Food: The Key To Fixing Climate Change

Even cereals are up at 14%, with the basic staple, rice, at 20%. Much of this is self-inflicted and controllable, provided we are ready to take some bold steps. While food inflation hovered below 4% during FY 2001 to FY 2008, it jumped to double digits during FY 2009 to FY 2013 and is continuing at that pace. One reason was the big fiscal stimulus of FY 2009, just before the last election, which doubled the fiscal deficit in a single year. In a country where an average household spends almost half of its expenditure on food, it was but natural that this increased spending will put pressure on food prices. The supply response in agriculture is positive and gave a high farm GDP growth in response to better price incentives, but not so high as to keep have to control food prices in the medium term, we must wind down the fiscal stimulus in a calibrated way. That’s where the dilemma between growth and food inflation appears. Though the fiscal stimulus helped raise overall growth, it also pumped up lot of expenditure through NREGA-type activities. These have led to an unprecedented increase in farm wages, which have been growing at almost 18% per annum for the last five years. This is causing cost push food inflation, partly also via MSPs responding to rising costs in farming. Unless labour and land productivity increases faster, this pressure on food inflation is going to stay. But policymakers can do a lot to bring food inflation from 18% to less than 7%, if not below 4%. The government has huge stocks of cereals, way above what it needs for its commitments under NFSA. At least 20 million tonnes of rice and wheat can be liquidated in the domestic market at pragmatic prices (wheat at Rs 1,400/quintal and rice at Rs 1,900/qtl).

Some food aid funneled through states will continue if the government shuts down

One franchisee quoted in the report said restaurant owners should expect to work 10- to 14-hour days. Read the report. Not an easy path to success Investing in a food franchise can also take substantially more start-up capital than other types of franchises, thanks to real-estate, equipment and supply costs, plus other expenses. Still, the initial investment can vary from as low as $34,500 to as high as $4 million, depending on the type of restaurant, the report said. While starting any type of franchise may be easier than launching an independent small business, franchising is not really an easy path to success, Stites said. Key mistakes to avoid The surveys finding that satisfaction is lower among food franchisees than other types of franchisees is not unusual, Stites said. The food sector is a little bit more complicated a business to run, he said, noting that its often very employee heavy, plus entails dealing with fluctuating food prices, the potential for food spoilage and other challenges. On top of that, youve got probably some of the slimmest profit margins of any business, he said. Franchisees without prior restaurant experience may be in for a rude awakening. In the food business, typically people are working 50, 60 hours a week. Theyre managing lots of teenagers or a first-entry-level-job type of employee, Stites said. If youve come out of the corporate world, maybe you had an executive assistant, maybe you had a team of people to help you do projects, you buy a food franchisechances are youre not going to do well. Satisfaction varies by company Another driver of satisfaction, or lack thereof: How the franchiser treats its franchisees. There are companies that are transparent and have a very inclusive culture, Stites said. They see their franchisees as partners.

(Tracy A. Woodward/The Washington Post.) Yesterday we cited a report that predicted federal food aid funneled through the states would dry up quickly if Congress fails to pass a bill authorizing some funding beyond Oct. 1. Well, the Department of Agriculture now says that thats true for some programs, but not for all. In a document outlining its contingency plan for a potential shutdown next week, USDA said funding for Supplemental Nutrition Assistance Program benefits formerly known as food stamps will continue in Octoberunder authority granted by the 2009 stimulus bill. In addition, the agency said, states might still also be able to receive partial reimbursements for related administrative costs from a $2 billion contingency fund. Child nutrition programs including School Lunch, School Breakfast, Child and Adult Care Feeding, Summer Food Service and Special Milk will also continue into October, the USDA said. But not all federal food aid will continue, though advocates say many states may pick up the tab. Federal funding for administration and benefits under the Supplemental Nutrition Program for Women, Infants and Children which provides grants to states for food aid, health care referrals and nutrition education for some low-income women and children will cease if the government shuts down. While the USDA report says states may only have enough leftover funds for a week or so, advocates believe that many states may choose to fund the program beyond that. Those concerned about whether benefits will be available should call program administrators to get the most up-to-date information, they say. Niraj Chokshi reports for GovBeat, The Post’s state and local policy blog. Before that he covered budget, tax and transportation policy for National Journal, blogged at The Atlantic and covered the business of the nation’s largest law firms in California for The Recorder.

Food franchisees face low pay, long hours

Differing estimates, same conclusion In 2012, the CGIARResearch Program on Climate Change, Agriculture and Food Security released a report stating greenhouse gas emissions (GHG) from the global food system accounted for about 28% of all GHG emissions. Of that chunk, deforestation and direct emissions from farms made up the largest percentage. Breakdown of agricultural emissions Source: Research Program on Climate Change, Agriculture and Food Security More recently, the United Nations Conference on Trade and Development came out with its own estimates, which showed an even greater effect from food, accounting for roughly half of all global GHG emissions — with deforestation and transportation creating the most pollution. Source: United Nations Conference on Trade and Development Instead of focusing on the rather large differences between these two estimates, I think it’s far more productive to simply acknowledge that the global-food-production system plays an enormous role in climate change — and that it’s also an important player in reversing the negative effects of climate change. Emissions directly from farms If we do the math, both studies estimate that pollution coming directly from agricultural production accounts for about 13% of all GHGs. The two biggest contributors to this subgroup are: Nitrous oxide emanating from the soil as a result of increased usage of fertilizers. Enteric fermentation resulting when livestock consume food and excrete methane gas. Commonly, nitrous oxide seeps into the atmosphere because of the heavy usage of ammonia in fertilizers. The top three ammonia producers worldwide account for roughly one-fifth of the global market. They are, in order of total capacity,Yara (NASDAQOTH: YARIY ) , CF Industries (NYSE: CF ) , and PotashCorp (NYSE: POT ) . As far as meat is concerned, the Big Four American producers are, in order of market share,Tyson (NYSE: TSN ) , Cargill, JBS USA, and National Beef Packing. What it means for your investments For right now, the short answer is that this means absolutely nothing for your investments. Though I think population growth is a function of increased food production — and not the other way around — I’m very much in the minority. Knowing that, farmers and officials are likely to continue relying on fertilizers to prop up harvests for the foreseeable future.