John Deere 216

Eliminating emergency reserves

The ability to manipulate the price of essential foods worldwide at will -- almost irrespective of today’s physical supply and demand for grains -- is quite recent. It is also scarcely understood.

Up until the grain crisis of the mid-1970s there was no single "world price" for grain, the benchmark for the price of all foods and food products. Grain prices were determined locally in thousands of market places where buyer and seller met. The onset of economic globalization was to change that radically to the worse as the tiny percent of grains traded internationally were able to set the global price for the bulk of grains grown.

From the time of the earliest traces left by Sumerian civilization some two thousand years before Christ, in the region between the Tigris and Euphrates rivers in today's Iraq, almost every culture had the practice of storing a reserve stock of a grain harvest – right up to the most recent times. Wars, droughts and famines were the reason. When properly stored, grain can be safely stored over a period of about seven years, enabling reserve stocks in case of an emergency.

After the Second World War, Washington created a General Agreement on Tariffs and Trade (GATT) to serve as a wedge to push free trade among major industrial nations, especially the European Community. During initial negotiations, agriculture was deliberately kept off the table at the insistence of the Europeans, especially the French, who regarded political defense of Europe’s Common Agriculture Policy (CAP) and European agriculture protections as non-negotiable.

Beginning in the 1980s with the political crusades of Margaret Thatcher and Ronald Reagan, the extremist free market views of Chicago's Milton Friedman became increasingly accepted by leading European power circles. Step-by-step the resistance to the Washington agriculture free trade agenda dissolved.