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Global food crisis: ‘The greatest demonstration of the historical failure of the capitalist model’

By Ian Angus

[First of two articles. Click here for part two.] 

“If the government cannot lower the cost of living it simply has to leave. If the police and UN troops want to shoot at us, that's OK, because in the end, if we are not killed by bullets, we’ll die of hunger.” — A demonstrator in Port-au-Prince, Haiti

April 28, 2008 -- In Haiti, where most people get 22% fewer calories than the minimum needed for good health, some are staving off their hunger pangs by eating “mud biscuits” made by mixing clay and water with a bit of vegetable oil and salt.[1]

Meanwhile, in Canada, the federal government is currently paying $225 for each pig killed in a mass cull of breeding swine, as part of a plan to reduce hog production. Hog farmers, squeezed by low hog prices and high feed costs, have responded so enthusiastically that the kill will likely use up all the allocated funds before the program ends in September. Some of the slaughtered hogs may be given to local Food Banks, but most will be destroyed or made into pet food. None will go to Haiti.

This is the brutal world of capitalist agriculture — a world where some people destroy food because prices are too low, and others literally eat dirt because food prices are too high.

Record prices for staple foods

We are in the midst of an unprecedented worldwide food price inflation that has driven prices to their highest levels in decades. The increases affect most kinds of food, but in particular the most important staples — wheat, corn, and rice.

The UN Food and Agriculture Organization says that between March 2007 and March 2008 prices of cereals increased 88%, oils and fats 106%, and dairy 48%. The FAO food price index as a whole rose 57% in one year — and most of the increase occurred in the past few months.

Another source, the World Bank, says that that in the 36 months ending February 2008, 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 grade of Thailand rice sold for $198 a tonne five years ago and $323 a tonne a year ago. On April 24, the price hit $1000.

Increases are even greater on 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.

This month, the hungry fought back.

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 René Préval, 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 paralleled 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, Côte 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 Cameroon, Ethiopia, Honduras, Indonesia, Madagascar, Mauritania, Niger, Peru, 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 magazine warned:

“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.”[2]

What’s driving food inflation?

Since the 1970s, food production has become increasingly globalised and concentrated. A handful of countries dominate the global trade in staple foods. Eighy 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. When the global food trade system stops delivering, it’s the poor who pay the price.

For several years, the global trade in staple foods has been heading towards a crisis. Four related trends have slowed production growth and pushed prices up.

The end of the `green revolution': In the 1960s and 1970s, in an effort to counter peasant discontent in south and southeast Asia, the U.S. poured money and technical support into agricultural development in India and other countries. The “green revolution” — new seeds, fertilisers, pesticides, agricultural techniques and infrastructure — led to spectacular increases in food production, particularly rice. Yield per hectare continued expanding until the 1990s.

Today, it’s not fashionable for governments to help poor people grow food for other poor people, because “the market” is supposed to take care of all problems. The Economist reports that “spending on farming as a share of total public spending in developing countries fell by half between 1980 and 2004.”[3] Subsidies and R&D money have dried up, and production growth has stalled.

As a result, in seven of the past eight years the world consumed more grain than it produced, which means that rice was being removed from the inventories that governments and dealers normally hold as insurance against bad harvests. World grain stocks are now at their lowest point ever, leaving very little cushion for bad times.

Climate change: Scientists say that climate change could cut food production in parts of the world by 50% in the next 12 years. But that isn’t just a matter for the future:

  • Australia is normally the world’s second-largest exporter of grain, but a savage multi-year drought has reduced the wheat crop by 60% and rice production has been completely wiped out.

  • In Bangladesh in November, one of the strongest cyclones in decades wiped out a million tonnes of rice and severely damaged the wheat crop, making the huge country even more dependent on imported food.

Other examples abound. It’s clear that the global climate crisis is already here, and it is affecting food.

Agrofuels: It is now official policy in the US, Canada and Europe to convert food into fuel. US vehicles burn enough corn to cover the entire import needs of the poorest 82 countries.[4]

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. The demand for agrofuels increases the prices of those crops directly, and indirectly boosts the price of other grains by encouraging growers to switch to agrofuel.

As Canadian hog producers have found, it also drives up the cost of producing meat, since corn is the main ingredient in North American animal feed.

Oil prices: The price of food is linked to the price of oil because food can be made into a substitute for oil. But rising oil prices also 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.[5]

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.

* * *

By the end of 2007, reduced investment in third world agriculture, rising oil prices, and climate change meant that production growth was slowing and prices were rising. Good harvests and strong export growth might have staved off a crisis — but that isn’t what happened. The trigger was rice, the staple food of three billion people.

Early this year, India announced that it was suspending most rice exports in order to rebuild its reserves. A few weeks later, Vietnam, whose rice crop was hit by a major insect infestation during the harvest, announced a four-month suspension of exports to ensure that enough would be available for its domestic market.

India and Vietnam together normally account for 30% of all rice exports, so their announcements were enough to push the already tight global rice market over the edge. Rice buyers immediately started buying up available stocks, hoarding whatever rice they could get in the expectation of future price increases, and bidding up the price for future crops. Prices soared. By mid-April, news reports described “panic buying” of rice futures on the Chicago Board of Trade, and there were rice shortages even on supermarket shelves in Canada and the US.

Why the rebellion?

There have been food price spikes before. Indeed, if we take inflation into account, global prices for staple foods were higher in the 1970s than they are today. So why has this inflationary explosion provoked mass protests around the world?

The answer is that 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.[6]

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.[7] That money, most of which went to a handful of very large landowners and agribusiness corporations, allowed U.S. exporters to sell rice at 30% to 50% below their real production costs.

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

There have been many variations on this theme, with rich countries of the north imposing “liberalisation” policies on poor and debt-ridden southern countries and then taking advantage of that liberalization to capture the market. Government subsidies account for 30% of farm revenue in the world’s 30 richest countries, a total of US$280 billion a year,[8] an unbeatable advantage in a “free” market where the rich write the rules.

The global food trade game is rigged, and the poor have been left with reduced crops and no protections.

In addition, for several decades the World Bank and International Monetary Fund have refused to advance loans to poor countries unless they agree to “Structural Adjustment Programs” (SAP) that require the loan recipients to devalue their currencies, cut taxes, privatize utilities, and reduce or eliminate support programs for farmers.

All this was done with the promise that the market would produce economic growth and prosperity — instead, poverty increased and support for agriculture was eliminated.

“The investment in improved agricultural input packages and extension support tapered and eventually disappeared in most rural areas of Africa under SAP. Concern for boosting smallholders’ productivity was abandoned. Not only were governments rolled back, foreign aid to agriculture dwindled. World Bank funding for agriculture itself declined markedly from 32% of total lending in 1976-8 to 11.7% in 1997-9.”[9]

During previous waves of food price inflation, the poor often had at least some access to food they grew themselves, or to food that was grown locally and available at locally set prices. Today, in many countries in Africa, Asia and Latin America, that’s just not possible. Global markets now determine local prices — and often the only food available must be imported from far away.

* * *

Food is not just another commodity — it is absolutely essential for human survival. The very least that humanity should expect from any government or social system is that it try to prevent starvation — and above all that it not promote policies that deny food to hungry people.

That’s why Venezuelan president Hugo Chavez was absolutely correct on April 24, to describe the food crisis as “the greatest demonstration of the historical failure of the capitalist model.”

 

[Ian Angus is the editor of Climate and Capitalism. This article first appeared in Socialist Voice (Canada). A companion article, ``Global food crisis: Capitalism, agribusiness and the food sovereignty alternative'', is at http://www.links.org.au/node/417]
* * *

Footnotes

[1] Kevin Pina. “Mud Cookie Economics in Haiti.” Haiti Action Network, Feb. 10, 2008. http://www.haitiaction.net/News/HIP/2_10_8/2_10_8.html

[2] Tony Karon. “How Hunger Could Topple Regimes.” Time, April 11, 2008. http://www.time.com/time/world/article/0,8599,1730107,00.html

[3] “The New Face of Hunger.” The Economist, April 19, 2008.

[4] Mark Lynas. “How the Rich Starved the World.” New Statesman, April 17, 2008. http://www.newstatesman.com/200804170025

[5] Dale Allen Pfeiffer. Eating Fossil Fuels. New Society Publishers, Gabriola Island BC, 2006. p. 1

[6] Oxfam International Briefing Paper, April 2005. “Kicking Down the Door.” http://www.oxfam.org/en/files/bp72_rice.pdf

[7] Ibid.

[8] OECD Background Note: Agricultural Policy and Trade Reform. http://www.oecd.org/dataoecd/52/23/36896656.pdf

[9] Kjell Havnevik, Deborah Bryceson, Lars-Erik Birgegård, Prosper Matondi & Atakilte Beyene. “African Agriculture and the World Bank: Development or Impoverishment?” Links International Journal of Socialist Renewal, http://www.links.org.au/node/328

 

Comments

Global Food Crisis

This is a great article.

The two leading paragraphs give a very clear example of what is happening. Capitalist greed will likely kill thousands of people throgh hunger and starvation.

When the final tombstone of Homo Sapiens is built, it may well read: "Here Lies Homo Sapiens, killed by capitalist greed."

La crisi alimentare: “La dimostrazione più grande del fallimento

www.resistenze.org - osservatorio - mondo - politica e società - 20-05-08 - n. 228

La crisi alimentare: “La dimostrazione più grande del fallimento storico del modello capitalistico.”
 
di Ian Angus, Socialist Voice, autore di Climate and Capitalism – Clima e Capitalismo.  
 
