Hunger in a World of Plenty

The skyrocketing cost of food has resurrected the specter of the "food riot."  The World Bank reports that global food prices rose 83% over the last three years and the FAO cites a 45% increase in their world food price index during just the past nine months.[1]  The Economist’s comparable index stands at its highest point since it was originally formulated in 1845.[2]  As of March 2008, average world wheat prices were 130% above their level a year earlier, soy prices were 87% higher, rice had climbed 74%, and maize was up 31%.[3]

Not surprisingly, people have taken to the streets in Mexico, Italy, Morocco, Mauritania, Senegal, Indonesia, Burkina Faso, Cameroon, Yemen, Egypt, and Haiti.  Over 100 people have been killed and many more injured. In Haiti, the poorest country in the western hemisphere, with food prices increases of 50-100%, driving the poor to eat biscuits made of mud and vegetable oil angry protestors forced the Prime Minister out of office.

The food crisis will get worse before it gets better. Without massive, immediate injections of food aid, 100 million people in the Global South will join the swelling ranks of the word’s hungry.[4]  But the protests are not simply crazed “riots” by hungry masses. Rather they are angry demonstrations against high food prices in countries that formerly had food surpluses, and where government and industry are unresponsive. They reflect demands for food sovereignty: people’s political and economic right to determine the course of their own food systems.

The food crisis appeared to explode overnight, reinforcing fears that there are just too many people in the world. But according to the FAO, with record grain harvests in 2007, there is more than enough food in the world to feed everyone—at least 1.5 times current demand. In fact, over the last 20 years, food production has risen steadily at over 2.0% a year, while the rate of population growth has dropped to 1.14% a year.[5] Population is not outstripping food supply. “We're seeing more people hungry and at greater numbers than before,” says World Hunger Program’s executive director Josette Sheeran, “There is food on the shelves but people are priced out of the market.”[6]

The immediate reasons for food price inflation include; droughts in major wheat-producing countries in 2005-06, low grain reserves (we have less than 54 days worth, globally); high oil prices; a doubling of per-capita meat consumption in some developing countries, and the diversion of 5% of the world’s cereals to agrofuels. Though an increase in agricultural growth is projected for 2008, most experts agree food prices will continue to rise. Drought, meat diets, low reserves, and agrofuels are only the proximate causes of food price inflation. These factors do not explain why—in an increasingly productive and affluent global food system—next year up to one billion people will likely go hungry. To solve the problem of hunger, we need to address the root cause of the food crisis: the corporate monopolization of the world’s food systems.

Rise of the Industrial Agri-foods Complex

The world food crisis reflects the weaknesses of a global food system that is highly vulnerable to economic and environmental shock. Why? Much of the problem springs from the risks and inequities inherent in the industrial agri-foods complex.  Built over the past half-century—largely with public funds for grain subsidies, foreign aid, and international research and development—the industrial agri-foods complex is made up of multinational grain traders, giant seed, chemical and fertilizer corporations, processors and supermarket chains. Forty years ago, much of the countries of the Global South had yearly trade surpluses in food of $7 billion. After the UN’s first “Decade of Development” this surplus shrunk to $1 billion. Today, after four “Development Decades” and the expansion of global agri-foods, the southern food deficit has ballooned to US $11 billion/year. The FAO predicts it will grow to $50 billion by 2030.[7] While not the result of a central “conspiracy,” the rise of food deficits in the Global South mirrors the rise of food surpluses in the industrial North. Far from the result of “overpopulation,” or the “invisible hand” of the market, hunger is the result of systematic destruction of southern food systems through a series of northern economic development projects.

Green Revolution: Winners and Losers

The germplasm collected from peasants in Asia and Latin America by Green Revolution scientists contributed $10.2 billion/yr to U.S. corn and soy production in the 1970-80s..; Fully one third of the seed produced by the International Center for Maize and Wheat Improvement (CIMMYT in Spanish) was appropriated by private northern seed companies including Pioneer Hy-Brid, and Cargill (Ecologist, 1996). Farmers and the environment fared less well from the spread of the Green Revolution. Central America is a case in point: From 1979-97, fertilizer use increased from 80 to 120/kg-ha and grain production increased by 45 million t/yr (CIECA, 2001) (CIMMYT, 1992). However, average yields actually dropped by 50% from 1980-96 (CIECA, 2001). How did grain production increase even as yields dropped? By expanding the “agricultural frontier.” During the heyday of the Green Revolution in Central America, the region lost half of its tropical forests and almost doubled its CO2 emissions (Utting, 1996; Kaimowitz, 1996)

