The whys of famine

22 August 2011 by Esther Vivas

We live in a world of plenty. Today food is produced for 12,000 million people, according to the Organization of the United Nations Food and Agriculture (FAO), when the planet is inhabited by 7,000 people. There is food. So why is one of every seven people in the world going hungry?

The food emergency that affects over 10 million people in the Horn of Africa brings to light a disaster that has nothing natural about it. Droughts, floods, wars … serve to exacerbate a situation of extreme food vulnerability, but they are not the only factors that explain it.

The famine in the Horn of Africa is not new. Somalia has been experiencing a situation of food insecurity for 20 years. And, periodically, the media moves us from our comfortable sofas and reminds us of the dramatic impact of world hunger. In 1984, nearly one million people died in Ethiopia; in 1992, 300,000 Somalis died of hunger; in 2005, almost five million people were on the brink of death in Malawi, just to name a few examples.

Hunger is not inevitable, nor is it inevitable that it affects certain countries. The causes of hunger are political. Who controls the natural resources (land, water, seeds) that enable the production of food? Who benefits from agricultural and food policies? Today, food has become a commodity and its main function, to feed people has started to take second place.

One can point to the drought, with consequent loss of crops and livestock as a major trigger of famine in the Horn of Africa, but how is it that countries like the U.S. and Australia, which periodically suffered severe droughts, are not suffering from extreme hunger? Obviously, the weather can exacerbate food problems, but not enough to explain the causes of hunger. In regard to food production, control of natural resources is key to understanding why and for whom things are produced.

In many countries of the Horn of Africa, access to land is a scarce commodity. The purchase of large amounts of fertile land by foreign investors (agro-industry, governments, hedge funds Hedge funds Unlisted investment funds that exist for purposes of speculation and that seek high returns, make liberal use of derivatives, especially options, and frequently make use of leverage. The main hedge funds are independent of banks, although banks frequently have their own hedge funds. Hedge funds come under the category of shadow banking. …) has led to the expulsion of thousands of peasants from their lands, decreasing the ability of these countries to feed themselves. Thus, while the World Food Programme tries to feed millions of refugees in Sudan it is a paradox that foreign governments (Kuwait, UAE, Korea…) are buying land to produce and export food for their own populations.

We should also remember that Somalia, despite recurrent drought, was a self-sufficient in food production until the late seventies. Its food sovereignty was undermined in later decades. Since the eighties, the policies imposed by the IMF IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.
and World Bank World Bank
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

, so that the country will pay its debt to the Paris Club Paris Club This group of lender States was founded in 1956 and specializes in dealing with non-payment by developing countries.

, have forced the implementation of a set of structural adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

measures. With regard to agriculture, this implied a policy of trade liberalization and opening up of markets, allowing the massive influx of subsidised products like rice and wheat from North American and European multinational agribusinesses, who began to sell their products below their cost price — creating unfair competition for local producers. Periodic devaluations of the Somali currency also generated rising input prices and encouraging the production of monoculture Monoculture When one crop alone is cultivated. Many countries of the South have been induced to specialize in the production of a commodity for export (cotton, coffee, cocoa, groundnuts, tobacco, etc.) to procure hard currency for debt repayments. for export, steadily forcing peasants to abandon the land. There are similar tales not only in Africa, but also in Latin America and Asia.

The rising price of staple cereals is one of the elements identified as a trigger for famine in the Horn of Africa. In Somalia, the price of corn and red sorghum increased by 106% and 180% respectively in just one year. In Ethiopia, the cost of wheat rose by 85% over the previous year. In Kenya, maize reached a value 55% higher than 2010. These increases have made these basic staples inaccessible. But what are the reasons for the escalation of prices? Several signs point to financial speculation over food commodities Commodities The goods exchanged on the commodities market, traditionally raw materials such as metals and fuels, and cereals. as a major cause.

The price of food is determined by the stock exchanges, the most important of which, worldwide, is Chicago, while in Europe the food is sold in the futures Futures A futures contract is a standardized advance commitment, negotiated on an organized futures market, to deliver a specified quantity of a precisely defined underlying asset at a specified time – the ‘delivery date’ – and place. Futures contracts are the most widely traded financial instruments in the world. exchanges in London, Paris, Amsterdam and Frankfurt.

But today, most of the purchase and sale of these goods does not correspond to actual trade flows. In the words of Mike Masters, head of hedge funds at Masters Capital Management, 75% of financial investment in the agricultural sector is speculative. We buy and sell commodities in order to speculate with them and make profit Profit The positive gain yielded from a company’s activity. Net profit is profit after tax. Distributable profit is the part of the net profit which can be distributed to the shareholders. which is eventually reflected in higher prices for the consumer. The same banks, hedge funds, insurance companies, which caused the subprime mortgage Mortgage A loan made against property collateral. There are two sorts of mortgages:
1) the most common form where the property that the loan is used to purchase is used as the collateral;
2) a broader use of property to guarantee any loan: it is sufficient that the borrower possesses and engages the property as collateral.
crisis, are those who speculate with food today, taking advantage of a deep global market which is deregulated and highly profitable.

The global food crisis, and famine in the Horn of Africa in particular, are the result of food globalization in the service of private interests. The chain of production, distribution and consumption of food is in the hands of a few multinationals who put their individual interests before collective needs and over recent decades have eroded, with the support of international financial institutions, the ability the countries of the Global South to determine their agricultural and food policies.

Returning to the beginning, why is there hunger in a world of abundance? Food production has tripled since the sixties, while the global population has only doubled since then. We are facing not a problem of food production, but above all a problem of access to food. The UN reporter for the right to food, Olivier de Schutter, told El Pais: “Hunger is a political problem. It is a matter of social justice and redistribution policies.”

If we want to end hunger in the world it is urgent to implement different policies for food and for agriculture which put at their centre the need of people, those who work the land and the ecosystem. This is to achieve what the international movement Via Campesina calls “food sovereignty” and regain the ability to decide what we eat. Borrowing one of the most popular slogans of the Movement 15-M, what is necessary is a “real democracy, and” in agriculture and nutrition.

Article published in the Spanish newspaper El País, 30.07.2011.

Esther Vivas, Center for the Study of Social Movements at the University Pompeu Fabra, is the author of “From field to plate. The circuits of production and distribution of food”.

Esther Vivas

est née en 1975 à Sabadell (Etat espagnol). Elle est auteure de plusieurs livres et de publications sur les mouvements sociaux, la consommation responsable et le développement durable. Elle a publié en français En campagne contre la dette (Syllepse, 2008) et est coauteure des livres en espagnol Planeta indignado. Ocupando el futuro (2012), Resistencias globales. De Seattle a la crisis de Wall Street (2009) est coordinatrice des livres Supermarchés, non merci et Où va le commerce équitable ?, entre autres.
Elle a activement participé au mouvement anti-globalisation et anti-guerre à Barcelone, de même qu’elle a contribué à plusieurs éditions du Forum Social Mondial, du Forum Social Européen et du Forum Social Catalan. Elle travaille actuellement sur des questions comme la souveraineté alimentaire et le commerce équitable.
Elle est membre de la rédaction de la revue Viento Sur et elle collabore fréquemment avec des médias conventionnels tels que Público et avec des médias alternatifs comme El Viejo Topo, The Ecologist, Ecología Política, Diagonal, La Directa, entre autres.
Elle est également membre du Centre d’Études sur les Mouvements Sociaux (CEMS) à l’Université Pompeu Fabra.
@esthervivas | |

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