Thursday, June 7, 2012

Wheat and World Politics

By Alan Caruba

We normally gauge the politics and actions of nations on whether they are having economic problems and whether they are threatening their neighbors or their citizens, but there is another measurement and it is the import and export of wheat because it is a vital component of food for billions of people around the world.

The good news for the nation and the world is that U.S. wheat farmers are expected to have bumper crops this year. An estimated 1.69 billion bushels will be produced, 13% more than last year.

Drawing on reports in Wheat Life magazine, here’s a look at the world these days.

Nations that fail to pursue peace pay a price for it. For example, several weeks after agreeing to provide North Korea with 240 metric tons of food for its starving population, the U.S. withdrew its offer in the wake of its missile launch. The launch was a failure, but so was the decision that aroused the fear of other nations regarding North Korea’s intentions. There’s a point when humanitarian action is useless in the face of Communist aggression and intransigence.

The government of Syria has another factor to worry about in addition to the opposition to its dictatorial rule. Officials there are also faced with the need to increase cereal imports by about a third after local grain output dropped ten percent. The inability to feed its restive population may prove to be as great a problem as their opposition to Assad’s regime.

Another troublemaker, Iran, is ramping up its imports of wheat in what appears to be a strategic reserve in anticipation of further, harsher sanctions aimed at curbing its nuclear program. In recent months, Iran has purchased wheat from the U.S., Australia, Brazil and Kazakhstan. Iran’s constant pursuit of hegemony in the Middle East, funding terrorist organizations, aiding Shiite unrest against Sunni Muslims, and general meddling in the affairs of its neighbors portends the possibility of shortages that could evoke more internal unrest.

Pakistan, America’s fair weather friend, recently permitted 100,000 tons of wheat to move from India to Afghanistan. What makes this of interest is that Pakistan regards India as an enemy that might attack it at any moment and one that is seeking to have good relations with Afghanistan, which the Pakistanis want to control via the Taliban. Thus the wheat transfer was a major exception that was accomplished when the Pakistanis pretended that it was Afghanistan, not India, using it as a transit point.

Meanwhile around the world, the introduction of genetically altered food crops that include wheat are possibly the greatest revolution of all. A salt-tolerant wheat which would thrive in the thirty percent of soils worldwide has been developed in Australia. It prevents salt build-up in leaves. In England, researchers have developed a genetically engineered wheat that releases a chemical that alerts the greenfly and blackfly to danger while attracting natural predators. This has the added benefit of reducing the use of pesticides to knock down the fly population.

Insect predation, along with rodent predation, is a major factor in the loss of food crops, causing the loss of millions of tons that would otherwise feed large populations. Weeds, too, must be controlled. While genetic engineering is welcome pesticides and herbicides protect vital food crops worldwide.

Finally, as the European Union struggles to keep itself intact, we learn that consumers in France have been paying inflated prices for retail flour as the result of rigging the domestic market. The practice has gone on since 1965. In 2002, German flour mills were brought into the deception as both nations colluded to limit cross border sales of packaged flour. Germany pulled out in 2008 when an investigation into the corrupt practice began. The French antitrust watchdog authorities fined their flour millers $318 million for participating in the illegal action. Presumably the price of a croissant or baguette has dropped.

The song, America the Beautiful, speaks of “amber waves of grain” for good reason.

America is a major wheat producing nation and it contributes billions to our economy. Wheat farmers like other elements of agricultural community have to deal, not only with Mother Nature, but also with a constant cascade of regulations and other policies that can impact their ability to not only feed us, but millions more around the world.

© Alan Caruba, 2012

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