Last year, only 51% of personal income was derived from working salaries, the lowest since 1929, according to an analysis by USA Today. The problem stems from the lingering effects of the recession and the high number of unemployed. Wages declined even more during the beginning of 2011, slipping to another historic low of 50.5% in February for personal income. The newspaper also found Americans in 2010 relied more on government assistance than at any other time in the nation's history. A record 18.3% of total personal income was a payment from the government last year for Social Security, Medicare, food stamps, unemployment benefits and other programs. To demonstrate just how high the rate is, government aid averaged about 12.5% annually from 1980 to 2000.
A recent report by the University of Buffalo School of Social Work says single workers in the U.S. need more than $30,000 a year for economic security. Single-parents with two children need nearly twice the income ($57,756) to cover basic expenses and save for emergencies and retirement, while dual-income households with two children require $67,920. The 2010 national poverty level is $10,830 for a single-person family and $18,310 for a family of three.
http://www.presstv.ir/usdetail/177335.html
Saturday, April 30, 2011
Wednesday, April 27, 2011
doom and gloom 2
Most of us are so accustomed to supermarkets which are absolutely packed to the gills with massive amounts of really inexpensive food that they cannot even imagine that life could be any other way. Unfortunately, that era maybe ending. As competition for food supplies increases, food prices are going to go up. For us it isn't going to happen today, and it probably isn't going to happen tomorrow, but at some point a major league food crisis is going to strike.
#1 According to the World Bank, 44 million people around the globe have been pushed into extreme poverty since last June because of rising food prices.
#2 The world is losing topsoil at an astounding rate. In fact, according to Lester Brown, "one third of the world's cropland is losing topsoil faster than new soil is forming through natural processes".
#3 Due to U.S. ethanol subsidies, almost a third of all corn grown in the United States is now used for fuel. This is putting a lot of stress on the price of corn.
#4 Due to a lack of water, some countries in the Middle East find themselves forced to almost totally rely on other nations for basic food staples. For example, it is being projected that there will be no more wheat production in Saudi Arabia by the year 2012.
#5 Water tables all over the globe are being depleted at an alarming rate due to "overpumping". According to the World Bank, there are 130 million people in China and 175 million people in India that are being fed with grain with water that is being pumped out of aquifers faster than it can be replaced. So what happens once all of that water is gone?
#6 In the United States, the systematic depletion of the Ogallala Aquifer could eventually turn "America's Breadbasket" back into the "Dust Bowl".
#7 Diseases such as UG99 wheat rust are wiping out increasingly large segments of the world food supply.
#8 The tsunami and subsequent nuclear crisis in Japan have rendered vast agricultural areas in that nation unusable. In fact, there are many that believe that eventually a significant portion of northern Japan will be considered to be uninhabitable. Not only that, many are now convinced that the Japanese economy, the third largest economy in the world, is likely to totally collapse as a result of all this.
#9 The price of oil may be the biggest factor on this list. The way that we produce our food is very heavily dependent on oil. The way that we transport our food is very heavily dependent on oil. When you have skyrocketing oil prices, our entire food production system becomes much more expensive. If the price of oil continues to stay high, we are going to see much higher food prices and some forms of food production will no longer make economic sense at all.
#10 At some point the world could experience a very serious fertilizer shortage. According to scientists with the Global Phosphorus Research Initiative, the world is not going to have enough phosphorous to meet agricultural demand in just 30 to 40 years.
#11 Food inflation is already devastating many economies around the globe. For example, India is dealing with an annual food inflation rate of 18 percent.
#12 According to the United Nations, the global price of food reached a new all-time high in February.
#13 According to the World Bank, the global price of food has risen 36% over the past 12 months.
#14 The commodity price of wheat has approximately doubled since last summer.
#15 The commodity price of corn has also about doubled since last summer.
#16 The commodity price of soybeans is up about 50% since last June.
#17 The commodity price of orange juice has doubled since 2009.
#18 There are about 3 billion people around the globe that live on the equivalent of 2 dollars a day or less and the world was already on the verge of economic disaster before this year even began.
From here
#1 According to the World Bank, 44 million people around the globe have been pushed into extreme poverty since last June because of rising food prices.
#2 The world is losing topsoil at an astounding rate. In fact, according to Lester Brown, "one third of the world's cropland is losing topsoil faster than new soil is forming through natural processes".
#3 Due to U.S. ethanol subsidies, almost a third of all corn grown in the United States is now used for fuel. This is putting a lot of stress on the price of corn.
#4 Due to a lack of water, some countries in the Middle East find themselves forced to almost totally rely on other nations for basic food staples. For example, it is being projected that there will be no more wheat production in Saudi Arabia by the year 2012.
#5 Water tables all over the globe are being depleted at an alarming rate due to "overpumping". According to the World Bank, there are 130 million people in China and 175 million people in India that are being fed with grain with water that is being pumped out of aquifers faster than it can be replaced. So what happens once all of that water is gone?
#6 In the United States, the systematic depletion of the Ogallala Aquifer could eventually turn "America's Breadbasket" back into the "Dust Bowl".
#7 Diseases such as UG99 wheat rust are wiping out increasingly large segments of the world food supply.
#8 The tsunami and subsequent nuclear crisis in Japan have rendered vast agricultural areas in that nation unusable. In fact, there are many that believe that eventually a significant portion of northern Japan will be considered to be uninhabitable. Not only that, many are now convinced that the Japanese economy, the third largest economy in the world, is likely to totally collapse as a result of all this.
#9 The price of oil may be the biggest factor on this list. The way that we produce our food is very heavily dependent on oil. The way that we transport our food is very heavily dependent on oil. When you have skyrocketing oil prices, our entire food production system becomes much more expensive. If the price of oil continues to stay high, we are going to see much higher food prices and some forms of food production will no longer make economic sense at all.
#10 At some point the world could experience a very serious fertilizer shortage. According to scientists with the Global Phosphorus Research Initiative, the world is not going to have enough phosphorous to meet agricultural demand in just 30 to 40 years.
#11 Food inflation is already devastating many economies around the globe. For example, India is dealing with an annual food inflation rate of 18 percent.
#12 According to the United Nations, the global price of food reached a new all-time high in February.
#13 According to the World Bank, the global price of food has risen 36% over the past 12 months.
#14 The commodity price of wheat has approximately doubled since last summer.
#15 The commodity price of corn has also about doubled since last summer.
