Oxfam: Growing a Better Future

This new report of theirs fails I\’m afraid.

Growing a Better Future.

Fails on two levels.

The first will seem a little technical but it\’s summed up here:

It should be emphasized that the model does not capture potential increases in
agricultural productivity that are likely to result from increased research and
development efforts incentivized by the price increases for agricultural output.

That\’s from the supporting report which gives us their estimates of the price rises to come. So everything they\’re saying about said future prices rises ignores everything we know people will do about such future price rises.

Yes Virginia, people really do change their behaviour in the face of changing prices.

Then, when they get to looking at the impact of climate change on crop yields, we get this:

The low-productivity scenario presented here depicts a world with rapid
temperature change, high sensitivity of crops to warming, and a CO2 fertilization
effect at the lower end of published estimates.

So we\’ve the worst case in terms of temperature change, the worst case in terms of crop sensitivityand the worst case in terms of the effects of CO2 itself on crop growth.

This is known as stacking the deck in favour of your (alarmist) case. A useful thing to have done would be to have played a little with these assumptions. What about taking the mid range of each of the predicted possibilities? Or mixing and matching?

Now, no, I don\’t know, this isn\’t an area I\’m really up with (perhaps one or more of you are?) but from the dim recesses of memory aren\’t some people saying that the extra CO2 effect is likely to boost crop yields substantially?

Is it possible that by not taking the worst of every factor, but say, as seems more reasonable, the mid levels, that prices might not even rise at all?

As I say, I don\’t know, but I\’d certainly have more trust in a report that actually looked at these points rather than just presented the results of the worst.

Still on the technical points, in the main report we get something that I\’m sure most will miss. From this subsidiary one we can see a bit of it:

With the exception of South Asia, real per capita
food consumption generally expands despite the strong domestic food price
increases, since average real income per capita is projected to rise. However, the
food price increases relative to other commodities means that the share of
income that households spend on food remains higher than it would be in the
absence of these price increases.

They\’re not, note not, saying that food per capita is going to be declining. Nor are they even saying that the percentage of household income spent on food is going to rise. They\’re not even saying that a shortage of food is what is going to raise food prices. What they are in fact saying is that as people get richer, as diets change, then food prices will rise because people are getting richer and diets will change.

This is much less a report about the iniquities of the international food system and the perils of climate change than it is a report about what happens to food prices as we abolish absolute poverty and destitution.

You know, a good problem to have, not a bad one.

And now on to the second problem, the conceptual one.

There are good things in the report, yes. Absolutely biofuels are an idiocy we should stop yesterday. Bomb the idiots in Brussels to get that one sorted. Yes, clearly, rich world agricultural subsidies should have stopped last week at the latest. Hang the corpses of those we\’ve just bombed on that one. For both are bastard children of the European Union.

But then we come to their analysis of the food system itself. They appear to have cobbled together every trendy left wing nonsense without quite understanding how they interact.

Just as a minor detail they seem to think that Bunge, Cargill and ADM control 90% of food commodity trade. That\’ll surprise the likes of Louis Dreyfus (claims to be world\’s leading rice trader) and Glencore: so there\’s a bit of detail lacking in the research.

But more importantly, they claim to want the following:

1) More food stocks to be held against emergencies.

2) Better transport systems for food crops.

3) Better access to modern farming inputs in poor areas and countries.

4) Better protection agains price volatility for farmers.

OK, these are all good things to want. But then they say that there should be a financial transactions tax to pay for governments to do all of these things.

What?

It\’s the commodity traders, the commodity markets, which provide 1 through 4. It\’s the traders like Bunge, Cargill, ADM (and Glencore and Louis Dreyfus etc) who actually hold food stocks. It\’s exactly that system of commodity markets, traders, that supports the whole set of grain elevators, transport systems and the like which enable rich world farmers to get their crops to market. It is exactly and precisely the system of pre-selling a crop to such traders that allows the purchase of the inputs, such as fertiliser, better seed and so on. In fact, when you go around areas like Brazil\’s Cerrado, it\’s exactly those commodity traders who are supplying the fertiliser etc to the farmers. For they know that it increases yields and thus gives them more to sell in 6 month\’s time.

