[A-List] Lenin and the market economy - collectivization and its meaning

["Michael Keaney" <michael011@xxxxxxxxxxx>]

Melvin wrote:

Sorry wrong list

****

I'm not so sure...



THE COST OF GRAIN: AUSTRALIA DROUGHT HITS OUTPUT
By Virginia Marsh in Sydney
Financial Times: Oct 17, 2006

The seriousness of Australia's drought was underlined yesterday when the
government said it was considering increasing emergency aid to farmers
to almost A$2bn (US$1.5bn, €1.2bn, £800m) and Graincorp, a big
grain handler, issued a profits warning.

John Howard, prime minister, announced a further A$350m in support for
farmers hit by the drought, the worst on record in some areas, and said
the government would consider other measures in the coming days.
Together, the initiatives could be worth as much as A$750m on top of the
A$1.2bn already spent on drought relief since 2001.

Australia is usually one of the world's top three exporters of wheat and
the worsening outlook for this year's crop has already hit international
markets.

Mr Howard, whose government includes the Nationals, a farming and
rurally-based party, said an existing exceptional circumstances income
support and interest rate subsidy package would be extended into 2008.
In addition, the assessment process would be streamlined to inform
farmers of funding decisions sooner.

"[These changes] will provide a great deal of reassurance and relief to
people in the affected areas," Mr Howard said in Canberra after
announcing the extra measures.

"The Australian bush is part of our history and looms large in our
psyche. There is an obligation on us all to do all we can to assist
those being affected by this very severe drought," he said.

The crisis provoked by the drought has reignited debate over the future
of the important agriculture sector.

Australia is one of the biggest global exporters of farm produce and the
world's driest inhabited continent, a situation that many
environmentalists say is unsustainable.

*****

CAPITAL MARKETS AND COMMODITIES: DROUGHT IN AUSTRALIA HAS TRIGGERED
WORLDWIDE PRICE RISES
By Daina Lawrence
Financial Times: Dec 13, 2006

Canadian wheat has been on the rise as a result of severe drought in
Australia, which triggered a global rally in prices, writes Daina
Lawrence.

Patricia Mohr, vice-president of economics for Bank of Nova Scotia, says
the hard year for wheat in Australia was being felt worldwide. "Harvest
in Australia was cut by 55 per cent and that is projected to send ending
stocks [the total for the year] to a 25-year low."

Ms Mohr says there have been "higher asking export prices from the
Canadian Wheat Board in International markets". The CWB is the world's
largest single seller of wheat and barley, with more than 20 per cent of
the market.

According to the CWB, Canada will be second only to the US in bread
wheat production with 25 per cent market share in the 2006-07 crop year
running from July 1 to June 30.

Canada tops the International market with both durum wheat and malting
barley, which have a commanding market shares of 73 per cent and43 per
cent respectively.

*****

Thirsty work
By Alan Beattie
Financial Times: May 24 2007

Spot the odd one out. Asia has billions of cheap workers, so exports
manufactures. Europe has millions of graduates, so exports banking.
Africa has steamy tropical regions, so exports fruit. America has
Hollywood, so exports movies. And Australia is the second-driest
continent on earth after Antarctica, so it exports water.

It is a paradox on display in the rural town of Griffith, Australia,
where fields of rice destined for export sit under water for five months
of the year. But Griffith's farmers see no contradiction. Rob Houghton,
a local farmer, says: "We have a global responsibility to grow rice the
way we do. This is a business and we are among the best at it."

In the wake of the worst drought in living memory in Australia, a battle
over the use of water is raging between farmers, urban consumers and
environmentalists. Australia in effect sends abroad billions of cubic
metres of water a year by using it to grow A$25bn-worth of exported farm
goods, both "dryland" (rain-fed) produce such as wheat, beef, wool and
dairy, and irrigated crops such as rice and fruit.