#16 The commodity price of soybeans is up about 50% since last June.
#17 The commodity price of orange juice has doubled since 2009.
#18 There are about 3 billion people around the globe that live on the equivalent of 2 dollars a day or less and the world was already on the verge of economic disaster before this year even began.
From here
doom and gloom once again
Taken from this website , an article by Lestor Brown:-
In the United States, when world wheat prices rise by 75 percent, as they have over the last year, it means the difference between a $2 loaf of bread and a loaf costing maybe $2.10. If, however, you live in New Delhi, those skyrocketing costs really matter: A doubling in the world price of wheat actually means that the wheat you carry home from the market to hand-grind into flour for chapatis costs twice as much. And the same is true with rice. If the world price of rice doubles, so does the price of rice in your neighborhood market in Jakarta. And so does the cost of the bowl of boiled rice on an Indonesian family's dinner table. For Americans, who spend less than one-tenth of their income in the supermarket, the soaring food prices we've seen so far this year are an annoyance, not a calamity. But for the planet's poorest 2 billion people, who spend 50 to 70 percent of their income on food, these soaring prices may mean going from two meals a day to one.
Historically, price spikes tended to be almost exclusively driven by unusual weather -- a monsoon failure in India, a drought in the former Soviet Union, a heat wave in the U.S. Midwest. Such events were always disruptive, but thankfully infrequent. More alarming still, the world is losing its ability to soften the effect of shortages. In response to previous price surges, the United States, the world's largest grain producer, was effectively able to steer the world away from potential catastrophe. From the mid-20th century until 1995, the United States had either grain surpluses or idle cropland that could be planted to rescue countries in trouble. When the Indian monsoon failed in 1965, for example, President Lyndon Johnson's administration shipped one-fifth of the U.S. wheat crop to India, successfully staving off famine. Now the safety cushion is gone.
The doubling of grain prices since early 2007 has been driven primarily by two factors: accelerating growth in demand and the increasing difficulty of rapidly expanding production. The United States, which once was able to act as a global buffer of sorts against poor harvests elsewhere, is now converting massive quantities of grain into fuel for cars, even as world grain consumption, which is already up to roughly 2.2 billion metric tons per year, is growing at an accelerating rate. A decade ago, the growth in consumption was 20 million tons per year. More recently it has risen by 40 million tons every year. But the rate at which the United States is converting grain into ethanol has grown even faster. In 2010, the United States harvested nearly 400 million tons of grain, of which 126 million tons went to ethanol fuel distilleries (up from 16 million tons in 2000). This massive capacity to convert grain into fuel means that the price of grain is now tied to the price of oil. So if oil goes to $150 per barrel or more, the price of grain will follow it upward as it becomes ever more profitable to convert grain into oil substitutes. And it's not just a U.S. phenomenon: Brazil, which distills ethanol from sugar cane, ranks second in production after the United States, while the European Union's goal of getting 10 percent of its transport energy from renewables, mostly biofuels, by 2020 is also diverting land from food crops.
This is not merely a story about the booming demand for food. Everything from falling water tables to eroding soils and the consequences of global warming means that the world's food supply is unlikely to keep up with our collectively growing appetites. Take climate change: The rule of thumb among crop ecologists is that for every 1 degree Celsius rise in temperature above the growing season optimum, farmers can expect a 10 percent decline in grain yields. This relationship was borne out all too dramatically during the 2010 heat wave in Russia, which reduced the country's grain harvest by nearly 40 percent.
While temperatures are rising, water tables are falling as farmers overpump for irrigation. This artificially inflates food production in the short run, creating a food bubble that bursts when aquifers are depleted and pumping is necessarily reduced to the rate of recharge. In arid Saudi Arabia, irrigation had surprisingly enabled the country to be self-sufficient in wheat for more than 20 years; now, wheat production is collapsing because the non-replenishable aquifer the country uses for irrigation is largely depleted. The Saudis soon will be importing all their grain. Saudi Arabia is only one of some 18 countries with water-based food bubbles. All together, more than half the world's people live in countries where water tables are falling. The politically troubled Arab Middle East is the first geographic region where grain production has peaked and begun to decline because of water shortages, even as populations continue to grow. Grain production is already going down in Syria and Iraq and may soon decline in Yemen. But the largest food bubbles are in India and China. In India, where farmers have drilled some 20 million irrigation wells, water tables are falling and the wells are starting to go dry. The World Bank reports that 175 million Indians are being fed with grain produced by overpumping. In China, overpumping is concentrated in the North China Plain, which produces half of China's wheat and a third of its corn. An estimated 130 million Chinese are currently fed by overpumping. How will these countries make up for the inevitable shortfalls when the aquifers are depleted?
Even as we are running our wells dry, we are also mismanaging our soils, creating new deserts. Soil erosion as a result of overplowing and land mismanagement is undermining the productivity of one-third of the world's cropland. How severe is it? Look at satellite images showing two huge new dust bowls: one stretching across northern and western China and western Mongolia; the other across central Africa. Wang Tao, a leading Chinese desert scholar, reports that each year some 1,400 square miles of land in northern China turn to desert. In Mongolia and Lesotho, grain harvests have shrunk by half or more over the last few decades. North Korea and Haiti are also suffering from heavy soil losses.
In this era of tightening world food supplies, the ability to grow food is fast becoming a new form of geopolitical leverage, and countries are scrambling to secure their own parochial interests at the expense of the common good. The first signs of trouble came in 2007, when farmers began having difficulty keeping up with the growth in global demand for grain. Grain and soybean prices started to climb, tripling by mid-2008. In response, many exporting countries tried to control the rise of domestic food prices by restricting exports. Among them were Russia and Argentina, two leading wheat exporters. Vietnam, the No. 2 rice exporter, banned exports entirely for several months in early 2008. So did several other smaller exporters of grain. With exporting countries restricting exports in 2007 and 2008, importing countries panicked. No longer able to rely on the market to supply the grain they needed, several countries took the novel step of trying to negotiate long-term grain-supply agreements with exporting countries. The Philippines, for instance, negotiated a three-year agreement with Vietnam for 1.5 million tons of rice per year. A delegation of Yemenis traveled to Australia with a similar goal in mind, but had no luck. In a seller's market, exporters were reluctant to make long-term commitments.
