Bank on food

How the banks wrought a food crisis


Ben Gisin is a short, solidly built man in his early 60s, with a round face, a quick, competent air, a white wisp of hair and a moustache. From his home base in Idaho Falls, Gisin, a former banker, is chronicling the growth of the local foods movement through his magazine, Touch the Soil. The magazine features star writers like New York Times bestseller Michael Pollan (who was in Boise this week).

Ben Gisin at home in Idaho Falls, making hand-milled buckwheat pancakes. - TIM ANDREAE
  • Tim Andreae
  • Ben Gisin at home in Idaho Falls, making hand-milled buckwheat pancakes.

During a recent visit with BW, Gisin detailed the systematic way that banks have manipulated land values, not only leading to the current financial crisis, but foreshadowing an even darker global catastrophe: a massive shortage of food.

After talking his way into an entry-level banking position, Gisin eventually became a senior loan officer at one of the nation's largest agricultural banks. But after watching the banking machine take its toll on people's lives for some 20 years, Gisin made a sudden and decisive career shift.

Instead of enforcing the economic "realities" that were pulling the land out from under farmers, he quit working for the bank and started a consulting business, harnessing his accumulated banking knowledge to benefit the farmer. Since then Gisin has met with significant success, consulting growers and ranchers regarding their debt, and in the process, negotiating some of the largest debt settlements between farmers and lenders.

Speaking from his kitchen table, Gisin argued that our entire economy is just an experiment; the idea of money as any kind of substantial thing is a complete phantasm. The words "loan" and "deposit" lead us further from the truth.

"We think we take 'money,' which doesn't exist, and 'deposit' it. And a 'loan' is impossible because the bank has no money to lend. All of these things are pure fantasy and we never really understand our economy because we're thinking in terms of these fantastical constructs which don't exist," Gisin said.

Every dollar bill that is in circulation first starts with a citizen, a business or a government getting into debt, Gisin said, hitting upon one of the inherent flaws of the system: Because money is created out of debt itself, it is by nature unsustainable. It pushes us into a frenzy of production and consumption in order to maintain higher and higher levels of debt.

According to Gisin, 70 percent of all commercial bank loans are secured by some form of real estate. Because land makes such good collateral, it's the big driver in the banking and lending system. And it is this simple fact that has our economic system in a head-on collision with food security. People get into debt for land and infuse money into a community in paying off that debt. So in order to create the money to buy our food, we're developing the land that produces the food.

Just between 1950 and 1960, 482 farms were lost each day. Today roughly 3 million U.S. acres are farmed, less than in 1954.

"Basically, we're disassembling the last of the planet's support systems in order to produce food, and frankly that's a place where we've overstepped in terms of our responsibility to future generations," Gisin said.

In some ways we have already exhausted our own agricultural resources. This year, with huge yields projected in each of the world's four largest food crops—corn, wheat, rice and soybeans—the world, according to the projections of the U.S. Department of Agriculture, will produce only seven-tenths of a percent more than it will consume. This year's prices for these crops have broken all records, and that incentive has had us farming every last bit of land.

As Gisin put it, "The bottom line is we've reached the limits of farmland. And I don't know how you communicate that to a community that's starving for money."

And so, the tightness of the supply (brought on by the scarcity of farmland), and the inefficiency of our monetary system to facilitate the movement of food from the farm to the dinner plate, has created a global food crisis. For example, Gisin asked, "How is that seven-tenths of a percent going to be interpreted by the free market in the coming year?" Will it be interpreted as excess, bringing about a drop in prices and thereby punishing the farmer so he can no longer afford to grow food? Or will we punish the consumer by running up the prices to the point that another hundred million people can't eat?

Even more alarming, in the last year, most major rice- and wheat-producing countries at some point closed their borders to protect their own food security. Both Japan and Switzerland proposed to the World Trade Organization that if a country were to close off its grain to them, they should be able to send in a commission to investigate rather than letting their populations starve.

Meanwhile, the U.S. government has just sold the last of its food stocks—the last 30 million bushels of wheat.

In contrast, China has made top officials in its various provinces personally accountable for the loss of farmland. On top of that, Chinese corporations are going to Africa and South America looking to buy farmland. And the Chinese government just paid top dollar ($6 a bushel) to purchase 26 million metric tons of wheat from its own farmers in order to begin to rebuild its food reserves. They will buy as much wheat as the entire United States will consume in a year to affect food security. Russia is doing the same thing as China, only on a smaller scale.

But in the United States, with both our food and our financial systems short circuiting, the government is rushing to the aid of the money banks, rather than food banks. Gisin said the government should rebuild our food reserves and save farmland and let the banks take care of their own liabilities.

According to Gisin, progress must come from outside of artificial accounting constructs. As he sees it, evolving from the confines of our present financial system is nothing less than a spiritual awakening. "That spiritual awakening," Gisin said, "is real simple. The human family needs to move from competition to cooperation."

Large-scale volunteerism is one example. In particular, Gisin cited the food bank network in which close to 1.25 million volunteers are working outside the bounds of the economic system in order to solve the hunger problem.

Perhaps the most obvious example of exchange without money is just that. Barter. There's already barter between countries, between corporations, between countries and big corporations and even among groups of corporations. In fact, if you were to add up all of this barter and give it a dollar amount, it would come to almost $4 trillion dollars per year.

As was his habit, Gisin asked and answered his own question in one breath: "So how come all these big players (countries and corporations) don't do all their economic transactions with money and us little players do? Are we missing something here? Yes. We're missing something."