Our focus on the crisis in the Horn of Africa continues, as DiA blogger Laura Mason suggests that the famine which has left millions at risk of starvation cannot be attributed solely to environmental factors, but instead also reflects unfair global trading policies that have left southern countries short of food.
The global south is more susceptible to food crises than those in the richer global North. According to the UN, 98% of those who do not have enough to eat are located in just seven countries – Bangladesh, China, Democratic Republic of Congo, Ethiopia, India, Indonesia and Pakistan. There is a growing awareness amongst international charities, such as the World Development movement, War on Want and Oxfam, that the world food system is unjust and inappropriate for people in the global south.
Food prices are spiking – traditionally price spikes tended to be exclusively driven by unusual weather and natural events (droughts, floods etc). However, according to the website Foreign Policy, today’s price hikes are driven by forces that are both elevating demand and making it more difficult to increase production.
These forces include: a rapidly expanding population, temperature increases, food speculation, unfair trade rules, and the converting of food producing land to growing bio fuel crops. This also means the USA can no longer provide a surplus of grain in times of famine due to the amount of food producing land converted to growing bio fuels.
Rising prices are having a major effect on people in the global south. In Britain, families spend around 15% of their budget on food, but for the planets’ poorest two billion people, who spend between 50 and 70% of their income on food, these soaring prices may mean going from two meals a day to one. In particular, staple foods saw huge price rises between 2010 and 2011. According to the food and agricultural organisation of the United Nations, wheat prices increased by 98%, sugar by 48% and rice by 33%.
One of the major causes of these price spikes is banker’s speculation on the price of food. Speculating on the future prices of commodities such as grain can vastly inflate the price, making the market increasingly unstable. Speculation does not increase selling prices for farmers in the global south, only for big companies with economies of scale. These price rises are also more likely to affect poor people buying food, rather than those who sell it. Mike Masters, fund manager at Masters Capital Management, testified to the US Senate in 2008 that speculation was driving up global food prices, and that food prices are no longer linked to low stock levels or harvests: ” Most of the business is now speculation – I would say 70-80%.”
Masters says investment banks heavily distort the markets: “Let’s say news comes about bad crops and rain somewhere. Normally the price would rise about $1 [a bushel]. [But] when you have a 70-80% speculative market it goes up $2-3 to account for the extra costs. It adds to the volatility. It will end badly as all Wall Street fads do. It’s going to blow up.”
“People die from hunger while the banks make a killing from betting on food,” says Deborah Doane, director of the World Development Movement in London.
Many farmers in the global south are not able to grow sufficient food to feed themselves and their families, and instead rely on buying this increasingly expensive food. This is at least in part due to regulations created by international organisations such as the World Trade Organisation and International Monetary Fund. In return for development funds, the WTO and IMF required countries in the global south to accept free trade rules. This means these countries need to open up their economies, removing government subsidies such as tariffs and subsidies. They were encouraged to produce and export cash crops and palm oil so that they could pay off their debts and buy other goods from abroad. Due to the lack of import restrictions, their markets were flooded with cheaper goods from countries that retained their tariffs and controls in order to support their own companies. The monopolies of huge companies like Cargill, Con Agra, Unilever and giant supermarkets allow them to keep their selling prices low at the expense of producers. Ninety percent of the global grain trade is now controlled by just three companies – Cargill, Bunge and Archer Daniels Midland. This keeps farmers in the global south working for survival, unable to build up reserves of food or invest in more productive technologies. In particular, in the Horn of Africa, farmers had traditionally been pastoralist nomads, moving their animals to where the rain had been. In recent decades, however, vast areas of the pastoralist land in the Horn of Africa has been taken over by agriculture and large-scale commercial farms, especially within areas that had previously been reserved for times of drought.
Governments were forced to save money by withdrawing such supports to farmers as minimum price guarantees, central marketing boards, credit and technical assistance.
Deprived of the tools needed to manage their food stocks and production, two thirds of countries in the global south have been turned from producers of food into importers. Without agricultural support policies there is no buffer between the price shocks and the bellies of the poorest people on earth. Smaller farmers have been driven off their land by cheap EU and US imports, while grain reserves have been sold off to service their debts. Their food trade surplus of $1.9 billion in the 1970s was turned into a $17.6 billion deficit in 2000. Professor Calestros Juma of Harvard University estimates that while global food production had grown by 145% over the past 40 years, African food production has fallen by 10% since 1960.
Organisations including the World Development Movement argue that in order to ensure that everyone is properly fed, we need to create a just and sustainable global food system. In order to achieve this we can draw on a framework developed by food producers and organisation such as the global peasants movement La Via Campesina. This framework calls for food sovereignty and argues that food should be healthy and culturally appropriate, supporting diversified food production and highlighting that food is not a commodity, with local food taking precedence over producing food for foreign export. Ensuring that farmers have control over their land and are not pushed off so that they can use it in a sustainable way and pass on skills. Nepal, Senegal, Venezuela and Bolivia have made food sovereignty official government policy.
An example of government polices that have been created to ensure food sovereignty are those implemented in Malawi. According to Actionaid research, Malawi has put a decisive end to years of recurring famine, reducing the number of people requiring food aid from over 4.5 million in 2004 to less than 150,000 in 2009. This has been achieved through a combination of targeted input subsidies, public procurement and expanded social protection.
Genuine food sovereignty (allowing countries to fees themselves sustainably) requires structural changes at a national and international level. In particular it requires a just international trading system and an end to market orientated policies promoted by international institutions such as the IMF and World Bank.
The views expressed in this article are those of the author and do not necessarily represent the views of Development in Action.
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