Fearing they might not be able to buy needed grain from the market, some of the more affluent countries, led by Saudi Arabia, South Korea, and China, took the unusual step in 2008 of buying or leasing land in other countries on which to grow grain for themselves. Most of these land acquisitions are in Africa, where some governments lease cropland for less than $1 per acre per year. Among the principal destinations were Ethiopia and Sudan, countries where millions of people are being sustained with food from the U.N. World Food Program. That the governments of these two countries are willing to sell land to foreign interests when their own people are hungry is a sad commentary on their leadership. By the end of 2009, hundreds of land acquisition deals had been negotiated, some of them exceeding a million acres. A 2010 World Bank analysis of these "land grabs" reported that a total of nearly 140 million acres were involved -- an area that exceeds the cropland devoted to corn and wheat combined in the United States. Such acquisitions also typically involve water rights, meaning that land grabs potentially affect all downstream countries as well. Any water extracted from the upper Nile River basin to irrigate crops in Ethiopia or Sudan, for instance, will now not reach Egypt, upending the delicate water politics of the Nile by adding new countries with which Egypt must negotiate.
Many of the land deals have been made in secret, and in most cases, the land involved was already in use by villagers when it was sold or leased. Often those already farming the land were neither consulted about nor even informed of the new arrangements. And because there typically are no formal land titles in many developing-country villages, the farmers who lost their land have had little backing to bring their cases to court. Reporter John Vidal, writing in Britain's Observer, quotes Nyikaw Ochalla from Ethiopia's Gambella region: "The foreign companies are arriving in large numbers, depriving people of land they have used for centuries. There is no consultation with the indigenous population. The deals are done secretly. The only thing the local people see is people coming with lots of tractors to invade their lands." Local hostility toward such land grabs is the rule, not the exception. In 2007, as food prices were starting to rise, China signed an agreement with the Philippines to lease 2.5 million acres of land slated for food crops that would be shipped home. Once word leaked, the public outcry -- much of it from Filipino farmers -- forced Manila to suspend the agreement. A similar uproar rocked Madagascar, where a South Korean firm, Daewoo Logistics, had pursued rights to more than 3 million acres of land. Word of the deal helped stoke a political furor that toppled the government and forced cancellation of the agreement. Indeed, few things are more likely to fuel insurgencies than taking land from people. Agricultural equipment is easily sabotaged. If ripe fields of grain are torched, they burn quickly. Not only are these deals risky, but foreign investors producing food in a country full of hungry people face another political question of how to get the grain out. Will villagers permit trucks laden with grain headed for port cities to proceed when they themselves may be on the verge of starvation? The potential for political instability in countries where villagers have lost their land and their livelihoods is high. Conflicts could easily develop between investor and host countries. We don't know, but the World Bank analysis indicates that only 37 percent of the projects will be devoted to food crops. Most of the land bought up so far will be used to produce biofuels and other industrial crops. Even if some of these projects do eventually boost land productivity, who will benefit? If virtually all the inputs -- the farm equipment, the fertilizer, the pesticides, the seeds -- are brought in from abroad and if all the output is shipped out of the country, it will contribute little to the host country's economy. At best, locals may find work as farm laborers, but in highly mechanized operations, the jobs will be few. At worst, impoverished countries like Mozambique and Sudan will be left with less land and water with which to feed their already hungry populations. Thus far the land grabs have contributed more to stirring unrest than to expanding food production.
This January, a new stage in the scramble among importing countries to secure food began to unfold when South Korea, which imports 70 percent of its grain, announced that it was creating a new public-private entity that will be responsible for acquiring part of this grain. With an initial office in Chicago, the plan is to bypass the large international trading firms by buying grain directly from U.S. farmers. As the Koreans acquire their own grain elevators, they may well sign multiyear delivery contracts with farmers, agreeing to buy specified quantities of wheat, corn, or soybeans at a fixed price. Other importers will not stand idly by as South Korea tries to tie up a portion of the U.S. grain harvest even before it gets to market. The enterprising Koreans may soon be joined by China, Japan, Saudi Arabia, and other leading importers. Although South Korea's initial focus is the United States, far and away the world's largest grain exporter, it may later consider brokering deals with Canada, Australia, Argentina, and other major exporters. This is happening just as China may be on the verge of entering the U.S. market as a potentially massive importer of grain. With China's 1.4 billion increasingly affluent consumers starting to compete with U.S. consumers for the U.S. grain harvest, cheap food, seen by many as an American birthright, may be coming to an end.
No one knows where this intensifying competition for food supplies will go. Food nationalism may help secure food supplies for individual affluent countries, but it does little to enhance world food security. Indeed, the low-income countries that host land grabs or import grain will likely see their food situation deteriorate. While the Food and Agriculture Organization (FAO) collects and analyzes global agricultural data and provides technical assistance, there is no organized effort to ensure the adequacy of world food supplies. The U.N. World Food Program (WFP), where the United States is the leading donor has food-assistance operations in some 70 countries and an annual budget of $4 billion. There is little international coordination otherwise. French President Nicolas Sarkozy -- the reigning president of the G-20 -- is proposing to deal with rising food prices by curbing speculation in commodity markets. Useful though this may be, it treats the symptoms of growing food insecurity, not the causes. The world now needs to focus not only on agricultural policy, but on a structure that integrates it with energy, population, and water policies, each of which directly affects food security. But that is not happening. Instead, as land and water become scarcer, as the Earth's temperature rises, and as world food security deteriorates, a dangerous geopolitics of food scarcity is emerging. Land grabbing, water grabbing, and buying grain directly from farmers in exporting countries are now integral parts of a global power struggle for food security. With grain stocks low and climate volatility increasing, the risks are also increasing. We are now so close to the edge that a breakdown in the food system could come at any time.
In the United States, when world wheat prices rise by 75 percent, as they have over the last year, it means the difference between a $2 loaf of bread and a loaf costing maybe $2.10. If, however, you live in New Delhi, those skyrocketing costs really matter: A doubling in the world price of wheat actually means that the wheat you carry home from the market to hand-grind into flour for chapatis costs twice as much. And the same is true with rice. If the world price of rice doubles, so does the price of rice in your neighborhood market in Jakarta. And so does the cost of the bowl of boiled rice on an Indonesian family's dinner table. For Americans, who spend less than one-tenth of their income in the supermarket, the soaring food prices we've seen so far this year are an annoyance, not a calamity. But for the planet's poorest 2 billion people, who spend 50 to 70 percent of their income on food, these soaring prices may mean going from two meals a day to one.
