Global Food Crisis : Corporate Coffers Full While Stomachs Go Empty

At the moment the whole world is caught in inflation frenzy, with skyrocketing global food prices but the neoliberal diktats are again wrongfully addressing the problem with a slew of monetary policies and bluffing the world with lame reasons for the cause of such an acute crisis. While on one hand, almost every corner of the developing countries have witnessed food riots, on the other hand the corporate biggies are busy counting massive profits expropriated at the cost of falling purchasing power of those teeming millions directly and indirectly linked to farm produce. While the people across the various parts of the globe: Philippines, Bangladesh, Argentina, Egypt, Mozambique, Dubai, Nepal, Indonesia, etc.are facing food riots, on the corporate-half of the globe there is the shower of agri-bonanza.

As the UN Food and Agriculture Organization (FAO) sums it up, over the one year from March 2007 and March 2008 prices of cereals has increased 88%, oils and fats 106%, and dairy 48%. The overall FAO food price index climbed 57% in one year — and most of the increase occurred in the past few months. According to the World Bank, it has happened in the last 36 months ending February 2008 that global wheat prices rose 181% and overall global food prices increased by 83%. The bank expects most food prices to remain well above 2004 levels until at least 2015.The most popular variety of Thailand rice sold for $198 a tones five years ago and is now priced at $323 a tones a year ago and finally in April 24, the price hit $1000.Inflation is even larger on the local markets — in Haiti, the market price of a 50 kilo bag of rice doubled in one week at the end of March.

These increases are catastrophic for the 2.6 billion people around the world who live on less than US$2 a day and spend 60% to 80% of their incomes on food. Hundreds of millions cannot afford to eat. Today, nearly 800 million of the world populations are hungry and if such acute situations continue unabated, more and more people would be forced into starvation. What are the roots of surging global food prices? Surging food prices are intricately linked with food security of the world, which in turn pertains to the issue of hunger. What explains the sources of world hunger? Is it the supply side theory or the problem is posed by the demand constraints?

There are a dozen myths which obscure our understanding of the roots of this hunger, or putting it in a more direct way, the neo-liberal diktats have propagated a web of myths that has obscured us from the actual reality of the hunger story. It is time now to investigate, bust the cultivated myths and put the culprits to question.

Myths About Hunger

One of the most common well-knitted myths is that the hunger story is the story of paucity. But the reality is that hunger is actually a problem of plenty. As Ian Angus points out, according to the United Nations Food and Agriculture Organization, enough food is produced in the world to provide over 2800 calories a day to everyone — substantially more than the minimum required for good health, and about 18% more calories per person than in the 1960s, despite a significant increase in total population. (Ian Angus, Socialist Voice, May 11 2008) Yet the world’s people, especially the vulnerable majority, have seen a falling purchasing power over the years. The falling purchasing power, imposed upon by global deflationary policies, has priced them out. So, while food stocks kept piling in the warehouses and countries switch over from being net importers to net exporters, its majority populace still remains hungry.

Can we blame hunger on the assaults of nature? Of course adverse climate conditions, like the recent Burmese cyclones, the severe Australian drought and the Chinese winters affect food production, but ultimately it is human forces which are making people vulnerable to natural catastrophes. While food is available in plenty for those who can afford it, millions live on the edge of disaster in the developing nations of South Asia and Africa. Nature can provide the final push over the brink but these millions are just like living corpses beaten to death by the brutal market forces, like usurious rate of interest, debt traps, fiscal consolidation, so on and so forth.

Quite often, the blame is squarely paced on the rising global population, and countries like India and China are blamed for ‘irresponsibly’ allowing population to increase. But such Malthusian accusations are highly misleading. As Utsa Patnaik points out (‘The Ideology of Overpopulation’, The Republic of Hunger and Other Essays, Three Essays Collective, 2007), nominal population figures on their own don’t tell the whole story: instead one should look at real or effective population: i.e, population figures adjusted with respect to its actual demand on resources. On doing so, one finds that “the greatest ‘real population pressure’ emanates not from India or China, but from the advanced countries.” Be it fossil fuels or food, the latter consume several times more than the ‘most densely populated countries’. Also consider: if hunger in a densely populated country like Bangladesh can be blamed on its population, what about Nigeria, Brazil or Bolivia, where plentiful food resources and hunger coexist? Rapid population growth share common roots with hunger in inequities that deprive poor, especially women, of economic opportunity and security.

The neoliberal prophets often uphold the “Second Green Revolution” as an answer to the agrarian crisis and hence hunger. Green Revolution technology magnified yields in a big way, but if scarcity is not the problem, simply increasing production cannot alleviate hunger! Merely increasing yields will not address the issues such as to dilute the distribution of economic power, which in turn would decide who would be buying the resultant harvest.

Real Roots of Hunger

So if food scarcity and over-population are not the problem, why are millions hungry across the globe? Ian Angus poses the question: “Why can’t the global food industry feed the hungry?” He locates the answer in a single sentence, “The global food industry is not organized to feed the hungry; it is organized to generate profits for corporate agribusiness.”

