World faces choice between higher energy, food cos

Originally posted by Maharbbal Pinguin, thx for the stats but they are not relevant (sorry some tech problem I can quote)

 

Stats are relevant, particularly when they address the topics we are discussing it.

Originally posted by Maharbbal 1. AIDS is unrelated

 

Of course it is related. It means SS Africa is not producing enough to feed its current population. It means each years that pass SS Africa is getting deeper into throuble.

 

Originally posted by Maharbbal 2. Relative decline in PIN/cap could mean that Africa does not export food anymore or that the value of the food produced as decline but not the quantity.

 

It means production is not catching up with the number of people.

 

Originally posted by Maharbbal 3. Africa is truly late in implementing best practice in most of its agriculture.

 

But to improve agriculture, you need money. Water and money are in very low supply in Africa.

 

Originally posted by Maharbbal 4. Water is a problem? True, but since Kenya and Ethiopia (pretty dry places) have become a new hub in horticulture, it shows that it is not an unsolvable issue.

 

Sure. But if Africa can’t feed its people today when they are “only” 600 millions, imagine what will happens when they reach 2, 4 or 8 billions, some years from now.

 

Originally posted by Maharbbal Production in Africa is so low that it can only rise.

 

However, stats shows it keeps falling and falling without an end.

 

Originally posted by Maharbbal It is lacking investment in infrastructure to produce and distribute, it is lacking capital-intensive factors of production (machines, seeds, breed, fertilizer), it is lacking the right institutional set to produce without fear of being robbed by rebels or the state itself, it is lacking farms big enough to be financially sound.

 

It is lacking of a population control policy as well.

Originally posted by Maharbbal If there was no hope for food production in Africa, why would the Chinese invest so much in lands there in order to feed their own population?

 

Well, that’s an excelent example of what happened when populations go uncontrolled. China needs more food for its “huge” population of 1.2 billion people, because its land, (roughly the size of “useful” SS Africa) is not enough to feed well all of them well.

But China is a country blessed with rivers and civil engineering works! Just imagine what will happen in an SS Africa with 2 or 4 billion people living in a continent even less productive than today.

Pinguin, thx for the stats but they are not relevant (sorry some tech problem I can quote)

1. AIDS is unrelated
2. Relative decline in PIN/cap could mean that Africa does not export food anymore or that the value of the food produced as decline but not the quantity.
3. Africa is truly late in implementing best practice in most of its agriculture.
4. Water is a problem? True, but since Kenya and Ethiopia (pretty dry places) have become a new hub in horticulture, it shows that it is not an unsolvable issue.

Production in Africa is so low that it can only rise. It is lacking investment in infrastructure to produce and distribute, it is lacking capital-intensive factors of production (machines, seeds, breed, fertilizer), it is lacking the right institutional set to produce without fear of being robbed by rebels or the state itself, it is lacking farms big enough to be financially sound.

If there was no hope for food production in Africa, why would the Chinese invest so much in lands there in order to feed their own population?

Originally posted by Leonidas ...what you show, is that it isnt feeding itself. i am saying it certainly can feed itself. You would need to seperate the mismanagement part from the list of stats you show before you can strongly argue your case that it cant. For instance - no water could that be because they dont have the infrastucture? Africa is not complety dry.......... or no growth in crop yeilds, because they dont use the latest methods in farming? Zimbawe did produce more food when it was well managed, same land - different policies. BTW its is sitting on a allot of platinum, so go figure why its poor.   BTW Allot of the enviromental issues is self inflicted (like everywhere else), deforestation and the resulted soil erosion can punish them hard and it already has. While it may never be the same, expensive land rehabilitaion programs can stem those losses   anyway food can be produced in the desert if the right infrastucture/crops are in place.

