http://www.pambazuka.org/images/articles/383/48881fruit.jpgA proper analysis of the food crisis is a matter that cannot be left with trade negotiators, investment experts, or agricultural engineers, writes Yash Tandon. It is essentially a matter of political economy. A crisis for some is an opportunity for others. Any analysis of the present food crisis carries with it its own prescription, and these prescriptions have the potential to bring benefits for some and losses for others.A proper analysis of the food crisis is a matter that cannot be left with trade negotiators, investment experts, or agricultural engineers, writes Yash Tandon. It is essentially a matter of political economy. A crisis for some is an opportunity for others. Any analysis of the present food crisis carries with it its own prescription, and these prescriptions have the potential to bring benefits for some and losses for others.
Global food prices have been rising steadily since 2002 and since January this year by 65%. Global hot spots of unrest caused by spiraling food prices in the last few months include Burkina Faso, Cameroon, Egypt, Haiti, Indonesia, Ivory Coast, Mauritania, Mozambique and Senegal.
The UN Special Rapporteur on the right to food, Jean Ziegler, reported in March this year that despite real growth in some countries of the South overall there has been little progress in reducing the number of victims of hunger and malnutrition. Hunger has increased every year since 1996, reaching an estimated 854 million people despite commitments made at the 2000 Millennium Summit and the 2002 World Food Summit to halve it. Every five seconds, a child under 10 dies from hunger and malnutrition-related diseases. The situation, he said, is alarming.
Among the most popular suggested causes of the food crisis are:
- Global warming that has disrupted the balance of natural systems of air, water and weather patterns essential for food productioN;
- Rising fuel prices pushing up cost of e.g. fertilizers, transport, etc.;
- Conversion of food land to Biofuels;
- Increased consumption by rising middle classes in e.g. India and China;
- Dismantling of agricultural infrastructure in countries in the South that during 1980s and 1990s followed the Structural Adjustment Policies of the Bretton Woods Institutions;
- WTO Doha negotiations that could reduce applied tariffs on food products by further up to 36% increasing the vulnerabilities of many countries in the South;
- US farm policy;
- US and EU subsidies -- including the practice of “shifting boxes” in order to maintain subsidies, and EU CAP reform;
- Financial Speculation in the food sector
Before anybody goes deeper into an analysis of any of the above, it is necessary to tread the jungle of “probable causes” warily, for one could tread on sensitive toes. The issue is not only “hot on the streets”, it is also “hot in the board rooms.” Jacques Diouf, the Director-General of the United Nations Food and Agriculture Organisation (FAO), was treading carefully through this jungle when in describing the spiraling food prices as an "emergency", he blamed both the developing and the developed countries as the sources of the crisis. In the developing countries, he said, it was, among other factors, the steady migration of rural populations to the cities, adverse weather conditions such as an unexpectedly severe cold spell in China, droughts in Australia and Kazakhstan and floods in India and Bangladesh. And in the developed countries it was, also the diversion of farmland to produce biofuels, and speculation in the futures markets.
So, how do we traverse this jungle? Like all forest dwellers, it is important to equip ourselves with a set of simple guidelines before setting on the journey. In our view, there are five basic guidelines, or principles, that must form the basis of any food policy. These are:
1. The Principle of food sovereignty. This is not the same as “food security”. A country can have food security through food imports. Dependence on food imports is precarious and prone to multiple risks -- from price risks, to supply risks, to conditionality risks (policy conditions that come with food imports). Food sovereignty, on the other hand, implies ensuring domestic production and supply of food. It means that the nationals of the country (or at the very least nationals within the region) must primarily be responsible for ensuring that the nation and the region are first and foremost dependent on their own efforts and resources to grow their basic foods.
2. The Principle of priority of food over export crops produced by small farms sustained by state provision of the necessary infrastructure of financial credit, water, energy, extension service, transport, storage, marketing, and insurance against crop failures due to climate changes or other unforeseen circumstances.
3. The Principle of self-reliance and national ownership and control over the main resources for food production. These are land, seeds, water, energy, essential fertilizers and technology and equipment (for production, harvesting, storage and transport).
4. The Principle of food safety reserves. Each nation must maintain, through primarily domestic production and storage systems (including village storage as well as national silos) sufficient stocks of “reserve foods” to provide for emergencies.
5. The Principle of a fair and equitable distribution of “reserve foods” among the population during emergencies.
Sadly, and with dire consequences, the above quite commonsensical and, we believe, reasonable principles have not been followed by many governments in the South. They have been grossly violated through five main reasons, among other minor ones:
1. Distorted state policies on production and trade (e.g. removal of tariffs that made local producers vulnerable to imported food from rich countries that subsidized their own food production and exports).
