- My late grandfather, a man of sturdy Norwegian-American
farm stock, who later became a newspaper editor and political activist
during the First World War, used to say, 'A man can get used to pretty
much anything with time, except dying...and even that with some practice.'
Well, as fate has it, it seems we, the vast majority of the human race,
are about to test that adage in regard to the availability of our daily
- Food is one of those funny things it's hard to live without.
We all tend to take it for granted that our local supermarket will continue
to offer whatever we wish, in abundance, at affordable prices or nearly
so. Yet living without adequate food is the growing prospect facing hundreds
of millions, if not billions, of us over the coming years.
- In a sense it's a genuine paradox. Our planet has everything
we need to produce nutritious natural food to feed the entire world population
many times over. This is the case, despite the ravages of industrialized
agriculture over the past half century or more.
- Then, how can it be that our world faces, according to
some predictions, the prospect of a decade or more of famine on a global
scale? The answer lies in the forces and interest groups that have decided
to artificially create a scarcity of nutritious food. The problem has several
- Eliminating emergency reserves
- The ability to manipulate the price of essential foods
worldwide at will -- almost irrespective of today's physical supply and
demand for grains -- is quite recent. It is also scarcely understood.
- Up until the grain crisis of the mid-1970s there was
no single "world price" for grain, the benchmark for the price
of all foods and food products.
- From the time of the earliest traces left by Sumerian
civilization some two thousand years before Christ, in the region between
the Tigris and Euphrates rivers in today's Iraq, almost every culture had
the practice of storing a reserve stock of a grain harvest right
up to the most recent times. Wars, droughts and famines were the reason.
When properly stored, grain can be safely stored over a period of about
seven years, enabling reserve stocks in case of an emergency.
- After the Second World War, Washington created a General
Agreement on Tariffs and Trade (GATT) to serve as a wedge to push free
trade among major industrial nations, especially the European Community.
During initial negotiations, agriculture was deliberately kept off the
table at the insistence of the Europeans, especially the French, who regarded
political defense of Europe's Common Agriculture Policy (CAP) and European
agriculture protections as non-negotiable.
- Beginning in the 1980s with the political crusades of
Margaret Thatcher and Ronald Reagan, the extremist free market views of
Chicago's Milton Friedman became increasingly accepted by leading European
power circles. Step-by-step the resistance to the Washington agriculture
free trade agenda dissolved.
- After more than seven years of intense horse-trading,
lobbying and pressure, the European Union finally agreed in 1993 to the
GATT Uruguay Round, requiring a major reduction of national agriculture
protection. Central to the Uruguay Round deal was agreement on one major
change: national grain reserves as a government responsibility were to
- Under the new 1993 GATT agreement, formalized with the
creation of a World Trade Organization to police the agreements with enforceable
sanctions against violators, 'free trade' in agriculture products was for
the first time an agreed priority of the world's major trading nations,
a fateful decision to put it mildly.
- Henceforth, grain reserves were to be managed by the
'free market,' by private companies, greatest among them the US Grain Cartel
giants, the behemoths of American agribusiness. The grain companies argued
that they would be able to fill any emergency gaps more efficiently and
save governments the cost. That ill-advised decision would open the floodgates
to unprecedented grain market shenanigans and manipulations.
- ADM (Archer Daniels Midland), Continental Grain, Bunge
and the primus inter pares, Cargill-the largest privately-held grain and
agribusiness trading company in the world-emerged the great winners of
the WTO process.
- The outcome of the GATT agriculture talks was very much
to the liking of the people at Cargill. That was no surprise to insiders.
Former Cargill executive Dan Amstutz played the key role in drafting the
agriculture trade section of the GATT Uruguay Round. In 1985 D. Gale Johnson
of the University of Chicago, a colleague of Milton Friedman, co-authored
a seminal report for David Rockefeller's Trilateral Commission that was
the blueprint for what they called "market-oriented" agricultural
reform. It provided the framework for the US position in the coming GATT
Uruguay Round negotiations. The Rockefeller group and its think tanks were
the architects of 'agricultural reform,' as with so much in our post-1945
- The process of eliminating government grain reserves
in major producing countries took time, but with the passage of the 1996
Farm Bill, the US had virtually eliminated its grain reserves. The EU followed
soon after. Today, among major agriculture producing countries, only China
and India still hold to a strategic security policy of nationally held
- Wall Street smells blood
- The elimination of national grain reserves in the USA
and EU and other major OECD industrial countries set the stage for the
next step in the process-elimination of agricultural commodity derivatives
regulation, allowing unbridled unchecked speculative manipulations.
