Understanding the food crisis

This e-debate was published by Engineers Against Poverty in their Current Views & News, No. 12 February 2009.

The price of food has risen dramatically in recent years creating a global crisis that has left millions more of the world’s most vulnerable people facing hunger and starvation. These developments, in the context of the international economic crisis, have the potential to reverse decades of progress in human development. But what are their causes and how can we improve food production in the global south to avert this crisis and prevent similar problems in the future? We asked Eric Holt Giménez, Executive Director of the Institute for Food and Development Policy in California, to debate the issues with Rob Lyons, writer and deputy editor of Spiked, the online news and commentary website.

Dear Rob

Food price inflation is a symptom of a system in crisis. The reasons given for spiraling prices include; droughts in major wheat-producing countries in 2005-06, low grain reserves; high oil prices; a doubling of per-capita meat consumption in some developing countries, the diversion of 5% of the world’s cereals to agrofuels, and a flood of speculative investment in commodity futures. These are only proximate causes of the food crisis itself. The root cause of the crisis is a global food system that is highly vulnerable to economic and environmental shock. This vulnerability springs from the risks, inequities and externalities inherent in national food systems that are globally dominated by an industrial agri-foods complex. Built over the past half century—largely with public funds for grain subsidies, foreign aid, and international agricultural research and development—the industrial agri-foods complex is made up of multinational grain traders, giant seed, chemical and fertilizer corporations, processors and global supermarket chains. Forty years ago, the global South had yearly trade surpluses in food of $7 billion. Today, after four “Development Decades” and the expansion of the industrial agrifoods complex, the southern food deficit has ballooned to US $11 billion/year. The rise of food deficits in the global South mirrors the rise of food surpluses and market expansion of the industrial North.

The destruction of Southern food systems occurred through a series of northern economic development projects: First the Green Revolution (1960-90) industrialized southern farm inputs leading to northern monopoly of seed and inputs, the loss of 90% of agrobiodiversity, and the displacement of millions of peasants to fragile hillsides, shrinking forests and urban slums. The Structural Adjustment Programs (SAPs) of the 1980s-90s imposed by the World Bank and the International Monetary Fund followed, dismantling marketing boards, price guarantees and entire research and extension systems, breaking down tariffs and flooding local markets with OECD countries’ subsidized grain. This tied southern food security to global markets dominated by the north. Regional Free Trade Agreements and World Trade Organization rules then cemented the SAPs into international treaties that overrode national law.

We need to address the proximate and root causes of the dysfunctional food system. Good first steps would be taking agriculture out of the WTO, a moratorium on renewable fuel targets in the north, regulating investment in commodity futures, and re-establishing national grain reserves. Then, policies and directed investment can re-build national food systems that support diverse, smallholder farming rather than global monopoly interests.
Eric

Dear Eric

I'm no fan of the free market; a system that is based on private profit will not always meet social need. But your diagnosis of the problem seems perverse at times and solutions would, I believe, make things worse.

First, we need to ask whether we are facing a technical problem of feeding the world. The answer is a resolute 'no'. The leaps in productivity we have experienced over the last few decades mean we are producing more and more. The green revolution, which you seem to dismiss as simply a con to hand more power to the industrialised North, helped to feed the world at a time when widespread starvation was assumed to be inevitable by many commentators like Paul Ehrlich. Whatever the cause of current food prices, it is not a lack of food per se.

Your list of the proximate causes of the current food price rises would seem about right. Agrofuels may well prove to be useful in the long run, but current technology, especially that based on American maize, means it is an expensive diversion at present. I would add that rising productivity has led, in recent years, to a decline in prices. As a result, there has been little incentive to invest in expanding production. In fact, a recent trend has been for the retirement of land from production, particularly in Europe and North America. This could be reversed if necessary, something that rising demand in China, India and other developing countries will encourage.

One of the major problems is not the trade in food, but the fact that the world market makes up such a small proportion of total food produced. Most food is produced and consumed domestically. There are relatively few exporters—the US is overwhelmingly dominant in this regard. So, far from a promotion of small-scale agriculture, we need a global shift towards the most advanced methods in farming so that the world is not so dependent on American surpluses. A drought here or a steady increase in demand there, should not cause such a disproportionate shift in prices.