(Traduzione di Curzio Bettio di Soccorso Popolare di Padova)
 
L’indirizzo url di questo articolo a: www.globalresearch.ca/index.php?context=va&aid=8836
28 aprile 2008
 
"Se il governo non può abbassare il costo della vita, semplicemente dovrebbe andarsene. Se la polizia e le truppe ONU vogliono spararci contro, va benissimo, dato che alla fine, se non verremo ammazzati dalle pallottole, noi moriremo comunque di fame.” – Un dimostrante a Port-au-Prince, Haiti.
 
Ad Haiti, dove la maggior parte delle persone riceve un quantitativo di calorie inferiore del 22% rispetto al minimo necessario per una buona salute, molti stanno attenuando i morsi della fame mangiando “biscotti di melma”, prodotti mescolando fanghiglia ed acqua con un po’ di olio vegetale e sale. [1]
D’altro canto, in Canada, attualmente il governo federale sta pagando 225 dollari per ogni maiale abbattuto in una selezione di massa di animali adulti negli allevamenti di maiali, come parte di un piano per ridurre la produzione suina. Gli allevatori di suini, schiacciati dai prezzi bassi di realizzo della carne di maiale e dagli alti prezzi dei mangimi, hanno risposto tanto entusiasticamente che il massacro probabilmente esaurirà tutti i fondi messi a disposizione prima che il programma vada a completamento a settembre. Una parte dei maiali abbattuti verrà consegnata alla locale Banca del Cibo, ma molti verranno distrutti o trasformati in cibo per animali. Nessuno verrà inviato ad Haiti! Questo è il mondo brutale dell’agricoltura capitalista – un mondo dove alcuni distruggono cibo perché i prezzi sono troppo bassi, ed altri letteralmente mangiano immondizia perché i prezzi del cibo sono troppo alti! 
 
Prezzi record per alimenti dall’agricoltura 
Noi ci troviamo nel pieno di una inflazione, senza precedenti, dei prezzi alimentari estesa a tutto il mondo e che ha portato i prezzi ai livelli più alti da decenni. Gli aumenti interessano molti tipi di alimenti, ma in particolare i più importanti alimenti di base — frumento, grano, riso.
L’Organizzazione per l’Agricoltura e l’Alimentazione (FAO) dell’ONU attesta che tra il marzo 2007 e il marzo 2008 i prezzi dei cereali sono aumentati dell’ 88%, degli oli e dei grassi del 106%, e dei latticini del 48%. Nel complesso, l’indice dei prezzi alimentari della FAO è balzato in un anno del 57% — e la quota importante degli aumenti è avvenuta in questi ultimi mesi. 
Un’altra fonte, la Banca Mondiale, afferma che i prezzi delle granaglie, negli ultimi 36 mesi, con termine febbraio 2008, sono aumentati globalmente del 181% e che i prezzi alimentari in generale sono cresciuti dell’ 83%. La Banca prevede che i prezzi della maggior parte degli alimenti rimarranno ben sopra i livelli del 2004, fino almeno al 2015.
Cinque anni fa, la qualità più popolare del riso Tailandese veniva venduta a 198 dollari a tonnellata, e l’anno scorso a 323 dollari a tonnellata. Il 24 aprile, il prezzo raggiungeva i 1.000 dollari! 
Gli aumenti sono ancora più elevati sui mercati locali — ad Haiti, il prezzo sul mercato di un sacco di riso da 50 chili è raddoppiato nel giro di una settimana, alla fine di marzo.
Questi aumenti sono catastrofici per 2,6 miliardi di persone nel mondo, che vivono con meno di 2 dollari al giorno e spendono dal 60% all’ 80% del loro reddito in cibo. Centinaia di milioni di persone non possono permettersi di mangiare.
Questo mese, gli affamati hanno reagito lottando.
 
Sono scesi per le strade
Il 3 aprile, ad Haiti, nella parte meridionale della città di Les Cayes, dimostranti hanno innalzato barricate, hanno bloccato camion che trasportavano riso, hanno distribuito il cibo e hanno tentato di dare alle fiamme un posto di controllo delle Nazioni Unite. La protesta si è rapidamente estesa alla capitale, Port-au-Prince, dove migliaia di manifestanti si sono diretti in corteo verso il palazzo presidenziale, scandendo ad alta voce: “Siamo affamati!”. Molti reclamavano il ritiro delle truppe delle Nazioni Unite e il ritorno di Jean-Bertrand Aristide, il Presidente in esilio, il cui governo era stato scalzato da poteri forti stranieri nel 2004.
Il Presidente René Préval, che all’inizio aveva dichiarato di non potere fare nulla, annunciava un taglio del 16% del prezzo all’ingrosso del riso. Al massimo, questa si presentava come una misura tappabuchi, dato che la riduzione era valida per un solo mese, e i dettaglianti non erano obbligati a tagliare i loro prezzi. 
Azioni da parte di gente affamata, del tutto consimili alle proteste di Haiti, sono avvenute in più di altri venti Paesi.
- In Burkino Faso, uno sciopero generale di due giorni è stato indetto dai sindacati e dai negozianti per ottenere riduzioni “significative ed efficaci” del prezzo del riso e di altri alimenti di base. 
- In Bangladesh, oltre 20.000 lavoratori delle industrie tessili di Fatullah hanno scioperato per richiedere prezzi più bassi ed aumenti di stipendio. Venivano lanciati ciottoli da strada e pietre contro la polizia, che sparava gas lacrimogeni contro la folla.  
- Il governo Egiziano ha inviato migliaia di soldati nel complesso tessile di Mahalla, nel Delta del Nilo, per impedire uno sciopero generale rivolto ad ottenere salari più alti, un sindacato indipendente, e un ribasso dei prezzi. Restavano uccise due persone e più di 600 venivano portate in carcere. 
- Ad Abidjan, Costa d’Avorio, la polizia ha usato gas lacrimogeni contro donne che avevano innalzato barricate, bruciato stracci e bloccato le strade principali. Migliaia si erano avviate in corteo verso la casa del Presidente, scandendo ad alta voce: “Abbiamo fame”, e “La vita è troppo cara, ci state ammazzando.” 
- In Pakistan e in Tailandia, sono stati impiegati soldati armati per impedire ai poveri di prelevare cibo dai campi e dai magazzini.
Identiche proteste sono avvenute in Cambogia, Camerun, Etiopia, Honduras, Indonesia, Madagascar, Mauritania, Niger, Perù, Filippine, Senegal, Uzbekistan, e Zambia. Il 2 aprile, il Presidente della Banca Mondiale ha convocato un vertice a Washington dei 33 paesi in cui gli aumenti dei prezzi potrebbero provocare rivolte sociali.
Un caposervizio della rivista Time avvertiva: “L’idea di masse affamate portate dalla loro disperazione a scendere per le strade per abbattere l’ancien regime sembrava impossibile e bizzarra, visto che il capitalismo ha trionfato in modo tanto deciso nella Guerra Fredda…Ed ora, i titoli di testa del mese scorso indicano che gli aumenti alle stelle dei prezzi del cibo stanno minacciando la stabilità di un numero crescente di governi in tutto il mondo…quando le condizioni rendono impossibile nutrire i loro bambini affamati, cittadini normalmente indifferenti possono all’improvviso diventare militanti disperati che non hanno nulla da perdere.” [2]
 
Quali sono le cause dell’inflazione dei prezzi del cibo?
Dagli anni Settanta, la produzione alimentare è diventata sempre più globalizzata e concentrata. Una manciata di paesi domina il commercio mondiale delle principali derrate alimentari. L’80% delle esportazioni di granaglie proviene da sei paesi esportatori, e questo vale anche per l’85% del riso. Tre paesi producono il 70% del grano esportato. Questo lascia i paesi più poveri del mondo, quelli che devono importare cibo per sopravvivere, alla mercé di orientamenti e politiche economiche di poche compagnie esportatrici. Quando gli ingranaggi del sistema mondiale del commercio degli alimenti terminano di girare, sono i poveri che pagano il prezzo. Per diversi anni, il commercio mondiale di derrate alimentari essenziali si stava direzionando verso una crisi.
Quattro tendenze collegate hanno rallentato la crescita della produzione e hanno spinto i prezzi verso l’alto.
 
1) La fine della Rivoluzione Verde: negli anni Sessanta e Settanta, in un tentativo di contrastare il malcontento contadino nel Sud-Est Asiatico e nell’Asia Meridionale, gli Stati Uniti fornivano all’India e ad altri paesi denaro e supporto tecnico per lo sviluppo della loro agricoltura. La “Rivoluzione Verde” — nuove sementi, fertilizzanti, pesticidi, tecniche ed infrastrutture agricole — produceva una spettacolare crescita nella produzione alimentare, in particolare di riso. Il rendimento per ettaro continuava ad espandersi fino agli anni Novanta. Attualmente, per i governi non è di uso aiutare la gente indigente a coltivare cibo per altra gente povera, dato che si pensa che sia “il mercato” a prendersi cura di tutti i problemi. The Economist riferisce che “la spesa per l’agricoltura in rapporto alla spesa pubblica complessiva dei paesi in via di sviluppo si è dimezzata tra il 1980 e il 2004.” [3] I sussidi e il denaro per la Ricerca e Sviluppo R&S si sono prosciugati e l’aumento della produzione si è impantanato.
Come risultato, nei sette degli ultimi otto anni il mondo ha consumato più granaglie di quelle che venivano prodotte, e questo significa che il riso è stato prelevato dalle scorte immagazzinate dai governi e dagli operatori commerciali come normale riserva assicurativa nel caso di scarsità di raccolti. Ora, le riserve di grano mondiali si trovano al più basso livello di sempre, permettendo quindi una ben piccola ancora di salvezza per i tempi duri.     
 