IMF-WB etc., to make way for corporate agri-business, aggressively promote “structural adjustment policies” and trade liberalization in agriculture as a panacea for all ills of poor countries and a prescription for prosperity. Actual practice has exploded this myth. In most Third World countries exports have boomed while hunger has continued unabated or actually worsened. While soybean exports boomed in Brazil – to feed Japanese and European livestock – hunger spread from one-third to two-thirds of the population.

Trade liberalization transforms self-sufficient agricultural economies into import-dependent ones; the idea was to open up markets in developing countries so they could absorb surplus production in the advanced countries.

Destroying food self-sufficiency in developing countries was a must: why else would they want to buy food from the advanced countries? In 1986, then-US Agriculture Secretary John Block put it quite bluntly, “The idea that developing countries should feed themselves is an anachronism from a bygone era. They could better ensure their food security by relying on US agricultural products, which are available in most cases at lower cost.” Lower costs, of course were made possible through huge subsidies for farmers in advanced countries, while quantitative restrictions and protective tariffs are dismantled in developing countries on the diktats of liberalization. As a result, the advanced countries can flood third-world markets with cheap food.

Global corporations favor luxury high-profit items like flowers, sugarcane, beef, shrimp, cotton, coffee, and soybeans for export to wealthy countries. Utsa Patnaik noted that crops in erstwhile colonies “have been demanded abroad in advanced countries for over three centuries for meeting their direct consumption and raw material needs,” but historically the growth of exports in such ‘free-trade’ regimes has always spelt hunger and famine for the domestic population. (‘The Loss of Food Security in Sub-Saharan Africa’, Republic of Hunger) As in colonial times, developing countries are made to grow luxury items to feed the demand of the developed countries; and as in colonial times, the result is hunger for the domestic populations.

Ian Angus observes, “The focus on export agriculture has produced the absurd and tragic result that millions of people are starving in countries that export food.

… (In developing countries) farmland that used to grow food for domestic consumption now grows luxuries for the north. Colombia, where 13% of the population is malnourished, produces and exports 62% of all cut flowers sold in the United States.

In many cases the result of switching to export crops has produced results that would be laughable if they weren’t so damaging. Kenya was self-sufficient in food until about 25 years ago. Today it imports 80% of its food — and 80% of its exports are other agricultural products.”

This is the case in entire continents: Africa, for instance, was a net food exporter in the era of decolonization in the 1960s; today it imports 25 percent of its food and almost every African country is a net importer!

The devastation of agricultural economies leads to the tragic situation where those who grow food cannot afford it; and farmers’ suicides and rural hunger are the result. Loss of land and livelihood in agricultural economies as a result of the above policies again leads to hunger. As Angus puts it, “The people who best know the land are being separated from it; their farms enclosed into gigantic outdoor factories that produce only for export.”

Angus remarks, “Since the 1970s, food production has become increasingly globalised and concentrated. A handful of countries dominate the global trade in staple foods. Eighty per cent of wheat exports come from six exporters, as does 85% of rice. Three countries produce 70% of exported corn. This leaves the world’s poorest countries, the ones that must import food to survive, at the mercy of economic trends and policies in those few exporting companies.” Food, from being a means of feeding people, becomes an item of global speculation at the hands of corporate agri-businesses.

There is also an intimate connection between food and fuel: the bid of global capitalism and imperialism to control both results in war and occupation in a very visible way; and in a less visible way in the “genocide through hunger”. Angus says, “rising oil prices … affect the cost of producing food. Fertiliser and pesticides are made from petroleum and natural gas. Gas and diesel fuel are used in planting, harvesting and shipping. It’s been estimated that 80% of the costs of growing corn are fossil fuel costs — so it is no accident that food prices rise when oil prices rise.”

Further, food can be converted into fuel. And imperialist nations hungry for fuel (necessary to maintain their lifestyles as well as to ensure military domination and hegemony) therefore promote ethanol and biodiesel. It is estimated that US vehicles burn enough corn to cover the entire import needs of the poorest 82 countries! “Ethanol and biodiesel are very heavily subsidised, which means, inevitably, that crops like corn (maize) are being diverted out of the food chain and into gas tanks, and that new agricultural investment worldwide is being directed towards palm, soy, canola and other oil-producing plants. This increases the prices of agrofuel crops directly, and indirectly boosts the price of other grains by encouraging growers to switch to agrofuel.” (Angus)

So, what’s the solution to the world’s hunger?

Ian Angus concludes:

“More than a century ago, Karl Marx wrote that despite its support for technical improvements, “the capitalist system works against a rational agriculture … a rational agriculture is incompatible with the capitalist system.” (Capital, Volume III)
Today’s food and farm crises completely confirm that judgment. A system that puts profit ahead of human needs has driven millions of producers off the land, undermined the earth’s productivity while poisoning its air and water, and condemned nearly a billion people to chronic hunger and malnutrition.