If farmers can no longer export on that scale, the worldwide
implications will be serious. Farmers elsewhere would no doubt welcome
the removal of an efficient, low-cost competitor. But for everyone else,
a reduction in the supply of Australian produce threatens higher food
bills. Consumers in Africa and the Middle East have already felt in
rising flour and bread prices the effects of the Australian drought,
which has helped push the cost of wheat to a 10-year high.

Global rice prices, too, have risen rapidly. And a shortage of skimmed
milk powder, a key ingredient in food processing, has forced up costs.
Australia and New Zealand between them supply a third of world milk
exports. "It would be very damaging if Australia and New Zealand stopped
exporting dairy," Peter Favila, the Philippines' trade and industry
secretary, told the FT recently. Other producers could come in to fill
the gap, but not as cheaply.

Griffith is a neat, prosperous settlement in the appropriately-named
"Riverina" area of southern New South Wales, six hours west of Sydney.
The district's first irrigation canals from the nearby Murrumbidgee
river were dug at the beginning of the 20th century and the settlement
expanded by Italian immigrants who brought their farming traditions with
them, preserved by what remains a tight-knit community identity. Driving
a tractor across one of his two farms, Glen Andreazza, the descendant of
one such family, compares it with California: "This is our version of
the Sacramento Valley". Vineyards, orange groves and peach orchards rise
out of the fields of red earth. The gherkins for Australia's McDonald's
Big Macs are grown here and the avenues leading into town are lined with
rows of green palms as well as the more familiar gum trees.

Like many Australian farming communities, it is a place built to feed
far-off consumers. Farm products, which suck up 65-70 per cent of the
country's water, make up nearly a quarter of all exports. As of 2002,
Australia was the world's sixth-biggest agricultural exporter and it
lobbies in global trade talks for more markets to be opened up.

But despite a historical Australian reverence for farming and rural
life, the use of water in agriculture has now come under intense
scrutiny. Trade should enable dry countries to import water by
buyingwater-intensive food and fibre. Egypt, for example, now imports
half its wheat,the traditional staple food. Parched Australia, however,
is the world's largest net exporter of the "virtual water" embedded in
farm produce.

Critics charge this means the country is in effect sucking itself dry to
subsidise foreign consumers, and that it should expand other exports
instead. Environmentalists say both irrigation and dryland farming
deplete water stocks and cause rivers and the country's already
naturally salty earth to become dangerously saline.

Griffith is at the frontline of Australia's water wars, the
"Murray-Darling basin" - a river system named after its two main
watercourses that covers parts of tropical Queensland and much of
temperate New South Wales and Victoria, emptying into the sea by the
South Australian city of Adelaide. Even farmers admit that the patchwork
of state jurisdictions has handed out water rights haphazardly. In
January John Howard, prime minister, announced a plan to centralise
power over water in the federal government. Water has shot up the
political agenda ahead of an election this year in which Mr Howard will
be seeking a fifth term.

Irrigated farming is under particular scrutiny. Just 0.5 per cent of
Australian farmland is artificially watered, but it produces 23 per cent
of agricultural output. So much is financially and psychologically
invested in irrigation in towns such as Griffith that to end it will be
an enormous upheaval.

Mr Andreazza farms annual crops, usually rice in the summer and wheat in
the winter. But the past year was, he says, "just a disaster". Each of
his farms has a theoretical annual allocation of water but can only
receive a percentage of that based on how much water is available.
Because of the desperately low rainfall, the state government cut his
allocation to 10 per cent of the maximum. His entire rice crop, which
needs to sit under water between October and March, was lost. He was not
alone: the national rice harvest - usually around 1.2m tonnes, 85 per
cent of which is sold overseas - came in at just 100,000 tonnes.

Mr Andreazza did make good money growing winter wheat, but only because
the drought savaged the dryland wheat farmers' harvest, driving up
prices. "It is mainly a question of riding out the bad years," he says.
But many more such episodes and his farm will be in trouble. Further
disaster was narrowly averted this season by heavy rains at the end of
April, before which irrigators were threatened with the loss of their
water.