Edited by pinguin - 27-May-2008 at 04:22

Originally posted by pinguin Originally posted by Leonidas .... BTW Africa can feed itself, there are two issue here that come front of mind, first agriculural production is bent towards cash crops, not basic food. Im talking cocoa, coffee, sugar and fruits. All for export as they chase $$. This was a World bank rip off set up after ww2. The poor countries took out loans to start this and are now caught in a debt trap as they all produced the same cash crops (prices crashed) and never got the return they expected. Second issue, is that these guys are badly governed, > corruption and conflict upseting any chance to develop further.  For example, Zimbabwe was a food bowl. But the farms were white owned, Mugabe broke that old imperial legacy but never replaced the well managed esates with anything else. hence now they have little in the way of food production. Africa is resource rich, there is no reason why they shouldnt be rich.   Africa hardly can feed itself. A very simple analysis of the statistics shows it.

what you show, is that it isnt feeding itself. i am saying it certainly can feed itself. You would need to seperate the mismanagement part from the list of stats you show before you can strongly argue your case that it cant. For instance - no water could that be because they dont have the infrastucture? Africa is not complety dry.......... or no growth in crop yeilds, because they dont use the latest methods in farming? Zimbawe did produce more food when it was well managed, same land - different policies. BTW its is sitting on a allot of platinum, so go figure why its poor.

Originally posted by pinguin Originally posted by Leonidas .... BTW Africa can feed itself, there are two issue here that come front of mind, first agriculural production is bent towards cash crops, not basic food. Im talking cocoa, coffee, sugar and fruits. All for export as they chase $$. This was a World bank rip off set up after ww2. The poor countries took out loans to start this and are now caught in a debt trap as they all produced the same cash crops (prices crashed) and never got the return they expected. Second issue, is that these guys are badly governed, > corruption and conflict upseting any chance to develop further.  For example, Zimbabwe was a food bowl. But the farms were white owned, Mugabe broke that old imperial legacy but never replaced the well managed esates with anything else. hence now they have little in the way of food production. Africa is resource rich, there is no reason why they shouldnt be rich.   Africa hardly can feed itself. A very simple analysis of the statistics shows it.   First, Africa is the driest continent, that is already overcrowded in relation to the poor irrigation it has. This is the evolution of water availability in 1990 and 2025.     dought in Africa:   Africa is both the driest continent (other than Oceania) and the region where hunger is most prevalent. Within Africa, undernourishment and periodic famines have afflicted semi-arid and drought-prone.. (FAO)     Unlike Asia and Latin America, Africa has failed in improving the yield of grain       Food production is declining in Africa   I wouldn't be optimistic about Africa in this respect at all. Africa is living on foreign aid already,     And food imports are growing, bought with foreign cash,

Originally posted by Leonidas .... BTW Africa can feed itself, there are two issue here that come front of mind, first agriculural production is bent towards cash crops, not basic food. Im talking cocoa, coffee, sugar and fruits. All for export as they chase $$. This was a World bank rip off set up after ww2. The poor countries took out loans to start this and are now caught in a debt trap as they all produced the same cash crops (prices crashed) and never got the return they expected. Second issue, is that these guys are badly governed, > corruption and conflict upseting any chance to develop further.  For example, Zimbabwe was a food bowl. But the farms were white owned, Mugabe broke that old imperial legacy but never replaced the well managed esates with anything else. hence now they have little in the way of food production. Africa is resource rich, there is no reason why they shouldnt be rich.

Edited by pinguin - 26-May-2008 at 02:27

Originally posted by pinguin Originally posted by Maharbbal 1) Population growth is only feeding a part of the crisis   The important part, isn't?

Nope it is a very important element but far from the one and only. It is difficult to know right now what proportion of the inflation is due to demographic growth, but if I had to guess I's say around 25%, certainly behind the price of oil and the change of food habits in the developping countries.

Pinguin you are ignorant re-read this thread and you'll understand that

1) Population growth is only feeding a part of the crisis

2) Massive improvement can be reached

3) The best way to feed the planet is through trade (Africa may never produce enough to feed itself but that does not matter as long as other regions of the world can produce the food African people need. Do you think the Netherlands produce all the food they consume?

There is no doomsday in sight, some painful bumps but no agricultural armagedon

Another commentary relevant to this thread, regarding especially how speculators drive up prices...

