Sustainablog

This blog will cover some news items related to Sustainability: Corporate Social Responsibility, Stewardship, Environmental management, etc.

31.3.05

Madagascar's Mining Project Draws Mixed Reaction

FEATURE - Madagascar's Mining Project Draws Mixed Reaction
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MADAGASCAR: March 30, 2005

TAOLAGNARO, Madagascar - As his taxi winds through Taolagnaro's pot-holed
dirt roads, Ebony Tsiong glances from the window at a coastal paradise of
white sands and palm trees.

"It is going to get better here," he says, as the car sweeps past rows of
dilapidated wood-and-thatch huts. "When this mining project gets opened,
it will bring money."
The hoped-for project belongs to Rio Tinto. The world's second largest
diversified miner has a concession in the region to develop a $350 million
ilminite mine with an annual production capacity of 750,000 tonnes of the
pigment used to colour paint, paper, plastics and toothpaste.
This year the company plans to make a final decision about whether to go
ahead.
The mine has for years pitted the company against environmental groups who
say it will wreck an irreplaceable stretch of coastal forest and displace
the communities living around it. But for many Madagascans, it is a chance
to develop the huge Indian Ocean island' most economically deprived
region.
"There will be jobs and they'll bring sponsorship," said Tsiong.
His taxi driver, Anthony, is no less enthusiastic. "They are going to
bring us paved roads", he said. "This will be better for the taxis."

DREAMS OF DEVELOPMENT
For Madagascar's government, keen to find sources of investment on the
island of 17 million, three quarters of whom live on less than a dollar a
day, mining is a key sector.
The World Bank thinks it could bring $400 million a year to the
impoverished island.
Though largely unexplored, mining experts think it has big reserves of
nickel, ilmenite, sapphires, rubies, diamonds, gold and bauxite.
Its three biggest mining projects -- Dynatech's nickel concession in the
east and two big ilmenite deposits owned by Ticor and Rio Tinto in the
south -- each promise to swell government coffers.
"The paradox is that Madagascar, though extremely poor, is rich in raw
materials," World Bank country director James Bond told journalists.
"To have a big, serious company like Rio Tinto extracting that wealth is
very good."
Though the government owns just a 20 percent stake in the project, the
company estimates that $21 million a year will accrue in taxes and
dividends, 70 percent going back into the region.
Besides revenue, the World Bank says construction of a big commercial port
to transport the ilmenite will connect the isolated region to the global
economy.
"(Taolagnaro) is remote and the roads are bad," said Bond. "A port will
allow it to be provisioned with things like rice and petrol, which are
expensive because of transport."
Rio Tinto is negotiating with the government to pay some of the costs
because of this.
Critics say the benefits of the project are unlikely to outweigh the
costs, social and environmental.
They doubt whether an international port will be much use in a region
that, with the exception of a few sisal plantations, doesn't export
anything.
"Given that the main use of this port will be the export of ilmenite and
Rio Tinto will be making the biggest profits, shouldn't they be paying for
it themselves?" said Ed Matthew, head of corporate responsibility at
Friends of the Earth.
They also say the project will be socially disruptive.
"The mine will bring over 400 foreign workers into a small town,
increasing the risk of HIV," said Yvonne Orengo, who heads the local
charity the Andrew Lees Trust.
"The immigrants will compete with large numbers of unemployed ... causing
great social stress."
Rio Tinto says it will make efforts to mitigate any negative social
effects.
"We have state of the art HIV prevention programmes for all workers on the
site," said Lisa Dean, director of the company's social programme in
Madagascar.

