Wall Street Grain Hoarding Brings Farmers, Consumers Near Ruin

April 28 (Bloomberg) — As farmers confront mounting costs and riots erupt from Haiti to Egypt over food, Garry Niemeyer is paying the price for Wall Street’s speculation in grain markets.

Commodity-index funds control a record 4.51 billion bushels of corn, wheat and soybeans through Chicago Board of Trade futures, equal to half the amount held in U.S. silos on March 1. The holdings jumped 29 percent in the past year as investors bought grain contracts seeking better returns than stocks or bonds. The buying sent crop prices and volatility to records and boosted the cost for growers and processors to manage risk.

Niemeyer, who farms 2,200 acres in Auburn, Illinois, won’t use futures to protect the value of the crop he will harvest in October. With corn at $5.9075 a bushel, up from $3.88 last year, he says the contracts are too costly and risky. Investors want corn so much that last month they paid 55 cents a bushel more than grain handlers, the biggest premium since 1999.

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Spain’s worst drought for a generation leaves water and comradeship in short supply

Llosa del cavall reservoir in Sant Llorencs de Morunys, north of Solsona

Spain is suffering its worst drought in more than four decades, pitting the country’s regions against each other in a fierce battle over water resources.

There has been 40 per cent less rain than usual since October 1 across the nation as a whole, according to the Meteorology Institute, although in some regions the impact has been far worse. Mediterranean regions such as Catalonia and Valencia have been the worst affected – they have had less rain than at any time since 1912.

Farmers in Catalonia fear they could lose their crops altogether if it does not rain in coming weeks, and Britons with homes on the coast could soon face restrictions on water.

The situation in Barcelona – Catalonia’s capital and top tourist draw – could soon become critical. Water reserves there are at 19 per cent of capacity – they must be shut down when they reach 15 per cent because there is too much sediment near the bottom. José Montilla, president of Catalonia, said: “We must prepare for the worst.”

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Analyst Predicts Corn Rationing in 2008

NEW YORK – A BB&T Capital Markets analyst said Monday corn rationing may be necessary this year, following a U.S. Department of Agriculture report predicting farmers would plant far fewer acres of corn in 2008.

According to the March Prospective Plantings Report, farmers intend to plant about 86 million acres of corn this year, down 8 percent from 2007, when the amount of corn planted was the highest since World War II.

Analyst Heather L. Jones said in a note to investors if the USDA estimate proves accurate, the year may produce just 200 million bushels of corn. That, she said, wouldn’t be enough to meet demand, given current export and feed demand trends and higher ethanol demand. Both ethanol and animal feed are made with corn.

“That is an untenable inventory demand, in our opinion,” she said. “Consequently, we believe demand must be rationed or there needs to be a big supply response from other growing regions of the world.”

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From Seeds of Suicide to Seeds of Hope: Navdanya’s Intervention to Stop Farmers’ Suicides in Vidharbha

The increasing costs of production and the falling farm prices that go hand in hand with globalisation and corporate hijack of seed supply, combined with the decline in farm credit is putting an unbearable debt burden on farmers. The lure of huge profits linked with clever advertising strategies evolved by the seeds and chemical industries are forcing farmers into a chemical treadmill and a debt trap. It has been witnessed that across the country, farmers are taking the desperate step of ending their life. The pesticides, which had created debt, also became the source of ending indebted lives. More than 150,000 farmers have committed suicide in India due to distortions introduced in agriculture as a result of trade liberalisation. More than 20,000 farmers have committed suicide in Andhra Pradesh alone.

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Already we have riots, hoarding, panic: the sign of things to come?

The spectre of food shortages is casting a shadow across the globe, causing riots in Africa, consumer protests in Europe and panic in food-importing countries. In a world of increasing affluence, the hoarding of rice and wheat has begun. The President of the Philippines made an unprecedented call last week to the Vietnamese Prime Minister, requesting that he promise to supply a quantity of rice.

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My Forbidden Fruits (and Vegetables)

IF you’ve stood in line at a farmers’ market recently, you know that the local food movement is thriving, to the point that small farmers are having a tough time keeping up with the demand.But consumers who would like to be able to buy local fruits and vegetables not just at farmers’ markets, but also in the produce aisle of their supermarket, will be dismayed to learn that the federal government works deliberately and forcefully to prevent the local food movement from expanding. And the barriers that the United States Department of Agriculture has put in place will be extended when the farm bill that House and Senate negotiators are working on now goes into effect.

As a small organic vegetable producer in southern Minnesota, I know this because my efforts to expand production to meet regional demand have been severely hampered by the Agriculture Department’s commodity farm program. As I’ve looked into the politics behind those restrictions, I’ve come to understand that this is precisely the outcome that the program’s backers in California and Florida have in mind: they want to snuff out the local competition before it even gets started.

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