I came across this humdinger of a letter to Hillary Clinton at the Celsias site. Whilst it could be regarded as some kind of political stunt it does raise serious issues about the nature of our globalised food chain.

I have never been a fan of Monsanto and there despicable deeds have been well recorded. But as we have seen with the impact of biofuels, the whole food production process is changing and judging from the price increases not for the betterment of consumers. A new term has been coined: Agflation

In New Zealand we are seeing the benefits and costs of food price rises. Our diary farmers are raking it in but consumers are suffering. But consumers are taking action; they are eating less meat and dairy; they are reinstating the veggie patch and being more circumspect about their shopping habits.

This brings several benefits: healthwise less meat and dairy is generally good for you; growing your own veggies creates a sense of self-sufficiency, gets you in touch with nature and you get to eat really fresh food; there is a greater focus on food and what you eat with many people finding it cheaper to avoid processed food and make your own from scratch.

Isn’t that what many activists have been calling for for a long time? And the reason that this is happening? The price mechanism.

People respond to price signals. And when the respond they can be very smart about it. There’s a lesson in here for the bureaucrats and activists.

Let’s hope they find it

It’s astonishing but not entirely unexpected. The British taxpayer is the proud owner of the Northern Rock and 100bln worth of loans. It’s a sad reflection on the state of the UK banking system that they can’t find a buyer for this.

But this simply hastens the decline of the banking system as we know it. In 10-20 years time we will look back on this and see how important this moment was. What the banking system or indeed money looks like remains to be seen but our trust in current arrangements must be questioned.

More importantly for football fans is the Northern Rock’s sponsorship of Newcastle. Surely the taxpayer won’t be happy about this. Supposedly the sponsorship is safe but they said that about Northern Rock.

Recent data shows the downturn in property prices is well underway. Whilst the big picture is clouded we are seeing some major shifts. In Auckland the median price was down 6% from December with Auckand city down a whopping 15%. Now sales volumes are at seven year record lows which impacts on the numbers but the reality is quite clear: the market has had a vicious turn and no amount of talking it up is going to help.

What is off major concern is the knock on effects. These will be felt over the next 6 months especially with interest rates continuing to bite. Yet some economists are looking for further rate rises.  The recent drought is expected to eat into farmers’ recent windfall gains from commodity prices rises.

So the Reserve Bank needs to look through this inflation blip and focus on the impacts of the credit crunch and falling house and land prices.  And banks have a responsibility not to pull the plug too quickly but work with people and businesses if they get into trouble.

It’s a tough time to be exposed in property.

Finally some research has been done on the effects of bio-fuel crops on the ecosystem. As widely expected the research has shown that bio-fuels can be highly destructive on the environment as well as actually adding carbon into the atmosphere.

So much for being the replacement to fossil fuels.

This a prime example of doing something because it looks like the right or a good thing to be doing. Those people with prescriptive views on how we should live our lives rarely take the trouble to do the sums and that’s where the problem arises.

Until we start to price up environmental externalities and let them flow through the price mechanism we will not get to see the true cost. So we will keep doing things because they feel good to us or they remove some embedded guilt about the way we use the environment.

The market is working in an inefficient manner and the environment continues to suffer because of it. Many environmentalists have a big grudge against the market perceiving it to be a monstrous creation of the capitalist machine. They are sadly mistaken. The market is how we show the real value of the environment to everyone not just those who think humans are a stain upon it.

Now I don’t want to tar all bio-fuels with the same brush. Bio-diesel from algae for example is using a waste stream and an easily grown input. Large swathes of forest don’t need to be cut down for this process.

But until we see the costs flow through the system we just don’t know.

So after the environment minister said the 13th chapter was inaccurate, it gets released. How ridiculous is that?

How can anyone have any faith in a government which is so transparently incompetent. It’s good to read Simon Upton calling for the Parliamentary Commissioner for the Environment to take charge of the next report.

13: unlucky for some.

I wasn’t going to bother with this really. Who needs another dose of reality? But there is an interesting story here.

The Greens have come out with a story about a buried chapter in this report. They claim that Chapter 13 was pulled due to a very negative slant on the dairy industry. It pointed to dairy as the “largest cause of environmental decline” in New Zealand. Anyone who likes to swim in their local stream, river or lake could attest to that.

The dairy industry is also one of the biggest earners for the country. There you have it. New Zealand is no more immune to political lobbying than any other country except its pretty transparent. It’s hard to keep anything a secret here.

The Greens propose that this report come under the auspices of the Parliamentary Commissioner of the Environment rather than the government.

Yes to that!  The government simply cannot be trusted to be objective. Yes it’s a sad statement to make but that’s the way it is until we get a more distributed form of democracy and power.

If you can’t sleep then here is the link to the various reports.