MINING AND ENVIRONMENT
Environmentalists say the mine will involve tearing up hundreds of acres
(hectares) of forest which is home to thousands of species of plant and
animal life found nowhere else.
Responding to critics, Rio Tinto set aside 230 hectares (570 acres) of its
2,000-hectare concession as a conservation zone.
It says the forest is being cut down by locals for firewood at such a rate
that in the next 20-40 years it will all be gone anyway.
"Most of the forest canopy has been degraded. The biodiversity is dying,"
said Manon Vincelette, Rio Tinto's environmental programme officer for
Madagascar.
"Even if there is no mine, the forest will be destroyed. Without us, all
of it will be."
Researchers question the company's view that the forest is disappearing.
"The company's assessment is misleading," Jane Ingram, a researcher at New
York's Columbia University, told Reuters. "They say forest disappears at
86 hectares per year but they extrapolate from just two aerial photographs
-- 1950 and 2000. It's too simplistic."
Ingram said rates of deforestation are too erratic and the factors causing
it too complicated to put the blame all on locals or make predictions
about when the forest will disappear. Research showed some of the biggest
losses coincided with when the company was building roads to get access to
the site, she said.

The Long Emergency -- What's going to happen as we start running out of cheap gas to guzzle?

Illustration by Steve Brodner


The Long Emergency

What's going to happen as we start running out of cheap gas to guzzle?

