LaRouche: "We Don't Have the Food Supplies..."
July 11, 2012 • 8:10AM

"We don't have the food supplies to maintain the population of the United States itself, right now!" Lyndon LaRouche said this July 7. We are now well into the principal crop season of North America, and it's a catastrophe. Drought persists in the entire southwestern part of the continent, but also dryness and heat have struck a multi-state zone in the U.S. Cornbelt. The weather impact, the decades of anti-improvements, plus the barring of any food reserves under WTO rules, means hunger and famine. A few updates from Mexico and the U.S. document the scale of this emergency.

Mexico: Hunger, Drought, Desperation

NATIONWIDE: Two out of three hectares are affected by drought. The National Water Commission, CONAGUA, confirms that 1,213 municipalities suffer the same phenomenon in varying degrees. Nineteen of the 32 states are affected by drought.

There are now 20 million rural poor, and nationwide, there are 52 million in total, out of the population of 115 mn. Cruz Lopez Aguilar, head of the House Agro and Cattle Commission, estimates that there's been a 35% increase in poverty nationwide as a result of 2011 drought, now extending well into 2012. "That's terrible, because this is added to the 52% poverty we see in the whole country..." In money terms, the drought directly is reducing the GDP by 10 percent, according to INEGI, Mexico's statistical agency.

FOREST FIRES are occurring. INEGI reports that 2011 was one of the worst years ever, in terms of forest fires, in which Coahuila was especially affected, where 425,000 hectares (about a million acres) were destroyed. Losses amount to $15 bn. pesos nationwide. Almost 1 mn. Mexicans are forced out of their locales every year due to forest fires. 53% of area affected by forest fires is concentrated in four states: Durango, Coahuila, Sonora, and Chihuahua, where drought has been most severe. A total of 243,000 hectares in these 4 states alone, have been burned.

WATER WARS. "Social conflict" is becoming the operative phrase as farmers and citizens in different parts of the country are fighting with each other, drilling illegal wells, etc. Something similar has occurred in drought-stricken parts of Brazil. An Agriculture Ministry official has complained that since there has not been a total ban on drilling wells, this has led to a crisis in over-extraction of groundwater. Head of the Independent Peasant Confederation (CCI) says that there must be a "New Rural Development Plan" to create jobs and stimulate domestic production, to avoid social conflict.

The first death from this occurred June 7 in Durango, when an 8-year-old girl was shot, when her family was trying to take water from a disputed well. Residents are defending water rights with machetes in one Durango municipality, according to El Universal. A local official in Durango warns that because 19 municipalities are suffering water shortages, this could lead to conflict between municipalities.

The situation is acute in Chihuahua, were Mennonite groups are digging illegal wells.

FOOD CRISIS. Mexico is at present 40% food-import dependent, according to CCI leader Rafael Galindo, who says that this figure could go to 80%, due not only to drought, but also to floods, tornados, and other natural disasters.

Beef deficit. Mexico now has a beef deficit: between January and June, the country imported $600 mn. worth of beef, while it exported $400 mn. worth, according to head of the National Confederation of Cattle-Growers Organizations. An estimated 33% of the national cattle herd is damaged, that is, 9 million head.

Crop damage. Cruz Lopez Aguilar, head of the House Agro and Cattle Commission, says that even in areas where some rain has occurred, there is accumulated damage caused by two years of drought, and in some cases, farmers haven't been able to produce crops for three years.

2011 was the worst year of drought, during which 2.7 mn. hectares were lost for seven of the major crops, especially in Sinaloa, Zacatecas, and Guanajuato.

- Some State Highlights: -

— Nuevo Leon: 50,000 head of cattle have been destroyed, 10% of the state's herd. The volume of water impounded by dams has fallen by 27% over the past 12 months. Orange exports are down by 50%; crop is 35% of normal.

— Zacatecas: An officially estimated 80,000 head of cattle were lost. The regional cattle-growers organization says cattle losses are higher, at 150,000 head. Bean production 25% of normal, down to 73,000 tons from 300,000 tons. The dams are at 17% of capacity.

— Durango: there is neither corn nor beans for domestic consumption; infant malnutrition is up by 50%, and especially bad in Indian communities. There are 1,200 communities without water. The cow cemetary in one municipality is 1 km. wide. 100,000 head of cattle have died in the state.

United States — Scrounging for Corn

The largest extent of drought in the contiguous United States was reported last week, by the "Drought Monitor" program of NOAA/NASA/USDA, since it first began doing its weekly map and grid, in year 2000.

The U.S. corn crop, under the persistent heat and dryness, was once again downgraded in the weekly USDA Crop Progress Report issued July 9. Nationwide, corn was rated as only 40 percent "good." This is down from July 2 rating of 48% good, down from 56% the week before, and down from 72% rated good five weeks ago.

Given the already low corn supplies on hand as of last Winter, there now is skirmishing to line up corn in the countryside. Firsthand reports received in past 72 hours, describe some of the dynamics involved in what LaRouche has been forewarning for months. Absolute food shortages, and chaos in the food chain:

* FARMERS FACE FINANCIAL SHOCK from having forward contracted to supply corn they now won't have, and can't obtain. Farmers have been conditioned to be savvy, and to advance buy and sell grain, and advance-contract for inputs — called "risk management." But their own crops are withering in the fields, and they cannot line up other sources to fulfull contracts they made, even at any (big loss) price.

* ETHANOL PLANTS IN SOUTHEAST IOWA are facing financial failure. They have cut back or suspended production, because of the too-high price of corn, or absolute lack of corn. They have been trying to sell their stock; no one is buying. A mass crash of ethanol companies regionally (farmer-owned) is imminent.

* MAJOR ETHANOL COMPANIES, including some big-names based in the Dakotas, are facing failure.

* A FREAKED-OUT MASS-EMAIL WENT OUT MONDAY FROM THE RENEWABLE FUELS ASS'N, attempting to scotch a rumor that there is a corn shortage sufficient to activate a waiver of the Federal mandate for ethanol, the Renewable Fuels Standard, RFS. The email prayed to the market gods: "Ultimately, the market will sort out any imbalances in supply and demand." It went on, "Ethanol producers have tightened their belts in recent weeks and reduced production. Last week's production was the lowest of the year and roughly 10% below levels from January."