2) Le variazioni climatiche: Scienziati asseriscono che le variazioni climatiche possono limitare del 50% la produzione alimentare in varie parti del mondo nei prossimi 12 anni. Ma questo non interessa solo il futuro:
 
- Normalmente, l’Australia è per importanza il secondo esportatore al mondo di grano, ma una pesante siccità che dura da qualche anno ha ridotto la resa dei raccolti del 60% e la produzione di riso è stata completamente annullata.  
- In Bangladesh, in novembre, uno dei più devastanti cicloni degli ultimi decenni ha distrutto un milione di tonnellate di riso e danneggiato pesantemente il raccolto di grano, rendendo quel vasto paese ancora di più dipendente dalle importazioni di alimenti.
 
Altri esempi abbondano. [N.d.tr.: da “il Manifesto del 7 maggio 2008. L’altra vittima del ciclone tropicale Nargis, che si è abbattuto nelle prime ore di sabato 3 maggio 2008 sulla regione Birmana del delta del fiume Irrawaddy: il riso. La zona più colpita dal ciclone Nargis è anche la più importante per la produzione di riso, di cui la Birmania è uno dei principali esportatori. Come prima conseguenza, un carico da 50.000 tonnellate che doveva partire per lo Sri Lanka è stato bloccato dal regime militare, in attesa di verificare le necessità alimentari del paese dopo la catastrofe. L'anno scorso la Birmania aveva esportato 400 milioni di tonnellate di riso. Tutto il Sudest asiatico è a questo punto attraversato dal problema se destinare ancora quantità così imponenti di produzione all'esportazione. Anche perché la qualità di riferimento sul mercato di Chicago - il riso tailandese 100% Grado B - ha raggiunto la soglia critica dei 1.000 dollari per tonnellata, ma i piccoli produttori asiatici non hanno tratto quasi nessun giovamento da questo rialzo dei prezzi. Nei giorni scorsi, perciò, la Tailandia - il principale esportatore, una sorta di Arabia Saudita del riso - ha proposto la creazione di una «Orec» dei produttori insieme a Birmania, Vietnam, Laos e Cambogia. La proposta ha ricevuto per ora soltanto il sì della Birmania, ma si sa che il Vietnam è favorevole e anche gli altri paesi sono fortemente interessati. «Siamo il centro alimentare del mondo, ma abbiamo poca influenza sui prezzi», ha spiegato il portavoce del governo Tai; «noi importiamo petrolio caro, ma esportiamo riso a basso prezzo». Una penalizzazione della bilancia commerciale che non può continuare all'infinito, pena gravi tensioni all'interno di questi paesi. Le critiche a questa proposta arrivano soprattutto dall'Occidente, e si basano sulla facile previsione che un eventuale cartello dei produttori farebbe lievitare ancor più i prezzi. Non tutti sono però convinti che il riso continuerà ad aumentare (+80% dall'inizio dell'anno). Le Filippine hanno rinunciato a una maxi-ordinazione da 675 mila tonnellate, convinte che ci sarà un ribasso a breve. Ed anche il presidente della spagnola Ebro Puleva, uno dei maggiori commercianti di riso al mondo, prevede che nel corso del 2009 si potrebbe tornare intorno ai 600 dollari per tonnellata. Bisognerà però vedere, adesso, se e quanto peserà la distruzione dei raccolti in Birmania (paese con 53 milioni di abitanti) sul mercato mondiale del riso.]
Risulta evidente che la crisi climatica del globo si fa sentire anche in questo campo e impone i suoi effetti sui raccolti.
 
3) Gli agrocarburanti: Ora la politica ufficiale negli Stati Uniti, Canada ed Europa è quella di convertire prodotti agricoli da alimentazione in carburanti. I veicoli Statunitensi bruciano tanto grano bastante per coprire l’intero fabbisogno di importazioni alimentari degli 82 paesi più poveri nel mondo.[4]
L’etanolo e il biodiesel ricevono agevolazioni in modo veramente pesante, il che significa, inevitabilmente, che raccolti di frumento o di mais vengono trasferiti dalla catena alimentare ai serbatoi del gas, e che in tutto il mondo nuovi investimenti nell’agricoltura vengono impegnati verso le coltivazioni di piante per la produzione di olio, come la palma, la soia, ed altre, olio da bruciare per ottenere energia. Questo fa aumentare in modo diretto i prezzi dei prodotti agrocombustibili, ed indirettamente incrementa il prezzo di altre granaglie, visto che gli agricoltori sono incoraggiati a convertirle ad agrocarburanti. Ed è così che gli allevatori Canadesi di maiali sono stati sorpresi dall’alto costo dei mangimi, e questo ha causato l’aumento dei costi di produzione della carne, visto che il grano è il principale ingrediente dei mangimi per allevamento nel Nord America.  
 
4) I prezzi del petrolio: Il prezzo degli alimenti è vincolato al prezzo del petrolio, dato che il cibo può diventare sostituto del petrolio. Ma l’aumento del prezzo del petrolio può condizionare anche i costi di produzione del cibo. Fertilizzanti e pesticidi sono derivati dal petrolio e dal gas naturale. Il gas e il carburante diesel vengono utilizzati durante le fasi delle lavorazioni agricole di semina, di raccolta e di spedizione del prodotto.[5]
È stato valutato che l’80% dei costi di produzione del grano sono costi per i carburanti fossili — quindi non è un caso che i prezzi degli alimenti crescano al crescere del prezzo del petrolio. 
 
* * *
 
Alla fine del 2007, la riduzione degli investimenti nel terzo mondo, l’aumento del prezzo del petrolio e le variazioni climatiche hanno implicato un rallentamento di crescita della produzione e i prezzi sono aumentati. Buoni raccolti e un forte aumento delle esportazioni potevano ritardare la crisi — ma non è quello che è successo. L’innesco è stato il riso, l’alimento fondamentale per tre miliardi di persone. 
All’inizio di quest’anno, l’India annunciava che veniva sospesa la maggior parte delle esportazioni di riso, data la necessità di ricostituire le sue riserve. Poche settimane più tardi, il Vietnam, la cui raccolta di riso era stata compromessa da una importante infestazione di insetti durante la fase di maturazione, decideva per una sospensione di quattro mesi delle esportazioni per assicurare il fabbisogno necessario al mercato domestico. India e Vietnam insieme contribuiscono di norma al 30% delle esportazioni di tutto il riso, e quindi le loro decisioni sono stati sufficienti a spingere oltre ai limiti il già difficile mercato mondiale del riso. I mercanti di riso hanno cominciato immediatamente ad immagazzinare partite disponibili, accaparrando qualsiasi quantità di riso che potevano conservare, nell’attesa di un futuro aumento dei prezzi, e rilanciando il prezzo dei prossimi raccolti. I prezzi hanno spiccato il volo!
Dalla metà di aprile, i notiziari hanno descritto “incette in previsione di aumento dei prezzi” dei contratti a termine (futures) del riso alla Camera di Commercio di Chicago, e vi sono state limitazioni di riso sugli scaffali dei supermercati in Canada e negli USA.
 
Perché le rivolte? 
Già in tempi precedenti vi sono stati picchi nei prezzi alimentari. Infatti, se noi prendiamo in considerazione l’inflazione, negli anni Settanta i prezzi globali degli alimenti di base erano più alti di quelli attuali. Allora, perché questa esplosione inflazionistica sta provocando proteste di massa in tutto il mondo? La risposta sta nel fatto che dagli anni Settanta i paesi più ricchi al mondo, favoriti dalle agenzie internazionali da loro controllate, hanno sistematicamente ostacolato le potenzialità dei paesi più poveri di nutrire le loro popolazioni e di proteggere se stessi in una crisi di questa natura.  
Ne è potente e spaventoso esempio Haiti.  
Per secoli, ad Haiti era stato raccolto il riso, e fino a vent’anni fa i contadini di Haiti producevano circa 170.000 tonnellate di riso all’anno, sufficienti a coprire per il 95% il consumo interno. I coltivatori di riso non ricevevano sussidi governativi, ma, come in ogni altro paese produttore di riso di quel periodo, il loro accesso ai mercati locali veniva protetto da imposte tariffarie sulle importazioni.
Nel 1995, come condizione per fornire un prestito disperatamente necessario, il Fondo Monetario Internazionale pretese da Haiti il taglio delle imposte sul riso di importazione, dal 35% al 3%, la percentuale più bassa nei Caraibi. Il risultato fu un massiccio flusso di riso dagli Stati Uniti che veniva venduto a metà del prezzo del riso di provenienza Haitiana. Migliaia di coltivatori di riso persero le loro terre e i loro mezzi di sostentamento, e oggi i tre quarti del riso consumato ad Haiti è di provenienza Statunitense. [6]
Il riso degli Stati Uniti non ha preso il controllo del mercato Haitiano per le sue qualità migliori, o perché i coltivatori di riso negli USA sono più efficienti. È risultato vincente perché le esportazioni di riso sono pesantemente sovvenzionate dal governo USA.
Nel 2003, i coltivatori di riso hanno ricevuto 1,7 miliardi di dollari in sovvenzioni governative, una media di 232 dollari per ettaro coltivato a riso.[7] Questa massa di denaro, la maggior parte della quale perveniva ad un gruppo ristretto di grandi latifondisti e di imprese del settore agro-industriale, consentiva agli esportatori Statunitensi di vendere il riso dal 30% al 50% inferiormente all’effettivo costo di produzione.
In breve, Haiti veniva costretta ad abbandonare la protezione governativa dell’agricoltura domestica — e quindi gli USA hanno utilizzato i loro piani di protezione governativa per controllare i mercati. Vi sono state molte variazioni su questo tema, con i ricchi paesi del nord del mondo che impongono le politiche della “liberalizzazione” sui paesi del sud del mondo, poveri e gravati dal debito, e i paesi ricchi abusano di questo liberismo per impadronirsi dei mercati.
I sussidi governativi valgono per un 30% delle entrate delle aziende agricole nei 30 paesi più ricchi al mondo, un totale di 280 miliardi di dollari all’anno, [8] un vantaggio insuperabile in un “libero” mercato, dove i ricchi dettano le regole.
La competizione globale nel commercio delle derrate è truccata, e i poveri sono stati abbandonati, privi di protezioni e con raccolti limitati. 
Per giunta, per diversi decenni, la Banca Mondiale e il Fondo Monetario Internazionale si sono opposti a concedere prestiti ai paesi poveri, a meno che non sottoscrivano “Programmi di Aggiustamenti Strutturali” (SAP) che esigono che il prestito, destinato a depotenziare la capacità di concorrenza di questi paesi, produca il taglio delle imposte sulle importazioni, la privatizzazione dei servizi pubblici, e la riduzione o l’eliminazione dei programmi di sostegno per i loro coltivatori. 
Tutto questo è stato fatto con la promessa che il libero mercato avrebbe prodotto crescita economica e prosperità — invece, la povertà è aumentata e ogni sostegno economico all’agricoltura è stato eliminato.
“Gli investimenti per introdurre sostegni strutturali e di sviluppo all’agricoltura sono andati assottigliandosi, e col tempo si sono esauriti del tutto, nella maggior parte delle aree rurali dell’Africa soggette ai Programmi SAP. È stato abbandonato ogni interesse per l’incremento di produttività delle piccole aziende di coltivatori. Gli aiuti dall’estero all’agricoltura sono venuti a mancare, non solo quando i governi si sono sottratti. I finanziamenti per l’agricoltura della Banca Mondiale sono scesi lo stesso in modo marcato dal 32% del prestito complessivo del 1976-8 all’11.7% del 1997-9.”[9]
Durante le precedenti ondate inflattive dei costi delle derrate alimentari, i poveri avevano almeno accesso al cibo prodotto da loro stessi, agli alimenti prodotti localmente e disponibili a prezzi imposti localmente. Attualmente, in molte regioni dell’Africa, Asia e America Latina, questo non è proprio possibile. Sono i mercati globali a determinare ora i prezzi locali — e spesso il solo cibo disponibile deve essere importato da tanto lontano.
 
