Center for a New American Security

For the first time, the February 2013 Government Accountability Office High-Risk Series Report lists climate change as a high financial risk factor for the U.S. government. Specifically, it addresses the impacts of climate change on agricultural production and the U.S. government’s ability to respond to impending agricultural crises. Citing the United States Global Change Research Program, the report states, “the impacts and costliness of weather disasters- resulting from floods [and] drought- will increase in significance as what are considered ‘rare’ events become more common and intense due to climate change.” The potential costs to the federal government are substantial, particularly with regards to its role as “insurer of property and crops vulnerable to climate impacts.”

GAO’s prescience has proven evident in recent weeks. The Midwest (to include Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, Ohio, North and South Dakota, and Wisconsin) has experienced debilitating extremes of drought and floods. Every county in Kansas and 89 of the 93 counties in Nebraska have been declared drought emergencies well before harvest season. Simultaneously, 48 of the 102 counties in Illinois experienced flooding and devastation of crop land.

The implications of the drought and flood cycle are far-reaching for U.S. markets and policy. According to the USDA and the EPA, the affected region accounts for 85% of U.S. corn production, 81% of U.S. soybean production, and approximately 67% of U.S. wheat production. Corn exports comprise the largest net contribution to the U.S. agricultural trade balance of all agricultural commodities- highlighting the importance of developing effective crop crisis response.

Drought and flood will continue to persist as long-term problems. Yet the current fiscally constrained environment further limits the government’s ability to respond in an ad-hoc fashion to crop disasters resulting from climate change. GAO recommends a new look at the way federal crop insurance functions, taking into account permanent changes in climate patterns that have emerged since the inception of federal crop and flood insurance programs. It also recommends concerted efforts at data collection and analysis to ascertain the impacts of long-term climate change exposure- both on agriculture and the structure of insurance. Most importantly, the GAO recommends a stronger relationship between the Secretary of Agriculture and the Secretary of Homeland Security regarding the effects of climate change on agricultural production- establishing U.S. food security as a matter of national security. 

Photo: Drought designations as of May 2, 2013. Courtesy USDA Farm Service Agency. 

On Wednesday, the U.S. Geological Survey (USGS) released the findings from its climate change impacts study on California’s San Francisco Bay and Sacramento-San Joaquin Delta system, Flash Forward 100 Years: Climate Change Scenarios in California’s Bay-Delta.

I mention the report because it is a powerful reminder that while climate change will likely be devastating for communities in vulnerable developing countries like Bangladesh and the Maldives, developed countries like the United States also have much to worry about if we do not begin planning for climate change. According to the USGS study, areas like the Suisun Bay (pictured above) are vulnerable to changes in the climate, with implications for the surrounding communities: “water-resource planners will need to develop adaptation strategies to address potentially longer dry seasons, diminishing snow packs and earlier snowmelt leaving less water for runoff in the summer. The study also describes risk from flooding as sea-level rise accelerates and extreme water levels become increasingly common. Increased intensity and frequency of winter flooding could also occur as a result of earlier snowmelt and a shift from snow to rain.” 

California’s San Francisco Bay and Sacramento-San Joaquin Delta is tremendously important to the California economy. The impacts of climate change that are likely to manifest there could prove disastrous. “The Delta provides drinking water to 25 million people and irrigation water to farmland producing crops valued at $36 billion per year,” according to the USGS. “Intensive efforts are underway among the USGS, the Bureau of Reclamation, the Fish and Wildlife Service, NOAA, and the State of California to address what will be increasingly difficult decisions regarding allocations of water for human consumption and biological needs.”

Photo: Suisun Bay, a shallow tidal estuary that forms the entrance to the Sacramento-San Joaquin River Delta, as seen during sunrise. Courtesy of Francis Parchaso and the USGS.   

If I had to pick one news story that stood out to me this weekend, it would have to be this piece from the Sunday Washington Post reporting on the growing domestic backlash to India’s land grab. The story stood out to me, in part, because land rights, use and seizing are issues we have not analyzed too much on the Natural Security blog. But as this report from yesterday’s Post portends, it is a creeping trend that we are likely to read more about as farmers in developing countries seek to hold onto their land in countries where population growth is shrinking the amount of arable farmland at the same time governments try to industrialize their economies by renting land to domestic or foreign companies.

