The global food price crisis - a critique of orthodox perspectives

10 July 2009 by Walden Bello


Capitalist industrial agriculture, with its wrenching destabilisation and transformation of land, nature, and social relations is responsible for today’s food crises, argues Walden Bello.

In an extract from his forthcoming book Food Wars, Walden Bello critiques the orthodox views of economist Paul Collier on the global food price crisis. Collier argues that not enough food was produced to meet increased demand from Asia, thanks to a failure to promote commercial farming in Africa, the European Union ban against GMOs and the diversion of American grain to biofuels production.

Bello counters that a globalised system of production has ’created severe strains on the environment’, ’marginalised large numbers of people from the market, and contributed to greater poverty and greater income disparities within countries and globally’. Defenders of peasant agriculture, says Bello, blame ’capitalist industrial agriculture, with its wrenching destabilisation and transformation of land, nature, and social relations’ for today’s food crises, with ’rates of 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. determining where investment will be allocated’ rather than the desire to satisfy ’the real needs of the global majority’.

Perhaps the most influential orthodox view on the causes, dynamics, and solution to the food price crisis was provided by Oxford University economist Paul Collier in an article that came out in Foreign Affairs [1] Collier, author of the controversial The Bottom Billion [2], asserted that the food price crisis stemmed from the increased demand for food in Asia, brought on by prosperity that was not matched on the supply side owing to three problems: The failure to promote commercial farming, especially in Africa, the ban against genetically modified organisms Genetically Modified Organisms
GMO
Living organisms (plant or animal) which have undergone genetic manipulation in order to modify their characteristics, usually to make them resistant to a herbicide or pesticide. In 2000, GMOs were planted over more than 40 million hectares, three quarters of that being soybeans and maize. The main countries involved in this production are the USA, Argentina and Canada. Genetically modified plants are usually produced intensively for cattle fodder for the rich countries. Their existence raises three problems.


- The health problem. Apart from the presence of new genes whose effects are not always known, resistance to a herbicide implies that the producer will be increasing use of the herbicide. GMO products (especially American soybeans) end up gorged with herbicide whose effects on human health are unknown. Furthermore, to incorporate a new gene, it is associated with an antibiotic-resistant gene. Healthy cells are heavily exposed to the herbicide and the whole is cultivated in a solution with this antibiotic so that only the modified cells are conserved.


- The legal problem. GMOs are only being developed on the initiative of big agro-business transnationals like Monsanto, who are after the royalties on related patents. They thrust aggressively forward, forcing their way through legislation that is inadequate to deal with these new issues. Farmers then become dependent on these firms. States protect themselves as best they can, but often go along with the firms, and are completely at a loss when seed thought not to have been tampered with is found to contain GMOs. Thus, genetically modified rape seed was destroyed in the north of France in May 2000 (Advanta Seeds). Genetically modified maize on 2600 ha in the southern French department of Lot et Garonne was not destroyed in June 2000 (Golden Harvest). Taco Bell corn biscuits were withdrawn from distribution in the USA in October 2000 (Aventis). Furthermore, when the European Parliament voted on the recommendation of 12/4/2000, an amendment outlining the producers’ responsibilities was rejected.


- The food problem. GMOs are not needed in the North where there is already a problem of over-production and where a more wholesome, environmentally friendly agriculture needs to be promoted. They are also useless to the South, which cannot afford such expensive seed and the pesticides that go with it, and where it could completely disrupt traditional production. It is clear, as is borne out by the FAO, that hunger in the world is not due to insufficient production.

For more information see Grain’s website : https://www.grain.org/.
(GMOs) in the European Union (EU), and the diversion of around a third of American grain to the production of ethanol instead of food.

In the 1980s and 1990s, it was widely acknowledged that the world had enough food to feed some seven or eight billion and that hunger and malnutrition stemmed from unequal income distribution that translated into unequal access to food. By the turn of the millennium, the problem had become one of production. However, Collier’s diagnosis of the supply constraints left much to be desired. The diversion of corn to agro-fuel production was one cause that was certainly incontrovertible, but the other two factors he identified - the European ban on GMOs and the restraints placed on the growth of commercial agriculture - were questionable.

Collier’s identifying Europe’s GMO ban - now eased, incidentally - as a key constraint on production is disingenuous. The main problem with European agricultural production has, in fact, been overproduction and dumping brought about by heavy subsidisation. He adds though, that he is concerned about the ban’s impact on Africa’s farmers, discouraging them from engaging in genetically engineered agriculture owing to fears of their exports being banned from entering Europe. A ’New Green Revolution’ based on genetic engineering (GE) is necessary, says Collier, because the productivity of African agriculture is so low, having missed the first Green Revolution in the 1960s and 1970s.

Collier’s attributing African agriculture’s problems mainly to the lack of a GE-inspired miracle is idiosyncratic, to say the least. Moreover, his dismissal of concerns about GMO-based agriculture is cavalier, implying an unscientific stance among those critical of a GE transformation of agriculture. He fails to appreciate that the stance of critics of GE is a legacy of the well known negative ecological and social impacts that accompanied the first, chemical-intensive Green Revolution. Moreover, he fails to recognise that the fears about GE are not abstract but are concerns that are well-grounded empirically.

