I’ve written about this twice before here and here. Â
– It is a growing trend and it is going to get bigger in coming years. Â It’s an indication (which most folks can’t see or deny) that the train is, indeed, going off the rails. Â
– Food, oil, water are all going to be going into short supply and nations states everywhere are looking hard at their options – even as most of us sleep the sleep of the sheep.
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In Venezuela, the national guard has taken over control of the country’s rice mills. Hugo Chávez, Venezuela’s President, accused rice producers of evading government price controls and the President has suggested that the owners, which include the American agribusiness firm, Cargill, would be compensated with “paper”.
Agribusiness is the latest target for the Venezuelan leader’s bombast but President Chávez must be feeling a bit miffed. He has been upstaged: when banks are nationalised in the heart of the City of London and their bosses threatened with confiscation of their personal property, the seizure of a few rice mills by a South American autocrat looks feeble.
In isolation, it looks trifling but we should look again at what governments are doing in agriculture. The rice shortage in Venezuela, threats of government intervention in farms in Argentina and a land grab by sovereign wealth funds in the Gulf tells us more about the future than Sir Fred Goodwin’s pension.
The Argentine Government has been at loggerheads with its farmers over export taxes and low domestic grain prices. The Government accuses farmers of hoarding food and over the weekend, Cristina Fernandez, the Argentine President, threatened to intervene in the economy. A new state-controlled agency would intervene, buying up grain and cattle in an attempt to control prices in a country that is world No 2 in corn and No 3 in soya bean.
The black comedy of the banks has persuaded us to forget about food security. Food price inflation gripped the markets early last year and has surged again at the beginning of this year. For most of the world food continues to be a worry.
The cost of food has not returned to the low levels that preceded the doubling and tripling of wheat and rice prices over 2007 and 2008. Credit is costly for farmers and after last year’s massive harvest that brought down prices, planting has been weak. Anxiety about the future has spurred those countries with cash to make big investments in the soil.
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