8 Sep 2011

Food and water for the poor -- not political lies

via MD, GG and MS, I read an interesting interview with the Chairman of Nestle in which he says:
There is no market for how that water is allocated and used. The result is waste, overuse and misuse of the water we have. If we don't do something about that, Mr. Brabeck-Letmathe fears, we will soon run ourselves dry.

[snip]

"If oil becomes scarce," he notes, "the oil price goes up. But if water does, well, we still pump the same amount. It doesn't matter because it doesn't cost. It has no value." He drives this point home by connecting it back to biofuels: "We would never have had a biofuel policy—never," he contends, "if we would have given water any value." It takes, Mr. Brabeck-Letmathe says, "9,100 liters of water to produce one liter of biodiesel. You can only do that because water has no price."

He cites Spain as an example of an agricultural sector in need of adjustment. "The total [output] of the Spanish agricultural system," he says, "is less in value than the subsidies they receive between the Common Agricultural Policy, the subsidies for tax relief, the subsidies for water."  
He makes two important points (that I have made many times on this blog and in my book).

First, political interference has distorted food markets (via artificial stimulation of demand for biofuels and artificial blockages on GMOs), which is bad for farmers and the poor but good for food companies with political connections.

Second, we need better markets for water, to ensure that it goes to highest and best use instead of political cronies with little need to be efficient (let alone care for the environment, human rights, etc.)

Bottom Line: Many politicians in developed and developing countries are hastening our "progress" towards an end of abundance by interfering with market signals that can improve our use of water and extend scarce resources to those who can barely afford food and water. Unfortunately, less political interference implies less theft for cronies, so we need to tackle corruption (= political lobbying) as the root cause of much human suffering.