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Skyrocketing food prices around the world in April caused panic buying
and hoarding, dire warnings from government and aid officials, and
massive revolts in dozens of countries. The UN's Food and Agriculture
Organization said that from March 2007 to March 2008 prices of cereals
had increased 88%, wheat by 130%, and oils and fats 106%. Dairy products
rose 80% in 2007. The FAO food price index as a whole rose 57% in one
year, with most of the increase just in the past few months.
The May 5 Wall Street Journal reported that rice, the staple food of
more than half the world, has tripled in price since the start of the
year, going up more than 10 per cent in a single day in April.
The World Bank expects food prices to remain well above 2004 levels
until at least 2015. Reserves of all major foods are down
significantly. Price hikes have led the World Food Program to cut food
aid to 73 million people in 78 countries. In some markets increases are
even more dramatic: In Haiti, the 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 who live on
less than $2 a day and spend 60 to 80% of their incomes on food. Yet
food production continues to increase. Farmers across the world
produced a record 2.3 billion tons of grain in 2007, up 4% from 2006,
and the FAO projects another increase of 2.6% in 2008.
Since 1961 the world's cereal output has tripled, while the population
has only doubled. There is enough food produced in the world to feed its
population. But less than half of the world's grain production is eaten
by people. Most goes into animal feed and, increasingly, biofuels—all
as part of global corporate-controlled, vertically-integrated chains
spanning production, distribution, processing, and marketing.
And even without the diversion of grain to animal feed or biofuels,
capitalism's class structure has long prevented the majority from
having the income needed to buy it (or rice or other foods)—not to
mention making food a commodity to buy rather than a human right in the
first place.
A Cargill spokesperson explains, "Cargill produces phosphate
fertilizer in Florida, use it in Argentina to grow soybeans, which are
processed into meal and shipped to Thailand to feed chickens, which are
sent back to supermarkets in Japan." Concentration among these
companies has drastically increased in recent decades, which, combined
with the vertical integration just described, allows losses in one
sector to be made up in another.
This concentration has been nowhere more in evidence than in the U.S.
As a result, the government subsidies that allow U.S. exporters to
undersell, drive out, and impoverish food producers in many
underdeveloped countries go primarily not to small or medium-sized
family farms in the United States, but to huge agribusinesses or
privately-held farms employing massive numbers of workers (especially
farmworkers on land owned or run by subcontractors).
What’s more, the IUF, an international federation of food-sector
unions, points out that "rising demand for animal-based protein
has been steady rather than explosive. It cannot explain the 31%
increase in the price of rice in the closing days of March, or the 400%
increase in the price of Mexican tortillas. India, hard hit by the
rising cost of rice, produced record harvests of rice, wheat and
oilseeds in 2007/8. Mexico exported maize in 2006; 2007 saw record
levels of production in Mexico, in the region and globally."
The media are quick to blame rising demand from countries such as China
and India, where recent economic growth has boosted meat consumption.
The demand for meat from developing countries has doubled since 1980,
and because cattle and chickens are fed on corn, its price has risen.
But the vast majority in such countries have been left out of this
growth and are suffering as well from the current crisis. Seventy-five
percent of Indians still earn less than $2 a day. And while India's
economy has grown 8.5 percent in the last five years, agriculture has
grown by no more than 2.5%– yet farming still supports the majority of
India's workforce. Similar contradictions flourish in China.
Another common explanation is climate change, especially as manifested
in the multiyear drought in Australia. Normally the world’s
second-largest exporter of grain, its wheat crop has fallen by 60% and
rice production has been wiped out.
Floods that are devastating crops from China to England, and droughts,
storms, and erosion causing loss of arable land elsewhere are
convincing scientists that global warming is already having an effect
on production and that such events will become routine. Worldwide, an
area of fertile soil the size of Ukraine is lost every year because of
drought, deforestation, and climate instability.
Yet the poor harvest in Australia is estimated to have added no more
than 1.5% to global wheat prices.
Corn for fuel
Another common explanation is the booming market for biofuels,
diverting corn from consumption. George Bush wants 15% of U.S. cars to
run on bio-fuels by 2017, which will mean tripling corn production
while decreasing the acreage devoted to raising corn for food. From 20%
to 50% of feedstocks in producing countries fill fuel tanks rather than
stomachs.
This in turn has driven up the price of not only corn, but also—because
of diversion of land to corn, of soybeans—as well as prices of meat and
dairy products as cattle and chicken are fed on pricier corn.
The corn currently used for U.S. ethanol production could meet the
needs of all the FAO's low-income food-deficit countries. Yet if the
entire U.S. corn output, rather than last year's 20%, were diverted to
ethanol, it would still only replace 7% of current U.S. petroleum
consumption.
