There's Nothing Funny About Ug99

I have been writing about the world hunger crisis this past week since our dinner with Joe and Pat Richter of Farms International. What caught my attention was the food riots in fourteen countries. And nary a word in our newspapers.

Once you start to look, the picture looks less than promising. Can too much knowledge be a bad thing? I would like to believe that the only way we can begin to fix things is by knowing how broken they are.

My brother forwarded the following article to me about a killer strain of black stem rust that destroy wheat crops called Ug99. One of the articles I read last week made reference to this wheat disease as one of the variables in a "perfect storm" of trouble brewing, which also included the decision to fight global warming by making food crops into ethanol.

Don't take my word alone. Do a Google search on the topic and you'll see it's serious.

Ug99!

“Ug99” is the name given to a strain of wheat fungus (Puccinia Graminis). This virulent new form of the disease first appeared in Uganda in 1999. It is spread by wind and now is responsible for driving up food prices.

It appears that the present genetic composition of wheat has little or no resistance to this new fungus strain. In some areas of the globe, crop losses are expected to reach 100%. In Africa there are known experiences of loss of over 70%. The economic losses expected from this fungus are now estimated in the many billions and growing. Worse there is an intensifying fear of exacerbated food shortage in the poor and emerging countries of the world. The ramifications are serious.

Food rioting continues to expand around the world. We saw the most recent in Johannesburg last week. So far this unrest has been directed at rising prices. Actual shortages are still to come. Remember: food shortages can cause changes in governments and can lead to severe repression of populations. Also, remember that the food chain starts with grains. All grains are under severe price pressure and the ability of substitution is shrinking because there is no surplus grain inventory to replace one in short supply.

Governments are responding with protectionism and tax policy modification of export-import taxes and tariffs. Typically they reduce the import taxes so as to lower the domestic price of incoming grains and foodstuffs. At the same time they raise the export taxes in order to keep homegrown foodstuffs within the country. In some cases they actually embargo exports. These tariffs and embargoes end up only adding to trade barriers, reducing global efficiencies and ultimately only raising the prices for everyone. Such actions have already occurred in Argentina, Brazil, China, Ethiopia, India, Morocco, Peru, Russia, Turkey, Venezuela, Zambia, and others.

The world’s mature and wealthier countries are food exporters as a result of developed and efficient agriculture. Australia, Canada, European Union, New Zealand and the United Sates are in that category. But these countries have taken little advance action in the face of the increasing global food imbalances. The US Agriculture Department reports global grain stocks at half century lows.

America’s bio-fuel policy is worsening the situation. We have a huge subsidy in place for corn-based ethanol. That is raising and has driven up the price of corn. There is no end in sight for that subsidy and, thus, the upward corn price pressure is imbedded for all practical reasons. Ethanol is American politics at its very worst.

In addition it seems that the new form of wheat fungus has risk to America’s wheat crop. Present American wheat has very little resistance to Ug99. It will take between five and eight years to genetically engineer a resistance. In the interim period, US agriculture now faces this higher risk of fungus.

As with bird flu (H5N1), North and South America have been spared from Ug99 to date. And as with bird flu, the professional epidemiologists are worried just as the rest of us go about our daily lives taking things for granted. Complacency is always the enemy.

Meanwhile, Ug99 is windborne and on its ways to the breadbaskets of Asia. And meanwhile, H5N1 is avian borne and spreads globally. The most recent human case was confirmed in Egypt on April 17th. So far, H5N1 virus is still a bird disease and not efficiently transmitted among humans. The World Health Organization (WHO) reports 30 confirmed cases and 23 deaths, year-to-date in 2008.

USED WITH PERMISSION

Copyright 2008, Cumberland Advisors. All rights reserved.
The preceding was provided by Cumberland Advisors, 614 Landis Ave, Vineland, NJ 08360 856-692-6690. This report has been derived from information considered reliable but it cannot be guaranteed as to its accuracy or completeness. David R. Kotok, Chairman and Chief Investment Officer, email: david.kotok@cumber.com

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For information on Farms International, visit http://www.farmsinternational.com/

"Doing Good That Is Good."

Eating Words Won't Won't Satisfy Hunger

This past week I made several blog entries regarding the world famine crisis that is unfolding. In my most recent entry I used the phrase "idiot legislators"... which for many is a relatively mild accusation, but in my case it feels unkind to be so harsh. Put yourself in their shoes. What would you be doing right now about the energy issues and economic challenges and international food supply issues our world currently faces?

