Food Crisis Symptom of Dubious Liberalisation
GENEVA - The high food prices that have sparked riots in many parts of the developing world — from Indonesia, India and Bangladesh to Cameroon, Cote d’Ivoire and Haiti — should come as no surprise. These are only the latest in a series of events many developing countries have suffered as a result of opening their borders and neglecting domestic agriculture.
A large number of developing countries have conscientiously implemented World Bank and International Monetary Fund (IMF) conditions and World Trade Organisation (WTO) commitments. They have applied the given structural adjustment policies — and have seen the damaging consequences to their domestic agricultural sector.
The consequence has been the certain erosion of their capacity to produce their own food.
In the era of stronger state control in the 1970s and even the early 1980s, domestic food markets in the developing world were often in the hands of state marketing boards and cooperatives. Marketing boards would guarantee floor prices, and provide fertilisers and seeds. They also controlled import volumes, redistributed food where there were production shortfalls, and purchased commodities from cooperatives.
These marketing boards were not always run in the best possible way; there were many instances of corruption or inefficiency, but they did fulfil certain critical functions. Farmers were provided a market to sell their produce to, which meant they had a livelihood. Prices were stable even though they were often lower than what farmers would have liked.
As a result of these policies, many developing countries were either net food exporters, or at least were nearly food self-sufficient.
All that has changed over the last 20 years. Investment support to farmers was done away with. Small farmers were told to produce for the international market, and their markets were opened to producers from outside. Rather than supporting staple crops, government support went to the export sector. Since all would specialise in the products where they had ‘comparative advantage’, gains were supposed to accrue all round.
But rather than producing winners, millions of the poorest subsistence farmers were knocked out of their own markets. Imports took over what was previously produced by local people. Over the last 20 years, the production capacity in many countries has severely diminished.
The Philippines has been one prime example of such policies. “During the 60s and 70s, we were self-sufficient,” Jowen Berber of Centro Saka, an NGO working on agrarian issues with farmers, told IPS. “That was the time that the government was heavily investing in rice — irrigation, infrastructure, marketing support and production support such as credits and inputs. But when the government stopped those incentives and subsidies, rice production slowly decreased.”
Berber said “the acreage of irrigated land has also been falling because the government has not been maintaining irrigation facilities. We also have a very high level of post-harvest losses in rice — up to 35 percent because our post-harvest facilities are very old.”
Instead of supporting farmers with guaranteed prices as before, Berber said “the government now intervenes to buy less than 1 percent of the domestic rice that is produced. They are buying more imported rice than our own local rice.”
A study on import surges by David Pingpoh and Joean Senahoun, commissioned by the UN’s Food and Agriculture Organisation (FAO) in 2006, noted that the Cameroon government support to the rice sector was removed in 1994 through implementation of IMF and World Bank policies. The fertiliser market was privatised. Rice yields of poor farmers dropped as fertilisers became unaffordable. Tariffs were liberalised, and annual rice imports doubled from 152,000 tonnes to 301,000 tonnes between 1999 and 2004.
This opening rendered the country vulnerable to the policies of other countries. At the time, India was de-stocking its rice surplus, and rice imports from India increased from 7,900 tonnes in 2001 to 60,300 tonnes in 2002. As a result of this import surge, rice farmers were hard hit, and many left the sector. Land for rice cultivation dropped 31.2 percent between 1999 and 2004.
According to the FAO, Cote d’Ivoire also saw imports flooding in when the market was opened up. As a result of implementing commitments at the WTO, Cote d’Ivoire removed import restrictions on key agricultural goods, particularly rice. Duty on all agricultural products was set at a maximum of 15 percent, except for 25 tariff lines.
As a result, rice imports increased at an annual rate of 6 percent from 470,000 tonnes to 715,000 tonnes between 1997 and 2004. Imports were mainly from Thailand, China and India. Domestic production dropped 40 percent over this period.
In Nepal, the civil society organisation ActionAid documents that rice import surges came in 1994, 1996 and 2000, with imports increasing by 175 percent, 55 percent and 800 percent respectively. From 24,500 tonnes imported in 1999, by the year 2000 imports had hit 195,000 tonnes. The porous borders between Nepal and India, and the Nepal-India Trade Treaty were widely seen as the cause of these surges. In certain areas of Nepal, domestic prices fell by nearly 20 percent. The southern belt bordering India saw a multitude of rice plants and rice mills shutting down.
Today, in the latest twist of events, food prices have increased due to global shortfalls. Food production has been redirected towards biofuel production. Drought in Australia has contributed to shortages on the world market. Speculators playing on commodity markets have further increased prices.
Up to 37 countries have been gripped by protests and riots. In Cameroon, seven people were killed in the unrest in February. Food riots also took hold of Abidjan in the Cote d’Ivoire in March this year.
At meetings in Berne in Switzerland to address the global food crisis, UN Secretary-General Ban Ki-Moon, World Bank president Robert Zollick and WTO director-general Pascal Lamy again made a plea for more free trade the panacea. But farmers remain unconvinced that more of the same policies that have contributed to the last two decades of destruction of agriculture can help.
Reacting to the push by the WTO leadership, the World Bank and the UN to stitch up the Doha Round so that further liberalisation can assist in resolving the food crisis, Henri Saragih, international coordinator of the global network of peasant farmers La Via Campesina writes, “Protecting food has become a crime under free trade rules. Protectionism has become a dirty word. Meanwhile, countries have become addicted to cheap food imports, and now that prices are shooting up, hunger is raising its ugly head.”
© 2008 Inter Press Service
“At meetings in Berne in Switzerland to address the global food crisis, UN Secretary-General Ban Ki-Moon, World Bank president Robert Zollick and WTO director-general Pascal Lamy again made a plea for more free trade the panacea.”
