10 July 2009

Do You Know What Would Really Boost Food Output?

INSTANT VIEW-G8 summit pledges $20 bln to boost food output (Reuters, 7/10/09)
Following are comments from aid experts on the G8 summit's global food security initiative, which pledged $20 billion over three years to spur agricultural investment in poorer countries to fight hunger.


"$20 billion was a last-minute agreement and it was greeted with great happiness by all of us in the conference room. While we are rebuilding agriculture we need to continue supporting food assistance because the financial crisis is pushing another 103 million people into hunger this year."
Higher temperatures and increased atmospheric CO2. Best of all, they're free.


Harry Eagar said...

We don't need to increase food production, not for quite a while.

It would be simpler and cheaper to use technologies we already know well to conserve the food already being produced, instead of feeding it to rats and fungi.

If the Soviet Union had invested in farm-to-market roads and those blue bins you see all over the Midwest, it would have lasted a lot longer, maybe even generations longer.

Peter Burnet said...

So near and yet so far, eh Harry? If only they had been smart enough to publish Solzhenitsyn's Blue Bins Now!, the fun might have lasted forever.

Harry Eagar said...

Heck, if they had listened to Bukharin instead of shooting him, they might have also. They were very aware of the agricultural problem, they just never addressed it seriously.

However, there are plenty of other places with the same problem, India for example.

It isn't a political problem. It's a stupidity problem.

erp said...

You're right it is a stupidity problem -- the stupidity of socialism.

Susan's Husband said...

The Soviets couldn't address the agricultural problem seriously because of the nature of the state. One need merely look at the history of private farms in the USSR to see that.

Harry Eagar said...

Possibly true, but how does that explain all the non-socialist countries that have the same problem?

What is so interesting about the Bolsheviks is that they understood very well that agricultural productivity was their greatest economic problem, but they never went outside ideology to look for solutions. (Always excepting, of course, Bukharin).

In most of the countries where the same problem exists, it was not recognized, until very recently (I mean within the last 20 years) that agricultural efficiency was worth noticing.

As between socialists, who recognize a problem but don't fix it; and capitalist development economists, who don't even recognize it, I don't know how you choose.

I don't know what De Mistura's economic cult is, but he obviously doesn't know anything about agriculture.

erp said...

State run farms (or any other kind of endeavor) produce far less than private or corporate run ones. Rather simple. People work harder for themselves or a meaningful paycheck than they do for big brother.

Susan's Husband said...

Countries with actual free markets don't have agricultural efficiency problems for the normal definition of "free market". Since none of us have ever grasped the Eagar definition of "free market", I can't say if that's true for such.

Harry Eagar said...

You're not listening. The problem is not low production. Even though the USSR (and India, too) produced less than they might have, they produced more than they needed.

They failed to manage it and ended up with shortages at the consumer end.

You can beat up on socialism all you want, but it is not a socialism problem. It is caused by all sorts of things: lack of land reform, allowing markets to direct capital to the wrong places, resistance of rural elites to good roads.

Free markets do not have a good record on keeping people fed, one reason I dislike them.

Peter Burnet said...

allowing markets to direct capital to the wrong places...

Ah, for the good old days when capitalists were oily, rapacious exploiters consciously ripping off the poor. Now it seems they've become the Keystone cops of rational decision-making who need wise bureaucrats to point out which way is North.

Gaw said...

Harry, the Soviet Union's agriculture problems derive directly from it being socialised. Sure, they could have done with better roads, but lack of a price mechanism, profit motive, property rights, not to mention the long run effects of the near-genocide that was collectivisation, are more pertinent.

However, I do think that farming is the one industry that does benefit from some state underwriting. Most businesses just have to cope with the vagaries of the market but farming also has to manage with the weather. It's also not just a business: it produces the stuff of life and shapes the landscape and society of the major part of most countries.

BTW collectivisation was at one time one of Bukharin's ideas. There weren't really substantive poilcy differences between the Bolsheviks; ideological 'positions' were about power not policy.

erp said...

Harry, what prevented the Soviets from building roads to move produce to markets? Perhaps they were more afraid of their subjects using the roads to vote with their feet than they were of starving them.

Susan's Husband said...

"You're not listening. The problem is not low production."

No, you're not listening. I didn't claim the problem was low production. Simply scroll back up and look for yourself. Nor does your counter-claim address my claim.

I am curious, though, as to why the USSR spent so much precious hard currency on importing wheat if they produced enough domesticaly. It can't be a transport / storage problem, unless your claim is that it's easier to transport and store wheat across the Atlantic than from Ukraine. erp's question is a good one as well. One of the claimed benefits of socialism is that the State can "get things done".

Free markets have an excellent record at keeping people fed — there has never been a famine in a free market society. That's far better than socialism's record.

Harry Eagar said...

'There has never been a famine in a free market society.'

Not true. Scotland is one of many exceptions.

And, yes, it was far cheaper to import wheat by sea than to collect it from the Ukraine.

The Soviet Union's agricultural problem was inherited from the Russian Empire. They didn't fix it, but they didn't cause it. It was already there.

erp said...

