http://www.grain.org/articles/?id=39 For some time now the rising cost of food all over the world has taken households, governments and the media by storm. The price of wheat has gone up by 130% over the last year.[1] Rice has doubled in price in Asia in the first three months of 2008 alone,[2] and just last week it hit record highs on the Chicago futures market.[3] For most of 2007 the spiralling cost of cooking oil, fruit and vegetables, as well as of dairy and meat, led to a fall in the consumption of these items. From Haiti to Cameroon to Bangladesh, people have been taking to the streets in anger at being unable to afford the food they need. In fear of political turmoil, world leaders have been calling for more food aid, as well as for more funds and technology to boost agricultural production. Cereal exporting countries, meanwhile, are closing their borders to protect their domestic markets, while other countries have been forced into panic buying. Is this a price blip? No. A food shortage? Not that either. We are in a structural meltdown, the direct result of three decades of neoliberal globalisation. Farmers across the world produced a record 2.3 billion tons of grain in 2007, up 4% on the previous year. Since 1961 the world’s cereal output has tripled, while the population has doubled. Stocks are at their lowest level in 30 years, it’s true,[4] but the bottom line is that there is enough food produced in the world to feed the population. The problem is that it doesn’t get to all of those who need it. Less than half of the world’s grain production is directly eaten by people. Most goes into animal feed and, increasingly, biofuels – massive inflexible industrial chains. In fact, once you look behind the cold curtain of statistics, you realise that something is fundamentally wrong with our food system. We have allowed food to be transformed from something that nourishes people and provides them with secure livelihoods into a commodity for speculation and bargaining. The perverse logic of this system has come to a head. Today it is staring us in the face that this system puts the profits of investors before the food needs of people. Market realities The policy makers who have shaped today’s world food system – and who are supposed to be responsible for averting such catastrophes – have come out with a number of explanations for the current crisis that everyone has heard over and over again: drought and other problems affecting harvests; rising demand in China and India where people are supposedly eating more and better than in the past; crops and lands being massively diverted into biofuel production; and so on. All of these issues, of course, are contributing to the current food crisis. But they do not account for the full depth of what is happening. There is something more fundamental at work, something that brings all these issues together, and which the world’s finance and development chiefs are keeping out of public discussion. Nothing that the policy makers say should obscure the fact that today’s food crisis is the outcome of both an incessant push towards a “Green Revolution” agricultural model since the 1950s and the trade liberalisation and structural adjustment policies imposed on poor countries by the World Bank and the International Monetary Fund since the 1970s. These policy prescriptions were reinforced with the establishment of the World Trade Organisation in the mid-1990s and, more recently, through a barrage of bilateral free trade and investment agreements. Together with a series of other measures, they have led to the ruthless dismantling of tariffs and other tools that developing countries had created to protect local agricultural production. These countries have been forced to open their markets and lands to global agribusiness, speculators and subsidised food exports from rich countries. In that process, fertile lands have been diverted away from serving local food markets to the production of global commodities or off-season and high-value crops for Western supermarkets. Today, roughly 70% of all so-called developing countries are net importers of food.[5] And of the estimated 845 million hungry people in the world, 80% are small farmers.[6] Add to this the re-engineering of credit and financial markets to create a massive debt industry, with no control on investors, and the depth of the problem becomes clear. Agricultural policy has completely lost touch with its most basic goal of feeding people. Hunger hurts and people are desperate. The UN World Food Programme estimates that recent price hikes have meant that an additional 100 million people can no longer afford to eat adequately.[7] Governments are frantically seeking shelter from the system. The fortunate ones, with export stocks, are pulling out of the global market to cut their domestic prices off from the skyrocketing world prices. With wheat, export bans or restrictions in Kazakhstan, Russia, Ukraine and Argentina mean that a third of the global market has now been closed off. The situation with rice is even worse: China, Indonesia, Vietnam, Egypt, India and Cambodia have banned or severely restricted exports, leaving just a few sources of export supply, mainly Thailand and the US. Countries like Bangladesh can’t buy the rice they need now because the prices are so high. For years the World Bank and the IMF have told countries that a liberalised market would provide the most efficient system for producing and distributing food, yet today the world’s poorest countries are forced into an intense bidding war against speculators and traders, who are having a field day. Hedge funds and other sources of hot money are pouring billions of dollars into commodities to escape sliding stock markets and the credit crunch, putting food stocks further out of poor people’s reach.[8] According to some estimates, investment funds now control 50–60% of the wheat traded on the world’s biggest commodity markets.[9] One firm calculates that the amount of speculative money in commodities futures – markets where investors do not buy or sell a physical commodity, like rice or wheat, but merely bet on price movements – has ballooned from US$5 billion in 2000 to US$175 billion to 2007.[10] The situation today is untenable. Look at Haiti. A few decades ago it was self-sufficient in rice. But conditions on foreign loans, particularly a 1994 package from the IMF, forced it to liberalise its market. Cheap rice flooded in from the US, backed by subsidies and corruption, and local production was wiped out.