The Guardian 18 June, 2008
FAO World Food Security Conference
Food crisis: "failure of capitalist model"
Anna Pha
"It is the biggest demonstration of the historic failure of the capitalist model", Gladys France Duran Urbaneja told the World Food Security: The Challenges of Climate Change and Bioenergy conference held in Rome, June the third to the fifth. Speaking on the last day of the conference, the Venezuelan representative said that what she had heard at the conference, confirms that the food crisis is not a technical problem, it is social and political.
The conference was originally scheduled as a technical meeting of the United Nations Food and Agriculture Organisation (FAO). Taking place at a time of global food crisis, it took on far larger proportions and significance. More than 40 heads of state or government and 100 high-level ministers from 183 countries took part. Sixty non-governmental organisations, other UN agencies and big business were also present. Over 5,159 people attended, including 1298 journalists.
The Venezuelan representative pointed out that 25,000 people die of starvation every day — 18,000 of them children.
"The crux of the problem is producing enough in a sustainable manner and ensuring its equitable distribution", said Sharad Pawar, India’s Minister for Agriculture, emphasising the need for "affirmative action to ensure that food is available to all at affordable prices and that farmers also get remunerative returns on their investments".
Distorted priorities
Director General of the FAO Jacques Diouf pointed to the many contradictions in spending priorities, such as the massive US$1,200 billion (AU$1,250 billion) that was spent on arms purchases in 2002 alone. Yet it was not possible to find US$30 billion (AU$31.2 billion) a year to enable the 862 million people who suffer starvation and malnourishment to enjoy the right to food. (see last week’s Guardian for his speech).
In 2008, the production of bio-fuels will consume around 35 million tonnes of oil-producing grains, 250 million tonnes of cane sugar (about 20 percent of world production), and over 92 million tonnes of maize (six times the maize consumption of Mexico, the largest maize consumer in the world), the Venezuelan representative noted.
The International Monetary Fund (IMF) representative said, "it is not a global food shortage. In fact, there is enough food to feed the world". Unfortunately, he failed to address the causes of the crisis and why this food is not reaching the people who need it. Instead, he offered more of the same failed policies and stressed the need to stop the food crisis "from turning into a general inflation or balance of payments problem"!
True to form, the Director-General of the World Trade Organisation (WTO), Pascal Lamy, focused on the need to finalise the Doha round of negotiations, open up markets, reduce trade barriers and let demand dictate prices, claiming that would bring them down.
The contributions from the US, Australia and a number of other wealthy countries tended to focus on "free market" solutions and finalising the WTO Doha round of negotiations.
Speakers from developing countries concentrated on the causes of the crisis, immediate action to feed their people, and longer term measures to achieve food security and sovereignty and sustainable economic development.
They pointed to a multitude of causes. These included poverty; climate change (water shortages, dessertification, floods, etc); steep oil prices; high cost of transportation; financial institutions speculating in food stock; distribution based on wealth, not needs; displacement of peasants by agro-industrial and agribusiness; monopoly practices of multinational corporations (patents; seed and fertiliser prices; etc); government subsidies and tariffs; abandonment of agriculture and traditional practices; lack of rural infrastructure and research; replacement of food crops by bio-fuel crops; free trade agreements; World Bank and International Monetary Fund policies; and priority of profits over people’s needs.
"Speculators looking for assets with rising prices may well have sensed the strains in the world food markets and re-oriented their portfolios to buy food commodities. This would go a long way to explaining why the FAO food price index rose by 54% over the past 12 months, … It is simply obscene to let greed and speculation cause massive starvation", the representative of the United Nations Conference on Trade and Development (UNCTAD) said.
Failed policies
"But the crisis also has much more deep-seated, longer-term causes. One such cause is the decline in agriculture in many developing countries — a decline brought about by distorted international markets, lack of investment, and absence of institutional support. Declining investment has in turn resulted in low, and even decreasing, agricultural productivity. UNCTAD research has shown that in the LDCs [least developed countries] in particular … the sector was more productive 50 years ago than it is today."