By JAMES HOWARD KUNSTLER

A few weeks ago, the price of oil ratcheted above fifty-five dollars a
barrel, which is about twenty dollars a barrel more than a year ago. The
next day, the oil story was buried on page six of the New York Times
business section. Apparently, the price of oil is not considered
significant news, even when it goes up five bucks a barrel in the span of
ten days. That same day, the stock market shot up more than a hundred
points because, CNN said, government data showed no signs of inflation.
Note to clueless nation: Call planet Earth.
Carl Jung, one of the fathers of psychology, famously remarked that
"people cannot stand too much reality." What you're about to read may
challenge your assumptions about the kind of world we live in, and
especially the kind of world into which events are propelling us. We are
in for a rough ride through uncharted territory.
It has been very hard for Americans -- lost in dark raptures of nonstop
infotainment, recreational shopping and compulsive motoring -- to make
sense of the gathering forces that will fundamentally alter the terms of
everyday life in our technological society. Even after the terrorist
attacks of 9/11, America is still sleepwalking into the future. I call
this coming time the Long Emergency.
Most immediately we face the end of the cheap-fossil-fuel era. It is no
exaggeration to state that reliable supplies of cheap oil and natural gas
underlie everything we identify as the necessities of modern life -- not
to mention all of its comforts and luxuries: central heating, air
conditioning, cars, airplanes, electric lights, inexpensive clothing,
recorded music, movies, hip-replacement surgery, national defense -- you
name it.
The few Americans who are even aware that there is a gathering
global-energy predicament usually misunderstand the core of the argument.
That argument states that we don't have to run out of oil to start having
severe problems with industrial civilization and its dependent systems. We
only have to slip over the all-time production peak and begin a slide down
the arc of steady depletion.
The term "global oil-production peak" means that a turning point will come
when the world produces the most oil it will ever produce in a given year
and, after that, yearly production will inexorably decline. It is usually
represented graphically in a bell curve. The peak is the top of the curve,
the halfway point of the world's all-time total endowment, meaning half
the world's oil will be left. That seems like a lot of oil, and it is, but
there's a big catch: It's the half that is much more difficult to extract,
far more costly to get, of much poorer quality and located mostly in
places where the people hate us. A substantial amount of it will never be
extracted.
The United States passed its own oil peak -- about 11 million barrels a
day -- in 1970, and since then production has dropped steadily. In 2004 it
ran just above 5 million barrels a day (we get a tad more from natural-gas
condensates). Yet we consume roughly 20 million barrels a day now. That
means we have to import about two-thirds of our oil, and the ratio will
continue to worsen.
The U.S. peak in 1970 brought on a portentous change in geoeconomic power.
Within a few years, foreign producers, chiefly OPEC, were setting the
price of oil, and this in turn led to the oil crises of the 1970s. In
response, frantic development of non-OPEC oil, especially the North Sea
fields of England and Norway, essentially saved the West's ass for about
two decades. Since 1999, these fields have entered depletion. Meanwhile,
worldwide discovery of new oil has steadily declined to insignificant
levels in 2003 and 2004.
Some "cornucopians" claim that the Earth has something like a creamy
nougat center of "abiotic" oil that will naturally replenish the great oil
fields of the world. The facts speak differently. There has been no
replacement whatsoever of oil already extracted from the fields of America
or any other place.
Now we are faced with the global oil-production peak. The best estimates
of when this will actually happen have been somewhere between now and
2010. In 2004, however, after demand from burgeoning China and India shot
up, and revelations that Shell Oil wildly misstated its reserves, and
Saudi Arabia proved incapable of goosing up its production despite
promises to do so, the most knowledgeable experts revised their
predictions and now concur that 2005 is apt to be the year of all-time
global peak production.
It will change everything about how we live.
To aggravate matters, American natural-gas production is also declining,
at five percent a year, despite frenetic new drilling, and with the
potential of much steeper declines ahead. Because of the oil crises of the
1970s, the nuclear-plant disasters at Three Mile Island and Chernobyl and
the acid-rain problem, the U.S. chose to make gas its first choice for
electric-power generation. The result was that just about every power
plant built after 1980 has to run on gas. Half the homes in America are
heated with gas. To further complicate matters, gas isn't easy to import.
Here in North America, it is distributed through a vast pipeline network.
Gas imported from overseas would have to be compressed at minus-260
degrees Fahrenheit in pressurized tanker ships and unloaded (re-gasified)
at special terminals, of which few exist in America. Moreover, the first
attempts to site new terminals have met furious opposition because they
are such ripe targets for terrorism.
Some other things about the global energy predicament are poorly
understood by the public and even our leaders. This is going to be a
permanent energy crisis, and these energy problems will synergize with the
disruptions of climate change, epidemic disease and population overshoot
to produce higher orders of trouble.
We will have to accommodate ourselves to fundamentally changed conditions.
No combination of alternative fuels will allow us to run American life the
way we have been used to running it, or even a substantial fraction of it.
The wonders of steady technological progress achieved through the reign of
cheap oil have lulled us into a kind of Jiminy Cricket syndrome, leading
many Americans to believe that anything we wish for hard enough will come
true. These days, even people who ought to know better are wishing
ardently for a seamless transition from fossil fuels to their putative
replacements.
The widely touted "hydrogen economy" is a particularly cruel hoax. We are
not going to replace the U.S. automobile and truck fleet with vehicles run
on fuel cells. For one thing, the current generation of fuel cells is
largely designed to run on hydrogen obtained from natural gas. The other
