THE POSTS MOSTLY BY GEOGRAPHICAL DISTRIBUTION

THE POSTS MOSTLY BY GEOGRAPHICAL DISTRIBUTION

.

.
Boston artist Steve Mills - realistic painting

Tuesday, April 13, 2010

Welcome to Zimbabwe (& to Fed)!


Welcome to Zimbabwe

Mises Daily: Monday, April 12, 2010 by 
[Speech given on April 10, 2010, in Phoenix, Arizona, at The Inflationary Path to Despotism (Mises Circle, Sponsored by James M. Rodney)]
If you follow economic affairs at all, you know who Ben Bernanke is. He's the chairman of the Federal Reserve. He was Time's 2009 "Man of the Year." CBS News said he may be the most important Fed chairman in history when Scott Pelley interviewed him for the highly watched 60 Minutes program.
Bernanke's an expert on The Great Depression, and famously said, back in 2002,
But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
But while Helicopter Ben is considered the great inflator, he's no match for Gideon Gono, governor of the Reserve Bank of Zimbabwe. So while Bernanke may have been named Man of the Year in 2009, Gono was awarded an Ig Nobel Prize in 2009 for "giving people a simple, everyday way to cope with a wide range of numbers by having his bank print notes with denominations ranging from one cent to one hundred trillion dollars." The aim of the Ig Nobels is to honour achievements that "first make people laugh and then make them think."
But don't think Gono is lacking for self-esteem. When interviewed by Newsweek in January 2009 and asked if he viewed his term as Reserve governor a success, Gono responded, "I am modestly credited with the survival strategy of my country."
On the other hand, Mr. Bernanke can count on his friends to sing his praises: "I shudder to think what the world would be like if Ben hadn't been running the Fed," former secretary Hank Paulson says. "It's just hard to explain that yes, we're in deep doo-doo, but we would have been in much deeper doo-doo."
Mr. Gono is a relatively young man of 50 years old. He started his career at the National Breweries, before joining the Zimbabwe Fertilizer Corporation, and then going into banking first with ZimBank, which is owned by the government, and then moving onto the Commercial Bank of Zimbabwe; he was Zimbabwe president Robert Mugabe's personal banker. He was appointed to head the University of Zimbabwe Council and was granted an honorary degree. Gono has a doctorate in strategic management from Atlantic International University, after beginning his secondary education at Rapid Results College. Gono was given an honorary doctor of laws degree from the University of Zimbabwe. Meanwhile Mr. Bernanke has his doctorate degree from MIT after studying at Harvard.
Both central bankers embrace their humble beginnings. Gono told Newsweek, "I owe a lot of my character and who I am today from a humble background. I was poor. I got a start making tea and keeping house. I'm a normal guy; I miss going to the supermarket."
Bernanke grew up in the small town of Dillon, South Carolina, and emphasizes "his Main Street middle-class roots," and his wife "still makes him do the dishes and take out the trash," according to Time.
And while Bernanke wears off-the-rack suits and owns just a pretty nice 4-bedroom townhome in Washington, DC, which cost him $839,000, his counterpart Gono lives in the richest suburb of Harare — Borrowdale Brook — in a 47-bedroom palace down the street from President Mugabe's place. The Gono residence, in addition to having as many bedrooms as a small hotel, has a glass swimming pool, a minitheater, landscaped gardens, and a gym larger than many houses in Zimbabwe's capital city.
Gono also owns numerous farms, which were confiscated by the Mugabe government. One is near Norton, which, when the seasonal weather is dry, draws clean water through a 25-mile-long pipeline linked to a reservoir that is supposed to supply water for the people of Harare. Gono also owns property in Malaysia.
Chairman Bernanke and his wife reportedly own a Ford Focus; Governor Gono "glides around in a twelve cylinder Mercedes Benz," according to The Zimbabwe Times.
So, Gono would seem to be doing much better than Bernanke who makes a salary of less than $200,000, but Bernanke's employer — the Fed — is making money, like, well, they were printing the stuff. Last year, America's central bank made $52.1 billion, the highest in its 96-year history. The central bank made over $30 billion the previous two years after making $29 billion in 2006.
"This shows that central banking is a great business to be in, especially in a crisis," former Fed official Vincent Reinhart told The Washington Post. "You buy assets that have a nice yield, and your cost of funds is very low. The difference is profit." Low cost of funds? Well, I guess. Reinhart leaves out the part about creating money out of nowhere to buy the assets.
While it's the Zimbabwean way for the head banker to take the central-bank largesse for himself and build a private palace, in America, the central bank builds work palaces for its economists throughout the country. Before Gono moved into his place, "extra security sensors were recently installed on the outside perimeter and biometric iris recognition and finger print authentication systems were fitted in the interior, but he has yet to be convinced that it is entirely safe," theTimes Online reported before he moved in. By the way, the security at America's central-bank locations is equally as tight.
Now, we have to be fair to Mr. Gono; things weren't exactly great in Zimbabwe when he took office in 2003. At the time the annual inflation rate was 619 percent. In an interview with Baffour Ankomah with New African in the fall of 2007, Gono blamed his country's inflation rate at 4,500 percent on "the differences that Zimbabwe has had with its former colonial master, the UK," and added, "we are busy laying the foundations for a serious deceleration programme."
But the Gono deceleration program didn't end up being all that serious: by the end of 2008 the inflation rate exceeded 231 million percent. At that time, the Times Online wrote, "A police inspector's Christmas bonus last week was worth one American cent on the widely used parallel black market."
So while Bernanke is worshiped in the United States, the Zimbabwean people have been angry with Gono — even resorting to throwing rocks at the Reserve Bank building. And many in the rock-throwing mob were low-grade civil servants, such as prison staff who had been trying to get money for Christmas, only to find that the banks had run out of cash, despite the introduction that morning of new Z$1 billion, Z$5 billion, and Z$10 billion notes.
Gono believes that "there is a positive correlation between the drought and inflation." And he pointed out in his '07 New African interview that droughts have become more frequent. Instead of a drought every ten years, the drought had persisted through much of the early and mid-2000s. "Those aspects have got a serious bearing on our inflation level," Gono said.
Forget about money printing. Inflation is all about the weather, lack of support from other nations, and political sanctions. In Governor Gono's mind, he has had nothing to do with the hyperinflation in his country. "No other [central-bank] governor has had to deal with the kind of inflation levels that I deal with," Gono told Newsweek. "[The people at] my bank [are] at the cutting edge of the country."