The UNCTAD contribution points to a number of reasons for this. One is the dwindling availability of arable land due to climate change.
"In some countries, however, the decline of the agricultural sector was reinforced by policies that abolished or weakened the role of key institutional support measures, including state-supported extension services, marketing boards, and state subsidies for agricultural inputs (such as seeds, pesticides, herbicides and fertilisers). And there has been little investment in the infrastructure needed to distribute agricultural products."
The UNCTAD address diplomatically stops short of attributing blame for such "free-market" policies, often forced on less wealthy countries by such bodies as the World Bank, IMF or through the WTO. Nor does it mention the role of the Organisation for Economic Co-operation and Development (OECD) and its policies which have been imposed on the people of these nations.
UNCTAD refers to a new emphasis on "social-sector and emergency aid". This has created ongoing dependency rather than longer-term self-sufficiency or sustainable development. It can, however, be very profitable for the private sector which western governments contract to provide the aid.
UNCTAD also highlights the impact of heavily subsidised exports from industrialised countries to developing countries. "Recent analysis by the FAO and UNCTAD has shown that agricultural subsidies in developed countries have been associated with rapidly increasing food imports in developing countries, alongside a decline in agricultural production. Indeed, a number of developing countries that have traditionally been food exporters — many of them LDCs — have become net food importers over the past 20 years. Sadly, these are the countries that are hit the hardest by the current crisis, a crisis made even worse for them by mounting oil prices."
Market forces bring starvation
These points made by UNCTAD were taken up in a number of other contributions from developing countries. Sri Lanka was one of these:
"Before the economy of our country was opened to the play of global market forces, the focus of social and economic development was the rural sector. Rural incomes, rural well being, rural infrastructure, rural transport, rural health, rural education and other rural services constituted the main goals and objectives of social development. Development was focused on enhancing the productivity, well being and dignity of the peasant and small farmer who produced the food for our people", Sri Lanka’s Agriculture Minister said.
"With the advent of the open economy, the focus of the development activity shifted … from the village to the town. It shifted from the largest part of the country where rural people toiled to produce food for us all, to the urban centres of commerce and industry where food and services are produced largely for export to high income countries.
"The country progressively dismantled its buffer stocks of rice and wheat flour — a then abiding feature of our food security — which cushioned the food supply from the shocks and uncertainties of crop failure on the one side and price fluctuations on the other. As the State for all practical purposes started reneging its responsibility for providing food to the people at an affordable price, the supply and price of food became more or less a market responsibility."
Climate change & bio-fuels
In Bangladesh previous gains in reducing poverty are being eroded and the capacity to produce its own food is threatened, Dr C S Karim told the conference. "The rank of the poor may be swelling again…
"How do we, for example, raise domestic production when fertiliser prices are rising fast and extremely high price of oil makes irrigated agriculture much costlier.…
"Ensuring availability will not automatically ensure food security. People must have purchasing power backed by income or transfers to access food. Examples of high availability and low access leading to famines are not rare in history," Karim said.
"It is a multifaceted problem caused by interlinked factors, ranging from skyrocketing oil prices to rigid protectionism in the international trading system; from the crushing impact of climate change on productivity to a massive shift from food crops to bio-fuel production", the contributions from Indonesia said.
"We have to take into account not only the need of economies for fuel but also the need of the poor for nourishment. The developed countries have to increase their efficiency in the use of energy so that demand for bio-fuels will not interfere with the stability of food supply. Hence international cooperation in research and development on bio-fuels is essential."
Indonesia also warned of "the possibility of new armed conflicts breaking out and the prospects of a dangerous instability throughout the world."
"As long as globalisation fails to reduce hunger, no one can claim that it engenders development. This is why we at UNCTAD believe that the current food crisis is ultimately a development crisis … In a world of such relative economic prosperity as ours … there is simply no excuse for hunger."
UNCTAD poses the question: "What is to be done?"
This question will be covered in part 2 of this report in a future issue of The Guardian.