- Under the Clinton Treasury (1999 2000) the elimination
of grain reserves was formalized by the Commodity Futures Trading Commission
(CFTC)-the government body charged with supervising derivatives trade in
exchanges such as the Chicago Board of Trade or NYMEX- and in legislation
drafted by Tim Geithner and Larry Summers at Treasury. As will be shown
below, it was no accident that Wall Street pushed Geithner, former President
of the NY Federal Reserve, to become Obama's Treasury Secretary in 2008,
amid the worst financial debacle in history. Something to do with having
foxes guard henhouses.
- When Henry Kissinger was Secretary of State in 1972-1973,
acting in league with the Department of Agriculture and major US grain
trading companies, he orchestrated an unprecedented 200% jump in the price
of grain. The price hike was triggered at that time by the US signing a
three-year contract with the Soviet Union that had just gone through a
disastrous harvest failure.
- The US-Soviet deal hit amid global drought and severely
reduced harvests worldwide, hardly a prudent time to sell the entire US
grain cupboard to an ostensible Cold War opponent. The sale took place
amid a major world grain harvest shortfall leading to the explosive price
rise. Critical voices in US press at the time appropriately dubbed it the
Great Grain Robbery. Kissinger had even arranged for much of the cost of
shipping US grain to the Soviets to be paid by US taxpayers. Cargill and
company laughed all the way to the bank.
- Around the same time, the big American grain companies-Cargill,
Continental Grain, ADM, Bunge-began what would be a twenty-year process
of transforming world grain markets into venues for controlling essential
human and animal nutrition by manipulating grain prices regardless of supply.
- The twenty-year process of the US' gaining control of
world grain markets and prices took a giant leap forward in the 1980s with
the advent of financial commodity index trading and other derivatives.
- The Summers-Geithner-Wall Street new versoin of the earlier
grain robbery especially after 2006 would eventually pale anything Kissinger
and friends had engineered in the 1970s.
- In 1999, at the urging of major Wall Street banks such
as Goldman Sachs, JP Morgan, Chase Manhattan and Citibank, the Clinton
Administration drafted a statute that would fundamentally alter grain-trading
history. It was called the Commodity Futures Modernization Act and was
made law in 2000.
- The two key architects of Clinton's new law were a former
Goldman Sachs consultant and Clinton's Treasury Secretary Larry Summers,
and his Assistant at Treasury Tim Geithner, friend of Wall Street and today
Obama's Treasury Secretary. Secretary Summers was also a key player in
preventing efforts to regulate financial derivatives in commodities and
- The Summers-Geithner recommendations were contained in
a November 1999 Report to Congress from the President's Working Group on
Financial Markets, the infamous "Plunge Protection Team."
- At the time, the Commodity Futures Trading Commission
(CFTC) proposed also to deregulate trading in derivatives between major
banks or financial institutions, including derivatives of grain and other
- The historic and unprecedented deregulation opened a
massive hole in Government supervision of derivatives trading, a gaping
hole that ultimately facilitated the derivatives games leading to the 2007
financial collapse. It also formed the deregulation free-for-all that is
behind much of the recent explosion in grain prices.
- Some years earlier in 1991 Goldman Sachs had rolled out
its own commodity "index," which was to go on to become the global
benchmark for derivatives trading of all commodities, including food and
oil. The Goldman Sachs Commodity Index or GSCI was a new derivative that
tracked the prices of some 24 commodities -- from corn to hogs to coffee
to wheat to precious metals and energy. From the point of view of Wall
Street, the idea was brilliant. It let speculators gamble on the future
price of an entire range of raw materials in one step, a kind of Wall Street
version of a "one-step" gambling mall
- With the CFTC deregulation of commodity trading in 1999
Goldman Sachs was positioned to reap sweet financial rewards with its GSCI.
Now bankers and hedge funds and other high-profile speculators were able
to take huge positions or bets on the future grain price with no need to
take delivery of actual wheat or corn at the end.
- The price of grain was now run by the new casino masters
of grain supplies -- from Wall Street to London and beyond -- who traded
grain futures and options in Chicago, Minneapolis, Kansas City. No longer
was future price a form of hedging limited to knowledgeable active participants
in the grain industry, whether farmers or millers or large grain end-users
the individual traders who had relied on futures contracts for more
than a century to insulate themselves from risks of harvest failure or
- Grain had become a new speculative field for anyone willing
to risk investors' capital, high stakes gamblers such as Goldman Sachs
or Deutsche Bank or high-risk offshore hedge funds. Grain, like oil before
it, had now been almost entirely decoupled from everyday supply and demand
in the short term. The price could be manipulated for brief periods through
rumor rather than fact.