2. Land grab by the rich commercial farmers, thus disempowering small producers and rendering them vulnerable to “market attacks.”
3. Effective loss of control over resources of food production, including land (even where nationals “owned” land) because of imported seeds, imported fertilizers, imported machinery, imported technical assistance, and imported banks, and also loss of control over water and energy through surrendering these to foreign corporations attracted by the lure of so-called FDIs (foreign direct investments).
4. Donor aid dependence, and bad advice that came with it from donors including the World Bank and the IMF during the heyday of the “Washington Consensus” (1975-2005).
5. Disruption of the infrastructure of food production (as described above) that came as a consequence of the above four factors.
Many countries have, as a result, lost their food sovereignty (even as they talked of “food security”), became food importers and “cash crop” or mineral exporters, lost control over the resources needed for production (land, water, seeds, energy, technology, etc), and became hostage to foreign supplies of food not only during periods of emergencies but also during “normal” times.
HERE ARE A FEW EXAMPLES OF THE ABOVE “EXISTENTIAL TRUTH” OF OUR TIMES
It is estimated that up to 15 million Mexican farmers and their families (in particular indigenous peoples) may have been displaced from their livelihoods as a result of the North American Free Trade Agreement (NAFTA) and competition with subsidized American maize.
Just 10 corporations, including Aventis, Monsanto, Pioneer and Syngenta, control one third of the $23 billion commercial seed market and 80% of the $28 billion global pesticide market. Another 10 corporations, including Cargill, control 57% of the total sales of the world's leading 30 retailers and account for 37% of the revenues earned by the world's top 100 food and beverage companies.
In an increasingly liberalizing (globalizing) world, Transnational Corporations (TNCs) have increased their control over the supply of water, especially in the South. In many cases, private sector participation in water services has been one of the “aid conditionalities” of the so-called “donor assistance” (ODAs) from donor countries and the IMF and the World Bank. Just three companies, Veolia Environnement (formerly Vivendi Environnement), Suez Lyonnaise des Eaux and Bechtel (USA), control a majority of private water concessions globally..
The biofuels industry is inherently predatory on land and resources, especially if it is generated out of food such as maize and Soya beans. It is estimated that to produce 50 litres of biofuels to run a car for one day’s long trip or three days city-run, it would consume about 200 kg of maize -- enough to feed one person for one year. This does not even take into account the cost of energy, water and other resources that go into biofuels production.
The Social Enterprise Development (SEND) Foundation in Ghana have criticised multi-national companies that are trying, using the “opportunity” of “food crisis”, to capture African agriculture through the so-called “Green Revolution” for Africa. FoodFirst Information and Action Network (FIAN) said that peasants have been evicted in several African countries so that palm oil can be produced from forests.
The heavy production and export subsidies that OECD countries grant their farmers - more than $349 billion in 2006 or almost $1 billion per day - mean that subsidized European fruit, vegetables lower grade meat, and chicken wings can be found in markets all over West Africa at lower prices than local produce.
A proper analysis of the food crisis is a matter that cannot be left with trade negotiators, investment experts, or agricultural engineers. It is essentially a matter of political economy. A crisis for some is an opportunity for others. Any analysis of the present food crisis carries with it its own prescription, and these prescriptions have the potential to bring benefits for some and losses for others.
The analytical jungle needs to be carefully traversed. But in this jungle, watch out for animals that have sharp claws and powerful teeth. We thought “imperialism” was a “dirty word” not to be uttered in polite company. But under the title “Food Investment, not Imperialism”, an editorial in the London Financial Times of May 13, 2008 advocated foreign investments as a solution to the problem of food crisis. However, having expounded the virtue of what it called “cross-border farm investment” (read, FDIs), it goes on with what we cannot but agree. It says:
“The only exception is if investment in agriculture turns into imperialism. That is a practice with a long and unpleasant history, from the plantation agriculture of the European empires to the 1954 coup in Guatemala, assisted by the US Central Intelligence Agency, at least in part for the benefit of the United Fruit Company. A developing country can suffer if capital intensive cash crops are produced at the expense of labour intensive food.”
Bravo! There is sometimes wisdom that comes through looking at history from hindsight. Sadly, history is often forgotten by those who are in a hurry to sign free trade agreements (FTAs), Economic Partnership Agreements (EPAs), donor aid loans and grants, and Bilateral Investment Treaties (BITs). The lure of money to balance the budget or to finance food imports is too powerful against the lessons of history. Only if our policy makers were able to exercise some foresight!
*Yash Tandon is the Executive Director of the South Centre, an Intergovernmental think tank of the developing countries.
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