way to get hydrogen in the quantities wished for would be electrolysis of
water using power from hundreds of nuclear plants. Apart from the dim
prospect of our building that many nuclear plants soon enough, there are
also numerous severe problems with hydrogen's nature as an element that
present forbidding obstacles to its use as a replacement for oil and gas,
especially in storage and transport.
Wishful notions about rescuing our way of life with "renewables" are also
unrealistic. Solar-electric systems and wind turbines face not only the
enormous problem of scale but the fact that the components require
substantial amounts of energy to manufacture and the probability that they
can't be manufactured at all without the underlying support platform of a
fossil-fuel economy. We will surely use solar and wind technology to
generate some electricity for a period ahead but probably at a very local
and small scale.
Virtually all "biomass" schemes for using plants to create liquid fuels
cannot be scaled up to even a fraction of the level at which things are
currently run. What's more, these schemes are predicated on using oil and
gas "inputs" (fertilizers, weed-killers) to grow the biomass crops that
would be converted into ethanol or bio-diesel fuels. This is a net energy
loser -- you might as well just burn the inputs and not bother with the
biomass products. Proposals to distill trash and waste into oil by means
of thermal depolymerization depend on the huge waste stream produced by a
cheap oil and gas economy in the first place.
Coal is far less versatile than oil and gas, extant in less abundant
supplies than many people assume and fraught with huge ecological
drawbacks -- as a contributor to greenhouse "global warming" gases and
many health and toxicity issues ranging from widespread mercury poisoning
to acid rain. You can make synthetic oil from coal, but the only time this
was tried on a large scale was by the Nazis under wartime conditions,
using impressive amounts of slave labor.
If we wish to keep the lights on in America after 2020, we may indeed have
to resort to nuclear power, with all its practical problems and
eco-conundrums. Under optimal conditions, it could take ten years to get a
new generation of nuclear power plants into operation, and the price may
be beyond our means. Uranium is also a resource in finite supply. We are
no closer to the more difficult project of atomic fusion, by the way, than
we were in the 1970s.
The upshot of all this is that we are entering a historical period of
potentially great instability, turbulence and hardship. Obviously,
geopolitical maneuvering around the world's richest energy regions has
already led to war and promises more international military conflict.
Since the Middle East contains two-thirds of the world's remaining oil
supplies, the U.S. has attempted desperately to stabilize the region by,
in effect, opening a big police station in Iraq. The intent was not just
to secure Iraq's oil but to modify and influence the behavior of
neighboring states around the Persian Gulf, especially Iran and Saudi
Arabia. The results have been far from entirely positive, and our future
prospects in that part of the world are not something we can feel
altogether confident about.
And then there is the issue of China, which, in 2004, became the world's
second-greatest consumer of oil, surpassing Japan. China's surging
industrial growth has made it increasingly dependent on the imports we are
counting on. If China wanted to, it could easily walk into some of these
places -- the Middle East, former Soviet republics in central Asia -- and
extend its hegemony by force. Is America prepared to contest for this oil
in an Asian land war with the Chinese army? I doubt it. Nor can the U.S.
military occupy regions of the Eastern Hemisphere indefinitely, or hope to
secure either the terrain or the oil infrastructure of one distant,
unfriendly country after another. A likely scenario is that the U.S. could
exhaust and bankrupt itself trying to do this, and be forced to withdraw
back into our own hemisphere, having lost access to most of the world's
remaining oil in the process.
We know that our national leaders are hardly uninformed about this
predicament. President George W. Bush has been briefed on the dangers of
the oil-peak situation as long ago as before the 2000 election and
repeatedly since then. In March, the Department of Energy released a
report that officially acknowledges for the first time that peak oil is
for real and states plainly that "the world has never faced a problem like
this. Without massive mitigation more than a decade before the fact, the
problem will be pervasive and will not be temporary."
Most of all, the Long Emergency will require us to make other arrangements
for the way we live in the United States. America is in a special
predicament due to a set of unfortunate choices we made as a society in
the twentieth century. Perhaps the worst was to let our towns and cities
rot away and to replace them with suburbia, which had the additional side
effect of trashing a lot of the best farmland in America. Suburbia will
come to be regarded as the greatest misallocation of resources in the
history of the world. It has a tragic destiny. The psychology of previous
investment suggests that we will defend our drive-in utopia long after it
has become a terrible liability.
Before long, the suburbs will fail us in practical terms. We made the
ongoing development of housing subdivisions, highway strips, fried-food
shacks and shopping malls the basis of our economy, and when we have to
stop making more of those things, the bottom will fall out.
The circumstances of the Long Emergency will require us to downscale and
re-scale virtually everything we do and how we do it, from the kind of
communities we physically inhabit to the way we grow our food to the way
we work and trade the products of our work. Our lives will become
profoundly and intensely local. Daily life will be far less about mobility
and much more about staying where you are. Anything organized on the large
scale, whether it is government or a corporate business enterprise such as
Wal-Mart, will wither as the cheap energy props that support bigness fall
away. The turbulence of the Long Emergency will produce a lot of economic
losers, and many of these will be members of an angry and aggrieved former
middle class.
Food production is going to be an enormous problem in the Long Emergency.
As industrial agriculture fails due to a scarcity of oil- and gas-based
inputs, we will certainly have to grow more of our food closer to where we
live, and do it on a smaller scale. The American economy of the
mid-twenty-first century may actually center on agriculture, not
information, not high tech, not "services" like real estate sales or