- Unlike directly involved parties like millers or farmers
or large restaurant chains, speculators neither produced nor took delivery
of the corn or wheat they gambled with. They could hardly take delivery
of 10 tons of hard red winter wheat and store it. Their game was a complex
new form of arbitrage where the only rule was to buy low and sell high.
Derivative instruments and US Government laissez faire regulatory negligence
allowed the players' potential profits from the game to be leveraged often
- But there was another perverse twist: Goldman Sachs'
GSCI was structured so that investors could only buy the contract. It was,
as the industry calls it, "long only." No one could bet on a
fall in grain prices with it. You only stood to profit from an ever-rising
grain price and that happened as ever more innocent investors were suckered
into high-risk commodity speculation creating a kind-of self-fulfilling
- That long-only feature was done to encourage bank clients
to leave their money with the bank or fund for the long term and let the
bankers play with other people's money, with huge potential windfall profits
to the bankers -- while any losses fell to the clients.
- The fatal flaw was that the GSCI structure did not allow
"short selling" that would force prices down in times of grain
surplus. Investors were lured into a system that required them to buy and
keep buying once grain prices rose for whatever reason. Soon other banks,
including Barclays, Deutsche Bank, Pimco, JP Morgan Chase, AIG, Bear Stearns,
and Lehman Brothers, floated their own commodity index funds. For the first
time, high-risk commodity investing -- including into grain and other agriculture
products -- became a financial product for the "little man" who
knew little if anything about what he was getting into, just that his banker
or fund adviser was urging him to invest in it. The banks as usual played
with "other people's money" at the expense of 'other people.'
- In a detailed analysis of the grain price bubble of 2007-2008,
Olivier de Schutter, a UN Special Rapporteur on the Right to Food, recently
concluded that "a significant portion of the increases in price and
volatility of essential food commodities can only be explained by the emergence
of a speculative bubble." The timing of that bubble was notable as
it conveniently offset huge losses of those same mega-banks that were under
water with their excesses in securitized home mortgages and other Wall
Street casino madness. Schutter added,
- In particular, there is a reason to believe that a significant
role was played by the entry into markets for derivatives based on food
commodities of large, powerful institutional investors such as hedge funds,
pension funds and investment banks, all of which are generally unconcerned
with agricultural market fundamentals. Such entry was made possible because
of deregulation in important commodity derivatives markets beginning in
- Following the collapse of the dot.com stock bubble in
2000, as Wall Street and other major financial players began seeking alternatives,
commodities and high-risk derivatives based on baskets of commodities became
a major speculative investment theme for the first time.
- Since 2000 the totality of dollars invested in various
commodity index funds --Goldman Sachs' GSCI being the largest -- has risen
from some $13 billion in 2003 to a staggering $317 billion during the oil
and grain speculation bubble in 2008. This was documented in a study by
Lehman Brothers shortly before Treasury Secretary Henry Paulson made them
a sacrificial lamb in order to bail out his Wall Street cronies.
- Since 2008 with some fluctuation, investor funds have
continued to pour into various commodity funds, keeping food prices high
and rising. From 2005 to 2008, the worldwide price of food rose 80 percent
-- and has kept rising. In the period from May 2010 through May 2011 the
price of wheat rose again some 85%. "It's unprecedented how much investment
capital we've seen in commodity markets," said Kendell Keith, president
of the National Grain and Feed Association, in a recent interview.
- The Food and Agriculture Organization of the UN estimates
that since 2004, world food prices on average have soared by an unprecedented
240%. The offering of food commodities as a speculative alternative by
the large banks and hedge funds exploded in 2007 when the US sub-prime
financial tsunami first hit. Since then, speculation in food commodities
has only gathered more momentum as other investments in stocks and bonds
became highly dangerous. One result has been a predictably rapid rise in
starvation, hunger and malnutrition in poorer populations around the world.
- The FAO calculates that food-deficit countries will be
forced to spend fully 30% more on importing food -- with a world value
of a staggering $1.3 trillion. Three decades ago, that international market
was tiny; today it is overwhelmingly dominated by a small handful of US
agribusiness giants. Agribusiness, like military exports, is a core US
strategic sector, long supported to extraordinary lengths by Washington.