The value of Mr Andreazza's land is heavily dependent on the water
rights that come with it. When he bought a second farm in 1991, he says,
"I paid A$1,000 [£415, $825, ?610] an acre and was the laughing stock of
the town." In fact, it was a shrewd investment: after a boom in wine
production, local land is now worth A$3500-4000 per acre. "But without
water, I wouldn't get five hundred dollars an acre for it." Without
irrigation, he would be lost. "I won't be a dryland farmer," he says.
"It takes a special breed to be a dryland farmer - living every season
in the lap of the gods, just having to keep hoping for rain, year after
year. I am my own master, as long as I have water."

Australian rice farmers lead the world in conservation. Their water use
per tonne of output is half the global average. To make fields
absolutely level so that the minimum amount of water is needed to cover
the rice, for example, Mr Andreazza uses laser-guided earth movers that
can get the edges of a 250m-wide plot to within half a centimetre of
each other in height. He says rice farmers must work to overcome their
bad reputation and find new ways of saving water. "Because our fields
are covered with water for five months of the year we look like
environmental terrorists," he says.

Yet for many Australians the question is whether agriculture is a good
use of water within Australia, not whether its farmers are more
efficient than their counterparts in wetter countries. Many cities are
suffering severe limits on water use. As Mr Houghton puts it: "If you
are on a level 5 [the highest] water restriction and can't wash your car
and you see some crocodile down the river growing rice, I can see why
you would get cranky."

The country is building expensive recycling and desalination plants to
provide water for cities. But in a recent study, John Quiggin, an
economist at the University of Queensland, noted that the price of urban
water currently averages A$1000 per megalitre - far higher than the
price of rural water rights, which farmers trade between themselves at
around A$100 per megalitre in non-drought years. He says it would make
more sense for farmers to sell water from their allocations to cities,
and for government to buy out farmers' water rights and leave the water
in the river systems to minimise environmental damage. Both are
restricted under current rules.

Griffith is anxiously watching the debates over Mr Howard's water plan
to see if those restrictions will be relaxed. His government proposes
making A$10bn available to rationalise the use of water, including A$6bn
in infrastructure investment and A$3bn to purchase water rights in the
Murray-Darling basin.

But agricultural interests say the A$3bn should be used to reward
farmers for using less water, not buy them out of production altogether.
Fewer farmers would mean those remaining each shouldering a greater
burden of rural infrastructure costs. Doug Miell, chief executive of the
New South Wales Irrigators' Council, says: "If that A$3bn is spent
indiscriminately it could do huge damage and take out maybe 15-20 per
cent of water from farming in the southern Murray-Darling basin. That
would devastate entire communities."

Mr Howard's government is anxious not to hurt farmers, not least because
they traditionally support its junior coalition partner, the National
Party. The water issue pits two of the more glamorous characters of
Australian politics against each other. The newly-appointed environment
and water minister in Mr Howard's government is Malcolm Turnbull, a
self-assured and hyperactive MP from Sydney, widely believed to have his
own prime ministerial ambitions, while his opposite number in the Labor
Party is Peter Garrett, long-time environmental activist and former
singer with the socially conscious rock bandMidnight Oil.

Mr Turnbull is a largely unknown quality down in Griffith, but antipathy
to Mr Garrett is widespread. Though the Labor Party insists it is not
anti-farmer, its electoral base is mainly urban and industrial. One
Griffith winery owner says: "If Garrett becomes minister we can all walk
off the farm the next day. He should stick to singing. Labor will keep
all the water for Adelaide and the industries down there".

Whoever wins this year's election, the great unknown is whether, as the
farmers think and hope, the drought this year was a one-off, or whether,
as most scientists believe, global warming means south-eastern
Australia's climate is on a drying trend. Another few dry years and no
amount of pleading is likely to save the irrigators. It is not a
pleasant prospect in Griffith, still arguing that what it does benefits
Australia and the world beyond.

"If we don't get water we can't grow rice," says Mr Houghton. "I don't
know what I would do. I sit and ponder it over a beer sometimes. But
someone has to export. Someone has to balance the economy."


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