* * *
Il cibo non è solo un’altra materia prima — è assolutamente essenziale per la sopravvivenza dell’uomo. Il minimo che veramente l’umanità dovrebbe aspettarsi da qualsiasi governo o sistema sociale è quello di cercare di prevenire la fame — e soprattutto quello di non favorire politiche che neghino il cibo alla gente che ha fame.
Per questo, il 24 aprile, il Presidente del Venezuela Hugo Chavez è stato assolutamente corretto nell’affermare che la crisi alimentare “è la più palese dimostrazione dello storico fallimento del modello capitalista”. 
 
Footnotes
[1] Kevin Pina. "Mud Cookie Economics in Haiti – L’economia dei biscotti di melma" Haiti Action Network, 10 febbraio 2008. http://www.haitiaction.net/News/HIP/2_10_8/2_10_8.html
[2] Tony Karon. "How Hunger Could Topple Regimes – Come la fame può far crollare i regimi" Time, 11 aprile 2008. http://www.time.com/time/world/article/0,8599,1730107,00.html
[3] "The New Face of Hunger – Il nuovo aspetto della fame" The Economist, 19 aprile 2008.
[4] Mark Lynas. "How the Rich Starved the World – Come i ricchi affamano il mondo"
New Statesman, 17 aprile 2008. http://www.newstatesman.com/200804170025
[5] Dale Allen Pfeiffer. “Eating Fossil Fuels - Divorare carburanti fossili” New Society Publishers, Gabriola Island BC, 2006. p. 1
[6] Oxfam International Briefing Paper, aprile 2005. "Kicking Down the Door – Abbattere a calci le barriere " http://www.oxfam.org/en/files/bp72_rice.pdf   
[7] Ibid.
[8] OECD Background Note: Agricultural Policy and Trade Reform.(Nota di fondo dell’OECD, Organizzazione Economica per la Cooperazione Europea: Riforma in agricoltura delle politiche e del commerciohttp://www.oecd.org/dataoecd/52/23/36896656.pdf
[9] Kjell Havnevik, Deborah Bryceson, Lars-Erik Birgegård, Prosper Matondi & Atakilte Beyene. "African Agriculture and the World Bank: Development or Impoverishment? – Agricoltura Africana e la Banca Mondiale: Sviluppo o Impoverimento?" Links International Journal of Socialist Renewal, http://www.links.org.au/node/328

Waldon Bello: Manufacturing a food crisis

Manufacturing A Food Crisis
By Walden Bello
June 2, 2008 edition of The Nation
May 15, 2008
http://www.thenation.com/doc/20080602/bello

When tens of thousands of people staged demonstrations
in Mexico last year to protest a 60 percent increase in
the price of tortillas, many analysts pointed to biofuel
as the culprit. Because of US government subsidies,
American farmers were devoting more and more acreage to
corn for ethanol than for food, which sparked a steep
rise in corn prices. The diversion of corn from
tortillas to biofuel was certainly one cause of
skyrocketing prices, though speculation on biofuel
demand by transnational middlemen may have played a
bigger role. However, an intriguing question escaped
many observers: how on earth did Mexicans, who live in
the land where corn was domesticated, become dependent
on US imports in the first place?

The Mexican food crisis cannot be fully understood
without taking into account the fact that in the years
preceding the tortilla crisis, the homeland of corn had
been converted to a corn-importing economy by "free
market" policies promoted by the International Monetary
Fund (IMF), the World Bank and Washington. The process
began with the early 1980s debt crisis. One of the two
largest developing-country debtors, Mexico was forced to
beg for money from the Bank and IMF to service its debt
to international commercial banks. The quid pro quo for
a multibillion-dollar bailout was what a member of the
World Bank executive board described as "unprecedented
thoroughgoing interventionism" designed to eliminate
high tariffs, state regulations and government support
institutions, which neoliberal doctrine identified as
barriers to economic efficiency.

Interest payments rose from 19 percent of total
government expenditures in 1982 to 57 percent in 1988,
while capital expenditures dropped from an already low
19.3 percent to 4.4 percent. The contraction of
government spending translated into the dismantling of
state credit, government-subsidized agricultural inputs,
price supports, state marketing boards and extension
services. Unilateral liberalization of agricultural
trade pushed by the IMF and World Bank also contributed
to the destabilization of peasant producers.

This blow to peasant agriculture was followed by an even
larger one in 1994, when the North American Free Trade
Agreement went into effect. Although NAFTA had a
fifteen-year phaseout of tariff protection for
agricultural products, including corn, highly subsidized
US corn quickly flooded in, reducing prices by half and
plunging the corn sector into chronic crisis. Largely as
a result of this agreement, Mexico's status as a net
food importer has now been firmly established.

With the shutting down of the state marketing agency for
corn, distribution of US corn imports and Mexican grain
has come to be monopolized by a few transnational
traders, like US-owned Cargill and partly US-owned
Maseca, operating on both sides of the border. This has
given them tremendous power to speculate on trade
trends, so that movements in biofuel demand can be
manipulated and magnified many times over. At the same
time, monopoly control of domestic trade has ensured
that a rise in international corn prices does not
translate into significantly higher prices paid to small
producers.

It has become increasingly difficult for Mexican corn
farmers to avoid the fate of many of their fellow corn
cultivators and other smallholders in sectors such as
rice, beef, poultry and pork, who have gone under
because of the advantages conferred by NAFTA on
subsidized US producers. According to a 2003 Carnegie
Endowment report, imports of US agricultural products
threw at least 1.3 million farmers out of work--many of
whom have since found their way to the United States.

Prospects are not good, since the Mexican government
continues to be controlled by neoliberals who are
systematically dismantling the peasant support system, a
key legacy of the Mexican Revolution. As Food First
executive director Eric Holt-Giménez sees it, "It will
take time and effort to recover smallholder capacity,
and there does not appear to be any political will for
this--to say nothing of the fact that NAFTA would have
to be renegotiated."

Creating a Rice Crisis in the Philippines

That the global food crisis stems mainly from free-
market restructuring of agriculture is clearer in the
case of rice. Unlike corn, less than 10 percent of world
rice production is traded. Moreover, there has been no
diversion of rice from food consumption to biofuels. Yet
this year alone, prices nearly tripled, from $380 a ton
in January to more than $1,000 in April. Undoubtedly the
inflation stems partly from speculation by wholesaler
cartels at a time of tightening supplies. However, as
with Mexico and corn, the big puzzle is why a number of
formerly self-sufficient rice-consuming countries have
become severely dependent on imports.

The Philippines provides a grim example of how
neoliberal economic restructuring transforms a country
from a net food exporter to a net food importer. The
Philippines is the world's largest importer of rice.
Manila's desperate effort to secure supplies at any
price has become front-page news, and pictures of
soldiers providing security for rice distribution in
poor communities have become emblematic of the global
crisis.

The broad contours of the Philippines story are similar
to those of Mexico. Dictator Ferdinand Marcos was guilty
of many crimes and misdeeds, including failure to follow
through on land reform, but one thing he cannot be
accused of is starving the agricultural sector. To head
off peasant discontent, the regime provided farmers with
subsidized fertilizer and seeds, launched credit plans
and built rural infrastructure. When Marcos fled the
country in 1986, there were 900,000 metric tons of rice
in government warehouses.

