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Market driving hunger crisis

The world is facing a hunger crisis unlike anything it has seen in more than 50 years. Some 925 million people don’t have enough to eat and almost 16,000 children die from hunger-related causes each day.

That’s the stark reality facing almost one in seven of the world’s population. With food prices reaching a new high, the head of the UN Food and Agricultural Organisation (FAO), Jacques Diouf, has called for “urgent structural change” to solve global hunger. The rapid increase in hunger and malnourishment since the food crisis of 2008 reveals the inadequacy of the present global food system, he said.

The World Bank estimates that the spike in global food prices in 2008, followed by the global economic recession in 2009 and 2010 has pushed between 100-150 million people into poverty.

But all Diouf’s talk of safety nets and social protection programmes, investment and support for small-scale farming is pie in the sky at a time when the market is driving land and food production in entirely the opposite direction.

In Africa, the main development activity at present is not land redistribution, or even food aid, but an enthusiastic entry into the world of global speculation in land and food production. The dramatic weather changes caused by global warming, which governments refuse to address, is also pushing up food prices.

Food Commodity PricesThe role of the market in buying and selling commodity futures is a further crucial factor in driving up prices. Last year, US wheat futures prices rose 47 per cent, corn rose more than 50 per cent and soybeans jumped 34 per cent.

Catherine Flax, investment bank JP Morgan's CEO for commodities, admitted that the financial crisis and fears of inflation have made investors suspicious of banks and financial services: "I do think investors are increasingly looking at physical assets, whether agricultural assets or infrastructure type assets, in part because of the expectations of inflation but also I don't think investors are entirely over the insecurity of the financial crisis."

Rising demand in Asia is a major issue. China’s food imports are soaring, as its own agricultural development is neglected, in favour of land privatisation and industrialisation.

There is no will on the part of governments to interfere in this unbridled operation of the market. In fact, there is an increasing tendency to end subsidies and to let inflation rip.

This policy is meeting resistance, especially in North Africa. The Algerian government rapidly cut import duties when food riots threatened its own survival. The price of basic goods rose by 30 per cent in less than a month in Algeria and a popular uprising led to the arrest of more than 1,000 people, many of them minors.

In neighbouring Tunisia dozens of people have been killed in clashes between protesters and security forces in clashes centred on unemployment and rising food prices. Bureaucrats in China also fear unrest, with inflation currently running at 5 per cent per year according to official figures, but in reality as much as double that.

Food prices in Australia are likely to soar in the coming months as a result of the Queensland floods, with 50 per cent of crops having been affected and 20 per cent wiped out entirely.

In reality it is THE MARKET in food that is in crisis, not the SUPPLY of food. There is food enough in the world – the rich never go hungry. The operation of the market is preventing people from either growing or purchasing what they need.

The structural change required is more fundamental than that proposed by the FAO. We must rapidly move away from the spoliation of agricultural land by market-driven farming systems. We need a commonwealth in land and a system of food production based on co-operation and the assumption that adequate food is a human right for all.

Penny Cole
Environment editor
13 January 2011

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