The food crisis and farm crisis are rooted in an irrational, anti-human system. To feed the world, urban and rural working people must join hands to sweep that system away.”

- Arundhati Choudhury


Empty Bellies Roar With Anger

Them belly full but we hungry.

A hungry mob is a angry mob.

A rain a-fall but the dirt it tough;

A pot a-cook but the food no ‘nough...

A hungry man is a angry man.

A hungry mob is a angry mob.

- Bob Marley, 1976


Taking to the streets

“In Haiti on April 3, demonstrators in the southern city of Les Cayes built barricades, stopped trucks carrying rice and distributed the food, and tried to burn a United Nations compound. The protests quickly spread to the capital, Port-au-Prince, where thousands marched on the presidential palace chanting “We are hungry!”. Many called for the withdrawal of UN troops and the return of Jean-Bertrand Aristide, the exiled president whose government was overthrown by foreign powers in 2004.

“President Rene Preval, who initially said nothing could be done, has announced a 16% cut in the wholesale price of rice. This is at best a stop-gap measure, since the reduction is for one month only and retailers are not obligated to cut their prices.

“The actions in Haiti parallelled similar protests by hungry people in more than 20 other countries.

•In Burkino Faso, a two-day general strike by unions and shopkeepers demanded “significant and effective” reductions in the price of rice and other staple foods.

•In Bangladesh, more than 20,000 workers from textile factories in Fatullah went on strike to demand lower prices and higher wages. They hurled bricks and stones at police, who fired tear gas into the crowd.

•The Egyptian government sent thousands of troops into the Mahalla textile complex in the Nile Delta, to prevent a general strike demanding higher wages, an independent union and lower prices. Two people were killed and more than 600 have been jailed.

•In Abidjan, Cote d’Ivoire, police used tear gas against women who had set up barricades, burned tires and closed major roads. Thousands marched to the president’s home, chanting “We are hungry”, and “Life is too expensive, you are killing us”.

•In Pakistan and Thailand, armed soldiers have been deployed to prevent the poor from seizing food from fields and warehouses.

“Similar protests have taken place in Cambodia, Cameroon, Ethiopia, Honduras, Indonesia, Madagascar, Mauritania, Niger, Peru, the Philippines, Senegal, Thailand, Uzbekistan and Zambia. On April 2, the president of the World Bank told a meeting in Washington that there are 33 countries where price hikes could cause social unrest.

“A senior editor of Time warned in the magazine’s April 11 edition: “The idea of the starving masses driven by their desperation to take to the streets and overthrow the ancien regime has seemed impossibly quaint since capitalism triumphed so decisively in the Cold War … And yet, the headlines of the past month suggest that skyrocketing food prices are threatening the stability of a growing number of governments around the world … when circumstances render it impossible to feed their hungry children, normally passive citizens can very quickly become militants with nothing to lose.”

- Excerpted from ‘Behind the food crisis: capitalism’s historical failure’, by Ian Angus, Socialist Voice, 28 April and 9 May 2008


Them Belly So Full, They Throw Food Away...

Americans waste an estimated 27% of the food available for consumption, according to a US Department of Agriculture study of 1997 - almost half a kg of food every day for every American. In 2004, a new study from the University of Arizona (UA) in Tucson found that a shocking forty to fifty per cent of food generated in the US is wasted, uneaten.


Haiti’s Road to Hunger

“Since the 1970s the richest countries in the world, aided by the international agencies they control, have systematically undermined the poorest countries’ ability to feed their populations and protect themselves in a crisis like this. Haiti is a powerful and appalling example.

“Rice has been grown in Haiti for centuries, and until 20 years ago Haitian farmers produced about 170,000 tonnes of rice a year, enough to cover 95% of domestic consumption. Rice farmers received no government subsidies, but, as in every other rice-producing country at the time, their access to local markets was protected by import tariffs.

“In 1995, as a condition of providing a desperately needed loan, the International Monetary Fund required Haiti to cut its tariff on imported rice from 35% to 3%, the lowest in the Caribbean. The result was a massive influx of US rice that sold for half the price of Haitian-grown rice. Thousands of rice farmers lost their lands and livelihoods, and today three-quarters of the rice eaten in Haiti comes from the US.

“US rice didn’t take over the Haitian market because it tastes better, or because US rice growers are more efficient. It won out because rice exports are heavily subsidised by the US government. In 2003, US rice growers received $1.7 billion in government subsidies, an average of $232 per hectare of rice grown. That money, most of which went to a handful of very large landowners and agribusiness corporations, allowed US exporters to sell rice at 30-50% below their real production costs.

“In short, Haiti was forced to abandon government protection of domestic agriculture. The US then used its government protection schemes to take over the market.

“There have been many variations on this theme, with rich countries imposing
‘liberalisation’ policies on poor and debt-ridden countries and then taking advantage of that liberalisation to capture the market.”

- (Excerpted from Ian Angus, Socialist Voice)

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