the use of ethanol.  Oil companies must use a designated amount of ethanol each year, 12.6 billion gallons in 2011, which will rise to 15 billion gallons by 2015.  The ethanol subsidy is paying oil companies to abide by a mandate required by federal law.

The use of corn in ethanol is continuing to rise.  The oil industry uses more ethanol each year because of the federal mandate, and as of November 2010, ethanol production consumed 40 percent of the corn crop produced in the United States.  If the United States decides not to renew the ethanol subsidy it will not only  save 40 percent of its corn crop, but will also save $25-$30 billion over the next five years.

The United States is a major exporter of food, supplying over half the global corn exports and over 40 percent of soybean exports.  However, with more and more corn produced in the United States being used for ethanol, less corn is used for food; thus, by the law of supply and demand, increasing the price of corn.  With the ethanol subsidy creating an increase demand for corn and raising the price, more and more farmers will gravitate to growing corn instead of other crops that are also needed for food supplies around the world.

With food prices on the rise, it is imperative to think long term when deciding if the ethanol subsidy should be renewed.

Not only are the economic arguments to the ethanol subsidy important, but so are the moral arguments.  Tomorrow I will evaluate the morality of rising food prices and the ethanol subsidy.

When you think about it, NBC’s little promotional stunt on Sunday Night Football for their “Green is Universal” week is a lot like a mini-Kyoto treaty: it was an empty gesture that had no long-term impact on the problem it was trying to address, while immediately making things worse on their broadcast, and in the end the only thing it accomplished was to make the participants feel a bit better about themselves. They probably shouldn’t though, considering that in order to send Matt Lauer to Illulissat, Greenland (4,200 miles roundtrip from 30 Rock), Al Roker to the Galapagos Islands (6,100 miles roundtrip), and Ann Curry to the South Pole (18,000 miles roundtrip) probably created many times the carbon emissions that were “offset” by Bob Costas’ romantic candlelight rendezvous with the American football-viewing public.

Or perhaps they shouldn’t feel so bad, considering that we’re just now learning that the southeastern United States is suffering through a dreadful drought (caused, of course, by Global Warmingtm) partly because of a lack of hurricaines (also brought to you by Global Warmingtm) over the last few years:

…journalists from The New York Times to the Augusta Chronicle have blamed the Southeast’s woes on man-made carbon dioxide.

Wrote the Chronicle: “Indeed, the drastic effects of global climate change intrude everywhere on our daily consciousness – from the serious drought that now threatens cities in the Southeast to. . . Category 5 hurricanes regularly battering coastlines.”

But, according to the AP stories that ran across the nation, the drought conditions are a result of “stifling summer heat and a drier-than-normal hurricane season.”

Complained a USA Today story: “With hurricane season nearing an end, no one expects relief before winter.”

Yes, both the presence and absence of hurricanes are simultaneously the fault of – you guessed it – climate change! If only we could figure out some way to distinguish between those carbon emissions that cause lingering drought and those that cause increased hurricanes and balance them somehow.

Perhaps the UN could add that to the agenda of their upcoming UN Climate Change Conference 2007 in fabulous, sunny Bali, Indonesia! Via The New Editor, Claudia Rosett gives insight into the sacrifice that our beloved international diplomats will be making to save us from ourselves:

UN policy allows even the lowlier UN staffers to travel business class on long-haul flights (your tax dollars at work), the better to arrive wined, dined and ready to hit the ground …and the beaches … and the golf courses … and the tennis courts — running. Apparently there is so much to discuss that the conference will run for a full fortnight, from Dec. 3-14, at Bali’s seaside luxury resort of Nusa Dua.

For all those taxpayer mugs out there who have not had the experience of flying business class to spend a fortnight at Nusa Dua, check out the spectacular seaside photos of the Bali International Convention Center, with its slogan: “The Place…Where Business is a Pleasure.” For more information, page through the Bali conference outline on the UN Framework Convention for Climate Change, or UNFCC, web site. This includes a handy list of pre/post conference tours, and a list of hotels (Nusa Dua Beach Hotel and Spa, and Melia Bali Villas and Spa Resort, already sold out) plus recreational facilities: sailing, fishing, snorkeling, ocean kayaking, and, of course, the shopping gallery.

I don’t know about you, but I shudder at the thought of a world so ravaged by the horrors of climate change that UN staffers would be forced to fly coach to a two week long conference at a fabulous seaside resort.

In the meantime, though, let’s just be thankful that the UN and NBC are willing to kick out so much carbon in order to help in creating the global warming-caused hurricanes that will offset the global warming-caused drought that afflicts the global warming-ravaged Southeast US. And let’s tip our cap to Glenn Beck, who is using his perch on CNN to help out as well: