Herd on the street

Kevin Clarke| comments | Print this pagePrint | Email this pageShare
blog

An online investment board hosts a lively chat among a gaggle of eager Wall Street wannabes who cheer and jeer each other through to a near consensus on a winning strategy. Nothing unusual about that. It's the nature of their specific strategy that's worth at least one Mr. Spock eye-brow raise. The fellas are trying to decide how best to position themselves to profit from the coming future of food scarcity and hunger calamity.

Their investment model is pretty simple: the Green Revolution, that vast worldwide experiment in high input, chemical reliant farming which was launched in the United States beginning in the 1940s before infecting development strategies around the world, is running its course. Yields are not increasing; the soil is exhausted, propped up by fertilizers and other expensive chemical inputs that have pushed the fields of our Lord into the era of diminishing agricultural returns.

Neither, of course, is the main resource in farming, arable land, ever likely to increase as urban sprawl continues to claim land that could have been used for food production. Finally throw in an increasing global population with a growing taste for the fat-rich Western diet, and you've got all the ingredients necessary for a vast worldwide run on food banks and a concurrent profit opportunity. The impact of "growing fuel"--cornfields earmarked for ethanol for example, instead of grocery shelves--remains unclear but is likely to put further pressures on overall global supply of food as crops are diverted to fuel production.

My online investing clique finds some support for their theory in a recent report from the United Nations Food and Agriculture Organization (FAO). According to the FAO, the ongoing global financial crisis may leave over a billion people hungry every day in 2009 while the overall number of the world's hungry people will rise from 915 million in 2008 to 1.02 billion. The FAO disagrees with my investment advisors only in the ultimate root of the great hunger. It argues that overall poverty engendered by the financial crisis will drive hunger in 2009, not food scarcity and increased demand.

Personally I would hate to ruin this great opportunity for a big stock market payoff, but if these guys are able to find such clarity in their little crystal balls, shouldn't the rest of us figure out a way to cash in on famine futures as well? Of course our payoff would be a little different than the $ signs dancing in these online eyes. We would be seeking to avoid such things as food riots, state meltdowns, widespread hunger, humiliation, suffering, affronts to human dignity, that sort of thing—even if it means losing out a little on a fast ROI.

Perhaps U.S. food policy makers at the USDA and USAID ought to reconsider their subsidy and distribution strategies for the next few years. Maybe bend food production policy a little away from fuel and overall scarcity and toward plenty enough for all. I know it will ruin the chances of my Wall Street friends of making a quick buck on hunger, but I've thought about it a little and I'm pretty sure I can live with that.