[11] Now prices for rice have risen 50% since last year and the average Haitian can’t afford to eat. So people are taking to the streets or risking their lives to journey by boat to the US. Food protests have also erupted in West Africa, from Mauritania to Burkina Faso. There, too, structural adjustment programmes and food-aid dumping have destroyed the region’s own rice production, leaving people at the mercy of the international market. In Asia, the World Bank constantly assured the Philippines, even as recently as last year, that self-sufficiency in rice was unnecessary and that the world market would take care of its needs.[12] Now the government is in a desperate plight: its domestic supply of subsidised rice is nearly exhausted and it cannot import all it needs because traders’ asking prices are too high. Making a killing from hunger The truth about who profits and who loses from our global food system has never been more obvious. Take the most basic element of food production: soil. The industrial food system is a chemical-fertiliser junkie. It needs more and more of the stuff just to keep alive, eroding soils and their potential to support crop yields in the process. In the current context of tight food supplies, the small clique of corporations that control the world’s fertiliser market can charge what they want – and that’s exactly what they are doing. Profits at Cargill’s Mosaic Corporation, which controls much of the world’s potash and phosphate supply, more than doubled last year.[13] The world’s largest potash producer, Canada’s Potash Corp, made more than US$1 billion in profit, up more than 70% from 2006.[14] Panicking now about future supplies, governments are becoming desperate to boost their harvests, giving these corporations additional leverage. In April 2008, the joint offshore trading arm for Mosaic and Potash hiked the price of its potash by 40% for buyers from Southeast Asia and by 85% for those from Latin American. India had to pay 130% more than last year, and China 227% more.[15] Table 1. Profit increase for some of the world’s largest fertiliser corporations Profits 2007 (US$ million) Increase from 2006 Potash Corp (Canada) 1,100 72% Yara (Norway) 1,116 44% Sinochem (China) 1,100 95% Mosaic (US) 708 141% ICL (Israel) 535 43% K + S (Germany) 420 2.8% Source: Compiled from corporate reports Table 2. Profit increase for some of the world’s largest grain traders Profits 2007 (US$ million) Increase from 2006 (%) Cargill (US) 2,340 36% ADM (US) 2,200 67% ConAgra (US) 764 30% Bunge (US) 738 49% Noble Group (Singapore) 258 92% Marubeni (Japan) 90* 43%* Source: Compiled from corporate reports Managing and assessing are not so difficult for a company like Cargill, with its near monopoly position and a global team of analysts the size of a UN agency. Indeed, all of the big grain traders are making record profits. Bunge, another big food trader, saw its profits of the last fiscal quarter of 2007 increase by US$245 million, or 77%, compared with the same period of the previous year. The 2007 profits registered by ADM, the second largest grain trader in the world, rose by 65% to a record US$2.2 billion. Thailand’s Charoen Pokphand Foods, a major player in Asia, is forecasting revenue growth of 237% this year. The world’s big food processors, some of which are commodity traders themselves, are also cashing in. Nestlé’s global sales grew 7% last year. “We saw this coming, so we hedged by forward-buying raw materials”, says François-Xavier Perroud, Nestlé’s spokesman.[17] Margins are up at Unilever, too. “Commodity pressures have increased sharply, but we have successfully offset these through timely pricing action and continued delivery from our savings programmes”, says Patrick Cescau, Group CEO of Unilever. “We will not sacrifice our margins and market share.”[18] The food corporations don’t seem to be making these profits off the back of the retailers. UK supermarket Tesco reports profits up 12.3% from last year, a record rise. Other major retailers, such as France’s Carrefour and the US’s Wal-Mart, say that food sales are the main factor sustaining their profit increases.[19] Wal-Mart’s Mexican division, Wal-Mex, which handles a third of overall food sales in Mexico, reported an 11% increase in profits for the first quarter of 2008. (At the same time Mexicans are demonstrating in the streets because they can no longer afford to make tortillas.[20]) It seems that nearly every corporate player in the global food chain is making a killing from the food crisis. The seed and agrochemical companies are doing well too. Monsanto, the world’s largest seed company, reported a 44% increase in overall profits in 2007.[21] DuPont, the second-largest, said that its 2007 profits from seeds increased by 19%, while Syngenta, the top pesticide manufacturer and third-largest company for seeds, saw profits rise 28% in the first quarter of 2008.[22] Such record profits have nothing to do with any new value that these corporations are producing and they are not one-off windfalls from a sudden shift in supply and demand. Instead, they are a reflection of the extreme power that these middlemen have accrued through the globalisation of the food system. Intimately involved with the shaping of the trade rules that govern today’s food system and tightly in control of markets and the ever more complex financial systems through which global trade operates, these companies are in perfect position to turn food scarcity into immense profits. People have to eat, whatever the cost. The urgent need for a policy rethink The larger backdrop to this perverse food market situation is the global financial system, which is now teetering on its flimsy axis. What began as a localised housing loan collapse in the US in 2007 has unravelled into something far more serious, as people realise that the emperors of the global financial system have no clothes. The world economy is living on debt that no one can pay. While central bankers and Lear jet executives try to patch the holes and restore confidence, the underlying truth is that the system is close to bankruptcy and no one in power wants to take the necessary tough measures: not the IMF, nor the World Bank, nor the leaders of the world’s most powerful nations. Not much more than public relations glitter can be expected from the G8 meeting in June. Similar problems lie at the heart of the food crisis: an ideologically driven elite has forced countries to wrench open markets and let the free market run, so that a few megacorporations, investors and speculators can take huge payoffs. Many countries have lost that most basic power: the ability to feed themselves. This loss, coupled with the corruption that plagues our countries and trading systems, shows that neoliberalism has lost any legitimacy that it might once have had. It is a measure of how out of touch these ideologues are that many now openly call for more trade liberalisation as a solution to the food crisis, with some even proposing that the rules of the WTO be changed to prevent countries from imposing export restrictions on food.[23] The World Bank president, Robert Zoellick, has tried to win the world over with his call for a “New Deal” to solve the hunger crisis, but there is nothing new about it: he calls for more trade liberalisation, more technology and more aid. Today’s food crisis is the direct result of decades of these policies, which must now be rejected. While immediate action is necessary to lower food prices and to get food to those who need it, we also need radical changes in agricultural policy so that small farmers around the world gain access to land and can make a living from it. We need policies that support and protect farmers, fishers and others to produce food for their families, for the local markets and for people in cities, rather than money for an abstract international commodity market and a tiny clan of corporate boardroom executives. And we need to strengthen and promote the use of technologies based on the knowledge and in the control of those who know how to grow food. To put it another way, we need food sovereignty, now – the kind that is defined and driven by small farmers and fisherfolk themselves. Social movements around the globe have been struggling to promote such a reversal of strategy, only to be dismissed as unrealistic and backward by those in power, and often violently repressed. The glimmer of hope in this crisis is that the situation can be reversed. Peasant organisations have concrete proposals about what needs to be done to resolve the crisis in their countries, and governments should listen to what they are saying. Already some governments are talking of a policy change towards food self-reliance.[24] Others are starting to question the fundamental rationale of pushing for more free trade. Neoliberal hawks at the top of the global food policy pyramid have lost whatever credibility they may think they once had. It is time for them to move out of the way so that the visions of food sovereignty and agrarian reform that come from the grassroots can take their place and get us out of this hellish mess. Going further: References 1 Bloomberg, quoted by the BBC, London, 14 April 2008, http://news.bbc.co.uk/2/hi/business/7344892.stm 2 BBC, “Action to meet Asian rice crisis”, London, 17 April 2008, http://news.bbc.co.uk/2/hi/business/7352038.stm 3 See http://www.riceonline.com for daily reports. With many Asian rice exporters out of the game, needy countries from Asia and Africa are turning to the US market where prices are going through the roof. 4 Brian Halweil, “Grain harvest sets record, but supplies still tight”, Worldwatch Institute, Washington DC, http://www.worldwatch.org/node/5539 5 Katarina Wahlberg, “Are we approaching a global food crisis?”, World Economy & Development in Brief, Global Policy Forum, 3 March 2008, 6 Food policy expert interviewed on Radio France International, Paris, 20 April 2008. 7 “UN food chief urges crisis action,” BBC, London, 22 April 2008, http://news.bbc.co.uk/2/hi/americas/7360485.stm 8 Sinclair Stewart and Paul Waldie, “U.S. food producers, speculators square off”, Globe and Mail, Toronto, 23 April 2008, 9 Ibid. and Paul Waldie, “Why grocery prices are set to soar”, Globe and Mail, Toronto, 24 April 2008, 10 Paul Waldie, “Why grocery prices are set to soar”, op cit. 11 Bill Quigley, “USA role in Haiti hunger riots”, ZNet, US, 23 April 2008, 12 World Bank, “Can the world market for rice be trusted”, Box 1 on p. 52 of “Philippines: Agriculture Public Expenditure Review,” Technical Paper, World Bank, Washington DC, 2007, http://go.worldbank.org/TGRSK19300 13 Potash and phosphates are two of the main ingredients in chemical fertiliser. 14 David Ebner, “Saskatchewan: A lot more than wheat” Globe and Mail, Toronto, 11 April 2008, 15 John Partridge and Andy Hoffman, “China deal sends Potash soaring” Globe and Mail, Toronto, 17 April 2008, 16 “Cargill income up sharply in third quarter”, World Grain, Kansas City, 14 April 2008, 17 “Tightening belts,” The Economist, London, 10 April 2008, 18 Jonathan Sibun, “Unilever profits surge despite price pressures,” Daily Telegraph, London, 3 November 2007, http://tinyurl.com/6p8tcx; and, “Get set for more price hikes: Unilever chief,” Business Standard, India, 16 March 2008, http://tinyurl.com/694cqn 19 Foo Yun Chee, “Major European retailers post higher profits for 2007,” Reuters, 6 March 2008, www.iht.com/articles/2008/03/06/business/RETAIL.php 20 Associated Press, “Wal-Mart de Mexico’s 1Q profits rise 11 percent on higher sales, cost controls,” 8 April 2008, 21 Monsanto, Annual Report, 2007. 22 DuPont, Annual Report 2007, and “Syngenta anuncia cifra negocio en progresión 28 por ciento primer trimestre”, EFE, 22 de abril 2008, 23 Isabel Reynolds, “WTO should pressure food exporters – Mandelson”, Reuters, 23 April 2008, 24 See, for example, recent comments from West African farmers and officials: Noel Tadégnon, “Le ROPPA préconise une pression sur les autorités politiques pour soutenir l’agriculture africaine,” APA, 23 April 2008, http://www.apanews.net/apa.php?article61599; and, “Réunion extraordinaire du Conseil des ministres de l`UEMOA, hier : 200 milliards pour freiner la flambée des prix,” Le Nouveau Réveil, Abidjan, 24 April 2008, http://www.lenouveaureveil.com/a.asp?n=290011&p=1903
Company
(%)
While big money is being made from fertilisers, it is just a sideline for Cargill. Its biggest profits come from global trading in agricultural commodities, which, together with a few other big traders, it pretty much monopolises. On 14 April 2008, Cargill announced that its profits from commodity trading for the first quarter of 2008 were 86% higher than the same period in 2007. “Demand for food in developing economies and for energy worldwide is boosting demand for agricultural goods, at the same time that investment monies have streamed into commodity markets,” said Greg Page, Cargill’s chairman and chief executive officer. “Prices are setting new highs and markets are extraordinarily volatile. In this environment, Cargill’s team has done an exceptional job measuring and assessing price risk, and managing the large volume of grains, oilseeds and other commodities moving through our supply chains for customers globally.”[16]
Company
*Data is for Marubeni’s Agri-Marine division only.
