China Looking Favorably on GM Crops

Few would doubt that China is one of the fastest growing countries today. With a population already at 1.3 billion, ways to feed and employ them are shrinking. Because of this, later this month, the Chinese government plans to use $3.5 billion for research on genetically modified (GM) crops. Although China first consented to four GM crops in the late 1990s, little research or progress has been made with regard to introducing other such crops. In fact, in the last eight years only two new GM plants have been approved: poplar trees in 2005 and papaya in 2006. Of the six GM crops allowed by the Chinese government, only cotton has truly become popular. Until recently, the government has been against growing other GM staples such as rice, corn and soybeans.

Food shortages and a growing population, however, are weighing on the population and the government. According to an article in the September 5 issue of Science1, Premier Wen Jiabao stated that “to solve the food problem, we have to rely on big science and technology measures, rely on biotechnology, rely on GM.” After this, Jiabao went on to approve the GM measure in July 2007. Crops aren’t the only organisms being approved for genetic modification; livestock are being considered as well. This area, however, is not as well-researched or as developed as that of crop modification.

Outlook of Chinese GM Crops

If past results are any indication of how well China’s GM project will do, then the outlook certainly appears bright. Since GM cotton is the only crop grown in a significant quantity, it has had plenty of attention and opportunity to prove itself. GM cotton became important in China in 1997. Since then, 64 different varieties of cotton resistant to pests are grown on 3.7 million hectares. This equates to 70% of the land normally used for conventional cotton being used for GM cotton. Because the GM cotton is resistant to pests, less pesticide has been needed. This means 650,000 tons of pesticide was kept on the shelf rather than on the plants, in the rivers or in the aquifer.

Research on other important staple crops has not been totally ignored, however. In 2005 Dr. Huang Jikun, the director of the Center for Chinese Agricultural Policy in Beijing, publically acknowledged that field trials with GM rice were, so far, successful. Their studies had shown GM rice increased yield, effectively reduced the amount of pesticide needed and could soon be ready for use at the same level GM cotton had been2. The primary reason the government has shown restraint with GM rice is that it is the country’s most important and abundant crop. If GM rice is used, and it fails or fails to sell, China could be facing a severe economic crisis. Because of this and the global hesitancy or outright hatred toward GM, rice is not predicted to be used to the extent cotton is for another couple of years, according to Jikun.

This is particularly unfortunate since rice has been modified to contribute so many positive agricultural aspects. For example, a gene has been found in an unused variety of rice that allows it to survive submersion in water for over two weeks. The variety of rice that is currently used dies if submerged for such a long period of time. In Bangladesh, over a million hectares were flooded and remained so for up to three weeks. Since conventional rice was being grown, the entire rice crop died, causing economic losses of $600 million in 20073. Luckily, a small number of rice farmers were testing a GM variety. These survived and recovered even after 12 days under water; this is three times longer than what conventional rice can withstand. Although they did harvest one ton less than usual, they harvested four tons more than conventional farmers who were devastated by the flooding.

Meeting the Demand for Rice

This is not the only modified variety, however. There are others that can increase rice yield. This would be particularly important and beneficial to countries such as China since they have had to recently restrict their rice exports due to increasing demand and lessening supply. The shortfall has caused a leap in prices. In December 2007, Thai rice cost $362 per ton. By April, a mere four months later, this same amount of rice cost $1000. Although prices dropped to $720 per ton in July, this is still twice as much as the cost in December. Adding to the strain, the International Rice Research Institute has predicted that by 2015, a mere seven years in the future, the global community will need to produce 50 million more tons of rice than what was grown in 2005. This means rice production will need to increase 12% in the coming decade. Considering the problems with supply that is currently being faced, 12% is significant indeed and the reason countries such as China are finally seriously considering the advantages GM foods could provide.

Although $3.5 billion sounds like a large investment into the field of GM, this is over a 13-year period. This means approximately $269 million each year will go to the GM project specifically. This is slated to come from the local governments who own the land used to grow the GM crops and from the GM companies themselves. With these funds, the government intends to conduct research as well as initiate education programs regarding GM crops. Since modified crops have become a hotly contested issue in many parts of the world, the Chinese government wants to ensure they have to deal with as few GM-induced problems as possible. They plan to accomplish this by educating their population on the benefits economically, agriculturally and environmentally of GM products. While it is recognized that introducing a new technology such as this could lead to some problems, China’s growth rate leaves little room for indecisiveness or uncertainty as to how to feed the population both now and in the future.

Sources

1 – China Plans $3.5 Billion GM Crops Initiative, Science, September 5, 2008, pp. 1279.

2 – Science, April 29, 2005, pp. 688.

3 – Reinventing Rice to Feed the World, Science, July 18, 2008

Ron Paul’s “Rally for the Republic” in St. Paul, Minnesota

Economically speaking, the Democratic and Republican conventions were exercises in massive self-delusion. Barack Obama and his party acolytes bragged about how they would spend money we don’t have (we’re $10 trillion in the hole, by the way), and McCain and the Republicans promised to balance the budget, strengthen the dollar, and close the $70 trillion Medicare/Social Security shortfall, all without a tax hike or fundamental changes to the monetary system.