Personally, I do currently feel that efforts to convert farmland from food production to energy production can be easily labeled idiotic. When people make stupid decisions, this does not mean they are stupid people. A lot of smart people make stupid decisions. I have made my share. This does not mean I am a stupid person. When I jumped out of a moving car, for example, it was a stupid thing to do. I still aced most of my tests in school.

So, as I eat my words I am noticing that there is not a lot of nutritional value in words. If there were, we could have our printing presses do overruns on every job. Words in abundance would pour forth from our shores. We're already bombarding the world with words through radio, and other media. And here I am pushing out more words through my fingertips onto computer screens potentially visible around the globe.

At the end of the day, an empty tummy needs food, not words.

I myself do not have an answer to this crisis since I myself do not have the facts. My hope is that those who have all the facts will be able to sort things out and make decisions based on truth. What we don't need is for moneyed interests to determine national policy for personal gain. It is in this sense that I do not always trust our legislators.

We cannot lose sight of our global interdependence.

Legislative Idiocy: An Inconvenient Truth

In 1901 there was an automobile wreck in Kansas. The amusing thing about this wreck is that there were only two cars in Kansas at the time. I guess there were no stop signs at that intersection. The sad part is that someone was probably killed.

This is where politicians are so good. They quickly realize that something has to be done, and they step right in, flex their muscles and pass a new law. The 1901 law stated that you had to stop your car every mile and shoot a flare up into the sky so that other cars would know you were approaching.

The story is true. And the tendency of politicians to take action, even when absurd and ignorant, shows no signs of going away any time soon.

Examples are legion. It appears that things are going to get worse before they get better because we somehow seem incapable of learning from the past. Can the leopard change his spots?

Phillip V. Brennan, in an article titled Global Warming Hysteria Creates Food Shortages, notes that "at this very moment, the world is plunging into a food scarcity crisis that is the direct result of the global warming hysteria. The headlong rush to grow food crops to make ethanol instead of growing crops to feed the world is pushing food prices skyward and creating the threat of famine in Third-World countries."

The more I read, the more amazed I am that our leaders are so spineless so as to be swept up in this global warming hysteria. It should not surprise me. I've many times read that politicians inside the Beltway are more concerned about staying in tune with public opinion than with facts about Reality. As is historically their natural bent, the laws legislators pass will be more destructive than helpful, despite their earnestness.

Many nations that used to export rice are now holding back and even banning exports. Countries dependent on these foods are already experiencing riots. Some newspapers are printing that the hunger and upheaval caused by the current passion for ethanol, and subsequent food shortages, could result in World War III. This is no joke.

How alarmed should we be here in the States? Well, it's your call, but in many places they are already rationing certain foods.... in the U.S.A.

Global Food Crisis No Longer Under the Radar

In the early 1990’s the festering unrest between Hutus and Tutsis in Rwanda went pretty much unreported. Violence, fear and exodus festered under the surface for years. The only thing that made the news here in the U.S. was the tragic slaughter of some of Jane Goodall’s favorite gorillas. Then in 1994 all hell broke loose. Hutus no longer concealed the savage slaughtering of Tutsis. There were literally rivers of blood.

Somehow if it doesn’t make the network news, we’re able to achieve some modicum of blissful unawareness. Unfortunately, the world’s suffering is not alleviated so easily.

A global food crisis is upon us. Food riots have broken out in at least fourteen countries, and untold numbers of people are literally starving to death.

The causes are many and no one measure will resolve the whole of it, but a bit of awareness is required if we are going to see things turn for the better. Here are just a few of the symptoms and causes, in no particular order of importance. Sources include Janet Tu’s “Region’s aid groups grappling with global food crisis” (Seattle Times) and Anthony Faiola’s “Global Food Prices and Africa’s Economic Famine”, transcript from an online chat.

Organizations like World Vision and Farms International, whose ministries and services are directly focused on helping the Third World needy, are especially attuned to the crisis. Joseph Richter, Executive Director of Farms International, brought the seriousness of the crisis to our attention yesterday. Currently there are food riots in fourteen countries, he said. The causes are complicated. Chief of these are rising fuel prices, the conversion of crops to corn for ethanol, the greater demand for meat in China and India, and draughts in two other breadbaskets, Australia and Russia.

In Anthony Faiola’s “Global Food Prices” piece, the journalist fielded questions from around the world. One question drew attention to the increased crop substitution that is taking place in order to produce ethanol. Faiola replied, “Thanks for the good question. One of the big problems is crop substitution. As corn prices increased because of biofuel demand, some farmers shifted production from consumption crops such as wheat, soy beans, etc, to capitalize on the high prices for corn. It has helped link prices for these grains together, one reason they are shooting up at the same time.”

