Debunking the food crisis

Food, Food, Everywhere - And Not a Crumb to Eat

The philanthropic folk singer, Harry Chapin, once noted the following:

?If you want to get into the nuts and bolts of the real world, a child is born: the first thing they need is air, we are fouling up our air but very few people are dying of asphyxiation; the second thing they need is liquid, very few people are dying of thirst; the third thing is food, there is enough food to feed everyone in this planet twice over why, why, why, are they going hungry??

Unlike the time when Chapin said these words, the so-called food crisis of the present is truly global in nature. The sharp increases in the price of staple foods have been felt around the globe, albeit with different effect. In the rich, industrial countries of the west it has been a minor inconvenience at best while in poorer countries it has become a major catastrophe.

According to recent reports, nearly a billion people are severely affected by the high cost of food. Yet the problem doesn't have to do with the simple economic equation of supply and demand. Indeed, these same reports note that while the cost of food has been rising sharply around the world there also has been a parallel increase in the amount of food being produced. According to the UN Food and Agriculture Organisation (FAO), despite record production in 2008 food prices are expected to remain high, cutting off access to commodities for the world's poorest people. From this, it's clear that the present food crisis has little to do with supply and demand and instead is mainly due to other influences such as ineffective trade policies, market speculation, and the rising cost of energy, namely oil.

A prime example of this sad state of affairs is the situation in Hungary. The economy of this Central European country was mainly based on agriculture as it has few natural resources. In fact, for the most part of the last two centuries it was considered the bread basket of the region; its high quality agricultural products were exported throughout Europe and beyond. Thanks to the past two decades of neo-liberalism, which has sought to turn Hungary into a logistics center for the movement of goods and services between east and west, this agricultural focus has been lost. As a result, rural communities lie in a dilapidated state and the country now imports most of its food. What it does export is often cheap commercial trash, as exemplified by the tainted paprika scandal of a few years ago.

As in the rest of the world, the global rise in food prices has hit Hungarian consumers hard. The paradox, however, hasn't been lost on most Hungarians. For years farmers have complained about cheap imports which have been putting them at a disadvantage. Unlike other European countries, such as France, Germany or The Netherlands, the government in Hungary has given little support to the agricultural sector. Indeed, many accuse the government of selling out the interests of its own rural communities for that of multinational companies which have sought to buy up cheap Hungarian land. As a result, the past few years have seen farmers en masse slaughtering their herds, digging up their orchards and vineyards, and allowing their fields to go barren since to make a living from agriculture has grown steadily difficult. At the same time, the price of food has been on the increase.

The present food crisis can't be attributed simply to the fact that the Chinese are drinking more milk and eating more meat

Sadly, this situation is not limited to Hungary but has been replicated in most, if not all, agricultural states around the globe. Yet what is even more frustrating is the government response to the paradox of rising food prices. In Hungary, for instance, when the price of milk suddenly skyrocketed the official explanation was that this was because the Chinese have begun to drink more milk. Of course, no mention was made of what happened to Hungary's dairy cows or why is it that the price of milk in Europe soars because consumers in China drink more milk.

As strange as it may seem, this is the line touted by neo-liberalists around the world to explain the present dilemma. The food crisis is not because there is something wrong with the way food is presently distributed but, as one pundit recently wrote in the Financial Times, "has come about as the result of the success of globalization in reducing world poverty." Along these lines, as China develops, helped by its massive exports to western markets, millions of Chinese households have started to eat better. Better in this sense means more meat, which is considered a new luxury. In turn, to produce a kilogram of meat it takes approximately 6 kilograms of wheat which, in part, explains the rise in wheat prices.