Oil price mocks fuel realities By F William Engdahl As business and consumers consider the implications for them of crude oil selling at US$130-plus per barrel, they should bear in mind that, at a conservative calculation, at least 60% of that price comes from unregulated futures speculation by hedge funds, banks and financial groups using the London ICE Futures and New York Nymex futures exchanges and uncontrolled inter-bank or over-the-counter trading to avoid scrutiny (see Speculators knock OPEC off oil-price perch, Asia Times Online, May 6, 2008). US margin rules of the government's Commodity Futures Trading Commission allow speculators to buy a crude oil futures contract on the Nymex by paying only 6% of the value of the contract. At the present price of around $130 per barrel, that means a futures trader only has to put up about $8 for every barrel. He borrows the other $120. This extreme "leverage" of 16 to one helps drive prices to wildly unrealistic levels and offset bank losses in subprime and other disasters at the expense of the overall population. The hoax of "peak oil" - namely the argument that oil production has hit the point where more than half all reserves have been used and the world is on the downslope of oil at cheap price and abundant quantity - has enabled this costly fraud to continue since the invasion of Iraq in 2003, with the help of key banks, oil traders and big oil majors. Washington is trying to shift blame, as always, to Arab oil producers and the Organization of Petroleum Exporting Countries (OPEC). The problem is not a lack of crude oil supply. In fact, the world is in over-supply now. Yet the price climbs relentlessly higher. Why? The answer lies in what are clearly deliberate US government policies that permit the unbridled oil price manipulations. World oil demand flat, prices boom The chief market strategist for one of the world's leading oil industry banks, David Kelly, of JP Morgan Funds, recently admitted something telling to the Washington Post: "One of the things I think is very important to realize is that the growth in the world oil consumption is not that strong." One of the stories used to support the oil futures speculators is the allegation that China's demand for imported oil is exploding out of control, driving shortages in the supply-demand equilibrium. Yet the facts do not support the China demand thesis. The US government's Energy Information Administration (EIA) concluded in its most recent monthly Short Term Energy Outlook report that US oil demand is expected to decline by 190,000 barrels per day (b/d) this year. That is mainly owing to the deepening economic recession. Chinese consumption, the EIA says, far from exploding, is expected to increase this year by only 400,000 barrels a day. That is hardly the "surging oil demand" blamed on China in the media. Last year, China imported 3.2 million barrels per day, and its estimated usage was around 7 million b/d total. The US, by contrast, consumes around 20.7 million b/d. That means the key oil-consuming nation, the US, is experiencing a significant drop in demand. China, which consumes only a third of the oil the US does, will see a minor rise in import demand compared with the total daily world oil output of some 84 million barrels, less than half of one percent of total demand. OPEC has its 2008 global oil demand growth forecast unchanged at 1.2 million barrels per day (mm bpd), as slowing economic growth in the industrialized world is offset by slightly growing consumption in developing nations. OPEC predicts that global oil demand in 2008 will average 87 million bpd, largely unchanged from its previous estimate. Demand from China, the Middle East, India and Latin America is forecast to be stronger, but the European Union and North American demand will be lower. So the world's largest oil consumer faces a sharp decline in consumption, a decline that will worsen as the housing and related economic effects of the US securitization crisis in finance de-leverages. The price in normal open or transparent markets should presumably be falling not rising. No supply crisis justifies the way the world's oil is being priced today. Big new oil fields coming online Not only is there no supply crisis to justify such a price bubble. There are several giant new oil fields due to begin production over the course of 2008 to further add to supply. The world's single-largest oil producer, Saudi Arabia, is finalizing plans to boost drilling activity by a third and increase investments by 40%. Saudi Aramco's plan, which runs from 2009 to 2013, is expected to be approved by the company's board and the Oil Ministry this month. The kingdom is in the midst of a $50 billion oil production expansion plan to meet growing demand in Asia and other emerging markets and is expected to boost its pumping capacity to a total of 12.5 mm bpd by next year, about 11% up from the present capacity of 11.3 mm bpd. In April this year, Saudi Arabia's Khursaniyah