I don't know about Scotland's famines. Perhaps they suffered from the same plague that devastated Ireland's crops.

You aren't correct that that Soviets inherited famine, but didn't make it worse. Prior to the Soviet takeover, the Ukraine exported wheat, after the Soviet takeover, the Ukraine had to import wheat. I remember seeing pictures of Russian peasants burning their fields rather than give their crops to the Bolshies.

BTW - Wasn't the reason for the Russian revolution to cure the ills of the czars.

Harry Eagar said...

Wrong Scottish famine. Sorry.

Ukraine exported wheat even while farmers starved. Ireland exported wheat even while farmers starved. India exported wheat even while farmers starved.

That's how markets work.

Bret said...

That is indeed how politically controlled markets work.

Harry Eagar said...

Except that two of the three were perfectly free markets. The third was a capitalist gangster state.

I recommend C.V. Woodward's 'The Great Hunger.' I promise you will be suprised.

I could have lengthened the list considerably, but I thought 3 excellent examples were sufficient.

Peter Burnet said...

OT, David, I know this blog is top secret but is there a special security clearance above that. And who the heck is Ann?

David said...

I feel like the whole secret blog concept has been soiled.

Peter Burnet said...

Anything we can do to help you through the pain of letting Ann slip away? How about a hundred comment dust-up on Darwin?

Susan's Husband said...

So, even Mr. Eagar admits that one of his examples wasn't a free market, yet he presented it as one anyway. Such intellectual honesty!

India has never been a free market by the standard definition and has only gotten in to the general neighborhood in the last 20 years or so, during which there hasn't been a famine.

Neither Amazon.com nor Google are aware of a book called "The Great Hunger" by C. V. Woodward. The closest match is "The Great Hunger" by Cecil Woodham-Smith. All close matches are about Ireland, not Scotland, so we have a cite that has nothing to do with Eagar's original claim.

So we have 2 of 3 of these "excellent" example discredited. Apparently Eagar's definition of "excellent" is just as idiosyncratic as "free market".

Harry Eagar said...

Yes, got the author's name wrong.


It will come as a surprise, no doubt, for the Indians to learn that under the governance of the laissez faire British Empire they did not have free markets or famines.

The Ukrainian (and wider) famine of '92 presents an interesting problem for market theory. The government encouraged grain exports but did not interfere with property internally. There was nothing to prevent producers from selling internally (except, of course, the starving 'buyers' were broke).

So, like the English landlords in Ireland, they exported food during a famine that killed millions.

The Scottish famines were a result of the preference of the lairds for sheep, in which they saw more money. We can guess that Adam Smith observed the perishing Highlanders with his own eyes, but this did not cause him to doubt the beneficence of the invisible hand.

erp said...

How could living in Scotland under their (I assume) mostly English lairds be construed as free market capitalism -- ditto poverty stricken post Soviet eastern Europe?

Things have eased up a bit all round since then.

Susan's Husband said...

It's an Eagar thing. We can't understand.

Gaw said...

Harry, I think your argument's reach extends far beyond the grasp of your knowledge. Or indeed the facts.

BTW I think the theory is that you never have famines in democracies, rather than in free markets.

erp said...

Gaw, I'm confused. How can democracy prevent famines without capitalism and free markets? Even Scandinavian model socialism doesn't forbid individual profit, it just taxes the heck out it.

Gaw said...

erp: I'm not sure whose theory this is, but I'm sure it's not referring to democracy exclusively, i.e. other factors, such as capitalism and free markets, may also be present (as, in fact, they almost always are)

I guess the point is that there may be examples of famines where there are free markets or a form of capitalism but not when these are combined with democracy.

Perhaps it should be reformulated to replace democracy with liberty? Liberty, both political and economic, is perhaps indivisible. Perhaps it's therefore the only way to ensure people don't get so impoverished they suffer famine?

Harry Eagar said...

There haven't been so many democracies around so long that that theory has been tested very severely, but I'd hope it was true. Famines, though, are tricky things.

Anyhow, it wasn't me that pronounced the theory, and it was presented as one of free markets.

The Scottish lairds were, big surprise here, Scots.

Since they were permitted to do anything they wanted with their property, including evicting their human tenants and replacing them with more profitable sheep, I'm puzzled at where you guys think interference with markets arose. It didn't arise.

erp, you'll have to ask somebody else about poverty-stricken post-Soviet eastern Europe. I haven't said anything about it (here, although if you really cared, I did endorse the idea that Islamic disinclination to invest in agriculture kept eastern European agriculture inefficient in the pre-Soviet era; you can find that at my blog. That wouldn't apply to Ukraine, though).

Perhaps you are confused by my writing style. By '92, I meant 1892, the big tsarist famine during the peak of grain exports through Odessa.

erp said...

Gaw, I think it's a good rule of thumb that prosperity for all can only be achieved by a free people.

Harry, thanks so much for clearing up your writing style. When I see, '92, I think 1992, not 1892.

Harry Eagar said...

'prosperity for all can only be achieved by a free people.'

If then. People weren't prosperous where I grew up, but then they weren't very free, either. And I grew up in the USA

erp said...