Historically, price spikes tended to be almost exclusively driven by unusual weather -- a monsoon failure in India, a drought in the former Soviet Union, a heat wave in the U.S. Midwest. Such events were always disruptive, but thankfully infrequent. More alarming still, the world is losing its ability to soften the effect of shortages. In response to previous price surges, the United States, the world's largest grain producer, was effectively able to steer the world away from potential catastrophe. From the mid-20th century until 1995, the United States had either grain surpluses or idle cropland that could be planted to rescue countries in trouble. When the Indian monsoon failed in 1965, for example, President Lyndon Johnson's administration shipped one-fifth of the U.S. wheat crop to India, successfully staving off famine. Now the safety cushion is gone.
The doubling of grain prices since early 2007 has been driven primarily by two factors: accelerating growth in demand and the increasing difficulty of rapidly expanding production. The United States, which once was able to act as a global buffer of sorts against poor harvests elsewhere, is now converting massive quantities of grain into fuel for cars, even as world grain consumption, which is already up to roughly 2.2 billion metric tons per year, is growing at an accelerating rate. A decade ago, the growth in consumption was 20 million tons per year. More recently it has risen by 40 million tons every year. But the rate at which the United States is converting grain into ethanol has grown even faster. In 2010, the United States harvested nearly 400 million tons of grain, of which 126 million tons went to ethanol fuel distilleries (up from 16 million tons in 2000). This massive capacity to convert grain into fuel means that the price of grain is now tied to the price of oil. So if oil goes to $150 per barrel or more, the price of grain will follow it upward as it becomes ever more profitable to convert grain into oil substitutes. And it's not just a U.S. phenomenon: Brazil, which distills ethanol from sugar cane, ranks second in production after the United States, while the European Union's goal of getting 10 percent of its transport energy from renewables, mostly biofuels, by 2020 is also diverting land from food crops.
This is not merely a story about the booming demand for food. Everything from falling water tables to eroding soils and the consequences of global warming means that the world's food supply is unlikely to keep up with our collectively growing appetites. Take climate change: The rule of thumb among crop ecologists is that for every 1 degree Celsius rise in temperature above the growing season optimum, farmers can expect a 10 percent decline in grain yields. This relationship was borne out all too dramatically during the 2010 heat wave in Russia, which reduced the country's grain harvest by nearly 40 percent.
While temperatures are rising, water tables are falling as farmers overpump for irrigation. This artificially inflates food production in the short run, creating a food bubble that bursts when aquifers are depleted and pumping is necessarily reduced to the rate of recharge. In arid Saudi Arabia, irrigation had surprisingly enabled the country to be self-sufficient in wheat for more than 20 years; now, wheat production is collapsing because the non-replenishable aquifer the country uses for irrigation is largely depleted. The Saudis soon will be importing all their grain. Saudi Arabia is only one of some 18 countries with water-based food bubbles. All together, more than half the world's people live in countries where water tables are falling. The politically troubled Arab Middle East is the first geographic region where grain production has peaked and begun to decline because of water shortages, even as populations continue to grow. Grain production is already going down in Syria and Iraq and may soon decline in Yemen. But the largest food bubbles are in India and China. In India, where farmers have drilled some 20 million irrigation wells, water tables are falling and the wells are starting to go dry. The World Bank reports that 175 million Indians are being fed with grain produced by overpumping. In China, overpumping is concentrated in the North China Plain, which produces half of China's wheat and a third of its corn. An estimated 130 million Chinese are currently fed by overpumping. How will these countries make up for the inevitable shortfalls when the aquifers are depleted?
Even as we are running our wells dry, we are also mismanaging our soils, creating new deserts. Soil erosion as a result of overplowing and land mismanagement is undermining the productivity of one-third of the world's cropland. How severe is it? Look at satellite images showing two huge new dust bowls: one stretching across northern and western China and western Mongolia; the other across central Africa. Wang Tao, a leading Chinese desert scholar, reports that each year some 1,400 square miles of land in northern China turn to desert. In Mongolia and Lesotho, grain harvests have shrunk by half or more over the last few decades. North Korea and Haiti are also suffering from heavy soil losses.
In this era of tightening world food supplies, the ability to grow food is fast becoming a new form of geopolitical leverage, and countries are scrambling to secure their own parochial interests at the expense of the common good. The first signs of trouble came in 2007, when farmers began having difficulty keeping up with the growth in global demand for grain. Grain and soybean prices started to climb, tripling by mid-2008. In response, many exporting countries tried to control the rise of domestic food prices by restricting exports. Among them were Russia and Argentina, two leading wheat exporters. Vietnam, the No. 2 rice exporter, banned exports entirely for several months in early 2008. So did several other smaller exporters of grain. With exporting countries restricting exports in 2007 and 2008, importing countries panicked. No longer able to rely on the market to supply the grain they needed, several countries took the novel step of trying to negotiate long-term grain-supply agreements with exporting countries. The Philippines, for instance, negotiated a three-year agreement with Vietnam for 1.5 million tons of rice per year. A delegation of Yemenis traveled to Australia with a similar goal in mind, but had no luck. In a seller's market, exporters were reluctant to make long-term commitments.
Fearing they might not be able to buy needed grain from the market, some of the more affluent countries, led by Saudi Arabia, South Korea, and China, took the unusual step in 2008 of buying or leasing land in other countries on which to grow grain for themselves. Most of these land acquisitions are in Africa, where some governments lease cropland for less than $1 per acre per year. Among the principal destinations were Ethiopia and Sudan, countries where millions of people are being sustained with food from the U.N. World Food Program. That the governments of these two countries are willing to sell land to foreign interests when their own people are hungry is a sad commentary on their leadership. By the end of 2009, hundreds of land acquisition deals had been negotiated, some of them exceeding a million acres. A 2010 World Bank analysis of these "land grabs" reported that a total of nearly 140 million acres were involved -- an area that exceeds the cropland devoted to corn and wheat combined in the United States. Such acquisitions also typically involve water rights, meaning that land grabs potentially affect all downstream countries as well. Any water extracted from the upper Nile River basin to irrigate crops in Ethiopia or Sudan, for instance, will now not reach Egypt, upending the delicate water politics of the Nile by adding new countries with which Egypt must negotiate.