Mr. Bernanke also feels his central bank has nothing to do with inflation. "Well, [the Fed is] an institution that people don't hear so much about but it's a very important one. It manages monetary policy for the country. It's one of the main tools we have for stabilizing our economy and keeping prices stable," Bernanke told 60 Minutes.But Ludwig von Mises anticipated Gono's claims years ago, writing in Economic Policy, "The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy."
As Murray Rothbard quipped in The Case Against the Fed,
The culprit solely responsible for inflation, the Federal Reserve, is continually engaged in raising a hue-and-cry about "inflation," for which virtually everyone else in society seems to be responsible. What we are seeing is the old ploy by the robber who starts shouting "Stop, thief!" and runs down the street pointing ahead at others.
So you need dams and irrigation equipment? But of course the citizenry has not saved and accumulated capital because what they did save was confiscated by the government directly or inflated away. Governor Gono has the answer. "We are printing money to build dams and buy irrigation equipment," he explains. "Combine that infrastructure and the abounding energy of our people to succeed, and you have the makings of an agricultural revolution that is bound to take us to levels not seen in our living memory."
But, Zimbabwe already had an agricultural revolution. It was once one of southern Africa's most prosperous countries, referred to as "the breadbasket of Africa." Its Victoria Falls is one of the seven natural wonders of the world. The Zambezi River boasts abundant wildlife and pulsing rapids. And the country's lush soil is the envy of all of Africa. The country is said to hold 80 percent of the world's platinum deposits and huge reserves of natural gas. And along with its rich natural resources, the Zimbabwean population boasts a literacy rate exceeding 90 percent.
"Zimbabwe's lush soil is the envy of all of Africa. The country is said to hold 80 percent of the world's platinum deposits and huge reserves of natural gas. And along with its rich natural resources, the Zimbabwean population boasts a literacy rate exceeding 90 percent. So what happened?"
So what happened?
Committed Marxist Robert Mugabe took over in Zimbabwe in 1980. In addition to running the printing presses, Mugabe and the Zimbabwe parliament pushed through an amendment to their constitution in 2000 allowing for the seizure of white-owned farmland, despite voters turning the measure down just two months prior.
Now the country that was for many years a major food exporter to the region has a quarter of its citizens dependent on international food relief. And while Gono blames the heavens for being stingy with the rain, an all-party parliamentary committee warned before the start of the rainy season that production would be at an all-time low due to shortages of diesel, seed, fertilizer, chemicals, functioning farm machinery, and skilled labor.
Printing money with more zeros will not increase production — just the opposite. But Gono looks to America for inspiration. "Look at the bridges across the many rivers in New York and elsewhere," Gono tells New African, "and the other infrastructure in the country that were built with high budget deficits. There are times when it is necessary to dig deeper and construct or reconstruct."
"Therefore, printing money to sustain lives," sounding like the über-Keynesian, "to build infrastructure and a springboard from which to leap forward, cannot be bad." That sounds familiar. That's what the financial rescue of 2008 and 2009 was all about: sustaining lives (especially those on Wall Street and in Detroit) and providing a springboard for consumption. Spending on shovel-ready infrastructure, hiring census workers, and all that.
And Bernanke has been celebrated for pulling the American economy back from the edge of the abyss with a massive expansion of its balance sheet and interest rates set just north of zero.
And now Washington and the Federal Reserve believe they can cure what ails the US economy and the speculative binge that caused the financial meltdown with stringent regulation. The London Times reports that in his "pugnacious lunchtime" speech in late January, President Obama introduced a "sweeping series of measures aimed at checking the behavior of banks," which will be the "biggest regulatory crackdown on the banks since the 1930's."
Yes, the authorities in Zimbabwe have been cracking down as well. "There is a very high level of indiscipline and corruption in the Zimbabwean economy," Gono told Newsweek. "I would enact tougher legislation that would ensure offenders would never do it again."
Gono went as far as closing down the Zimbabwean Stock Exchange in November of 2008, and said a couple months later "unless there is more discipline and honor, the exchange will stay closed. I can't be bothered. I don't know when it will open." Governor Gono then commissioned a study of the stock exchange, and unsurprisingly the study argued "that the Stock Market has been traditionally one of the drivers behind Zimbabwe's hyperinflation." The stock market opened again in February of 2009 but trading is thin and is conducted only in US dollars.
One Zimbabwean businessman told the BBC
I don't even know if I'll have a job at the end of the week, because there is so much uncertainty. There are so many companies closing down. It is quite interesting to see people going in banks with bags and sometimes even suitcases. You know that there are large amounts of money in there — which unfortunately are not going to buy much.
"The things that we buy — the groceries at home, the things we get for our two children — we have to buy immediately, as soon as we get the money," according to one woman. "We know that if we wait a bit, the prices are going to go up again. If we wait another week, we will not be able to afford anything."
We're repeatedly reminded that Ben Bernanke is the foremost expert on the Great Depression. "The Depression was an incredibly dramatic episode — an era of stock-market crashes, breadlines, bank runs and wild currency speculation, with the storm clouds of war gathering ominously in the background.… For my money, few periods are so replete with human interest," the Fed chairman told Time. Bernanke believes that the Federal Reserve was too tight with monetary policy, making matters worse. Create more money and save failing banks is his prescription.
"Helicopter Ben's policies haven't yet produced the kind of price-inflation numbers that Mr. Gono's policies have. But there is still time."
Bernanke's counterpart in Zimbabwe has studied the same history and came to the same conclusion. "I'm a student of economic histories of countries and I can tell you that what we are doing is not unique," Gono told New African. "If you study carefully the history of the American economy, if you look at Chinese history, if you look at Russian history, British history and others, you will find that at some point they had to rely on their central banks."
Bill Bonner wrote recently in The Daily Reckoning, "Several countries are already past the point of no return. Even if America taxed 100% of all household wealth, it would not be enough to put its balance sheet in the black. And Professors [Kenneth] Rogoff and [Carmen] Reinhart show that when external debt passes 73% of GDP or 239% of exports, the result is default, hyperinflation, or both. IMF data show the United States already too far gone on both scores, with external debt at 96% of GDP and 748% of exports."
"To ensure that my people survive, I had to print money," Gono told Newsweek. "I found myself doing extraordinary things that aren't in the textbooks. Then the IMF asked the U.S. to please print money. The whole world is now practicing what they have been saying I should not. I decided that God had been on my side and had come to vindicate me."
Governor Gono may have God on his side while doing extraordinary things, but Chairman Bernanke has President Obama on his. When announcing the Fed chairman's reappointment, the president cited Bernanke's "background, his temperament, his courage, and his creativity."
So, you might ask, what is Zimbabwe's inflation rate these days? It's hard to know for sure. But Steve Hanke, professor of applied economics at John Hopkins University and senior fellow at the Cato Institute, reports that "as of 14 November 2008, Zimbabwe's annual inflation rate was 89.7 Sextillion (1021) percent," that's a daily rate of 98 percent, with prices doubling every 24.7 hours. Since then, Hanke has not been able to update his index because the price data from Zimbabwe has deteriorated and is unreliable.
Helicopter Ben's policies haven't yet produced the kind of price-inflation numbers that Mr. Gono's policies have. But there is still time. According to our government's numbers, prices are going nowhere. But John Williams's numbers at shadowstats.com reveal that prices are rising at a 9.4% clip, despite the recession.
The great Henry Hazlitt wrote, "Inflation is a twisted magnifying lens through which everything is confused, distorted, and out of focus, so that few men are any longer able to see realities in their true proportions."Mr. Gono's quotes of course are laughable. But hopefully the point is made that inflation is no laughing matter, and hyperinflation is downright tragic. No tool other than war can completely destroy an economy like inflation. Zimbabwe is living proof — happening right now in our lifetimes. And yet it is America's central bank that in many ways has served as an inspiration for the Zimbabwean policies.
No two men are more confused and out of focus than Chairman Bernanke and Governor Gono.