Absent from this list is Louis Dreyfus (France), a private agricultural commodities trader with annual sales in excess of US$22 billion, which does not report its profits.
http://globalresearch.ca/index.php?context=va&aid=8794
Tuesday, April 13, 2010
Making a killing from hunger
Posted by Madhura at 3:40 PM 0 comments
Labels: Articles, Corporate Crimes, Corporate Takeovers, Food Security, Global Food Crisis, Global Hunger Index, inflation and food prices 2008, www.grain.org
The food emergency and food myths
http://www.grain.org/seedling/?id=552 Why Bush is wrong to blame Indians for the rise in food prices Vandana Shiva * United States President George W. Bush has a new analysis of the global rise in food prices. At an interactive session in the US state of Missouri on the economy, Bush argued that prosperity in countries like India had triggered increased demand for better nutrition. “There are 350 million people in India who are classified as middle-class. That’s bigger than America. Their middle class is larger than our entire population. And when you start getting wealthy, you start demanding better nutrition and better food so demand is high and that causes the price to go up.” The myth that Bush is propagating is that of growth. It is being repeatedly stated that the rise in the price of food is due to “surging demand” in emerging economies like China and India. The argument is that, since the economies of China and India have grown, their people have become richer and are eating more, and this increased demand is leading to a price rise. This story might succeed in diverting US political debate away from the role of US agribusiness in the current food crisis, both through speculation and through the hijacking of food into biofuels, and in presenting economic globalisation as having benefited Indians, but the truth is that President Bush’s statement is false on many counts. First, while the Indian economy has grown, the majority of Indians have become poorer because they have lost their land and livelihoods as a result of globalisation. Most Indians are, in fact, eating less today than a decade ago, before the era of globalisation and trade liberalisation. Per capita availability of food has declined from 177 kilograms per person per year (485 grams per day) in 1991 to 152 kg per person per year (419 g per day) today. Economic growth has gone hand in hand with growth in hunger. One million children in India die every year for lack of food. Secondly, nutrition has deteriorated, even for the middle classes, from how it was before globalisation. The poor are worse off because their food and livelihoods have been destroyed. The middle classes are worse off because they are eating less healthily, as junk food and processed food enter India through globalisation. India is now at the epicentre of the problems of both malnutrition of the poor, who do not get enough food, and malnutrition of the rich, whose diets are being degraded. India has today not only the world’s largest number of hungry children but also the world’s largest number of diabetics. India is perceived as an economic superpower with 9 per cent growth. Yet because this growth is based on a large-scale takeover of the land of tribals and peasants and large-scale destruction of the livelihoods of millions in agriculture, textiles and small-scale industry, poverty has grown. In the past Indian farmers had seed security because 80 per cent of seed was farmers’ own seed, and 20 per cent came from the public sector seed farms. Globalisation has forced India to allow biotech giants such as Monsanto into the seed market. And Monsanto’s growth comes at the cost of farmers’ lives. More than 150,000 have committed suicide as they have got trapped in debt created by high cost, non-renewable, unreliable seed. Indian farmers had market security. While producing the diverse crops they ate, they also used to grow rice and wheat for the national food security system, which, while paying the farmers a remunerative price, also provided the poor with affordable food through the Public Distribution System (PDS). Globalisation has destroyed the security of both the producers and the poor by integrating the local and domestic food economy into the speculative global commodity trade controlled by agribusiness. Force-feeding is not free trade While Indians are eating less, India is buying much more soya and wheat on the international market. These imports have been forced on India by US agribusiness, aided by the pressure of WTO rules and the US government. Such imports were not necessary before, because India was self-sufficient in wheat and edible oils. The new food imports are the not the result of “demand” from India, but of the imposition of bad food. In 1998 India imported soya, even though we had adequate edible oils. With the US product benefiting from subsidies of nearly US$200 per tonne, these imports amounted to dumping. Millions of India’s coconut, mustard, sesame, linseed and groundnut farmers lost their market, their incomes and their livelihoods. And India’s healthy edible oils were replaced by unhealthy, genetically engineered soya oil and palm oil – industrial oils that have not been eaten in any traditional culture. In 2005 India imported wheat as part of the US–India agreement on agriculture, even though India produced 74 million tonnes of wheat and did not need more. These imports are designed to destroy domestic production to create markets for US agribusiness. This is force-feeding, not free trade. The US wheat was declared unfit to eat, but the US arm-twisted India to dilute its health standards. Destruction of domestic production worldwide can only result in food scarcity and food insecurity. When food gets into the hands of global agribusiness, which makes profits through price fixing and speculation, a food emergency is inevitable. We are seeing the serious consequences of the forced integration of the world’s food systems into a global commodity market through access rules of “free trade” controlled by agribusiness. The perturbations this is causing in local food systems are serious. Production everywhere is getting destabilised by speculative trade, creating both an absolute decline in local food production capacity and a relative decline in the entitlement of the poor, because of rising food prices. The absolute decline in food production arises from three factors. First, the transformation of ecological biodiverse systems to chemical monocultures that produce more commodities but less food for the household and for local economies. Second, the shift from food crops to cash crops for export. Third, the vulnerabilities created by climate change, to which industrial farming and globalised food systems make a significant contribution. Food security requires a strengthening of local and domestic food economies, the defence