Wednesday, February 27, 2008

I Hate to say I Told You So...

But I told you so. Or to be more accurate, everyone who cares more about people than profit told you so.

From a post in 2005 about biofuels:
Not only inefficient, but "a humanitarian and environmental disaster", says George Monbiot, presenting a chilling vision, in which "most of the arable surface of the planet will be deployed to produce food for cars, not people." He reminds us that markets respond to profit, not hunger. Those who need food the most are exactly the ones with the least amount of money to buy it, and so the monied person's car will always win out. He reminds us that even today, those who buy meat products have more purchasing power, so grain is fed to animals instead of to starving kids.

In 2006, when I blogged about the Global Food Supply Near the Breaking Point, the problem was overproduction and low commodity prices driving smaller farmers out.
"Many Canadian and U.S. farmers are going out of business because crop prices are at their lowest in nearly 100 years," Qualman said in an interview. "Farmers are told overproduction is to blame for the low prices they've been forced to accept in recent years."

However, most North American agribusiness corporations posted record profits in 2004. With only five major companies controlling the global grain market, there is a massive imbalance of power, he said.

Now, here we are in 2008, and the UN's food aid programme is in serious trouble, due to the astronomical increase in the price of food.
What is the problem?

In the three decades to 2005, world food prices fell by about three-quarters in inflation-adjusted terms, according to the Economist food prices index. Since then they have risen by 75%, with much of that coming in the past year. Wheat prices have doubled, while maize, soya and oilseeds are at record highs.

Why are food prices rising?

The booming world economy has driven up prices for all commodities. Changes in diets have also played a big part. Meat consumption in many countries has soared, pushing up demand for the grain needed by cattle. Demand for biofuels has also risen strongly. This year, for example, one third of the US maize crop will go to make biofuels*. Moreover, the gradual reform and liberalisation of agricultural subsidy programmes in the US and Europe have reduced the butter and grain mountains of yesteryear by eliminating overproduction.

*Note, because of the high cost of food, the "US, the biggest single food aid contributor, will radically cut the amount it gives away."

Again, I recognize that there are many problems with the food aid system, because it does nothing to help the economic structural problems that are to blame for hunger and malnutrition (food aid can in some cases even harm local food producers, say by undercutting them) but this is certainly not the answer.

1 comment:

Anonymous said...

Oh yeah. Let's not forget that the big companies control the markets and small farmers rely on working together in order to avoid getting crushed by the corps. And meanwhile, the Cons are trying to take the wheat boards away - which, if it goes through, means even more small producers will go under, as they will be forced to add sales and marketing to their already very full days.