Thursday, May 19, 2016

China's USDA Conspiracy Theory

The following story actually happened. I have statistics to prove it.   
A Martian Interplanetary Task Force on agricultural commodity markets recently landed on the Earth. A team member assigned to China set out for the city of Dalian, where that country's most active futures market is located.  

As our Martian friend approached the Dalian Commodity Exchange, he came upon two Chinese men in animated conversation, each holding a sheaf of papers in his hand. The Martian stopped to listen.

“They’re up to their tricks again!” One man exclaimed.

“USDA and ABCD—different letters, but the same game! They won’t stop until they own our entire country!” The second replied.

“What can be done to stop them?” The first man waved the paper held in his sweaty hand.

The curious Martian sidled up the two men.

“May I ask what you’re discussing?” The Martian ventured.

“Haven’t you read the U.S. Department of Agriculture’s monthly agricultural commodity supply and demand report? I can't believe they reduced their estimate of soybean production so much. How could their forecast change that much in one month? It has to be part of a plot to bankrupt our Chinese companies!” The first man was furious.

The Martian queried, knitting his brow, “I’ve noticed that USDA sometimes makes big adjustments in its crop estimates from month to month, but how is that a plot against Chinese companies?”

The second Chinese man got in the Martian’s face, “Where have you been? Everybody knows the USDA regularly manipulates its data to drive up prices. They do it all the time.”

The first man continued his friend’s thought, “When prices shoot up, that sets off panic-buying by Chinese importers. After Chinese buyers have sewn up expensive contracts for American soybeans, USDA reverses its estimates a few months later.”

Like a partner in a vaudeville act, the second Chinese man jumped in: ”Then prices fall, and our countrymen are caught with commitments to buy at sky-high prices and they’re bankrupted.”

“Why would USDA do that?” the Martian asked innocently.

“They have pulled this trick many times over the years. There has to be a sinister motive,” the second man explained in exasperation.

“Obviously, USDA is working hand-in-glove with the ABCDs!” the first man interjected.

“What are ABCDs?” the Martian asked.

“Hello?!” The first man was losing patience, “The multinational grain companies—ADM, Bunge, Cargill, Louis Dreyfuss.”

“The ABCDs swoop in to buy up Chinese companies as soon as the USDA’s trickery bankrupts them,” man number two explained, having a slightly higher tolerance for the Martian’s naiveté.

“Why would USDA want to help those companies?” the Martian asked, at the risk of further enraging the men.

“The companies must be paying them!” the first man shouted, crumpling the sheaf of papers and throwing them on the ground.

The Martian looked down and saw that the man had been holding a copy of the USDA report. Throwing down the papers seemed to have a calming effect on the Chinese man.

Nevertheless, the Martian was determined to get to the bottom of this fascinating issue. If USDA can’t be trusted, who can?

The Martian took a step back and questioned the man’s conspiracy theory: “But I heard people who work at USDA wear shabby clothes, drive old cars, and have bad haircuts. There’s barely a single Rolex in the place.”

“I can’t help it if they have no sense of style,” Man number 1 said.

“If I worked at USDA, that’s what I would do,” continued Man number 2.

The Martian delved deeper: “Well, if the USDA is so dishonest, why do you read their reports?”

“Everyone reads them,” responded the first Man, "They're on all the web sites as soon as they come out in the middle of the night, our time."

“Why don’t you just rely on Chinese government reports instead?” the Martian asked.

Man number 2 looked at the Martian as if he was from another planet. “Well, the Chinese government doesn’t have any supply and demand reports like this.”

"If they do, they don't publish them," explained Man number 1, suddenly helpful.

The Martian saw that the second Man was holding a copy of the Chinese Ministry of Agriculture’s monthly Agricultural Outlook magazine.

“May I see your magazine?” the Martian asked.

The man handed him the Agricultural Outlook (which was named after a now-defunct USDA magazine) and the Martian flipped through it. He stopped momentarily, excited to find a table labeled “Chinese grain stocks,” a number he thought was a State Secret. His face fell as he looked closely and saw that the data were compiled from USDA reports. He flipped to the back of the publication and, sure enough, there were no supply and demand tables.

The Martian commodities buff couldn’t resist taking the issue a little further: “If USDA is so clever at tricking Chinese businessmen, why doesn’t the Chinese government publish fake data to trick the Americans?”

Man number 1 looked quizzically at his chum.

Man number 2 shot back, “We’re masters of fake numbers. Our government has an entire statistics bureau to do that.”

The Martian responded, “So why hasn’t China’s statistics bureau been able to bankrupt the ABCDs?”

“Well, nobody believes them,” The man replied.
It is unclear whether the Martian will spread this conspiracy theory about USDA reports back to his home planet. However, the conspiracy theory lives on in the Chinese news media in articles like "USDA Data Conspiracy Overtly Dangerous 'Foreign Report'" which appeared this week here and here and here and here and here and here and here and...

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