This is the truth, nothing but the truth, and the whole truth, with a waterboard as my witness!

Tuesday, November 18, 2008

The commanding heights of the New American Century IV

The Commanding Height of food is important in that it creates the societal stability that consitutes society. I guess you have to look at a case where societies fail to meet this commanding height, use your own historical example; the French Revolution, North Korea, Haiti, or any other failed nation state or revolution.

The commanding height of food is realized in it's absence, where a ruling class or government was so irresponsible as to allow a food crisis to occur. This can be due to environmental crisis or drought, it can be from poor central planning, but really it is a lack of an understanding that food is a commanding height and a multitude of approaches to meet it.

Recently there has been a trend to open markets that do two things, reduce food production locally, reduce employment, create trade imbalances, create civil striffe, and prevent local currencies from circulating. Free trade advocates point to the short-term advantages of less expensive imports. But that approach leads to imbalances that really make exporters of grains and foods similar to Opec. It is a commanding height yeilded to another.

Thirty years ago, Haiti raised nearly all the rice it needed. What happened?

In 1986, after the expulsion of dictator Jean Claude “Baby Doc” Duvalier, the International Monetary Fund (IMF) loaned Haiti $24.6 million in desperately needed funds. (Baby Doc had raided the treasury on the way out.)

But in order to get the IMF loan, Haiti was required to reduce tariff protections for rice and other agricultural products and some industries to open up its markets to foreign competition. The United States has by far the largest voice in decisions of the IMF.

Doctor Paul Farmer was in Haiti then and saw what happened. “Within less than two years, it became impossible for Haitian farmers to compete with what they called ‘Miami rice.’ The whole local rice market in Haiti fell apart as cheap, US-subsidized rice, some of it in the form of ‘food aid,’ flooded the market. There was violence, ‘rice wars’ and lives were lost.”

“American rice invaded the country,” recalled Charles Suffrard, a leading rice grower in Haiti in an interview with the Washington Post in 2000. By 1987 and 1988, there was so much rice coming into the country that many stopped working the land.

Gerard Jean-Juste, a Haitian priest who has been the pastor at St. Claire and an outspoken human rights advocate, agrees. “In the 1980s, imported rice poured into Haiti, below the cost of what our farmers could produce it. Farmers lost their businesses. People from the countryside started losing their jobs and moving to the cities. After a few years of cheap imported rice, local production went way down.”

Still, the international business community was not satisfied. In 1994, as a condition for US assistance in returning to Haiti to resume his elected presidency, Jean-Bertrand Aristide was forced by the United States, the IMF and the World Bank to open up the markets in Haiti even more.

But Haiti is the poorest country in the Western Hemisphere. What reason could the United States have in destroying the rice market of this tiny country?

Haiti is definitely poor. The US Agency for International Development reports that the annual per capita income is less than $400. The United Nations reports that life expectancy in Haiti is 59, while in the United States it is 78.

Over 78 percent of Haitians live on less than $2 a day, more than half live on less than $1 a day.

Yet, Haiti has become one of the very top importers of rice from the United States. The US Department of Agriculture 2008 numbers show Haiti is the third largest importer of US rice—at over 240,000 metric tons of rice.

Rice is a heavily subsidized business in the United States. Rice subsidies in the United States totaled $11 billion from 1995 to 2006. One producer alone, Riceland Foods Inc. of Stuttgart Arkansas, received more than $500 million in rice subsidies between 1995 and 2006.

The Cato Institute has reported that rice is one of the most heavily supported commodities in the United States—with all three different subsidies averaging over $1 billion a year since 1998 and projected to average more than $700 million a year through 2015. The result? “Tens of millions of rice farmers in poor countries find it hard to lift their families out of poverty because of the lower, more volatile prices caused by the interventionist policies of other countries.”

In addition to three different subsidies for rice farmers in the United States, there are also direct tariff barriers of 3 to 24 percent, reports Daniel Griswold of the Cato Institute—the same type of protection, though much higher, that the United States and the IMF required Haiti to eliminate in the 1980s and 1990s.

US protection for rice farmers goes even further. A 2006 story in the Washington Post found that the federal government had paid at least $1.3 billion in subsidies for rice and other crops since 2000 to individuals who do no farming at all, including $490,000 to a Houston surgeon who owned land near Houston that once grew rice.

And it is not only the Haitian rice farmers who have been hurt.

Paul Farmer saw it happen to the sugar growers as well. “Haiti, once the world’s largest exporter of sugar and other tropical produce to Europe, began importing even sugar—from US-controlled sugar production in the Dominican Republic and Florida. It was terrible to see Haitian farmers put out of work. All this sped up the downward spiral that led to last month’s food riots.”

After the riots and protests, President Rene Preval of Haiti agreed to reduce the price of rice, which was selling for $51 for a 110 pound bag, to $43 dollars for the next month. No one thinks a one-month’s fix will do anything but delay the severe hunger pains a few weeks.

Haiti is far from alone in this crisis. The Economist reports a billion people worldwide live on $1 a day. The US-backed Voice of America reported that about 850 million people were suffering from hunger worldwide before the latest round of price increases.

Thirty three countries are at risk of social upheaval because of rising food prices, World Bank President Robert Zoellick told the Wall Street Journal. When countries have many people who spend half to three-quarters of their daily income on food, “there is no margin of survival.”

The point here is that there is Commanding Heights in the economy and that a government has FAILED when it does support them. A populace has no OPTION but to revolt and turn to violence when their own government enacts polices that starve them, unemploy them, and do nothing but return a pump-n-dump profit. If you are hungry and the rich have capitulated this commanding height of a society, then eat the rich!

It is the role of genuine leaders of industry and politics to hekp create a better world. Google CEO Eric Schmidt Calls For Innovation Bailout and supports two of the five commadning heights. He supports the information and energy commanding heights. While some say don't eat the rich, tax them, I think that responsible CEO's know that there are limits to hubris and that wealth is the reflection not only of personal accomplishments but their impact on the world around them, Gates and Buffet have done much with monies to help meet some challenges that are beyond conventional thinking, such as a seed vault.
At least Bill Gates invested in protecting a commanding height when most were way to ignorant and complacent, (not hungry) to consider it.

The sad fact is that many of our CEO's are that, business managers and not leaders, frankly better material for an object lesson of greed punished by a guillotine than spending monies on seeking energy efficieny such as google has done with geothermal.

You will know them by their works, if the politicians sell out their citizens and promote the destruction of local food production, revolt at the ballot.

Food is a commanding height.

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