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| The
Outcry is muted, but the Food Crisis is getting worse |
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The
financial debacle has drowned out coverage of food shortages.
Where are the
billion-dollar bailouts for the hungry? |
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Just a
few months ago, we were being told that this is a period
of stark, unprecedented and unfolding food crisis, with
looming shortages and huge global imbalances between
demand and supply. Everyone who matters - from officials
in international organisations to leaders of rich and
poor countries - warned us of the terrible social, political
and nutritional consequences of doing nothing, of the
millions who would go hungry and the riots that would
occur if the imbalances persisted or increased.
But now the whole problem has disappeared from the international
radar, relegated to the inside pages of newspapers and
perfunctory afterthoughts in politicians' speeches.
So what happened? Was it not such a problem, after all?
No, the ''silent tsunami'' has simply been overwhelmed
in public awareness by the much noisier tsunami in the
world of international finance, with the giant sucking
sounds of possible bank collapses and enormous bail-outs
grabbing all the attention. Yet the global food crisis
is far from over, and is even likely to intensify in
the near future.
One reason why many analysts decided that the food crisis
may not be so intense is the global decline in crop
prices that began sometime in the middle of last year.
For about two years before that, commodity prices, including
both food and non-food crops, had been increasing, and
in the first few months of 2008 they soared. But in
early June last year the prices of both oil and food
crops fell, so that they are now lower than they were
even a year ago.
When food prices were rising, there was much talk of
the shifts in demand that were causing this trend. President
Bush joined those who decided that this reflected the
increased demand from China and India as their per capita
incomes grew. This was a ludicrous argument because
food consumption has actually declined in both countries.
Both economies have shown even sharper declines in per
capita food intake despite the continued presence of
widespread hunger, because of increased income inequalities
within these countries. In any case, that argument about
more food demand from China and India quickly collapsed
along with the fall in global prices. Now it is more
than evident that the wild swings that have been observed
in food and several commodity markets over this year
have been the result of speculative forces, rather than
any real changes in global demand and supply.
But despite this volatility and the recent price decline,
the food crisis remains. And it does indeed reflect
patterns of demand and supply - but not the ones that
have been talked about. The basic problem now is not
even one of absolute shortage so much as the inability
to pay for food, and this problem will get worse for
many developing countries and their poorer citizens.
Three problems now dominate the global food scenario.
First, there is a crisis of cultivation, especially
in the developing world. This is the result of two decades
of policy neglect: falling public investment in agricultural
research, extension and support; aggressive trade liberalisation
that exposed southern farmers to heavily subsidised
marketing by northern agribusinesses; financial liberalisation
that reduced cultivators' access to credit and made
them prey to speculative forces that also affected prices.
As a result, cultivation costs have increased even in
years when crop prices are falling, and cultivation
is becoming unviable in many countries.
Second, this has been associated with a depression in
wages in developing countries, which means that mass
purchasing power did not increase even when the economies
were growing. So demand for food has not gone up, simply
because the poor do not have the incomes to pay for
it.
Third, there has been an increasing concentration of
firms operating in global agriculture, with a few large
agribusinesses coming to dominate both input and output
markets. These companies are also the ones who benefit
from government subsidies promoting ethanol, which divert
land meant for food to the paradoxically more energy-intensive
production of fuel for cars. This concentration is reflected
in recent food-price trends: while world prices have
fallen sharply in the past four months, retail prices
of food in most developing countries have not fallen.
Unfortunately, each of these negative processes is likely
to intensify. The financial crisis will reduce the ability
of developing country governments to increase much-needed
investment in agriculture or enlarge the distribution
of affordable food. It will adversely affect wage incomes,
reducing purchasing power further. And it will add to
pressures for concentration in industry, including agribusiness.
In the middle of last year, we had a global outcry about
the perilous state of billions of people in developing
countries whose governments could not afford to provide
enough food for them and who could not themselves earn
enough to buy food at prevailing prices. These problems
are now worse, but the global outcry is all about the
multinational banks that are under threat. And several
multiples of the money that could not be found to provide
food for the hungry are quickly being delivered to bail
out irresponsible finance.
To
see this story with its related links on the guardian.co.uk
site, go to
http://www.guardian.co.uk/commentisfree/2009/jan/09/food-shortages-coverage-jayati-ghosh
January
12, 2009. |
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