The Green Revolution

The first major development in the rise of the agri-foods complex was the spread of the industrial model of food production through the “Green Revolution.” Starting in the 1960s, the Green Revolution marketed “technological packages” of hybrid seeds, fertilizers and pesticides, to developing countries in Asia, Africa and Latin America. A project of Ford and Rockefeller Foundations (thereafter financed with public money), the Green Revolution raised yields per acre by developing rice, wheat and maize hybrids that could be densely planted and responded to irrigation and high applications of fertilizer. In the West, world per-capita food production increased by 11%. But the number of hungry people also increased by 11%. [8] This is because the Green Revolution’s technologies were more easily adopted by large-scale farmers who took over rich bottomlands, displacing peasants. Many smallholders, pushed out of agriculture, migrated to the city slums now common throughout the Global South. Others, encouraged by government “land reforms” cleared new agricultural land in tropical forests and on fragile hillsides. Development projects soon followed, offering cheap credit so smallholders could buy the Green Revolution technological packages. In fragile forest and hillside conditions, Green Revolution packages degraded soils rapidly, requiring higher and higher fertilizer applications. Yields fell, and the tremendous diversity of local varieties planted by traditional farmers was reduced by as much as 90%, destroying centuries-old agro-biodiversity. To compensate, more and more forest and hillside land was brought into production, causing massive environmental damage. The Green Revolution, ostensibly a project to save the world from hunger, undermined the ability of the poor to feed themselves by displacing them from their land and degrading the agroecosystems they depended on to produce food.

The Debt Crisis

The spread of the Green Revolution coincided with a general boom in lending from the Global North to the Global South (which is one reason why so much credit was available to peasants for technological packages…) The Global South borrowed heavily to finance economic development. Agricultural exports were used to obtain foreign exchange to pay back loans. Production boomed, leading to a fall in prices for agricultural goods. Farmers in the North and the South responded by producing more to increase income. The global oil shock of the 1970s led to an increase in production costs and a recession that, in turn, led northern banks to call in their loans. Family farmers in the US went bankrupt and the countries of the Global South defaulted on the loans, leading to the “Debt Crisis.”

Take Two: Structural Adjustment

The second major development in the rise of the industrial agri-foods complex was the Structural Adjustment Programs (SAPs) of the 1980-90s. The SAPs were conditional loan programs enforced in tandem by the World Bank and the International Monetary Fund (IMF) so that developing countries, debt-ridden after twenty years of development, would pay back their loans to northern banks. To receive loans from the World Bank, developing countries signed IMF agreements to remove their tariff barriers to foreign imports, privatize state companies and services, and dismantle their food marketing boards. This allowed widespread “dumping” of highly-subsidized US and European grain surpluses. Farmers in the Global South couldn’t compete against grain sold at prices below the costs of production and were forced to quit farming. These rural poor were then available to work for starvation wages on plantations growing low-end agricultural exports including, bananas, cotton, tobacco, coffee, sugar, and beef, or high-end, non-traditional export crops, like snow-peas and flowers. Support for national food production disappeared. Southern countries lost the ability to feed themselves.

“Free” Trade: The nail in the coffin of food security

The spread of Free Trade Agreements (FTAs) and the rise of the World Trade Organization (WTO) ended any aspirations to food security the Global South might have had. The WTO was formed in 1995 for the global enforcement of market-led economic development. The WTO’s Agreement on Agriculture (AoA) restricts government power to establish agricultural policies. The WTO’s “disciplines” (areas of enforceable deregulation) include domestic supports, export subsidies, market access, tariffs, and quotas—all the mechanisms needed by nations to regulate their farming sector and ensure a stable food supply. The WTO has a number of obscure rules kept in colored “boxes” that allow the US and EU to exempt their subsidies from WTO disciplines. This dualist system privileges northern grain, seed and chemical companies seeking to dominate southern markets.

The Calculus of Northern Subsidies

• $1 billion/ day
• EU subsidy/cow ≈ $2 ≈ daily wage of world’s 3 billion poor
• 6x greater than OECD’s development assistance
• Removal could return more than 5X all development assistance to 3rd World

Similarly, Free Trade Agreements (FTAs) enforce “free” trade agreements within regional trading blocs. Since their inception, the North American Free Trade Agreement (NAFTA) and the Central American Free Trade Agreement (CAFTA) have led to the destruction of millions of rural livelihoods in Latin America, driving a million people a year to the US in search of work.  

