By Renatto Barbieri and Daniel Bornstein
Renatto Barbieri is the Portfolio Manager of the Galtere Global Agribusiness Fund (Galtere is a financial investment advisory firm based in New York). An agronomist by training, Mr. Barbieri has 20 years’ experience in commodity trading, structuring, financing, investment, and business development.
Daniel Bornstein is a junior at Dartmouth College majoring in anthropology and environmental studies. He has written articles on global food security for Nourishing the Planet, PolicyMic.com, and College News Magazine.
The most recent price report from the UN Food and Agriculture Organization warned of climbing food prices, a worrying reminder of the precarious state of the global food situation. Whenever corn and soybean prices climb in the various exchanges, investors—in the form of finance companies, pension funds, university endowments, trading companies, seed processors, fertilizer and chemical manufacturers—rush to take advantage of perceived bottlenecks in agricultural production in order to extract a monetary gain. Unfortunately, most of them will have contributed to accelerating the destruction of some of our most precious natural resources and the livelihood stability of rural communities all over the world.
Little notice is paid to the fact that over 90% of soybeans are dedicated to animal production and industrial uses, a figure acknowledged by the United Soybean Board, which is charged with maximizing profit opportunities for U.S. farmers. A large amount of corn finds its way into ethanol production, industrial foods and animal feeds.
In response to rising demand for meat in developing countries, Brazil has converted the Cerrado region into massive soybean plantations. The notion that the land is simply being “transformed” is a convenient euphemism for this disaster: continued tree felling, local communities’ displacement, the depletion of water resources, and soil degradation—all for the purpose of export production, not local food consumption. Brazil has become one of the world’s largest users of chemical fertilizer, standing as the world’s second-largest importer of phosphate and potash fertilizers, according to Corn and Soybean Digest. This leaves farmers susceptible to international price volatility and exacts a heavy toll on the environment.
The Brazilian government’s initiative to boost domestic fertilizer production, in response to the price volatility issue, only continues down this unsustainable path and distracts attention from alternative approaches. At the same time, vast sugarcane plantations for ethanol production—touted as an alternative to fossil fuel energy—are not only extending chemical-intensive agriculture, but displacing local food production.