SocraticGadfly: 12/12/04 - 12/19/04

December 12, 2004

U.S. losing grip on farming No. 1

America the breadbasket of the world? Not much longer, according to The New York Times. Brazil is expected to pass it in a decade or so.

What’s it all mean? For Brazil, a new presence on the world stage, in agricultural trade talks above all else.

But it also means continued pressure on Amazonia, as modern farm techniques allow ever-more tropical areas to be farmed.

What’s it mean for us?

Possibly more calls for protectionism just at point at which U.S. and the E.U. looked like an agreement to lower subsidies might be doable. However, the World Trade Organization has already ruled that U.S. cotton subsidies (in a case brought by Brazil) are illegal. Ditto for sugar.

Pride of place, and economic muscle, are already at stake.

The Times reports that, in June, the United States imported more in farm products than it sold abroad. And, already reportedly the world’s biggest exporter of chickens, orange juice, sugar, coffee and tobacco, Brazil soon hopes to add soybeans to the list. Cattle may be next after that, or hogs. Meanwhile, Brazilian agriscience is working on developing a tropics-loving strain of wheat.

In both countries, it means continued pressure to consolidate farms into ever-larger holdings. Brazilian farmers profiled in the story had 100,000-acre plus farms.

It also means continued downward pressure on genetic crop diversity, in all likelihood, and continued growth in influence of Archer Daniels Midland, Cargill, ConAgra, etc. Of course, who’s to say that the South American ADM isn’t just around the corner?

Meanwhile, in the agricultural equivalent of outsourcing, some large American and European farmers are buying land in Brazil.

Finally, it probably means more worries about obesity here in the U.S., as more cheap farm products, especially sugar, followed by corn, and maybe wheat, mean more processed junk foods.

Meanwhile, that famous coffee? Only No. 7 on Brazil’s agricultural list now.

Bankruptcy possible at GM?

Could GM eventually head into bankruptcy over its unfounded pension liabilities and its ongoing sag in sales, now down to 27 percent of the U.S. market? Bloomberg analyst Doron Levin didn’t make any such explicit statement in his article, but in a follow-up e-mail, he didn’t deny the possibility, saying, “Only time will tell.”