Many of the land deals have been made in secret, and in most cases, the land involved was already in use by villagers when it was sold or leased. Often those already farming the land were neither consulted about nor even informed of the new arrangements. And because there typically are no formal land titles in many developing-country villages, the farmers who lost their land have had little backing to bring their cases to court. Reporter John Vidal, writing in Britain's Observer, quotes Nyikaw Ochalla from Ethiopia's Gambella region: "The foreign companies are arriving in large numbers, depriving people of land they have used for centuries. There is no consultation with the indigenous population. The deals are done secretly. The only thing the local people see is people coming with lots of tractors to invade their lands." Local hostility toward such land grabs is the rule, not the exception. In 2007, as food prices were starting to rise, China signed an agreement with the Philippines to lease 2.5 million acres of land slated for food crops that would be shipped home. Once word leaked, the public outcry -- much of it from Filipino farmers -- forced Manila to suspend the agreement. A similar uproar rocked Madagascar, where a South Korean firm, Daewoo Logistics, had pursued rights to more than 3 million acres of land. Word of the deal helped stoke a political furor that toppled the government and forced cancellation of the agreement. Indeed, few things are more likely to fuel insurgencies than taking land from people. Agricultural equipment is easily sabotaged. If ripe fields of grain are torched, they burn quickly. Not only are these deals risky, but foreign investors producing food in a country full of hungry people face another political question of how to get the grain out. Will villagers permit trucks laden with grain headed for port cities to proceed when they themselves may be on the verge of starvation? The potential for political instability in countries where villagers have lost their land and their livelihoods is high. Conflicts could easily develop between investor and host countries. We don't know, but the World Bank analysis indicates that only 37 percent of the projects will be devoted to food crops. Most of the land bought up so far will be used to produce biofuels and other industrial crops. Even if some of these projects do eventually boost land productivity, who will benefit? If virtually all the inputs -- the farm equipment, the fertilizer, the pesticides, the seeds -- are brought in from abroad and if all the output is shipped out of the country, it will contribute little to the host country's economy. At best, locals may find work as farm laborers, but in highly mechanized operations, the jobs will be few. At worst, impoverished countries like Mozambique and Sudan will be left with less land and water with which to feed their already hungry populations. Thus far the land grabs have contributed more to stirring unrest than to expanding food production.
This January, a new stage in the scramble among importing countries to secure food began to unfold when South Korea, which imports 70 percent of its grain, announced that it was creating a new public-private entity that will be responsible for acquiring part of this grain. With an initial office in Chicago, the plan is to bypass the large international trading firms by buying grain directly from U.S. farmers. As the Koreans acquire their own grain elevators, they may well sign multiyear delivery contracts with farmers, agreeing to buy specified quantities of wheat, corn, or soybeans at a fixed price. Other importers will not stand idly by as South Korea tries to tie up a portion of the U.S. grain harvest even before it gets to market. The enterprising Koreans may soon be joined by China, Japan, Saudi Arabia, and other leading importers. Although South Korea's initial focus is the United States, far and away the world's largest grain exporter, it may later consider brokering deals with Canada, Australia, Argentina, and other major exporters. This is happening just as China may be on the verge of entering the U.S. market as a potentially massive importer of grain. With China's 1.4 billion increasingly affluent consumers starting to compete with U.S. consumers for the U.S. grain harvest, cheap food, seen by many as an American birthright, may be coming to an end.
No one knows where this intensifying competition for food supplies will go. Food nationalism may help secure food supplies for individual affluent countries, but it does little to enhance world food security. Indeed, the low-income countries that host land grabs or import grain will likely see their food situation deteriorate. While the Food and Agriculture Organization (FAO) collects and analyzes global agricultural data and provides technical assistance, there is no organized effort to ensure the adequacy of world food supplies. The U.N. World Food Program (WFP), where the United States is the leading donor has food-assistance operations in some 70 countries and an annual budget of $4 billion. There is little international coordination otherwise. French President Nicolas Sarkozy -- the reigning president of the G-20 -- is proposing to deal with rising food prices by curbing speculation in commodity markets. Useful though this may be, it treats the symptoms of growing food insecurity, not the causes. The world now needs to focus not only on agricultural policy, but on a structure that integrates it with energy, population, and water policies, each of which directly affects food security. But that is not happening. Instead, as land and water become scarcer, as the Earth's temperature rises, and as world food security deteriorates, a dangerous geopolitics of food scarcity is emerging. Land grabbing, water grabbing, and buying grain directly from farmers in exporting countries are now integral parts of a global power struggle for food security. With grain stocks low and climate volatility increasing, the risks are also increasing. We are now so close to the edge that a breakdown in the food system could come at any time.
Monday, April 25, 2011
No sanctuary for the Roma in Rome
About 150 Roma gypsies were barred from participating in the Easter vigil of the basilica of Saint Paul Outside the Walls on Sunday, after temporarily taking shelter there on Good Friday after being forced out of their settlements in the capital.
Amid cries of "shame, shame" from local and foreign pilgrims, the gipsies were blocked from entering St Paul's Outside the Walls. Police had offered the Roma payments of €1,000 (£880)– €500 from Rome city council and €500 from the Roman Catholic charity Caritas – to leave the area in front of the church.
Amid cries of "shame, shame" from local and foreign pilgrims, the gipsies were blocked from entering St Paul's Outside the Walls. Police had offered the Roma payments of €1,000 (£880)– €500 from Rome city council and €500 from the Roman Catholic charity Caritas – to leave the area in front of the church.
Sunday, April 24, 2011
land grabbing
“Nothing will bring a government down faster than hungry people,” says Robert Thompson, former director of rural development at the World Bank.“If a country can’t supply its food domestically, it wants assurances that supplies will be there through thick and thin and that exporting countries will allow trade to flow,” he says.
India’s government is considering buying or leasing millions of acres of land in Central and South America. The purpose: to grow crops that will help feed India’s 1.1 billion people. North of Buenos Aires, Argentina, a Japanese company is growing corn and soybeans for shipment back to Japan. In Africa, a Japanese aid agency works with partners from Brazil and Mozambique to convert part of Guinea’s vast savannah into corn, soybean and cotton production. A leading Malaysian palm-oil producer is looking at plans for a 300,000-hectare (720,000-acre) palm-oil plantation in Cameroon. Bahrain currently produces bananas on 2,400 acres in the Philippines. Kuwait is interested in another 2,400 acres there for rice production. Saudi investors are negotiating for an additional 2,400 acres for aquaculture and are already pumping money into a 12,000-acre project to grow basmati rice, corn, bananas and pineapple. In Mongolia, South Korea has bought more than 800,000 acres to develop “an overseas food base” to procure more food resources. In Romania, nearly 2.4 million acres of farmland are now foreign-owned – about 12% of the country’s base farmland. Most examples involve richer countries with large populations and limited agricultural resources attempting to improve their food security by controlling land and agricultural production in poorer, less developed nations. The growing trend is fueling concerns that the purchases are another form of colonialism.
