Socialist Worker

Hungry for change: the scandal of rising food prices

As the spiralling cost of food hits the poorest, Sadie Robinson and Esme Choonara ask why we suffer from famine in a world of plenty

Issue No. 2096

Queuing for food in Bangladesh   (Pic: IRIN)

Queuing for food in Bangladesh (Pic: IRIN)


The lives of billions of people across the globe are under threat due to rising food prices.

A series of massive price increases has sparked panic in many parts of the world.

The latest food stuff to soar is rice, with prices doubling since January. There have also been steep rises in the prices of other basic foods, such as wheat, dairy and corn. This situation is set to produce a deadly crisis for the world's poor.

The mainstream media has put forward a number of explanations for the hike in food prices.

These rest upon the premise that there is a shortage of food. So a drought in Australia, a major wheat exporter, is said to cause shortages and higher prices.

The finger of blame is also being pointed at China and India, who are already being blamed for climate change. Their 'larger and more affluent' populations are supposedly responsible for the alleged lack of food.

But the fact is that there is no food shortage. The world's food supply is characterised by abundance, not by scarcity.

There are enough grains, rice and wheat produced to provide every human being with more than their daily needs – and this is before other foods such as meat, dairy, vegetables, nuts, beans or fish are taken into account.

In the modern world, there has been enough food to feed people during every famine. People do not starve due to a lack of food – they starve because they cannot afford to buy it. Famine always hits the poorest.

Consumption

And the view that growth in population and consumption leads to poverty and scarcity is not true either.

According to the World Hunger Education Service, a US-based NGO, global agriculture produces 17 percent more calories per person today than it did 30 years ago – despite the population of the world increasing.

Revolutionising production and increasing productivity are the hallmarks of capitalism. Today there is the potential to end food shortages.

So why have food prices risen so sharply recently? The main reason is that food is a commodity like any other, and is subject to speculation and the fluctuations of the market.

It seems the recent credit crunch is making food price rises worse. As speculators find their investments in housing and the stock market threatened they have shifted to invest in commodities, such as food.

The recent rush to investment in biofuels has also helped to drive up food prices as agribusinesses and traders shift from food to fuel crops in an attempt to chase profits.

'The credit crunch has pushed a lot of investors into commodities as a safe haven,' wrote Paul Braks, commodities analyst at Rabobank, in the bosses' Financial Times newspaper.

Now speculators are betting on the chances of food prices climbing even further and are rushing to buy, which pushes the prices even higher.

There is no thought, of course, for what this means for the billions people this will affect around the world.

This is just one aspect of the madness of a world run on the basis of profit. Capitalists compete within the food industry to grab the biggest share of the market, leading to overproduction and a glut of food.

So business and governments use a variety of methods to keep food prices – and profits – high. This can mean the stockpiling of food or even its destruction as a way of dealing with overproduction and hiking up prices.

The US destroyed huge amounts of food during the 1930s Great Depression, despite rampant malnutrition – causing people to organise hunger marches.

The Agricultural Adjustment Act of 1933 restricted food production to keep prices high. Six million pigs were slaughtered, ten million acres of crops were ploughed under and fruit was left to rot.

Even in 'normal' times, malnutrition and food insecurity is a permanent feature of capitalism. Some 1.2 billion people in the Global South live on less than $1 dollar a day and of these, 780 million suffer from chronic hunger.

Children are particularly vulnerable – the stunting that results from malnutrition affects 33 percent of children in developing countries. Malnutrition is estimated to contribute to the deaths of five million children in poor countries every year.

Potential

The socialist revolutionary Karl Marx noted 150 years ago that capitalism provides the potential, for the first time in human history, to expand production to meet the basic needs of the world's population.

But he noted that although capitalism could expand production up to a point, eventually the way the system puts profits above other considerations would become a barrier to further development.

This is the situation we face today. Millions will starve and billions more will be malnourished because the system is geared towards making profits rather than meeting human needs.

The crisis in food prices has sparked riots and protests around the world – in Egypt, Indonesia, Mexico, the Ivory Coast, Cameroon, Argentina and Burkino Faso.

The resistance of ordinary people will be the key to putting an end to the capitalist system that produces too much food while letting people starve.

Sadie Robinson


Rice prices spark fight for the right to food

The crisis around spiralling rice prices starkly demonstrates how food insecurity and hunger are built into the global system of food production.

Rice prices have shot up in the past few months. Thai rice, seen as the global benchmark, has almost doubled in price from January to March this year.

Rice is a staple food for more than half the world's population. In countries such as Bangladesh, Cambodia, Thailand, Burma and Vietnam, the majority of the population rely on rice for up to 80 percent of their calorie intake.

Millions consequently face food insecurity or severe hunger. Governments are desperate to stop riots and protests developing over rice prices.

In Bangladesh the army is overseeing the distribution of discounted rice. In the Philippines the government has called on restaurants to cut rice portions to protect stocks.

The most common response is to ban exports. Governments including China, India, Vietnam, Egypt and Cambodia have in recent months imposed total bans or serious curbs on rice exports.

This allows governments to temporarily protect their domestic supplies, but it is worsening the overall problem by pushing up rice prices further as traders rush to buy up and stockpile any available rice.

Rice is mostly produced for a domestic market – only 6 or 7 percent is traded on the world market.

But this international trade plays a crucial role in determining world rice prices. It is also where countries turn to for imports if they face rice shortages.

Rice stocks are at their lowest levels since the 1970s, so every market shortage becomes a crisis – or an opportunity, if you a trader.

As prices started rising, many rice traders started stockpiling and hoarding rice to sell at inflated prices when the crisis becomes more acute.

Commodity markets are the main factor behind price rises. But rising fuel prices and a lack of infrastructure to deal with extreme weather in countries such as Bangladesh have also played their part.

Long term trends in land use have also seen rice cultivation become static or even decline. In many countries land has been shifted in past years into more profitable crops, or taken over for commercial development.

The rising costs of wheat, corn and soya, are making the crisis worse for millions as it becomes impossible to switch to a cheaper food staple.

The problem is not just in Asia. Many countries in Africa were forced after 1995 by the World Trade Organisation to drop import controls and open borders to rice imports. This created an increased reliance on rice in those countries.

As Robert Zeigler from the International Rice Research Institute points out, we already know the devastating human costs of rising food prices.

'We have seen this before in the 1970s, associated with the oil price shocks,' he says. 'There was a serious spike in food price rises, in particular rice. The consequences were very serious.

'Bangladesh shortly after its independence could not source rice on the world market – it had no stocks and couldn't access credit – and according to colleagues in Bangladesh, up to three million died as a result.'

It is obscene that the drive for profits is threatening to deny basic foods to millions today. The fight for the right to food is set to become a defining feature of our era.

Esme Choonara


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Features
Tue 8 Apr 2008, 19:57 BST
Issue No. 2096
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