Paradoxically, the next few years under the new
democratic dispensation saw the gutting of government
investment capacity. As in Mexico the World Bank and
IMF, working on behalf of international creditors,
pressured the Corazon Aquino administration to make
repayment of the $26 billion foreign debt a priority.
Aquino acquiesced, though she was warned by the
country's top economists that the "search for a recovery
program that is consistent with a debt repayment
schedule determined by our creditors is a futile one."
Between 1986 and 1993 8 percent to 10 percent of GDP
left the Philippines yearly in debt-service payments--
roughly the same proportion as in Mexico. Interest
payments as a percentage of expenditures rose from 7
percent in 1980 to 28 percent in 1994; capital
expenditures plunged from 26 percent to 16 percent. In
short, debt servicing became the national budgetary
priority.

Spending on agriculture fell by more than half. The
World Bank and its local acolytes were not worried,
however, since one purpose of the belt-tightening was to
get the private sector to energize the countryside. But
agricultural capacity quickly eroded. Irrigation
stagnated, and by the end of the 1990s only 17 percent
of the Philippines' road network was paved, compared
with 82 percent in Thailand and 75 percent in Malaysia.
Crop yields were generally anemic, with the average rice
yield way below those in China, Vietnam and Thailand,
where governments actively promoted rural production.
The post-Marcos agrarian reform program shriveled,
deprived of funding for support services, which had been
the key to successful reforms in Taiwan and South Korea.
As in Mexico Filipino peasants were confronted with
full-scale retreat of the state as provider of
comprehensive support--a role they had come to depend
on.

And the cutback in agricultural programs was followed by
trade liberalization, with the Philippines' 1995 entry
into the World Trade Organization having the same effect
as Mexico's joining NAFTA. WTO membership required the
Philippines to eliminate quotas on all agricultural
imports except rice and allow a certain amount of each
commodity to enter at low tariff rates. While the
country was allowed to maintain a quota on rice imports,
it nevertheless had to admit the equivalent of 1 to 4
percent of domestic consumption over the next ten years.
In fact, because of gravely weakened production
resulting from lack of state support, the government
imported much more than that to make up for shortfalls.
The massive imports depressed the price of rice,
discouraging farmers and keeping growth in production at
a rate far below that of the country's two top
suppliers, Thailand and Vietnam.

The consequences of the Philippines' joining the WTO
barreled through the rest of its agriculture like a
super-typhoon. Swamped by cheap corn imports--much of it
subsidized US grain--farmers reduced land devoted to
corn from 3.1 million hectares in 1993 to 2.5 million in
2000. Massive importation of chicken parts nearly killed
that industry, while surges in imports destabilized the
poultry, hog and vegetable industries.

During the 1994 campaign to ratify WTO membership,
government economists, coached by their World Bank
handlers, promised that losses in corn and other
traditional crops would be more than compensated for by
the new export industry of "high-value-added" crops like
cut flowers, asparagus and broccoli. Little of this
materialized. Nor did many of the 500,000 agricultural
jobs that were supposed to be created yearly by the
magic of the market; instead, agricultural employment
dropped from 11.2 million in 1994 to 10.8 million in
2001.

The one-two punch of IMF-imposed adjustment and WTO-
imposed trade liberalization swiftly transformed a
largely self-sufficient agricultural economy into an
import-dependent one as it steadily marginalized
farmers. It was a wrenching process, the pain of which
was captured by a Filipino government negotiator during
a WTO session in Geneva. "Our small producers," he said,
"are being slaughtered by the gross unfairness of the
international trading environment."

The Great Transformation

The experience of Mexico and the Philippines was
paralleled in one country after another subjected to the
ministrations of the IMF and the WTO. A study of
fourteen countries by the UN's Food and Agricultural
Organization found that the levels of food imports in
1995-98 exceeded those in 1990-94. This was not
surprising, since one of the main goals of the WTO's
Agreement on Agriculture was to open up markets in
developing countries so they could absorb surplus
production in the North. As then-US Agriculture
Secretary John Block put it in 1986, "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."

What Block did not say was that the lower cost of US
products stemmed from subsidies, which became more
massive with each passing year despite the fact that the
WTO was supposed to phase them out. From $367 billion in
1995, the total amount of agricultural subsidies
provided by developed-country governments rose to $388
billion in 2004. Since the late 1990s subsidies have
accounted for 40 percent of the value of agricultural
production in the European Union and 25 percent in the
United States.

The apostles of the free market and the defenders of
dumping may seem to be at different ends of the
spectrum, but the policies they advocate are bringing
about the same result: a globalized capitalist
industrial agriculture. Developing countries are being
integrated into a system where export-oriented
production of meat and grain is dominated by large
industrial farms like those run by the Thai
multinational CP and where technology is continually
upgraded by advances in genetic engineering from firms
like Monsanto. And the elimination of tariff and
nontariff barriers is facilitating a global agricultural
supermarket of elite and middle-class consumers serviced
by grain-trading corporations like Cargill and Archer
Daniels Midland and transnational food retailers like
the British-owned Tesco and the French-owned Carrefour.

There is little room for the hundreds of millions of
rural and urban poor in this integrated global market.
They are confined to giant suburban favelas, where they
contend with food prices that are often much higher than
the supermarket prices, or to rural reservations, where
they are trapped in marginal agricultural activities and
increasingly vulnerable to hunger. Indeed, within the
same country, famine in the marginalized sector
sometimes coexists with prosperity in the globalized
sector.

This is not simply the erosion of national food self-
sufficiency or food security but what Africanist Deborah
Bryceson of Oxford calls "de-peasantization"--the
phasing out of a mode of production to make the
countryside a more congenial site for intensive capital
accumulation. This transformation is a traumatic one for
hundreds of millions of people, since peasant production
is not simply an economic activity. It is an ancient way
of life, a culture, which is one reason displaced or
marginalized peasants in India have taken to committing
suicide. In the state of Andhra Pradesh, farmer suicides
rose from 233 in 1998 to 2,600 in 2002; in Maharashtra,
suicides more than tripled, from 1,083 in 1995 to 3,926
in 2005. One estimate is that some 150,000 Indian
farmers have taken their lives. Collapse of prices from
trade liberalization and loss of control over seeds to
biotech firms is part of a comprehensive problem, says
global justice activist Vandana Shiva: "Under
globalization, the farmer is losing her/his social,
cultural, economic identity as a producer. A farmer is
now a 'consumer' of costly seeds and costly chemicals
sold by powerful global corporations through powerful
landlords and money lenders locally."

African Agriculture: From Compliance to Defiance

De-peasantization is at an advanced state in Latin
America and Asia. And if the World Bank has its way,
Africa will travel in the same direction. As Bryceson
and her colleagues correctly point out in a recent
article, the World Development Report for 2008, which
touches extensively on agriculture in Africa, is
practically a blueprint for the transformation of the
continent's peasant-based agriculture into large-scale
commercial farming. However, as in many other places
today, the Bank's wards are moving from sullen
resentment to outright defiance.

At the time of decolonization, in the 1960s, Africa was
actually a net food exporter. Today the continent
imports 25 percent of its food; almost every country is
a net importer. Hunger and famine have become recurrent
phenomena, with the past three years alone seeing food
emergencies break out in the Horn of Africa, the Sahel,
and Southern and Central Africa.

Agriculture in Africa is in deep crisis, and the causes
range from wars to bad governance, lack of agricultural
technology and the spread of HIV/AIDS. However, as in
Mexico and the Philippines, an important part of the
explanation is the phasing out of government controls
and support mechanisms under the IMF and World Bank
structural adjustment programs imposed as the price for
assistance in servicing external debt.

Structural adjustment brought about declining
investment, increased unemployment, reduced social
spending, reduced consumption and low output. Lifting
price controls on fertilizers while simultaneously
cutting back on agricultural credit systems simply led
to reduced fertilizer use, lower yields and lower
investment. Moreover, reality refused to conform to the
doctrinal expectation that withdrawal of the state would
pave the way for the market to dynamize agriculture.
Instead, the private sector, which correctly saw reduced
state expenditures as creating more risk, failed to step
into the breach. In country after country, the departure
of the state "crowded out" rather than "crowded in"
private investment. Where private traders did replace
the state, noted an Oxfam report, "they have sometimes
done so on highly unfavorable terms for poor farmers,"
leaving "farmers more food insecure, and governments
reliant on unpredictable international aid flows." The
usually pro-private sector Economist agreed, admitting
that "many of the private firms brought in to replace
state researchers turned out to be rent-seeking
monopolists."

The support that African governments were allowed to
muster was channeled by the World Bank toward export
agriculture to generate foreign exchange, which states
needed to service debt. But, as in Ethiopia during the
1980s famine, this led to the dedication of good land to
export crops, with food crops forced into less suitable
soil, thus exacerbating food insecurity. Moreover, the
World Bank's encouragement of several economies to focus
on the same export crops often led to overproduction,
triggering price collapses in international markets. For
instance, the very success of Ghana's expansion of cocoa
production triggered a 48 percent drop in the
international price between 1986 and 1989. In 2002-03 a
collapse in coffee prices contributed to another food
emergency in Ethiopia.

As in Mexico and the Philippines, structural adjustment
in Africa was not simply about underinvestment but state
divestment. But there was one major difference. In
Africa the World Bank and IMF micromanaged, making
decisions on how fast subsidies should be phased out,
how many civil servants had to be fired and even, as in
the case of Malawi, how much of the country's grain
reserve should be sold and to whom.

