Transparency Begets Measurability Begets Improvement Begets Resilience

YOU CANNOT IMPROVE AN INDUSTRIAL ACTIVITY THAT YOU CANNOT MEASURE, BUT YOU CANNOT MEASURE THAT ACTIVITY IF THE INDUSTRY ISN'T BEING HONEST. The world's fisheries are under a great deal of stress right now, between pollution and rising ocean acidity triggered by higher CO2 absorption rates. Unsurprisingly, the more regulated Western nations, having themselves long overfished, now do a much better job of measuring and managing fish stock. But with the ballooning middle class emerging across the East and South, two global regions even more given to eating fish than the West, the pressure for bigger catches is immense among those very nations featuring weaker governments and regulatory oversight, begetting a classic "tragedy of the commons" that is now being addressed by an aggressive expansion of aquaculture (fishing "farms") across Asia, which, in turn, generates new and profound environmental stresses along that continent's littoral zones.

The key to managing fish stocks is reliable data, which is hard to come by, the crucial requirement being open and transparent cooperation among commercial fishing firms and the scientific community. Where is that going to best happen? Where the regulatory environment is strongest.

However, a recent study suggests that, on a global basis, fish catches are systematically under-reported:

Tens of millions more tons of fish have been taken from the seas than are recorded in official statistics, suggests a huge and controversial project aiming to estimate the ‘true catch’ of the world’s fishing industry.

The work is detailed in a paper in Nature Communications by fisheries researchers Daniel Pauly and Dirk Zeller of the University of British Columbia in Vancouver, and it builds on a decade-long project that has drawn in hundreds of researchers from around the world.

According to Pauly and Zeller, global fisheries catches hit a peak of 130 million tons a year in 1996, and they have been declining strongly since then. This is substantially higher than the data collected by the Food and Agriculture Organization of the United Nations (FAO), which report that catches reached 86 million tons in 1996 and have fallen only slightly.

Actually, when you look at the above chart (note the typo on the vertical axis) that compares the two estimates (FAO v Sea Around Us), they appear to track with one another fairly tightly, with the new estimate just consistently higher throughout (roughly 50-60% larger).  But that's the point: if your most closely watched official estimate (FAO) is off by as much as one-third (underestimating the "damage"), then your calculations of fish-population resilience are likely to be significantly off.

Here's the real issue in data collection - a weak global authority relying on the honesty of member countries that are highly incentivized to low-ball their numbers to avoid criticism/penalties/etc.:

The FAO numbers have long been the only estimate of how many tons of fish are caught at a global level. But “the FAO doesn’t have a mandate to correct the data they get,” Pauly told journalists during a conference call.

This leaves the organization reliant mainly on the numbers submitted by member countries, he says, and “the countries have the bad habit to report only the data they see”. This means that many official statistics do not account for a huge amount of the world’s fisheries catch, such as that by small-scale and subsistence fisheries or fish thrown back as ‘discards’—species other than those being hunted.

To fill in the holes in official statistics, Pauly’s team embarked on an epic project to supplement the official baseline data from member nations. This included using results from peer-reviewed research, interviews with local specialists and consumption information from population surveys.

What I really about Pauly's team effort: it goes above and beyond the usual official reporting requirements and attempts to amass bigger data that yields more accurate truths.

YouTubes of 2015 Washington DC speech

Video segments of September 2015 briefing to an international military audience in the Washington DC area.

Part 1: Introductions and US grand strategy

 Part 2: America's looming energy self-sufficiency

Part 3: Climate Change and its impact on food & water

Part 4: The aging of great powers

Past 5: Millennials & Latinization of U.S.

Part 6: Evolution of US Military under Obama

Part 7: Dangers of a "splendid little war" with China

Part 8: Middle East without a Leviathan

Part 9: Answers to audience questions

The growing Sino-America co-dependency on food

FT story on a subject I've been harping on since my last book (and in it):  the stunning co-dependency that arrives with America increasingly feeding China, making our ag output as important to Beijing as the PG's energy exports.

Some data points on China's total imports (so not all NorthAm or US):

• Cereal imports into China up almost 13,000 percent since 2008 to current 5.2m MT
• Wheat up 6,000% to 3m MT
• Rice up 264% to 1.6m MT
• Overall rise from low-point of 2008 is from 2m MT to 12m MT.
• China is now the 7th biggest importer in world, after Japan, Egypt (remember that when you imagine Egypt going rogue under the MB), Mexico, EU-27, Saudi Arabia, and SoKo.  Japan is #1 at just under 25m MT.