In turn, we don't need food out of the WTO – we need a more thorough-going shift to real free trade. American and European protectionism is not in the interests of the developing world or consumers in the North.

In the circumstances, I probably sound like a raving free marketeer. But the promotion of trade and the application of the best technology to agriculture seems far preferable to the current small is-beautiful fad.
Rob

Dear Rob

Shortly after Paul Ehrlich (whose Malthusian population predictions never came to pass) wrote ‘The Population Bomb’, Amartya Sen—who lived through the Bengal famine of 1943—did his Nobel-prize winning work on famines. Basically, Sen found that people starve not because of lack of food, but because they are too poor to buy food. Sen’s findings are still true today. Sadly, small farmers make up most of the world’s poor. This is not, as you suggest, because they are incapable of high productivity. On the contrary, pound per acre they consistently out-produce industrial agriculture—when they have the land and the resources. Unfortunately, they have been displaced on to marginal lands, denied credit and fair prices, and can’t compete with the subsidies provided to northern agribusiness.

You are right, there is no food shortage. The U.N. estimates we have 1.5 times more than we need. And yes, over two decades, the Green Revolution increased food per capita by 11%. However, because it concentrated land and resources in fewer and fewer hands, the number of hungry people also increased by 11%. This was not the result of a lack of technology or global markets—the solutions you espouse - but due to the disenfranchisement of people from food–producing resources.

Industrial food production cannot be separated from industrial market power. Again, forty years ago the global South had yearly trade surpluses of $7 billion. Now they have a deficit of $11 billion. This trend parallels the rise of global “free” trade and the expansion of industrial technologies. It also correlates with the rise of agribusiness monopolies: The four largest agrochemical companies now control 60 percent of the world’s fertilizer. Monsanto controls three-fifths of seed production. In the last quarter of 2007—even as the world food crisis was spreading—earnings of grain giants Archer Daniels Midland and Cargill jumped 42% and 86%, respectively. Monsanto’s earnings increased 45%, and Mosaic Fertilizer’s profits rose 1200%. (On a roll, Monsanto just doubled the price of its Roundup Ready seed and obligatory glyphosate herbicide). Proprietary technology and market power have put a vise grip on the world’s food systems. Asking these monopolies to solve the food crisis is like asking an arsonist to put out the fire.

Einstein defined insanity as doing the same thing over and over again and expecting different results. Its time to stop to this agro-industrial/free trade madness.
Eric

Dear Eric

Amartya Sen is no doubt right. Small producers are motivated to make maximum use of every inch of their land within their means, and to apply as much labour—including that of their families—to eke out bigger returns. But my point was about labour productivity, and in the long run that is far more important to producing food on the huge scale a growing world population will need.

Very small farmers struggle to apply the kind of machinery, chemicals and all the other methods that make industrialized agriculture so productive. Every other sector of society has become more productive by specialisation and the division of labour. Why buck that trend for agriculture in the developing world?

Do you really want to promote small-scale agriculture? That seems like a recipe for keeping poor people poor. Without access to better technologies and the markets to sell their increased production, the best outcome would seem to be that such farmers manage to feed themselves with enough of a surplus to make a tough existence bearable. Where is the room in that picture for education, travel, leisure, healthcare—all the things we take for granted in the West? Small-scale farming is hardly an inspiring vision for the long-term and, with the vagaries of nature and food markets as they stand, it seems an insecure one, too. Marx, of all people, rightly praised capitalism for at least freeing people from the 'idiocy of rural life'.

That said, we need to start from where we are if a transition to an urbanized and more productive economy is to be made. That means fair markets for developing world farmers, as you suggest, and the means to access them. For the European Union, for example, to pay farmers to grow food, then pay them to export it, or even pay for farmers not to grow food, is both wasteful for European consumers and devastating to the poor in the South.

