Getting Used to Life Without Food, Part 2
Agribusiness as a Long-Term Strategy
Editor's Note: This editorial is continued from Getting Used to Life Without Food, Part 1: Wall Street, BP, Bio-Ethanol and the Death of Millions
The record rise in grain and food prices in recent years is not a mere Wall Street profit gimmick, although obscene profits are being made. Rather, it is apparently an integral part of a long-term strategy whose roots go back to the years just after World War Two when Nelson Rockefeller and his brothers tried to organize the global food chain along the same monopoly model they had used for world oil. Food would henceforth become just another commodity like oil or tin or silver whose scarcity and price could ultimately be controlled by a small group of powerful trading insiders.
At the same time the Rockefeller brothers were expanding their global business reach from oil to agriculture in the developing world through their technology-driven Green Revolution scheme after the war, they were also financing a little-noticed project at Harvard University. The project would form the infrastructure for their plan to globalize world food production under the central control of a handful of private corporations.
Its creators gave it the name ‘agribusiness,’ in order to differentiate it from traditional farmer-based agriculture -- the cultivation of crops for human sustenance and nutrition. The push to place world national governments’ emergency grain reserves into private hands was merely a logical expansion of the original Rockefeller agribusiness strategy, as was their highly mis-represented “Green Revolution” which at day’s end merely promoted a huge sale of US agriculture products from John Deere tractors (using large volumes of Standard Oil Rockefeller products) to US chemical fertilizers made by other companies in the Rockefeller orbit—forcing a trend to large scale farming and forcing millions off the land into cities where they former a cheap labor pool for large multinationals. The highly-touted harvest yields turned out to be actual losses after several harvests. 1
Agribusiness and the Green Revolution went hand-in-glove. They were part of a grandiose strategy which included Rockefeller Foundation financing of research for development of genetic alteration of plants a few years later.
John H. Davis had been Assistant Agriculture Secretary under President Dwight Eisenhower in the early 1950s. He left Washington in 1955 and went to the Harvard Graduate School of Business, an unusual place for an agriculture expert in those days. Davis had a clear strategy. In 1956 he wrote an article in the Harvard Business Review in which he declared, “the only way to solve the so-called farm problem once and for all, and avoid cumbersome government programs, is to progress from agriculture to agribusiness.” He knew precisely what he had in mind, though few observers had a clue back then. 2
Davis, together with another Harvard Business School professor, Ray Goldberg, formed a Harvard team with Russian-born economist Wassily Leontief, who was then mapping the entire US economy, in a project funded by the Rockefeller Foundation. During the war, the US Government had hired Leontief to develop a method of dynamic analysis of the total economy that he referred to as ‘input-output’ analysis. Leontief worked for the US Labor Department as well as for the Office of Strategic Services (OSS), the predecessor to the CIA. 3
In 1948 Leontief got a major four-year $100,000 grant from the Rockefeller Foundation to set up the Harvard ‘Economic Research Project on the Structure of the American Economy.’ A year later the US Air Force joined the Harvard project, a curious engagement for one of the prime US military branches. The transistor and electronic computers had just been developed along with methods of linear programming that would allow the processing of vast amounts of statistical data on the economy. Soon the Ford Foundation joined in to fund the Harvard project. 4
The Harvard project and its agribusiness component were part of a major attempt to revolutionize US and later, global food production. It was to take four decades before it dominated the food industry. Professor Goldberg later referred to the agribusiness revolution and the development of genetically-modified agribusiness as ‘changing our global economy and society more dramatically than any other single event in the history of mankind.’ 5 He just might have been right as we are now likely about to witness over the coming decade.
As Ray Goldberg boasted years later, the core idea driving their agribusiness project was the re-introduction of ‘vertical integration’ into US food production. By the 1970s most Americans had forgotten that bitter battles had been fought before World War I and during the 1920's to pass laws in Congress to prohibit vertical integration by giant conglomerates, and to break up trusts such as Standard Oil, in order to prevent them from monopolizing whole sectors of vital industries.
