Oxfam's 'Grow' world hunger plan: More peasants
Hippie-crats correct on axing farm subsidies, tho
Get rid of Big Agriculture, increase impoverished subsistence farmers
As has been remarked upon by all sorts of people before, if the low-productivity farmlands of the world became as productive as the high productivity ones, then we'd all be swimming in food. In short, if the the nether reaches of the Congo had the same farming infrastructure as the nether reaches of the Dakotas then the problem would be solved. So far so good... but then Oxfam's analysis turns to shit. For it has managed to get itself infected with the lefty mantra that any and everything done by big companies must be awful, and that anything done with money in offices is positively evil. For having pointed out that what, say, the African farmer needs is the same infrastructure that the American one has, it then decides to demonise those companies which provide that American infrastructure. Those commodity trading companies become the evil ones.
For who is it that gets the new soya seeds to the Argentine or Brazilian farmer? Ships the fertiliser? Runs the warehouses and processing plants after the harvest? Operates the ports that ship the food to the hungry and pays the farmers so that they can do it all again next season? Quite, it's those very commodity companies, the Bunge, ADM, Cargill types that do all of this. The same companies which could, if allowed, bring exactly that infrastructure and supply chain to the places that don't currently have it.
No, really, they've managed to build exactly that in only 20 years in Argentina as the place has moved from beef to soy production. But Oxfam for some reason wants them out of the supply chain and governments taking over such duties.
And then the report goes entirely doolally over commodities speculation, over futures and options. One of the points the report makes (in one of the good bits) is that price volatility is damaging both to producers and consumers. So we'd like to have some method of dampening such volatility. At which point it insists that this means we must lessen speculation in foodstuffs. But, umm, speculation in foodstuffs is what dampens price volatility in foodstuffs.
If any Oxfam type happens to read this by mischance, here's why. To make money in commodities you have to buy low and sell high. When you buy low you prevent prices from falling further, in fact you raise them: maybe only a little depending on how much of the market you're buying, but raise them you do. Good, so we've just reduced the slumping of prices which do so much damage to farmers. When you sell high you're increasing the supply onto the market at a time of shortage. This reduces the price volatility at the high end which does such damage to consumers. So, our speculator making money reduces price volatility: it's only the speculator who buys high and sells low who increases it and as he goes bust very quickly we don't need to worry about him.
And yes, we do have the example of the American onion market where price volatility has been greater since the 1950s (and the banning of futures trading in onions) than was the case before the ban.
Another tax to pay for it all
Finally, to pay for all of their grand plans, to get those seeds to farmers, to build transport networks, they want to have a financial transactions tax. As we saw when Sweden brought in one of those, where the bond futures market shrank by 90 per cent or so and the options market closed entirely, an FTT would entirely destroy the very system which currently reduces price volatility. And it would probably bankrupt all those companies which currently build and operate the farming infrastructure which Oxfam insists should be extended to all.
So far so appalling, but my real venom – as I would suggest yours should be – is reserved for what they want to do to the people of Africa. When they consider how to boost farming there they consider the sort of farming that rich people do. Couple of percent of the people on the land, earning well, the rest of us able to go off and build health care systems, education, houses, libraries, all the things that make a civilisation. In Africa they decide that this would not be appropriate. No, in Africa we should insist upon smallholder farming: and for smallholder read peasant. Instead of fields of waving grain planted and cut by vast machines, we should rely on Mbutu and his kids trying to do it all with a hoe and machete.
The problem with this is that the amount that Mbutu can earn – the living standard for him and his kids – is determined by the productivity of their labour. If they're going to be stuck in low labour productivity peasant farming then they'll only ever be able to live like peasants. Forever. For this is the problem with peasant farming: the farmers have to be and live like peasants. Quite why Oxfam insists that 500 million Africans have to be condemned to this lifestyle, one that 500 million Europeans (the odd hippy excepted) have quite happily abandoned I'm not sure. It can't be racism, for Oxfam is on the left and lefties are against racism. But there it is, it is really condemning hundreds of millions for all eternity to what Marx called the idiocy of rural life.
And for that I'll not forgive it, and for that I suggest you too condemn Oxfam, its report and its campaign. ®
Sponsored: IBM FlashSystem V9000 product guide