Agrofuels: A poor idea, badly implemented, at the worse possible time

The renewable fuel targets of the US Energy Acts of 2005 and 2007 mandated the consumption of 4 billion, 7.5 billion, and then 36 billion gallons a year of agrofuels.[9] This obligatory market—sweetened with tariffs and subsidies that prop up half of ethanol’s wholesale market price—has led to an “agrofuels boom.” Between 2001 and 2007, the amount of corn used in US ethanol distilleries exploded from 18 million tons 81 million tons. In 2007, the jump in ethanol production more than doubled the average annual growth in demand for the world’s grains that took place between 1990 and 2005.[10] At this rate, half of the US corn harvest will be diverted to ethanol production by the end of 2008. As more corn is planted, it displaces wheat and soybeans, increasing their market price. Since U.S. corn accounts for some 40% of global production, U.S. agrofuel expansion impacts global markets for all food grains, and exacerbates food-price inflation worldwide.

The agrofuels boom collapses the food system with the energy economy.  Ever since the Green Revolution, cheap oil has driven a fuel-intensive industrial food system.  Rising petroleum costs makes industrial farming more expensive, and raises the cost of transporting food the 1200-2000 miles it often travels through the global food system.  At this writing, the price of oil is a record $120 a gallon. Freight costs are up 80% since 2006 and fertilizer prices spiked 150%.[11]. Now, thanks to agrofuels, food not only depends on oil, it competes with fuel.

In addition to food-fuel competition in the global north, the proliferation of agrofuel plantations throughout the Global South is further displacing small-scale farmers. Since smallholders make up one-half to two-thirds of the population in southern countries (and still produce almost half of the food), the agrofuels boom not only threatens this sector’s livelihood security, it reduces their contribution to national food security. The fuel produced will do nothing to alleviate the energy crunch in the Global South either, as agrofuels are primarily for export to northern countries.

Just how big agrofuels’ effects food prices depends on who is talking. President Bush says it's responsible for about 15 percent of the rise in costs. The U.S. Department of Agriculture claims 20 percent. [12] The World Bank asserts that the 60% rise in corn prices from 2005-07, “is largely because of the U.S. ethanol program, combined with market forces.”[13] What is clear is that both direct and indirect effects of agrofuels on the food system are global, profound—and highly destructive.

The Balance of the Agri-foods Industrial Complex

The expansion of industrial agri-foods crippled food production in the Global South and emptied the countryside of valuable human resources. But as long as cheap, subsidized grain from the industrial north kept flowing, the agri-foods complex grew, consolidating control of the world’s food systems in the hands of fewer and fewer grain, seed, chemical and petroleum companies. Today three companies, Archer Daniels Midland, Cargill, and Bunge control the world’s grain trade. Chemical giant Monsanto controls three-fifths of seed production. Unsurprisingly, in the last quarter of 2007, even as the world food crisis was breaking, Archer Daniels Midland’s profits jumped 20%, Monsanto 45%, and Cargill 60%. Recent speculation with food commodities has created another dangerous “boom.” After buying up grains and grain futures, traders are hoarding, withholding stocks and further inflating prices.

Food Sovereignty: Fixing the Food System to Solve the Food Crisis

World leaders are scrambling to address the political fallout from the waves of protest sweeping the planet. US president George Bush recently requested $770 million in food aid from Congress. But the corporate agenda behind the president’s call became apparent when he then called on other countries to ease trade barriers on agriculture and to lift bans on genetically modified foods.’ [14]

The official prescriptions from the US, the World Bank and the CGIAR for solving the world food crisis call for more of the same policies that caused the crisis in the first place: e.g., more free trade and more Green Revolutions (now read: gene revolutions). Expecting the institutions that built the current food system to solve the food crisis is like asking an arsonist to put out a forest fire. More free trade and more Green Revolutions are good news for an industrial agri-foods complex seeking to prolong their windfall profits, but it will do nothing to re-structure our environmentally vulnerable and economically inequitable global food system.