The Danger behind the Fed's Exceptional Profits


The Danger behind the Fed's Exceptional Profits

A few days ago, the Fed announced that it had "earned" a record-high amount of money in 2009. Then it turned $46 billion over to the Treasury. Here we are in the midst of a serious recession, with the unemployment rate high, the housing market still in a slump, and the stock market making only small steps toward recovery. In this climate, the Fed is making profits.
That's impressive, isn't it? Unfortunately, the Fed's huge earnings are a signal that the economy is still in terrible shape and that its condition is worsening.
Let us take a closer look at the Federal Reserve's balance sheets, at least to the extent that they are available to us. One year before reaching their record-high profits, the Fed's assets consisted of nearly $500 billion in government assets. These consisted of Treasury bonds and assets issued by Fannie Mae and Freddie Mac, the two giants of the real-estate market whose solvency is guaranteed by the federal government. Since Fannie and Freddy are currently owned by the state, their assets should be treated as state securities.
During 2009, the Fed was engaged in aggressive interventions in the financial markets; through various operations, it increased the amount of state assets in its possession to $1.8 trillion. The amount of government assets on the Fed's balance sheet more than tripled. With this huge increase in assets held, $46 billion is merely a 2.5 percent return, which was provided directly by the government.
Therefore, the Fed's so-called "profits" are not a sign of the coming of a great revival for economy. They rather mean that a "Keynesian trick" has hid the decline in economic welfare. This trick is often referred to as a "policy mix" — a mixture of fiscal and monetary policies.
Here is how it works. The newly elected President Obama increased the budget deficit to a record high. The Treasuries for that debt are released to the "free market." At the same time, the Fed started its open-market operations, i.e., printing money and buying public debt in order to put it on the balance sheet. Then, when this debt approached maturity, the state paid the Fed for the issued debt (instead of paying to the private investors).
But that is not all. Contrary to the claims of some groups, the Fed is not a private bank: it cannot keep the profits earned from holding public debt. Over 90 percent of the money that the Treasury pays the Fed goes … back to the Treasury. Thus, the modern state receives earnings from printing money while giving a small fee to its financial intermediary.
"From the market point of view the Fed is a bankrupt institution."
Here, in a nutshell, lies the whole mystery of the modern "print on demand" scheme. There are no free lunches, but there are lunches being paid for by somebody else.
Some news agencies claim that the Fed's profits show that taxpayers did not lose money as a result of the massive bailout programs. However, the facts are that Fed earned the money through government securities. When the government does pay the Fed in order to boost its "earnings," the money safely returns to the government.
Thus, the government and the central bank can show profits ad infinitum by endlessly pouring money from the Treasury's account to the Fed's account and vice versa. Or better yet, the Fed can pay the Treasury several times more by printing trillions of US dollars, buying companies on Wall Street, and achieving small dividends.
Thus, the so-called "profits" are not evidence that the US economy is doing well. Far from it, these profits are proof that the printers are working long hours. Moreover, the state took upon itself huge liabilities, which call into question the solvency of the entire American financial system. It makes the hypothesis of a return of high inflation more probable (although this scenario is currently still less likely than further "deflation" of the credit).
We should use this opportunity to touch upon a different problem, the accounting rules for the Federal Reserve. Unlike most financial institutions, the Fed does not comply with the "mark to market" rule, the principle according to which, in case of assets losing their value, the books need to be revalued in order to reflect the market price.
If the securities issued by Fannie and Freddy and bought by the Fed suddenly declined in value by 50 percent, the Fed would not need to book the losses on these assets. This mechanism makes the central bank not only a lender of last resort but also a market creator of last resort.
The question arises, what might happen if the Fed was faced with the need to resell the assets in order to increase interest rates or stop inflation.
Then we may find out that the Fed would not be able to sell these securities at the booked price. To convince the private banks to buy them through open-market operations, it might need to reduce the price. Then the Fed would have no other choice than to record the actual losses. This could even result in the Fed reaching negative equity.
If it came to this, there are two possible scenarios. In the first, the central bank would be recapitalized by the Treasury. This would be an interesting scenario, in which the power to tax would support the power to print, not the other way around. In the other scenario, since nothing precludes the Fed from having negative equity — it's not a private company, traded on the stock market — there would be no consequences. It might well continue its operations without any noticeable difference.

In either case, one thing is certain: from the market point of view the Fed is a bankrupt institution. History provides an example of a currency backed by a phony real-estate market: French assignats, which ended up being completely devalued.But wouldn't that mean a collapse of the dollar? The value of liabilities would be much higher than the value of assets, while the dollar would not even be covered by state-issued bonds.
The only thing keeping the Fed alive is the protective umbrella of the American state and its legal-tender laws. This is not a parasitic relationship but a symbiotic one. What remains to be seen is how strong this symbiotic bond is and how long it will take to succumb to unavoidable decay.

Poland’s Leaders Move to Weaken Currency, Then Die in Plane Crash

Poland’s Leaders Move to Weaken Currency, Then Die in Plane Crash
There’s no telling if the two events are connected, but their timing is mighty interesting.
The Polish government and the National Bank of Poland, in a “rare moment of unity,” agree to weaken Poland’s currency, the zloty, in an act that would benefit Poland’s exporters at the expense of Poland’s trading partners - that is, the European Union, among others. Then, the next day, Poland’s president and the president of its national bank die in a plane crash.
From the Wall Street Journal in an item dated April 9, 2010:
In one of those rare moments of unity, the National Bank of Poland and the Polish government agreed on the need to weaken the Polish zloty, which over recent weeks has rebounded close to its pre-crisis strength. The currency’s strength is now seen a possible threat to economic recovery. After several verbal interventions over the past few days, the central bank intervened with real money Friday, for the first time in more than a decade.
The bank followed through on its Thursday warnings that it is “technologically and psychologically” prepared to enter the currency market to prevent “excessive strengthening of the zloty.” Government officials also said earlier this week that the “strong zloty” is damaging growth and, after Friday’s intervention, said they fully back the central bank’s move.
In moving to weaken the zloty, Poland’s leadership was placing the interests of the people of Poland ahead of the interests of the European collective known as the European Union.

