"WHEAT varieties in the Middle East and Central Asia, where the crop originated, have enormous potential to revitalise the Australian grains industry, according to an Australian researcher.

Ken Street, who is based in Syria, said there was much genetic material from Central Asian wheat varieties that were immediately relevant to the Australian grains sector.

"The region, dry like Australia, is the obvious place to look for genes that confer traits like frost and drought tolerance," he said. "There is little genetic material from there in Australian wheat genealogy. The genetic base of Australian wheat is comparatively narrow, coming from Western Europe.""

Prepare yourself for: the robbing of indigenous wheat varieties from local farmers who have selected these varieties over centuries, followed with the inclusion of the desirable traits from these varieties into Australian wheat (with no compensation to middle eastern farmers), followed with the improvement in the production of Australian due to the new genes, and then the sale of the wheat back to the people of the Middle East.

Now milk- and other stuff

The proof of globalization? easy: prices of milk and dairy products have increased by 20% since the beginning of 2007, and it is set to increase a further 20% according to the head of the milk and dairy products importer in Lebanon. This is in great part due to the lifting of subsidies on dairy products in the EU as well as the increase in the Euro. But the replacement of forages with biofuel crops and the droughts also have their little role to play. I have blogged earlier about this worlwide increase in price, and you can put the pieces together if you search the blog under "milk". Now price increases may be a tad over exagerated (cartels have to make a living too you know) because the EU subsidies were at 27% and they have not yet been completely lifted, but there has been panic buying of milk world wide, and we are feeling it in Lebanon. This good report by Sahar Nasser in the excellent economic page of al-akhbar tells us that the price of one ton of milk rose from $2200 to $5500 and that of butter from $1800 to $5000. These increases are over 120%. The local retail prices have not completely caught up yet because of the stocks available in storage.

At the same time, the wheat mills owners cartel are refusing the government subsidy of $50 per ton and are threatening to dramatically raise the price of flour they sell to the breadmaking industry if the government does not provide them with a subsidy of at least $100 per ton. Labour union leaders are calling this "a blackmail by the mills cartel" (made of just 10 people). The government allows this monopoly to exist, as I've said earlier.

But now where does this leave us? in looming crisis. Hear me out:

Successive Lebanese government have acted knowingly and cold bloodedly to destroy the farming sector in Lebanon (see The roots of inequality and other feature articles). They still do that by signing skewed bilateral free trade agreements. This government in particular has been very, very active at that, and there are many posts below to show it.

There was a point to the super opening of markets: locally, it facilitated trade so that merchants could make money. But aspects of it are more sinister. Food import created dependency, which was very welcome by the US and the EU, as it facilitated control over governments. The same tactic was used in other Arab countries, like Tunisia or egypt: if they do not abide by the day's orders, trading is rendered more difficult, prices increase, bread or food riots ensue, and government become shaky until the donors send in food aid, or governments are allowed to pay subsidies. Subsidies are by the way only allowed to be given to the rich, and only on imported products. Monopolistic import cartels are the ones that benefit from them, as they are the trojan horses of the global economic order in the country. In Lebanon, the head of the grain mills union (cartel) also doubles up as the vice president of the Lebanese American Chamber of Commerce. For more details about this, see Rania Masri's excellent article in Al-Adab (if you can read Arabic-Rania, could you please blog the english version?).

So we now have a country's whose food sovereignty has been destroyed (note well, not food security, but food sovereignty, which is the right to decide what a nation grows and what it eats), and suddenly world food prices begin to climb.

The good news is that there is a lot that can still be done. Yes, as we are starting to hear, this will help create a revival in agriculture. Already, the increase in local food prices is making more people move back into agriculture (i myself am buying 20 bee colonies and 4 cows, but that's a diffferent issue). However, there are 2 excessively important issues here:

1. The adjustment period is going to be difficult. i would love to be able to say "the government should brace itself and prepare safety nets" and believe what I say, but this government and the dynasty it originates from has not shown any ability and willingness to do that. It has imposed one of the most unjust and primitive form of taxations, and its idea for collecting money is to create taxes that affect mostly the poor, like raising fuel prices. But someone must step in and take action. I hate the idea, but I can see here a great opportunity for sectarian-political leadership to enhance the already near total surogacy of their constituency by creating sectarian-based support systems (Hizbullah's Jihad al Binaa is one of them, and USAID supported NGOs are another- you didn't know that the US is now a Lebanese sect, and ambassador Feltman is its patriarch?).