hawking cheeseburgers to tourists. Farming. This is no doubt a startling,
radical idea, and it raises extremely difficult questions about the
reallocation of land and the nature of work. The relentless subdividing of
land in the late twentieth century has destroyed the contiguity and
integrity of the rural landscape in most places. The process of
readjustment is apt to be disorderly and improvisational. Food production
will necessarily be much more labor-intensive than it has been for
decades. We can anticipate the re-formation of a native-born American
farm-laboring class. It will be composed largely of the aforementioned
economic losers who had to relinquish their grip on the American dream.
These masses of disentitled people may enter into quasi-feudal social
relations with those who own land in exchange for food and physical
security. But their sense of grievance will remain fresh, and if
mistreated they may simply seize that land.
The way that commerce is currently organized in America will not survive
far into the Long Emergency. Wal-Mart's "warehouse on wheels" won't be
such a bargain in a non-cheap-oil economy. The national chain stores'
12,000-mile manufacturing supply lines could easily be interrupted by
military contests over oil and by internal conflict in the nations that
have been supplying us with ultra-cheap manufactured goods, because they,
too, will be struggling with similar issues of energy famine and all the
disorders that go with it.
As these things occur, America will have to make other arrangements for
the manufacture, distribution and sale of ordinary goods. They will
probably be made on a "cottage industry" basis rather than the factory
system we once had, since the scale of available energy will be much lower
-- and we are not going to replay the twentieth century. Tens of thousands
of the common products we enjoy today, from paints to pharmaceuticals, are
made out of oil. They will become increasingly scarce or unavailable. The
selling of things will have to be reorganized at the local scale. It will
have to be based on moving merchandise shorter distances. It is almost
certain to result in higher costs for the things we buy and far fewer
choices.
The automobile will be a diminished presence in our lives, to say the
least. With gasoline in short supply, not to mention tax revenue, our
roads will surely suffer. The interstate highway system is more delicate
than the public realizes. If the "level of service" (as traffic engineers
call it) is not maintained to the highest degree, problems multiply and
escalate quickly. The system does not tolerate partial failure. The
interstates are either in excellent condition, or they quickly fall apart.
America today has a railroad system that the Bulgarians would be ashamed
of. Neither of the two major presidential candidates in 2004 mentioned
railroads, but if we don't refurbish our rail system, then there may be no
long-range travel or transport of goods at all a few decades from now. The
commercial aviation industry, already on its knees financially, is likely
to vanish. The sheer cost of maintaining gigantic airports may not justify
the operation of a much-reduced air-travel fleet. Railroads are far more
energy efficient than cars, trucks or airplanes, and they can be run on
anything from wood to electricity. The rail-bed infrastructure is also far
more economical to maintain than our highway network.
The successful regions in the twenty-first century will be the ones
surrounded by viable farming hinterlands that can reconstitute locally
sustainable economies on an armature of civic cohesion. Small towns and
smaller cities have better prospects than the big cities, which will
probably have to contract substantially. The process will be painful and
tumultuous. In many American cities, such as Cleveland, Detroit and St.
Louis, that process is already well advanced. Others have further to fall.
New York and Chicago face extraordinary difficulties, being oversupplied
with gigantic buildings out of scale with the reality of declining energy
supplies. Their former agricultural hinterlands have long been paved over.
They will be encysted in a surrounding fabric of necrotic suburbia that
will only amplify and reinforce the cities' problems. Still, our cities
occupy important sites. Some kind of urban entities will exist where they
are in the future, but probably not the colossi of twentieth-century
industrialism.
Some regions of the country will do better than others in the Long
Emergency. The Southwest will suffer in proportion to the degree that it
prospered during the cheap-oil blowout of the late twentieth century. I
predict that Sunbelt states like Arizona and Nevada will become
significantly depopulated, since the region will be short of water as well
as gasoline and natural gas. Imagine Phoenix without cheap air
conditioning.
I'm not optimistic about the Southeast, either, for different reasons. I
think it will be subject to substantial levels of violence as the
grievances of the formerly middle class boil over and collide with the
delusions of Pentecostal Christian extremism. The latent encoded behavior
of Southern culture includes an outsized notion of individualism and the
belief that firearms ought to be used in the defense of it. This is a poor
recipe for civic cohesion.
The Mountain States and Great Plains will face an array of problems, from
poor farming potential to water shortages to population loss. The Pacific
Northwest, New England and the Upper Midwest have somewhat better
prospects. I regard them as less likely to fall into lawlessness, anarchy
or despotism and more likely to salvage the bits and pieces of our best
social traditions and keep them in operation at some level.
These are daunting and even dreadful prospects. The Long Emergency is
going to be a tremendous trauma for the human race. We will not believe
that this is happening to us, that 200 years of modernity can be brought
to its knees by a world-wide power shortage. The survivors will have to
cultivate a religion of hope -- that is, a deep and comprehensive belief
that humanity is worth carrying on. If there is any positive side to stark
changes coming our way, it may be in the benefits of close communal
relations, of having to really work intimately (and physically) with our
neighbors, to be part of an enterprise that really matters and to be fully
engaged in meaningful social enactments instead of being merely
entertained to avoid boredom. Years from now, when we hear singing at all,
we will hear ourselves, and we will sing with our whole hearts.
Adapted from The Long Emergency, 2005, by James Howard Kunstler, and
reprinted with permission of the publisher, Grove/Atlantic, Inc.

