The real roots of the food crisis

STRIKES, PROTESTS and riots over the cost and availability of food have swept across Burkina Faso, Somalia, Cameroon, South Africa, Ivory Coast, Mauritania, Senegal, Egypt, Yemen, Indonesia, Morocco and Bangladesh. “Peace-keeping” forces in Haiti fired tear gas and rubber bullets at protesters after days of unrest there.

The problems have even spread to the US, with major supermarket chain Walmart rationing rice sales.

The protests and panic buying have been sparked by massive increases in the price of food. In 2007, according to UN figures, the price of grain rose by 42 per cent and dairy products by 80 per cent. In the last year, wheat prices have increased by 130 per cent and rice by 74 per cent.

Food prices have already started to rise in Australia, with vegetables up 9.7 per cent, milk 11.6 per cent, bread 9 per cent, chicken 11.6 per cent and eggs 5.9 per cent over the year to date.

This crisis is routinely described as a food shortage. But the problem has far more to do with a shortage of money to pay for food than a lack of supply.

“These increases in food prices are not the consequence of food shortages, it’s the consequence of human greed that is putting at risk the lives of millions of men, women and children,” argues Jay Naidoo, the head of Southern Africa’s Development Bank. “There are companies that are making super profits on this issue.”

Another mainstream explanation is that Chinese and Indian economic growth is resulting in over-consumption on a global scale. But consumption per head in China (which is much richer than India) is about three times less than in the US and Britain. Although China’s imports of dairy and meat have increased, it remains a net exporter of rice, grain and corn.

Food off the table

The main problem is that global capitalism has completely re-organised the way that food is produced. The situation in Haiti, hardest hit by the current crisis, is a good example of the dynamic of food production under capitalism. Before 1950 Haiti produced more than 80 per cent of its own food and was also a food exporter. Today, thanks to US-dominated free trade policies, Haiti imports 75 per cent of its food.

The US government subsidises rice production at home, flooding the market in Haiti and driving local farmers out of business. Haitian farmers who once grew rice for local consumption instead produce crops for export, not staples that would feed the population.

As global food prices rise, Haitians-80 per cent of whom earn less than $2 a day-can no longer afford imported rice. This story is repeated time and again around the globe.

The organisation of biofuel production is making the problem worse. Biofuels were supposed to be a cheaper substitute for petrol as oil prices sky-rocketed. Some have even argued that they represent a partial solution to global warming (even though the production of biofuel is still carbon-intensive).

But because of the irrational way capitalism is organised, products such as bioethanol (made from the staples corn, wheat and sugar cane) have had a devastating impact on food prices.

The UN says it takes 232 kilograms of corn to fill a 50-litre car tank with ethanol. America will divert 18 per cent of its grain output to ethanol production this year, as per Bush’s plan to break dependency on oil imports.

It has a 45 per cent biofuel target for corn by 2015. This means big money for agribusinesses like Monsanto, Dow, DuPont, Syngenta and Bayer.

Rather than being an effective form of renewable energy, biofuels are taking food off the table of people around the world and reaping a massive profit for some of the world’s biggest corporations.

Many of the corporations benefiting from biofuels cash-cropping also argue that food shortages mean that genetically-modified (GM) foods are urgently needed. In November last year, a ban on GM crops was lifted in NSW and Victoria and NSW farmers have been able to plant GM canola since March.

But there are virtually no safety regulations to protect consumers. The pro-GM argument also assumes, again, that the problem is lack of food production. This is untrue-even if we take into account crop destruction as a result of climate-induced natural disasters.

Ironically, given their collective inaction in the face of climate change, some world leaders have been quick to blame global warming for the current crisis. There is an element of truth to this. For example, there were two major floods last year in Bangladesh, wiping out two million tonnes of rice. This is an indication of problems we face if climate change is not addressed. But most of these leaders have no intention of radically cutting the emissions of their own countries, or of alleviating the suffering of the poor.

The real root of the food crisis is the organisation of the capitalist system. Financial speculation has meant, for example, that stores of grain have been run down in some regions, leaving people unable to deal with unexpected weather patterns or economic downturns, while in other areas giant agribusinesses are hoarding staples in order to capitalise on price hikes. It is a rotten system that leaves literally billions hungry in order to make profit for a few.

By Ernest Price


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