Compounding the negative impact of adjustment were
unfair EU and US trade practices. Liberalization allowed
subsidized EU beef to drive many West African and South
African cattle raisers to ruin. With their subsidies
legitimized by the WTO, US growers offloaded cotton on
world markets at 20 percent to 55 percent of production
cost, thereby bankrupting West and Central African
farmers.

According to Oxfam, the number of sub-Saharan Africans
living on less than a dollar a day almost doubled, to
313 million, between 1981 and 2001--46 percent of the
whole continent. The role of structural adjustment in
creating poverty was hard to deny. As the World Bank's
chief economist for Africa admitted, "We did not think
that the human costs of these programs could be so
great, and the economic gains would be so slow in
coming."

In 1999 the government of Malawi initiated a program to
give each smallholder family a starter pack of free
fertilizers and seeds. The result was a national surplus
of corn. What came after is a story that should be
enshrined as a classic case study of one of the greatest
blunders of neoliberal economics. The World Bank and
other aid donors forced the scaling down and eventual
scrapping of the program, arguing that the subsidy
distorted trade. Without the free packs, output
plummeted. In the meantime, the IMF insisted that the
government sell off a large portion of its grain
reserves to enable the food reserve agency to settle its
commercial debts. The government complied. When the food
crisis turned into a famine in 2001-02, there were
hardly any reserves left. About 1,500 people perished.
The IMF was unrepentant; in fact, it suspended its
disbursements on an adjustment program on the grounds
that "the parastatal sector will continue to pose risks
to the successful implementation of the 2002/03 budget.
Government interventions in the food and other
agricultural markets... [are] crowding out more
productive spending."

By the time an even worse food crisis developed in 2005,
the government had had enough of World Bank/IMF
stupidity. A new president reintroduced the fertilizer
subsidy, enabling 2 million households to buy it at a
third of the retail price and seeds at a discount. The
result: bumper harvests for two years, a million-ton
maize surplus and the country transformed into a
supplier of corn to Southern Africa.

Malawi's defiance of the World Bank would probably have
been an act of heroic but futile resistance a decade
ago. The environment is different today, since
structural adjustment has been discredited throughout
Africa. Even some donor governments and NGOs that used
to subscribe to it have distanced themselves from the
Bank. Perhaps the motivation is to prevent their
influence in the continent from being further eroded by
association with a failed approach and unpopular
institutions when Chinese aid is emerging as an
alternative to World Bank, IMF and Western government
aid programs.

Food Sovereignty: An Alternative Paradigm?

It is not only defiance from governments like Malawi and
dissent from their erstwhile allies that are undermining
the IMF and the World Bank. Peasant organizations around
the world have become increasingly militant in their
resistance to the globalization of industrial
agriculture. Indeed, it is because of pressure from
farmers' groups that the governments of the South have
refused to grant wider access to their agricultural
markets and demanded a massive slashing of US and EU
agricultural subsidies, which brought the WTO's Doha
Round of negotiations to a standstill.

Farmers' groups have networked internationally; one of
the most dynamic to emerge is Via Campesina (Peasant's
Path). Via not only seeks to get "WTO out of
agriculture" and opposes the paradigm of a globalized
capitalist industrial agriculture; it also proposes an
alternative--food sovereignty. Food sovereignty means,
first of all, the right of a country to determine its
production and consumption of food and the exemption of
agriculture from global trade regimes like that of the
WTO. It also means consolidation of a smallholder-
centered agriculture via protection of the domestic
market from low-priced imports; remunerative prices for
farmers and fisherfolk; abolition of all direct and
indirect export subsidies; and the phasing out of
domestic subsidies that promote unsustainable
agriculture. Via's platform also calls for an end to the
Trade Related Intellectual Property Rights regime, or
TRIPs, which allows corporations to patent plant seeds;
opposes agro-technology based on genetic engineering;
and demands land reform. In contrast to an integrated
global monoculture, Via offers the vision of an
international agricultural economy composed of diverse
national agricultural economies trading with one another
but focused primarily on domestic production.

Once regarded as relics of the pre-industrial era,
peasants are now leading the opposition to a capitalist
industrial agriculture that would consign them to the
dustbin of history. They have become what Karl Marx
described as a politically conscious "class for itself,"
contradicting his predictions about their demise. With
the global food crisis, they are moving to center
stage--and they have allies and supporters. For as
peasants refuse to go gently into that good night and
fight de-peasantization, developments in the twenty-
first century are revealing the panacea of globalized
capitalist industrial agriculture to be a nightmare.
With environmental crises multiplying, the social
dysfunctions of urban-industrial life piling up and
industrialized agriculture creating greater food
insecurity, the farmers' movement increasingly has
relevance not only to peasants but to everyone
threatened by the catastrophic consequences of global
capital's vision for organizing production, community
and life itself.

Walden Bello

Walden Bello is senior analyst at and former executive
director of Focus on the Global South, a research and
advocacy institute based at Chulalongkorn University in
Bangkok. He is the author or co-author of many books on
politics and economic issues in the Philippines and
Asia, including, most recently, Deglobalization (Zed),
and recipient of the 2003 Right Livelihood Award, also
known as the "Alternative Nobel Prize." In March he was
named Outstanding Public Scholar for 2008 by the
International Studies Association.

Food crisis: When the "solution" is the problem

http://socialistworker.org/print/2008/06/11/solution-is-the-problem

When the "solution" is the problem

Chris Williams examines the causes of the global food crisis--and explains why the proposals offered by the world's wealthiest governments are motivated by self-interest.

WITH SOARING food prices sparking riots in dozens of countries and threatening to plunge 100 million more people into poverty, according to the New York Times, you might expect world leaders to take some kind of action.

Yet at the recent United Nations (UN) food summit in Rome, the priorities of world leaders were on display for all to see--and they didn't include alleviating the suffering of the billions around the globe, whose very existence is threatened by rising food prices.

UN Secretary General Ban Ki-moon stated that the world needs to "grow more food," and that governments placing restrictions on food exports and import tariffs in response to the protests of their starving populations must remove them.

But according to the UN's own figures, there is already enough food to feed everyone on the planet.

The Food and Agriculture Organization (FAO) of the UN reports that enough food was grown last year to give every single person on the planet 2,800 calories per day--enough to make them overweight. By 2030, with population growth continuing to decline as agricultural output rises, the UN predicts an estimated population of 8.3 billion people could receive 3,050 calories a day.

Even Pope Benedict XVI--hardly a radical--was moved to say, "Hunger and malnutrition are unacceptable in a world which, in reality, has sufficient production levels, the resources and the know-how to put an end to these tragedies and their consequences."

- - - - - - - - - - - - - - - -

ACCORDING TO Ban Ki-moon, however, the blame belongs, at least in part, with poor countries that have instituted measures designed to cushion their populations from the impact of rising prices. "Some countries have taken action by limiting exports or by imposing price controls," Ban said. "They only distort markets and force prices even higher."

This kind of "advice" is precisely what caused the food crisis in the first place.

Haiti, one of the countries hardest hit by the food crisis, used to grow its own rice, and Haitian farmers were protected by high tariff barriers. All that ended in 1986, when the International Monetary Fund (IMF), as a condition for more loans to pay off previous debt, forced Haiti to remove trade barriers.

Within two years, domestic rice growing was decimated by cheap U.S. imports, leaving Haiti open to the vagaries of the world market and unable to feed its own population when prices shot through the roof.

How can U.S. companies afford to sell rice so cheaply that they can undercut competition in a country where 80 percent of the population lives on less than $2 a day? U.S. agribusiness is subsidized to such an extent that it can sell rice at up to 20 percent below production cost--the very kind of support that Haitian farmers were barred from receiving.

The U.S. was at least criticized at the food summit for these extensive farming subsidies, which amount to massive corporate welfare handouts. Of the $165 billion in federal subsidies going to farmers from 1995-2005, more than 80 percent went to the largest 20 percent of growers. In the same period, members of Congress and their relatives raked in $9.2 million in farm subsidies, according to USA Today.

The U.S. also caught flak for its role in promoting biofuels for its corn-to-Hummer-fuel program. One-third of the U.S. corn crop this year will be turned into the alternative fuel ethanol, another factor that is driving up food prices. Much of the rest of corn will be used to feed animals--an unnatural and highly inefficient use in itself, but the animals grow faster and therefore are more profitable.

But the response of the Bush administration to the criticism was basically to tell the rest of the world to get lost. U.S. Agriculture Secretary Ed Schafer bristled at the criticism: "I don't think the United States gets enough credit at all for providing over one half of all the food aid."

The disagreements between different countries representing their own corporate interests meant that a comprehensive and meaningful solution to the food crisis--or even a coherent statement--was beyond the summit.

Proposals in Rome included implementing a "new Green Revolution" for Africa (translation: Africans are starving because they don't know how to grow things and need Western technology, irrigation techniques and genetically modified seeds) and reducing "barriers to trade" (translation: give us total access to all your markets and land).

Delegates from the 183 countries represented at the summit were supposed to issue a resounding declaration on "eliminating hunger and securing food for all." However, because of all the squabbling over subsidies, export controls and the role of increased biofuel production, the statement had to be watered down to almost complete meaninglessness.

- - - - - - - - - - - - - - - -

THE ESCALATION in human misery as a result of rising food prices is fabulous news for some, however. The giant agribusinesses are quite literally profiting from the increase in starving people.

As Britain's Independent pointed out,

Some of the world's richest food companies are making record profits. Monsanto last month reported that its net income for the three months up to the end of February this year had more than doubled over the same period in 2007, from $543 million (£275 million) to $1.12 billion. Its profits increased from $1.44 billion to $2.22 billion.