It is part of a larger and rather private agenda shaped decades ago under
the aegis of the Rockefeller and Ford Foundations and their eugenics advocates.
- Importing food is today the rule rather than the exception
as cheap, globalized agribusiness products, often under IMF pressure, are
being forced onto populations across the developing world, including formerly
self-sufficient food-producing societies now rendered dependant on imported
food. This is done in the name of 'free trade' or what is often called
'market-oriented agriculture.' Left unsaid is that the so-called 'market'
is colossally inefficient and unhealthy, literally and financially. Imported
food dependency is artificially created by huge multinational conglomerates
such as Tyson Foods, Smithfield, Cargill or Nestle, corporate giants whose
last concern seems to be the health and well-being of those of us who must
consume their industrial food products.
- The cheap agribusiness imports often undercut the prices
of locally grown crops, driving millions from their land into overcrowded
cities in desperate search of jobs.
- Today the price of wheat derivatives, or 'paper wheat,'
controls the price of real wheat as speculators like Goldman Sachs, JP
Morgan Chase, HSBC, Barclays or numerous offshore hedge funds -- with little
interest in grains other than as a profit source -- now outnumber bona-fide
agriculture industry hedgers four-to-one.
- That is a complete reversal of the situation that dominated
grain prices for the past hundred years or more. For some 75 years, the
CFTC had imposed limits on how much of certain agricultural commodities
-- including wheat, cotton, soybeans, soybean meal, corn, and oats -- can
be traded by non-commercial players who are not part of the food industry.
So-called 'commercial hedgers,' like farmers or food processors, previously
could trade unlimited amounts in order to manage their risk. Not so with
- Those limits were designed to prevent manipulation and
distortion in what are relatively small markets. With the passage of the
Summers-Geithner Commodity Modernization Act of 2000 and the infamous 'Enron
Loophole' -- allowing exemption from government regulation -- the fast
and loose trading in energy derivatives was rapidly expanded to include
food commodities. The dam broke in 2006 when Deutsche Bank asked for and
was granted CFTC permission to be exempt from all trading limits. The regulatory
authorities assured them that there would be no penalties for exceeding
the limits. Others followed, lemming like.
- For some two billion people in the world who spend more
than half of their income on food, the effects have been horrifying. During
the speculation-driven grain price explosion in 2008, more than a quarter
billion people became what the UN terms "food insecure," or a
total of one billion human beings, a new record.
- That need never have occurred had it not been for the
diabolical consequences of the US Government deregulating grain speculation,
with support from the US Congress over the past decade or more. By early
2008, upwards of 35% of all US arable land was being planted with corn
to be burned as biofuel under the new Bush Administration incentives. In
2011 the total is more than 40%. Thus, the stage was set for the slightest
minor market shock to detonate a massive speculative bubble in grain markets,
as was then being done by the use of the same GSCI index games as are played
- Agribusiness as a long-term strategy
- The record rise in grain and food prices in recent years
is not a mere Wall Street profit gimmick, although obscene profits are
being made. Rather, it is apparently an integral part of a long-term strategy
whose roots go back to the years just after World War Two when Nelson Rockefeller
and his brothers tried to organize the global food chain along the same
monopoly model they had used for world oil. Food would henceforth become
just another commodity like oil or tin or silver whose scarcity and price
could ultimately be controlled by a small group of powerful trading insiders.
- At the same time the Rockefeller brothers were expanding
their global business reach from oil to agriculture in the developing world
through their technology-driven Green Revolution scheme after the war,
they were also financing a little-noticed project at Harvard University.
The project would form the infrastructure for their plan to globalize world
food production under the central control of a handful of private corporations.
- Its creators gave it the name 'agribusiness,' in order
to differentiate it from traditional farmer-based agriculture -- the cultivation
of crops for human sustenance and nutrition. The push to place world national
governments' emergency grain reserves into private hands was merely a logical
expansion of the original Rockefeller agribusiness strategy, as was their
highly mis-represented "Green Revolution" which at day's end
merely promoted a huge sale of US agriculture products from John Deere
tractors (using large volumes of Standard Oil Rockefeller products) to
US chemical fertilizers made by other companies in the Rockefeller orbit-forcing
a trend to large scale farming and forcing millions off the land into cities
where they former a cheap labor pool for large multinationals. The highly-touted
harvest yields turned out to be actual losses after several harvests.
