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Arabica Robusta

Gambling with the futures | SocialistWorker.org - 0 views

  • HISTORICALLY, FUTURES contracts were traded primarily between producers of commodities and consumers of commodities at large, regulated commodities exchanges. Most futures contracts eventually resulted in the actual delivery of a commodity on a set date. That's all changed in recent years. Now, the bulk of firms trading on futures exchanges are speculators with no intention of ever receiving delivery of the commodities they are trading.
  • All other things being equal, the prices of expiring futures contracts should converge with the pricing on spot markets on the date of expiration--that is, the price of oil in June should be pretty close to the price of oil futures contracts trading today that expire in June. But there are huge divergences developing. Why? Because there are too many investors chasing too few futures contracts, and this is creating demand for the underlying commodity that drives up the price of the commodity to be delivered in the future.
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    HISTORICALLY, FUTURES contracts were traded primarily between producers of commodities and consumers of commodities at large, regulated commodities exchanges. Most futures contracts eventually resulted in the actual delivery of a commodity on a set date. That's all changed in recent years. Now, the bulk of firms trading on futures exchanges are speculators with no intention of ever receiving delivery of the commodities they are trading.
Arabica Robusta

Argentina and the magic soybean: the commodity export boom that wasn't | Mark Weisbrot ... - 1 views

  • One of the great myths about the Argentine economy that is repeated nearly every day is that the rapid growth of the Argentine economy during the past decade has been a "commodity export boom". For example, the New York Times reported last week:
  • I haven't seen any economists make the claim that Argentina's remarkable economic growth over the past nine years – which has brought record levels of employment and a two-thirds reduction in poverty – has been driven by soybeans or a commodities export boom. Maybe that is because it is not true.
  • It turns out that only 12% of Argentina's real GDP growth during this period was due to any kind of exports at all. And just a fraction of this 12% was due to commodity exports, including soybeans. So Argentina's economic growth from 2002-2010 was not an export-led growth experience, by any stretch of the imagination, still less, a "commodities boom".
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  • there is no plausible story that anyone can tell from the data to support the idea that Argentina's growth over the past nine years was driven by a "commodities boom." Why does this matter? Well, as economist Paul Krugman noted yesterday, "articles about Argentina are almost always very negative in tone ― they are irresponsible, they are renationalizing some industries, they talk populist, so they must be going very badly." Which, he points out, "doesn't speak well for the state of economics reporting." It sure doesn't.
  • The myth of the "commodities export boom" is one way that Argentina's detractors dismiss Argentina's economic growth as just dumb luck. But the reality is that the economic expansion has been < a href="http://www.cepr.net/index.php/publications/reports/the-argentine-success-story-and-its-implications">led by domestic consumption and investment. And it happened because the Argentine government changed its most important macroeconomic choices: on fiscal, monetary, and exchange rate policies. That is what took Argentina out of its 1998-2002 depression and turned it into the fastest-growing economy in the Americas.
  • By defaulting on its debt and devaluing its currency, Argentina was freed to change its most important macroeconomic policies.
Arabica Robusta

Mark Weisbrot, "Argentina and the Magic Soybean: The Commodity Export Boom That Wasn't" - 0 views

  • One of the great myths about the Argentine economy that is repeated nearly every day is that the rapid growth of the Argentine economy during the past decade has been a "commodity export boom."  
  • I haven't seen any economists make the claim that Argentina's remarkable economic growth over the past nine years -- which has brought record levels of employment and a two-thirds reduction in poverty -- has been driven by soybeans or a commodities export boom.  Maybe that's because it's not true.
Arabica Robusta

Pension funds: key players in the global farmland grab - 1 views

  • According to Barclays Capital, some US$320 billion of institutional funds are now invested in commodities, compared to just US$6 billion ten years ago.
  • The big picture shows that: the largest institutional investors are planning to double their portfolio holdings in agricultural commodities, including farmland; they are reportedly going to do it very soon; the new surge in money will push up global food prices; high food prices will hit poor, rural and working-class communities hard.
  • A coalition of family farm, faith-based and anti-hunger groups, along with business associations, have initiated a campaign to persuade investors to pull out of commodity index funds.
Arabica Robusta

The European Civil Society Round-Up: Food security as key: New biofuels report - 0 views

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    a new study released by the Common Fund for Commodities at an international forum on biofuels held recently in Kuala Lumpur. "Fundamentally, there is a link between poverty reduction and biofuels sector development that can be promoted," said Ambassador Ali Mchumo, the managing director of the Common Fund in Amsterdam.
Arabica Robusta