Cargill's net earnings soared by 86 per cent from $553 million to $1.03 billion over the same three months. And Archer Daniels Midland, one of the world's largest agricultural processors of soy, corn and wheat, increased its net earnings by 42 percent in the first three months of this year from $363 million to $517 million. The operating profit of its grains merchandising and handling operations jumped 16-fold from $21 million to $341 million.

Because of the rising prices, speculative trading in agricultural commodities has grown by more than 1,000 percent in the past four years, to more than $150 billion, and this, in turn, is pushing prices up.

The food crisis, therefore, doesn't really have anything to do with "things," but with relationships. Specifically, world hunger is about relationships among different sets of people--those who own and control the global economy in food and those who don't.

In the so-called "free market," it doesn't matter that people think food should be a human right, or that humans can't survive without it. Food is a commodity, the same as any other commodity--clothes, cars, pencils, books, etc. People aren't seen as having a right to purchase any particular commodity, and there is no distinction between necessities and luxuries.

Those who are rich can purchase anything they want, while those who are poor may not have enough to buy even the most basic foodstuffs.

Economists call this a lack of "effective demand." In other words, there is certainly intense demand among the poor for food, but because they don't have the money, that "demand" isn't "effective," in the sense that the market will provide for them.

As Jeffrey Sachs, director of the Earth Institute at Columbia University, told the New York Times last year, market liberalization and trade deregulation are "based on the idea that if you take away the government for the poorest of the poor, that somehow markets will solve the problems...But markets can't step in and won't step in when people have nothing. And if you take away help, you leave them to die."

If governments try to facilitate feeding the poor by instituting price controls or subsidizing the products, rather than the corporations that manufacture them, they are accused of creating "distortions" in the market and "disturbing" the free flow of goods.

This is why simply growing more food isn't the solution to the food crisis. It's not food that the world lacks. What the majority of the population of the world lacks--despite being the ones who actually grow all the food and manufacture all the goods--is the power to control how that food and those goods are distributed.

Ban Ki-moon's declaration that $20 billion a year is required to eradicate world hunger sounds like a lot of money--until you stack it up against the $35 billion allocated to crop subsidies in the recent U.S. farm bill or the $13 billion going to the oil and gas corporations, along with $25 billion to a resurgent nuclear industry, in the recent energy bill. That $20 billion to fight world hunger is less than the Christmas bonuses paid to Wall Street executives last year, and less than 2 percent of the U.S. defense budget.

And such are the priorities of the system that far less than $20 billion was pledged in aid at the food summit.

- - - - - - - - - - - - - - - -

THE FOOD crisis is also directly connected to other aspects of the operation of the system--particularly, the conflicts over resources that play out around the globe.

Africa has increasingly been plunged into a rerun of the 18th century "scramble for Africa" over its extensive (and, from a corporate perspective, underutilized) natural resources. Oil and other industrially important minerals (uranium and copper, for example) abound, and new competitors are throwing their hats into the ring--China and India, in particular.

Western governments talk about China's involvement in Darfur, but their motivations in this case are not that they care about the impoverished and brutalized people of Darfur, but that China is the single biggest investor in Sudan's developing oil fields--which, according to the West, are supposed to be reserved for exclusive exploitation by Western corporations.

Oil companies are scouring the planet in search of new supplies of oil and other raw materials. As these become harder and more expensive to find, business interests need increasing military and diplomatic arm-twisting, bullying and bribing to get access--especially because they are being out-competed in some areas they regard as their own by a very flush China and a newly reinvigorated, loaded and, hence, aggressive Russia.

In addition, it is estimated that for every calorie of food produced, it requires the consumption of 10 calories of oil. Hence, the strong correlation between rocketing oil prices and increases in the cost of food.

All of these factors--food prices, oil, imperialism--are fundamentally connected to the underlying insanity of the capitalist mode of production.

Africa does need technical know-how and advanced irrigation techniques. But if these are provided by the same corporate vultures and paid for with the same type of "loans" and "development aid" that the UN has in mind, all we have to look forward to is another UN conference in five years urging the "world community of nations" to once again "do better" and "really focus" on poverty reduction and food provision.

As the Independent commented:

A sane world would at this point reverse course and do some of the worthy things that UN summits are so good at talking about--helping some of the 96 percent of African farms dependent on rainfall to build irrigation systems, for example.

But the business-driven priority, as endorsed by the FAO summit, is to gouge open the world's economies even faster, via a speedy conclusion of the Doha round of trade liberalization. That is likely to make it even harder for the poor to feed themselves.

Fortunately, the thousands of protesters at the Rome summit (as well as the rioters in poor countries whose actions have spurred many governments to institute price and export controls) point in a different direction.

What is required now is the rebirth of a global justice movement that brings together all these various protests and asserts that food is a fundamental human right--a movement that recognizes capitalism has created the problem of world hunger and is incapable of being part of the solution.

We need a democratic movement that organizes to roll back the priorities of a system that denies people food in order to guarantee profits.

= = = = = = = = = = = = = = = =

What else to read

The International Socialist Review has a special feature on the global food crisis, including Sharon Smith's "The revolt over rising food prices," an eyewitness report on "Haiti's food riots" by Mark Schuller and Hossam El-Hamalawy's "Revolt at Mahalla" on the eruption of class struggle in Egypt in connection with the food crisis.

For updated statistics on world hunger, visit the United Nations' Food and Agriculture Organization Web site. The FAO's report "State of Food Insecurity in the World" is available online. The Food First Web site also has useful articles and analyses.

World Hunger: Twelve Myths by Frances Moore Lappe, Joseph Collins, Peter Rosset and Luis Esparza is an authoritative examination of the policies and politics that cause hunger, as well as the misconceptions about "humanitarian" aid from advanced countries.

How the Market Has Driven up Prices and Hunger

The Global Food Crisis
How the Market Has Driven up Prices and Hunger

Karen Harper, Oakland LMV

Anger at rapidly rising food prices has now been surpassed in the US by
anger at the high cost of gas and getting to work. For the 2 billion
ordinary people around the globe that live on less than $2 a day, the
current global food crisis is having a huge impact. It is likely that
more people will starve to death in the coming months than die as a
result of all the current wars on the planet combined. How did this
situation arise?

There has been a worldwide increase in prices in certain food
commodities especially cereals, which are the staple foods for a huge
proportion of the world's population. Primarily affected are wheat,
corn, rice and soybeans. These price increases in turn are affecting the
prices of other foods like dairy products and eggs. Slightly less
affected at this point are the prices of meats and vegetables.

For example, globally, food prices have increased by 83% in the past 36
months, 1 with the greatest price increase happening since the summer of
2007. Rice prices in Asia have increased two to threefold in the recent
period and specifically doubled this year. Thai rice at the end of 2007
was $320 per metric ton, in May 2008 it was $1100 per metric ton.2 In
May of 2008, corn in the US was priced at $5.50 a bushel, which is
double the 2007 price, 3 and at the Minneapolis Grain Exchange in
February wheat prices had quadrupled in one year to over $15 a bushel.4
Even food commodities that have primarily local markets have increased
in price: lentils in India have increased from $300 to $800 per ton
during this same period.5 In Burundi a product called farine noir, a
combination of black flour and moldy cassava, which is sold as a
subsistence food to the very poor, saw its price triple in eight weeks.6

In China food inflation was estimated at about 18% for last year.7 In
the Middle-east, which is net food importer, the food import bill has
increased 170% since 2000. In Egypt and Yemen alone food prices have
increased almost 60% in one year.8 In Pakistan food and beverage prices
increased by over 20% in March of this year alone.9

*Worldwide Starvation, Increased Revolts *
The biggest impact from price increases are on the world's poorest
people. There are many references to the "world's bottom billion," which
is generally the population who live on less than $1 per day, and is
currently about 880 million people. This is an arbitrary dividing line,
and in fact, 2.1 billion people live on less than $2-a day.10 The UN
estimates that with the current rise in food prices 100-130 million more
people are at risk from hunger than they were 8 months ago.11 In the
world's under developed countries the poorest people spend about 40-70%
of their incomes on food, compared to 10-15% in the industrialized
nations.12 So it is clear how this food crisis is greater for those
living in poverty.

In response to these dramatic price increases, there has been increased
unrest in dozens of countries in the form of strikes and riots. Haiti,
Egypt, Yemen, and the Philippines have had some forms of rioting. In
Haiti the Prime Minister was forced to resign in response to the unrest
over food prices. In Lebanon, a general strike was organized in response
to price increases, and calls for strikes in Egypt have been
aggressively suppressed by the US-backed regime there.

Some countries, desperate to prevent food-related unrest, have
introduced increased price controls for food. India and Vietnam, the #2
and #3 rice exporters in the world, have begun export restrictions.13
Also countries such as Argentina, China, Cambodia, and Indonesia have
introduced similar measures.
India, under pressure from its population's rising anger, shut down its
food futures markets to try to dampen price fluctuations. Indonesia,
Thailand, and Cambodia are providing subsidized rice to their
populations, and the government of the Philippines has been buying up
massive amounts of rice, which it then plans to provide to its
population at a lower cost.
However when the Philippines government tried to buy up 500,000 tons of
rice on the global market, only 300,000 tons were available for
purchase.14

*Energy and Food Crisis Converge*
There are multiple reasons why food prices are increasing, primary among
these is the increase in fuel costs. Currently oil is selling at about
$135 a barrel, which has more than doubled since last year's high price.
This is a huge additional expense for food production, especially for
factory farming practices. These are very fuel-intense and highly
mechanized, with the use of tractors and other heavy machinery. Also,
with globalized food production, there is increased shipping of food
around the globe, which is consuming more fuel. This is entirely a
market-driven process. Food production is geared toward producing large
volumes of food cheaply, which is then shipped to where they are most
likely to be sold for the most profit.