What's more, biofuel will increase, rather than lessen, the global
warming problem. The energy required to produce biofuel is considerably
greater than that contained in the biofuel itself. Factor in increased
pressure on water and land—which, for example, is destroying tropical
forests from Brazil to Indonesia for expanded palm oil and soy
production—and the biofuel contribution to reversing global warming is
sharply negative.
This situation led Jean Ziegler, UN Special Rapporteur on the Right to
Food, to say that "producing biofuels today is a crime against
humanity." But biofuels means big profits for agribusiness
companies. European use of palm oil for biodiesel fuel has also pushed
up prices for this product, which is used as cooking oil in much of the
world.
Countries hold back grain exports
India, Vietnam, China, Egypt, Cambodia, and other food exporters have
suspended exports or severely taxed them to protect their own reserves.
In reaction, rice buyers started buying up stocks, and bidding up the
price for future crops. There were shortages and stockpiling from
Singapore to the U.S., where worried shoppers in California bought up
hundreds of pounds of rice at a time from Asian supermarkets. U.S.
chains like Costco have limited multi-bag rice purchases.
Yet Thailand, the world's largest rice exporter, is reporting record
harvests this year. But the increase in supply hasn't been nearly
enough to offset global demand, and the price of bulk Thai jasmine rice
has nearly doubled since December.
Export bans or restrictions in Kazakhstan, Russia, Ukraine, and
Argentina cut off a third of the normal supply to wheat markets.
In the midst of this crisis the irrationality of national borders
amidst globalized production takes on a particularly tragic form—and
nowhere more than in Africa. Thus, Mali has halted grain exports to
neighboring Mauritania, yet merchants from Mali and from Senegal come
to Mauritania to buy up whatever wheat is left, because it is cheaper
there. Another tragic example is the impact of India's export ban on
Bangladesh.
While millions starve, the Canadian government, reports Ian Angus in
Socialist Voice, is paying $225 for each pig killed to reduce
production.
The soaring cost of petroleum has also increased the price of
fertilizer and food harvesting, processing and transport costs. This is
due in part to the fuel-inefficient nature of the globalized market, in
which food is transported thousands of miles.
The UN World Food Program estimates that recent price hikes have meant
an additional 100 million people can no longer afford to eat
adequately, and it issued the first "extraordinary" appeal in
its history to meet a $500 million funding shortfall.
The UN’s Ziegler said growth in biofuels, speculation on commodities
markets, and export subsidies mean the West is responsible for mass
starvation. Ziegler called "madness" the idea that hunger is
just fate (even citing Marx to support his argument!): "This is
silent mass murder."
Estimates suggest 25,000 people die every day from hunger. But it's
important to remember that hundreds of millions of people were already
starving and malnourished last year, and the year before that.
U.S. households still spend a smaller share of their income on food
than any other country—7.2% in 2006, compared to 22% in Poland, over
40% in Egypt and Vietnam, and 70 to 80% for the hundreds of millions
who live on less than $2 a day all over the globe.
Still, U.S. consumers are shocked by the increases they face,
especially coming on top of soaring energy, health-care, and other
costs. Eggs cost 35% more in March than the year before. Milk jumped
23%, chicken and other poultry 7%. Overall, U.S. food prices in 2008
are expected to rise 4% to 5%, double the increases of recent years.
For the poorest U.S. families, higher costs mean going hungry, and food
stamps cover an ever-decreasing portion of the month's needs.
An article by GRAIN, a food NGO, summarized well the multiple factors
involved in the decades-long restructuring of global food production:
"Today's food crisis is the outcome of a push towards a ‘Green
Revolution’ since the 1950s and the trade liberalization and structural
adjustment policies imposed on poor countries by the World Bank and the
IMF since the 1970s. These policies were reinforced with the
establishment of the WTO in the mid-1990s and, more recently, through
bilateral free trade and investment agreements, and 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 subsidized food exports from
rich countries. Fertile lands have been diverted away from serving
local 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. Of the
estimated 845 million hungry people in the world, 80% are small
farmers."
In recent years, agribusiness corporations, with the aid of the WTO,
have attempted to patent seeds grown for thousands of years around the
world, and to use financial and legal pressure to force farmers to buy
their seeds and destroy their own.
The German magazine Der Spiegel pointed out that Iraq and Sudan, once
the "bread baskets" of the Arab world, now depend on the
World Food Program. And don’t forget the fiats of Proconsul Bremer
during the early occupation of Iraq, imposing U.S. intellectual
property law to force purchase of patented genetically-modified (GM)
strains of wheat and barley, as well as his unsuccessful efforts to end
food subsidies.
One of the most tragic victims of such policies is Haiti—also an
example of the most steadfast resistance (see article on page 9). Women
there are baking "mud biscuits" out of clay, salt, and vegetable
oil. For some families this diarrhea-causing but temporarily
hunger-numbing "food" is all they have.