China is looking to buy 200,000 hectares of farmland in Russia, Australia, Argentina and other countries, the Des Moines Tribune reported in March. In Venezuela and Zimbabwe, they provide machinery and laborers in return for 20% of the harvest. In Australia they buy local land and in Brazil and Argentina they tend to rent. They also rent in Russia and Mongolia. China has already invested $85 million since 2005, the Register adds. “In Venezuela and Zimbabwe, they provide machinery and laborers in return for 20% of the harvest. In Australia they buy local land and in Brazil and Argentina they tend to rent. They also rent in Russia and Mongolia,” the Des Moines Register reported.
Demand for good agricultural land has exploded around the globe. Before 2008, global farmland expanded on average by fewer than 10 million acres annually, but expansion plans in 2009 totaled more than 100 million acres, according to the World Bank. More than 70% of the demand has been in Africa, where Ethiopia, Mozambique, Sudan and other countries have transferred millions of acres to investors. In the food prices crisis of 2008 a number of exporting countries went to either taxing or banning exports, and many food importers like China began to get nervous about food availability. With the erosion of confidence in the ability of world markets to assure supplies, they are thinking that if they own the farms, they have a better chance of getting the food out.
Jay O’Neil, senior agricultural economist at Kansas State’s international grains program, argues that big investments in foreign farmland don’t do much to solve nations’ food security fears. “In countries like China, the leaders get up each morning and ask ‘How are we going to guarantee food security for the coming years?’” says O’Neil. “They don’t realize that buying land doesn’t solve the question. It has zero effect on domestic price inflation, and it doesn’t guarantee that the grain will go to whoever owns the land. It doesn’t mean governments wouldn’t slap on export controls as Russia did in 2010. Probably when they most need grain is when they would be at the most risk of restrictions,”
Taken from here
India’s government is considering buying or leasing millions of acres of land in Central and South America. The purpose: to grow crops that will help feed India’s 1.1 billion people. North of Buenos Aires, Argentina, a Japanese company is growing corn and soybeans for shipment back to Japan. In Africa, a Japanese aid agency works with partners from Brazil and Mozambique to convert part of Guinea’s vast savannah into corn, soybean and cotton production. A leading Malaysian palm-oil producer is looking at plans for a 300,000-hectare (720,000-acre) palm-oil plantation in Cameroon. Bahrain currently produces bananas on 2,400 acres in the Philippines. Kuwait is interested in another 2,400 acres there for rice production. Saudi investors are negotiating for an additional 2,400 acres for aquaculture and are already pumping money into a 12,000-acre project to grow basmati rice, corn, bananas and pineapple. In Mongolia, South Korea has bought more than 800,000 acres to develop “an overseas food base” to procure more food resources. In Romania, nearly 2.4 million acres of farmland are now foreign-owned – about 12% of the country’s base farmland. Most examples involve richer countries with large populations and limited agricultural resources attempting to improve their food security by controlling land and agricultural production in poorer, less developed nations. The growing trend is fueling concerns that the purchases are another form of colonialism.
China is looking to buy 200,000 hectares of farmland in Russia, Australia, Argentina and other countries, the Des Moines Tribune reported in March. In Venezuela and Zimbabwe, they provide machinery and laborers in return for 20% of the harvest. In Australia they buy local land and in Brazil and Argentina they tend to rent. They also rent in Russia and Mongolia. China has already invested $85 million since 2005, the Register adds. “In Venezuela and Zimbabwe, they provide machinery and laborers in return for 20% of the harvest. In Australia they buy local land and in Brazil and Argentina they tend to rent. They also rent in Russia and Mongolia,” the Des Moines Register reported.
Demand for good agricultural land has exploded around the globe. Before 2008, global farmland expanded on average by fewer than 10 million acres annually, but expansion plans in 2009 totaled more than 100 million acres, according to the World Bank. More than 70% of the demand has been in Africa, where Ethiopia, Mozambique, Sudan and other countries have transferred millions of acres to investors. In the food prices crisis of 2008 a number of exporting countries went to either taxing or banning exports, and many food importers like China began to get nervous about food availability. With the erosion of confidence in the ability of world markets to assure supplies, they are thinking that if they own the farms, they have a better chance of getting the food out.
Jay O’Neil, senior agricultural economist at Kansas State’s international grains program, argues that big investments in foreign farmland don’t do much to solve nations’ food security fears. “In countries like China, the leaders get up each morning and ask ‘How are we going to guarantee food security for the coming years?’” says O’Neil. “They don’t realize that buying land doesn’t solve the question. It has zero effect on domestic price inflation, and it doesn’t guarantee that the grain will go to whoever owns the land. It doesn’t mean governments wouldn’t slap on export controls as Russia did in 2010. Probably when they most need grain is when they would be at the most risk of restrictions,”
Taken from here
Tuesday, April 12, 2011
Two Russias
The richest slice of Russian society has doubled its wealth in the past 20 years, while almost two-thirds of the population is no better off and the poor are barely half as wealthy as they were when the Soviet Union fell, according to researchers. The wealthiest fifth of the population received a pay cheque equivalent to 198% of its value in 1991, while the poorest fifth made only 55% in real terms. In total, 60% of the population has the same real income or less than the average 20 years ago.
Income inequality between the mid-1980s and the mid-2000s has increased eight times more than in Hungary, and five times more than in the Czech Republic.
The huge gap between rich and poor "largely negates the economic and social achievements of recent years,"
http://www.guardian.co.uk/world/2011/apr/11/russia-rich-richer-poor-poorer
Income inequality between the mid-1980s and the mid-2000s has increased eight times more than in Hungary, and five times more than in the Czech Republic.