This process increases the dependence on cash crops for many farmers in
the developing world who hope to produce enough to make a meager living
for themselves. However, this makes many poor rural dwellers more
vulnerable to the market. Inherent in capitalism's inequality, they will
never be paid the full value of the food products they are producing, so
they can never afford to buy back what they are producing. In areas
where farm productivity is relatively low it is impossible for them to
make enough income from what they produce to buy back enough basic food
for themselves and their families. This just puts them at a further
disadvantage compared to their counterparts in more developed countries
whose farming techniques are more productive per acre: simply irrigating
land doubles its productivity compared to non-irrigated land. In the US,
farmers can often yield 150 bushels of corn per acre, compared to farms
in the under developed world which average about 30 bushels per acre.15

On top of increased fuel prices, there is increased demand for food
worldwide. With rising economic growth in China and India swelling the
ranks of the middle class in those countries, there is increased demand
for meat. Every kilogram of beef produced requires 10 kilograms of
grain, and each kilogram of pork requires about 4.16 This grain is
being diverted to animal feed, or the land is being diverted away from
human food production to animal food production.

*Food for Cars*
Other food crops, especially corn, and soy to a lesser extent, are also
being diverted to bio-fuel production. Last year a record 13.1 billion
bushels of corn was grown in the US on 85 million acres; 22% of that was
diverted to ethanol production.17 US farmers get a 51 cent tax credit
per gallon of ethanol produced. The current farm bill in Congress will
likely decrease this to 45 cents, but this is unlikely to have a major
effect on the colossal production of ethanol from corn. This push for
bio-fuels is a huge subsidy to big corn growers and not necessarily a
greener source of fuel.

Increased demand for corn for bio-fuels will lead to diversion of land
from growing other crops which will in turn increase the cost for animal
feeds and other food production. The UN estimates that the diversion of
corn to bio-fuels has already contributed 10% to the current rise in
food prices, while the IMF estimates it at 20-30%.18 Patrick Schnable,
an agronomy professor at Iowa State University made this point, "Crops
will go to the highest bidder, and we in the western world are willing
to pay more for fuel than poor people are able to pay for food."19

Global warming is also likely contributing a small amount to the price
increase through the effects of climate change on changing crop
patterns. An ongoing drought in Australia for the last few years has
significantly decreased their wheat production.

Finally, financial speculation on food prices has also contributed to
the increase. It is discounted as a significant factor in the capitalist
press. They are very quick to rule it out as a possible contributor to
escalating prices. However, in an interview with the Financial Times
Kemal Dervis, head of the UN Development Program argued, "We are seeing
excessively expansionary economic policies, just as we did when the
dotcom bubble burst" and, "We face a new phenomenon of commodity prices
going through the roof at a time of recession, or at least slowdown, in
the advanced economies.. I cannot help feeling that liquidity in the
system is looking for an outlet." 20
Speculation Fuels Runaway Prices

An important element of capitalism is that it always seeks to maximize
its profits. The current housing and credit crisis means that real
estate is not as attractive as a source of profits, and consequently
food futures have become more appealing. Food futures, which are the
basis of this speculation, are when food is bought before it is
harvested and delivered. Those who buy the futures at one price can turn
around and sell at whatever the market price is later. There is a huge
speculative element in this, as those buying the food futures are hoping
that food prices will rise. Tim Hannagan, a senior grain analyst from a
major Chicago trading company said, "I've never seen a rice (futures)
market until this year in my three decades of trading grains." 21

Middlemen stand to make huge amounts of money, just as we have seen in
recent years in the housing market. Grains are being stockpiled, not
just by traders, but by governments, which fuels panic buying and
further increases the mammoth potential for profiteering. Around
Christmas of 2007, fuelled by the low dollar, investors staged a run on
the US wheat harvest. The price skyrocketed.

Jeff Voge, the Chairman of the Kansas City Board of Trade, said, "We
have never seen anything like this before. Prices are going up more in
one day than they have in entire years in the past. But no matter what
the price there always seems to be a buyer. this isn't just any
commodity. It is food, and people need to eat." 22

Meanwhile, according to the European Commission, two-thirds of the
recent rise in food prices can be attributed to increased costs of
ingredients. Bread increased 10% between February 2007 and 2008, but
doubling the price of wheat should only have led to a price increase of
3%. From their report, "energy, transport, and labor costs have risen.
But it is possible that somewhere along the food chain someone may be
doing well out of this." 23

*Short Term Perspectives*
There is no perspective for a short-term decrease in food prices. None
of the fundamental causes are likely to change soon. Financial Times
analyst, Martin Wolf, argues, "prices are likely to remain relatively
elevated, by historical standards, unless (or until) energy prices
tumble."24 It is hard to imagine any perspective of energy prices
tumbling. Energy is likely to continue to become more expensive. This
will, in turn, increase world wide suffering, poverty, starvation, and
social unrest, particularly in the under developed world, but capitalism
will continue to push to maximize profits as long as it can get away
with it.

Increased prices of their commodities will still fail to help poor cash
crop farmers, and the general price increases will only make it harder
for them. In fact, Kemal Dervis, the UN development notes that "we have
been saying Africans cannot grow food or cotton because of low world
prices, in a sense, there is an opportunity here. But on the negative
side you have to remember that higher energy prices affect the prices of
fertilizer and other inputs. Farmers cannot produce more because the
inputs are so expensive." 25

Once again we are facing the undeniable fact of capitalism that there
will always be an underclass, and those on the bottom need to stay on
the bottom for capitalism to maximize its profits.

*Capitalism's Alternative*
Capitalism's solutions to the global food crisis would be aimed at the
preservation of the market and maintaining maximum profits. Their
answers would include an increased use and reliance on genetically
modified foods. In Japan, where the population has a deep aversion to
genetically modified foods, manufacturers have started importing GM
foods for use in processed foods for the first time.26 The capitalists
will push also to eliminate subsidies and tariffs to decrease
regulations and allow the market to "work things out". This will be at
the expense of poor countries and to the benefit of richer ones.
Big Business will also push to increase production per acre, which is
more energy and water intensive, more chemically reliant, more
destructive to the environment, and ultimately unsustainable.

The market is driven by profits and ignores the needs of humanity. It
depends on and perpetuates massive imbalances and inequality worldwide.
To solve the global food crisis the market system itself must be
destroyed.

In the midst of rising global food prices there is also extreme global
caloric imbalances with massive levels of starvation in the under
developed world and unprecedented levels of obesity in the developed
world. Calories are put into the global market place and then they
follow the Dollar or Euros. In the developed world it is common to throw
food calories away. Bulimics flush them down the toilet, while others
exercise hard to get rid of them. Capitalism pushes them our way and we
are desperate to get rid of them. Meanwhile there is brutal starvation
and malnutrition across the entire globe. As long as the market exists
the imbalance will continue.

We also need to focus on decreasing consumption in developed nations,
not just of unnecessary calories, but also of consumer goods. A change
in lifestyles will decrease the general strain on global resources,
making more resources available for food production.
*
Socialism, Democracy and Ending the Market*
By replacing capitalism with democratic Socialism we can begin to plan
food production according to the needs of people worldwide and with a
better understanding of resources worldwide to try to decrease the
global shipping of food. This may mean any of the following: do we eat
foods only when they are locally in season? Do we only eat foods grown
in our geographic area? Do we discourage development in places such as
deserts where there is inadequate soil and water to produce enough food
to support large populations? Do we try to increase food production
within urban areas. These questions need to be discussed, and will only
be seriously taken up once the market itself is eliminated.

Cuba, after the fall of the Soviet Union, lost access to cheap Soviet
oil, and essentially became close to a post-petroleum economy. As
combine harvesters were left to rust, wheat production collapsed and the
caloric intake of Cubans also collapsed. In response the Stalinist
regime led the development of infill urban organic gardens all over the
island. These were able to produce a massive increase in food for the
population. Local organic gardens in Havana supply 90% of all the fruit
and vegetables consumed by the city's two million residents.27
Similarly, where lawns were abandoned for agriculture during World War
Two, Victory Gardens provided the US with 40% of all its vegetables. 28

We can see that under democratic socialist planning there is a
perspective to better provide for the world's food needs in a way that
capitalism has failed to do. Big business will never be able to feed the
world because the profit motive can never be separated from capitalism.

Sources
Business Week 5-12-08 Solutions for a Hunger Crisis (1,19)
Business Week 5-1-08 What Spurred the Run on Rice? (2,13,14, 21)
Business Week 5-1-08 Is Ethanol Getting a Bum Rap (3,15,17)
Mgex.com (4)
Financial Times 4-26-08 UN says Oil Rise Hits Food Prices Harder (5,18)
Business Week 5-12-08 Food Emergency: On the Front Line with the U.N.'s
Josette Sheeran (6,11)
Voanews.com (7)
Financial Times 5-7-08 Mideast Reels as Hunger Outgrows Oil Revenues (8)
Financial Times 5-12-08 UAE Investors Buy Pakistan Farm Land (9)
World Bank 2008 World Development Report (10)
Financial Times 4-30-08 The Food Crisis is a Chance to Reform Global
Agriculture (12, 24 )
Earthsave.ca (16 )
Financial Times 5-7-08 Warning over Dangers of Inflation for World's
Poor (20,25)
Washington Post 4-27-08 The New Economics of Hunger (22,26)
Financial Times 4-30-08 Food Prices Have Risen Faster Than Justified,
Argues Brussels (23)
The Independent 8-8-06 The Good Life in Cuba: Havana's Green Revolution
(27)

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