[Marxism] (no subject)

[Anon Anon]

Fuelling Hunger
Posted to the IUF website 28-Apr-2008
http://www.iuf.org/cgi-bin/editorials/db.cgi?db=default&ww=1&uid=default&ID=579&view_records=1&en=1

"Often we are seeing food on the shelves but people
being unable to afford it."
United Nations' World Food Program Executive Director
Josette Sheeran on "The new face of hunger"

"Producing biofuels today is a crime against
humanity."
Jean Ziegler, UN Special Rapporteur on the Right to
Food

"I see so much focus on food, and it seems to be so
trendy in the investment world
The markets seem to me
to have a bubble-like quality."
Goldman Sachs chief economist Jim O'Neill


Some 16 months after tens of thousands of Mexicans
took to the streets to protest a four-fold increase in
the price of tortillas (flat maize bread that is the
country's staple food), politicians and international
agencies have woken up to the enormity of the global
food crisis. From Argentina to Yemen, Bolivia to
Uzbekistan, food riots are spreading across the globe.
The FAO warns that global food reserves are at their
lowest in 25 years, and says that with prices set to
rise still further food riots will become a general
phenomenon over the next year. The IMF now speaks of
100 million potential new victims of starvation.

What is powering the 90% overall rise in global food
prices over the past three years, the doubling of
wheat prices in less than a year and similarly
dramatic increases in the prices of other grains and
edible oils over the past year? One putative
explanation has been recycled with such frequency by
politicians, industry, journalists and even the
Director General of the United Nations' Food and
Agriculture Organization (FAO) that it has all but
escaped critical examination. We have been repeatedly
told that escalating food prices are the result of
rising demand in developing countries, whose growing
consumption of meat and milk is driving prices rapidly
upwards. Rising demand for animal-based protein,
however, has been steady rather than explosive. It
cannot explain the 31% increase in the price of rice
which occurred in the closing days of March alone, or
the 400% increase in the price of Mexican tortillas.
India, hard hit by the rising cost of rice, produced
record harvests of rice, wheat and oilseeds in 2007/8.
Mexico exported maize in 2006; 2007 saw record levels
of production in Mexico, in the region and globally.

The other conventional explanation for sharp, rapid
food price inflation - climate change-related pressure
on arable land and water resources - likewise fails to
fit the facts, though the problem is real and requires
urgent action. Australia's poor grain harvest as a
result of drought is reckoned to have added no more
than 1.5% to global wheat prices.

It is unquestionably the diversion of food crops to
biofuel production which has reduced world food stocks
to dangerously low levels and is driving the increased
prices which have transformed basic food into a luxury
for the world's rural and urban poor. Biofuels made
from food and feed crops include ethanol made from
maize (corn), cane sugar, beet sugar and wheat, and
biodiesel made from soybeans, sunflower oil, palm oil,
rapeseed (canola) and other plants. From 20 to 50
percent of feedstocks in major producing countries,
and in particular maize and rapeseed, are now filling
fuel tanks rather than stomachs. This in turn has
driven up the price of soybeans, an important global
protein source, and dragged with it meat, dairy and
other food prices.

Corporate hunger for biofuels, not growing demand for
more varied protein in developing countries, is what
is aggressively driving up the cost of food. The maize
currently feeding US ethanol production is sufficient
to meet the current needs of all the FAO's low-income
food-deficit countries - and the United States has
mandated a five-fold increase in ethanol production.
If the entire US maize output, rather than last year's
20%, were diverted to ethanol, it would still only
replace 7% of current US petroleum consumption. It has
been estimated that for domestic production to meet
the EU's mandatory targets for biofuels in road
transport, some three-quarters of EU arable land would
have to be devoted to non-food production. Indonesia
is encouraging a 400% increase in palm oil production
over the coming decade. These policies will have
catastrophic social, environmental and climatic
consequences.

It has been repeatedly claimed that switching to
biofuels will protect the environment. However when
all the inputs and outputs are adequately taken into
account, the energy (most of it petroleum-derived)
required to produce a given unit of biofuel is
considerably greater than that contained in the
biofuel itself. Some of the proposed "second
generation" biofuel sources (like cellulosic biomass
from trees whose cultivation would replace food crops)
are even more avid consumers of energy. Factor in
increased pressure on water and land (for example
destroying the tropical forests which are the planet's
carbon sinks) for expanded oil palm and soy
production, and the biofuel contribution to reversing
global warming is sharply negative. Expanding biofuel
production means more, not less, greenhouse gas
emissions.

