Tuesday, 12 February 2013

Civilization on the brink – except in Davos.


The newspapers are full of dots every day – but we are failing to join them and see the picture – is it because we are too stupid or too frightened. Our leaders cavort in Davos, pleased at the light at the end of the GFC tunnel. Few see the unfolding chaos of 2013 – yet the market signals could not be clearer. Let me explain.

Last year I wrote about the price achieved in Tokyo for a single blue fin tuna. In 2011 the record was $370,000 in 2012 it was $730,000 and this January a single fish sold for $1.75 Million, despite the economic backdrop of which we are all aware.  The extraordinary and escalating price increases of mature fish is a clear sign of the imbalance of demand and supply. These prices clearly signal of the real plight of our seas. It is now a multi-billion dollar a year race to finish the rape of our seas,

Most of our industrial agricultural animal production depends on fishmeal, or other proteins whose price fluctuate alongside it. The price of fishmeal hit $2,000 per tone this month – up from $1,000 at the time of the onset of the GFC in 2008. This will drive up the price of many things including farmed fish, shellfish, chicken and pet food.

The last major price changes happened in 2008 when basic food prices rose some 25% in a year. This led to riots in over thirty countries from Greece and Italy in Europe to much of the developing world.  A similar price adjustment is happening today – deeper and faster. Changing weather patterns, damaged eco-systems and ever more people on the planet are driving an increasing mass of humanity into hunger.

In the past we simply alleviated hunger by buying grain from countries like the USA. The 2012 droughts in the US have pushed up the price of wheat and maize, and led to the world's poor eating less.  Today there are only 15 net food-exporting countries and they are under increasing pressure to feed their own populations. Buying food on global markets just shifts the hunger and food insecurity from one location to another. That is why countries like Saudi and China are buying up farmland across Africa. In fact they have already acquired more productive farmland on the African continent than exists in France. In Saudi’s case you can’t eat sand or drink oil and in China’s – well what would you do with 17% of the world’s population and only 8% of the worlds land mass.

Jim Yong Kim, the new president of the World Bank, spoke at Davos this month and gave a grave warning about the risk of conflicts over natural resources in a world where eco-systems are strained.  "There will be water and food fights everywhere,”
He also said action was needed to create a carbon market, eliminate fossil-fuel subsidies and "green" the world's 100 megacities, which are responsible for 60 to 70% of global emissions. We need more people like Kim who can see the coming food crisis.

If we do nothing - we risk nothing less than the collapse of civilisation as famine and hunger rip through the slums of our cities and cause riots across the world.


Our leaders need to get busy making some hard and unpopular choices. Otherwise Mother Nature will make the choices for us. Kim is the first one to spell it out, lets hope the others at Davos were paying attention.


 Lets get busy repairing the future.

Jason J Drew 

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