This in short describes the West’s attitude and contribution to the global food crisis. More free trade. We are capitalist whores.
The U.N., the World Bank and the WTO are tools of the capitalist West and do not have the interests of the developing world. Any suggestions they make needs to be thoroughly screened and analysed for infection !
As an aside, trade is a way for a particular region to extend its carrying capacity. For example, Japan now only produces 40% of the calories they consume. (Would it be possible for them to produce 100%? I don’t know. We do know that they were recently in a panic over inadequate food supplies–this happening in one of the richest nations on Earth.)
Importing petroleum from another era has been a way for us to over extend the global carrying capacity via industrial agriculture–cheap energy for irrigation, and transportation, and cheap feed stocks for fertilizer, herbicides, and pesticides. We are now beginning to see the starvation that is going to result from our former naivete about such matters.
joneden, Japan made a conscious choice to become dependent on global trade for 60% of its food, choosing to protect and develop its hi-tech industries instead of agriculture. Japan bought heavily into the Washington Concensus idea of specialization, the illusion that everyone benefits from this global inter-dependence of specialists. The problem with this of course is that the people lose their self-determination and become fodder for the global machine, the people take the hits for the machine, and buffer it against its very own instabilities. What is best for the people is something very difficult for the capitalists to get their death grip on: Local economic/political self-determination everywhere, land water and food rights for all, and much more.
The global movement Food Not Bombs is on the front lines of this crisis. At our U.S. National Gathering in Nashville our volunteers reported an increase in hunger in every community. Food Not Bombs is an all volunteer global movement that has been providing meals to thousands of people every week. We have over 1000 groups in the Americas, Europe, Africa, Asia, the Middle East and Australia. We have started a new movement “Food Not Lawns” to organize community gardens. We coordinated the food relief effort for Katrina, fed the Orange Revolution in the Ukraine and we are organizing to handle the current crisis. Visit our site to get involved. www.foodnotbombs.net
DUH ! Dollars and oil equals food !
And, “globalization” was designed from day one to enhance corporate interests from the developed world and make the developing world more dependent while forcing them into deeper debt. Just put the small producers around the world out of business.
Another major factor in the “food crisis” is the dollar devaluation due to the Federal Reserve putting huge sums of new money into the overall money supply is forcing developing nations to use their now devalued reserve currency American dollars to purchase commodities that are now priced according to current inflated dollar prices.
And developing world agriculture that usually operates without American style farm subsidies are now paying more for oil/gas products used to grow food if they are still able to produce.
But why have “they” created so much new funny money ?
The single most outstanding factor is deficit war spending . Even the “credit crunch” is a consequence of a loose money policy and corrupt regulation that was supposed to pump up an economy impacted by huge deficits.
And some may recall the Vietnam era war spending was followed by drastic inflation. No way to pay for the war, so they went off the gold standard and created floating currency.
Thus, we are all paying to subsidize the MIC and war crimes designed to privatize Iraq’s resources for American oil corporations.
Boycott Exxon for starters !
Or perhaps the peasants are ready for a Bastille Day ?
Words and music by Geddy Lee, Alex Lifeson, and Neil Peart:
There’s no bread, let them eat cake
There’s no end to what they’ll take
Flaunt the fruits of noble birth
Wash the salt into the earth
But they’re marching to Bastille day la guillotine will claim
Her bloody prize free the dungeons of the innocent
The King will kneel, and let his kingdom rise
Bloodstained velvet, dirty lace
Naked fear on every face
See them bow their heads to die
As we would bow as they rode by
And were marching to Bastille day la guillotine will claim
Her bloody prize sing, o’choirs of cacophony the King has kneeled, to let his kingdom rise
Lessons taught but never learned
All around us anger burns
Guide the future by the past
Long ago the mould was cast
For they marched up to Bastille day la guillotine — claimed
Her bloody prize hear the echoes of the centuries power isn’t
All that money buys.
JConrad as always hits the nail on the head.
Interesting Tidbits:
The ALBA Nations met in Nicaragua last week to discuss the growing world food crisis. They pointed out that Fidel had accurately predicted the problem when NAFTA was being discussed in 1994. The new ALBA Bank is making funds available to invest in small farmers and the local agriculture infrastructure.
Speaking of infrastructure, when I visited Cuba this spring, the nightly news kept reporting on the new irrigation tunnels being built in the Sierra Nuestra Mountains. They had been started in the early ’90s but were abandoned with the end of funds from the USSR.
Starting almost from scratch the system has been renovated and rebuilt. I believe it is finally operating after about 3 years of major effort by the government.
This is of interest on the BI, which has an ancient system of flumes and tunnels etc delivering water to most of the North Shoreline [AKA Hamakua] It too was basically abandoned in the early ’90s when the sugar mills closed. In the early 20th Century, new growers worked to get the state to put some money into getting the system up and running again. Eventually, they kind of did, with great loss thru leakage in the old reservoirs etc - but the money just isn’t there to invest in local agriculture. Then, it was shut down again by the earthquake in 2006.
It still is being operated on glue and rubber bands - if it were a plane, it would be flying on a wing and a prayer.
How can poor old Cuba, which we were are assured daily by the media is living in abject poverty, accomplish what we fail to do for all our wealth and ingenuity? Could it be because they invest in the people and country itself rather then outsourcing their wealth?
And, a funny about the falling dollar. When Ronaldo, the famous international soccer star accidentally hired 3 transvestites for a night of fun and games, they added insult to injury by insisting on getting their money in Brazilian Reals rather then US dollars.
Poor Uncle Sam - He gets no respect at all anymore!