Behind the crisis

Food riots in Haiti and Egypt, dire warnings about rocketing food prices – the world is in the midst of a food crisis. Why is this happening? Christian Aid policy manager Alex Cobham explains that much of the problem is of the West’s making.

The food crisis facing many poor countries does not come as a surprise.

Christian Aid has long warned that the doctrinaire imposition of market liberalisation on developing countries has left the poorest farmers without financial or marketing support, and this has seriously threatened staple food yields.

‘The poor are the first to suffer from climate change, and equally from soaring food prices.’

Vulnerable

The poorest people in developing countries have been increasingly forced to rely on imports, which are extremely vulnerable to fluctuating global economic conditions.

Much of recent debate over the food crisis has been polarised into a choice between saving the planet by growing biofuels and feeding the world’s people by growing food.

It is not that simple.

The poor are the first to suffer from climate change, and equally from soaring food prices. Both problems need to be tackled urgently, but more intelligently – and recognising that they are both human development issues above all.

Alex James hears about rising food prices in Burkina Faso. Click on image below and press play to watch video.

Speculation

There are indeed short-term reasons for prices nearing historic highs in staples such as rice, soybeans, corn and wheat. These include the commodity price boom, which may partly have been fuelled by futures speculation.

Rising consumption in some parts of the developing world, such as China and India, as well as more and more land being turned over to biofuels production, has also contributed to the problem.

But the key underlying factors are structural.

No protection

Aggressive market liberalisation policies imposed on poorer countries by rich countries, the International Monetary Fund and the World Bank, have left many of the world’s poorest men and women exposed to violent swings in market conditions.

And they face these swings without any of the institutional structures that protect food producers in richer countries.

The structures that were dismantled did not always function perfectly – from food marketing boards to keep agricultural producer prices stable, to state banks that supplied credit to small-scale rural farmers.

Stability

But when they were dismantled or privatised, nothing was left behind - except volatile market prices and little or no private credit facilities.

Christian Aid analysis shows that stable and secure markets are essential to increase staple food yields, and collective farmer organisations can help marginal producers get their goods to market.

Subsidised food production by rich countries that were immune from pressure to liberalise has undercut producers in the developing world and left them reliant on imports – despite potentially lower costs of domestic production.

The recent shift in subsidies to biofuel production has brought a sudden end to much of the related food dumping, at a time when domestic production in many countries is on its knees.

Climate change

Finally, a year of extreme weather events linked to El Nino and La Nina have made food production more volatile.

Prospery Raymond, Christian Aid’s representative in Haiti, where five people have died in food riots, notes that Hurricane Dean and Tropical Storm Noel destroyed much of the bean crop last year, leading to a shortage of seed this year.

At the same time, a cup of imported US rice – that previously undercut and decimated domestic production – now costs about one-and-a-half times what the average worker makes in a day. The majority who are unemployed are even more desperate.

Responsibility

Those who bear responsibility for, and have reaped the benefits of, the skewed version of globalisation that exists, must recognise that the structures they have imposed are ultimately responsible for this crisis.

There will be other crises to follow if they do not put human development and security at the heart of their agenda, recognising that free markets can sometimes be an instrument for this, but should never again be pursued as a goal in their own right.

source: http://www.christianaid.org.uk/issues/lifeonthemargins/stories/rising_food_prices.aspx