Friday, April 25, 2008


A dangerous mixture of rice and oil

by Larry Geller

Viviane Lerner has researched the current rice hoarding/food crisis situation and sent some articles to me, for which I am very appreciative. The video and article cited below are via Viviane.

First the video:

I don't know what to make of it. Is there a rice shortage or Costco Signnot? Seems not, but how to reconcile the Costco statement in the video that they are able to replenish their supplies with this posted sign?

Viviane circulated this "absolute Must-Read!" article, The Politics of Food is Politics:

In recent days, we have seen the rising price of oil and the devaluation of the dollar create two quantum shifts in the economy: the beginning of the collapse of the air travel industry and a global crisis of food-price inflation. These are related in ways that are crucial to understand...

There's much more. Another snippet:

The airline industry has been very forthright about their problems. They are saying, "We were neither tooled nor organized for $120-a-barrel oil." Most of us get this, because we associate transport technology with fossil hydrocarbons. We drive cars; and we buy the gas to put in those cars. Planes run on No. 1 Jet Fuel and if oil prices go up, so does the cost of jet fuel. Most of us are less likely to associate is oil prices with food prices.

We buy food at the supermarket; so we don't generally experience -- directly -- the association between fuel and food. The connection, however, is every bit as central in the current food production regime as the link between aircraft engines and their fuel. Industrial monocropping for global distribution is "neither tooled nor organized for oil at $120-a-barrel." It is not just the far-flung food transport network (much of it refrigerated and fuel-hungry) that creates the intimate dependency on oil; it is the whole scheme called industrial (or corporate, or "modern") agriculture.

This oil/food link -- during the onset of what some call the Peak Oil event -- has resulted almost overnight in steep food-price inflation, hitting peripheral economies like a tsunami.

Half the world's population survives on less than $2 per person per day. Even an increase of a few pennies for a kilo of rice can threaten survival on such a slender margin. That -- on the surface -- is why we are witnessing an outbreak of food riots around the globe.The unexamined assumption, however, is that it's somehow natural for human beings to be in the position of abject dependence on cash money to obtain food.

What to make of this? I don't know. Andy Parx commented on an earlier article I posted:

Last night Steven Colbert showed about a dozen clips from CNN, Fox, MSNBC etc. of talking heads, each saying “there is no rice shortage” to which he responded “Oh my god- there IS a rice shortage”... kind of like when authorities announce “this is not the time to panic” you know it’s time to panic.

Then there is the macro view in Step Aside Dollar, Is Rice the New Global Currency? in the Asia Times.

China is exchanging its depreciating reserves of the greenback for things of value, notably rice, with deadly consequences for U.S. foreign policy.

It's hard to summarize this article. With apologies, because it's inadequate, here is a snippet from the middle. I've always felt that anyone who can draw graphs like this must have something right:

Rice 1 Rice 2

Isn't that impressive? I wish I knew more of what it implies.
I'll just reiterate that our state government should be tracking this in case there is a predictable consequence for our islands, which are so very isolated and oil-dependent.
Should we be doing something besides waiting our turn to buy rice at Costco?



Nice graphs.


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