|Re: GM drags down the value of farmers' crops (24/9/2007)|
NOTE: This is Craig Sams' response to farmer Peter Lundgren's recent 'thoughts from the tractor cab':
Peter Lungren identifies the problem correctly - biofuels, for all their insanity, have rescued the farmers on the 5/6 of the world's arable land that is not in the EU or the US from poverty and bankruptcy. Now that US and EU surpluses are mopped up by biofuel subsidies instead of production subsidies, the CBOT price is coming in to line with the actual cost of production of corn and soybeans in Iowa. This is actually higher than anywhere else in the world because of the technology fees, expensive equipment, high standard of living etc. of US farmers, so farmers elsewhere are suddenly more competitive.
However, I don't think that going GM follows on from this. Farmers in the US went GM because biotech's monopoly control of the seed market and some strategic lawsuits against prominent farmers who were inadvertently contaminated herded them into the GM fold. Farmers don't like buying inputs and the cost of inputs such as fertiliser and herbicide is soaring, so the higher prices will enable them to farm less intensively and with less dependence on expensive chemicals.
Add in the fact that the emerging carbon economy will reward farmers who sequester carbon and charge those who emit CO2 and nitrous oxide and I would suggest that the balance will tip away from GM.
Ultimately crop prices reflect the value of land more than anything else. There is too much land chasing too few mouths (FAO figures state that the world produces 50% more food than it can consume). The surplus land should be retired to rebuild its fertility, use it as a carbon sequestration sink and keep it in reserve in case we need fertile land in the future. Biofuels and GM exhaust our precious soil resources for short term gain that only makes economic sense because of the subsidies ADM, Cargill, Bunge and the other big biofuel companies have extracted from our 'democratic' governments. (When was the last time that subsidies to agriculture or to big food trading companies was on the electoral agenda?)