of rural livelihoods and small farmers, and the reining in of the global grain giants and their price fixing. We need anti-trust action against the agribusiness corporations which are at the heart of the current food crisis. GMOs are a problem for food security, not a solution There is increasing reference to new seeds and GMOs as a solution to the food crisis. GMOs, however, are part of the cause of the food crisis. Bt cotton has destroyed food production in India and has pushed farmers to suicide. Cotton used to be grown as an intercrop with food crops. Now it is a monoculture. With high production costs and low prices for their crops, farmers are trapped in both debt and hunger. GMOs do not, in any case, produce more food. There are only two traits commercialised in twenty years – herbicide resistant crops, and Bt toxin crops. Neither is a trait to improve yield. In fact, research shows a yield drag in GM crops. In India we see high risks of crop failure, with average yields of Bt cotton at 300–400 kg/acre, not the 1,500 kg/acre advertised by Monsanto. It is a myth that industrial, chemical agriculture produces more food. Industrial monocultures produce more commodities, not more food. This is good for Cargill, ADM and Conagra. It is bad for farmers, the poor and the planet. Food sovereignty is the answer to the food emergency The current food emergency is a result of half a century of farming unsustainably, and one and a half decades of trading unfairly in food. The United Nations called an emergency meeting in early June 2008 to address the food emergency. Even the World Bank felt the need for an urgent response. Will the response intensify unsustainability and injustice, or will the global community use the crisis to advance sustainability, justice and fairness? There are already signs that global agribusiness, which has created the crisis both historically and currently, will use it to increase its stranglehold on the world food system. Reducing import duties has been one response of governments to deal with rising food prices. But lowering import duties encourages the destruction of domestic markets and domestic production, thus aggravating the agrarian crisis, pushing more farmers into poverty and leading to an overall decline in food production. The crisis of rising food prices is a direct result of countries being forced by the World Bank, the WTO and regional and bilateral agreements to import food from US agribusiness that they did not need. Mexico was forced to import maize. India has been forced to import soya oil and wheat. The World Bank’s call for contributions to the World Food Programme to increase by US$500 million and President Bush’s request to Congress to add US$770 million to the country’s food aid could become another subsidy to Cargill and ADM if the additional money is not accompanied by the creation of fair markets for farmers at local and regional levels. Emergency food aid cannot correct the distortions, unfairness or unsustainability of the food system as it is currently organised. Both trade rules and the paradigm of food production need to be changed. The globalised system under corporate control is a recipe for food disasters and famines. Either we stop the damage through food democracy and rebuild food sovereignty by strengthening local economies and sustainable agriculture, or the corporate powers that have created the emergency will use it to deepen and expand their profits and control, while billions are condemned to starvation and death. And while people suffer, the corporations’ close allies, such as Bush, will continue to put a false spin on the causes of the food crisis. China not to blame GRAIN Vandana Shiva argues forcefully that Indians are not eating better and, despite what President Bush says, the food crisis cannot be blamed on their “better nutrition” and “better food”. But it is also true that a small elite in both India and China are eating more meat. As Vandana Shiva points out, much of this meat is being consumed in the form of junk food and is thus less healthy, but could this additional demand nonetheless be contributing to the food crisis? Daryll Ray, an investigator at the University of Tennessee, shows that this is not the case with respect to China. In a recent policy article, he looked at meat consumption in China. [1] Beef consumption indeed rose from 1.1 million tonnes in 1990 to 7.4 million tonnes in 2007. However, China supplied this additonal demand with additional domestic production, even achieving a small surplus, which it exported. The same with pork: consumption increased from 23 million tonnes to 45 million tonnes, but once again domestic production met the demand. It is almost the same with poultry: chicken consumption rose from 2.4 million tonnes to 11.5 million tonnes, with domestic production satisfying all the increased demand until 2007, when a small quantity (124,000 tonnes) was imported. What about rice? Did China import a lot, thus causing scarcity elsewhere? Again the answer is “no”. Consumption rose from 124 million tonnes in 1990 to 134 million tonnes in 1999, but domestic production met the additional demand and provided a surplus, which was exported. And maize for animal feed? Yet again, China covers its own consumption and is an important exporter. Daryll Ray concludes: “The data do not support the often-stated implication that the sharp increase in grain prices is attributable to the Chinese diet change.” So what does lie behind the food crisis? University lecturer Alejandro Nadal, commenting on Daryll Ray’s figures in an article in the Mexican newspaper La Jornada, has no doubts: “Today conglomerates like Archer Daniels Midland, Cargill, Bunge, Monsanto and Syngenta have so much control over markets and infrastructure that they can manage stocks, invest in grain futures and manipulate prices on a world scale so that they can obtain huge profits. But neither the WTO or the FAO are interested in tackling this problem.” [2] 1 http://agpolicy.org/weekcol/408.html * Vandana Shiva is founding director of The Research Foundation for Science, Technology and Natural Resource Policy, based in Delhi, India. She is the author of Staying Alive and many other books and articles.
2 Alejando Nadal, “Precios de alimentos: adiós al factor China”, La Jornada, 11 June 2008, http://tinyurl.com/5lr3k8
Posted by Madhura at 3:37 PM 0 comments
Labels: Articles, Food Security, Global Food Crisis, inflation and food prices 2008, Vandana Shiva, www.grain.org
Thursday, December 24, 2009
FOOD CRISIS (Part One)
http://www.zcommunications.org/znet/viewArticle/17632
'The greatest demonstration of the historical failure of the capitalist model'
May 14, 2008 By Ian Angus
Source: Socialist Voice
Ian Angus's ZSpace Page
"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
Part Two of this article will examine those questions.