oilfield began pumping and will soon add another 500,000 bpd to world oil supply of high grade Arabian light crude. In addition, the country's Khurais oilfield development, the largest of Saudi Aramco's projects, will boost the production capacity of Saudi oilfields from 11.3 million bpd to 12.5 million bpd by 2009. Khurais is planned to add another 1.2 million bpd of high-quality Arabian light crude to Saudi Arabia's export capacity. Brazil's Petrobras is in the early phase of exploiting newly confirmed oil reserves offshore in its Tupi field that could be as great or greater than the North Sea. Petrobras says the new ultra-deep Tupi field could hold as much as 8 billion barrels of recoverable light crude. When online in a few years it is expected to put Brazil among the world's "top 10" oil producers, between Nigeria and those of Venezuela. In the US, aside from rumors that the big oil companies have been deliberately sitting on vast new reserves in Alaska for fear that the prices of recent years would plunge on over-supply, the US Geological Survey (USGS)recently issued a report that confirmed major new oil reserves in an area called the Bakken, which stretches across North Dakota, Montana and south-eastern Saskatchewan. The USGS estimates up to 3.65 billion barrels of oil in the Bakken. These are just several confirmations of large new oil reserves to be exploited. Iraq, where the Anglo-American Big Four oil majors are salivating to get their hands on unexplored fields, is believed to hold oil reserves second only to Saudi Arabia while much of the world has yet to be explored for oil. At prices above $60 a barrel huge new potentials become economic. The major problem faced by Big Oil is not finding replacement oil but keeping the lid on world oil finds in order to maintain present exorbitant prices. Here they have some help from Wall Street banks and the two major oil trade exchanges - Nymex and London-Atlanta's ICE and ICE Futures. Then why do prices still rise? There is growing evidence that the recent speculative bubble in oil, which has gone asymptotic since January, is about to pop. Late last month, in Dallas, Texas, the American Association of Petroleum Geologists held its annual conference, with major oil executives and geologists present. According to one participant, knowledgeable oil industry chief executives reached the consensus that "oil prices will likely soon drop dramatically and the long-term price increases will be in natural gas". Just a few days earlier, Lehman Brothers, a Wall Street investment bank, had said that the current oil price bubble was coming to an end. Michael Waldron, the bank's chief oil strategist, was quoted in Britain's Daily Telegraph on April 24 saying, "Oil supply is outpacing demand growth. Inventories have been building since the beginning of the year." In the US, stockpiles of oil climbed by almost 12 million barrels in < ="text/" ="http://asianmedia.com/GAAN/www/delivery/ajs.php?zoneid=36&cb=7815570318&loc=http%3A//www.atimes.com/atimes/Global_Economy/JE24Dj03.&referer=http%3A//www.atimes.com/atimes/Global_Economy/JE24Dj02."> April according to the May 7 EIA monthly report on inventory, up by nearly 33 million barrels since January. At the same time, MasterCard's May 7 US gasoline report showed that gas demand has fallen by 5.8%. And refiners are reducing their refining rates dramatically to adjust to the falling gasoline demand. They are now running at 85% of capacity, down from 89% a year ago, in a season when production is normally 95%. The refiners today are clearly trying to draw down gasoline inventories to bid gasoline prices up. "It's the economy, stupid," to paraphrase Bill Clinton's infamous 1992 election quip to daddy Bush. It's called economic recession. The May 8 report from Oil Movements, a British company that tracks oil shipments worldwide, shows that oil in transit on the high seas is also quite strong. Almost every category of shipment is running higher than it was a year ago. The report notes that, "In the West, a big share of any oil stock building done this year has happened offshore, out of sight." Some industry insiders say the global oil industry from the activities and stocks of the Big Four to the true state of tanker and storage and liftings, is the most secretive industry in the world with the possible exception of the narcotics trade. Goldman Sachs again in the middle The oil price today, unlike 20 years ago, is determined behind closed doors in the trading rooms of giant financial institutions like Goldman Sachs, Morgan Stanley, JP Morgan Chase, Citigroup, Deutsche Bank or UBS. The key exchange in the game is the London ICE Futures Exchange (formerly the International Petroleum Exchange). ICE Futures is a wholly owned subsidiary of the Atlanta Georgia International Commodities Exchange. ICE in Atlanta was founded in part by Goldman Sachs, which also happens to run the world's most widely used commodity price index, the GSCI, which is over-weighted