2. The revival of farming isn't going to happen just like that. It must be promoted and prepared, and must benefit the poor and the small as well as the rich and the big. Sustainable practices must be adopted in order to mitigate the negative impacts of farming. Clear policies for regaining food sovereignty -making resourecs available to all is one of them- must be adopted. Otherwise, this opportunity will turn into another painful debacle.

Of course, a favorable government is absolutely essential for that. One that protects farmers and citizens, and not just the arms of the resistance and its leadership.

Do you think they'll talk about this in the next round of dialogue? if it happens?

Innocenti

The impact of global warming as well as the shift from food cereals to biofuels is starting to be felt in Lebanon: bread makers have threatened to raise the price of bread, so the government stepped in to subsidize wheat prices by selling 50,000 tons at the price of $225 per ton as opposed to $300 price in Beirut. Wheat import in Lebanon is monopolized by a cartel of 12 mills, owned by 10 people. The head of the breadmakers union accuses the government of committing a crime by subsidizing the cartel. The head of the consumers association calls the cartel a group of vampires and blames the minister of Economy and Trade Sami Haddad (him again) for subsidizing it. The cartel: we are falsely accused.

I read Al Hayat today

The Arab World is catching up on the globally warm issues: In its weekly section "Oil in a Week", Al Hayat today ran an article about how agrofuel production is causing an inflation of the prices of foodstuff. The article had nothing new to offer (see previous posts on this blog for complete briefings on the issue of agro fuels) and included no analysis whatsoever, and no mention of the impact of this price increase on food and farming in the Arab World. But its alays a good thing to have as background material in an broad circulation Arabic daily. Its a pity that the editor does not really integrate information because it would really be interesting:

In the same issue (sunday July 15) Al Hayat also ran a couple of small pieces (not available online) about the price increase of wheat, resulting in the prices of bread and pasta shooting skywards (but without mentionning the AW). The price hike is attributed to climatic conditions (drought) and to the demand on agro fuel. This has resulted in the increase of the price of the loaf of bread in Britain by 30-40% during the course of the past year. The largest pasta makers in the world, Barilla, decided they will increase their prices next fall. This could of course have dramatic consequences for many countries, like Lebanon, where the country is only 25% self sufficient in bread flour, and worse for Egypt, which has recently adopted pasta instead of rice as the staple for its army. Dont laugh, you're talking about feeding hundreds of thousands daily.

Just under this small brief, in the same issue, is an even smaller piece of news: Tunis increases its wheat imports by 19% in the first quarter of the past year. The wheat will be used to manufacture...pasta for export to African countries. Wonder how the wheat price hike will affect the newly establishd Tunisian food industry.

...and in the Arabian Gulf, low catches this year have resulted in a 25% increase in the price of local fish. The article blames the Gulf war and rampant urbanization and the destruction of coastal habitat due to the creation of artificial lands, such as the Palm in Dubai and many, many others, for the decrease in fish stocks. I'm sure the Gulf war affected the fish population, but fishermen in Bahrain will tell you (as they told me) that the royal family owns all the lands on the coast, and that they detroyed all the mangrove swamps to erect huge complexes (in the Freudian sense). The mangrove swamps are where fish lay their eggs and fish babies grow sheltered from predators by the web of mangrove roots. The construction started 15 years ago and intensified 10 years ago, and we are now seeing the resulting decline in the stocks. That's about the time it takes for the impact on populations to be felt.

Grain of wisdom

Wheat production (in spite of the subsidies) continues to shrink in lebanon. This year's area planted in wheat is 13,000 hectares, 2000 ha less than last year. The cost of producing one ton is around $110. The Lebanese government buys it for $250, and sells it to the industrial mills for $200. So the subsidy is $50 per ton. The total production this year is expected to be 70,000 tons. If I'm doing my math correctly, the government subsidy will be in the order of $3.5 millions. The government thinks that by cutting subsidies and saving $3.5 million per year it is going to plug the $40 billions in debt it has created. Could the wish to stop subsidies be due to the Free Trade Agreements about to be signed with the US? At a time when grain reserves are at their lowest in the world? At the time when the price of wheat is expected to suddenly start climbing because of the biofuel craze? At the time when the US grain mountains have become pimples and free grain donations may evaporate soon?

Arabic article in al akhbar