Posted by Madhura at 3:28 PM 0 comments
Labels: Articles, Food Security, food sovreignty, Global Food Crisis, inflation and food prices 2008, www.zcommunications.org
FOOD CRISIS (Part Two): Capitalism, Agribusiness, and the Food Sovereignty Alternative
http://www.zcommunications.org/znet/viewArticle/17642
By Ian Angus
Source: Socialist Voice
Ian Angus's ZSpace Page
"Nowhere in the world, in no act of genocide, in no war, are so many people killed per minute, per hour and per day as those who are killed by hunger and poverty on our planet."
—Fidel Castro, 1998
When food riots broke out in Haiti last month, the first country to respond was Venezuela. Within days, planes were on their way from Caracas, carrying 364 tons of badly needed food.
The people of Haiti are "suffering from the attacks of the empire's global capitalism," Venezuelan president Hugo Chàvez said. "This calls for genuine and profound solidarity from all of us. It is the least we can do for Haiti."
Venezuela's action is in the finest tradition of human solidarity. When people are hungry, we should do our best to feed them. Venezuela's example should be applauded and emulated.
But aid, however necessary, is only a stopgap. To truly address the problem of world hunger, we must understand and then change the system that causes it.
No shortage of food
The starting point for our analysis must be this: there is no shortage of food in the world today.
Contrary to the 18th century warnings of Thomas Malthus and his modern followers, study after study shows that global food production has consistently outstripped population growth, and that there is more than enough food to feed everyone. According to the United Nations Food and Agriculture Organization, enough food is produced in the world to provide over 2800 calories a day to everyone — substantially more than the minimum required for good health, and about 18% more calories per person than in the 1960s, despite a significant increase in total population.[1]
As the Food First Institute points out, "abundance, not scarcity, best describes the supply of food in the world today."[2]
Despite that, the most commonly proposed solution to world hunger is new technology to increase food production.
The Alliance for a Green Revolution in Africa, funded by the Bill and Melinda Gates Foundation and the Rockefeller Foundation, aims to develop "more productive and resilient varieties of Africa's major food crops ... to enable Africa's small-scale farmers to produce larger, more diverse and reliable harvests."[3]
Similarly, the Manila-based International Rice Research Institute has initiated a public-private partnership "to increase rice production across Asia via the accelerated development and introduction of hybrid rice technologies."[4]
And the president of the World Bank promises to help developing countries gain "access to technology and science to boost yields."[5]
Scientific research is vitally important to the development of agriculture, but initiatives that assume in advance that new seeds and chemicals are needed are neither credible nor truly scientific. The fact that there is already enough food to feed the world shows that the food crisis is not a technical problem — it is a social and political problem.
Rather than asking how to increase production, our first question should be why, when so much food is available, are over 850 million people hungry and malnourished? Why do 18,000 children die of hunger every day?
Why can't the global food industry feed the hungry?
The profit system
The answer can be stated in one sentence. The global food industry is not organized to feed the hungry; it is organized to generate profits for corporate agribusiness.
The agribusiness giants are achieving that objective very well indeed. This year, agribusiness profits are soaring above last year's levels, while hungry people from Haiti to Egypt to Senegal were taking to the streets to protest rising food prices. These figures are for just three months at the beginning of 2008.[6]
Grain Trading
· Archer Daniels Midland (ADM). Gross profit: $1.15 billion, up 55% from last year
· Cargill: Net earnings: $1.03 billion, up 86%
· Bunge. Consolidated gross profit: $867 million, up 189%.
Seeds & herbicides
· Monsanto. Gross profit: $2.23 billion, up 54%.
· Dupont Agriculture and Nutrition. Pre-tax operating income: $786 million, up 21%
Fertilizer
· Potash Corporation. Net income: $66 million, up 185.9%
· Mosaic. Net earnings: $520.8 million, up more than 1,200%
The companies listed above, plus a few more, are the monopoly or near-monopoly buyers and sellers of agricultural products around the world. Six companies control 85% of the world trade in grain; three control 83% of cocoa; three control 80% of the banana trade.[7] ADM, Cargill and Bunge effectively control the world's corn, which means that they alone decide how much of each year's crop goes to make ethanol, sweeteners, animal feed or human food.
As the editors of Hungry for Profit write, "The enormous power exerted by the largest agribusiness/food corporations allows them essentially to control the cost of their raw materials purchased from farmers while at the same time keeping prices of food to the general public at high enough levels to ensure large profits."[8]
Over the past three decades, transnational agribusiness companies have engineered a massive restructuring of global agriculture. Directly through their own market power and indirectly through governments and the World Bank, IMF and World Trade Organization, they have changed the way food is grown and distributed around the world. The changes have had wonderful effects on their profits, while simultaneously making global hunger worse and food crises inevitable.
The assault on traditional farming
Today's food crisis doesn't stand alone: it is a manifestation of a farm crisis that has been building for decades.
As we saw in Part One of this article, over the past three decades the rich countries of the north have forced poor countries to open their markets, then flooded those markets with subsidized food, with devastating results for Third World farming.
