More hidden costs of our love affair with cheap imported goods
Remember a couple of weeks ago, when a Brazilian soy magnate turned a voracious eye on the Amazon rainforest, marveling at how awesome it would be to raze more of it to plant soy? Blairo Maggi, known as Brazil’s “soy king,” said this:
With the worsening of the global food crisis, the time is coming when it will be inevitable to discuss whether we preserve the environment or produce more food. There is no way to produce more food without occupying more land and taking down more trees.
Well, I think I may have found an ally for him: the cash-flush Chinese government. From the FT:
Chinese companies will be encouraged to buy farmland abroad, particularly in Africa and South America, to help guarantee food security under a plan being considered by Beijing.
China imported up to 60 percent of the soybean it consumed last year and the crop would be a focus of policy support for companies acquiring land overseas, along with bananas, vegetables and edible oil crops, said an official familiar with the ministry’s proposal. The ministry is already talking to Brazil about the possible acquisition of land for soybean, according to [an] official.
Nice one. As China solidifies its position as manufacturing center for the U.S. and Europe, it’s hacking away at its arable land, developing it to erect factories and fouling it with pollutants. As a result, it’s rapidly becoming a massive net food importer. From China Daily:
China reported a deficit of $3.66 billion in agricultural product trade in the first quarter, against a surplus of $460 million for the same period of 2007.
Seems like it’s committing a significant portion of its vast foreign-exchange holdings to food and now foreign land. And unlike the United States — which years ago began to liquidate government-held grain reserves — it’s committed to storing some for possible rough times ahead:
The Ministry of Commerce last week issued a notice calling for tightened control on grain and fertilizer exports, faster imports of commodities such as edible oil and meat, and expanding storage of farm produce to ensure domestic supply.
In a global economic system built to maximize transnational trade, nations maximize their “comparative advantage,” and look abroad for goods they don’t produce “efficiently.” For China, that means tapping its massive pools of cheap labor and cheap coal to become a manufacturing powerhouse — and looking to places like Brazil to grow food.
And in Brazil, agribiz leaders like above-mentioned Maggi — and their business partners like U.S. grain trading giants Cargill, Archer Daniels Midland, and Bunge — are only too ready to accommodate. From a recent US World & News Report article:
Farmers and agribusiness people in this part of Brazil [the half-rainforest, half-savanna state of Mato Grosso] are watching the global food commodity price issue with considerable interest. By and large, they believe that the highly mechanized, chemical-intensive, big-scale production they have developed (and in some cases adapted from the U.S.) is what a world contending with expensive food staples needs.
One Brazilian ag economist told the magazine that “Brazil has more available but unexploited farmland than all of what is being currently used in the European Union.”
Unfortunately, much of that available but unexploited farmland lies in the rainforest — a vast carbon sink that contributes mightily to climate stability.
Rather than plunk factories atop China’s farmland or cut farms into Brazil’s rainforests and savannas, the time may have come to rethink the obsession with global trade and redefine "comparative advantage."