Friday, June 5, 2009

Global cereal production continures to reach unexpected highs - FAO report

Global cereal production continures to reach unexpected highs - FAO report
New York, Jun 4 2009 12:10PM

Following last year’s record-breaking cereal harvest, the 2009 crop is set to be the second highest documented yield, according to a new United Nations Food and Agriculture Organization (<" <" released today.

The world’s cereals output is predicted to be 2,219 million tons in 2009, almost 3 per cent lower than in 2008, and the growth in consumption to slow to 1.3 per cent in 2009-2010, compared to 4 per cent in the previous period.

In its bi-annual “Food Outlook” report, FAO noted that the higher than expected forecast has allowed stocks to be replenished and as a result cushion global food supplies against future market shocks, such as the price hike crisis in 2008.

However, the report cautioned that prices remained high in many developing countries, and the loss of employment, income and other effects of the global economic crisis threatened the poor’s access to food.

The Rome-based agency’s report also predicted that world trade in 2009-2010 in cereals would fall by 4 per cent on last year, with the contraction mostly felt in wheat imports, which could be slashed by 10 million tons due to higher production in several wheat importing countries.

While a drop in prices is expected to save food importing countries as much as $226 billion in 2009 compared to the previous year, the continuing economic downturn could offset much of the benefit, the report warned.

FAO voiced concern over the weakening of the United States dollar and the sharp rebound of energy prices, which could exert upward pressure on international food prices.

But, “barring major crop setbacks, with world staple food stocks at more comfortable levels than in 2008, the food economy looks less vulnerable to those external developments than it was last year,” the report concluded.

In a related development, the head of the UN rural development agency said that “the impact on Africa of the recent food and fuel crisis, and now the unprecedented global economic crisis, has been severe and threatens to undo the continent’s notable economic progress.”

The President of the International Fund for Agricultural Development (<", Kanayo F. Nwanze, <" that by investing in and creating a dynamic smallholder agriculture sector, African Governments can limit the impact of the global financial crisis on poor rural communities.

Some 80 million smallholder farms exist in Africa, supplying around 80 per cent of African agricultural production, noted Mr. Nwanze, ahead of the Joint Annual Meeting of Ministers of Finance and Economy of the African Union (AU) and of the UN Economic Commission for Africa (ECA) on 6-7 June in Cairo.

The theme of this year’s meeting, which Mr. Nwanze is attending, is “Enhancing the effectiveness of fiscal policy for domestic resources mobilization.”

Urban Mass Transit is not a National Problem

Urban Mass Transit is not a National Problem. By Bob Poole, Director of Transportation Studies, Reason Foundation

At a time of unprecedented federal deficits, the idea of expanding the federal government’s spending into what is basically a local issue requires a very high level of justification. The others who have posted on this blog, arguing in favor of federal funding for transit operating costs, have failed to meet that standard.

Merely desiring federal money and having something nice to spend it on is hardly a justification. Not when, according to the Government Accountability Office, “the federal government’s financial condition and fiscal outlook are worse than many may understand. Specifically, the federal budget is on an unsustainable path—raising questions about whether people should assume federal funds will be available to help solve the nation’s current infrastructure challenges.” (GAO-08-763T, May 8, 2008)

Recently-retired Comptroller General David Walker devoted much of his energy in recent years to calling on the nation to rethink the role of the federal government. A sensible rethinking should ask which functions are truly national in scope, such that they serve all Americans and can best be carried out at a national scale. National defense is one such function. The Interstate highway system is another.

The federal government got into surface transportation funding in the 1950s on an interstate-commerce rationale. And indeed, it would have been difficult to build the nationwide Interstate system without the federal funding mechanism of highway user taxes that redistributed funds from high-traffic states to lower-traffic states for that specific purpose. But urban mass transit is a local and sometimes regional function. Its beneficiaries are primarily those who use it and secondarily those in that urban area who receive secondary benefits (such as slightly less traffic congestion and miniscule improvements in air quality). There are no national benefits.