But the restructuring of global agriculture to the advantage of agribusiness giants didn't stop there. In the same period, southern countries were convinced, cajoled and bullied into adopting agricultural policies that promote export crops rather than food for domestic consumption, and favour large-scale industrial agriculture that requires single-crop (monoculture) production, heavy use of water, and massive quantities of fertilizer and pesticides. Increasingly, traditional farming, organized by and for communities and families, has been pushed aside by industrial farming organized by and for agribusinesses.
That transformation is the principal obstacle to a rational agriculture that could eliminate hunger.
The focus on export agriculture has produced the absurd and tragic result that millions of people are starving in countries that export food. In India, for example, over one-fifth of the population is chronically hungry and 48% of children under five years old are malnourished. Nevertheless, India exported US$1.5 billion worth of milled rice and $322 million worth of wheat in 2004.[9]
In other countries, farmland that used to grow food for domestic consumption now grows luxuries for the north. Colombia, where 13% of the population is malnourished, produces and exports 62% of all cut flowers sold in the United States.
In many cases the result of switching to export crops has produced results that would be laughable if they weren't so damaging. Kenya was self-sufficient in food until about 25 years ago. Today it imports 80% of its food — and 80% of its exports are other agricultural products.[10]
The shift to industrial agriculture has driven millions of people off the land and into unemployment and poverty in the immense slums that now surround many of the world's cities.
The people who best know the land are being separated from it; their farms enclosed into gigantic outdoor factories that produce only for export. Hundreds of millions of people now must depend on food that's grown thousands of miles away because their homeland agriculture has been transformed to meet the needs of agribusiness corporations. As recent months have shown, the entire system is fragile: India's decision to rebuild its rice stocks made food unaffordable for millions half a world away.
If the purpose of agriculture is to feed people, the changes to global agriculture in the past 30 years make no sense. Industrial farming in the Third World has produced increasing amounts of food, but at the cost of driving millions off the land and into lives of chronic hunger — and at the cost of poisoning air and water, and steadily decreasing the ability of the soil to deliver the food we need.
Contrary to the claims of agribusiness, the latest agricultural research, including more than a decade of concrete experience in Cuba, proves that small and mid-sized farms using sustainable agroecological methods are much more productive and vastly less damaging to the environment than huge industrial farms.[11]
Industrial farming continues not because it is more productive, but because it has been able, until now, to deliver uniform products in predictable quantities, bred specifically to resist damage during shipment to distant markets. That's where the profit is, and profit is what counts, no matter what the effect may be on earth, air, and water — or even on hungry people.
Fighting for food sovereignty
The changes imposed by transnational agribusiness and its agencies have not gone unchallenged. One of the most important developments in the past 15 years has been the emergence of La Vía Campesina (Peasant Way), an umbrella body that encompasses more than 120 small farmers' and peasants' organizations in 56 countries, ranging from the Landless Rural Workers Movement (MST) in Brazil to the National Farmers Union in Canada.
La Vía Campesina initially advanced its program as a challenge to the "World Food Summit," a 1996 UN-organized conference on global hunger that was attended by official representatives of 185 countries. The participants in that meeting promised (and subsequently did nothing to achieve) the elimination of hunger and malnutrition by guaranteeing "sustainable food security for all people."[12]
As is typical of such events, the working people who are actually affected were excluded from the discussions. Outside the doors, La Vía Campesina proposed food sovereignty as an alternative to food security. Simple access to food is not enough, they argued: what's needed is access to land, water, and resources, and the people affected must have the right to know and to decide about food policies. Food is too important to be left to the global market and the manipulations of agribusiness: world hunger can only be ended by re-establishing small and mid-sized family farms as the key elements of food production.[13]
The central demand of the food sovereignty movement is that food should be treated primarily as a source of nutrition for the communities and countries where it is grown. In opposition to free-trade, agroexport policies, it urges a focus on domestic consumption and food self-sufficiency.
Contrary to the assertions of some critics, food sovereignty is not a call for economic isolationism or a return to an idealized rural past. Rather, it is a program for the defense and extension of human rights, for land reform, and for protection of the earth against capitalist ecocide. In addition to calling for food self-sufficiency and strengthening family farms, La Vía Campesina's original call for food sovereignty included these points:
- Guarantee everyone access to safe, nutritious and culturally appropriate food in sufficient quantity and quality to sustain a healthy life with full human dignity.
- Give landless and farming people — especially women — ownership and control of the land they work and return territories to indigenous peoples.
- Ensure the care and use of natural resources, especially land, water and seeds. End dependence on chemical inputs, on cash-crop monocultures and intensive, industrialized production.
- Oppose WTO, World Bank and IMF policies that facilitate the control of multinational corporations over agriculture. Regulate and tax speculative capital and enforce a strict Code of Conduct on transnational corporations.
- End the use of food as a weapon. Stop the displacement, forced urbanization and repression of peasants.
- Guarantee peasants and small farmers, and rural women in particular, direct input into formulating agricultural policies at all levels.[14]
La Vía Campesina's demand for food sovereignty constitutes a powerful agrarian program for the 21st century. Labour and left movements worldwide should give full support to it and to the campaigns of working farmers and peasants for land reform and against the industrialization and globalization of food and farming.
Stop the war on Third World farmers
Within that framework, we in the global north can and must demand that our governments stop all activities that weaken or damage Third World farming.
Stop using food for fuel. La Vía Campesina has said it simply and clearly: "Industrial agrofuels are an economic, social and environmental nonsense. Their development should be halted and agricultural production should focus on food as a priority."[15]
Cancel Third World debts. On April 30, Canada announced a special contribution of C$10 million for food relief to Haiti.[16] That's positive - but during 2008 Haiti will pay five times that much in interest on its $1.5 billion foreign debt, much of which was incurred during the imperialist-supported Duvalier dictatorships.