Note that US is biggest world exporter of wheat, corn and soybeans.

Yes, China is planting like crazy, so its own ag output is up.  It's just that demand is rising much faster.

The key line of the piece: 

China still has an official policy that mandates 95 percent self-sufficiency - a policy known as the "red line" - but recent comments suggest that the insistence on self-sufficiency is waning.

The US is waking up to China as THE ag export market.  Nebraska's top ag official:

China represents a huge export market . . . [and] a growing export destination.  

Nebraska's corn exports to China have doubled in the last half-decade.

China is already the world's biggest soybean importer (and - again - the US is the biggest exporter), and "is adding corn, wheat, barley and rice to its shopping list" (and - again - the US is the biggest exporter of corn and wheat).

Turning point on US obesity epidemic?

From NYT:

After decades of rising childhood obesity rates, several American cities are reporting their first declines.

The trend has emerged in big cities like New York and Los Angeles, as well as smaller places like Anchorage, Alaska, and Kearney, Neb. The state of Mississippi has also registered a drop, but only among white students.

“It’s been nothing but bad news for 30 years, so the fact that we have any good news is a big story,” said Dr. Thomas Farley, the health commissioner in New York City, which reported a 5.5 percent decline in the number of obese schoolchildren from 2007 to 2011.

The drops are small, just 5 percent here in Philadelphia and 3 percent in Los Angeles. But experts say they are significant because they offer the first indication that the obesity epidemic, one of the nation’s most intractable health problems, may actually be reversing course.

Crucial to get kids less fat, because fat kids are almost totally doomed to be fat adults, burdened by all manner of lifetime medical ailments.  Our obesity epidemic began with kids and it will end with kids.

Especially tough since so many kids eat majority of their weekday food at school (breakfasts + lunch + snacks). Health advocates have to fight food and beverages industry on this.  Good example:  big push to get sodas out of schools and Coca-Cola and others fire back with "energy drinks" that are just as sugary.  Sugary drinks are believed to account for half of the obesity epidemic.  

Then there are those cheap-skate Republicans in Congress who insist on labeling pizza a "vegetable," while insisting on more tests and thus less phys ed.  I can tell you that Indiana is nuts on that score (testing):  my kids are forced to prep and take these mindless (and useless) tests ALL YEAR LONG.  What a way to prep kids for the 21st century!

But I digress ...

Researchers are trying to figure out what's working.  All they know is this: "declines occurred in cities that have had obesity reduction policies in place for a number of years."

Looking ahead:

Though obesity is now part of the national conversation, with aggressive advertising campaigns in major cities and a push by Michelle Obama, many scientists doubt that anti-obesity programs actually work.

Exercising is required, but it never does it alone (and never will).  Key is reducing all those empty calories and portion sizes ("Want some fries with your pizza and Gatorade?").

What we eat in America is what is most profitable for US food companies and ag corps to sell - plain and simple. We subsidize grains big time and do virtually nothing for fruits and vegetables.

We've got a nanny state alright, and she's telling us that fat is good.

I admire Michelle Obama for working this issue.  Exactly the right focus for her right now.  Because when we solve the tripling of obesity that's unfolded over the past three decades (stunning, really), we solve a good deal of our healthcare crisis.

Great summarizing FT article on "global food security" risk

Notice the equatorially-centric band? Remind you of another map?

Starts by calling farmers "the canaries in the mine when it comes to climate change."  Brilliant.

What affects farmers affects the global food supply and causes the price rises that hit middle class wallets and increases the risk of hunger for the world's poor.

CC isn't the "only culprit" when it comes to good security.

The primary drivers, the article notes, are population growth and the stunning growth of the global middle class, which, as we know, likes to eat and eat well.

Next is the loss of land to food crops due to urbanization and the diversion of crops to fuels (dumbest idea in human history).

But here's the quote that caught my eye:

If these were the only pressures on the global food supply, feeding the world sustainably could still be achievable, says Jerry Nelson, a senior research fellow at the International Food Policy Research Institute (IFPRI).  "If you didn't have climate change, you could tell a story about how it will be challenging and how we need to invest more in productivity, reduce waste and manage international trade," he says.  "But this would be something we could accomplish.

"When you throw climate change into the mix, that makes everything a lot more difficult."