Such explanations are superfluous. The present food crisis can't be attributed simply to the fact that the Chinese are drinking more milk and eating more meat. Yet those who champion the cause of globalization insist that the remedy to high food prices is to increase food supply, this despite the fact that it has already been observed that food supply has increased. Nevertheless, neo-liberalist pundits argue that the most realistic way to raise global supply (hence the simplistic approach of supply and demand) is to replicate the Brazilian model of large, technologically sophisticated agro-companies supplying the world market. Accordingly, many areas of the world have good land that could be used far more productively if it were properly managed by large companies.

Again, Hungary provides as case in point of fallacious theories being put into practice. As a result of restrictive agricultural policies adopted by the government, many small land holders have been driven off their land. The government makes no secret of its intention: it feels that small land holdings are inefficient and a legacy of the past; if Hungary is to modernize and become a competitive player in the global arena it must move with the times. This means the consolidation of Hungary's agricultural sector into fewer but larger holdings which are more cost effective and productive than small individual holdings.

While all this may look fine on paper, the social implications of this are far-reaching. As an agricultural nation, Hungary has an extensive network of rural communities. The consolidation of the land into large holdings run by multinationals has led to the devastation of these communities. Many are ghost towns with no-one left but the dead and dying as young people leave to search for work in big towns and cities. Meanwhile, thanks to an insane highway construction program which seeks to carve up the country into tiny pieces, communities located near large urban centers such as Budapest have been transformed into mere suburbs of these large urban areas. This transformation, in turn, has led to severe environmental degradation thanks to unchecked urban sprawl.

All this fits into the Hungarian government's outlook for a "new" and "modern" Hungary. Indeed, some politicians regard small villages as relics of the past which must be destroyed as they have no place in a modern, European state. The chronic under funding of local governments to the point of bankruptcy and the reorganization of the country's large system of counties into a new system made up of handful of "regions" merely reinforce this outlook.

It goes without saying that in Hungary and other parts of the world where such transformations have taken place or are underway, there has been opposition. This opposition has often turned into open rebellion. China has been witness to many such rural rebellions; however, the state media has been careful to make sure that these uprisings have not made the headlines.

Still, the fact that such opposition exists has led those in support of globalization to lament that large-scale commercial agriculture is "unromantic". As the Financial Times pundit observed, "we laud the production style of the peasant: environmentally sustainable and human in scale. In respect of manufacturing and services, we grew out of this fantasy years ago, but in agriculture it continues to contaminate our policies. In Europe and Japan, huge public resources have been devoted to propping up small farms. The best to be said for these policies is that we can afford them." He goes on to note that in Africa, which can't afford them, development agencies have oriented efforts on agricultural development to peasant-style production. He adds that the result of this is that Africa has less large-scale commercial agriculture than it had fifty years ago.

Not everyone would regard this as a bad thing. Indeed, some would argue that where such small farms exist rural communities are actually prospering. Yet those who are intent on introducing the neo-liberalist social model throughout the world see the situation differently. They maintain that small scale or peasant style farming is not well suited to innovation and investment. Consequently, they argue that agriculture in Africa has fallen further behind the advancing productivity frontier of the commercial model. Moreover, with the increase in fertilizer and energy costs, they envision that production will likely decrease unless countered by subsidies and credit schemes, something that most nations in Africa can ill afford.

Hopeless Romantics

All this still doesn't adequately explain the present food crisis, however. Other aspects also come into play, such as what the land is actually used for. Bio-fuel, for example, has contributed much to the present state of affairs.

There is no denying the negative effect of bio-fuel on the agricultural sector. A hybrid beast of environmental romanticism and technological utopianism, there has been mounting evidence that bio-fuel production has diverted important resources (land, water, etc.) from the production of food to the production of energy. In many areas of the world, the notion of using food for energy is perverse. Yet in the US and the EU, fears of climate change have been manipulated by a shrewd intent on promoting this form of energy.

Likewise, the issue of genetically modified organisms (GMOs) has once again risen to the surface. Not only is it a factor in the production of bio-fuel, but the present food crisis itself is being manipulated by supporters of the technology. Their point is simple: GMOs can guarantee better yields and thus increase food production, thereby easing the strain of the present food crisis.

