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From: The Socialist issue 524, 12 March 2008: End the occupation

Search site for keywords: Food - Economy - World economy - China - Brazil - Capitalism - Indonesia - Pakistan - Sri Lanka - Russia - Venezuela - Australia - Egypt - European Union - Latin America - Zimbabwe - Farmers - Mexico

World's poor hit by rocketing food prices...

...victims of global capitalism

ONE IN six of the world's population (854 million) do not have enough food to eat. Every year, despite the recent boom in the world economy, another four million are added to this total. Now the developing crisis in the world economy, combined with rising food prices, spells disaster for workers and poor around the world. Ken Douglas reports.

SINCE 2004 world food prices have doubled and agricultural prices have risen by about 50%. This is devastating for the two billion people worldwide who live on less than $2 a day.

In China last year, eggs and meat increased by almost 50%, food prices have gone up by 17% in Sri Lanka, 16% in Pakistan and Indonesia and 10% in Russia and Latin America. At their highest since records began, prices are still rising around the world and have triggered riots and protests in a number of countries.

There appear to be four main factors fuelling these price rises. Bad weather has been a major factor, with drought in India, Australia, Brazil and parts of China affecting soya and grain harvests, and pork production hit by rain in other parts of China. Flooding affected 57 countries in 2007 and devastated the harvests in Mozambique, Zambia and Malawi.

Rising demand for oil, raw materials and food as a result of the boom in India and particularly China, have also been a factor. Low production costs and low inflation in China had also helped keep prices down worldwide, but last month inflation hit an 11-year high of 7.1% and a former head of the Chinese central bank warned recently that the country was on the verge of "entrenched" inflation.

The rising cost of oil has made a major contribution, affecting the cost of production, transport and fertilisers. This is driving the switch to biofuel production, which is further exacerbating the grain shortages.

The US has increased the production of ethanol from corn from 1.6 billion gallons in 2000 to 5 billion gallons in 2006, with a target of 35 billion by 2017.

Huge swathes of rain forest are currently being axed in Brazil and Indonesia for biofuel crops. Both these factors have also fed into higher grain costs that are pushing up the cost of rearing livestock.

"We are seeing a new face of hunger in which people are being priced out of the food market" according to Josette Sheeran, executive director of the World Food Programme, the UN agency responsible for food aid. WFP is holding crisis talks as the demand for food aid is increasing at the same time as the rising costs and shortages are hitting food donations.


The price rises are a catastrophe for workers and poor people around the world. But they also present dangers for capitalist governments and the imperialist powers who have been the complete servants of the multinationals - the giant corporations that have prospered in the era of neo-liberal policies.

National governments, particularly in the neo-colonial countries still dominated by western powers, have very little power in the face of the huge multinationals that have prospered in the era of neo-liberal policies of super-exploitation.

In an attempt to ameliorate the worst effects, rationing has been reintroduced in Pakistan and extended in Egypt. Zimbabwe's president Robert Mugabe attempted to stop inflation by government decree but the shops simply emptied of goods.

Governments are also using up their stockpiles of food which are at the lowest levels for 35 years. However, these are stop-gap measures and the US Department of Agriculture has warned that the high prices could continue for at least the next two to three years.

Even in Venezuela, despite radical measures to keep the price of basic foodstuffs down, the president Hugo Chavez has failed to nationalise food production.

This has allowed the Venezuelan capitalists to create artificial shortages of basic foodstuffs which were an important factor in Chavez losing the recent referendum on constitutional change.

In November 2007, although 75% of Venezuelans thought that the employers were behind the shortages, by the week before the referendum at the beginning of December a majority were blaming government inefficiency and corruption.

Nevertheless, governments may come under pressure from protest movements to fix food prices and even nationalise some food production to cut across growing radicalisation. There have already been riots and mass protests in Mexico, Yemen, West Bengal, Senegal and Morocco. A general strike took place in Cameroon on 25 February sparked off by fuel price rises and the rising cost of palm oil and flour.

Production for need

The effects are also being felt in the advanced industrial countries. Pork farmers in Britain recently have demonstrated for subsidies, claiming that there is no point in rearing pigs. Employers and governments attempting to force through below-inflation pay deals will meet more resistance at a time of rising prices in the shops.

The central banks also face a dilemma in this situation. Normally they would use interest rate rises to limit people's spending to try and control inflation. But they are under pressure, due to the credit crunch and looming recession, to lower interest rates to make borrowing and credit cheaper. However, to do so risks further fuelling inflation.

There is no long-term solution under capitalism, because the over-riding interest of food manufacturers and distributors is profit. Even now the European Union, on behalf of big business, is still attempting to force through the European Partnership Agreement (EPA) on African countries, with the aim of further opening up their markets to European goods and destroying local production. Rising prices are then putting these goods out of reach of ordinary people.

Incredibly, speculators are now putting their funds into food commodities, further ramping up the price, because there is a profit to be made from the rising prices.

Companies producing genetically modified crops are also using the crisis to press for their increased use as a solution to the food shortages.

The working class and poor across the world are being forced to pay for this capitalist crisis. There is enough food in the world for everyone. It is the pursuit of profit that stops people having enough to eat.

Only the democratic ownership and control of agriculture and the food multinationals, along with a democratic plan of production and distribution, can ensure that everyone on the planet has a nutritious, healthy diet, based on sustainable food production.

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