by John Brian Shannon
MY COMMENT ON PROFESSOR PAUL KRUGMAN‘S ARTICLE BEGINS…
It’s always a treat when the world’s leading economist writes a column about the environment — which happens to be one of my favourite topics.
But why is an economist writing about “the great Midwestern drought” presently scorching many of the United States? And, what does economics have in common with the weather, climate and climate-change anyway?
Everything, as it turns out.
Professor of Economics Paul Krugman comments, “This drought has already sent corn prices to their highest level ever.”
Just for the record, corn does not exist in its own universe. If corn prices are at record levels you can bet that other crops are at or near, record highs too. Think of corn as the bellwether for other crops in America. Where corn trends, others follow.
Lack of rainwater to fill creeks, rivers, lakes and even to help restore underground aquifer levels, combined with weeks of relentless heat, define a drought condition.
Corn, a major crop grown in the United States, is used in many different ways. One, low-grade corn called maize is used to feed livestock, and millions of tons of it are produced and consumed each year. Cattle like the taste, its filling and its high sugar levels provide them with plenty of energy, or if they don’t expend enough energy, they eventually turn into nicely-marbled tenderloin. Mmmm…
Two, corn is widely available for consumers and is a tasty summer treat fresh from the field, or it can be frozen or canned.
Three, it is increasingly used by the petroleum industry as a fuel-feedstock. Over six billion litres of ethanol fuel was produced from U.S. corn last year. Not only that, some plastics are manufactured from corn cellulose, for example, many plastic soda-pop bottles are manufactured with 5% corn bio-content.
The thing about corn — it requires huge volumes of water, fertilizer and lots of sunshine. Water must come from the sky to supplement the always insufficient water available on the ground or underground. When it doesn’t get the water it needs, it quickly punishes farmers by dying within a week. End of crop.
Thousands, or even millions of acres of corn which had received months of hard work and expense – all gone within one week.
At that point, thousands of farmers face the end of their year and there is little for them to do except fill out their crop-insurance claim forms, praying they get an amount equal to 49% – 66% of their planned crop gross-revenue.
Which has a downstream effect on the economy, obviously.
If, in the space of one week and at about halfway through the year, you were suddenly forced to accept only about half of your total yearly pay — would your spending patterns change for the balance of the year?
This is how climate-change affects the well-being of a nation and by extension, the world, as Prof. Krugman rightly points out, “If [the drought] continues, it could cause a global food crisis, because the U.S. heartland is still the world’s breadbasket.”
But its not climate-change unless it happens again and again. True fact. One bad year, does not a climate-change make.
Professor Krugman cites a research paper by the world-renowned NASA scientist, Dr. James Hansen, “As documented in a new paper by Dr. Hansen and others, cold summers by historical standards still happen, but rarely, while hot summers have in fact become roughly twice as prevalent. And 9 of the 10 hottest years on record have occurred since 2000.”
Imagine that. Perhaps the climate-deniers can continue to obfuscate for another ten years the growing body of evidence which proves global warming is real. What they might not be able to explain away are the increasing billions of dollars of losses in the U.S. agriculture economy and in other nations which possess highly-accurate crop monitoring systems — including impressive ag-satellite technology it must be said!.
With the many technological achievements including improved crop species, more effective fertilizers/pesticides and astronomically better land management practices, why are our ag-related losses increasing over recent years? Surely we should be facing lower losses with the greater productivity afforded us by employing the latest technologies.
Its time for an economics team to step up and provide this answer, for there will be no fooling accurate ag-statistics and to-the-penny ag-accounting practices. Where is the U.S. Department of Agriculture team dedicated to plotting each year’s crop losses (whether a fully-failed crop, or only partially-damaged by drought) into 2010-equivalent dollars and presenting it to the President for his consideration — and to the media for their informed commentary?
I’ve said it before and I’ll say it again; “The Market is the perfect, self-correcting machine. It will get to the heart of every matter connected to it.” Though we may not always like what it says, if we choose to listen it can teach us much.
The market informs us about every step along the path of production for every crop and manufactured product. America’s ag-economy has been state-of-the-art for some time now and there is not a cent which is not fully accounted-for. The only unaccounted-for losses these days are climate-related. And almost everyone seems afraid to step up and say so.
John Brian Shannon writes about green energy, sustainable development and economics from British Columbia, Canada. His articles appear in the Arabian Gazette, EcoPoint Asia, EnergyBoom, the Huffington Post, the United Nations Development Programme – and other quality publications.
John believes it is important to assist all levels of government and the business community to find sustainable ways forward for industry and consumers.
Check out his personal blog at: http://johnbrianshannon.com
Check out his economics blog at: https://jbsnews.wordpress.com
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