A giant pool of money flows into global agriculture

As part of its interesting Food Chain series, the New York Times writes Food Is Gold, So Billions Invested in Farming about how investment funds are pouring billions of dollars into agriculture. One investment bank has estimated that investments in agricultural commodities has increased over 3X, from $70 billion at the start of 2006 to $235 billion in April of 2008, with roughly half of this growth being due to appreciation and half to new investment (for more details see Financial Times on agricultural funds and why food prices are rising?). However, money is now moving from investments in commodity futures into actual agricultural infrastructure:

Huge investment funds have already poured hundreds of billions of dollars into booming financial markets for commodities like wheat, corn and soybeans. But a few big private investors are starting to make bolder and longer-term bets that the world’s need for food will greatly increase — by buying farmland, fertilizer, grain elevators and shipping equipment.

Part of the article is reminiscent of the TechnoGarden scenario of the MA, in which rich companies invest in the underdeveloped African agriculture infrastructure. The article states:

Emergent is raising $450 million to $750 million to invest in farmland in sub-Saharan Africa, where it plans to consolidate small plots into more productive holdings and introduce better equipment. Emergent also plans to provide clinics and schools for local labor.

One crop and a source of fuel for farming operations will be jatropha, an oil-seed plant useful for biofuels that is grown in sandy soil unsuitable for food production, Ms. Payne said.

“We are getting strong response from institutional investors — pensions, insurance companies, endowments, some sovereign wealth funds,” she said.

The fund chose Africa because “land values are very, very inexpensive, compared to other agriculture-based economies,” she said. “Its microclimates are enticing, allowing a range of different crops. There’s accessible labor. And there’s good logistics — wide open roads, good truck transport, sea transport.”

However, unlike the TechnoGarden scenario, this investment seems focussed on increasing yields of food and fuel, rather than producing multiple ecosystem services. Consequently, such investments attempts to increase yields by practicing intensive agriculture are likely to lead to negative impacts on other people and ecosystems using water, and potentially leading to local or regional ecological regime shifts (see our paper Gordon et al 2008).

Also, many of these investments are not aimed at increasing agricultural yield on the ground, but hedging against inflation risk, and providing market power for large funds to leverage investments in other financial instruments, such as options, derivatives and other more complicated packages. This coupling of financial markets, to the already coupled food, fuel, and climate systems means that the systemic consequences of these investments are likely to be unexpected and novel.

Resilience Interviews

inteviews: Fikret Berkes (left), Ann Kinzing and Will SteffenKaitlyn Rathwell and others from the Stockholm Resilience Centre interviewed twenty international resilience researcher, including Fikret Berkes, Ann Kinzing and Will Steffen, at Resilience 2008 about key social and ecological aspects of resilience. The interviews are now available online at the Resilience Centre’s website – Welcome to the Resilience school.

Susan Owens
Our knowledge of the global environment increases and governing institutions that works with the environment also changes, but do they match?

What is the most important factor for knowledge transfer between science and policy?

Neil Adger
How can we apply social sciences to the resilience concept?

Arild Underdal
What are multilevel governance systems?
Why use multilevel governance systems?

[links updated Feb 17, 2009]

Resilience to Earthquakes

In response to the high number of school children killed in school collapses in the recent Sichuan earthquake, Andrew Revkin writes in the New York Times about the challenges of enhancing resilience – even when the problem and solution are well understood – in his article A Move to Turn Schools From Earthquake Death Traps Into Havens:

… The main challenge in bolstering resilience to such geophysical shocks, Ms. Wang, Mr. Tucker and many other experts said, is not the structural engineering. There is no mystery to adding and securing iron rods in concrete, securing floors to beams, boosting the resilience of columns, monitoring the size of gravel mixed with cement.

It is not cost, either. In California, Dr. Tucker notes, the premium for building earthquake resistance into new schools is less than 4 percent. The payoff, beyond saved lives, is significantly lower repair costs after a temblor — 10 to 100 times less than in unimproved buildings. (In poorer countries, the differential in cost could be substantially higher, other experts note, but the payoff, they say, is priceless.)

Rich or poor, the big challenge lies in overcoming social and political hurdles that still give priority to pressing daily problems over foreseeable disasters that may not occur for decades, scores of years, or longer. In some developing countries there is a tendency to ascribe earthquakes and their consequences to fate, but Dr. Tucker and other experts say that lets the authorities off the hook.

“I can’t hold a government responsible for protecting its citizens against a meteorite falling out of the sky,” Dr. Tucker said. “But I can and do hold a government in a country with known seismic risk responsible for protecting its children, who are compelled to attend school, from the school collapsing during an earthquake.”