Then, the next day, the president of Poland dies in a plane crash along with numerous other top leaders, including the president of the National Bank. From the Mail Online:
Polish president Lech Kaczynski and his wife Maria have been killed after their plane  crashed on approach to Smolensk airport in western Russia.
Russian news agencies reported at least 87 people died in the crash near Smolensk airport in western Russia, citing the Russian Emergencies Ministry. They reported 132 people were aboard the Tupolev Tu-154.
The Army chief of staff, Gen. Franciszek Gagor, National Bank President Slawomir Skrzypek and Deputy Foreign Minister Andrzej Kremer were on the passenger list.
Poland has been dragging its feet in adopting the euro and joining the European Union, having pushed back its target date for doing so until 2015. Here in the U.S., we might say that Poland is not a “team player.” In the New World Order, bad things tend to happen to leaders who aren’t team players.
Source: Infowars.com

Saturday, April 10, 2010

Beef

Beef
[[ΤΩΡΑ ΘΕΛΟΥΝ ΝΑ ΜΑΣ ΚΟΨΟΥΝ ΚΑΙ ΤΟ ΛΙΓΟ ΚΡΕΑΤΑΚΙ ΠΟΥ ΤΡΩΓΟΥΝ ΟΙ ΠΤΩΧΟΙ ΣΤΑ ΓΚΟΥΝΤΥ'Σ--ΑΝΙΜάΛΙΑ ΣΩΣΤΑ ΚΑΙ ΧΟΡΤΟΦΑΓΑ]]
  • by Anup Shah----http://www.globalissues.org/article/240/beef
Sub-sections:
  1. Diverting Resources To Environmentally Destructive Uses
  2. Wasteful Use Of Resources Also Contributes To Hunger And Poverty
  3. Creating Mass Consumption Of Beef
  4. Fast Food And Beef Industries Promote Each Other.
  5. Intensive Farming And Shortcuts Cause Bse And Other Health Problems
    1. Side Note On Vegetarianism And/Or Reduction In Meat Consumption
    2. Meat Production, Consumption And Climate Change
  6. Farm Subsidies: Creating Economic And Environmental Waste
  7. Industrialized Meat Production: Shortcuts Create More Health And Environmental Problems
Diverting Resources To Environmentally Destructive Uses
Consider the following (notes for stats are at the bottom of the page):
  • More than one third of the world’s grain harvest is used to feed livestock. 1
  • Breaking that down a little bit 2
    • Almost all rice is consumed by people
    • While corn is a staple food in many Latin American and Sub-Saharan countries, “worldwide, it is used largely as feed.”
    • Wheat is more evenly divided between food and feed and is a staple food in many regions such as the West, China and India.
  • The total cattle population for the world is approximately 1.3 billion occupying some 24% of the land of the planet 3
  • Some 70 to 80% of grain produced in the United States is fed to livestock 4
  • Half the water consumed in the U.S. is used to grow grain for cattle feed. 5
  • A gallon of gasoline is required to produce a pound of grain-fed beef. 6
Junk-food chains, including KFC and Pizza Hut, are under attack from major environmental groups in the United States and other developed countries because of their environmental impact. Intensive breeding of livestock and poultry for such restaurants leads to deforestation, land degradation, and contamination of water sources and other natural resources. For every pound of red meat, poultry, eggs, and milk produced, farm fields lose about five pounds of irreplaceable top soil. The water necessary for meat breeding comes to about 190 gallons per animal per day, or ten times what a normal Indian family is supposed to use in one day, if it gets water at all.
… Overall, animal farms use nearly 40 percent of the world’s total grain production. In the United States, nearly 70 percent of grain production is fed to livestock.
Vandana Shiva, Stolen Harvest, (South End Press, 2000), pp. 70-71.

Images: Amazon forest cleared for agriculture (top). Another area turned into cattle ranch (bottom). (Source: NASA)
The impact of beef covers many issues today.
Not only is land used up to grow grain to feed cattle, but additional land is of course required for pastures and grazing.
Furthermore, overgrazing leads to land degradation while top soil loss and water wastage and depletion are also extremely urgent issues.
With industrial agriculture, more petrochemicals are used. More energy is required to create fertilizers, pesticides and herbicides, etc, to grow the grain that is used to feed cattle.
Deforestation of large amounts of forests, including the Amazon, has occurred due to timber industries, industrial agriculture and also meat industry/cattle grazing:
Cattle raising has also been criticized for its role in the destruction of tropical forests. Hundreds of thousands of acres of tropical forests in Brazil, Guatemala, Costa Rica, and Honduras, to name just a few countries, have been leveled to create pasture for cattle. Since most of the forest is cleared by burning, the extension of cattle pasture also creates carbon dioxide, and, according to some environmentalists, contributes significantly to global warming.
Richard Robbins, Global Problems and the Culture of Capitalism, (Allyn and Bacon, 1999), p.220
Additionally, concentrated land ownership (as also described in this site’s poverty and hunger section), leads to inefficient use of that land. With the forest clearing mentioned above, sometimes the cattle industry will not be the direct reason for forest clearing, but an indirect reason, because they displace others who then may clear resources for their survival, as Food First highlights:
In the late 1990s the dynamic of forest destruction has been driven by a combination of cattle ranching, increasing soybean acreage, and commercial logging. … Landless Brazilians are forced to clear new areas not because of insufficient land elsewhere in Brazil but because relatively few own most of that rich resource [of cropland].
… Further aggravating the problem is the pervasive use of prime agricultural lands for pasture and the portion of idle land among the country’s largest land holdings. Overall, 42.6 percent of agricultural land is not cultivated, and among Brazil’s largest land holdings (of 1,000 hectares or more) 88.7 percent of arable land is left permanently idle.
… The astounding concentration of land ownership in Brazil has left 4.8 million rural families completely landless, not to mention millions of impoverished families who abandoned the countryside for the infamous urban favelas out of economic desperation. Moreover as the mechanization of large soybean farms spreads through the country, farmworkers lose their jobs. So ever more landless workers must compete for fewer jobs.
While deforestation is frequently blamed on small farmers, in fact, large-scale forest conversion for ranching and increasingly for soybeans is far more widespread. In one of the few studies that actually compared large—vs. small-scale clearing (in the neighboring Bolivian Amazon), 80 percent of the clearing was carried out by large holders. The forest is, by and large, not being cleared to feed the hungry.
Frances Lappe Moore, Joseph Collins, Peter Rosset, World Hunger: 12 Myths, (Food First and Grove Press, Second Edition, 1998) pp. 47—48 (Emphasis is original)
Note also how deforestation is often blamed on “overpopulation” which is also sometimes attributed as the cause of hunger. Yet, as shown throughout this site, and with immense detail in the above book, World Hunger, it is politics, economics and so on are affecting the use of our resources, which are more than adequate for all (for now), as well as being the causes of hunger.
(See also this February 27, 2001 radio interview on Democracy Now! for more about deforestation of Amazon for McDonald’s and more.)
Wasteful Use Of Resources Also Contributes To Hunger And Poverty
As seen in the above statistics, a large amount of grain is used to feed livestock, while people go hungry. Of course, meat and other products from livestock are important. However, as we shall see with the example of beef, the amount of consumption of meat such as beef and its purpose (as seen in convenience such as fast foods) has raised much criticism because of the costly inputs, which could be largely used to help feed hungry people while reducing meat consumption to healthier levels.
[B]eef is terribly inefficient as a source of food. By the time a feedlot steer in the United States is ready for slaughter, it has consumed 2,700 pounds of grain and weighs approximately 1,050 pounds; 157 million metric tons of cereal and vegetable protein is used to produce 28 metric tons of animal protein. … [B]eef in the quantities that Americans consume it is unhealthy, being linked to cardiovascular disease, colon cancer, breast cancer, and osteoporosis. Yet Americans are among the highest meat consumers in the world and the highest consumers of beef.
Richard Robbins, Global Problems and the Culture of Capitalism, (Allyn and Bacon, 1999) p.221
We can see numerous issues here, for example:
  • If we add these input costs, together with additional costs such as the costs of the health issues and environmental degradation and so on, we see that many resources are expended for this consumption, while at the same time, many around the world go hungry.
  • As mentioned in the structural adjustment section of this web site, IMF/World Bank/US policies of structural adjustment force poor nations’ governments to cut back their expenditure of things like health and education and even food support programs for the poor.
  • At the same time, the rich nations also promote an increase in production of “cash crops” such as fruits, vegetables, grains and so on for export, while even the farmers themselves go hungry.
  • In the meanwhile, much of the wealthy world protect their own farming sector and subsidize their agribusinesses making it hard for the poor countries to compete fairly.
  • Today’s increased and excessive meat consumption has come about through numerous political and economic mechanisms. Beef, like sugar and many other things we consume, are a large part the result of turning luxury items into necessities, to increase profits. In addition some wealthier governments and their agribusiness lobbies have strong influences over global agricultural methods and standards as well as economic agreements (such as the above-mentioned SAPs) to favor food production that they benefit from but may not always be good for everyone. For example, their policies encourage market distortions that favor production of unhealthy products. In addition, these subsidies in wealthy nations also results in dumping of excess food on the poorer countries, which has actually increased hunger, although it is described as food aid. Some have argued that there are foreign policy objectives for this while others say it is a result of market distortion.
  • Sometimes world hunger is attributed to just “over population” as it fits the observations of over-simplified Malthusian theories, where it is assumed that there are too many people and food production cannot keep up and hence we have hunger. While it is true that one day we could have so many people that we cannot feed and therefore population issues are important, it doesn’t mean that today we are reaching those limits. These examples of beef, of sugar, of SAPs that divert resource use due to economic policies rather than due to human numbers, or demands of the large number of poor in the world, are more impacting on hunger, as discussed in detail in this web site’s population section.
Creating Mass Consumption Of Beef
So how did beef consumption increase so much?
The answers [as to why so much beef is consumed in spite of such environmental damage] involve understanding the relationships among Spanish cattle, British colonialism, the American government, the American bison, indigenous peoples, the automobile, the hamburger, and the fast-food restaurant.
Richard Robbins, Global Problems and the Culture of Capitalism, (Allyn and Bacon, 1999), p.222
To summarize his detailed account:
  • As Spanish colonization of the Americas took hold, cattle were introduced in places like Argentina, Central America etc.
  • By the seventeenth century cattle was so abundant, that one could be killed for the hide and the remaining meat left to rot.
  • Around the Industrial Revolution, England was the “beef-eating capital of the world.” Not only to increase food for a growing population, but also to keep wages down, and due to the influence of wealthy meat industry leaders and landowners, beef consumption was made affordable to more and more people.
  • The British Empire distributed much rum and meat to its military forces, thus helping to subsidize the sugar and meat industries.
  • To support an increasing demand, Britain would look to its empire, its colonies and other areas for additional beef and support of grain production.
  • American meat industries, eager to make profits from the British demand looked to increase their cattle production.
  • However, they had to overcome problems including available rangeland and meeting the specific taste requirements of the British which, involved having fatter cows.
  • But Indians and buffalo were in the lands that cattle producers needed for rangeland.
  • Hence, this led to the famous near extermination of the bison, which would also “deal” with the Indian problem.
  • From just 1870 to 1880, millions of buffalo were reduced to “virtual extinction.” (The famous Buffalo Bill and others profited from hunting expeditions.)
  • This destroyed the Indians of the Plains, to whom buffalo were central in their culture as both a major food source and spiritual power. They were moved off to reservations and other lands but no means of real chance of continued meaningful existence.
  • To meet demands of fatty beef by the British, corn was increasingly fed to cattle. Furthermore, the price of grain was so cheap, it was advantageous to feed corn to cows. Thus, this formed a symbiotic relationship to the extent that even today, “the price of corn is closely linked to the demand for the price of cattle” (p.227).
  • After World War II, the surge in automobile use (helped by a $350 billion project to construct 41,000 miles of highways in the United States) led to the growth of the suburbs and fast-food restaurants that were making beef, and in particular, the hamburger a prime choice. (See also, for example, Eric Schossler’s Fast Food Nation: The Dark Side of the All-American Meal (Houghton Mifflin Company, 2001), a New York Times bestseller. It provides a lot of details about the rise of the fast food industry and its various impacts.)