And it’s not as if no other means of transit funding are available. Local transportation sales taxes exist in a growing number of urban areas and are a robust funding mechanism. All of California’s urban counties have such “self-help” taxes, providing a larger share of their budgets than federal transit aid. There is considerable potential in real-estate value capture that very few transit agencies have even attempted to exploit.

There are also perverse incentive effects when cities and their transit agencies can get “free” federal money. In a growing number of cases, when faced with the choice of a very costly light rail project or a far more affordable bus rapid transit (BRT) project, being able to get a large fraction of the cost as a gift from Washington biases the choice toward the more costly alternative. If the cost of the project had to be raised locally, there would be stronger incentives for cost-effectiveness to play a major role in such choices.

Finally, there is the question of whose money it is. Currently, most federal transit funding comes from the transit account of the Highway Trust Fund. In other words, the source of that funding is motorists and trucking companies, paying what are supposed to be user taxes in order to have a high-quality highway system to use. Ever since the 1964 Urban Mass Transit Act, the fraction of highway user taxes that can be diverted to non-highway uses has been steadily increased. Yet study after study in recent years has documented the poor condition of our highways and bridges, and the horrible congestion plaguing urban roadways. Taking an even bigger slice of the pie for urban transit would condemn the vast majority of Americans—for whom cars and trucks are their only viable alternative—to ever-worsening highway hell.

Schwarzenegger Outlines Need for Privatization, Budget Reform in California

Schwarzenegger Outlines Need for Privatization, Budget Reform in California. By Leonard Gilroy
Out of Control Policy Blog, June 2, 2009, 10:02pm


"Spending on prisons has nearly doubled in the last five years. We spend $49,000 per inmate per year; the national average is only $32,000. Now, other states have privately run correctional facilities that operate at half of the cost. Why can't we?

"We must also restructure the relationship between state and local government. We all hear from the local officials about the heavy hand of Sacramento. If we are providing fewer resources we have an obligation to cut most of the strings and mandates and to get out of the way. Right now we are cutting billions of dollars from our schools, so shouldn't we give districts more freedom and flexibility and not tie their hands with strict rules like who is allowed to mow the lawn or fix the roof, or do the plumbing?

"I'm also proposing once again to eliminate and consolidate more than a dozen state departments, boards and commissions. These include the Waste Management Board, the Court Reporters Board, the Department of Boating and Waterways and the Inspection and Maintenance Review Committee and so on.

"There is absolutely no reason to hold onto those redundant boards in the crisis. We should not and I will not, cut a dollar from education or a dollar from health care or a dollar from public safety or a dollar from our state parks without first cutting the Waste Management Board and other boards like it. (Applause) Every dollar that we save from those boards and commissions is a dollar that can help vulnerable citizens.

"I'm also proposing to sell off state property, because Sacramento should not be in the real estate business, especially when we are in a fiscal crisis like this. Now, I know that the money that we receive from this property won't go directly to the general fund; it will pay off debt. But that lowers our debt payment, which then does help the general fund. Everywhere I go I hear stories about families selling off their boats and motorcycles to make ends meet. They have garage sales, they have yard sales. They know that you don't have or keep a boat at the dock when you can't put food on the table.

"All of these proposals I have talked about for years and yet they never got done. I remember in 2004 I talked about blowing up the boxes and consolidating agencies. But now we are here in a crisis. Then we had the revenues go up and we had the economy come back in a big way, so we couldn't get it done. Now we're in a crisis and we are running out of excuses and we have run out of time. And the people have run out of patience. [...]

"Now, I know that Senator Steinberg is talking about reforming and restructuring the relationships between the state and local government and Senator Hollingsworth and the Republicans have some great ideas about performance-based budgeting. And in July, we should receive the bipartisan recommendation from our tax modernization commission. This will be a tremendous opportunity to make our revenues more reliable and less volatile and to help the state avoid the boom and the bust budgets that have brought us here today. Let's all work together on all of those issues and make it happen.

"I don't expect every single one of those reforms to happen within the next 14 days but we can certainly get them done before this party adjourns for summer recess on July 17th."