It's no secret that supporters of GMOs have been disappointed by the reaction of Europeans to the technology, a reaction that has had a domino effect in other parts of the world as well. As far as GMO exporters are concerned, they feel that Europe's fear of science have been manipulated by the agricultural lobby into yet another form of protectionism. Economists, meanwhile, contend that the ban on both the production and import of GMO crops has retarded productivity growth. Since the EU is a large agricultural producer, the consequences of this reduction in productivity growth have rebounded on the world food markets.

While supporters of GMOs attempt to pin the blame for the present food crisis on the Europe's resistance to the technology, the facts point elsewhere. For one, Europe's ban on GMOs has been in place for several years, long before food prices began their stellar rise. Not only this, over the past few years the ban on GMOs in Europe has eased much to the dismay of consumer groups. In other words, the rise in food prices has actually coincided with the increase in GMOs in Europe. Despite this, supporters of GMOs maintain that as an unintended side-effect of the EU ban African governments have been terrified into banning the technology lest they would be shut out from selling to European markets.

We don't need more globalization, but less of it.

At the end of the day, what is driving the global food crisis is nothing new. The problem today is the same as the problem of hunger in the days of Harry Chapin. It's not a question of whether there is enough food around or that the Chinese are eating and drinking more than before; rather, the problem lies in the distribution of what is being produced. This is further exacerbated by a global financial crisis which has pushed up commodity prices to newer heights. Thus, it's not just food which has seen prices rise, but everything from energy to minerals and natural materials such as wood.

Naturally, supporters of globalization and the neo-liberalist model of society view the situation differently. They feel that while the policies needed for the long term have been befuddled by romanticism, the short term global response has been pure beggar-thy-neighbor. "It is easier for urban slum dwellers to riot than farmers", writes the Financial Times pundit. "Riots need streets, not fields. And so in the internal tussles between the interests of poor consumers and poor producers, the interests of consumers have prevailed."

What such pundits fail to explain is after decades of liberalization and globalization which was supposed to bring prosperity for the majority, how is it that the vast majority of people are impoverished (as he writes, "the tussle between poor consumers and poor producers"). Perhaps this lies at the heart of the problem: we don't need more globalization, as such analysts argue, but less of it.

The notion that governments in grain-exporting countries have swung prices in favor of their consumers and against their farmers by banning exports, and that this type of response further politicizes and fragments the global food market is ludicrous. True, in countries such as Hungary governments have put the focus on urban consumers to the detriment of rural producers. Yet this was done in the interest in creating commercial-scale food production and securing market share for multinational food producers operating across national borders. Cheaper foreign imports were encouraged, thereby bankrupting small scale farmers. The upshot to all of this, therefore, has been the opposite: arable land has been used by multinationals for speculation, urban development, bio-fuel production, and agricultural production for cross border delivery which can't be equated with what is commonly understood as either export or trade.

In the end, Hungary has dismantled most of its facilities and factories related to agriculture and now imports most of its food. As consumers are now dependent on foreign imports as opposed to local produce, prices are no longer determined by local conditions but by market speculation. Unfortunately, this same process has been repeated elsewhere within Central and Eastern Europe, as well as other parts of the world.

Unless more attention is paid to local production, the global food crisis will linger, perhaps indefinitely. Yet like so many problems, the solution lies with consumers and not with politicians - most of whom are the cause of the present crisis anyway. One such solution is what is known as the "100 mile diet". The basis of this diet is that you only consume products that are produced within a 100 mile radius of where you live. The implications of this are that not only does it help to reduce a person's "carbon footprint"; it also helps to reinvigorate local communities and local culture.

Such notions may sound idealistic and naive. But so too are the notions of recycling and reducing emissions in order to avoid catastrophic climate change. Alas, only when there is an economic price tag associated with an issue do people begin to take such issues seriously. Considering that food prices are expected to rise further, there is hope for change yet.