Fast Food And Beef Industries Promote Each Other.
Post World War II has seen “globalization” and consumption of fast foods such as McDonald’s spread around the world, not just to the relatively wealthier West, but even in wealthy parts of the developing world. With the disastrous poverty and hunger-increasing structural adjustment policies, as well as various other trade and economic “agreements”, many resources (economic as well as environmental) have been diverted to such unproductive uses.
The fast-food restaurant, made possible by the popularity of the automobile, put the final touch on the ascendancy of beef. Ray Kroc, the founder of McDonald’s, tapped into the new temporal and work routines of American labor. … time and efficiency [and convenience made] the hamburger patty [become] more popular. Thus as with sugar, our “taste for beef goes well beyond our supposed individual food preferences. It is a consequence of a culture in which food as a commodity takes a form defined by economic, political and social relationships.”
Richard Robbins, Global Problems and the Culture of Capitalism, (Allyn and Bacon, 1999), p.230 (Emphasis Added)
Talking of the fast food industry and of McDonald’s, here are some interesting statistics from Eric Schossler, author of the New York Times bestseller, Fast Food Nation; The Dark Side of the All-American Meal, (Houghton Mifflin Company, 2001), from p. 4:
  • McDonald’s is now responsible for 90 percent of the United State’s new jobs
  • It has about 28,000 restaurants world wide, opening around 2,000 new ones each year
  • It provides jobs to around 1 million people in America
  • It is the nation’s largest purchaser of beef, pork and potatoes, and the second largest purchaser of chicken
  • It is the largest owner of retail property in the world
  • It earns most of its money not from selling food, but from collecting rent
  • It spends more on advertising and marketing than any other brand, replacing Coca Cola as the world’s most famous brand
  • It operates more playgrounds than anyone else and is one of America’s largest toy distributor
The demands and influence of the fast food industry on the world’s food supply, its impacts on society and the environment, its interests in global economics, are therefore considerable. Amy Goodman, introducing a radio broadcast, explains:
It’s a public health nightmare: The number of people in this country [the United States] who are obese doubled from the late 1970s to the early 1990s. Over one quarter of adults, and more than 12 percent of children in the US are obese.
The food industry spends around $33 billion a year in advertising and promotion to persuade people to eat more food. A New York man is suing McDonald’s, Burger King, Wendy’s, and KFC, saying that their marketing tactics are responsible for his obesity and two heart attacks.
Companies like Coca-Cola, Procter & Gamble and Slim-Fast sponsor university-based research and nutrition journals. American Dietetic Association fact sheets on food and nutrition are sponsored by Monsanto, NutraSweet and Campbell.
At the World Food Summit in Rome last month [June 2002], the US stood alone among 182 nations in opposing the right to food. The Bush administration pushed for a narrow world-hunger agenda, emphasizing a greater role for the private sector and biotechnology firms.
The food industry spends millions lobbying Congress and regulatory agencies. It pays off. Last month President Bush signed a $190 billion farm bill. Under the 10 year program, taxpayers will pay farmers $4 billion a year to grow more corn. The people who benefit from the production of corn are not the farmers, but the processors, factory farms, snack and soft drink makers, who have switched from using sugar to corn sweeteners.
Amy Goodman, The Politics of Food, Democracy Now! Radio, July 26, 2002
(We will also discuss a bit later the ramifications of this on resources, capital, labor, and wealth in general.)
Intensive Farming And Shortcuts Cause Bse And Other Health Problems

