The Local, Moral Hazards of the Global Trade in Food & Shelter

As I mentioned in my previous post, I have resolved to respond to “bigger-picture” global analyses by finding local ways to “be the change.”   This post begins with the global food crisis and narrows to focus on hunger in San Diego.

IS AGRICULTURE PART OF THE GREEN REVOLUTION?

Had I arrived hours earlier to the Van Jones lecture the other night, I might have secured a place in the long line at the microphone to ask how green revolution economists are factoring in the impending burst of the global food bubble, and whether localized movements to make farming viable and sustainable are registering in these analyses. 

For those of you who couldn’t make it, Jones spoke directly to the average, university-aged audience members about their generation’s three interlocking challenges:  to overcome the (moral) failure of the current economic system, to outwit the petroleum-based energy bubble, and to reverse environmental degradation through thrifty, conservation-based, green, innovative entrepreneurship.  His final point was that politics must transcend outdated partisanship –that is, as he sees it, “liberal” government (or regulation-only) solutions will not suffice, and wasteful, destructive (“drill-baby-drill”), credit-based market solutions got us into this mess in the first place.  As shorter term solutions, Jones suggested employing Boeing technology and the highly-skilled workers of Detroit and Michigan to fashion wind turbines and solar panels, and employing unemployed folks in urban and other economically-depressed areas to make homes more energy-efficient.  He closed with a theological message of stewardship and love (of nature/country/one’s brother) as genuinely patriotic values that countermand contemporary market trends, namely greed and recklessness.

It was a very good talk, but unfortunately for me, despite a brief mention of bio-fuels, which his emphasis on solar and wind precludes, Mr. Jones never spoke of agriculture or the farming industry or what middle-aged folks can do, now that they/we have messed everything up so terribly.

THE GLOBAL PICTURE – IS THE FOOD BUBBLE LIKE THE HOUSING BUBBLE? 

The Real News network has a terrific two-part interview with Jayati Ghosh explaining how the global food market, specifically the commodities futures market, has become the new speculative bubble that is about to burst.  (Thanks R. Patel for posting it!)  (Go here for Part I, and here for Part II.) 

And yes, it is the same bubble as the subprime lending bubble

Here’s a brief summary of Ghosh’s interview.  In 2007, when USAmerican “index investors” — familiar characters like Goldman Sachs, whom Jones would call “banksters” — were forced to bring monies back home to cover their losses in the subprime market, they began speculating on commodities futures, known to the rest of us, as rice, maize and wheat.  The global price of rice tripled, and wheat and maize followed closely behind, more than doubling.  Smaller, developing countries on the margins of subsistence experienced famine, forcing them to work directly against the “advice” of the IMF and World Bank.  Malawi, for instance, returned to localized, public procurement strategies, over-the-counter (OTC) trade, and subsidizing farmers to grow “food” that is meant to be consumed, rather than traded as a piece of paper or “commodity.”  

In particular, low interest rates for speculators in the United States present the same “moral hazard” that created the housing bubble. Ghosh points out that, effectively, risk-taking investment is encouraged in the present market, because there is no downside to failure.  She suggests that necessary future protections include international regulation (explicitly banning speculation in the commodities market), making farming viable, and reducing information asymmetry–that is, where farmers are the last to know whether prices are expected to change and often plan their harvests around last year’s trends.  I encourage you to see the interview in its entirety. 

OCCIDENTAL EFFECTS:  While it is argued that the United States and other developed nations have yet to feel the real impacts of the global food bubble, the citizens of many countries around the globe noticed rising prices in 2007 and were alarmed.   In Italy, “Spaghetti Shock” reflected the “inability” of the Association of Pasta Makers to absorb premium prices for durum wheat.  In Mexico, the price of tortillas went up, and in Germany, beer drinkers took the hit.  All of these price increases were attributed to the effects of biofuels market and/or speculative activity.

THE LOCAL PICTURE:  WHAT’S HAPPENING IN SAN DIEGO? 