It wasn’t until the David Rockefeller-backed Presidency of Jimmy Carter in the late 1970’s that US multinational business was able to begin the rollback of decades of carefully constructed US Government regulations of health, food safety and consumer protection laws, and open the doors to a new wave of vertical integration of agriculture. The vertical integration process was sold to unaware citizens under the banner of ‘economic efficiency’ and ‘economy of scale.’ 6
A return to vertical integration and the accompanying agribusiness were introduced amid a publicity campaign in mainstream media and from industry claiming that government had encroached far too much into the daily lives of its citizens and had to be cut back to give ordinary Americans ‘freedom.’ The war cry of the campaigners was ‘deregulation.’ Of course, de-regulation by government merely opened the door to private control – another form of regulation -- by the largest and most powerful corporate groups in any given industry. That was certainly the case for agriculture -- the big four grain cartel companies dominated world grain markets from the 1970s to today. They worked hand-in-glove with big Wall Street derivative players such as Goldman Sachs and JP Morgan Chase and Citigroup.
By the latter part of 2007, trading in food derivatives was fully deregulated by Washington, and US government grain reserves gone. The way was clear for dramatic food price rises.
The speculative machine that had been put into place by Wall Street and its banker friends was creating the potential for significant, long-term food inflation. But the inflation needed a major ‘venting’ to get the ball really rolling. That was to come from George W. Bush.
The Killer Punch—BP, Bioethanol and Genocide
In 2007, just as the US real estate crisis was causing the first tsunami shock waves through Wall Street, the Bush Administration made a major public relations push to convince the world that the US had turned into a "better steward of the environment." Too many fell for the hype.
The center of the Bush program, announced in his January 2007 State of the Union Address, was something called '20 in 10'—cutting US gasoline use 20% by 2010. The official reason given to the public was to "reduce dependency on imported oil," as well as cutting unwanted "greenhouse gas" emissions. That wasn't the case, of course, but it made good PR. Repeat it often enough and maybe most people will believe it. Maybe they won't realize that their taxpayer subsidies are being used to grow ethanol corn instead of feed corn and are also driving the price of their daily bread through the roof.
The heart of the Bush plan was a huge taxpayer-subsidized expansion of the use of bio-ethanol for transport fuel. President Bush's first plan required production of 35 billion gallons (about 133 billion liters) of ethanol a year by 2017. Congress had already mandated, via the Energy Policy Act of 2005, that corn ethanol for fuel must rise from 4 billion gallons in 2006 to 7.5 billion gallons in 2012.
To make certain it would happen, farmers and big agribusiness giants like ADM were given generous taxpayer subsidies to grow corn for fuel instead of for food. David Rockefeller’s corporate farms were one of the largest recipients of US Government agriculture subsidies. Currently ethanol producers in the US get a subsidy of 51 cents per gallon of ethanol. The subsidy is paid to the blender, usually an oil company, that blends it with gasoline for sale. In the 2011 harvest year, an estimated 40% of all corn acreage in the United States is expected to be grown for biofuel.
As a result of these generous US Government subsidies to produce bio-ethanol fuels, and the new legislative mandate, the US refinery industry has been investing big time in building special new ethanol distilleries, similar to oil refineries, except they produce ethanol fuel. The number currently under construction exceeds the total number of oil refineries built in the US over the past 25 years. When finished in the next 2-3 years, the demand for corn and other grain to make ethanol for car fuel will double from present levels.
Not wanting to be left behind, the EU bureaucrats in Brussels -- no doubt generously encouraged by the likes of BP, Cargill, ADM and the major biofuel lobby -- came up with its own scheme for "10 in 20" or a mandate that 10% of all road fuel in the EU by 2020 be from biofuel. Shockingly, they did so despite the existence of a report by the same EU Commission on the damaging impact of such a massive turn to subsidized biofuels. The London Times reported,
A study by the Commission on the land use implications of sourcing only 5.6 per cent of Europe’s transport fuel from biofuels concluded that any significant rise beyond 5.6 per cent would 'rapidly' increase carbon emissions and 'erode the environmental sustainability of biofuels'... Like most political diktats, the figure of 10 per cent was plucked out of the air and no one at the Commission had a clue, when the policy was adopted, how the fuel industry was to meet the one in ten mandate without a huge rise in biofuel planting in the tropics. 7
In short, the use of farmland worldwide for bio-ethanol and other biofuels—burning the food product rather than using it for human or animal feed—is being treated in Washington, the EU, Brazil and other major centers as a major new growth industry. The impact on human beings, however, is quite the opposite.
