Climate, Corn, and Cargill

June 24, 2014

Cargill Corporation is not a household name, except for those who may remember that it has been a leading funder for the Prairie Home Companion radio show.

The Ag Giant has politically been a regular supporter of Republican candidates. Now, Cargill’s chairman, Gregory Page, has participated in preparing a new report (titled “Risky Business”) from leading economic and risk modelers on the threat posed by climate change to the global economy.  The report argues that business should anticipate and prepare for climate change as they do for other threats to their business model.

Could it be Mr. Page is looking at some of the sobering information about the agricultural impacts of climate change?

Wall Street Journal:

Among Risky Business’s committee members is Gregory Page, executive chairman of Cargill Inc., the agribusiness giant that mostly donates to Republicans.

In an interview, Mr. Page said he agreed to serve on the Risky Business committee because the group isn’t focusing on potential solutions, which sharply divide Americans in general and could split this group in particular.

“It’s the effort of very good scientists to assess potential impacts and a range of outcomes,” he said.

The independent assessment of the risks to the U.S. economy was conducted by the Rhodium Group, an economic research firm that analyzes disruptive global trends, and Risk Management Solutions, the world’s largest catastrophe-modeling company for reinsurance and investment management firms.

To estimate the time frames and possible costs, the two companies used recent advances in climate modeling, econometric research and private-sector risk assessment looking at regions of the country, organized loosely around shared geologic characteristics and climate impacts. In some areas, they broke down data by counties.

Some lawmakers remain skeptical that climate change will have such a severe impact and others say any potential solutions are too expensive.

The U.S. Chamber of Commerce and a number of energy companies are fighting new carbon-emissions limits that will affect coal-fired power plants. They say the regulations from the Environmental Protection Agency will lead to job losses, impose heavy costs on the utilities industry and raise electricity prices.

Mr. Page said he understands some of the disagreement over climate change, but that in the agricultural sector, the threat of long-term weather-pattern changes cannot be ignored. Risky Business’s methodology produced a lot of useful, detailed data, he said, but didn’t promote one solution or political agenda—one of the reasons he and Cargill participated in the project, he added.

Guardian:

The days of “king corn” could be numbered as climate change brings higher temperatures and water shortages to America’s farmland, a new report warned on Wednesday.

Nearly one-third of US farmland is devoted to raising corn and the country produces about 40% of the world’s corn crop. But the $1.7tn (£1tn) industry – the equivalent of Australia’s GDP – is under threat from water shortages, heatwaves and unpredictable rainfall caused by climate change.

“Corn is an essential input to our economy, and climate change, water scarcity and pollution are a critical threat to that sector going forward,” said Brooke Barton, director of the water programme at the Ceres green investor network and author of the report.

The report goes on to urge farmers and food producers to work together to reduce those climate-related risks and the environmental costs of growing corn.

Recent studies have found corn at high risk from the higher temperatures, changing rainfall patterns, and water shortages caused by climate change.

Corn plants are especially sensitive to heatwaves and drought. A report in Science last month found that growers were having more trouble than initially expected in adapting to hotter and drier conditions.

Over the years, farmers in the mid-west have taken advantage of new corn varieties that are more resistant to pests and have more water-resistant roots by planting corn plants closer together.

But the Science study found those densely planted fields were even more vulnerable to heat and water stress.

The scientists said growers in the mid-west could lose as much as 15% of their yield within the next 50 years.

 

 

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3 Responses to “Climate, Corn, and Cargill”

  1. jimbills Says:

    Gregory Page would be on that committee in a fact-finding mission to steer his business in response to climate change. He’s not really there to help mitigate climate change, and he states repeatedly he’s there because the Risky Business committee doesn’t focus on solutions.

    Cargill’s main business is shipping and trading food, although they also do a few other things like ship coal and own two large palm plantations in Indonesia. They are the second largest U.S. private corporation behind Koch Industries. Their main concern would be to protect a free market approach and to adapt as a company to a shifting food security landscape. In other words, help create climate change in its business practices, fight governmental action that regulates the free market as a mitigation tool, and figure out how to continue profitability from the results of climate change.

    As food prices are likely to rise with climate change, and as they’re a food shipping and trading business, they’re in a pretty solid position.

    To rationalize this, Cargill will claim that it is most interested in providing enough food for a growing world – and we do face monumental problems in the coming decades on that front.

    You can tell what Gregory Page’s sentiments are here:

    An important distinction to make with our system of corporation-dominated free enterprise is that the people in corporations are most often NOT psychopaths (although some are). Most of them see the issues around us and do care. But the system itself behind shareholder and privately-owned corporations is psychotic, as it cares more for individual interests than the interests of the whole. Externalities are written off just as a psychopath wouldn’t give a second though to harming another. A company will market how green it is while its net actions are anything but green, just as a psychopath will wear a nice suit and have an engaging smile. Altruism doesn’t exist in the sum total of capitalism – the rare and isolated cases of public concern are easily overwhelmed by the totality and urgency of private and individual concern. What will make us money? What will make us money this quarter?

    Another article:
    http://money.cnn.com/2011/10/24/news/companies/cargill_food_business.fortune/

    “We’re not a philanthropy,” says Page, in one of a series of rare interviews that Cargill granted to Fortune over the past several months. “I think we have to be careful not to lay claim to an altruism that doesn’t exist.”

    And also from that article:

    “And then there’s climate change. It’s hard to think of an organization anywhere in the world with a bigger stake in understanding potential disruptions to the food supply wrought by global warming than Cargill. Page does not disagree, although his take may surprise you. “Clearly the volatility can be an opportunity,” he says, acknowledging that sharp price swings can play to Cargill’s vaunted trading expertise. Then he adds, “The big part of our business is the physical handling of tens of millions of tons of food. If we believe the world is headed toward a varied weather pattern, those services become more important.”

    In other words, signs point to Cargill’s influence — and profits — continuing to grow. But is what’s good for Cargill good for the world?”

    • rayduray Says:

      Thanks for a lucid take on how corporate self-interest will distort humanity’s response to climate change.

      Along these lines, here’s a behind-the-scenes take on the fiasco at COP-15 in Copenhagen when Barack Obama played a distinctly obstructionist role on the Kyoto Protocols, to the detriment of the environment. Not exactly what the image makers at the White House hope you to learn:

      http://www.atimes.com/atimes/World/WOR-01-230614.html

      Quoting the author, Peter Lee:

      “I suffered an attack of bulging eye/throbbing vein syndrome when reading presumptive presidential candidate Hillary Clinton’s blithe account of a clever piece of business she pulled at the Copenhagen Climate Summit in 2009….. Horsepucky as far as the “we broke up China’s cabal and got the real negotiations going” thing. ”

  2. rayduray Says:

    Yves Smith at Naked Capitalism has an analysis of “Risky Business” that I found worth noting:

    http://tinyurl.com/q2gx8dh

    Yves raises some interesting questions about just what purpose this “Risky Business document is intended to serve:

    “So I am genuinely not certain of what to make of this document. Is it an effort (aside from Hank Paulson, who is a long standing conservationist) to assuage their consciences? Where were they when the IPCC made its report in 2007 and a push from such top-level businessmen could have had a real impact? Or is this sort of public presentation a sign of disfunction among the business elite?”


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