Corporate profits = global hunger

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A handful of companies stand between millions of small farmers and millions of consumers in the food cycle

by Simon Butler
(Green Left Weekly, July 4, 2009)

Three years ago, a number of news outlets reported on a troubling first-ever occurrence. The world’s obese people outnumbered the world’s starving.

This wasn’t because hunger was becoming any less of a problem. In 2006, the United Nations Food and Agriculture Organisation (FAO) said some 873 million people were undernourished — or one in every seven people worldwide.

At the same time, more than 1 billion people were very overweight — a result of sugar-laden, high-fat diets, increasingly inactive lifestyles and relentless corporate advertising.

This bizarre paradox was the starting point for Raj Patel’s investigation of the world food system in his groundbreaking 2006 book Stuffed and Starved.

In the poverty-stricken global South, the poorest cannot afford to feed themselves. In the West, more people are stuffed with highly processed and unhealthy fast-foods favoured by the big food companies.

In both cases, record numbers of people are malnourished — even those overfed.

The figures were a striking example of the utter insanity of the world’s food system. Food should be treated as a human right.

Yet, this goal is unachievable as long as food production is controlled by giant corporations and world food prices are set artificially high by agricultural monopolies and commodity traders.

The same market-based food system that condemns so many to starvation also wastes an immense amount of food. In a February report, the United Nations Food Programme (UNEP) put food waste and losses in the United States at around 40-50% of the total.

It estimated around 25% of fresh fruits and vegetables are lost in transport between the field and households.

The report also estimated food waste makes up almost half of Australia’s landfill. In Britain, close to one-third of all food bought is thrown away.

UNEP executive director Adam Steiner said more than half of all food produced is either lost wasted or discarded. This amount “could feed the entire projected population growth alone by becoming more efficient while also ensuring the survival of wild animals, birds and fish on this planet.”

Things have changed since 2006, but not for the better.

Figures for the world’s starving have now caught up with the overweight in the wake of the 2007-08 food crisis caused by skyrocketing prices and the global economic crisis.

The FAO projects that 1.02 billion people will not get enough to eat in 2009 — an 11% rise in a year. One in six people worldwide will be undernourished by the year’s end.

When the world’s richest nations met at the G20 summit in April to work out a “rescue plan” for the world economy, the outcome for the world’s hungry was predictably underwhelming. Some US$1.1 trillion of taxpayers money was found by governments to stabilise the financial system.

At the same summit, US President Barack Obama announced the US would grant $1 billion to programs to assist agricultural development in the global South.

The world’s hungry got less than one-tenth of a percent of what the banks got.

Hunger is up despite record global harvests. On June 4, the FAO said world cereals crop will be the second biggest ever-recorded, just below the highest-ever yield last year.

Yet two bumper crops in a row have not led to a matching fall in food prices. After record price hikes from 2006-08, international food prices are still 33% higher than 2005, the FAO said.

It also noted that in the poorest countries, food prices are relatively higher again.

The global economic crisis is worsening the hunger crisis. Incomes are down due to higher unemployment and a drop in remittances sent back home from people working in the developed world.

But its root cause lies even deeper.

The food market is highly concentrated. A few big firms dominate the market in most food industries. More than 80% of the beef-packing industry is controlled by four transnational companies.

Four companies control 60% of flour milling. Six control 85% of the world grain trade. Three control 80% of banana production and another three have 83% of the world’s cocoa sewn-up.

Patel describes this as a global “food bottleneck.” A small number of companies stand between millions of small farmers and millions of consumers in the food cycle.

This gives the agribusiness giants enormous power to set artificially low prices for the food they purchase from farmers, and set artificially high prices to sell the same food to consumers.

The same companies exert huge control over the trade policies of First World governments and institutions like the International Monetary Fund, World Bank and World Trade Organisation.

Finally, just like sub-prime mortgages, global food prices fall victim to financial speculators trading in “commodity futures.” Indeed, the recent “food crisis” was not a result of a food shortage. Prices skyrocketed mostly because panicked dealers shifted trillions out of collapsing mortgage bonds into the food commodity market throughout 2008 in search of quick returns.

Mass starvation, immense waste and unhealthy food is the horrifying fallout of 21st century capitalism. But it’s great for business.