Or better said - with regard to risk - more uncertain.

Great little piece in "FT Special Report: Managing Climate Change."

Obesity epidemic: one variant of the punitive approach

WSJ headline says Denmark scraps it's "much-maligned 'fat tax' after a year."

Danish lawmakers have killed a controversial "fat tax" one year after its implementation, after finding its negative effect on the economy and the strain it has put on small businesses far outweigh the health benefits.

Nations including Switzerland, the U.K, and Germany have held up the tax, which applies to any food containing more than 2.3% saturated fat, as a potential model for addressing obesity and other health concerns. But in Denmark, it has been a source of pain for consumers, food producers and retailers as the nation's economy struggles.

"The fat tax is one of the most maligned we [have] had in a long time," Mette Gjerskov, the minister for food, agriculture and fisheries, said during a news conference Saturday announcing the decision to dump the tax. "Now we have to try improving the public health by other means."

The failure of Denmark's fat tax is a demonstration of how difficult it can be to modify behavior by slapping additional duties on products seen by many as essential staples, especially during tough economic times. Products such as butter, oil, sausage, cheese and cream were subject to increases of as much as 9% immediately after the new tax was enacted.

"What made consumers upset was probably that an extra tax was put on a natural ingredient," said Sinne Smed, a professor at the Institute of Food and Resource Economics.

The fat tax comes to an end after netting an estimated €170 million ($216 million) in 2012 in new revenue. Danish lawmakers will slightly raise income taxes and reduce personal tax deductions to offset the lost revenue. The lawmakers also decided on Saturday to reverse an earlier decision to create a sugar tax.

"This is not what is needed in the current economic situation," said Holger Nielsen, Denmark's minister for taxation.

Human bodies are designed to crave fat, especially when we're stressed.  The body is telling us to store up because things seem dangerous.  This is evolution talking:  if things are going south, better to stockpile fat now for the bad days ahead.

Problem is, modern life creates all sorts of stresses and modern food companies love moving this sort of product, because it nets them the highest profits.

End result:  an obesity epidemic.  The food companies know how to trigger our interest, and life provides all manner of stimuli that triggers our desire.  The cost is pushed downstream.  

Governments want cheap food but then regret the healthcare bill that follows.  Governments then try to go punitive - actually on the consumer - by issuing a fat tax that the sellers pass on directly.  Consumers get mad, tax gets scrapped.

Conservatives yell, "nanny state."  But in truth, Western governments already lavish the ag and food industries with subsidies that encourage all this, meaning the nanny state is already here, she's just encouraging us to eat the worst sorts of food (or the most profitable to sellers).  In relative terms, veggies and fruits aren't subsidized, grains are.  So we're being fatted up by our nanny state for the healthcare providers.

Governments can't disincentivize bad eating by taxing people.  They need to rejigger the already bad incentive system for ag and food companies.

Still, the fact that states are trying is an indicator of the progressive agenda that eventually must come.

But Big Food wins another round ("See, the evil government is trying to deny you your bad diet!"  Cha-ching!)

Chart of the Day: Water and Food in Mideast

Close the Straits of Hormuz, says the WSJ, and you shut down more than oil flow.  Ninety percent of food in the PG is imported.

Water is perhaps the most complex of the region's resource-security puzzles.  Gulf countries have some fo the lowest rainfall rates and smallest water resources in the world.  Gulf countries satisfy demand by desalinating seawater, but that leaves them vulnerable if their desalination plants malfunction or are attacked.

From a Wikistrat crowd-sourced simulation: North American Energy Export Boom meta-scenarios

These are the four master narratives that got fleshed out in the first week of the Wikistrat simulation looking at an unfolding/future North American Energy Export Boom.

We went into the exercise with the four implied "bins" of the X-Y:

1. The lose-lose of North America getting the revolution "wrong" by getting the rule-set wrong (too restrictive out of environmental fears or too loose out of greed) and the Rest of the World either contributing to that outcome or exploiting it for their own equally short-term mindset.
2. The lose-win of NorthAm getting it "wrong" and the ROW drilling ahead anyway, "winning" on terms they find acceptable enough, even if NorthAm might define them as a loss.
3. The win-lose of NorthAm getting it "right" but doing so in such a way as to set off a destructive global competition toward that end; and 
4. The win-win of North-Am getting it "right" and triggering a virtuous QWERTY effect where the world benefits similarly.