To solve the food crisis we need to fix the food system. That entails re-regulating the market, reducing the oligopolistic power of the agri-foods corporations, and re-building agroecologically resilient peasant and smallholder agriculture. We need to make food affordable by making sustainable family farming viable. These tasks are not mutually exclusive—we don’t have to wait to fix the food system before making food affordable or farming viable. In fact, the three need to work in concert, complementing each other. Farm and food advocates are suggesting four essential steps:

Step 1: Reactivate the peasant sector in the Global South

“An absolute priority has to be given to domestic food production in order to decrease dependency on the international market. Peasants and small farmers should be encouraged through better prices for their farm products and stable markets to produce food for themselves and their communities. Landless families from rural and urban areas have to get access to land, seeds and water to produce their own food. This means increased investment in peasant and farmer-based food production for domestic markets.

Henry Saragih, International Coordinator for La Via Campesina[15]

Taking agriculture out of the WTO and re-negotiating Free Trade Agreements to favor the smallholder-peasant sector will be important parts of decreasing dependency on international markets.

In the immediate term, the World Food Program (WFP) needs $755 million to close its funding gap and make emergency food available. The WFP should buy as much food as locally as possible from smallholders at fair prices, then distribute or sell at accessible prices to people who are too poor to buy it on the open market. This avoids “dumping” cheap grains from abroad and reduces the costs of relief, allowing more people to eat. If accompanied with a strong rural support system of production credit, transport, marketing and distribution, this will rebuild local food systems as it extends relief. Because smallholders represent 80% of the world’s poor, this strategy will help most of the hungry feed themselves and produce a surplus for others.

Step 2: Moratorium on Agrofuels

United Nations Special Rapporteur on Hunger, Jean Zeigler has called for an immediate 5-year Moratorium on Agrofuels. In both the US and Europe, campaigns are underway to roll back the renewable fuels standards that force consumers to buy agrofuels at the pump. Joachim von Braun, director general of the International Food Policy Research Institute, the policy arm of CGIAR stated, "Our models analysis suggests that if a moratorium on biofuels would be issued in 2008, we could expect a price decline of maize by about 20 percent and for wheat by about 10 percent in 2009 and 2010." [16]  Without mandatory targets, the agrofuels global house of cards falls flat. A 5-year Moratorium on the targets will halt the agrofuels expansion and give us time to research alternatives and for an informed public debate on the future of our food and fuel systems.

Step 3: Rebuild national food economies

Decades of letting the global market allocate food resources has crippled national food economies, pitted northern farmers against southern farmers in a race to the bottom, and unleashed a “speculative frenzy” in food commodities. According to Via Campesina,

“Countries need to set up intervention mechanisms aimed at stabilizing market prices. In order to achieve this, import controls with taxes and quotas are needed to avoid low-priced imports which undermine domestic production. National buffer stocks managed by the state have to be built up to stabilize domestic markets: in times of surplus, cereals can be taken from the market to build up the reserve stocks and in case of shortages, cereals can be released.” [17]  

An essential step—at home and abroad—is to re-establish national grain reserves. The National Family Farm Coalition (NFFC) claims, “We are just one drought away from possibly seeing $10/bushel corn or $20/bushel wheat with absolutely no plan in place to deal with such a calamity.” A sign-on letter to Congress drafted by NFFC and signed by over 30 US farm and food organizations, states, “The United States needs to have a long-term vision for preserving our food security and food sovereignty – much more than simply answering agribusiness’s pleas for cheap commodities. A prudent reserves policy that stabilizes commodity prices would reduce controversial farm subsidy payments by ensuring prices do not collapse... It is not too late for Congress to establish policy that will benefit both consumers and farmers instead of leaving our fates to the whims and dictates of unstable, global markets.”[18]

Step 4: Prioritize Agroecology

The International Assessment of Agricultural Science and Technology (IAASTD) recently released the results of an exhaustive four-year international consultation with over 400 scientists. The IAASTD calls for an overhaul of agriculture dominated by multinational companies and governed by unfair trade rules. The report warns against relying on genetic engineered "fixes" for food production and emphasizes the importance of locally-based, agroecological approaches to farming. The key advantages—aside from its positive environmental impact—is that while creating a market surplus, it provides both food and employment to the world's poor.[19] On a pound-per-acre basis, these small family farms are more productive than large-scale industrial farms.[20] And, they use less oil, especially if food is traded locally or sub-regionally. These alternatives, growing throughout the world, are like small islands of sustainability in increasingly perilous economic and environmental seas. As industrialized farming and free trade regimes fail us, these approaches will be the keys for building resilience back into a dysfunctional global food system.