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WORLD FOOD CRISIS

The real face of market capitalism

BY NIDIA DIAZ —Special for Granma International—

BEYOND the statistics, diagnoses and prognoses, the imminent food crisis that is about to hit the world, especially the poorest countries and the most vulnerable groups – as was to be expected – has exposed for all to see the real face of market capitalism, its unrelenting mechanisms, insatiable greed and operating methods subject to laws that invariably act against the least protected.
It is no longer a matter of apocalyptic warnings or slogans from a group of "rebels" attempting to disrupt the "sacred peace" of a world order established by the globalized and neoliberal capitalist system.
There are many reasons, certainly technically explicable, for humanity being pushed into such an abysm but , at the end of the day, every analysis leads to the conclusion that the inevitable laws of the capitalist market are causing the looming disaster.
International and regional agencies — the United Nations, the Food and Agriculture Organization (FAO), UNESCO, the Economic Commission for Latin American and the Caribbean (ECLAC) — have understood this to be the case, and have sounded the kind of alarm that in times past was only sounded by certain statespersons and researchers who have been alerting the world to this danger for decades, in a bipolar world where such claims and solid arguments served only to be described by the powerful as "communist threats."
Undoubtedly, certain factors have accelerated the crisis, such as the unstoppable increase in the price of oil and the consequent race to develop biofuels on an unprecedented scale, the trade war surrounding food, extremely high subsidies, the appearance of genetically modified seeds… All of this and much more are nothing more than part of the capitalist world's mechanisms.
Some commentators recall how deregulation and privatization in agriculture, together with the peak of globalization in the 1990s, led the World Trade Organization (WTO) to describe food reserves as a "market distortion," thus contributing to the domination of the market by transnational corporations, some of them with patent rights controlling planting methods and seed bioengineering.
The "opening up" of the agricultural sector by the WTO conceded financial domination over this extremely important industry — so closely tied to human survival — to transnational agribusinesses. As never before, food has become a for-profit enterprise, and the food and agricultural production process has become an even more lucrative and globalized business, in which land is to be exploited without any regulation whatsoever, until its resources are exhausted.
It is impossible to ignore that, according to figures from world food markets, a dozen key companies associated with 40 intermediate companies control the so-called "food chain,",with the most important link dominated by a handful of grain cartel transnationals: Cargill, Continental Grains (CGC), Archer Daniels Midland (ADM), Louis Dreyfus and Bunge & Born. Their domination is virtually complete in the grains market, from wheat to corn and oatmeal, including sorghum, barley and rye, to meat, milk products, oils and fats, fruit, vegetables, sugar and spices. Cargill, for example, exports 25% of all grains exported from the United States and is one of the most important businesses in the country with an $88 million income last year alone. Continental (CGC) specializes in cereals, poultry and beef, along with investments in securities, real estate and the purchase of business assets; ADM has focused on the biofuels business and almost half of its profits come from products subsidized by the U.S. government.
The dramatic reality, especially for the peoples of the Third World, is that the price of food has risen 45% in the last nine months, with the highest one-month increase in 20 years registered last December, according to FAO figures. The price of cereal grains increased by 41%, vegetable oils by 60% and dairy products head the list with an increase of 80%.
This trend appears to be accelerating, with the price of wheat this March reaching 130% of its cost at the same time last year.
In this context, Jacques Diouf, general director of the FAO, was particularly explicit during the group's last meeting in Brasilia, emphasizing that governments cannot put their confidence in market forces to counteract the skyrocketing cost of food and that clear political decision-making is needed to increase agricultural production.
Diouf attributed the price increases to "a group of factors;" among these he mentioned the role of speculators, who have been "looking for opportunities" in the raw materials and food markets.
As for Latin America and the Caribbean, the forecasts made by the United Nations Economic Commission for the region (ECLAC) couldn't be more terrifying. They predict an additional 15.7 million destitute people as a result of the price increases, without mentioning those who will pass into the category of poor. The Commission also states that there will be a worsening of the situation facing those living in extreme poverty before these increases.
Institutions that have shown no sensitivity to the needs of broad layers of the population, basically the poorest, have not been able to hide their alarm at predictions that the seriousness of the crisis may also have a "domino" effect on the capitalist system in its entirety.
This explains some of the statements recently made during the spring meeting of the International Monetary Fund and the World Bank which, on other occasions, have been less than credible. For example, they point to the cost of oil as a prime cause of the increases in food prices such as wheat and rice. The current president of the World Bank, U.S. Robert Zoellick went so far as to say: "While many (in the U.S.) are worrying about filling their gas tanks, many others around the world are struggling to fill their stomachs."
Confirming the expected failure to meet the UN Millennium Goals as a consequence of the world food crisis and price increases, IMF Director General Dominique Strauss-Khan described these latter as "a source of disequilibrium that has, in one blow, eliminated the progress made in the struggle against poverty."
What the IMF, the World Bank or any other institutional guardians of the world capitalist order cannot conceal, is that the food crisis - its causes and its consequences - have revealed, as have few other events, the very nature, the naked truth and the inequality of a predatory and exploitative system.