The Wikistrat crowd came up with about two dozen scenarios, each filled out to the tune of several hundred words spread across about ten fields that explored their up- and down-sides, uncertainties, risks, etc. At the end of that first week, I thereupon read through everything (after commenting all the way during the week) and binned the two dozen into plausible pathways (roughly the order portrayed above in the bullets per bin). Then, taking all those precursing, in-situ and downstream scenarios in hand, I rethought the original notional master narratives, naming them thusly:

• The lose-lose lower-left scenario becomes What the Frack??#*!, suggesting a rude surprise and significant disappointments and a sense of having one's dream destroyed by circumstances beyond one's control. As a stream, it involves a Euro crash delaying investment flow, thus delaying development and allowing negative environmental evidence (water contamination and seismic activity chief among them) to mount. Then you get the environmental counterattack, as the Not In My Backyard Types declare their opposition (Build Absolutely Nothing Anywhere Near Anything). The "Erin Brockovitch" fights thus begun, foreign competitors swoop in to both steal the technology and complicate its local application through "lawfare" campaigns designed to keep the fracking revolution bogged down in courts for years. By the time all the legal dust settles, what the energy industry can actually exploit in terms of resources is far less than originally imagined, yielding a "red queen" sort of outcome (running in place) where the additional supply tapped is quickly swallowed up by growing domestic demand and the fabled export boom never quite occurs.
• The lose-win master narrative is dubbed, The Gas is Always Greener on the Other Side of the Fence, suggesting that, no matter how if unfolds in NorthAm, it seems to go better elsewhere in the world. In NorthAm, a compromise emerges between industry and enviros: short-term regulations allow for a fairly permissive situation but mid-term data collection ensures a legal/regulatory showdown down the road. This situation creates an overall market uncertainty that allows a certain amount of macro-questioning to unfold: Are we trading gains in CO2 emissions (coal to gas on electricity) that are just ruined by releasing more greenhouse gases instead? The NorthAm effort diverges as Canada, less fussy and more greedy in its mindset, moves aggressively to connect its unconventional reserves to Asia and NorthAm industry players decide it's easier to experiment more aggressively abroad, leading to a quick global spread of the technologies. Over time, we witness more desperate Europe (fearing Russian dependence) and Asia (fearing dependence on EVERYONE!) actually moving ahead more successfully with the revolution, with the latter suffering exacerbated water difficulties as a result. In the end, the US, desperate at the lost lead, moves toward national energy companies (public-private partnerships) to try and catch up.
• The win-lose scenario is called, Fits of Peaks, suggesting both more great-power contentiousness (fits of pique) and destabilizing shifts in global energy profiles (akin to the imagined "peak oil" in supply, but here in terms of demand). In this narrative, the US is especially creative in setting up enclaved experiments (the example of letting Native American reservations do things that states cannot) that get around the usual environmental rule-sets. Here, Mexico becomes its own big NAFTA experiment, as the political system there, desperate over PEMEX's decline in oil, sets up a sister national energy company to pursue the fracking revolution and that entity becomes a magnet for investment and aggressive experimentation. Sensing a way to push the Free Trade of the Americas idea, the US uses the lure of cheap energy cooperation to reach out to Latin America in a geostrategically defensive move (good-bye Carter Doctrine focus on the Persian Gulf, and welcome back Monroe Doctrine's historical ambitions regarding the Western Hemisphere's economic and political integration). Yes, OPEC tries to fight back by keeping oil prices low, but the fracking revolution's main impulse (natural gas) still takes off magnificently, giving America a newfound geostrategic confidence that allows it to press China all the more on the negative aspects of its rise in East Asia. The Middle Kingdom, in turn, sensing that America is aggressively organizing the Western Hemisphere to its long-term economic advantage, attempts the same in East Asia. Thus, in an attempt to stave off one sort of strategic vulnerability, the US amplifies another, making this the "be careful what you wish for" scenario.
• The win-win scenario is called, Now We're Cooking with Gas!, which is actually the old marketing catch phrase used in late-19th century America when pushing natural gas stoves as an ungrade to old wood-burning ones. More generally, the phrase has come to refer to a process that has experienced a significant increase in efficiency. Here we talk about the US and Canada coming together to finesse the environmental challenges in a responsible manner, allowing their companies to promote the technology worldwide to their own market advantage. As a result of the long-term boom in incredibly cheap natural gas, King Coal is dealt a death blow first in NorthAm and thereupon globally, as there's now no economic reason for not building gas-fired electricity generation plants almost exclusively (raising the question of what happens to nukes?). Over time, natural gas becomes so plentiful and cheap globally, that a portion of shale gas is siphoned off to gasoline production, so that even the gas-combustion half of hybrid cars are sourced by natural gas - in addition to the electricity part. This development proves a boon for the swapping out of pure gas-combustion automobiles with hybrids and natural-gas fired mass transportation vehicles. Over time, the explosion of cheap energy redefines the North American economic scene, leading to an industrial renaissance and a rebuilding of America's manufacturing industrial base. It also boosts NorthAm's competitive advantage in agriculture, befitting an increasingly voracious global middle class as global climate change stresses crop production in many of the world's emerging economic regions. In the end, all that academic speculation about looming "resource wars" proves to be just that, and the fracking revolution, well-played by North America, is the primary reason why.