to oil prices. As I noted in my earlier article, ICE was the focus of a recent congressional investigation. It was named both in the Senate's Permanent Sub-committee on Investigations' June 27, 2006, Staff Report and in the House Committee on Energy and Commerce's hearing in December 2007, which looked into unregulated trading in energy futures. Both studies concluded that the energy price climb to $128 and beyond is driven by billions of dollars' worth of oil and natural gas futures contracts being placed on the ICE. Through a convenient regulation exception granted by the George W Bush administration in January 2006, the ICE Futures trading of US energy futures is not regulated by the Commodities Futures Trading Commission (CFTC), even though the ICE Futures US oil contracts are traded in ICE affiliates in the US. And at Enron's request, the CFTC exempted the over-the-counter oil futures trades in 2000. So it is no surprise to see in a May 6 report from Reuters that Goldman Sachs announces oil could in fact be on the verge of another "super spike", possibly taking oil as high as $200 a barrel within the next six to 24 months. That headline, "$200 a barrel!" became the major news story on oil for the next two days. How many gullible lemmings followed behind with their money bets? Arjun Murti, Goldman Sachs' energy strategist, blamed what he called "blistering" (sic) demand from China and the Middle East, combined with his assertion that the Middle East is nearing its maximum ability to produce more oil. "Peak oil" mythology again helps Wall Street. The degree of unfounded hype reminds one of the self-serving Wall Street hype in 1999-2000 around dot.com stocks or Enron. In 2001, just before the dot.com crash in the NASDAQ, some Wall Street firms were pushing the sale to the gullible public of stocks that their companies were quietly dumping. Or they were pushing dubious stocks for companies where their affiliated banks had a financial interest. In short, as later came out in Congressional investigations, companies with a vested interest in a certain financial outcome used the media to line their pockets and that of their companies, leaving the public investor holding the bag. It would be interesting for Congress to subpoena the records of the futures positions of Goldman Sachs and a handful of other major energy futures players to see if they are invested to gain from a further rise in oil to $200, not forgetting that 16 to one leverage with which a hedge fund or bank can buy oil futures. We are hit with an endless series of plausible arguments for the high price of oil: a "terrorism risk premium", a "blistering" rise in demand of China and India; unrest in the Nigerian oil region; oil pipelines' blown up in Iraq; possible war with Iran ... And above all the hype about peak oil. Oil speculator T Boone Pickens has reportedly raked in a huge profit on oil futures and argues, conveniently, that the world is on the cusp of "peak oil". So does the Houston investment banker and friend of Vice President Dick Cheney, Matt Simmons. As noted in the June 2006 US Senate report, The Role of Market Speculation in Rising Oil and Gas Prices, "There's a few hedge fund managers out there who are masters at knowing how to exploit the peak oil theories and hot buttons of supply and demand, and by making bold predictions of shocking price advancements to come they only add more fuel to the bullish fire in a sort of self-fulfilling prophecy." Will a Democratic Congress act to change the carefully crafted opaque oil futures markets in an election year and risk bursting the bubble? On May 12, the House Energy and Commerce Committee stated it will look at this issue in June. F William Engdahl is author of A Century of War: Anglo-American Oil Politics and the New World Order (PlutoPress), and Seeds of Destruction: The Hidden Agenda of Genetic Manipulation (Global Research, available at www.globalresearch.ca). He may be reached at info@engdahl.oilgeopolitics.net. (Copyright 2008 Asia Times Online Ltd. All rights reserved. Please contact us about sales, syndication and republishing.)

Edited by vulkan02 - 25-May-2008 at 07:44

About the export problem, you should consider the Argentinian case. Huge producer of wheat as you know, the country has faced a few problems last year. This has motivated the government to ban export. As a result, the farmers' income dropped while the price of production went on rising (oil, fertilizer, seeds world prices have risen and farmers receive no subsidies in this case). As a result the next harvest is expected to be 15% lower than the previous one. Free market remains the best incentive for productivity.

On electricity, the Russians were speaking about building ships with nuclear plants on them that could be quickly deployed next to the shores of the regions that need it. When I hear about what you say about Pak (but of course the case in other countries such as South Africa) I really think it would be a brilliant idea.