GRAIN also notes the dependence of industrialized food production on
chemical fertilizers, which deplete soil but bring huge profits for
agribusiness.
Corporate profits booming
Profit reports coming out at the height of the crisis showed boom times
for the multinationals. ADM's profit rose 65% in 2007 to a record $2.2
billion. The first quarter operating profit of its grain business rose
to $366 million from $46 million a year earlier.
Another huge trader, Thailand's Charoen Pokphand Foods, expects revenue
to more than triple this year. Nestlé's global sales grew by an
"unprecedented" 7% last year. "We saw this coming, so we
hedged by forward-buying raw materials," said a spokesperson.
Unilever boasted that although "commodity pressures have increased
sharply, we offset these through timely pricing action."
Officials at agribusiness giant Bunge were told in a February
conference call that "food companies are so panicked about
supply" that Bunge can charge what it wants for soybean oil.
Retailers are also making out. Wal-Mart said food sales are the main
factor sustaining their profit increases, and its Mexican division
reported an 11% increase in profits for the first quarter of 2008.
Monsanto, the world's largest seed company, reported a 44% increase in
overall profits in 2007. DuPont, the second-largest, said 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. In the midst of all this, the same hedge
fund and other vultures who feasted on subprime mortgages and
derivatives swooped down on global food markets.
A series in Germany's Spiegel painted a horrifying picture of their
activities. Hedge funds are driving up prices by pouring billions into
commodities to escape sliding stock markets and the credit crunch.
Investment funds now control at least half the wheat traded on commodity
markets. The amount of speculative money in commodities futures
ballooned from $5 billion in 2000 to $175 billion to 2007.
Spiegel told of Dwight Anderson, a New York hedge-fund manager, who
realized "that rising hunger would be synonymous with profitable
investments." The governing body for these speculators in the
U.S., the Commodity Futures Trading Commission, defends their behavior
by saying it provides "liquidity" to markets.
The reaction to this crisis of World Bank president (and former U.S.
trade representative) Robert Zoellick is to call for even more trade
liberalization: "If ever there is a time to cut distorting
subsidies and open markets for imports, it must be now. … We will need
to integrate and mobilize a diverse range of partners—most of all, the
private sector."
The head of the FAO insisted poor countries invest more in agricultural
infrastructure. The head of the UN's Industrial Development
Organization said wider trade links and more supermarkets are the
answer. Zoellick and others are calling for a second "Green
Revolution"—a dangerous precedent described below.
Mass resistance erupts
Meanwhile, the wretched of the earth have their own response. In April
the prisoners of starvation arose en masse. After huge protests in
Haiti, its Prime Minister was forced to step down. In Bangladesh, tens
of thousands of factory workers protesting food prices hurled bricks
and stones at police.
Egyptian workers from large textile factories have been at the center
of repeated strikes and demonstrations against price hikes since 2004,
and on April 6 hundreds of thousands participated in a countrywide
general strike along with students and other workers.
Protests involving tens of thousands or more in pitched battles,
strikes, mass rallies—and police and army repression—also occurred in
Cote d'Ivoire, Cameroon, Mozambique, Yemen, Pakistan, Thailand, Mexico,
Somalia, South Africa, Burkina Faso, Argentina, Cambodia, Ethiopia,
Honduras, India, Indonesia, Madagascar, Mauritania, Niger, Peru, the
Philippines, Senegal, Thailand, Uzbekistan, and Zambia.
A neighborhood congress in El Alto, Bolivia, of the kind that spread
around the country in 2005—almost leading to the seizure of power by
workers and peasants—met on April 20. Over 5000 people from this neighborhood
called for the nationalization of rice, cooking oil, and sugar mills.
Food issues were also behind the Oaxaca, Mexico, rebellion in 2006,
which demanded an end to Plan Puebla Panama, a plan to privatize land.
In 1997, Food First co-director Anuradha Mittal could already write,
"Since the 1976 demonstrations in Peru in response to IMF-imposed
food price increases, riots and protests have taken place in dozens of
countries."
She cited the Zapatista revolt of 1994, as well as mass uprisings in 1996
in Jordan, Argentina, Bolivia, Kazakhstan, Pakistan, and Bulgaria.
A new Green Revolution?
Calls for a new "Green Revolution" are being criticized as
efforts to push GM food on the poor for the profit of agribusiness. The
combined $150 million food-aid effort by the Bill & Melinda Gates
Foundation and the Rockefeller Foundation is headed up by long-time
proponents of GM crops.
This mirrors the pro-corporate nature of the original Green Revolution,
which dispersed U.S. technology—grain varieties, petrochemical
fertilizers, and large-scale irrigation systems—in Latin America and
Southeast Asia, making production dependent on continued input
purchases from the West.
Some big farmers increased production and profits, but many more small
farmers were driven under by sinking prices as supply mushroomed. Many
took part in a mass migration to the cities in the 1960s and '70s,
where a relatively fortunate few found jobs in sweatshops then
beginning to spread, but the majority subsisted on informal economic sector
activities.
