A crime against humanity - PR9

The cost of food sky-rocketed recently, after three decades of low or falling prices. Wheat rose by 77% in 2007, while the cost of rice almost trebled in the six months to April 2008. Not surprisingly there have been food riots in more than 30 countries including Bolivia, Cameroon, Egypt and Yemen, as subsidies are withdrawn and shortages bite. Even in the UK steep rises in the price of food staples have hit poorer families hard as wages fail to keep pace with food and energy price inflation.

The cause of the increase is an imbalance of supply and demand. Demand has risen sharply due to a combination of economic growth, population increase and the expansion of biofuels. Feverish capitalist expansion in China and India in particular has led to increased demand for food and a shift towards more meat and dairy products. This new diet consumes far more grain since it is far less efficient: it takes nine or ten kilos of grain to produce one kilo of beef. In China average meat consumption has gone up from 20kg to 50kg a year since the 1980s.

And just as more grain is diverted to feed livestock, so corn and other crops are also being diverted away from human mouths towards petrol tanks. The amount of maize produced world-wide increased by 51 million tons from 2004 to 2007, but at the same time biofuel use in the USA increased by 50 million tons, wiping out most of the rise.

The race to increase biofuel production has been marketed as a “green” initiative to tackle global warming, but nothing could be further from the truth. The real driver behind it has been concerns about fuel security and oil price rises. Recent research into the impact of biofuels suggests that they may be more energy intensive than fossil fuels, are certainly leading to deforestation, and are probably making climate change worse.

And yet still governments aggressively promote them. Suppliers in the UK are now required to include at least 2.5% biofuel in petrol, the European Union wants to raise this to 5.75% by 2010; and in nine provinces in China 10% of petrol must be ethanol from crops. It is estimated that vehicles in the USA already consume enough corn to meet the import needs of the poorest 82 countries in the world.

The other forces behind the price hikes are poor wheat harvests due to drought in Australia, Europe and southern Africa, and crop damage from floods in other areas. According to the UN World Food Programme, 57 countries, including 29 in Africa, 19 in Asia and nine in Latin America, have been hit by catastrophic floods. Harvests have been affected by drought and heatwaves in south Asia, Europe, China, Sudan, Mozambique and Uruguay.

It should be clear from this that the price rises are not temporary blips, but are here to stay for at least a few years if not longer. Droughts and floods are going to continue and worsen as climate change escalates, biofuel demand is set to rise much further, and fuel costs are unlikely to come down. Rising oil prices add further to the costs of production (through fertiliser and tractor fuel costs) and of distribution.

The market is already responding to price rises by increasing grain production, but this will only benefit the big grain producers who have the capacity to expand and intensify. Small producers will struggle to compete.

The impact is being felt across the globe, but it is the poorest people and countries that are being devastated. Over a billion people live on US$1 a day or less – “absolute poverty” in World Bank terms – and a further 1.5 billion live on between $1 and $2 a day. One of the much trumpeted successes of globalisation and world economic growth has been that these numbers have fallen over the past decade.

However, globalisation has also meant that an increasing proportion of poor people are dependent on wages and trade rather than subsistence. Some poor farmers will benefit as food producers; more and more, including the urban working class and unemployed, will be completely dependent on buying food, and they will be pushed further into poverty. The World Bank estimates that at least 100 million more people will be pushed into absolute poverty.

The poorest already spend a higher proportion of their income on food, and as this rises they will have to cut back on other things such as medical care, school fees for children, meat, vegetables etc. People in high income countries spend an average of 16% of their income on food compared with 55% in low income countries.

And they get less for the money they spend – people in Sierra Leone spend 68% of their income on food to get an average of 1,700 calories per person; compare this with the USA that spends only 12% on food to gobble up 3,732 calories per person. In Afghanistan people now spend 50% of their income on food, up from 10% two years ago, and in El Salvador the poor are only eating half as much food as they were last year.

The radical restructuring of the global economy is the underlying cause of the food crisis; developing countries were forced by the World Bank and IMF to reduce subsidies to food producers, lift import barriers and open up their economies to the international market. The result has been a shift in global food production – many countries that were self-sufficient or even exporters of staple crops became dependent on imports.

Food production has become highly centralised, with six countries producing 80% of wheat exports. Once other countries are dependent on imported food they are vulnerable to changes in world prices and to policies of the big producers.

Global institutions like the World Bank, WTO and IMF are squarely on the side of the rich. Take rice production in Haiti, for example, where it is a staple of the diet. In 1995 the IMF demanded that Haiti cut its tariff on imported rice in return for a loan. Up to that point Haiti produced almost all its own rice without government subsidy. Lowering the tariffs opened the country up to cheap imports, and now 75% of rice in Haiti is produced in the USA.

And don’t be conned into thinking this is the beauty of the free market – the USA is the third largest rice exporter, and effectively dumps subsidised rice on other countries. According to Oxfam, the industry received US$1.3 billion in government subsidies in 2003, and sells its rice at 34% below cost price.

This is but one example of how globalisation, the growth of “free trade” across the world, is in fact the promotion of a system rigged in favour of the rich. Millions of people are now hungry because they cannot afford the “market price” for food but have been forbidden from growing their own. Meanwhile agribusinesses makes billions in profit, joined recently by hedge funds that have moved into food futures – effectively betting on the empty stomachs of children in the global south.

Famine and “food insecurity” is not new. But this time it is clearer than ever that there is nothing natural or inevitable about it. This food crisis is not due to natural disasters or overpopulation. The United Nation’s Food and Agriculture Organisation has worked out that plenty of food is produced in the world – enough to provide over 2,800 calories a day to everyone which is more than enough to stay healthy.

The problem, once again, is that under capitalism food is produced first and foremost to make profit. If more profit can be made from feeding cars rather than people, then that is what will happen, however much concern world leaders show for the poor. There are a lot of people who are horrified by hunger, climate change and inequalities who nonetheless see capitalism as the answer.

But they should think about this. Even the generosity and philanthropy of the capitalists is designed to make profit. The USA has a food aid budget of $1.2 billion for 2008. George Bush has asked for this to be increased. But a close look at the way that aid is handled shows first that 65% of the money goes in transport and overhead costs, and second that US law requires that all the food donations be bought from US producers, once more lining the pockets of the already rich and, no doubt, obese.

It really is time that people woke up to the fact that the market is the problem. Meanwhile socialists and trade unionists need to rebuild the anti-capitalist movement in solidarity with those who are rioting and striking in protest at food prices. Until the huge multinational agribusinesses are expropriated (along with the speculator parasites) and replaced with a rational system of planned food production and distribution under workers’ and small farmer control, then the market will continue to wreak havoc on food supplies.

Unions, NGOs and community organisations must demand from the wealthy nations an emergency plan that includes a massive expansion of emergency food aid, without conditionality, investment in local agriculture (free credits to small farmers) and the destruction of organisations like the WTO that perpetuate this crime against humanity.

Sat 04, October 2008 @ 12:53