- Agribusiness and the Green Revolution went hand-in-glove.
They were part of a grandiose strategy which included Rockefeller Foundation
financing of research for development of genetic alteration of plants a
few years later.
- John H. Davis had been Assistant Agriculture Secretary
under President Dwight Eisenhower in the early 1950s. He left Washington
in 1955 and went to the Harvard Graduate School of Business, an unusual
place for an agriculture expert in those days. Davis had a clear strategy.
In 1956 he wrote an article in the Harvard Business Review in which he
declared, "the only way to solve the so-called farm problem once and
for all, and avoid cumbersome government programs, is to progress from
agriculture to agribusiness." He knew precisely what he had in mind,
though few observers had a clue back then.
- Davis, together with another Harvard Business School
professor, Ray Goldberg, formed a Harvard team with Russian-born economist
Wassily Leontief, who was then mapping the entire US economy, in a project
funded by the Rockefeller Foundation. During the war, the US Government
had hired Leontief to develop a method of dynamic analysis of the total
economy that he referred to as 'input-output' analysis. Leontief worked
for the US Labor Department as well as for the Office of Strategic Services
(OSS), the predecessor to the CIA.
- In 1948 Leontief got a major four-year $100,000 grant
from the Rockefeller Foundation to set up the Harvard 'Economic Research
Project on the Structure of the American Economy.' A year later the US
Air Force joined the Harvard project, a curious engagement for one of the
prime US military branches. The transistor and electronic computers had
just been developed along with methods of linear programming that would
allow the processing of vast amounts of statistical data on the economy.
Soon the Ford Foundation joined in to fund the Harvard project.
- The Harvard project and its agribusiness component were
part of a major attempt to revolutionize US and later, global food production.
It was to take four decades before it dominated the food industry. Professor
Goldberg later referred to the agribusiness revolution and the development
of genetically-modified agribusiness as 'changing our global economy and
society more dramatically than any other single event in the history of
mankind.' He just might have been right as we are now likely about to
witness over the coming decade.
- As Ray Goldberg boasted years later, the core idea driving
their agribusiness project was the re-introduction of 'vertical integration'
into US food production. By the 1970s most Americans had forgotten that
bitter battles had been fought before World War I and during the 1920's
to pass laws in Congress to prohibit vertical integration by giant conglomerates,
and to break up trusts such as Standard Oil, in order to prevent them from
monopolizing whole sectors of vital industries.
- It wasn't until the David Rockefeller-backed Presidency
of Jimmy Carter in the late 1970's that US multinational business was able
to begin the rollback of decades of carefully constructed US Government
regulations of health, food safety and consumer protection laws, and open
the doors to a new wave of vertical integration of agriculture. The vertical
integration process was sold to unaware citizens under the banner of 'economic
efficiency' and 'economy of scale.'
- A return to vertical integration and the accompanying
agribusiness were introduced amid a publicity campaign in mainstream media
and from industry claiming that government had encroached far too much
into the daily lives of its citizens and had to be cut back to give ordinary
Americans 'freedom.' The war cry of the campaigners was 'deregulation.'
Of course, de-regulation by government merely opened the door to private
control another form of regulation -- by the largest and most powerful
corporate groups in any given industry. That was certainly the case for
agriculture -- the big four grain cartel companies dominated world grain
markets from the 1970s to today. They worked hand-in-glove with big Wall
Street derivative players such as Goldman Sachs and JP Morgan Chase and
- By the latter part of 2007, trading in food derivatives
was fully deregulated by Washington, and US government grain reserves gone.
The way was clear for dramatic food price rises.
- The speculative machine that had been put into place
by Wall Street and its banker friends was creating the potential for significant,
long-term food inflation. But the inflation needed a major 'venting' to
get the ball really rolling. That was to come from George W. Bush.
- The Killer Punch-BP, Bioethanol and Genocide
- In 2007, just as the US real estate crisis was causing
the first tsunami shock waves through Wall Street, the Bush Administration
made a major public relations push to convince the world that the US had
turned into a "better steward of the environment." Too many fell
for the hype.
- The center of the Bush program, announced in his January
2007 State of the Union Address, was something called '20 in 10'-cutting
US gasoline use 20% by 2010. The official reason given to the public was
to "reduce dependency on imported oil," as well as cutting unwanted
"greenhouse gas" emissions. That wasn't the case, of course,
but it made good PR. Repeat it often enough and maybe most people will
believe it. Maybe they won't realize that their taxpayer subsidies are
being used to grow ethanol corn instead of feed corn and are also driving
the price of their daily bread through the roof.
