Three global revolutions effect business of grain

by Morton Sosland
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Henry A. Kissinger, the former Secretary of State and Nobel Prize winner, has set out in this presidential election year his insightful views of what he believes is the principal foreign policy issue any new administration is certain to face. This single issue, he says, is the need to distill and lead in developing a new international order dealing with three revolutions now occurring around the world. A close reading of Kissinger’s analysis of the revolutions he believes are under way in international relations reveals that each has applicability to the world of grain and grain processing. Indeed, what he describes as the major international political and even military challenges facing the new president and the new administration also deserve examination as confrontations that very likely will try the skills of executives working in all aspects of grain.

Kissinger’s three revolutions are already well known to grain executives and, indeed, have impacted the world of grain in a way not unlike their great present and future effect on relations between nations. His three revolutions are: Transformation of the nature of the states in Europe from proud individual nations pursuing their own purposes to an uncertain political and economic cohesion represented by the European Union (E.U.); second, the threat that radical Islam poses to the role of nation states in the Middle East and in other parts of the world, and third, a shift in the center of gravity of international politics from the Atlantic Ocean to the Pacific and Indian Oceans.

In the case of Europe’s transformation, its tie to grain relates directly to how grain flows are no longer bound to Europe, either in imports or in competition for export trade. Hardly anything symbolizes how Europe’s priorities have been changed by the new order better than the way that the E.U.’s once proud dominance in flour exporting, and thus its support of its domestic milling industry, has given way to the point that the bloc, even with growth in membership, no longer leads flour exporting. While France’s insistence on protecting its farmers from competition reminds that the nation-state is not dead in the E.U., the willingness of Brussels to give way on many farm issues reflects how far this revolution has gone.

When it comes to the revolution due to radical Islam, Dr. Kissinger centers on rejection of national sovereignty based on secular states. This struggle, characterized by rising antagonisms and ferocity, is a fight to maintain western notions of negotiation and equilibrium. The nations of the Middle East are mostly importers of grain and flour but exporters have recently emerged, spurred in part by Islamist concepts of a desire to dominate trade in food.

His third revolution, the shift of political gravity to Asia, is a matter that already has had huge repercussions for grain. Rising demand in India and China is among the principal bullish factors cited in explaining what has happened to the world food situation in the past year. Not only has the political center shifted, but the balance in global grain markets appears to have moved in a similar direction. He notes that such political shifts in the past frequently led to war, comparing China’s recent rise to the emergence of Germany in the 19th century.

He qualifies this threat to peace by citing countervailing forces, one of which is "economic globalization." Here is a development in which the grain industry has long played a — if not the — leading role. Hardly anything symbolizes globalization more starkly than international mutual dependence on grain. As the revolutionary shift toward the nations of Asia persists, the industry not only needs to be ready to respond to how this affects trade and markets, but it should seek out ways to foster how the business of grain provides the foundation for helping to maintain peace. This is best done through the industry’s primary task of supplying food.