30.3.05

Mos Food Inc. and Dai Nippon Printing Track Beef with IC Tags

Mos Food Inc. and Dai Nippon Printing Track Beef with IC Tags

Date:
20050111
Category:
Food/Water,Eco-product/Business,System/Law
Player:
Non-manufacturing industry

Japanese
Mos Food Services, Inc. and Dai Nippon Printing Co. announced on November
30, 2004 that they plan to experiment with a food traceability system for
hamburger patties using IC tags. In the verification stage of the
experiment, they will manage shipping records of imported beef hamburger
patties and provide customers with information on where the beef was
produced. The experiment is being carried out at three shops in the Tokyo
metropolitan area for three months starting on December 15, 2004.

IC tags are attached to delivery cases at factories where imported beef is
processed into hamburger patties. To clarify production records, the IC
tags are read, recorded, and stored in the database server at company
headquarters whenever the delivery cases are carried in or out of
warehouses, shipped or delivered. Mos Food Services intends to provide the
information to customers at its hamburger shops by using a blackboard, or
the like.

Mos Food Services is aiming to further promote their policies on secure
and safe food supplies and establish a physical distribution system that
provides stricter traceability to deal with emergencies such as accidental
distribution of unsuitable food supplies. Through this experiment, Mos
intends to test the accuracy of the latest technology in order to attain
better precision in their traceability system, as well as promote research
and development with a view to using IC tags for every type of foodstuff
in future.

Dai Nippon Printing, which supports this system, aims to build its
business opportunities for IC tags, in anticipation of growth in IC tag
use.

Punch-up over handouts: Rich countries are under pressure to end their farm subsidies. Might some poor countries be sorry to see them go?

Punch-up over handouts

Mar 23rd 2005
From The Economist print edition

Rich countries are under pressure to end their farm subsidies. Might some
poor countries be sorry to see them go?



BURKINA FASO, in west Africa, depends on cotton for about 40% of its
merchandise exports. Alas, prices are not always what they might be.
According to the International Cotton Advisory Committee, a body that
advises governments, world prices would have been about 26% higher in the
2001-02 season were it not for the $4 billion in subsidies America
lavished on its cotton growers. Farming upland cotton in the United States
was once about separating lint from seed. Now, it is a convenient method
for parting the American taxpayer from his money.

The pickings may soon become less rich (see article). This month the World
Trade Organisation (WTO) upheld its ruling that such subsidies distorted
trade and breached limits agreed in 1994. Mr Bush's budget for the coming
fiscal year proposes deep cuts in farm subsidies. Furthermore, a promise
to eliminate rich countries' export subsidies (eventually) and to make a
“substantial” cut in other kinds of handouts was vital to reviving the
Doha round of global trade talks last summer. It was also agreed that the
grievances of Burkina Faso and its neighbours should be addressed
“ambitiously, expeditiously and specifically”.