- The heart of the Bush plan was a huge taxpayer-subsidized
expansion of the use of bio-ethanol for transport fuel. President Bush's
first plan required production of 35 billion gallons (about 133 billion
liters) of ethanol a year by 2017. Congress had already mandated, via the
Energy Policy Act of 2005, that corn ethanol for fuel must rise from 4
billion gallons in 2006 to 7.5 billion gallons in 2012.
- To make certain it would happen, farmers and big agribusiness
giants like ADM were given generous taxpayer subsidies to grow corn for
fuel instead of for food. David Rockefeller's corporate farms were one
of the largest recipients of US Government agriculture subsidies. Currently
ethanol producers in the US get a subsidy of 51 cents per gallon of ethanol.
The subsidy is paid to the blender, usually an oil company, that blends
it with gasoline for sale. In the 2011 harvest year, an estimated 40% of
all corn acreage in the United States is expected to be grown for biofuel.
- As a result of these generous US Government subsidies
to produce bio-ethanol fuels, and the new legislative mandate, the US refinery
industry has been investing big time in building special new ethanol distilleries,
similar to oil refineries, except they produce ethanol fuel. The number
currently under construction exceeds the total number of oil refineries
built in the US over the past 25 years. When finished in the next 2-3 years,
the demand for corn and other grain to make ethanol for car fuel will double
from present levels.
- Not wanting to be left behind, the EU bureaucrats in
Brussels -- no doubt generously encouraged by the likes of BP, Cargill,
ADM and the major biofuel lobby -- came up with its own scheme for "10
in 20" or a mandate that 10% of all road fuel in the EU by 2020 be
from biofuel. Shockingly, they did so despite the existence of a report
by the same EU Commission on the damaging impact of such a massive turn
to subsidized biofuels. The London Times reported,
- A study by the Commission on the land use implications
of sourcing only 5.6 per cent of Europe's transport fuel from biofuels
concluded that any significant rise beyond 5.6 per cent would 'rapidly'
increase carbon emissions and 'erode the environmental sustainability of
biofuels'... Like most political diktats, the figure of 10 per cent was
plucked out of the air and no one at the Commission had a clue, when the
policy was adopted, how the fuel industry was to meet the one in ten mandate
without a huge rise in biofuel planting in the tropics.
- In short, the use of farmland worldwide for bio-ethanol
and other biofuels-burning the food product rather than using it for human
or animal feed-is being treated in Washington, the EU, Brazil and other
major centers as a major new growth industry. The impact on human beings,
however, is quite the opposite.
- The United States today is far and away the world's largest
producer of ethanol biofuel for transportation fuel. In 2010 the US produced
13 billion gallons (US) or 50 billion liters of ethanol biofuel, amounting
to near 60% of the world's total. The EU added some 6% to the global total
as number three behind Brazil in a macabre contest to see which country
can destroy the most food by burning toxic biofuels.
- The most alarming aspect of the entire biofuel scam is
the fact that three full years after the grain price explosion of 2008
was demonstrated to be directly tied to the biofuels removal of millions
of acres of US farmland -- from corn for feed to corn for fuel -- no action
has been taken either in the US Congress or in the EU or anywhere else
to reverse that insane policy. The stunning inaction seems testimony to
the political power of the biofuels lobby. Who are they? Not surprisingly,
they are the same agri and oil giants behind US and EU food and energy
policy. Major players include BP, Shell, ExxonMobil, Chevron, ADM, Cargill
and the like. It is a powerful lobby and sees a goose that can literally
lay multiple golden eggs in the form of mandated biofuels requirements
of the EU and USA and elsewhere.
- This January the Institute for European Environment Policy
(IEEP), an independent body, issued a report on the role of bioenergy in
EU governments' "renewable energy action plans." Recent proclamations
by the German government that renewables will replace nuclear electric
generation by 2020, and similar pledges by other EU governments, all rely
on a fantastic delusion that the electriic power being generated by large
nuclear plants can come from biodiesel. The January IEEP study notes that:
- More than half of the renewable energy which EU Member
States expect to consume annually by 2020 will consist of bioenergy, e.g.
biomass, bioliquids and biofuels. This is revealed in a first evaluation
of the proposed scale of deployment of bioenergy by the EU Member States
in the period to 2020 as forecast in their National Renewable Energy Action
Plans (NREAPs)...A significant increase in absolute consumption of bioenergy
is anticipated. In the 23 plans examined, bioenergy will thus remain the
main contributor to the renewable energy sector. Overall, the bioenergy
contribution to final energy consumption is expected to more than double,
from 5.4% in 2005 to almost 12% (124Mtoe) in 2020. Bioenergy will have
a quasi-dominant role in the renewable portion of the EU heating and cooling
sector, and is foreseen to contribute more than 80% to the sectoral target.