The situation is worsening at an alarming rate because of simultaneous setbacks on so many fronts along with the rising prices. Americans who wish to contribute to a trustworthy organization that is doing real good in this area, with bare minimum overhead, can find a worthy conduit at Farms International.

Ethanol and the World Food Shortage

Over the years I’ve often observed and noted that the food crises in most countries are not due to lack of capability, but from political decisions. It turned out that the starvation in Ethiopia a few decades ago (we all saw ads featuring children with bloated bellies, but without explanation of causes) was due to Communists deliberately starving the people into submission. There is plenty of capacity to feed everyone in the world. Our political and economic systems prevent the poor and starving from obtaining their daily sustenance.

Tragically, we are today experiencing tremendous upheavals in food production, primarily due to our own political interventions. The intentions may be good on the part of legislators, but the ramifications have not been thought through, even though they appear obvious to many. The decision to convert huge portions of U.S. farmland from food production to ethanol/energy production is a vivid example of the law of unintended circumstances, as the following article outlines.

"Silent Famine" Sweeps Globe

WASHINGTON – From India to Africa to North Korea to Pakistan and even in New York City, higher grain prices, fertilizer shortages and rising energy costs are combining to spell hunger for millions in what is being characterized as a global "silent famine."

Global food prices, based on United Nations records, rose 35 percent in the last year, escalating a trend that began in 2002. Since then, prices have risen 65 percent.

Last year, according to the U.N. Food and Agriculture Organization's world food index, dairy prices rose nearly 80 percent and grain 42 percent.

"This is the new face of hunger," said Josetta Sheeran, director of the World Food Program, launching an appeal for an extra $500 million so it could continue supplying food aid to 73 million hungry people this year. "People are simply being priced out of food markets. ... We have never before had a situation where aggressive rises in food prices keep pricing our operations out of our reach."

The WFP launched a public appeal weeks ago because the price of the food it buys to feed some of the world's poorest people had risen by 55 percent since last June. By the time the appeal began last week, prices had risen a further 20 percent. That means WFP needs $700 million to bridge the gap between last year's budget and this year's prices. The numbers are expected to continue to rise.

The crisis is widespread and the result of numerous causes – a kind of "perfect storm" leading to panic in many places:

* In Thailand, farmers are sleeping in their fields because thieves are stealing rice, now worth $600 a ton, right out of the paddies.

* Four people were killed in Egypt in riots over subsidized flour that was being sold for profit on the black market.

* There have been food riots in Morocco, Senegal and Cameroon.

* Mexico's government is considering lifting a ban on genetically modified crops, to allow its farmers to compete with the United States.

* Argentina, Kazakhstan and China have imposed restrictions to limit grain exports and keep more of their food at home.

* Vietnam and India, both major rice exporters, have announced further restrictions on overseas sales.

* Violent food protests hit Burkina Faso in February.

* Protesters rallied in Indonesia recently, and media reported deaths by starvation.

* In the Philippines, fast-food chains were urged to cut rice portions to counter a surge in prices.

* Millions of people in India face starvation after a plague of rats overruns a region, as they do cyclically every 50 years.

* Officials in Bangladesh warn of an emerging "silent famine" that threatens to ravage the region.

According to some experts, the worst damage is being done by government mandates and subsidies for "biofuels" that supposedly reduce carbon dioxide emissions and fight climate change. Thirty percent of this year's U.S. grain harvest will go to ethanol distilleries. The European Union, meanwhile, has set a goal of 10 percent bio-fuels for all transportation needs by 2010."

A huge amount of the world's farmland is being diverted to feed cars, not people," writes Gwynne Dyer, a London-based independent journalist.

He notes that in six of the past seven years the human race has consumed more grain than it grew. World grain reserves last year were only 57 days, down from 180 days a decade ago.

One in four bushels of corn from this year's U.S. crop will be diverted to make ethanol, according to estimates."

Turning food into fuel for cars is a major mistake on many fronts," said Janet Larsen, director of research at the Earth Policy Institute, an environmental group based in Washington. "One, we're already seeing higher food prices in the American supermarket. Two, perhaps more serious from a global perspective, we're seeing higher food prices in developing countries where it's escalated as far as people rioting in the streets."

Palm oil is also at record prices because of biofuel demands. This has created shortages in Indonesia and Malaysia, where it is a staple.

Nevertheless, despite the recognition that the biofuels industry is adding to a global food crisis, the ethanol industry is popular in the U.S. where farmers enjoy subsidies for the corn crops.

Source: The "Silent Famine" Copyright 2008, WorldNet Daily