And finally, it\’s the entire system of speculative froth (yes, all those people playing in offices with money) in the futures and derivatives markets which reduces price volatility for the farmers. Indeed, it\’s that which removes the price risks from the farmers altogether, from the consumers as well, and places risk squarely where it can best be bourne, with the speculators.

And a financial transactions tax will kill that system stone dead. Recall what happened in the Swedish example. An FTT imposed, the bond futures market declines in volume by 93% and the options market diappears altogether.

So in terms of what we do about what they diagnose as the problem, they\’ve decided that in order to reduce price volatility, gain better transport, gain better access to inputs, hold stocks against emergencies, they\’re going to destroy the system which does all of those things in order to pay for doing it.

To repeat. The policy prescription from this report is that we should kill the system that already gives us the things we claim to want.

They\’re cretins at this point.

And finally finally, there\’s a moral error at the heart of their reasoning.

They consider, then explicitly reject, the large farm method for Africa. They plump instead for \”smallholders\”. They talk about efficiency, of course, but miss the most important part of that. Yes, productivity of land is important, so too is productivity of inputs. But the most important part of productivity, the one that actually determines life as it is lived, is productivity of labour. And they go for that \”smallholder\”, meaning \”peasant\” form of farming. The one where while, in places and at times, the productivity of land and inputs can indeed be high, the productivity of labour is by definition low.

For that\’s exactly what this type of farming does, substitutes labour for those other inputs, land, fertiliser, tractors and so on. And what does low productivity of labour mean? Yup, that\’s right, low wages for those providing the labour.

And that\’s appalling. Morally detestable. For the real problem with peasant farming is that it means that the farmers have to live as peasants. With the income of peasants.

None of us pinkish people in Europe are willing to go back to being peasants so quite why Oxfam thinks 500 million black Africans will be happy to remain peasants I\’m not sure. Other than vague accusations of racism, that the grinning picanninies are happy to sing while scraping the fields with a stick: something we happily gave up centuries ago, I can\’t actually think of a coherent explanation.

But in the end, that is the real problem I have with this report. Oxfam are trying to design a system whereby 500 million Africans get to be peasants for evermore.

Tell me, how did they ever get described as \”progressive\”?

10 comments on “Oxfam: Growing a Better Future

  1. Nicola Horlick was running rings round the Oxfam CEO on R4 yesterday morning – pointing out that half a billion smallholdings can’t feed the planet but with serious capital investment and removal of import duties half those smallholders can work new bigger farms and be paid money instead of living hand-to-mouth, and the other half can go off and re-train, also to do things other than live hand-to-mouth.

    The Oxfam-ite couldn’t see it at all. They need aid! Charity! (And unspoken, people like her to tell all the little peeps what to do).

  2. It truly seems that those who talk most about helping other people (ie the likes of Oxfam, socialists generally, the EU) do the most monumental harm and those of us who just get quietly on living our own lives and trying to do to others as we would be done by, seem to have achieved all that has ever been achieved that is truly good.

    Is that the tragedy of the human condition?

    What a very sad post because you are unquestionably correct and there is unquestionably nothing that anybody is going to do about it.

    I’m off to the pub.

  3. cuffleyburgers (#4) said:
    “there is nothing that anybody is going to do about it. I’m off to the pub.”

    Most sensible thing anyone has ever said about international aid.

  4. Pingback: Get the fertiliser out. We can feed the world | The Rational Optimist…

  5. Pingback: Agricultural productivity, food consumption and Oxfam « Aid Thoughts

  6. Just closing a loop …

    Gosh! As one of the self-serving hippie-crats alluded to here I thought it might be worth pointing out this article:

    http://bit.ly/mKujjU

    (Once again, you’ve really made a difference here Tim, where would the world be without you 😉

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