There are advantages to monopolies in certain situations, but not when they are in private hands. When profit is the ultimate arbiter, a monopoly allows a company to make its money by screwing over customers rather than through socially useful innovation. The situation regarding Monsanto, particularly in regard to GM technology, is particularly concerning. It may be time to repeat the lessons of Standard Oil or AT&T and break the company up.
All the best, Rob

Dear Rob

I suspected we were close on some points, and happily, that is the case. However, I cannot agree that the path to world food security is the wasteful, poisonous, energy and water-guzzling, GHG spewing, inequitable industrial agriculture you insist is "more productive." Neither do I accept that rural life need be a dead end or that total urbanization is inevitable or desirable.

The strategy you espouse has already failed in Africa. By abandoning smallholder agriculture African countries increased their urban population sevenfold. Two-thirds of urban Africans now live in slums. Despite decades of international aid, foreign direct investment and World Bank conditional loans, the industrial sector has stagnated at 30% of GDP since 1961. In the countryside, as larger-scale plantations expanded, smallholders were crowded onto smaller plots. Local food production plummeted and poverty grew. African countries spend 54% of their GDP on food imports, leaving them vulnerable to the global food price inflation that sparked the food crisis. The industrial transition did not slow population growth because it actually increased poverty and insecurity in both rural and urban areas. Africa's population growth is not the cause of its hunger crisis per se, but the result of poverty—brought on by the programmed destruction of African smallholder systems.

Regarding farm drudgery, there are many, many highly effective small-scale technologies and agroecological management techniques that significantly reduce the need for labor and chemicals in agriculture. It is large-scale monocrops that increase our food system's vulnerability to the hazards of climate change. Diverse, small-scale agroecosystems spread risk much more evenly and so are not only the planet's best hedge against droughts, floods and plain erratic weather, they will help cool the planet as well.

Half the world's people are hungry because they are poor. Three-fifths of the poor are farmers who have low incomes because they don't have enough land, access to water, roads, credit or fair treatment in the market. There is no work for them in the cities and no new industrial revolution for them on the horizon. If we don't improve their farming conditions we will not eradicate poverty or hunger. We need land reform, investment in rural schools, health, roads and yes, massive investment in smallholder agriculture if we are to get out of this mess. To solve the food crisis we need to transform the food system, democratizing it in favor of the poor. We need food sovereignty.
Best Eric

Dear Eric

Poverty is, indeed, the bottom line. But far too often these days, the problem of poverty is buried under discussion about the environment. 'Development' turns into 'sustainable development', which really means little or no development. Industrial agriculture is not the problem. It's the social system—capitalism—that ensures that most people do not benefit from the gains in productivity that arise from industrialisation.

Measures to increase productivity for small farmers would be beneficial. But such measures would hopefully be short-term, designed to get rural societies back on their feet so they have a chance to aim for something better. In recent years, a tendency to view 'intermediate' and 'appropriate' technology as an endpoint in itself—rather than a stepping stone to broader and fuller economic development—has set back the possibility of transforming these societies. I believe that environmentalism has further encouraged this backward outlook.

Farmers will embrace opportunities with little encouragement if given access to the tools they need and the economic incentive to produce as much as they can. Credit, subsidies for inputs and truly free trade would help a lot. Until someone replaces hydrocarbons as the principle source of energy, that means transporting things around the world and boosting production using artificial fertilisers and other chemicals—none of which fits into the usual notion of 'sustainable'.

The problems of capitalism have been magnified by the way in which the richest countries have exploited the poorest. It is undoubtedly the case that Africa has been the victim of one detrimental Western fashion after another, from attempts to fast-forward the continent into the modern world with one-off glamour projects that were disconnected from the wider economy, through savage cuts in public spending to repay loans, to 'debt relief' (often illusory) tied to 'conditionalities'. Poor countries don't just need food sovereignty - they need sovereignty, full stop.

Wealthy, broad-based economies provide the greatest security for their populations. That's what we have in the developed world and that is what is increasingly becoming true of previously very poor countries like China and India. It is an aspiration held by millions of Africans, too. Western intervention in the continent has ended up denying that aspiration. For me, only industrialisation, urbanisation and production on a global scale can bring an end to human need once and for all.
All the best, Rob
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