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Food: Scoffing on profits
"Please sir, may I have some more?" It's not just Dickensian orphans who have to fight for the most basic staple - food. Billions around the world suffer from either malnourishment or obesity. Even in the 'advanced' capitalist countries, the profit system is incapable of providing people with a balanced diet. Iain Dalton looks at the effect of capitalism on food and socialist solutions.
Food prices soar
The lives of 18 million people in the Sahel region of west Africa are currently threatened by poor harvests and high food prices. In 2011 the United Nation's Food and Agriculture Organisation reported that world food prices were at the highest since tracking began in 1990.
In 2010 the World Bank estimated that around one billion of the world's seven billion population were malnourished. Every year six million children worldwide die of malnutrition before their fifth birthday.
In Britain, as austerity measures combined with rising prices, a record 129,000 people used food banks in 2011 showing how an increasing number have to choose between food and heat. Food prices in the UK increased by 26% between June 2007 and 2011 according to government figures.
One factor behind the current rocketing prices is the ongoing drought in the US. In a report sounding more like Sub-Saharan Africa than the US, the Guardian reported: "Some stalks are chin-high - but with no ears of corn. Others are as squat as pineapple fronds. Soy bean that should be spread out at knee-level barely graze the shin."
Roughly a third of the US is now officially a disaster zone. In July the National Climatic Data Centre found that 55% of the continental US was in moderate to extreme drought. Wildfires have broken out in Utah and Colorado.
The US government estimates that a third of corn and soy bean crop is in poor condition, but those on the ground suspect the devastation to be far worse. One farmer told the Guardian: "Some stuff technically is not going to be worth the combine bill to harvest it."
On 23 July, corn hit a record $8 a bushel, when in 2006 the price was $2. This will have a knock-on effect on milk and meat prices as corn is used in most animal feeds. It's reported that some farmers have resorted to feeding their livestock candy.
Livestock is being slaughtered because US farmers can't afford the higher costs of feeding them, horse shelters are taking in extra animals and there has been a 70% drop in sales of tractors and farm machinery in parts of the mid-west. One retailer commented: "We've even had guys putting the money down and letting the money go just so they can get out of their contracts."
This situation in the US follows the worst drought in Russia's Black Sea region in 130 years which sent prices of wheat spiralling. As climate change leads to greater occurrences of extreme climate events such as droughts, tsunamis and flooding, the devastating impact on food production will be felt.
With 40% of US corn being used in ethanol production a debate is heating up on the question of biofuels. Some states have reported that ethanol and bio-diesel plants are either cutting back or shutting down production temporarily. Countless summits have shown that pro-big business politicians are incapable of taking action against the powerful energy lobbies.
There are other factors that affect food prices. As the banks went into crisis in 2007-8, a wave of speculation developed on commodity futures, including foodstuffs such as sugar and cattle - their total value increasing from under $2 trillion in 2004 to $9 trillion in 2007. Big institutions which buy and hold goods over long periods started investing in the commodity bubble, not only increasing prices, but also cutting off supplies - principally to developing economies.
Speculators have again welcomed the latest crisis with massive bets on food prices. Their attitude to rising prices was summed up by one fund manager: "It's like a big money tap has been turned on" (Bloomberg 23 July).
But "not only do high food prices weigh heavily on the incomes of the poor, they lead to more political unrest around the world," as the Economist recently blurted out.
2008 saw food riots in West Africa, Haiti, Morocco, Bangladesh and the Philippines. After a general strike over bread prices in the Egyptian city of Malhalla, the army was ordered to bake and distribute subsidised bread to stop further protests occurring.
While Tunisia and Egypt were in the midst of revolutionary upheavals in early 2011, fuelled in part by soaring food prices, Algeria was buying up 800,000 tonnes of wheat and Indonesia 800,000 tonnes of rice - both ruling elites trying to prevent upheavals in their own countries too.
Yet this option to stave off upheavals is limited. Many countries have severely reduced their stockpiles of grain reserves, seeing them as unnecessary.
There are very real threats to food production, especially climate change, but the biggest is the way food is produced. While the food industry is controlled by private companies for profit and speculators control the prices, millions will continue to starve or suffer malnutrition. In the West, undernourishment in poor families is increasing while millions of others suffer health problems, such as obesity, due to highly processed, unhealthy but profitable foods.
The Socialist Party calls for food, like other production, to be democratically planned and controlled by workers and the poor in the interests of all. Once the capitalist profit motive has been removed it will be entirely possible to eradicate hunger.
Our demands include:
- Set up popular committees, including trade unions and consumer groups, to monitor prices and measure the real cost of living increases for working people
- Open the books of the big companies that dominate the food industry and economy, to determine their real costs, profits, executive pay and bonuses, etc
- Immediately raise the minimum wage to £8 an hour, with regular increases to cover price rises. Substantially increase pensions and other benefits to reflect the cost of living. Invest in a mass programme of job creation
- Nationalise the major agricultural, wholesale, retail and distribution companies, alongside the banks and financial institutions. Pay compensation only on the basis of proven need
- For major investment into researching and developing safe, alternative sources of renewable energy. Develop techniques to phase out ecologically harmful farming techniques
- Plan agricultural production and distribution to provide nutritious food for all in a sustainable manner rather than short-term profits for a few at the top
End market madness!
Ever had people tell you that socialism can't work? Or that planning can't work and the only way you can run an economy is by the 'hidden hand' of the markets?
