the past few years. With this has come a sharp increase in the value of
arable land. Deep topsoil farmland in Iowa has changed hands as high as
$11,000 an acre recently. That’s up from about $6,000 just a few years
ago.
The shortage of arable land has gone global. Africa has seen an
explosion of activity since 2008. How big is the land grab? Who’s doing
the grabbing? It’s hard to tell as there is no central source of
information and many of the transactions are not made public. An outfit
called the Oakland Institute has been compiling information on this. From their June 8 press release:
The scale, rate and negative impact of land deals is alarming. In 2009 alone nearly 60 million ha– an area the size of France
– was purchased or leased in comparison to an average annual expansion
of global agricultural land of less than 4 million ha before 2008.
Consider these three maps. They describe the scope of what has happened in Mali, Sierra Leone and Ethiopia.
The total in these two countries alone is 460k HA or 1.14 million acres. How big is that? Big.
This is an area the size of Rhode Island, It is about 80Xs the size of
Manhattan. But this is small beer. Consider what is going on in one of
the poorest countries in the world, Ethiopia:
The total of 5.3mm acres in just this one country is equal to the size
of New Jersey. It's the same as the combined area of both Connecticut
and Delaware. If you’re thinking of a European comparison this is equal
in size to about half the land of Switzerland, Denmark or the
Netherlands. It’s equal to all of Israel.
Who’s playing in this big land grab? Hedge funds and other speculators
are big, so are a number of US Universities. From The Oakland report:
Western firms, wealthy US and European individuals, and investment funds with ties to major banks such as Goldman Sachs and JP Morgan.
Surprised that Goldie and JP are involved? I’m not. Some other players:
Several Texas-based interests are associated with a major 600,000 ha South Sudan deal which involves Kinyeti Development, LLC, an Austin, Texas-based "global business development partnership and holding company," managed by Howard Eugene Douglas, a former United States Ambassador at Large and Coordinator for Refugee Affairs.
A key player in the largest land deal in Tanzania is Iowa agribusiness entrepreneur and Republican Party stalwart, Bruce Rastetter, who concurrently serves as CEO of Pharos Ag,
co-founder and Managing Director of AgriSol Energy, CEO of Summit
Farms, and is an important donor to the Iowa State University.
Major
investors in Sierra Leone include Addax Bioenergy from Switzerland and
Quifel International Holdings (QIH) from Portugal. Sierra Leone
Agriculture (SLA) is actually a subsidiary of the UK based Crad-l
(CAPARO Renewable Agriculture Developments Ltd.), associated with the Tony Blair African Governance Initiative.
Are the African countries getting a square deal? Not even close:
In Sierra Leone official regulation requires investors to pay $5 per acre, or $12 per ha, per year.
In Ethiopia, Karuturi initially received land for just $1.25 per ha, the rate was later raised to $ 6.75 per ha. In comparison, rates for Brazil or Argentina are $5,000-6,000 per ha.
I loved this quote from Oakland:
“The
research exposed investors who said it’s easy to make a land deal – that
they could usually get what they want in exchange for giving a poor, tribal chief a bottle of Johnny Walker.”
I suppose that some good could come from all of this. Clearly there is
going to be a very big push for agribusiness in Africa in the coming
years. This would suggest that a new food supply is coming to a hungry
world. It also suggests that there are going to be jobs and opportunity
in the countries involved. I doubt that this will happen in the way the
land grabbers are thinking. I’m sure that the likes of Tony Blair and
Bruce Rastetter will do just fine, but the pensioners and LP interest
are going to get clobbered when history repeats itself in Africa. At
some point the locals are going to say “No”. At $2 an acre and a tax holiday to boot I wouldn’t blame them.
"Really? $6 billion?? You're bitching about a measly $6 billion? Those idiots in Congress just spent trillions, and they didn't create near as many jobs or stimulate the economy as much as ethanol has done for the midwest."
I would bitch it if it were only a dollar on the principle of it. That's how it starts...one small dollar amount at a time.
How many times do I have to say this?...the government does not make a profit, they are a net loss on the economy...any economy. The only consideration of the taxpayer is how large the loss should be, that is, the cost of funding it through taxation or indebtedness.
And 6 billion is not chump change and again, government does not create jobs because it does not make a profit in order to hire any employees...meaning, it has to take money from someone else, in order to give to you.