Pambazuka - Land grabs: Africa's new 'resource curse'? - 0 views

  • In Madagascar, a 99-year lease on 3.2 million acres of land – 50 per cent of Madagascar’s arable land, granted to multinational Daewoo ‘ensuring food security’ for South Korea, lead to a coup. ‘In the constitution, it is stipulated that Madagascar’s land is neither for sale nor for rent, so the agreement with Daewoo is cancelled,’ said current president Andry Rajoelina, a baby-faced former DJ, backed by the army – and allegedly, the majority of Malagasys, 70 per cent of whom depend on farmland for income. ‘One of the biggest problems for farmers in Madagascar is land ownership, and we think it’s unfair for the government to be selling or leasing land to foreigners when local farmers do not have enough land,’ an official from Madagascar’s Farmer’s Confederation revealed to Reuters.
  • The mentality of ‘grabbers’ could not be more different. ‘We are not farmers…’ stated an official from SLC Agricola, Brazil’s largest ‘farm’ corporation. ‘The same way you have shoemakers and computer manufacturers, we produce agricultural commodities.’
  • But with Africa losing an estimated US$148 billion in development finance each year, 60 per cent as a result of multinational mispricing, in addition to the direct servicing of odious debts – (amounting to a global figure of US$560 billion per annum of an outstanding US$2.9 trillion), little or no rents derived from the liquidation of exhaustible resources is redistributed in intangible capital. This is precisely because across Africa citizens are not required to finance the state budget – as occurs in high-income countries through intangible capital – they lack the political representation necessary to influence policies and usurped power structures.
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  • The terms differ from country to country, with the bulk of Ghana’s leased land allocated for export, in contrast to Ethiopia’s mixed status, but the issue remains one of control and exploitation, whether it is over local food monopolies or exported crops.
  • over 100 known specialised land funds and investments firms have embarked on ‘private sector’ land grabs, including well-known entities such as Morgan Stanley. Facilitating this process is the International Finance Corporation (IFC), the private sector arm of the World Bank group, ensuring for investors the ‘enabling environments’ and positive ‘investment climates’ required for the extractive industries, such as repatriation of profits and tax ‘competition’. From 1991-2002, deregulation proposed by IFIs composed 95 per cent of changes implemented in host countries.
  • development finance siphoned from Africa, whether through the extractive industries, or land grabs, are unlikely to be revealed as the IMF scrapped mandatory information exchange. Global watchdogs, such as the Financial Action Task Force (FATF) remained beholden to high-income nations as a ‘subsidiary’ unit in the Organisation of Economic Co-operation and Development (OECD). Meanwhile, the International Accounting Standard Board (IASB), founded and finance by the ‘big four’ accounting firms – maintaining units in secrecy jurisdictions such as the Cayman Islands – prefers multinationals to self-regulate trade via arms length transfer. What this effectively does is enable multinationals, conducting 60 per cent of global trade within rather than between corporations, to determine the future of entire continents such as Africa, where primary commodities – extracted by corporations, account for 80 per cent of exports.
  • Studies by the International Institute for Environment and Development (IIED) revealed, ‘Many countries do not have sufficient mechanisms to protect local rights and take account of local interests, livelihoods, and welfare. Moreover, local communities are rarely adequately informed about the land concessions that are made to private companies. Insecure local land rights, inaccessible registration procedures, vaguely defined productive use requirements, legislative gaps, and other factors all too often undermine the position of local people vis-à-vis international actors.’[1]
Arabica Robusta