The huge gap between rich and poor "largely negates the economic and social achievements of recent years,"
http://www.guardian.co.uk/world/2011/apr/11/russia-rich-richer-poor-poorer
Saturday, April 09, 2011
Oil and the engine of the world
At one time in history Bahrain was a part of Iran (Persia), as were parts of Saudi Arabia. There is long historical animosity between the Shiite and Sunni branches of Islam, and between Saudi Arabia and Iran (Persia). For centuries, Persia was the dominant empire in the region. Many of the current borders and even countries today were creations of the Western powers (primarily Britain and France) following the end of World War 1, the 1919 Treaty of Paris and the end of the Ottoman Empire. The countries and borders often had little to do with historical and tribal borders. At the centre of it all was oil. The Middle East/North Africa Arab countries have been ruled by autocratic and sometimes despotic leaders for decades. The people have generally lived in poverty while the rulers often lived in obscene luxury. The economic base of most of the countries is oil, led by Saudi Arabia but also Iran, Iraq, Kuwait, the United Arab Emirates, Libya, Algeria, Qatar, Oman, Egypt, Syria and Brunei. Bahrain at one time had oil. Even Israel (a democracy amongst the Arab autocratic countries) has some oil and some potential huge reserves of oil and gas that lie off the coast of both Israel and Gaza. The history of the region has been one of co-opting by the West, led by Britain and France following WW1, and later by the US. The story was played out in country after country of co-opting the leaders or assisting in setting up rulers from elsewhere. This was seen in Bahrain, whose Sunni rulers were originally from Kuwait and had co-opted the British in the early 19th century to protect their rule. Britain maintained its fleet in Bahrain until turning it over the US officially in 1991.
The uprising that started in Tunisia in January 2011 quickly spread to Egypt, then Bahrain, Yemen, Libya and others. Oil prices at the time were around $90 a barrel. Initially the markets did not think there was much of an issue; over the next month prices mostly trended downward, bottoming on February 15 near $84. It was on that date that President Gaddafi of Libya used military force on protestors. On February 22 oil prices gapped higher from $86 to $95 and have never looked back. Oil prices today are over $108. The Middle East produces 56 per cent of the world’s daily oil needs. Much it of goes through two key choke points – the Straits of Hormuz that connect the Persian Gulf with the Gulf of Oman and the Arabian Sea, and the Bab el-Mandab between the Horn of Africa and the Middle East and a link to the Red Sea, the Suez Canal, the Mediterranean and Indian Ocean. The Straits of Hormuz – only 21 miles wide at their narrowest – are between Oman and Iran. Some 17 per cent of the world’s oil passes through the Straits or 15 to 17 million barrels daily, limited to a channel two miles wide. It is the world’s most important oil chokepoint. The Bab el-Mandab is located between Djibouti and Yemen, two areas where there is now considerable unrest. The Bab el-Mandab is 18 miles wide at its narrowest, within which another two-mile channel sees an average of three to four million barrels of oil per day pass through.
Libya holds the largest estimated oil reserves of any African country, at 40 to 50 billion barrels. It has the world’s tenth-largest reserve holdings, well behind Saudi Arabia, Venezuela and Canada. Libya produced about two per cent of global daily production, or 1.7 million barrels. But Libya produces the world’s lightest crude and it is highly prized. Its lost production can be replaced to some extent by Saudi Arabia, the only country with any real production room. But the fact remains that Libya’s oil is highly prized, and numerous foreign oil companies were operating there. Demands that he step down were met with derision by Gaddafi. Libya threatened to expel the foreign oil companies. This would directly impact Western economic interests. On March 19, under the cover of protecting civilians and blessed by the United Nations, French war planes attacked Gaddafi forces to protect the rebels at Benghazi. Russia, China and Germany abstained at the UN vote and since then both Russia and Germany have criticized the operation, which has now turned into a NATO operation. Its end game is unknown. The likely outcome of the continuing unrest is unknown. The region is of huge strategic interest to the West, because of the oil. That they have supported and continue to support despotic regimes with little regard for their own people is well known. Unrest is nothing new to the region, particularly on Sunni-dominated Bahrain that has a history of unrest from the majority Shiite population.
But while eyes are on Libya, they should be on Bahrain. Here the majority Shiite Muslims (70 per cent) are ruled by an autocratic (and Sunni) constitutional monarchy. The Shiite majority do not benefit from the wealth of the country and are largely shut out of government. Saudi Arabia, an absolute monarchy, also has a significant Shiite population (20 per cent), mostly living in poverty. Despite both Bahrain and Saudi Arabia being countries of huge wealth, unemployment particularly amongst young people is quite high. Saudi Arabia sent troops to assist the rulers of Bahrain. According to such sources as Stratfor, it is suspected that Saudi Arabia did so with the approval of the US, and in turn Saudi Arabia backed the bombing of Libya. The Economist noted in its headline article of March 26 that “the West is locked into a military alliance with Bahrain – home to the US 5th Fleet – and its royal family’s protector Saudi Arabia.”
Across the Gulf lies Iran, which is not a friend of the West. Iran has the world’s fourth-largest reserves of oil. Iran is Shiite. It is openly backing the majority Shiite population in Iraq, assisting Shiite Hezbollah in Lebanon, and has provided backing to the Shiites in Bahrain and Saudi Arabia. The one major country not under the control of the West is Iran. Here, the West has claimed that Iran is trying to obtain nuclear weapons. (Iran is largely surrounded by countries with nuclear weapons: Pakistan, India, China, and Russia, the US in Afghanistan and Iraq, and Israel.) With Iran openly and covertly supporting some of the uprisings, the risk of an accident in the Persian Gulf is real. That could trigger a broader war where competing interests of the west (US, Britain and France) could clash with those of Iran, Russia and China. And at the heart of it all is oil. Where oil prices would go in such a scenario is impossible to say, but even a spreading of the unrest to Saudi Arabia with its own restive Shiite population could shoot prices to $150 or higher. And if oil prices soared the Western economies could tumble into a steep recession or even depression, dependent as they are on cheap oil to run their economies. Oil prices have had many ups and downs since the Arab oil embargo of 1973-74, coincident with the West losing its grip on the region it once controlled with little opposition. But the region is a bubble of boiling tribes and divergent interests with oil at its core. And that spells big trouble
It all makes for a deadly brew of trouble that is boiling and bubbling.
from here
The uprising that started in Tunisia in January 2011 quickly spread to Egypt, then Bahrain, Yemen, Libya and others. Oil prices at the time were around $90 a barrel. Initially the markets did not think there was much of an issue; over the next month prices mostly trended downward, bottoming on February 15 near $84. It was on that date that President Gaddafi of Libya used military force on protestors. On February 22 oil prices gapped higher from $86 to $95 and have never looked back. Oil prices today are over $108. The Middle East produces 56 per cent of the world’s daily oil needs. Much it of goes through two key choke points – the Straits of Hormuz that connect the Persian Gulf with the Gulf of Oman and the Arabian Sea, and the Bab el-Mandab between the Horn of Africa and the Middle East and a link to the Red Sea, the Suez Canal, the Mediterranean and Indian Ocean. The Straits of Hormuz – only 21 miles wide at their narrowest – are between Oman and Iran. Some 17 per cent of the world’s oil passes through the Straits or 15 to 17 million barrels daily, limited to a channel two miles wide. It is the world’s most important oil chokepoint. The Bab el-Mandab is located between Djibouti and Yemen, two areas where there is now considerable unrest. The Bab el-Mandab is 18 miles wide at its narrowest, within which another two-mile channel sees an average of three to four million barrels of oil per day pass through.