Harry Cleaver's 1972 article, "The Contradictions of the Green
Revolution" in the American Economic Review, exposed the politics
behind its technological and humanitarian veneer. The Green Revolution,
he wrote, was "woven into the fabric of American foreign policy
and is an integral part of the postwar effort to contain social
revolution and make the world safe for profits."
In 1954 Hubert H. Humphrey pointed out, "if you are looking for a
way to get people to be dependent on you, food dependence would be
terrific."
A legislative corollary to the Green Revolution was the 1966 amendment
of Public Law 480 forcing countries receiving "Food for
Peace" shipments to shift from industrialization to agricultural
development, to institute population-control programs, and to open
their doors to U.S. investors.
By promoting petrochemical fertilizer, the Green Revolution subjected
the developing world's soils to degradation and dependence on
artificial fertility. Cleaver presciently asked, "Can capitalism
be replaced in these countries before its profit-born technology, by
poisoning the environment, destroys all hope for survival?"
Cleaver noted that "the Green Revolution not only failed as a
political strategy, but was defeated—a product of the struggles of all
of those workers who refused to accept the changes it wrought."
But he added, "How fast are these effects taking place in relation
to the development of revolutionary groups capable of leading revolt
toward socialist goals?" Needless to say, the same question must
be asked today.
In the Mittal article cited earlier, she pointed out that in 1997, 23
years after the first World Food Summit announced its intention to wipe
out starvation within a decade, the world still had 840 million
chronically undernourished people. The U.S. delegation rejected even
the goal of halving that number by 2015. The delegation's head
complained that the Summit's intention to declare food a right would
contradict just passed welfare "reform" in the U.S.
Mittal noted even then that U.S. trade policies and dumping of grain
surpluses were destroying poor farmers, and the FAO was already
advocating "Green Revolution II, betting the world's food future
on the promise of genetic engineering."
Cuba’s successful farm practices
Recent changes in Cuba's policies, required by the end of trade with
the Soviet Union and a tightened U.S. blockade, show food crises can be
overcome without submitting to corporate dictates. Measures adopted
include urban gardens filled with compost and manure-rich soil. As
Sinan Koont wrote in Monthly Review in January 2004, "Cuba has
become a gigantic laboratory for farming without petroleum. Chemistry
is out, biology in. Worms excrete organic waste to produce a million
tons of compost a year."
Cuba has dramatically increased rice and vegetable yields while
reducing seed, water, and petroleum requirements. Work collectives,
from state farms and factories to schools and hospitals, use nearby
land to raise crops and animals for consumption in work-place
cafeterias. All of this is done with state and collective funding and
support.
Distribution is also designed to meet people's needs, not profits.
Ration cards guarantee every Cuban a minimum amount of food. The diets
of children, pregnant women, and the elderly are closely monitored, and
free or low prices are offered at schools, workplaces, and hospitals.
Radical supporters of Hugo Chavez claim to see similarly innovative
policies in Venezuela. But as Federico Fuentes and Tamara Pearson wrote
in Green Left Weekly, the measures taken "fall well short of what
is needed to overcome nearly a century of neglect of the countryside,
which has left Venezuela dependent on food imports." They
conclude: "Only by shifting control over production and
distribution into the hands of workers and communities can the issue be
decisively tackled."
On an international scale, Chavez joined with the presidents of Bolivia
and Nicaragua and Cuba's vice president at an April 23 press conference
vowing to use their anti-Washington trading bloc, the Bolivarian
Alternative for the Americas (ALBA), to increase regional food
production and consumption on a non-capitalist basis. But to have the
kind of impact on a regional level that Cuba's policies have had within
its borders will require radical land redistribution and the overthrow
of the ruling classes of Venezuela, Bolivia, and Nicaragua.
Uprisings provoked by hunger have played a key role in past
revolutions, such as the rice riots fueling the Chinese revolutions of
1911, 1925-27, and 1949, as well as the bread revolts in the 1917
Bolshevik Revolution. Fortunately, the latter had a revolutionary party
that could link the uprisings over food to struggles of workers against
their bosses and of all exploited classes against war as part of a
successful socialist revolution.
The multifaceted economic crisis now occurring around the world, of
which April’s food shocks are only one manifestation, increase the
possibility of more revolutionary upheavals. But for this to happen the
expansion, unification, and radicalization of the many workers’ and
farmers’ organizations that have sprung up around land and food crises
in recent decades is required.
An aid to this process would be demands reflecting the needs of their
members and the hundreds of millions they can potentially mobilize. And
the best guarantee of this is the construction of parties like that of
the Bolsheviks to lead this process and keep it independent of those
who would try to mute the increasingly radical voices of the world’s
hungry.
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