AfricaFiles | Responsibly destroying the world's peasantry? - 0 views

  • It has been several years since private investors and states began buying and leasing millions of hectares of farmland worldwide in order to secure their domestic supply of food, raw commodities, and biofuels, or to get subsidies for carbon storage through plantations.
  • All too often, notions such as "reserve agricultural land," or "idle land," are manipulated out of existence, sometimes being used to designate land on which many livelihoods depend, and that is subject to long-standing customary rights. The requirement that evictions take place only for a valid "public purpose," with fair compensation, and following consultation of those affected, is honoured more in the breach than in the observance.
  • what is required is to insist that governments comply fully with their human rights obligations, including the right to food, the right of all peoples to freely dispose of their natural wealth and resources, and the right not to be deprived of the means of subsistence.
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  • Because the principles ignore human rights, they neglect the essential dimension of accountability. There is also a clear tension between ceding land to investors for the creation of large plantations, and the objective of redistributing land and ensuring more equitable access to it.
  • It should come as no wonder that smallholders and agricultural labourers represent a combined 70% of those who are unable to feed themselves today.
  • Smallholders, by contrast, produce at a higher cost. They are often very productive by hectare, since they maximize the use of the soil, and achieve the best complementary use of plants and animals. But the form of agriculture that they practice, which relies less on external inputs and mechanization, is highly labour-intensive. If smallholders compete in the same markets as the large farms, they lose. Yet they render invaluable services, in terms of preservation of agro- and biodiversity, local communities' resilience to price shocks or weather-related events, and environmental conservation. The arrival of large-scale investment in agriculture will alter the relationship between these worlds of farming. It will exacerbate highly unequal competition. And it could cause massive social disruptions in the world's rural areas.
Arabica Robusta

Pambazuka - Food crisis in the Sahel: Real problem, false solutions - 0 views

  • Tidiane Kassé cautions that by tackling the consequences rather than the causes of the crisis, the region’s people are likely to remain vulnerable to hunger.
  • In contrast with other former French colonies in Africa, where independence parades have been held in a manner devoid of substance and sense (and built on the failings which have reinforced the links of subject to metropole and other examples of power –political, economic, etc), Niamey’s authorities are to limit themselves to a military parade on 3 August. With symbolism put aside, the reality needs to be faced up to: some 8 million Nigeriens – or half the country’s population – are affected by the famine.
  • In addition to the 8 million affected Nigeriens are some 1.6 million Chadians and 500,000 Malians. These statistics are only, however, the visible aspect that institutions and international non-governmental organisations display. They suffer from the limits around reading data on Africa, notably on rural areas and a region of the Sahel in which pastoral traditions and a nomadic lifestyle are a prominent feature.
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  • n the face of empty granaries, Niger’s people have begun to develop a strategy for survival. ‘In Niger, women cover a desert-like environment in search of anthills in order to dig up and retrieve grains of millet, corn and other crops that the ants have collected,’ tells Charles Bambara, in charge of communications for Oxfam GB in Dakar. In the north of Mali, farmers, keen to allow their livestock to drink, have taken to using the water points actually intended for elephants (in a bid to protect the last pachyderms alive in the country).
  • The disorder of the world food crisis in 2008 did not become hazy, and this new peak comes to remind us that, in the Sahel, the crisis results from an endemic problem. This is a problem that, as the thrust of recurrent fever testifies, is more a question of structure than conjuncture, that these are the failings of agricultural policies that impose their own tough realities, and that the recommended solutions are not different from those pushed in the 1980s with the establishing of structural adjustment programmes (SAPs) which sounded the death knell of Africa’s agricultural policies.
  • The reduced investment imposed by the International Monetary Fund (IMF) and the World Bank had then destroyed the base of an agriculture geared towards food sovereignty. Industrial cultures were promoted which washed the soil (leading to greater soil erosion, the use of pesticides and chemical fertiliser) and disrupted the balance of the systems of production behind subsistence and the generation of complementary revenues on the strength of access to local markets. From this point it was a question of food security, no matter where stocks came from. This was the period in which food aid poured in. Africa was to produce no longer, with African stomachs wagered on agricultural surpluses from Europe, the US and elsewhere. As a result, since 1980 sub-Saharan Africa has been the only region of the world where average per capita food production has continued to decline over the last 40 years.[3]
  • African agriculture has suffered a series of difficulties which, over 30 years, have left it vulnerable to the smallest of changes on both the international market and climatically. Agricultural policies applied by states, under donors’ pressure, have in effect turned their back on policies which, formerly, assured technical assistance to producers, backed up by a price-stabilisation mechanism and subsidies for commodities.
  • We could go even further towards the worst of it and look at the development of biofuels and the extent to which more and more land is being diverted away from food production. Essentially, we will be growing to power cars rather than fill granaries. And in July this year, Burkina Faso has inaugurated its first industrial unit of production, while the country remains vulnerable in the face of a food crisis.
  • ‘Today, in the smallest village, people eat bread, milk and coffee… This wasn’t part of our customs; we used to eat maize-based dough, sorghum and millet. But when you can’t live anymore from your field and you’re reliant on others (neighbours, food aid), you eat what you’re given.
  • The foundation of real food sovereignty lies in the promotion and consolidation of family agriculture, as well as the development of an agro-ecology which offers the best antidote to the wasting-away of fragile ecosystems at the mercy of deregulation.
Arabica Robusta