Dr. Tucker has written or co-written a lengthening string of reports pointing to the building risks worldwide as more populations shift to urban areas, often into shoddy, hastily built structures, with children sent to schools in similar, and often worse, condition.

Arthur Lerner-Lam, who maps disaster risks at Columbia University’s Lamont-Doherty Earth Observatory, agrees that urbanization in earthquake zones is setting the world up for its first true megadisaster — a million-casualty earthquake that many seismologists say is only a matter of time. The greatest risk, he said, lies in a belt from Italy and Turkey through central Asia and the Himalayas into central China.

In such regions, Dr. Tucker said, the best blueprints and materials are no guarantee of safety without adequate building codes, laws, training, inspections and enforcement. In regions prone to disasters, Dr. Tucker emphasizes that safety goes beyond blueprints and materials. It hinges on the presence of stringent building codes, legal frameworks, well-trained inspectors, and their enforcement. Inspection experts from Inspexion.com say that these factors are equally vital in the context of disaster inspection and response, ensuring that structures can withstand extreme forces, experts are equipped to assess damage accurately, and safety measures are rigorously upheld to protect communities in the aftermath of catastrophic events.

The biggest challenge of all may simply be redefining security, and building societies that demand that government investments match risks, said Fouad Bendimerad, an engineering and risk-management consultant in California and chairman of the Earthquakes and Megacities Initiative.

“The typical government spends around 15 percent of its G.D.P. to defend against exterior military threats that may never occur during the lifetime of generation,” Dr. Bendimerad said. “Why do we want to exonerate governments from dedicating a small portion of that 15 percent to protect against the threats of natural hazards that we know will happen?”

Resilience Q&A

People from the Stockholm Resilience Centre and Albaeco interviewed biodiversity, resilience and social-ecological researchers to provide brief answers to a set of Resilience questions. The videos are available on the Centre’s website:

Why is biodiversity important?
Gretchen Daily, professor of biological sciences at Stanford University (USA), answers this topical question.

What is ecological anthropology?
Professor Steve Lansing from the University of Arizona explains the meaning behind ecological anthropology.

What do you think will be the future ‘environmental surprises´?
Will Steffen, professor of the Fenner School of Environment & Society, The Australian National University, answers this question.

What is a regime shift?
Professor Terry Hughes from the Australian Research Council Centre of Excellence for Coral Reef Studies explains what is the meaning behind the term ‘Regime shifts’.

What is a complex systems approach?
Professor Steve Lansing from the University of Arizona explains the meaning behind the complex systems approach.

What is the key limiting factor for human development?
Professor Paul Ehrlich from the American Association for the Advancement of Science and the National Academy of Sciences, explains the key factors that affect human development.

What is a social-ecological system?
Professor Stephen Carpenter from Zoology Department, University of Winsonsin, explains the meaning behind the term social-ecological system.

Absolute poverty in China: Higher, but going down faster than previously estimated

From the Economist:

In December 2007 the World Bank unveiled the results of the biggest exercise in window shopping in history. Scouts in 146 countries scoured stalls, supermarkets and mail-order catalogues, recording the price of more than 1,000 items, from 500-gram packets of durum spaghetti to low-heeled ladies’ shoes.

This vast enterprise enabled the bank to compare the purchasing power of many countries in 2005. It uncovered some statistical surprises. Prices in China, for example, were much higher than earlier estimates had indicated, which meant the Chinese income in 2005 of 18.4 trillion yuan ($2.2 trillion at then-market exchange rates) could buy less than previously thought. At a stroke, the Chinese economy shrank, in real terms, by 40%.

Since then, many scholars have wondered what this economic demotion means for the bank’s global poverty counts. It famously draws the poverty line at “a dollar a day”, or more precisely $1.08 at 1993 purchasing-power parity (PPP). In other words, a person is poor if they consume less than an American spending $1.08 per day in 1993. By this yardstick 969m people suffered from absolute poverty in 2004, a drop of over 270m since 1990. The world owed this progress largely to China, where poverty fell by almost 250m from 1990 to 2004.

…[using a new poverty line of $1.25/day (2005 US$) Shaohua Chen and Martin Ravallion ] find that 204m Chinese people were poor in 2005, about 130m more than previously thought.

That is the bad news. The brighter news is that China’s progress against poverty is no less impressive than previously advertised. By Mr Ravallion’s and Ms Chen’s new standard, the number of poor in China fell by almost 407m from 1990 to 2004, compared with the previous estimate of almost 250m.