In the electricity sector the bioenergy share will be relatively low but
in the transport sector it is expected to reach nearly 90% of total renewable
energy by the year 2020.
- The IEEP conducted an analysis of required land acreage
needed for the cultivation of such a huge increase of biofuels by 2020.
They estimated, after all factors are properly calculated, that an additional
"4.1 to 6.9 million hectares" in the European Union will be needed
for biofuel, acreage more than three times the entire state of Kansas.
- Further, belying the EU myth that biofuels give a reduction
of CO2 (even were CO2 a problem -- which is highly contested among serious
scientists), the IEEP calculates that the enormous rise in biofuel use
will lead to more CO2 emissions from vehicles, equivalent to adding as
many as 26 million additional vehicles on European roads.
- Biofuels are highly undesirable for countless reasons,
as many serious environmental organizations have begun to realize. The
corn ethanol industry has grown, largely due to powerful corn and oil lobbies.
High demand will likely increase corn ethanol and gas prices as corn ethanol
is mixed with gasoline.
- Ethanol energy gets poor fuel-economy with standard engines.
And most importantly, it simply is not possible to produce the amount of
corn required to make the fuel a viable alternative to oil or a serious
supplier of energy.
- New Global Dustbowls?
- What biofuels and their pushers-from BP to agribusiness,
combined with the mad decisions of governments from Washington to Berlin
to Paris and beyond have accomplished is the elimination of grain
security reserves worldwide. This has been vigorously mixed with a cocktail
of deregulated free commodity derivatives trading to create the ingredients
for the worst potential food crisis in human history.
- The testing of that hypothesis may unfortunately already
be underway at the hands of forces far beyond the ability of man to control.
At the recent annual meeting of the Solar Physics Division of the American
Astronomical Society, scientists from the National Solar Observatory (NSO)
and the Air Force Research Laboratory (AFRL) presented results of studies
of recent solar flare activity, by far the greatest factor influencing
climate change on Earth. Flares occur in periodic cycles such as 11-year,
22-year and longer ones. The solar studies indicate that the Earth is now
at the beginning of what might be a decade or longer period of greatly
reduced solar activity.
- Reduced solar sunspot activity means a less active sun.
As Dutch physicist Gijs B. Graafland puts it, "It will affect severely
the evaporation of ocean water and by that the amount of rain. This results
in lower water for agriculture and therefore in less growth and more severe
blowing away of dry fertile top soil layers which gives a decade of high
- Translated to us, that could mean climate catastrophes,
harvest failures, droughts and dust storms -- such as those that swept
the US Midwest during the Great Depression of the 1930s -- in fertile regions
across the planet, not just once but over a span of years. If the solar
physicists as well as earlier Russian astrophysicist, Habibullo Abdussamatov,
the head of space research at St. Petersburg's Pulkovo Astronomical Observatory
in Russia who predicted similar onset of a new "Little Ice Age"
beginning 2014, are right, we may soon face a food crisis on a scale our
planet never in history has faced.
- * F. William Engdahl is author of Gods of Money: Wall
Street and the Death of the American Century; A Century of War: Anglo-American
Oil Politics and the New World Order and Full Spectrum Dominance : Totalitarian
Democracy in the New World Order. He may be contacted via his website,
HYPERLINK "http://www.engdahl.oilgeopolitics.net" www.engdahl.oilgeopolitics.net.
Reproduction of all or significant parts of this article, as well as foreign
translations, require the author's prior permission.
- F. William Engdahl, Seeds of Destruction: The Hidden
Agenda of Genetic Manipulation, HYPERLINK "http://www.GlobalResearch.ca"
www.GlobalResearch.ca, Montreal, 2007, pp. 216-219.