But as the round inches forward, some free-traders are troubled. Jagdish
Bhagwati, an economist at Columbia University and author of a book
defending globalisation, is one of them. Agricultural subsidies are
certainly undesirable, he wrote recently in the Far Eastern Economic
Review. But the claim that removing them will help the poorest countries
is “dangerous nonsense” and a “pernicious” fallacy.

Arvind Panagariya, a colleague of Mr Bhagwati's at Columbia University,
agrees*. His argument rests on a surprising observation: most poor
countries are net importers of agricultural goods. A study in 1999 found
that 33 of the 49 poorest countries import more farm goods than they
export; 45 of them are net importers of food. Subsidies depress the price
of agricultural products on world markets. That hurts rival exporters, as
Burkina Faso can testify. But importers gain.

By the same logic, the repeal of subsidies should benefit exporters but
hurt importers. In a paper published in 2003†, Stephen Tokarick, of the
International Monetary Fund, estimated by how much. He reckoned that, if
OECD countries were to scrap their subsidies (but keep their tariffs),
Brazil and Argentina, both strong agricultural exporters, would gain. But
the rest of Latin America would lose $559m a year (in 1997 dollars). India
would benefit a bit, but the rest of South Asia would be $164m worse off.
Sub-Saharan Africa would lose $420m, while North Africa and the Middle
East would face a cost of $2.9 billion.

The impact on different households within a poor country is another
question. In a recent book‡, William Cline, of the Centre for Global
Development, an American think-tank, points out that poor households tend
to be rural, and rural households tend to sell more food than they eat.
For them, rising farm prices are to be welcomed. It is the urban poor that
should worry—and maybe the rulers of poor and fragile nations, who have
traditionally striven to keep food prices low. Hard-pressed peasants are
less of a threat than disgruntled city folk within a stone's throw of the
presidential palace. An end to OECD farm subsidies, however, would
transfer money from town to countryside.

If such a transfer is to be welcomed, Mr Panagariya asks, why wait for
OECD countries to cut their subsidies? Poor countries could take matters
into their own hands by slapping a countervailing tariff on the subsidised
produce. That would raise the domestic price of food, benefiting rural
households. It would also be a neat way of raising revenue at rich
countries' expense.

Such a tariff would only raise farm prices at home, of course. Mr Cline
thinks most poor countries would benefit from a rise in the relative price
of agricultural goods in the world market. He argues that many poor
countries possess an underlying comparative advantage in farm goods. Yes,
they tend to be net importers of food. But that is deceptive. Thanks to
the large aid flows such countries receive, they tend to be net importers
of everything.

The privilege is mine
Mr Panagariya again demurs. He points out that many poor countries enjoy
privileged access to the sheltered markets of the European Union. Thus
they already enjoy higher prices for their exports than they could expect
to find on the open market.

The sugar producers of Mauritius, for example, sell their produce behind
the EU's steep import barriers at three times the market rate. By some
estimates, the island owes almost 30% of its export earnings to the
preferences the EU bestows upon it. But these privileges are not without
cost. The World Bank reckons that every $1 that a country such as
Mauritius gains from its trade privileges costs the EU and the United
States $6. As an aid programme, it is not terribly efficient.

The paradox of the Doha round is that the members fighting hardest to
retain subsidies, such as the EU, are those with most to gain from
abolition. Poor countries, on the other hand, stand to gain more from cuts
in tariffs. According to Mr Tokarick, the abolition of rich-world tariffs
would yield $12.5 billion for poor countries, with no regional losers. If
they also liberalised their own agricultural trade, they would reap
another $21.4 billion.

America's cotton subsidies deserve to be addressed “ambitiously,
expeditiously and specifically”, as the WTO agreed last summer. But no
less ambition and expedition must also be mustered in the fight against
tariffs.