Yeah, right.

Neither party talked about the Federal Reserve. The “debate,” if it can be called that, is between a top tax rate of 39.5% (Obama) or 35% (McCain). On economic matters, there is considerably more agreement between the two, supposedly competing American political parties than between factions within the Communist Party of China – and the ChiComms are considerably more economically literate, too.

But ten miles down the road from the Republican Party’s Orwellian big-government love fest, Ron Paul’s Rally for the Republic drew more than 10,000 economically educated patriots, who stood and cheered at the mention of the “Austrian theory of the business cycle,” and repeatedly broke out into impromptu chants of “End the Fed!” Imagine asking John McCain what he thought of the Austrian theory – “we might as well be speaking Chinese,” said author and historian Thomas Woods.

The speakers at Ron Paul’s Rally were a little more diverse than those at the GOP’s official convention, from which Paul – a Republican congressman – was banned. There were arch-conservatives such as Howard Phillips, the founder of Constitution Party, and John McManus, president of the John Birch Society; there were “paleolibertarians” such as Lew Rockwell and the aforementioned Thomas Woods, both of the Ludwig von Mises Institute; and there were fairly mainstream Republicans, such as former New Mexico Governor Gary Johnson and a pair of former Reagan aides, who have come to believe that their party has been hijacked by a dangerous cabal known as the neocons. Oh, and there was the unpigeonholeable Jesse “The Mind” Ventura, who railed against the two-party system for giving us our national debt and also floated some questions about 9/11.

Yes, it was a bit of a motley crew assembled in St. Paul, but that’s what’s great about America: it’s not the land of the lame and home of the homogeneous but the land and home of the free and brave. The conformist conventions of the duopoly, with all of their rules and restrictions, represent an America I don’t want to visit, let alone live in. But if you want diversity, look to the Ron Paul movement: there are pro-lifers and pro-choicers. There are Christian fundamentalists and gay-rights activists. There are border hawks and free-immigration libertarians.

What the heck could unite all these people?

The answer: a sound understanding of economic reality. The Paul crowd is not agitating for an income tax of 35% or even 25% but zero percent. Why? Because they know that the power to tax is the power to destroy. And they don’t pay lip service to “strengthening the dollar” without specific proposals; they know what must be done: the Fed must go the way of Enron, for it is just as corrupt and infinitely more destructive; and gold must be restored to its proper status as monetary base.

Sure, there are “mainstream” economists who would debate these radical proposals. But at the Democratic and Republican national conventions, there was no debate. Four and a half percentage points cannot possibly distinguish a “conservative” from a “liberal” if those terms are to have any meaning. And that the banking and currency system of the U.S. is above reproach – even in light of the recent bubbles, busts, and bailouts – is a black mark against American “democracy.”

A hundred years ago, the people of America were smart enough to debate economic issues. William Jennings Bryan built an entire presidential campaign on silver coinage. The Rally for the Republic showed the American people are still smart enough to consider issues of money and banking.

Is There a Correlation Between Crime and the Economy?

Crime rates should drop during good economic times and rise during bad ones. So very soon if you are walking the streets of New York late at night, you may be at risk of being mugged by gangs of investment bankers, driven to acts of desperate violence by the travails of the credit markets. This seems logical at first glance – people who lose their jobs may turn instead to burglary and theft to get what they want. But there is little evidence to suggest that crime rates drop during good economic times and rise during bad ones. Crime rates rose every year between 1955 and 1972, even as the economy surged, with only a brief, mild recession in the early 1960s. A bad economy doesn’t always bring more crime. Crime rates fell about one third between 1934 and 1938 while the nation was struggling to emerge from the Great Depression and weathering another severe economic downturn in 1937 and 1938.

Declining wages for poor young males drew them to crime as crack ravaged inner cities during the economic boom of the late 1980s. Low wages and the lure of crack profits thus discouraged young men from finding honest work. Economists and criminologists who can refer to data from all 50 U.S. states to help them understand what is going on have found little indication of a strong link between economic growth and crime. They instead credit some of the sharp fall in crime in the U.S. in the 1990s to larger police forces and harsher prison sentences. More stringent laws and larger government expenditures have also played an important role in the fall in the crime rate.

The truth is that broad figures on crime conceal large differences in specific crimes, each with its own particular explanation. Crimes, broadly speaking, have been falling for a decade. Car thefts are down because cars are harder to steal. Modern televisions and other home electronic equipments tend to be either too large to steal or too cheap to bother with.

That should take the focus away from crime. The economic downturn is threatening an increase in crime, illegal immigration, and extremism, putting further strain on tight police budgets. Illegal working is forecast to increase as migrants’ opportunities for legal employment decline and businesses seek to save costs.

Economic downturn also risks increasing the appeal of far right extremism and racism. Experiencing racism can be one of the factors that can lead to people becoming terrorists.

Local police resources could come under increasing pressure. The ever increasing gas prices might leave the police forces facing financial pressures.

So if the war against crime is to be won, then more stringent laws and increased federal, state, and local spending on law enforcement are needed. In other words, crime declines not because the economy is booming but because the government passes stringent laws and spends money – larger prisons, more police, and tougher punishments.