“All over India, farmers are coming into conflict with the government as it tries to satisfy the country’s insatiable hunger for land for industry, infrastructure and urban housing,” the Post reported. “And the decades-old way of doing business — the government seizing the land under a British colonial law, paying a token compensation to farmers and then bullying people into submission — just isn’t working anymore.”

The report details a number of billion dollar investments being made by South Korean and Indonesian companies, to name just a few. Yet as the government attempts to capitalize on the interest from foreign companies, long-time farmers are rebuffing attempts by the government to seize their land. As a result, “Projects worth tens of billions of dollars have been held up as farmers, backed by local politicians and empowered by India’s vibrant television news channels, have found their voice — and said no,” according to the Post.

Changes in the character of warfare are accelerating the growing reliance on contractors on the battlefield. . . Long-term nation-building efforts like those in Iraq and Afghanistan require an array of functions – from advising and training foreign security forces to constructing and maintaining power plants and waterworks – that the U.S. government is not manned to carry out on its own

This is a passage under the heading “The Changing Nature of Conflict,” in CNAS’s new report, Contracting in Conflicts: The Path to Reform.

Though discussion of Natural Security issues don’t figure prominently in the report, Richard Fontaine and Dr. John Nagl, the report’s authors, have teed up an array of topics to be explored deeper by persons such as myself. In addition to the abovementioned “power plants and water works,” Contracting in Conflict explains that contractors have found themselves filling the position of agricultural technician, energy infrastructure (re)constructionist, supply convoy security and a host of other necessary roles in the modern battlefield, both during and after the actual battle.

I picked up last week’s Rolling Stone for its cover story on the reissue and forthcoming documentary of Exile on Main St., but another story listed on the cover piqued my interest as well: “Capitalists of Chaos: Who’s Cashing in on Global Warming?”

As it turns out, this long piece is about the current wave of international investment in land that is or will continue to be arable and productive in the face of the effects of climate change. The thinking is that arable land is becoming squeezed by population and consumption trends, and that food and its production will become increasingly valuable. We’ve covered this a few times on the blog and in our publications, but not nearly to the depth this article presents – its author, McKenzie Funk, is writing an entire book on the subject.

Much of the article is focused on one man, Phil Heilberg, a former Wall Street commodities trader whose vision of future wealth centers on tracts of land he is purchasing in places such as southern Sudan. In style and content, it is not unlike reading about the international arms trade, and Funk focuses on Heilberg as one of the major forces in this growing industry much the way Viktor Bout was for his arms dealings. (While it is important to profile leaders within these often gray-market industries, like Bout, much of the Heilberg focus seems to derive from his openness in speaking with reporters rather than from him being the most important player.)

At first, the deal-making with African strongmen and tribal leaders for land seems shady. But as Heilberg explains, that’s the way things work in places like Sudan – you make deals with whomever you need to, or not at all. Heilberg operates within the existing system rather than requiring social or political change as a precondition for business. This is often one of the issues raised with China’s dealing in minerals, land and energy in Africa as well, but it is somehow less stark to read about it in the form of person-to-person transactions than in examining the issue at a country level. The article raises the question of whether modern ways of resource trading in the world are creating a new paradigm for international behavior at all levels that U.S. security analysts do not yet have a grasp on.

Is it just me, or are we seeing a lot on agriculture in the media lately? It's almost as though global-trend watchers are getting nervous. I noticed (or perceived, at least) an upward trend in ag coverage about a week back, hence my post two Mondays ago focused on its role in Afghanistan. Last week also witnessed a great Rolling Stone piece on investors purchasing land in Africa and elsewhere in order to bank on projected food shortages, which I'll get to tomorrow.

But for today I'll begin with yesterday's Financial Times. Part of its coverage came in the form of a special section on commodities (which is worth skimming in whole). The headline sounds quite reassuring: “Agriculture: Bumper Harvests Bring Stability.” Its author examines only the macro level, and describes food production abundance resulting this year from high prices. This stability he describes is in prices, not in the social and political conditions we monitor here at CNAS – and to be sure, the two do not always meet. He does, however, quote one expert who looks beyond just world prices, with a less optimistic result:

Emmanuel Jayet, agricultural commodities analyst at Société Générale in Paris, says that the factors that contributed to the 2007-08 crisis – rapidly rising consumption on the back of population growth, leading to insufficient supply – exist still.

“The sharp supply tightness that we had in 2008 – which was not only an investor story, but actual supply tightness – was a warning signal,” he says. “My concern is that consumption is growing steadily, and that production may not keep pace with rising demand.”