- Sophia Murphy, Strategic Grain Reserves In an Era of
Volatility, Institute for Agriculture and Trade Policy, Minneapolis, October
- Anon., Another Soviet Grain Sting, Time, November 28,
1977, HYPERLINK "http://www.time.com/time/magazine/article/0,9171,919164,00.html#ixzz1NMsb5yQY"
- PBS, The Warning, Public Broadcasting System, October
20, 2009, accessed in HYPERLINK "http://www.pbs.org/wgbh/pages/frontline/warning/view/#morelink"
- Lawrence Summers et al, Over-the-Counter Derivatives
Markets and the Commodity Exchange Act: Report of The President's Working
Group on Financial Markets, Washington, D.C., November 1999.
- Cadwalader, Wickersham & Taft LLP, CFTC Releases
Plan for Market Deregulation, March 1, 2000, accessed in HYPERLINK "http://library.findlaw.com/2000/Mar/1/128962.html"
- Frederick Kaufman, How Goldman Sachs Created the Food
Crisis, Foreign Policy, April 27, 2011, accessed in HYPERLINK "http://www.foreignpolicy.com/articles/2011/04/27/how_goldman_sachs_created_the_food_crisis"
- Amine Bouchentouf, et al, Investing in Commodities via
the Futures Markets, accessed in HYPERLINK "http://www.dummies.com/how-to/content/investing-in-commodities-via-the-futures-markets.html#ixzz1PdYxiCqD"
- Olivier de Scheutter, Food Commodities Speculation and
Food Price Crises, Briefing Note 02, September 2010, accessed in HYPERLINK
- Frederick Kaufman, The Food Bubble: How Wall Street
starved millions and got away with it, July 2010, Harper's Magazine, pp.
- Frederick Kaufman, How Goldman Sachs Created the Food
Crisis, Foreign Policy, April 27, 2011, accessed in HYPERLINK "http://www.foreignpolicy.com/articles/2011/04/27/how_goldman_sachs_created_the_food_crisis"
- Neena Rai, et al, High Food Prices Pose Threat to Poor
Nations, The Wall Street Journal, June 8, 2011.
- Global Labour Institute, Food Crisis-Financializing
Food: Deregulation, Commodity Markets and the Rising Cost of Food, Geneva,
June 7, 2008, accessed in HYPERLINK "http://www.globallabour.info/en/2008/07/financializing_food_deregulati.html"
- See F. William Engdahl, Seeds of Destruction: The Hidden
Agenda of Genetic Manipulation, 2007, Montreal, HYPERLINK "http://www.GlobalResearch.ca"
www.GlobalResearch.ca, pp.123-151 for a more detailed analysis of the fraud
of the Green Revolution and its so-called "wonder wheat" from
Norman Borlaug, himself a product of the Rockefeller research organization.
- Current Biography, 1967, Wassily Leontief; and Ray Goldberg.
- Ray Goldberg, The Evolution of Agribusiness, Harvard
Business School Executive Education Faculty Interviews: HYPERLINK "http://www.exed.hbs.edu/faculty/rgoldberg.html"
www.exed.hbs.edu/faculty/rgoldberg.html. W. Leontief, Studies in
the Structure of the American Economy, 1953. International Science Press
Inc., White Plains, New York. In its 1956 Annual Report, the Ford Foundation
noted the following grant: 'Harvard Economic Research Project:' In addition
to these over-all programs, a grant of $240,000 was made to support the
activities of the Harvard Economic Research Project over a six-year period.
This center, under the direction of Professor Wassily Leontief, was engaged
in a series of quantitative studies of the structure of the American economy,
focusing mainly on inter-industry relationships and the interconnections
between industry and other sectors of the economy. Equal support was contributed
by the Rockefeller Foundation. See also Ray Goldberg, The Genetic Revolution:
Transforming our Industry, Its Institutions, and Its Functions, an address
to The International Food and Agribusiness Management Association (IAMA).
Chicago, June 26, 2000. Goldberg founded and headed the IAMA as well as
holding seats on the boards of agribusiness giants Archer Daniels Midland,
Smithfield Foods and DuPont Pioneer Hi-Bred. He practiced what he preached.
- F. William Engdahl, op. cit.
- Carl Mortished, We're on a green road to hell, The London
Times, April 10, 2010.
- F.O. Lichts, Industry Statistics: 2010 World Fuel Ethanol
Production, Renewable Fuels Association, accessed in HYPERLINK "http://www.ethanolrfa.org/pages/statistics#E"
- IEEP Study, The Role of Bioenergy in the National Renewable
Energy Action Plans: A First Identification of Issues and Uncertainties,
January 31, 2011, accessed in HYPERLINK "http://www.ieep.eu/topics/climate-change-and-energy/energy/bioenergy/"