“Factory farming” of animals is also leading to health problems in the animals when they are so closely packed together. Pressures to cut costs etc are resulting in shortcuts being taken. The increase in things like “mad cow disease” and the “foot and mouth” epidemic, largely starting in Britain but also seen in other places around the world (partly due to globalization too) is also a result of taking “short cuts” in agriculture/food production. Eric Schossler, mentioned above is worth quoting at length:
A nationwide study [a ground beef microbiological survey] published in 1996 by the USDA [United States Department of Agriculture] found that … 78.6 percent of the ground beef contained microbes that are spread primarily by fecal material. The medical literature on the causes of food poisoning is full of euphemisms and dry scientific terms: coliform levels, aerobic plate counts, sorbitol, MacConkey agar, and so on. Behind them lies a simple explanation of why eating a hamburger can now make you seriously ill: There is shit in the meat.
Far from their natural habitat, the cattle in feedlots become more prone to all sorts of illnesses. And what they are being fed often contributes to the spread of disease. The rise in grain prices has encouraged the feeding of less expensive materials to cattle, especially substances with a high protein content that accelerate growth. About 75 percent of the cattle in the United States were routinely fed livestock wastes—the rendered remains of dead sheep and dead cattle—until August of 1997. They were also fed millions of dead cats and dead dogs every year, purchased from animal shelters. The FDA [U.S. Food and Drug Administration] banned such practices after evidence from Great Britain suggested that they were responsible for a widespread outbreak of bovine spongiform encephalothapy (BSE), also known as “mad cow disease.” Nevertheless, current FDA regulations allow dead pigs and dead horses to be rendered into cattle feed, along with dead poultry. The regulations not only allow cattle to be fed dead poultry, they allow poultry to be fed dead cattle. Americans who spent more than six months in the United Kingdom during the 1980s are now forbidden to donate blood, in order to prevent the spread of the human variant, Creutzfeldt-Jakob disease [CJD]. But cattle blood is still put into the feed given to American cattle. Steven P. Bjerklie, a former editor of the trade journal Meat & Poultry, is appalled by what goes into cattle feed these days. “Goddamn it, these cattle are ruminants,” Bjerklie says. “They’re designed to eat grass and, maybe, grain. I mean, they have four stomachs for a reason—to eat products that have a high cellulose content. They are not designed to eat other animals.”
The waste products from poultry plants, including the sawdust and old newspapers used as litter, are also being fed to cattle. A study published a few years ago in Preventative Medicine notes that in Arkansas alone, 3 million pounds of chicken manure were fed to cattle in 1994.
Eric Schossler, Fast Food Nation; The Dark Side of the All-American Meal, (Houghton Mifflin Company, 2001), pp. 197, 202 (Bold Emphasis Added)
Schossler goes on at length with many more examples, in his chapter titled “What’s in the meat.” (One might recall the famous case a few years back when Oprah Winfrey commented in public after hearing some gruesome details that she would not eat a hamburger, and the industry managed to sue her for it!)
Reading the above, one could think more about reduction in meat consumption, or even becoming vegetarian!
Side Note On Vegetarianism And/Or Reduction In Meat Consumption
The issues here raise another perspective on things like vegetarianism, or reducing meat consumption, from practical, social, environmental and economic angles:
  • Vegetarianism (or a large reduction in meat consumption) indirectly would help free up land for other uses such as growing food for others to eat as well—or in the case of beef consumption, help to reduce the pressures on natural forests such as the Amazon.
  • Vegetarianism (or a reduction of meat consumption etc) in an indirect way, could be a choice for those wishing to play a part in helping combat world hunger, environmental degradation etc.
  • Likewise, reducing or eliminating tobacco and alcohol consumption can also be seen as indirectly helping address world hunger and environmental issues.
  • This is because as those demands decrease, those lands could be used to grow other things such as food to feed the local people etc.
  • Of course, it is more complex than that, as political aspects of land control and its use still need to be addressed. (For example, there is obviously the risk of using that land to meet other demands such as drugs.)
  • However, tobacco for example, is very water and nutrient-thirsty, hence less tobacco demand in theory would help stave off some environmental degradation if positive alternatives are appropriately supported, both politically and economically.
  • All the support industries to promote, market and sell the consumption of such products, is, paraphrasing J.W. Smith’s book title, “wasted wealth” by what he describes as wasted labor due to wasted capital. (See World’s Wasted Wealth II, Institute for Economic Democracy, 1994.)
  • Of course, these alternatives cannot work in isolation. Economic alternatives also need to be addressed for the farmers and others who would lose out, and hints towards the need to address systemic and deep changes at the core, but this could be a starting point for people to research into issues of causes of world hunger, poverty, inequality, of additional anti-tobacco campaign themes and so on!
  • This site’s section on the economy and trade issues has more on these concerns.
Some scoff at the notion of being vegetarian or reducing meat consumption thinking it is a sign of weakness or whatever. The point is that the correct proportions are not only good for the environment, but good for one’s health. There are also other political issues that are affected by diet choices, and it should be remembered that excessive meat consumption is not usually just a free choice, but a choice influenced (knowingly or not) by many cultural factors that have been around in some form for decades.
Meat Production, Consumption And Climate Change
Meat production produces more greenhouse gas emissions than transportation with direct emissions from meat production accounting for some 18% of world’s total. (This includes emissions generated from clearing forests and land, making and transporting fertilizer, burning fossil fuels in farm vehicles, and the front and read end emissions from cattle and sheep.) By contrast, transport accounts for 13% of total global greenhouse gas emissions.
So, as well as potential health benefits from reduced meat consumption/production, there can be significant environmental benefits, tackling climate change perhaps being the most urgent.
New York Times food writer Mark Bittman discusses what’s wrong with the way we eat now (too much meat, too few plants; too much fast food, too little home cooking), and why it’s putting the entire planet at risk looking at the combination of issues explained here on this web site:
Towards the end of June 2003, McDonald’s acknowledged that the heavy use of growth-stimulating antibiotics by the meat industry threatens human health. It advised its poultry suppliers to phase out the practice or risk losing its business. McDonald’s is America’s largest buyer of meat products. This was detailed by William Greider for example, in The Nation magazine, who also noted that hogs and cattle are probably on notice too. Greider noted that McDonald’s tried to spin this as taking social responsibility and listening to its customers (following the adage of the “customer is always right” and the supposed practice of major brands to listen to their customers). Yet, many campaign groups should probably take most of the credit for this as Greider also details.
Greider also quoted a campaign leader from the Union of Concerned Scientists who said, “It’s definitely not perfect and it’s an unfortunate substitute for law, but people do have the power to change things. In a sense, McDonald’s is playing the role of what would be the USDA inspectors. If there’s going to be a choice, I would definitely rather have the government do it, but right now we don’t have a choice.”
But Greider also noted a contradiction of industrial agriculture, and the external costs associated with it:
  • The antibiotics problem is widely understood though not yet candidly addressed by industry scientists or the federal government.
  • Their egregious overuse encourages the development of resistant strains of bacteria that then may migrate into the environment at large, including perhaps human bodies.