Now, with the first week's scenario drill completed, the community moves on to brainstorming and competing their ideas regarding how this range of master narratives could impact the strategic interests of our six main characters: US (NorthAm), EU, China, India, Russia and Brazil.  Naturally, the fate of OPEC will loom throughout the proceedings.

The simulation thereupon unfolds over a third week that focuses on generating strategic options for the six pack of players.

Wikistrat's "The World According to Tom Barnett" 2011 brief, Part 5 (Flow of Food)

In this section of the brief I explore water and how it connects to grain-production centers of gravity, how climate change will impact the flow of food, how that flow will surpass the flow of energy in global importance in the future, and how the Western Hemisphere evolves as a result of its incredible water advantage.

WPR's The New Rules: A Look Ahead at the Geography of Global Security

As part of a “big think” forecast project commissioned by an intelligence community sponsor, I’ve begun to think about the future geography of global security. As often with this kind of project, I find myself falling into list-making mode as I contemplate slides for the brief. So here are nine big structural issues that I think any such presentation must include . . .

Read the entire column at World Politics Review.

WPR's The New Rules: Time to Worry About Over-Eating, not Over-Population

The real clash of civilizations in the 21st century will be not over religion, but over food. As the emerging East and surging South achieve appreciable amounts of disposable income, they're increasingly taking on a Western-style diet. This bodes poorly for the world on multiple levels, with the most-alarmist Cassandras warning about imminent resource wars. But the more immediate and realistic concern is the resulting health costs, which will inevitably trigger a rule-set clash between nanny-state types hell-bent on "reining in" a number of globalized industries -- agriculture, food and beverages, restaurants, health care and pharmaceuticals -- and those preferring a more free-market/libertarian stance.

Read the entire column at World Politics Review.

The simplest equation on making sufficient food happen

From WSJ interview with Peter Brabeck-Letmathe, CEO of Nestle. 

The global middle class means a good billion more have recently had the opportunity to access meat - high protein of choice, especially for growing bodies. When you want meat, it's a 10-times multiplier on grains or vegetables.

Do-able, says the CEO, if you follow one simple rule: "no food for fuel."

Other two rules: don't fear genetic advances and DO charge for water.

Besides some geographic adjustment on climate change, that's really it. We can handle the new demand without problems, no matter what the fear-mongers tell you. But we can't simultaneously chase "energy independence," which is doofus amidst all the other skyrocketing commodity interdependencies, because we cannot will ourselves into not caring about the Gap.

Simple solutions requiring decent political leadership, which appears - on a global scale right now - to be our one great unrenewable resource.

Time's Battleland: "The future of Fifth Generation Warfare: Follow the food!"

Everybody thinks that the future is going to see fights over energy, when it's far more likely to be primarily over food. Think about it: The 19th century is the century of chemistry and that gets us chemical weapons in World War I. The 20th century is the century of physics and that gets us nuclear weapons in World War II. But the 21st century? That's the century of biology, and that gets us biological weaponry and biological terror. My point: obsessing over nuclear terrorism is steering by our rearview mirror.

Read the entire post at Time's Battleland blog.

Chart of the Day: chocolate consumption (advanced v emerging)

From FT analysis of Kraft buying Cadbury (beating out Hershey) and how controversial that's been in the UK (flagship company and all), but this is no worse that InBev buying Budweiser - heh?

But in both instances, it's the future growth of the Gap countries that drives the purchases (InBev doing well there, Kraft hoping to take advantage of Cadbury's ability to market in India).  So far Kraft doing okay ($29 share price before, $35 since).

