fair trade food globalisation

What’s going on in the food markets?

In 2008 there was a food crisis, as you may remember. It was started by droughts and poor harvests in some major grain exporting countries, with prices pushed higher by the runaway price of oil. Demand for biofuels diverted more crops away from the priority of feeding people, and the whole crisis was exacerbated by commodity speculators seeking a profit out of the instability. 100 million more people went hungry, nudging the number of malnourished past a billion for the first time. Food riots broke out as the poor were priced out of the market.

It was a shock to our globalised food system, and it put food security firmly back on the agenda. One response was a proliferation of  land leasing deals, with vulnerable importers such as Korea and Saudi Arabia seeking arable land in Africa. Others capped their exports to make sure they met their own needs first.

That’s an approach Russia has used again this year. A record breaking summer has brought fire and drought, and grain exports have been frozen until the end of 2011. Harvests have failed elsewhere too. Canada has been too wet, Eastern Europe too dry. Germany is expected to end the year as a net importer of wheat, and EU harvests are down. Buyers will be hoping for a good year from growers such as Australia and Argentina, who harvest in December.

We’re a way off the heights of 2008, but food prices have been rising. There have been riots in Mozambique and protests elsewhere, and the UN has called an emergency meeting later this month. We will begin to feel the effects ourselves in the coming months, with small increases to the price of bread and other basics.

What is remarkable is that despite all of these problems, the FAO predicts that this year will be the third highest global wheat crop on record. I’m not sure what to make of this – is it good news or bad news? On the one hand, it suggests a fair bit of slack in the system – you can have all kinds of weather disasters and still get a good crop. On the other hand, if we see shortages and riots on a bumper harvest, what does a bad year look like?

Either way, we’re not really learning the lessons of 2008 fast enough. Perhaps we’ve been preoccupied with the recession, but international progress needs to move much faster on food security. So here are five priorities I believe we should be pursuing:

  1. End commodity speculation. There is debate over just how much speculation is a factor in rising food prices, but we do know that it makes it worse. Since every dollar in increased prices means more hunger, any increase at all through speculation is thoroughly unjust. Nobody should make a profit from the hunger of others. You can join the campaign to end speculation here.
  2. Suspend the biofuels target. Since April 2008 all UK fuel contains a small percentage of biofuels, with targets for 10% biofuels by 2020. By 2014, a fifth of the UK’s wheat harvest is expected to be processed for fuel. This is beginning to look rather short-sighted.
  3. End subsidies. Everybody knows that subsidised agriculture in the developed world harms poorer countries. Bill Clinton recently apologised for hunger in Haiti: “I did that,” he said, “I have to live every day with the consequences of the lost capacity to produce a rice crop in Haiti to feed those people, because of what I did.” It’s a crazy double standard on free trade that the Western world props up its farmers at the expense of the poor, and movement to reform it has been far too slow.
  4. Direct aid policy towards food independence. Malawi is expecting a food surplus for a fifth year in a row, by essentially doing the opposite of what the IMF told it to do, and growing its own food rather than concentrating on cash crops for export. President Mutharika’s domestic subsidies have moved Malawi from food aid dependency to food aid donor. While emergency food aid is well funded, just 6% of development aid goes towards agriculture, which would deal with the root causes of hunger
  5. Encourage more efficient diets. Around a third of global grain supplies go to lifestock rather than being eaten directly. This is a wasteful way to go about feeding the world. It’s hard to exactly how to go about it, but encouraging people to eat less meat would stretch grain supplies further. Higher taxes on meat products would be one way. Removing beef subsidies from factory farms while keeping them for grass-fed cattle would be another. The UK forbids the feeding of waste food to pigs, which has been done for centuries and causes no harm, and this could be reinstated.


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