The United States today is far and away the world's largest producer of ethanol biofuel for transportation fuel. In 2010 the US produced 13 billion gallons (US) or 50 billion liters of ethanol biofuel, amounting to near 60% of the world’s total. The EU added some 6% to the global total as number three behind Brazil in a macabre contest to see which country can destroy the most food by burning toxic biofuels. 8
The most alarming aspect of the entire biofuel scam is the fact that three full years after the grain price explosion of 2008 was demonstrated to be directly tied to the biofuels removal of millions of acres of US farmland -- from corn for feed to corn for fuel -- no action has been taken either in the US Congress or in the EU or anywhere else to reverse that insane policy. The stunning inaction seems testimony to the political power of the biofuels lobby. Who are they? Not surprisingly, they are the same agri and oil giants behind US and EU food and energy policy. Major players include BP, Shell, ExxonMobil, Chevron, ADM, Cargill and the like. It is a powerful lobby and sees a goose that can literally lay multiple golden eggs in the form of mandated biofuels requirements of the EU and USA and elsewhere.
This January the Institute for European Environment Policy (IEEP), an independent body, issued a report on the role of bioenergy in EU governments' "renewable energy action plans." Recent proclamations by the German government that renewables will replace nuclear electric generation by 2020, and similar pledges by other EU governments, all rely on a fantastic delusion that the electriic power being generated by large nuclear plants can come from biodiesel. The January IEEP study notes that:
More than half of the renewable energy which EU Member States expect to consume annually by 2020 will consist of bioenergy, e.g. biomass, bioliquids and biofuels. This is revealed in a first evaluation of the proposed scale of deployment of bioenergy by the EU Member States in the period to 2020 as forecast in their National Renewable Energy Action Plans (NREAPs)...A significant increase in absolute consumption of bioenergy is anticipated. In the 23 plans examined, bioenergy will thus remain the main contributor to the renewable energy sector. Overall, the bioenergy contribution to final energy consumption is expected to more than double, from 5.4% in 2005 to almost 12% (124Mtoe) in 2020. Bioenergy will have a quasi-dominant role in the renewable portion of the EU heating and cooling sector, and is foreseen to contribute more than 80% to the sectoral target. In the electricity sector the bioenergy share will be relatively low but in the transport sector it is expected to reach nearly 90% of total renewable energy by the year 2020. 9
The IEEP conducted an analysis of required land acreage needed for the cultivation of such a huge increase of biofuels by 2020. They estimated, after all factors are properly calculated, that an additional "4.1 to 6.9 million hectares" in the European Union will be needed for biofuel, acreage more than three times the entire state of Kansas.
Further, belying the EU myth that biofuels give a reduction of CO2 (even were CO2 a problem -- which is highly contested among serious scientists), the IEEP calculates that the enormous rise in biofuel use will lead to more CO2 emissions from vehicles, equivalent to adding as many as 26 million additional vehicles on European roads. 10
Biofuels are highly undesirable for countless reasons, as many serious environmental organizations have begun to realize. The corn ethanol industry has grown, largely due to powerful corn and oil lobbies. High demand will likely increase corn ethanol and gas prices as corn ethanol is mixed with gasoline.
Ethanol energy gets poor fuel-economy with standard engines. And most importantly, it simply is not possible to produce the amount of corn required to make the fuel a viable alternative to oil or a serious supplier of energy. 11
New Global Dustbowls?
What biofuels and their pushers—from BP to agribusiness, combined with the mad decisions of governments from Washington to Berlin to Paris and beyond – have accomplished is the elimination of grain security reserves worldwide. This has been vigorously mixed with a cocktail of deregulated free commodity derivatives trading to create the ingredients for the worst potential food crisis in human history.
The testing of that hypothesis may unfortunately already be underway at the hands of forces far beyond the ability of man to control. At the recent annual meeting of the Solar Physics Division of the American Astronomical Society, scientists from the National Solar Observatory (NSO) and the Air Force Research Laboratory (AFRL) presented results of studies of recent solar flare activity, by far the greatest factor influencing climate change on Earth. Flares occur in periodic cycles such as 11-year, 22-year and longer ones. The solar studies indicate that the Earth is now at the beginning of what might be a decade or longer period of greatly reduced solar activity.