Haiti's situation is not unique and it is not an extreme case. The total external debt of Third World countries in 2005 was $2.7 trillion, and their debt payments that year totalled $513 billion.[17] Ending that cash drain, immediately and unconditionally, would provide essential resources to feed the hungry now and rebuild domestic farming over time.
Get the WTO out of agriculture. The regressive food policies that have been imposed on poor countries by the World Bank and IMF are codified and enforced by the World Trade Organization's Agreement on Agriculture. The AoA, as Afsar Jafri of Focus on the Global South writes, is "biased in favour of capital-intensive, corporate agribusiness-driven and export-oriented agriculture."[18] That's not surprising, since the U.S. official who drafted and then negotiated it was a former vice-president of agribusiness giant Cargill.
AoA should be abolished, and Third World countries should have the right to unilaterally cancel liberalization policies imposed through the World Bank, IMF, and WTO, as well as through bilateral free trade agreements such as NAFTA and CAFTA.
Self-Determination for the Global South. The current attempts by the U.S. to destabilize and overthrow the anti-imperialist governments of the ALBA group — Venezuela, Bolivia, Cuba, Nicaragua and Grenada — continue a long history of actions by northern countries to prevent Third World countries from asserting control over their own destinies. Organizing against such interventions "in the belly of the monster" is thus a key component of the fight to win food sovereignty around the world.
* * *
More than a century ago, Karl Marx wrote that despite its support for technical improvements, "the capitalist system works against a rational agriculture ... a rational agriculture is incompatible with the capitalist system."[19]
Today's food and farm crises completely confirm that judgment. A system that puts profit ahead of human needs has driven millions of producers off the land, undermined the earth's productivity while poisoning its air and water, and condemned nearly a billion people to chronic hunger and malnutrition.
The food crisis and farm crisis are rooted in an irrational, anti-human system. To feed the world, urban and rural working people must join hands to sweep that system away.
Footnotes
[1] Frederic Mousseau, Food Aid or Food Sovereignty? Ending World Hunger in Our Time. Oakland Institute, 2005. http://www.oaklandinstitute.org/pdfs/fasr.pdf.
International Assessment of Agricultural Knowledge, Science and Technology for Development. Global Summary for Decision Makers. http://www.agassessment.org/docs/Global_SDM_210408_FINAL.pdf
[2] Francis Moore Lappe, Joseph Collins, Peter Rosset. World Hunger: Twelve Myths. (Grove Press, New York, 1998) p. 8
[3] "About the Alliance for a Green Revolution in Africa."
http://www.agra-alliance.org/about/about_more.html
[4] IRRI Press Release, April 4, 2008. http://www.irri.org/media/press/press.asp?id=171
[5] "World Bank President Calls for Plan to Fight Hunger in Pre-Spring Meetings Address." News Release, April 2, 2008
[6] These figures are taken from the companies' most recent quarterly reports, found on their websites. Because they report the numbers in different ways, they can't be compared to each other, only to their own previous reports.
[7] Shawn Hattingh. "Liberalizing Food Trade to Death." MRzine, May 6, 2008. http://mrzine.monthlyreview.org/hattingh060508.html
[8] Fred Magdoff, John Bellamy Foster and Frederick H. Buttel. Hungry for Profit: The Agribusiness Threat to Farmers, Food, and the Environment. Monthly Review Press, New York, 2000. p. 11
[9] UN Food and Agriculture Organization. Key Statistics Of Food And Agriculture External Trade. http://www.fao.org/es/ess/toptrade/trade.asp?lang=EN&dir=exp&country=100
[10] J. Madeley. Hungry for Trade: How the poor pay for free trade. Cited in Ibid
[11] Jahi Campbell, "Shattering Myths: Can sustainable agriculture feed the world?" and " Editorial. Lessons from the Green Revolution." Food First Institute. www.foodfirst.org
[12] World Food Summit. http://www.fao.org/wfs/index_en.htm
[13] La Vía Campesina. "Food Sovereignty: A Future Without Hunger." (1996) http://www.voiceoftheturtle.org/library/1996%20Declaration%20of%20Food%20Sovereignty.pdf
[14] Paraphrased and abridged from Ibid
[15] La Vía Campesina. "A response to the Global Food Prices Crisis: Sustainable family farming can feed the world." http://www.viacampesina.org/main_en/index.php?option=com_content&task=view&id=483&Itemid=38
[16] By way of comparison, this year Canada will spend $1 billion on the illegal occupation of and war in Afghanistan
[17] Jubilee Debt Campaign. "The Basics About Debt." http://www.jubileedebtcampaign.org.uk/?lid=98
[18] Afsar H. Jafri. "WTO: Agriculture at the Mercy of Rich Nations." Focus on the Global South, November 7, 2005. http://www.focusweb.org/india/content/view/733/30/
[19] Capital, Volume III. Karl Marx & Frederick Engels, Collected Works, Volume 37, p. 123
Ian Angus is editor of Climate and Capitalism. Part One of this article was published in Socialist Voice and in The Bullet (Socialist Project), on April 28, 2008.
Posted by Madhura at 3:21 PM 1 comments
Labels: Agribusiness vs Small Farmers, Articles, Food Security, food sovreignty, Global Food Crisis, inflation and food prices 2008, www.zcommunications.org