  • The supposed efficiency of corporatized agriculture is riddled with many such contradictions
    • the company cuts costs and boosts profits by growing the chickens or hogs faster, often in brutal conditions,
    • then somebody else (usually the taxpayers) pays to fight newly created strains of disease.
    • Given market competition, each company typically claims it has no choice but to adopt the various practices of so-called efficiency that also produce collateral damage to society, health and the environment.
    • Then they hear from their customers—not just scattered objections now and then, but in concerted, coordinated, well-informed waves.
(The note above about companies saying they have no choice but to do what their competition is doing, to avoid losing out, is prevalent in many related industries. For example, in the beginning of August, 2003, the BBC reported on a health warning about certain other foods and drinks, and amongst various interviews, an industry spokeswoman also pointed out that they take these concerns seriously but that they have to be realistic because of the pressures of competition.)
Farm Subsidies: Creating Economic And Environmental Waste
Enormous farm subsidies seen in some rich nations cause predictable problems, resulting in what some describe as “privatized profits; socialized costs”. For example,
  • Market distortions change prices and consumption habits
  • Unhealthier foods become cheaper
  • Health, environmental and other costs increase, and are borne by the citizenry
  • Agribusiness and related industries benefit
And so, the cycle continues. Products from the industries who benefit from this unequal arrangement are far cheaper than they should really be. Take for example the hamburger:
If water used by the meat industry [in the United States] were not subsidized by taxpayers, common hamburger meat would cost $35 a pound. You need 25 gallons of water to produce a pound of wheat—2,500 gallons to generate a pound of meat
Simone Spearman, Eating More Veggies Can Help Save Energy, San Francisco Chronicle, June 29, 2001. (Emphasis Added) [Previous link is to a reposted version at Commondreams.org]
This truer cost of $35 per pound is only based on accounting for water. If other costs and effects were factored in, the likely cost would surely be staggering.
Also in the US, healthier foods get less subsidies and are therefore more expensive, explaining partially the increase in excessive meat consumption in recent decades:
us-food-subsidies-vs-nutrition-pyramid.jpg
Image: “Why does a salad cost more than a Big Mac?”, from Health vs. Pork: Congress Debates the Farm Bill, Good Medicine, Physicians Committee for Responsible Medicine, Autumn 2007, Volume XVI, Number 4
Addressing health and environmental costs would appear to put a government at odds with itself! For example,
  • Reducing the subsidies that create unhealthy consumption risks reducing the profits of the agribusiness industries that benefit from the current system, thus reducing their overall GDP and affecting a government’s “growth” target;
  • Improving health standards or increasing health expenditure can be risky politically, either due to claims of “big government” or because governments may not have sufficient resources to do this effectively.
For years many governments have been under pressure to reduce health and other such expenditures. Individuals are typically blamed by industry (unsurprisingly) and sometimes by government for the increase in obesity framing it as mostly an individual choice issue, rarely admitting the distortions caused by decades of government and their own lobbying for such policies that makes the cost of healthy eating more expensive, as shown by the New York Times:
cost-of-healthier-eating.jpg
Image: “The Cost of Healthy Eating”, New York Times via Derek Thompson, This is Why You’re Fat, The Atlantic, July 20, 2009.
As mentioned on the obesity section of this web site, industry also raises the fear of job losses or competition pressures as reasons not to change anything, while also saying that it is individual responsibility regarding diet (knowing they can challenge a threat to their “growth” with advertising, marketing, PR campaigns and government lobbying).
Recent notions to tax individuals when purchasing unhealthy foods, in this context, misses the point; there is already a form of taxation, or government intervention that creates and encourages an unhealthy outcome with distorted prices, which all individuals already pay for.
Addressing that imbalance means individuals can not only avoid paying additional taxes for unhealthy foods, but their choices are likely to be governed by better information and prices — information and price signals that markets would take into account in a more balanced way if those harmful subsidies are not there. Or, if governments have the courage, they could remove existing subsidies but direct some (or all, or more?) in a way that encourages healthier choices and behavior.
The environment may benefit from agriculture policies that are less intensive and livestock oriented. Additional benefits may include reduced health burdens and expenditure — which governments are already being pressured on — as well as allowing health services to concentrate on other important issues.
This may be an example where economic measurement of “growth” and GNP may not necessarily reflect actual aims and health of society.
Industrialized Meat Production: Shortcuts Create More Health And Environmental Problems
Schlosser, quoted above on the gruesome details of what cattle are fed, details the impacts that contaminated meat has on people’s healths, the social costs, and so on. He also gives a hint to what could be considered a costly way to deal with this all:
Instead of focusing on the primary causes of meat contamination—the feed being given to cattle, the overcrowding at feedlots, the poor sanitation at slaughterhouses, excessive line speeds, poorly trained workers, the lack of stringent government oversight—the meatpacking industry and the USDA are now advocating an exotic technological solution to the problem of foodborne pathogens. They want to irradiate the nation’s meat.
… The American Medical Association and the World Health Organization have declared that irradiated foods are safe to eat [but introduction has been] impeded, however, by a reluctance among consumers to eat things that have been exposed to radiation. … The Beef Industry Food Safety Council—whose members include the meatpacking and fast food giants—has asked the USDA to change its rules [on having a special radiation label] and make the labeling of irradiated meat completely voluntary. The meatpacking industry is also working hard to get rid of the word 'irradiation,' much preferring the phrase 'cold pasteurization.'
Steven Bjerklie, the former editor of Meat & Poultry .. thinks it will reduce pressure on the meatpacking industry to make fundamental and necessary changes in their production methods, allowing unsanitary practices to continue. “I don’t want to be served irradiated feces along with my meat,” Bjerklie says.
Eric Schossler, Fast Food Nation; The Dark Side of the All-American Meal, (Houghton Mifflin Company, 2001), pp. 217—218
Hence without addressing some of the root causes of a lot of public health problems, more resources are spent dealing with the impacts of outbreaks of things like E. Coli and other pathogens. Nationwide recalls of meat products can also affect those who sell and distribute, and require use of more resources. Children and adults can suffer terribly, even die from such poisoning, to which no financial cost can be attributable. While radiation may be a good fix, the additional problems of wasteful use of resources, etc cannot be treated.
And it isn’t just beef, but industrial agriculture in general which shows this pattern of externalized costs, as summarized by the following:
The powerful myth that industrial food is cheap and affordable only survives because all of these environmental, health, and social costs are not added to the price of industrial food. When we calculate the real price, it is clear that far from being cheap, our current food production system is imposing staggering monetary burdens on us and future generations.
The Editors, Fatal Harvest, Myth three: Industrial food is cheap, AlterNet.org, September 5, 2002
The British newspaper, The Guardian also reveals the extent to which companies will exert influence and political power:
The food industry has infiltrated the World Health Organisation, just as the tobacco industry did, and succeeded in exerting “undue influence” over policies intended to safeguard public health by limiting the amount of fat, sugar and salt we consume, according to a confidential report obtained by the Guardian.