As anyone reading this blog is well aware, I have concentrated my research and civic participation lately on ameliorating the effects that the CA state budget is having on San Diego’s most vulnerable populations.  In absence of a graph demonstrating how local San Diego farmers and consumers have been impacted by the Great Recession or the multiple effects of the simultaneous petroleum, water, housing and employment crises over the last three years, I’ll offer my initial findings about approaches to dealing with hunger on the local level; so far these approaches appear to include renegade activism, philanthropy (charity), government programs, governance reform, and advocacy.

In the US, hunger or “food insecurity” increased by 46% this year.  In San Diego, poverty is up 50%.*

  • For the first time ever, the San Diego Food Bank is holding a summer food drive to collect non-perishables.  The red barrels that usually arrive during the fall/winter holiday season are stationed now at San Diego County Albertsons/Sav-on Pharmacy stores, Jack in the Box “restaurants,” and Stater Bros. 
  • For families with children, the Summer Lunch Cafe will be providing free lunches at parks throughout the county.  (And yes, these lunches are regulated by USDA standards that often preclude fresh food donations from local, organic growers.) 
  • Food Not Bombs is known to feed hungry people in parks and anywhere they can around San Diego — currently Downtown at 16th & Island, Wednesdays around 5:30 — by preparing food “rescued” from grocery stores, bakeries, etc. before being discarded.  While the group has become well known in various cities, and has secured relationships with several local businesses to ensure the safety of rescued food, this approach to feeding the hungry has met with controversy over the years.  Perhaps as the need becomes greater, businesses that discard foods will create policies to donate food earlier than the last possible moment and reduce the ick factor and increase the dignity quotient in serving salvaged food.

WHAT CAN I DO? Many conscientious, low to moderate- income, householders in San Diego have begun to focus on eating locally, consuming more fresh foods and shopping primarily at the Farmers’ market (or subscribing to a CSA).  Of course, you can plant a garden or keep chickens or bees in your backyard, if you have one, or grow food in a container if you have a patio that has a hose and gets enough sun, but let’s face it not all of us do.  I am a strong proponent of the 1 in 10 platform and an advocate for policies to allow San Diegans to consume locally produced food, but if our family is at all representative, we do not frequent Jack in the Box, but we do supplement our fresh food with staples, non-perishables, and a host of sundries, which we purchase weekly at three local stores.  Finances may change our spending patterns and those of families like ours, but for now I decided to call up the stores that most frequently get our business to see how they are responding to the local hunger crisis.

Whole Foods, Hillcrest – While they weren’t participating in the food bank’s summer food drive, Ray Kau was very excited about a host of programs, including a farm-to-schools project with such partners as the SDC Children’s Obesity Initiative, and a local growers project with such partners as Terra Miguel, and last fall’s SuperFood Drive, which focused on nutrition-dense non-perishable, food donations (e.g., canned black beans). 

Trader Joe’s in Hillcrest – John Crumley explained by phone that TJ’s donates on a store-by-store basis, and they neither keep records, nor publicize donations. 

People’s Co-op in Ocean Beach – They collect donations all year-long and have done so for 20 years, but I’ll have to call back tomorrow to speak to Nancy Cassidy who manages the donations, which are distributed by OB Mainstreet.

Next Post:  Opportunities to Change Food Policy & Alleviate Hunger in San Diego

References & Notes

1.  See the report “Hunger & the Safety-Net in San Diego County.”

2.  *It bears repeating that only thirty-five percent of San Diego County residents who qualify for supplementary nutritional assistance (food stamps) benefits received help last year–the worst performance of any county in the nation!  This news spurred a host of responses ranging from cooperative agency-government partnerships and volunteer efforts to increase participation in food stamp programs to bolstering the Prop B campaign to ouster these indifferent County Supervisors. Why?  Well, in an interview with the Voice, Supervisor Dianne Jacob expressed her dilemma/challenge/duty with the following harshness:

“if I take police officers off the street to hand out welfare checks to those who don’t deserve it because I’ve eliminated a fraud program, am I doing my job? I’d say no.” 

Ouch!  How’s that for a message from a public servant (paid to administer state and federally-funded social programs)?

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