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Capitalism feeding off hunger

A capitalist perfect storm has ended all progress in reducing world hunger, and one billion people are now undernourished, a sizable increase from its 2006 estimate of 854 million people. In every country, prices are soaring, including in the UK where food prices have risen by 22% in the last three years.

The crisis has been caused by the cumulative effects of:

Commodity speculators have moved strongly into food, betting on shortages and pushing up prices in a world where the food supply is increasingly globalised.

True, the wheat crop will be 30m tonnes lower than last year – a 5.5% decrease, due to drought in China, the heat wave in Russia and the floods in Pakistan. But stocks are not so low that prices could not be kept at a reasonable level. However that would assume a rational economic and trade system – and we are a million miles away from that. The market price of wheat and maize soared by 30% in just a few weeks.

In Russia, the price of buckwheat – a popular staple – has tripled. World meat prices – dependent on grain prices – are at a 20-year high. Egyptians can no longer afford their own basic diet of bread, cheese, tomatoes. Sugar and rice prices are at an all-time high.

According to the UN food price indicator (a figure based on a statistical analysis of 6 key commodities) prices have not reached the 2008 high of 199 – when there were food riots across the world – but they are heading in that direction at 188. The figure increased 14 points in 2010.

Governments across the world are preparing for social uprisings – already 12 people died last month in riots in Mozambique. But those same governments have facilitated the system that has led to the food crisis.

UN special rapporteur on the right to food, Olivier de Schutter, says a combination of environmental degradation, urbanisation and large-scale land acquisitions by foreign investors for biofuels is squeezing land suitable for agriculture.

According to the World Bank, more than one-third of large-scale land acquisitions are intended to produce agro fuels. It is this loss of local agriculture that causes shortages – and not population increases.

Meeting in Rome, the UN’s Food and Agricultural Organisation’s committee on world food security (CFS) established a panel of experts to look at the “causes and consequences of food price volatility, including market distorting practices and links to financial markets, and appropriate and coherent policies, actions, tools and institutions to manage the risks linked to excessive price volatility in agriculture."

This panel will have as much success in changing the system as the International Panel on Climate Change has had in persuading governments to reduce greenhouse gas emissions; or experts working with the Convention on Bio-diversity have had in stopping the corporations destroying the planet’s eco-system.

The unsustainability of capitalism itself is the real problem, and the food crisis is a systemic, not a sporadic crisis. If we allow a system driven by profit and speculation to keep control of the world’s land use and agriculture, we will face famine on a scale not seen before.

Rioting and looting could well result as food prices rise out of reach. But these are not solutions. The real need is for a transformation in the ownership of land, the way food markets operate, the development of local food and the sharing of expertise and knowledge in a not-for-profit framework. That means grasping the opportunities offered by capitalist crisis to go beyond protest to democratising ownership, production and the political system itself.

Penny Cole
Environment editor
28 October 2010

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