Libya holds the largest estimated oil reserves of any African country, at 40 to 50 billion barrels. It has the world’s tenth-largest reserve holdings, well behind Saudi Arabia, Venezuela and Canada. Libya produced about two per cent of global daily production, or 1.7 million barrels. But Libya produces the world’s lightest crude and it is highly prized. Its lost production can be replaced to some extent by Saudi Arabia, the only country with any real production room. But the fact remains that Libya’s oil is highly prized, and numerous foreign oil companies were operating there. Demands that he step down were met with derision by Gaddafi. Libya threatened to expel the foreign oil companies. This would directly impact Western economic interests. On March 19, under the cover of protecting civilians and blessed by the United Nations, French war planes attacked Gaddafi forces to protect the rebels at Benghazi. Russia, China and Germany abstained at the UN vote and since then both Russia and Germany have criticized the operation, which has now turned into a NATO operation. Its end game is unknown. The likely outcome of the continuing unrest is unknown. The region is of huge strategic interest to the West, because of the oil. That they have supported and continue to support despotic regimes with little regard for their own people is well known. Unrest is nothing new to the region, particularly on Sunni-dominated Bahrain that has a history of unrest from the majority Shiite population.
But while eyes are on Libya, they should be on Bahrain. Here the majority Shiite Muslims (70 per cent) are ruled by an autocratic (and Sunni) constitutional monarchy. The Shiite majority do not benefit from the wealth of the country and are largely shut out of government. Saudi Arabia, an absolute monarchy, also has a significant Shiite population (20 per cent), mostly living in poverty. Despite both Bahrain and Saudi Arabia being countries of huge wealth, unemployment particularly amongst young people is quite high. Saudi Arabia sent troops to assist the rulers of Bahrain. According to such sources as Stratfor, it is suspected that Saudi Arabia did so with the approval of the US, and in turn Saudi Arabia backed the bombing of Libya. The Economist noted in its headline article of March 26 that “the West is locked into a military alliance with Bahrain – home to the US 5th Fleet – and its royal family’s protector Saudi Arabia.”
Across the Gulf lies Iran, which is not a friend of the West. Iran has the world’s fourth-largest reserves of oil. Iran is Shiite. It is openly backing the majority Shiite population in Iraq, assisting Shiite Hezbollah in Lebanon, and has provided backing to the Shiites in Bahrain and Saudi Arabia. The one major country not under the control of the West is Iran. Here, the West has claimed that Iran is trying to obtain nuclear weapons. (Iran is largely surrounded by countries with nuclear weapons: Pakistan, India, China, and Russia, the US in Afghanistan and Iraq, and Israel.) With Iran openly and covertly supporting some of the uprisings, the risk of an accident in the Persian Gulf is real. That could trigger a broader war where competing interests of the west (US, Britain and France) could clash with those of Iran, Russia and China. And at the heart of it all is oil. Where oil prices would go in such a scenario is impossible to say, but even a spreading of the unrest to Saudi Arabia with its own restive Shiite population could shoot prices to $150 or higher. And if oil prices soared the Western economies could tumble into a steep recession or even depression, dependent as they are on cheap oil to run their economies. Oil prices have had many ups and downs since the Arab oil embargo of 1973-74, coincident with the West losing its grip on the region it once controlled with little opposition. But the region is a bubble of boiling tribes and divergent interests with oil at its core. And that spells big trouble
It all makes for a deadly brew of trouble that is boiling and bubbling.
from here
Monday, April 04, 2011
Robert Putnam is professor of public policy at Harvard University's John F. Kennedy School of Government and also the author of Bowling Alone.
ROBERT PUTNAM: People of different income levels, educational backgrounds, are less likely to marry people of other, outside their own social class. Less intermarriage across class lines is declining, not rising. Racial, I'm sorry residential segregation in class terms is increasing not decreasing. Integration in schools - that is kids going to school with people whose dads do something or mums do something other than them, that's class segregation in schools - is increasing not decreasing.
MARK COLVIN: What's causing it?
ROBERT PUTNAM: A number of things actually. It's not a single thing. I think part of it, the largest single explanation is the growth of the economic gap in America and frankly not only in America. I think that's true in most other countries. I don't know the details of the data here in Australia but I do know in most parts of the world there is a growing gap between rich and poor. And that means that kids coming from upper middle class backgrounds are living in a different world now from kids coming from working class or less well off backgrounds. This is sometimes in America mistaken as a racial problem because people think, well you know if there are class differences you've got racial differences. But actually it's clear it's not racial problem. It's a class problem.
http://www.abc.net.au/pm/content/2011/s3181969.htm
ROBERT PUTNAM: People of different income levels, educational backgrounds, are less likely to marry people of other, outside their own social class. Less intermarriage across class lines is declining, not rising. Racial, I'm sorry residential segregation in class terms is increasing not decreasing. Integration in schools - that is kids going to school with people whose dads do something or mums do something other than them, that's class segregation in schools - is increasing not decreasing.
MARK COLVIN: What's causing it?
ROBERT PUTNAM: A number of things actually. It's not a single thing. I think part of it, the largest single explanation is the growth of the economic gap in America and frankly not only in America. I think that's true in most other countries. I don't know the details of the data here in Australia but I do know in most parts of the world there is a growing gap between rich and poor. And that means that kids coming from upper middle class backgrounds are living in a different world now from kids coming from working class or less well off backgrounds. This is sometimes in America mistaken as a racial problem because people think, well you know if there are class differences you've got racial differences. But actually it's clear it's not racial problem. It's a class problem.
http://www.abc.net.au/pm/content/2011/s3181969.htm
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