The growing food crisis
FOOD PRICES have been shooting up in recent months;
854 million of the poorest in the world go hungry, while many more
cannot afford key parts of their diet. Working-class and poor people see
the effects of the growing economic turmoil swirling around the globe
when trying to feed their families. These price rises threaten
governments unable to guarantee the most basic needs of life.
China experienced an 18.2% rise in the year to
January with pork up 59% and cooking oil 37%. Tomato prices soared 138%
after the recent blizzards, whose full effects have yet to pass from raw
to processed foods. One third of wages are spent on food, so living
standards are being hit.
USA commodity prices are rising 40%. Minneapolis
wheat, the variety most suitable for commercial flour production, has
risen 50% since the start of the year. Russian milk prices rose 30% and
bread 22% in the past year. British food went up 7.4% last year – the
biggest annual increase since the Office for National Statistics started
tracking 15 years ago. A ‘basic basket’ of 24 staple items has gone up
£2.59 (11%).
The main reasons prices are going up, according to
Joachim von Braun, head of the International Food Policy Research
Institute, are increased demand (accounting for half the price
increases), biofuels (one third of the increases) and the weather, all
causing shortages of staple foods. Meat consumption in China has doubled
since 1990 and now accounts for one third of all meat eaten in the
world. Indian meat consumption has increased 40% and Brazilian by a
third over the past 15 years. Animals need feeding, either with crops or
on land that could be used to grow crops.
Rapid economic growth has meant higher incomes for
some. "Thirty years ago, one family could probably eat [500 grams] of
meat a month. Now its once a week", said one old Chinese man. But higher
prices are now eating into this newfound standard of living. An
accountant, married to a factory manager, complained: "We don’t eat
pork, lamb or beef so much any more. It’s just too expensive.
Everything’s rising; the cost of vegetables has doubled". For the
poorest, the rise in flour and cooking oil is hitting harder. (Guardian,
25 February)
Crude oil cost $20 a barrel ten years ago. It now
costs around $100, pushing up the cost of farming, food processing and
transport. Nitrate fertiliser produced from oil has trebled in price.
Desperate to reduce their reliance on oil from politically unstable
parts of the world, capitalists are rapidly expanding biofuel
production. Land previously growing food is being turned over to
industrial crops, where higher prices and profits are to be found. One
third of the US maize crop will go to biofuel production this year, a
major contribution to the 400% price rise of flat corn bread in Mexico.
One estimate is that a tank of ethanol for a big car almost equals a
year’s food for a poor family.
There is growing evidence of climate change
affecting farming. In the past year West Africa has had devastating
floods. Chinese blizzards destroyed many crops. There have been serious
droughts in two of the most important wheat producing areas, Australia
and Ukraine. Southern Australia’s Goyder line was mapped out 140 years
ago. On one side was sufficient annual rainfall for crops while the
other side was too dry. But the past two years’ winter rains have failed
and the line has moved south. Some experts believe it could move 120km,
affecting a huge area of farmland.
Years of over-intensive farming are also affecting
yields. One of the main wheat producing areas of India – Punjab – has
seen agricultural growth fall from 4.7% a year between 1992-97 to 1.5%
from 2002-06. Over-use of artificial fertilisers has led to soil
erosion, and falling water tables makes irrigation harder. Indian rice
production was 93.3 million tonnes in 2002 but is expected to be 90
million tonnes this year. Over-fishing has led to the collapse of some
species, such as North Sea cod.
All these factors have resulted in the lowest food
stocks for years. World rice stocks – 136 million tonnes in 2001 – fell
to 71 million tonnes last year. Globally, wheat is at a 30-year low,
with a 60-year low in the US. India, the world’s second biggest wheat
producer, had to import 5.5 million tonnes in 2006 and 1.8 million last
year. It has banned the export of rice apart from luxury basmati.
While rising food prices are a daily nightmare for
the poor, they have "been welcomed by opportunistic hedge fund managers
looking for assets not correlated to the rocky equity markets". Stock
market analysts described agricultural commodities as "the most
recession-proof of all asset classes" this year. (Financial Times, 26
January)
One form of speculation, exchange-traded
commodities, has increased from $200 million to $3.2 billion since
autumn 2006. With stock-market predictions of coffee rising from $1.30
to $1.80 a pound, corn from $5 a bushel to $5.50-$6, and soya beans
expected to rise by 7-15%, there are plenty of opportunities for
money-making. Some of these speculators’ profits and bonuses may be
spent in restaurants like Vivat Bacchus in London, charging £1,000 for a
set menu (including wine).
Meanwhile, poor families watch their children starve
and develop diseases of malnutrition. In the poorest countries, 50-80%
of income goes on food. "There is food on shelves but people are priced
out of the market. There is vulnerability in urban areas we have not
seen before. There are food riots in countries we have not seen them in
before", said the head of the United Nation’s World Food Programme.
Riots have broken out in Morocco, Yemen (where bread
prices nearly doubled in four months), Mexico, Guinea, Mauritania,
Senegal, Burkina Faso and Uzbekistan. Consumer boycotts have been held
in protest at the price of tomatoes (in Argentina) and pasta (Italy).
Thousands have demonstrated in Bangladesh, Pakistan and Indonesia.
Pensioners have demonstrated in Russia.
During the cold war, when US imperialism and
Stalinist USSR competed for influence, governments in the Middle East,
Africa, South and East Asia were able to subsidise food and keep prices
down. Since the USSR collapsed, US capitalists have pressured these
governments to cut food subsidies, although they still exist quite
widely as every attempt to cut them is resisted by workers and poor
people.
These subsidies are now becoming more expensive for
governments to maintain. But the Indonesian government has been forced
to increase them after recent protests. The Pakistan government has
reintroduced rationing for the first time in 20 years. Egypt is the
biggest wheat importer in the world. The government, already under
pressure from big strikes over pay, has had to maintain food subsidies
despite falling income from oil. An extra 10.5 million people have been
given food aid.
When an attempt was made to cut subsidies in 1977,
there were massive riots and president Anwar Sadat had to flee Cairo
until the army crushed opposition. Today, ageing president Hosni Mubarak
is one of the US’s main supporters in the Middle East. If workers see
food price rises as a result of US biofuel policy, it will weaken his
position further. Other US supporters in the region, such as the
Moroccan, Tunisian and Jordanian governments, are also caught between
these pressures.
Rising food prices have been the spark that lit many
revolutions in the past, including the 1789 French revolution and the
revolution in Russia in February 1917. Contrasting their starving
existence and rotten food with rulers who gorge themselves on the finest
delicacies has led to mass movements demanding a complete change in
society. The growing attention paid by national and international
agencies to food prices is a sign some strategists of capitalism are
beginning to sense the future. But they cannot change their unplanned
and destructive system, which is utterly incapable of meeting the needs
of the world’s population.
Jon Dale
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