Reduced solar sunspot activity means a less active sun. As Dutch physicist Gijs B. Graafland puts it, “It will affect severely the evaporation of ocean water and by that the amount of rain. This results in lower water for agriculture and therefore in less growth and more severe blowing away of dry fertile top soil layers which gives a decade of high food prices.” 12
Translated to us, that could mean climate catastrophes, harvest failures, droughts and dust storms -- such as those that swept the US Midwest during the Great Depression of the 1930s -- in fertile regions across the planet, not just once but over a span of years. If the solar physicists as well as earlier Russian astrophysicist, Habibullo Abdussamatov, the head of space research at St. Petersburg's Pulkovo Astronomical Observatory in Russia who predicted similar onset of a new “Little Ice Age”13 beginning 2014, are right, we may soon face a food crisis on a scale our planet never in history has faced. 14
Editor's Note: To return to Part 1, read Getting Used to Life Without Food, Part 1: Wall Street, BP, Bio-Ethanol and the Death of Millions
- See F. William Engdahl, Seeds of Destruction: The Hidden Agenda of Genetic Manipulation, 2007, Montreal, www.GlobalResearch.ca, pp.123-151 for a more detailed analysis of the fraud of the Green Revolution and its so-called “wonder wheat“ from Norman Borlaug, himself a product of the Rockefeller research organization.
- Current Biography, 1967, Wassily Leontief; and Ray Goldberg.
- Ray Goldberg, The Evolution of Agribusiness, Harvard Business School Executive Education Faculty Interviews: www.exed.hbs.edu/faculty/rgoldberg.html. W. Leontief, Studies in the Structure of the American Economy, 1953. International Science Press Inc., White Plains, New York. In its 1956 Annual Report, the Ford Foundation noted the following grant: ‘Harvard Economic Research Project:’ In addition to these over-all programs, a grant of $240,000 was made to support the activities of the Harvard Economic Research Project over a six-year period. This center, under the direction of Professor Wassily Leontief, was engaged in a series of quantitative studies of the structure of the American economy, focusing mainly on inter-industry relationships and the interconnections between industry and other sectors of the economy. Equal support was contributed by the Rockefeller Foundation. See also Ray Goldberg, The Genetic Revolution: Transforming our Industry, Its Institutions, and Its Functions, an address to The International Food and Agribusiness Management Association (IAMA). Chicago, June 26, 2000. Goldberg founded and headed the IAMA as well as holding seats on the boards of agribusiness giants Archer Daniels Midland, Smithfield Foods and DuPont Pioneer Hi-Bred. He practiced what he preached.
- F. William Engdahl, op. cit.
- Carl Mortished, We’re on a green road to hell, The London Times, April 10, 2010.
- F.O. Lichts, Industry Statistics: 2010 World Fuel Ethanol Production, Renewable Fuels Association, accessed in http://www.ethanolrfa.org/pages/statistics#E.
- IEEP Study, The Role of Bioenergy in the National Renewable Energy Action Plans: A First Identification of Issues and Uncertainties, January 31, 2011, accessed in http://www.ieep.eu/topics/climate-change-and-energy/energy/bioenergy/.
- IEEP Press Release, New Report Concludes that Indirect Impacts of EU Biofuel Policy will Create Major Environmental Pressure, November 8, 2010.
- P. Gosselin, German Ethanol Requirement Turns Into A Debacle, March 4, 2011, accessed in notrickszone.com/2011/03/04/German-Ethanol-Requirement-Turns-Into-A-Debacle.
- Gijs B. Graafland, Effects of low sunspot levels on evaporation…, May 9, 2011, private email to the author.
- Jerome R. Corsi, New Ice Age to begin in 2014--Russian scientist to alarmists: 'Sun heats Earth!', May 17, 2010, WorldNetDaily.
- Solar Science Staff Writers, Major Drop In Solar Activity Predicted, June 15, 2011, Boulder Colorado, accessed in http://www.spacedaily.com/reports/Major_Drop_In_Solar_Activity_Predicted_999.html
About William Engdahl
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