The report, by an independent consultant to the WHO, finds that:
  • food companies attempted to place scientists favourable to their views on WHO and Food and Agricultural Organisation (FAO) committees
  • they financially supported non-governmental organisations which were invited to formal discussions on key issues with the UN agencies
  • they financed research and policy groups that supported their views
  • they financed individuals who would promote “anti-regulation ideology” to the public, for instance in newspaper articles.
“The easy movement of experts—toxicologists in particular—between private firms, universities, tobacco and food industries and international agencies creates the conditions for conflict of interest,” says the report by Norbert Hirschhorn, a Connecticut-based public health academic who searched archives set up during litigation in the US for references to food companies owned or linked to the tobacco industry.
He finds that there is reasonable suspicion that undue influence was exerted “on specific WHO/FAO food policies dealing with dietary guidelines, pesticide use, additives, trans-fatty acids and sugar.”
Sarah Boseley, WHO ‘infiltrated by food industry’, The Guardian, January 9, 2003
This does indeed happen in perhaps all industries, whereby those in a position to wield their influence and power will understandably try to do so.
And with fatty foods more generally, the issues involved are numerous, more than just health issues, but matters of politics, economics, and culture, and how our tastes are influenced and shaped over time:
Many issues are bundled in the politics of fat: government responsibility versus individual responsibility; free enterprise versus government regulation; industrial profit versus public health. A fair debate is made more difficult because the media, influenced by the enormous revenue from fast food corporations, typically treat the issue in a derisory fashion: It’s all about greedy lawyers, a sue-happy culture and irresponsible consumers. Yet there is more to the fat issue than is suggested by these pre-digested media reductions….
But food preferences are so personal and so emotionally charged that they are highly resistant to rational arguments about change. Dietary choices are developed from early childhood through cultural, regional, ethnic, familial and commercial influences….
The balance of influences on our dietary choices has changed dramatically over the last two centuries.… The invention of the automobile, the development of superhighways and urbanization helped to spread fast food franchises, supermarkets, and convenience foods. Regional, cultural, ethnic and familial influences on diet faded as all regional and ethnic preferences were homogenized by the universal presence of fast food franchises. Modern children’s food preferences are more powerfully influenced by television advertising than by familial or regional influences. Moreover, modern parents, who were raised on television, supermarket shopping, and convenience foods pass on to their children the food preferences that they developed under these commercial influences. Eating cereal for breakfast, for example, is a manufactured food tradition created by industry and the media….
The opponents of lawsuits against the fast food industry argue that “everyone knows” that McDonalds and Burger King sell high-fat foods and that those who eat these foods do so by their own free choice. Yet, knowledge alone is not enough to combat the power of life-long exposure to the media and to the omnipresence of fast food franchises and convenience foods. Partially hydrogenated oils have been used in American food manufacture since the 1920s—time for several generations of Americans to incorporate trans fats into their everyday diet and to normalize the consumption of hundreds of foods containing trans fats. Precisely because food preferences are formed over time and are deeply ingrained in our lifestyle, it is difficult for people to change their dietary habits, even when it is revealed that some ingredients in these foods are unhealthy or dangerous.
What is really at stake in the politics of fat is the extent to which government should restrict corporate and media influences on the American diet. There is no choice for consumers when every street corner and highway is crowded with fast food franchises and no healthy alternatives are available. There is no possibility of informed consumer decisions, when saturation advertising entirely overwhelms the cautionary messages of doctors and health professionals.
Only the food manufacturers have the resources and the media access to balance their own marketing and distribution power with cautionary labels and informational campaigns. Only economic pressure can force food manufacturers to eliminate their use of trans fats and other dangerous ingredients, especially in foods that are aggressively marketed to children.
Michael Stephens, The Politics of Fat, Alternet.org, July 8, 2003
Playing on the theme of the hit film, The Matrix, the Meatrix web site includes an animation describing how agribusiness in general, not just for beef, has led to
  • Animal cruelty from factory farming
  • Antibiotic resistant germs by feeding excessive antibiotics to animals keeping them alive from disease and other effects of cruel conditions animals are forced to live in
  • Massive pollution (including runoffs from excrement and other wastes into nearby waters, affecting local communities)
  • Destroyed communities who suffer health effects, or, as small farmers, lose out:
Beef and the related industries therefore, provides a vivid example of how our tastes are influenced, as well as giving an indication of the enormous input and “output” costs that are associated with it, while the reasons for those who are so influential in this area are typically in making a profit.
In short then, this is another example of wasted wealth, by wasted capital, wasted labor and wasted resources.
The outlook for industrial agriculture isn’t rosy. When the food system is merely working normally, it is centrally responsible for climate change, ecosystem degradation and fatal levels of pollution. When it goes wrong, it incubates new and lethal diseases in Petri dishes of animal feedlots.…. And this doesn't begin to cover the human, let alone animal, harm caused in the food system through low wages, exploitation and even slavery.
Raj Patel, Stuffed and Starved; Markets, Power and the Hidden Battle for the World’s Food System, Portobello Books, 2007, p.300
As with sugar, beef related industries and its consumption at high levels has had enormous “external” costs which are usually borne by others, sometimes without realizing. We now turn to yet another example of such enormous costs, but also goes further in that it creates entire economically dependent countries and regions, which means that their poverty or prosperity, or just their own economic destiny, is often largely beyond their control. That example is of the banana industry, which is on the next page.
Notes On Stats:
  1. Lester Brown, Michael Renner, Brian Halweil Vital Signs 2000, (World Watch Institute) p. 34; Frances Lappe Moore, Joseph Collins, Peter Rosset, World Hunger: 12 Myths, (Food First and Grove Press, Second Edition, 1998) pp.8, 180; Richard Robbins Global Problems and the Culture of Capitalism (Allyn and Bacon, 1999), p. 220
  2. Vital Signs, p.34
  3. See for example:
    • United Nations Food And Agriculture Organization statistics database on live animal numbers, last accessed March 21, 2010. These numbers have been reasonably consistent in the past 2 decades, only very slightly increasing, generally.
    • Devinder Sharma also highlights an interesting point that, “Around 1.5 billion marginal farmers in the developing world live in virtual penury” and yet, “cattle in the industrialised world are reared in luxury, with a cow in the developed world receiving subsidies that amount to almost twice the annual income of an average Third World farmer.” For years, many in the Third World have argued that the North heavily subsidizes and protects it agricultural industry while at the same time telling the poor to liberalize, which has resulted in poverty due to pushing down commoditiy prices and due to lack of market access for the poor. (Above link is from “Western cow vs Southern farmer: The absurdity of inequality”, InfoChangeIndia.org, April 2002)
    • Also see What Price Beef? by Marguerite Hampton, with a list of many, many stats, including statistics on how much land, water, energy and so on is required to support cattle, and the various effects.
  4. Robbins, p.220; Vandana Shiva, Stolen Harvest (South End Press, 2000), pp. 70-71.
  5. Ibid Robbins, p.220
  6. Ibid