Saturday, September 4, 2010

Painted into a Potash Corner

Just when I thought I understood the implications of our increasingly concentrated and globalized food system, a new dimension crops up.  This time it's potash.

People have been applying potash to soil pretty much ever since sedentary agriculture began.  The word potash comes from the Dutch word potaschen.  People would make the potassium carbonate they needed to replenish their soils by leaching wood ashes and evaporating the solution in large iron pots, leaving a white residue called pot ash.  Pot ash was spread on soil to replenish the potassium lost to crop production.

Plants use potassium ions for protein syntheses and for the opening and closing of stomata.  When plants don’t get enough potassium, they lose the ability to maintain these processes.  Leaves turn brown and scorch, veins turn yellow, and purple spots can develop on the underside of leaves.  They become more prone to damage from wind, drought, frost, and disease.  Most balanced natural fertilizers such as manure contain some potash, which helps minimize the amount of supplement needed.  However, modern, chemical based fertilizers derive most if not all of their potassium from potash.

The first global trade in potash occurred in the 1700 – 1800’s.  Farmers who cleared the United States for agriculture made potash from the tree stumps and roots they dug up.  The potash was shipped back to Europe. Fast forward to 2010. Now over 150 countries use potash, and it is currently produced in 14.  Potash Corp of Canada currently produces 20% of the world supply and has 60% of the world’s known reserves.  The next largest producers are Russia and Belarus.  8 companies control 80% of the supply.  The US has only 1.6% of known reserves, which makes our dependence of foreign potash far worse than our dependence on foreign oil.

As incomes of people around the world increase, they tend to migrate toward a western diet and more meat consumption.  More meat consumed means more livestock, more feed required, and more industrial style crop production to feed the livestock.  Potash that used to command $200 per ton now fetches over $800.  That price is projected to double in the next decade. 

400% price increases are now attracting speculative capital to the once sleepy global fertilizer business.  In the 1980’s the government of Saskachuwan had a hard time selling shares in the IPO for its privatizing Potash Corp.  Now the company is the largest listed fertilizer company in the world and has suitors from Australia, China, and Brazil offering billions for the privatized company.  The headline in China’s Business Journal reads, “if BHP buys Potash Corp, is it the end of Chinese agriculture”?

Back in the US, the Wall Street Journal is covering the story as a tale of a billion dollar corporate takeover.  But what about the potential vulnerability this exposes in our food system?  Canada is one of the most politically stable countries in the world and it's right over our border.  The Canadian government, now recognizing the downside of privatization for its own not insubstantial agricultural sector, is trying to figure out a way to keep the company under Canadian ownership.  What would happen if Potash Corp was owned by a Chinese company?  A Brazilian company?  An Australian company? Do we care? Since we cannot support large scale agriculture in the US without a source of large scale potash, we could find ourselves at the mercy of foreign governments at a scale we've never experience before.  Even small scale organic food production systems require a source of potash.

Does anyone remember how to make their own potash from ashes or composted leaves?

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