Though lately, they just print/digitally credit accounts because enough people have figured out they will just sit on their ass and vote to take from someone else...and there is not enough of the "someone else's" to support any of it.
Finally, the 3 billion in federal tax revenue from ethanol is only half of the 6 billion subsidy. Back of the envelope on POET LLC alone is 1.8 million payroll on 27 plants coming in at 48.6 million. Like everything else involving a state-private partnership its a net money loser...requiring subsidization to stay in business.
"I guess we'll soon find out, because maybe you don't know it, but the ethanol industry has already agreed with Congress to go ahead and phase out the blenders subsidy."
I won't comment on the obvious here, I'm not here to fillet you if you are what you say you are, a farmer.
But if it were me, I would start dumping the ethanol company shares if you have any...insiders probably already are, without the subsidy its game over. And the mandate itself (in my view) will go away when the price of gasoline spikes due to the high cost of ethanol, people will raise too much hell. Even at the current price per gallon of gas its a drag on the economy.
"If you think I'm gonna go back to working two jobs and have my wife work too, just so I can farm and produce cheap food- forget it- it ain't gonna happen. I think I'll haul my corn to the ethanol plant, it's the same distance.
"I gotta tell ya, nmewn, after all the years of damn hard work, long hours, and shit for pay, I'm feeling pretty fucking unappreciated."
Look sodbuster, it is because I come from a long line of farmers that I didn't want to have this discussion with you. I know what you guys go through, I know what it takes, half of my family does it. My grandfather held thousands of acres in South Georgia and his decendents still farm it to this very day.
The occupation of farming is a hard life but an honorable one with the first rule being, never mortgage the farm to the bank or anyone/anything outside of the family as they will never have your best interests at heart. The second is do nothing to harm the land.
I don't live there or farm for a living or derive any income from their activity nor do I want to...and they don't talk to me at family reunions about "the business" knowing how I feel about price supports. I do live in the country, farming is all around me.
We will in fact, find out soon enough what the market will bear without subsidization.
Good luck sod, really I mean it, I just do not support taxpayer subsidies to private individuals or companies, I never will.
Seeya
I grew up on a dairy farm and can say from experience that it WAS government subsidies that kept small dairy farmers on the brink of bankruptcy. The ethanol subsidies result in a waste of land, money, food, etc... They should end. If there is a glut of corn, then produce less corn, produce something more valuable, get out of the corn farming business. Now, I know farming is a bit different than most businesses in that production plans are on a longer time frame, but the market is still the market. If there is a glut of corn, and the price is low, there needs to be less corn produced. Government meddling will only make mattters worse.
Kudos to you for saying it. Whatever our differences this debate HAS to come out fairly into the open. IMHO this corn to ethanol scramble is another disgraceful shamble of corporate play. It has an EROI of zero, it is just based on misuse of land assets for short term gains and long term hardships. That politicians have latched on is a sign of the times...the US political system is like gruyere cheese... But less savoury!
Brazil has gone into the ethanol route in a big way, but their EROI from sugar cane is better. Burning it in ICE technology is a no brainer energy wise...but that is another issue of global energy paradigm change.
The amount/composition of ethyl alcohol product to be blended with gasoline resulting in ethanol is established in bills passed by both houses of Congress and signed into law by current and prior Administration(s). It was not the black hand, invisible hand, Bilderbergers, Illuminati, Peaches the Shankerous syphilitic infected love lamb, Muslim extremists, not even my asshole next door neighbor nor the Ghost of Christmas Past who/which had any fucking thing to do with it.
T'was the federalies.
Exactly.
As the open secrets link shows...Grassley is high on the list of plundering buffoons that have transmitted the virus to all of us. Its no different than bailing out Wall Street in my book.
it's a little different: wall street and its co-conspirators ran the biggest and most dangerous control fraud in history which precipitated the most damaging financial debacle ever.
Well, we have to define who those co-conspirators were/are in order to see more clearly my point.
There is a reason no one has gone to jail for it.
It is because of who the co-conspirators are. I don't see any chance of the ruling class indicting themselves, but the truth is known.
This spells it out as good as anything else I've seen.
http://www.nytimes.com/2011/05/29/books/review/book-review-reckless-endangerment-by-gretchen-morgenson-and-joshua-rosner.html
Corn input producers without debt are now going broke or forced to seek debt. Plates may not have much meat on them in the future.