Food for thought

An interesting statistic;

Today, roughly 7 percent of the planet’s arable land is either owned by the Russian state or by collective farms, but about a sixth of all that agricultural land — some 35 million hectares — lies fallow.

and an unsurprising consequence;

The average Russian grain yield is 1.85 tons a hectare — compared with 6.36 tons a hectare in the United States and 3.04 in Canada.

Care of this New York Times article.

A decade after capitalism transformed Russian industry, an agricultural revolution is stirring the countryside, shaking up village life and sweeping aside the collective farms that resisted earlier reform efforts and remain the dominant form of agriculture.

14 thoughts on “Food for thought

  1. So long as raw food prices increased by 77% and Russian personal income taxes remain wonderfully low at 15%, investment flows toward Russian agriculture. Sounds like another success story for capitalism; those new Russian farms will be producing food long after all of the oil wells have run dry.

  2. The sovereign risk is enormous. The Russians are the world’s worst at fucking up. There’s a very high chance they’ll nationalise, regulate or otherwise screw it up.

    In fact Russia is at a crossroads right now. It could end up like Argentina, just one fuck-up after another, or more prosperous than Canada and Australia. Judging by the Georgia episode, I’d say Argentina beckons.

  3. The newspapers today talk about parts of Ossetia becoming part of Russia. Reads more like the New Russian Empire. I’m just glad they don’t have a navy! (Well, not one that travels around the world.)

  4. “…those new Russian farms will be producing food long after all of the oil wells have run dry”, “Using solar powered tractors I presume”.

    Actually, that’s not as ridiculous as it looks. In a generalised sense, that is just precisely what draught animals already are; and also, farms are one of the few areas where IC engines run off gas producers make sense (using otherwise waste material with low energy content). Of course, while fossil fuels are available, using them makes for higher net gain measured in terms of agricultural output, what with less need to produce and gather fuel and to set aside some final output production for nitrogen fixing plants.

  5. Interesting question, I suppose coming from the literature on Asian economic development re: import subsititution leading to the accumulation of capital unsuited for the local environment:

    How many farms in Australia for example use too much expensive capital machinery due to subsidies?

    Maybe we’ve subsidised farms into technical inefficiency, low yields and away from holistic farming and efficient energy conversions?

  6. Saw a program on Four Corners last night. They were worried that Woolworths and Coles were too predatory in their pricing, and their suppliers might be getting the thin end of the wedge.
    In some ways it was true- he who has hefty market share can throw his weight around. So I suppose the farmers should get together and start up a single desk, or a growers’ co-operative.
    After all, despite the program seeming to blame capitalism for all the wrongs on the land, Capitalism never promises Paradise, only the freedom to pursue happiness.

  7. Capitalism never promises Paradise, only the freedom to pursue happiness.

    True. However, the ‘benevolent world’ argument tends to go down the path that a being of reason can do pretty well in a causal world. Perhaps not ‘paradise’, whatever that is, but a pretty good deal nonetheless.

  8. Benevolent world Mick. I like what Chomsky once quipped: he could make a better argument for “malignant design” than “intelligent design”.

  9. Maybe we’ve subsidised farms into technical inefficiency, low yields and away from holistic farming and efficient energy conversions?

    I’d like to know what these farm subsidies are. I work in agribusiness and I’m not aware of anything beyond a bit of R&D matching funding. We are not at all comparable to the EU or USA.

  10. I like what Chomsky once quipped: he could make a better argument for “malignant design” than “intelligent design”.

    Reminds me of the time someone on this site or Catallaxy said something like:

    No, I actually believe there is a God, and he’s a malicious, conniving, greedy, sadistic little fuck!

    But I have to disagree. For the vast, vast majority of people all you need is the courage to make a go of it, and you can find happiness.

  11. Probably two concerns really in Australia:

    1. The wrong stuff being grown.

    2. Non going concerns being propped up.

    I do think technical inefficiency like I described probably does happen in the US and EU. Pollution in the sugar belt might be a sign of excessive technical inputs.

    What does Russia’s credit subsidies and ag protectionism look like?

  12. The wrong stuff being grown.

    Market forces soon sort that out.

    Non going concerns being propped up.

    I’d like to know how. Drought relief is the only propping up I’m aware of. It’s a fairly limited prop.

    Pollution in the sugar belt might be a sign of excessive technical inputs.

    Are you suggesting sugar farmers spend more money than necessary on fertilisers or herbicides? I doubt it, but even if they were to, whose money is it?

    What does Russia’s credit subsidies and ag protectionism look like?

    I’m not aware of any subsidies. Their main flaw is protectionism due to food security concerns. There’s quite a lot of that around. eg Japan, South Korea. They won’t allow exports unless it is surplus to domestic requirements, and won’t allow imports if it threatens the “viability” of domestic production.

    Australia has a bit of protectionism based on paranoid biosecurity standards, but it’s mild by comparison and subject to WTO review.

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