While food riots and the threat of mass starvation
have begun to shake optimistic forecasts of reversing
climate change through biofuels, two other critical
factors have largely escaped notice, as if the biofuel
boom were taking place in the pure environment of a
laboratory greenhouse.

First, the promotion of biofuels through subsidies and
other measures takes place in the context of extremely
high concentration along the supply chain. Two
companies, Cargill and ADM, distribute the vast bulk
of the world's internationally traded maize and other
grains. A handful of TNCs dominate global sugar
production and trade. Equally high levels of
concentration often exist at national level. One
company, Mexico's Grupo Gruma, controls over
three-quarters of the country's market for tortilla
flour. Their concentrated buying power is what sets
benchmark prices.

Second, record amounts of money have been flowing into
agricultural commodity markets in recent years,
accelerating even more rapidly as investors fleeing
meltdown in the credit markets seek new outlets.
Speculative capital has hitched itself to the food
commodity boom, creating a classic "asset bubble".
Food processing companies have also devoted increasing
financial resources to these same markets, potentially
adding to the upward pressure on prices without
fundamentally affecting the diversion of grains from
food to energy.

If the precise contribution of speculation, hedging
and old-fashioned hoarding to food price inflation
cannot, at present, be precisely determined, it is
because few of the agencies suddenly alert to the food
crisis have even asked the question. This in turn has
important implications for policy proposals to deal
with the crisis. Getting a grip on food price
inflation means confronting the concentrated power of
the agrofood TNCs and reining in speculative finance.

World Bank chief Zoellick has raised the spectre of
mass starvation to call for a "New Deal" for
agriculture - administered by the IMF and World Bank.
The New Deal, however, looks suspiciously like the
old. Together with the WTO, the international lending
agencies have promoted and enforced a world food
system dominated by a handful of giant corporations
whose power and reach are built on production systems
geared to massive export at the expense of domestic
food-producing capacity. Global food riots are proof
that feeding hungry corporations is not identical to
feeding human beings.

Rather than calling on the institutions which brought
about the crisis to resolve it, trade unions, together
with civil society organizations, must demand a public
investigation by the United Nations into the surge in
the cost of basic food. While the role of the FAO in
tackling the crisis is generally acknowledged, the
FAO's record is on many counts ambiguous: It too has
promoted export-based industrialized farming at the
expense of food security and social and environmental
sustainability. If the UN is to take a lead in
developing policies and measures to address the
crisis, there must be formal participation by the UN
Special Rapporteur on the Right to Food, along with
UNCTAD, the UN agency with the most experience of
international commodity markets, and the ILO, the only
UN agency in which trade unions have an institutional
voice.

Given the enormity of the crisis, the WTO's Agreement
on Agriculture must be suspended to give governments
the policy space they need for measures to tackle the
crisis. Regulating imports, limiting or even halting
exports, the imposition of tariffs/taxes, and
production subsidies to satisfy domestic food (not
biofuel) requirements must be considered legitimate
measures to defend food security, which take
precedence over the rules of the WTO.

Governments of major food staple exporting countries
should be required to furnish the World Food Program
with stocks at below market prices or the equivalent
in cash to allow food-deficit governments to buy
supplies from appropriate sources at subsidized
prices. Priority must be given to raising funds for an
international program to strengthen systems of local
and national food production. Since food price
inflation is an aggressive tax on the poor, who in
developing countries devote most of their income to
food, taxing the record profits of the grain trading
and processing TNCs would be a legitimate means of
partially financing the reconstruction of agriculture.
And unions should seek to implement the recent
decision of the IUF Executive Committee, which,
meeting in Geneva April 17 to 18, called for a
moratorium on the expansion of biofuel production
pending a full assessment of the social, employment
and environmental impact. Food rights - the right of
all to affordable nutritious food, and rights for
those who produce the world's food - must be at the
heart of global food policy. 


      ____________________________________________________________________________________
Be a better friend, newshound, and 
know-it-all with Yahoo! Mobile.  Try it now.  http://mobile.yahoo.com/;_ylt=Ahu06i62sR8HDtDypao8Wcj9tAcJ