Who kept them in bondage?

Hey Skipper said...

I am perhaps unique here in being the only one who has actually been to the USSR.

My itinerary didn't include farms. I was confined to the nicest bits. All of which were awful beyond my meagre powers of description. It was a grey, crumbling, shambolic, ugly, decrepit, destitute mess. Heck, not one car -- vistas that they were -- even had windshield wipers. Why? Because the miracle of state socialism couldn't produce even so simple a commodity.

The most famous joke about the USSR, told by the inmates themselves, was "The state pretends to pay the people, and the people pretend to work." Just the thing for a thriving farm sector.

Harry is right, the communists were aware of the agricultural problem. Unfortunately, the only means of addressing it directly contradicted the religious assumptions underlying the whole mess (which restates what SH said above). Lysenko ring a bell?

Even though the USSR (and India, too) produced less than they might have, they produced more than they needed.

They failed to manage it and ended up with shortages at the consumer end.

You say this as if USSR agricultural production wasn't part of the entire system. Every element of the system was less than might have been, and the sum of the deficiencies meant scarcity where there should have been plenty. It wasn't just roads, it was machinery, fertilizer, storage, transport, water. Now, extend those deficiencies everywhere. Heck, a mausoleum doesn't have the pervasive sense of decay that the USSR did.

In other words, it was a socialism problem. Everywhere it has been tried, it has failed. It is an anti-human ideology that politicizes everything. (Ghandi, BTW, imported socialism to India, and its legacies live on. India is far more socialist than China. India is a hellhole. China is not.)

This attributes in Ireland and Scotland to specialization, growing population, within the context of an immature market economy.

It will come as a surprise, no doubt, for the Indians to learn that under the governance of the laissez faire British Empire they did not have free markets or famines.

Perhaps this is time to discuss demographics?


However, I do think that farming is the one industry that does benefit from some state underwriting.

Agreed. The cost of maintaining an ongoing excess of production is far less than the cost of even brief shortfalls.

Harry Eagar said...

erp, landlords. Debt peonage.

Skipper, I'm pretty sure I said socialism -- or the Bolshevik version of it -- WAS the problem. The New Economic Policy of Bukharin was designed to get peasants to maintain buying power, so that they could spend money in the towns (mainly on textiles but also tools), which would give the city people revenue to buy food.

It sounds just like a market-oriented system, which it was, and which is why Bukharin was shot. Ideology trumps results.

The US faced just the same problem, on a far lesser scale, at the same time. It's answer was to do nothing, which resulted in economic collapse. Ideology trumps results.

Moral: You want to have a prosperous countryside.

Famine studies is an obscure corner of economic history, but I have knocked around in it for 40 years. There are many unresolved issues, but some things are pretty well accepted:

1. A good transportation network prevents famines, because there is almost never a general crop failure. Failures are local (although the locality can be a good-sized region).

2. Transportation networks also make it easier to put hoarders upside down. The immediate market reaction in a dearth is for entrepreneurs to speculate by withdrawing grain. This is the result the market demands but, as so often happens, it is not the result that any sane person would want.

This is another reason not to trust markets.

3. Food substitution eases dearths. England escaped famine a century earlier than France, a more productive agricultural country, because English people were willing to eat barley and French people were not.

The book you linked to is wrong about the place of dairy in Ireland. True, the Irish smallholders or small tenants lost the usufruct of the cattle, but Ireland was not bereft of cattle.

In the '40s, while millions of people died of starvation, Ireland continued to export to England beef and butter, which is how the tenants paid their English landlords.

Altough they were asked to forgive rents during the crisis, the laissez faire landlords -- backed up by the government -- insisted on the supreme rights of property. They would rather see Irish mothers die than take a pay cut.

India had consumption problems before Gandhi was born. These were (and are) in a big part due to the wretched state of transportation. One-third of Indian villages in 2009 still cannot be reached by road.

Yet the Indian population increased by about 500%, despite the destruction of its cotton industry, which used to provide the margin over subsistence for Indian peasants.

Production has not really been the problem usually, whether a country was organized socially or not. Production has been going up briskly most places.

Finally, I cannot agree that China is not a hellhole.

erp said...

In the '40s, while millions ...

Harry do you mean the 1840's?

Harry Eagar said...


Peter Burnet said...

Harry, I have to say your posts all sound like things that would be said at a weekend retreat for Gosplan officials. Tansportation systems, usufruct for cattle, distribution networks, blah, blah, blah. I want to jump on the conference table and scream: "They aren't going to produce the damn stuff unless they are paid to!!!"

Harry Eagar said...

You could shout that, but it wouldn't mean anything if the producer had to make, say, cotton in order to avoid being forced off the land, in which event he wouldn't produce anything.

Where I grew up there were 10 million cotton farmers who produced no food and who, when cotton dropped, starved. '10 cent cotton and 40 cent meat/how in the world can a poor man eat?'

There are 2 kinds of famines: Those where there is dearth, and those where there is enough food, but markets divert it from the people who need to eat it.

The second kind has been more common in the past 2 centuries or so.