When I worked in the Oven Fresh department of Morrisons it was very clear that they didn't leave making a profit to chance. We had plans of production that we drew up every day of how many of each product we would make based on recent sales figures, longer term trends in the industry as well as items that were on special offer.
We would have targets of what we would aim to sell that day, with the actual levels of items we produced being slightly higher in case of a surge in demand.
Linked to this we had a semi-automatic ordering mechanism to replenish stock. In the afternoon each day after we had cooked most of the products, we would take a stock count and the shortfall would be delivered the following morning.
But because our production was organised for profit, other things went out of the window - especially hygiene. Staff shortfalls on groceries and checkouts were made up by dragging staff away from hygiene and maintenance tasks. When we got new technology such as self-service checkouts this was seen as an excuse not to replace checkout staff that were leaving.
The big supermarket companies in Britain include Tesco, the country's biggest employer and most profitable company, yet staff in the supermarkets are still paid only a small amount above minimum wage and small suppliers are mercilessly squeezed.
The industry is crying out for being brought into public ownership democratically so that its wealth can be used to benefit all of society instead of a handful of the super rich.
The wealth exists to both ensure shops are fully staffed and pay all staff a living wage - such measures would remove much of the drudgery of working in retail.
New technology could be used to reduce the working week for all, with no loss of pay, to allow workers the time to take part in the running of the industry and society as a whole. On the basis of socialist planning whole new vistas of possibilities could open up that capitalist markets cut off.
Review: The Men Who Made Us Fat, BBC 4
The average weight of a person in Britain is three stone heavier than in the 1960s. Around two thirds of British adults are overweight and a quarter are obese, leading the NHS to spend £4.9 billion on dealing with obesity every year. These are that facts that Jacques Perreti starts out with in the three part documentary series 'The Men Who Made Us Fat'.
Peretti starts out in his quest to understand why these changes have taken place by posing the question - who is responsible? Is it the choices of individual people or those of governments and companies?
Peretti comes down hard on the decisions of governments and corporations over the past 40 years. He starts by examining the political situation in the early 1970s US which saw big increases in food prices, and the appointment of Earl Butz as Secretary of Agriculture in 1971 to propose solutions.
Butz encouraged the widespread production of commodity crops such as corn, calling for planting from 'fencerow to fencerow' and for farmers to 'get big or get out'. He also abolished government programmes designed to stop overproduction of corn and low prices.
To dispose of the new surplus, Butz championed a new product - high-fructose corn syrup - to replace sucrose (table sugar) as a sweetener. This changeover was further encouraged by the imposition of sugar tariffs and quotas in 1977. When Coca-Cola switched over to using corn syrup in 1984, it was a third cheaper than sugar.
Today corn syrup is in many processed products such as fizzy drinks, tomato ketchup, coleslaw and pizza toppings. Even burger baps in fast food restaurants are made with corn syrup to make them last longer.
This has a knock-on effect, as fructose is easily converted into fats and also suppresses the hormone Leptin, which gives you the feeling of being full. Peretti links both these factors with the increase in body fat and obesity.
Peretti gives several other examples of schemes to increase profits for food and drink companies such as increasing portion sizes and introducing snack foods. Yet capitalism doesn't deliberately seek to create unhealthy food. All goods and commodities have two types of value that matter to ordinary people - their usefulness and how much they cost.
So long as big business makes their profit, what goods are used for and how good they are at it, is largely irrelevant to them. Any changes to the product they are making matters only so much as it affects the profit.
But nutritionally this makes a huge difference. 'Supersizing' portions adds more calories, while replacing natural sugar with corn syrup increases fat intake massively.
Yet the standard line among food and drink industry spin doctors is that everything is a question of lifestyle choices and people not doing enough exercise to balance out the calories. At one point in the documentary we see a representative of the American Beverage Association contort her face into various grimaces as she tries to claim there is no link between soda drinks and obesity.
This has even been recognised by some companies. Cadbury's ran a promotion to collect a certain number of wrappers to exchange for sports equipment - a sort of weight-gain offsetting to complement companies carbon-offsetting in relation to the environment. This was quietly dropped when it was pointed out in the media just how much chocolate you would have to consume before you were ever able to claim any equipment.
Despite giving countless examples that demonstrate that the capitalist drive for maximising profit is responsible for the dominance of unhealthy food, Jacques Perretti concludes that a handful of men are to blame and that solutions on a capitalist basis, such as taxes on unhealthy food, are what's needed.
Yet as Richard Ayre, a former board member of the Food Standards Agency, pointed out: "For the last 20 years, politicians of all parties say they are not in favour of regulation..." Capitalist corporations will resist any attempt to put limits on their profits.
While large food companies are run to produce huge profits for a few at the top, it will continue to be at the expense of our health. As the programme points out, one of the key problems for people in trying to eat healthily is that the actual contents of food products are often hidden from us.
Outside the capitalist chase for profits, there are a number of ways which socialists would propose to deal with these issues.
A chain of low cost, healthy, publicly owned and democratically-run restaurants could be established, as the Bolsheviks attempted to do after the 1917 Russian Revolution. Preventative approaches to deal with obesity and other diet-related conditions could be organised through the NHS, including education initiatives such as free lessons in cooking healthy, nutritious food.
Crucially, a publicly owned and democratic food industry, with oversight committees involving nutritionists and consumers could exert control over what is put into our food, where it is sold and in what portion sizes.
In The Socialist 22 August 2012:
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