UPDATE 3-Biofuels major driver of food price rise-World Bank | Markets | Reuters - 0 views

  • World Bank economist Don Mitchell concluded that biofuels and related low grain inventories, speculative activity, and food export bans pushed prices up by 70 percent to 75 percent.
  • "The large increases in biofuels production in the U.S. and EU were supported by subsidies, mandates and tariffs on imports," Mitchell said in the research, which looks at rapid rises in food prices since 2002. "Without these policies, biofuels production would have been lower and food commodity price increases would have been smaller."
  • Bob Dineen, president of the Renewable Fuels Association, said the report showed a bias by the author against biofuels and underestimates the impact of higher energy prices and a weak dollar on higher food costs. "Such a simplistic approach fails to accurately and honestly account for the myriad of factors driving food costs higher," Dineen said. "I encourage the author and the World Bank to revisit the issue without bias, taking into account the increasingly significant role biofuels are playing in reducing global oil demand."
Arabica Robusta

Pambazuka - Successful African alternatives to corporate 'green revolutions' - 0 views

  • AGRA proposes exactly the kind of agriculture the panel of agricultural experts (from South Africa, Nigeria, Uganda, Morocco, Brazil, Mexico, Japan, China and more) rejected: Monoculture of one or two crops with the goal of increasing yields through the high use of fossil fuels, chemicals (fertilisers, pesticides) and biotechnology (patented genetically modified seeds).
  • As the demand for agrofuels seems to be insatiable, global corporations are noticing Africa for its extensive land masses, while not seeing the hungry. Calling Africa the ‘green OPEC’, they assert that 15 countries in Africa have a total combined land area greater than all of India ‘available’ for agrofuel production, not bothering to explain what ‘available land’ means in the context of a food deficit continent.[2]
  • the amount of plant material needed is massive. Lester Brown offers the comparison that the amount of grain required to fill the 90-litre petrol tank of a 4 × 4 vehicle once with maize ethanol could feed one person for a year. The grain it takes to fill the tank every two weeks over a year would feed 26 people.[3]
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  • Exporting crops for overseas consumption while Africans go hungry is a historical pattern all too familiar on the continent. It is certainly not the hope of 21st century African agriculture.
  • Both Namibia and South Africa are moving towards expropriation of land as a necessary means to correct this economic apartheid. Southern Africa is learning from the negative experience of land grabs in Zimbabwe, yet the commodity market approach can be similarly inequitable and destructive of livelihoods.
  • ‘Agroecology [sustainable mixed cropping] is a knowledge-intensive approach. It requires public policies supporting agricultural research and participative extension services. States and donors have a key role to play here. Private companies will not invest time and money in practices that cannot be rewarded by patents and which don’t open markets for chemical products or improved seeds.’[7]
  • There are about 18 recognised farming systems in Africa that can be grouped as a maize-dominated system, a cereal/root crop system, a root crop system and an agro-pastoral millet/sorghum system, all within overall mixed cropping. Part of Africa's food heritage, this genetic wealth offers important contributions towards making Africa a well-nourished continent.
  • Stories of stolen genetic treasures echo across the continent. Like traditional story tellers, when a botanist or agronomist ends his or her account of the latest theft, another joins in to give yet another account, often in voices of anguish and despair.
  • Today, the North American Tuli Association promotes the breed as follows: ‘NATA intends to expand their activities by spreading the benefits of the Tuli cattle to many countries within the Western hemisphere….the Tuli breed can provide the missing link to bridge the gap in cattle genetics, the gap being adaptation to heat and nutritional stress combined with carcass merit.’[10] Neither the government of Zimbabwe nor the foreign cattle associations consulted with the local communities or recognised their contribution in any way. NATA has even usurped the name of ‘tuli.’
  • A major discussion in the process of domesticating farmers' rights will be determining the relationship between individual rights of private property and social rights of farmers.
  • The WTO gives no recognition to social rights, only to private property rights, while the CBD, the ITPGRFA and the AU Model Legislation all recognise the rights of groups (farmers and communities) as equal to those of individuals (persons and corporations).
  • The AU model legislation also directly addresses the issue of biopiracy, such as the Tuli cattle case, by adopting the CBD principle of prior informed consent (PIC)
  • Because the wealth of the existing biodiversity is the basis for the future of agricultural Africa, it is essential that those who care about this wealth, and work toward improving its potential for use, are acknowledged.
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