current affairs fair trade food globalisation

One billion hungry people

The number of hungry people in the world is due to reach 1 billion for the first time this year. While the economic crisis gripped us here in the west, it was the food crisis that defined 2008 for many people. It has begun a new cycle, and like last year, it is being under-reported.

There are 100 million more hungry people now than there were two years ago. This week 7 million Zimbabweans heard that they will see their food ration halved next month as the World Food Programme has to cut back. They’ve run out of money. Despite our promises and the Millennium Development Goals, we’re moving backwards on this one.

To remind ourselves of the problem,  food prices rocketed between 2007 and 2008. Wheat went up 60%, corn 30%, and soy 40%. We didn’t notice much, because we only spend a small percentage of our income on food. In places where food accounts for 60 or 70% of a household’s income, these new costs just priced people out of the global food market.

There are many reasons for this. Part of it is bad harvests and drought. Part of it is biofuels and the redirecting of food to energy and transport instead of dinner tables, which reduced supply and forced the prices up.  Increased wealth in some developing countries has also led to rising demand for meat, so more grain is being fed to animals. Neither of these three factors are enough to explain why people are starving. There is enough food to feed everyone, even with biofuels and beef. The biggest problem is not the amount of food in the world, but the price. The price of food has parted company with the realities of supply and demand.

The undiscussed issue in the food crisis is the role of commodity speculation. We’ve talked about currency speculation in the past, how money is made by betting on the rise and fall of currencies, and the effects this can have on the economies involved. Commodities are subject to the same abuse. I’ve written specifically about the commodity markets here.

As usual, our response has been inadequate and misguided. There’s a new round of discussion on GM foods, which is largely irrelevant. Others are calling for a swift increase in aid. Again, great for feeding people now, but not a long term solution.

Here are some things we can do that will make a real difference:

  • The Financial Services Authority, the same people who have spectacularly failed to regulate the stock markets, should regulate speculation on commodities much more strictly, or ban it altogether. If food is not being bought for consumption, it shouldn’t be bought at all. Anything less is gambling on starvation.
  • End subsidies. I don’t want to hear a single politician recommend GM crops for Africa while the US and EU subsidize their agriculture and export the surpluses to Africa, putting African farmers out of business. Until this is injustice (not to mention an insult to free trade) is resolved, all our words are empty.
  • Drop the biofuels targets. All fuel sold in the UK includes 5% biofuels, with the aim of raising that to 10% by 2010. We’re burning food to drive our cars while a billion people go hungry.
  • Create food independence in developing countries. For a long time it has been the policy of the IMF to push poor countries to grow exports, and then buy in food to eat. This has meant countries stopped growing food for themselves, and started growing coffee or cotton. The market for those commodities collapsed some time ago as everyone piled into the markets, while the prices for food has rocketed. If the poor countries had prioritized their own needs and grown rice or corn, rather than our needs, and grown coffee, they wouldn’t be hungry now. Developing countries have to start growing food for themselves, and breaking their dependence on a volatile international food system.
  • We need to share basic technologies better. As Jeffrey Sachs describes, we can help African farmers with better seed, cheap fertilisers, and basic irrigation techniques. India pioneered many of these decades ago and substantially raised yields. It’s high time this knowledge was shared.

Globalization is not serving us well when it comes to food.

This map from the US Development Agency shows who the winners and losers are in the food crisis. Those with net exports of foods – the US, France, Autralia and so on, will do very well from the higher prices. Those with net imports are going to struggle. Some can afford it, those European countries or Japan. Others, those in red, are in serious trouble.

Here’s the problem: if the US and other nations are benefitting from the crisis, will they act against their own interests to help the hungry billion? I doubt it. Even with the callous Bush administration out of the way, I would expect the US response to be based around aid, rather than reform of the system. The system works too well for them.

The only solution here is to undo the globalized food system.

(With thanks to Nickoli for making me think about this again.)

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  1. I also believe that the U.S. will not help the suffering areas in the world with their food crisis, since we are almost benefitting from it.

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