The chart on the left explains why:  Core populations can only eat so much more chocolate (few more bodies over time), while Gap and New Core are "discovering" chocolate in a big way (4X the growth because of sheer numbers entering middle-class status).

Same will hold true for food after food and beverage after beverage.

As I've said, it ain't about hearts and minds but bellies and wallets.

The food-land equation

From Jason Clay, World Wildlife Fund in a NYT debate on population:

We currently use 33 percent of the Earth's surface for food.  As 25 percent isn't usable (deserts, cities, roads) and 12 percent is set aside for national parks and the like, we continue to expand the food production frontier each year.  At the current rate of habitat loss, after 40 years, we will have "eaten" nearly all the remaining natural habitat on the planet.  Whatever is sustainable with 7 billion people will not be with 10 billion.

So you add up 33 + 12 + 25 and you're talking 30 percent of the surface that theoretically gets exploited. Population growth (we hit 7 billion around Halloween) to come by 2050 (40 years) is approximately 2.5 (not 3 to make 10B), but let's take the three and say we'll have 40% more people.  

Honestly, considering how low yields are in most ag environments around the world, the notion that we can't support 40 percent more if we boost current land yields and get access to good land freed up by global warming/climate change (unmentionable to any WWF because of the species loss that will necessarily occur) is a huge supposition, given recent history.   For example, America now produces 50% more corn on the same land as it did in 2000.  Remember the corn fields you ran through as a kid.  Impossible today!  Why?  Dense rows of plants.

Clay then goes on to sound ominous notes about food production in 2100 due to per capita (he has to switch his argument there because the pop growth will level off and end mid-century) and he comes up with this meaningless stat that we'll "need to produce an amount of food that is 2.5 times the amount that all human societies have produces in the last 8,000 years."  That one is a pure scare tactic.  Human population was negligible until about 200 years ago and hunter-gathering was the prime route for a major portion of that sub-billion population, so stacking up the previous 7,800 years of ag production is a goofy standard.  Almost as unintelligent as saying we've got more humans alive today than have ever lived!

I do like the stats on the land use, so I blog to remember.

Chart of the day: A global middle class drinks coffee

FT story on how producing countries (mostly Gap) and emerging markets (mostly New Core) are driving an expansion in coffee consumption globally.  

Coffee demand globally is described by one expert as being at a "turning point":

Demand in western Europe and the US is nearing a plateau, while consumption in emerging markets is rising strongly, particularly in coffee-producing countries.

Brazil is considered the exemplar of the trend, and as readers of this blog will note, I've posted in the past about its rapidly expanding middle class and the stunning growth in food consumption there (both more volume and moving up the caloric chain).

Tea is kind of weird:  both high- and low-brow, meaning the rich love their tea and the poor depend on it in much of the world. But the middle class likes its coffee - its stimulus package every ayem.

Good news for producers.

WPR's The New Rules: For U.S., Abandoning the Middle East not a Solution

America's successful assassination of Osama bin Laden, long overdue, naturally renews talk across the country about ending the nation's military involvement in Afghanistan-Pakistan. Coupled with the ongoing tumult unleashed by the Arab Spring, Washington is once again being encouraged to reconsider its strategic relationship with the troubled Middle East. The underlying current to this debate has always been the widely held perception that America's "oil addiction" tethers it to the unstable region. Achieve "energy independence," we are told, and America would free itself of this terrible burden.

Read the entire column at World Politics Review.

Nestle gets in on the feast

FT story on a "bolt-on deal" for Nestle:

Nestlé underlined its determination to expand in fast-growing emerging markets with the acquisition of a majority stake in one of China’s best-known regional foods groups.

Nestlé said the deal to buy 60 per cent of family-owned Yinlu Foods Group would spearhead its push into products geared to local tastes. Yinlu, which has had a long association with Nestlé as a co-manufacturer of ready-to-drink Nescafé instant coffee, makes ready-to-drink peanut milk and ready-to-eat canned rice porridge.

No price for Yinlu, which is based in China’s south-east Fujian province, was revealed. Analysts’ estimates for the value of the stake in Yinlu, which has annual sales of about SFr750m ($835m), ranged between SFr540m and SFr1bn.

The deal will deepen Nestlé’s penetration in China, where the Swiss group is already known for its international Nescafé, Maggi and Kit Kat brands, as well as some products sold only domestically.