Mammals better invaders than birds

Journal Watch Online reports an interesting finding:

According to the “tens rule”, roughly ten percent of introduced species become established and ten percent of those become invasive. Only it doesn’t hold for mammals or birds, according to Jonathan Jeschke’s study, the findings of which are published in Diversity and Distributions.

The Ludwig-Maximilians-University, Munich, researcher found that fifty percent of introduced bird species become established, of which 34 percent become invasive. Mammals are even more successful colonists, with an amazing 79 percent finding a permanent home and 63 percent of those going on to become a pain in the proverbial for conservationists. That makes mammals almost fifty times more effective invaders than the tens rule predicts. How wrong can one be?

Source: Jeschke JM (2008) Across islands and continents, mammals are more successful invaders than birds. Diversity and Distributions DOI: 10.1111/j.1472-4642.2008.00488.x

I wonder what explains this difference between mammals and birds.  Is it something to do with biology or what species people move around?  It would be interesting to see how the patterns vary with body mass.

Another paper by Jeschke is also interesting.  Invasion success of vertebrates in Europe and North America – which showed that there does not seem to be ecological imperialism between vertabrates, and that invasion success is higher than expect.

Radio Feature: Resilience, Adaptation and Transformation in Turbulent Times

Mark Sommer, host and executive producer of A World of Possibilities, interviewed scientists and researchers from around the world at the Resilience 2008 conference last month in Stockholm, Sweden.

The 55 minute long radio show can be heard online and includes interviews with Buzz Holling, Brian Walker, Carl Folke, Charles Redman, Will Steffan and Frances Westley.

Their combined wisdom provides insight into how societies can become resilient in the face of traumatic change and unprecedented transition.

World of Possibilities is an award-winning, nationally and internationally syndicated radio program, that is part of the Mainstream Media Project. The show’s website includes links to other guest interviews that were recorded at the conference.

Brian Walker’s Research Areas for Resilience Science

Brian Walker, the former director of the Resilience Alliance reflected on the future of resilience science in his introductory talk at Resilience 2008. In his talk Probing the boundaries of resilience science and practice, he identified seven important research areas for resilience science:

  1. Test, criticize and revise the propositions about resilience made in Panarchy: Understanding Transformations in Human and Natural Systems and Ecology and Society special issue – Exploring Resilience In Social-Ecological Systems.
  2. Develop models of social-ecological systems that can produce the key aspects of the rich behaviour of the world. In particular these models should be able to produce:
    i) dynamics in which systems cross multiple thresholds,
    ii) produce “backloop” dynamics, and
    iii) incorporate models of adaptive governance that incorporate leadership, trust, ‘shadow’ networks, sleeper links, and poly-centric governance arrangements.
  3. Extend resilience theory from local or regional scales to the global to address questions such as:
    i) Do we need new propositions for global resilience issues?
    ii) Over what ranges of scale can we apply existing theory?, and
    iii) How important are scale-dependent processes?
  4. Resilience theory needs to better understand the consquences of multiple simultaneous shocks, because transformative change seems to be often triggered by two (or more) simultaneous shocks. For example an environmental shock and an economic (or political) shock occurring at the same time.
    Resilience theory needs to understand what coupled or sequential shocks are likely, and how could we go about assessing resilience to them. An example of this is the current food crisis that developed from the coupling of agriculture, energy, and climate issues.
  5. What are the differences between transformational change, adaptability and resilience? Transformability is the capacity to create a fundamentally new system when conditions make the existing system untenable. In much of the world the need is to transform, not to make the existing system regime more resilient. What are the design principles of transformations?
  6. How can we assess the costs and values of resilience? What is the difference between general (broad spectrum resilience to many things) vs. specified resilience (to a few specific things)? How can we conceptualize the danger in ‘optimizing’ for specified resilience? How much should we spend (or forego) to increase resilience?
  7. How can the value of different regimes be assessed? The desirablity of a regime usually depends upon the perspective it is viewed from, and different people have different perspectives. Coping with these perspectives is a challenge. But more fundamentally, this requires not just assessing the value of different ecosystem services, but also understanding the identity of a system, and its ability to maintain itself.
  8. Non-mathematical approaches to resilience. While mathematics is beautiful to some, it is difficult to communicate and in some situations is insufficient. We need to increase our ability to represent resilience in a variety of forms. This presents a challenge to the humanities and arts community. At Resilience 2008 we saw contributions towards this understanding, but there is much more to develop. Can science and the humanities work together to provide the impetus towards a richer, more resilient world?