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Friday, April 18, 2008

Food security

The United Nations warned recently of a "new face of hunger" - it no longer has enough money to keep global malnutrition at bay. Is this due to drought, pestilence or civil war ? No, it would appear that there is now a fifth apocalyptic horseman stalking the planet - a hike in the price of food.

Annual food price increases around the world of up to 40 percent accompanied by dramatic rises in fuel costs have stretched the already flimsy safety net of global capitalism to breaking point. Josette Sheeran, head of the UN's World Food Programme (WFP) earned his crust by identifying what might just turn out to be the problem: "There is food on shelves but people are priced out of the market". Not for the first time, capitalism appears to have made history of recent attempts to reform it.

It’s no longer just the countryside that is suffering: famine is coming to the cities of the third world. There is vulnerability in urban areas never seen before. Food riots have sparked recently even in countries with no history of such events, from Morocco to Mexico, Senegal to Uzbekistan. An increasingly globalised society appears to be presenting the same problems worldwide.

The cause of the price rises is complex but is in part due to increased demand for animal feed from increasingly prosperous populations in India and China, who have rising expectations of a "western" lifestyle. Climate change has also had a direct impact due to increased extreme weather events affecting productivity. Indirect climate change impacts include the use of more land and agricultural produce for biofuels rather than for food. Is a starving child factored into your carbon footprint calculation? No sooner does the market system start to try and solve one problem - making production of supposedly renewable biofuels profitable in order to address global warming - than it appears to create another problem.

Of course the hungry and malnourished have never actually been away. Famines are just the tip of the iceberg: even between the droughts and civil wars, fellow members of our species die needless deaths (usually before their 5th birthday) and in their thousands everyday. The exact figures are not known or recorded: the Tomb of the Unknown Famine Victim grows bigger by the minute.

It is clear now however that, for every death from hunger, there is no genuine technical cause. For every child's life that hangs in the balance, sufficient food has always been available within a matter of hours' - if not in some cases minutes' - distance. It’s not a logistical problem or a matter of distribution. Neither is it an error in the market: the system is operating as it is meant to.

But isn't the market meant to send signals between consumers and producers ? That's its claim to fame surely, that it efficiently lubricates supply and demand, matching the two. In reality the signal which the market often responds to is not one regarding supply and demand but the one identifying profitability. The entire edifice of the money system is not geared to satisfying the needs of the majority for even the simplest means of living, such as food. Instead the objective is nothing more or less than profit, and it is an objective shared by the small minority who own and control the means of producing wealth to the exclusion of the rest of us.

If you are an individual capitalist, why sell your entire warehouse of grain for a small profit per unit ? And just to watch the market price drop? Far better to make just as much profit by restricting the amount you sell, and keeping the price high, and make just as much profit, while keeping your stock levels up for making a killing during the next famine. The invisible hand of the market can send all the signals it wants, but there is often an invisible hand picking up a telephone to tell fellow capitalists to keep stuff back, restrict sales and keep prices up. This society offers little security - food or otherwise - except the security to make profit.

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