Paul Bulcke, Nestlé’s chief executive, said the deal “demonstrates our long-term investment in China and our commitment to further developing local brands.”

Analysts said the transaction was another example of multinationals keen to grow in China trying to make or acquire products to suit local consumer tastes.

Nestle is an interesting company, what with the move into pharmanutricals (pharma inserted into foods to make therapy and eating one--sounds weird but it has huge applications in developing regions where nutrients are hard to get, as are drugs) and its aggressive push onto the table of the emerging global middle class.

Nestle has been in China for 20 years and employs 14,000 workers there in 23 factories, but it still feels the need to make buys like this to take full advantage of the growth of the middle class, which likes to eat better, use more electrical appliances, drive cars - for the first time, etc.

I always like to keep an eye on these guys.They think ahead nicely, which is why Nestle is the world's biggest food company. Started in 1867 by Henri Nestle in Switzerland. He makes the first milk food for a baby and uses it to save his neighbor's child. Nestle is also one of the most boycotted companies in the world. Why? Food is a very touchy subject - as are babies.

More aid versus better government: the illusion of Live Aid's success--in retrospect

Brutal bit of analysis in WSJ op-ed by John-Clark Levin (who has a hyphenated first name, I ask you?).

Ground zero for the famine 25 years ago was Ethiopia, hence my newly heightened interest.

$283M raised, but a subsequent BBC investigation says that "so much of the money went to arms instead of food that it may have prolonged and deepened Ethiopia's humanitarian catastrophe."

The later UN relief effort in Somalia wasn't much better, as 80% of the food aid was stolen, such was the bad security situation, which only stabilized after the US Marines showed up in 1992.  Once we withdrew after "Black Hawk Down," the situation once again deteriorated there.

Now fast forward to 2006, when severe drought once again struck. This time, Kenya and Ethiopia, with relatively stable governments, were able to cope far better than lawless Somalia. The easing of food shortages in the Congo over the past five years happened for similar reasons--better local governance.

Levin's point:  "Famine and poverty cannot be solved with charity alone.  We can only stop them by putting an end to corruption and instability."

A certain administering to the system, I might call it. 

Another era when it comes to child labor on farms

NYT story on how Labor Dept. is cracking down on farms that employ children and pay them less than the minimum wage.

Story caught my eye because I spent a few years as a child (above 12 but below 18) working on a local farm for what was then less than the minimum wage (I got paid $3/hr and thought that was pretty good in the late 1970s).  A 1938 US law allows kids 12 and over to work on farms with almost no limitations or rules, but Labor is changing that landscape because nowadays, it's most migrant kids doing the labor.

The Obama administration has opened a broad campaign of enforcement against farmers who employ children and underpay workers, hiring hundreds of investigators and raising fines for labor and wage violators.

A flurry of fines and mounting public pressure on blueberry farmers is only the opening salvo, Labor Secretary Hilda L. Solis said in an interview. Ms. Solis, the daughter of an immigrant farm worker, said she was making enforcement of farm-labor rules a priority. At the same time, Congress is considering whether to rewrite the law that still allows 12-year-olds to work on farms during the summer with almost no limits.

The blueberry crop has been drawing workers to eastern North Carolina for decades, but as the harvest got under way in late May, growers stung by bad publicity and federal fines were scrambling to clean up their act, even going beyond the current law to keep all children off the fields. The growers were also ensuring that the workers, mainly Hispanic immigrants, would make at least the minimum wage of $7.25 an hour.

“I picked blueberries last year, and my 4-year-old brother tried to, but he got stuck in the mud,” said Miguel, a 12-year-old child of migrants. “The inspectors fined the farmers, and this year no kids are allowed.”

Child and rights advocates said they were encouraged by these signs of federal resolve, but they were also waiting to see how wide and lasting the changes would be. Across the country, hundreds of thousands of children under 18 toil each year, harvesting crops from apples to onions, according to a recent report by Human Rights Watch detailing hazards to their health and schooling and criticizing the Labor Department for past inaction.

Most definitely a different era, but hard to argue against improving the lot of low-tech, low-education workers in this country, because impoverishing them serves nobody's needs.

I remember my farm labor with a certain romanticism, although I don't know any grown-up former farm kids who do, because they worked the longest hours and didn't really get paid.  Plus, there was no quitting the family farm until adulthood got them an out, which most took, happy enough if they left with all their fingers in tact.