Proponents of GMOs have not been able to alleviate worries that transgenic foods have the potential for creating unexpected reactions in humans unless these foods, which have never been seen before and thus not selected for human consumption by eons of evolution, are tested rigorously in accordance with the universally recognised precautionary principle. Neither have they been able to allay worries that non-target populations might be negatively affected by genetic modification aimed at specific pests, as in the case of Bt corn’s impact on the monarch butterfly. Nor have they dispelled the very real threat of loss of biodiversity posed by GMOs. The risks are hardly trifling, as noted by one account:

The effects of transgenic crops on biodiversity far extend the concerns already raised by monocropping under the Green Revolution. Not only is diversity decreased through the physical loss of species, but because of its ’live’ aspect, it has the potential to contaminate, and potentially to dominate, other strains of the same species. While this may be a limited concern with respect to the contamination of another commercial crop, it is significantly more worrisome when it could contaminate and eradicate generations of evolution of diverse and subtly differentiated strains of a single crop, such as the recently discovered transgenic contamination of landraces of indigenous corn in Mexico. [3]

Collier’s advocacy of GE is, in fact, out of line with even orthodox expert opinion at this point. The recently released International Assessment of Agricultural Knowledge, Science, and Technology for Development (IAASTD) - sponsored and funded by, among others, United Nations (UN) agencies, the World Bank World Bank
WB
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.

, and other institutions - failed to endorse GM crops, choosing instead to highlight the lingering doubts and uncertainties regarding their ecological and health impacts. [4]

Collier’s promotion of an African Green Revolution powered by genetic engineering is linked to his third contention - that it has been the non-development of commercial agriculture in Africa that has been responsible for the failure of supply to keep up with continental demand. Instead, ’over the past 40 years, African governments have worked to scale back large commercial agriculture. [5] For Collier, the solution to Africa’s food shortages are commercial agricultural farms employing genetically modified seeds. Further, peasant agriculture is part of the problem. Peasants, he says, are not entrepreneurs or innovators, being too concerned with their food security. Peasants would rather have jobs rather than be entrepreneurs, for which only a few people are fit. The most capable of fitting the role of innovative entrepreneurs are commercial farming operations:

’[Re]luctant peasants are right: Their mode of production is ill-suited to modern agricultural production, in which scale is helpful. In modern agriculture, technology is fast-evolving, investment is lumpy, the private provision of transportation infrastructure is necessary to counter the lack of its public provision, consumer food chains are fast-changing and best met by integrated marketing chains, and regulatory standards are rising toward the holy grail of traceability of produce back to its source. [6]

Collier’s account has, at least, the merit of posing starkly a choice between peasant and small farmer-based agriculture and industrial agriculture as the solution to the world’s food needs. However, his choice, the ’Brazilian model’ of industrial agriculture, is not exactly one that would elicit enthusiasm, being a model identified with having placed tremendous stresses on the environment. Moreover, the Brazilian agro-enterprise is part of a larger system of global industrial agriculture, marked by large agribusiness that combines, monopolistic trading Market activities
trading
Buying and selling of financial instruments such as shares, futures, derivatives, options, and warrants conducted in the hope of making a short-term profit.
companies, long-distance transportation of food, and supermarkets, catering largely to the global elite and upper middle class.

This globalised system of production has created severe strains on the environment, effectively marginalised large numbers of people from the market, and contributed to greater poverty and greater income disparities within countries and globally. The Brazilian model is part of the problem but Collier’s awareness of the model’s systemic flaws only comes when he notes that some ’have criticised the Brazilian model for displacing peoples and destroying the rain forest, which has indeed happened in places where commercialism has gone unregulated. [7]

But what is most astounding in Collier’s account is the absence of any reference to externally imposed policies that severely weakened agricultural capacity in a wide swath of developing countries and transitional economies. He notes that part of the problem in Africa has been the breaking down of publicly funded research stations that was part of a ’more widespread malfunctioning of the public sector.’ But he fails to point out that this breakdown was due to the International Monetary Fund 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.

http://imf.org
(IMF) and World Bank’s 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).

IMF : http://www.worldbank.org/
policies (SAPs) that systematically starved agriculture of state support. In October 2008, a report by an independent evaluation team of the World Bank simply confirmed what others had pointed out for two decades:

’Bank policies in the 1980s and 1990s that pushed African governments to cut or eliminate fertiliser subsidies, de-control prices and privatise may have improved fiscal discipline but did not accomplish much for food production. It had been expected that higher prices for crops would give farmers an incentive to grow more, while competition among private traders reduced the costs of seeds and fertiliser. But those market forces often failed to work as hoped. [8]

There was a link between the Brazilian model and SAPs. Both were central elements of a capitalist transformation of agriculture that was intended to integrate local food systems via trade liberalisation, into a global system that is marked by a division of labour that would allegedly result in greater efficiency and greater prosperity in the aggregate. Collier fails to see that SAPs were the cutting edge of this process by seeking to supplant peasant producers with capitalist entrepreneurs who are producing not just for local but for global markets as one step towards large-scale globally integrated capitalist industrial agriculture.

Death of the peasantry?

As for his put-down of peasants and small farmers, Collier is not unique. Many analysts share Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. his view, some of them with progressive credentials. In his acclaimed 1994 book The Age of Extremes, Eric Hobsbawm wrote that ’the death of the peasantry’ was ’the most dramatic and far-reaching social change of the second half of this century,’ one that cut ’us off forever from the world of the past. [9]

Hobsbawm’s proclamation of their death as a class struck many as premature since as he himself noted, ’Admittedly... regions of peasant dominance still represented half the human race at the end of our period. [10] Yet Hobsbawm’s views have a respectable pedigree. Marx himself compared peasants to a ’sack of potatoes’ with little real solidarity and even less class consciousness, and thus destined for the ash heap of history.

Yet peasants have refused to die and go gently into that good night to which Collier, Hobsbawm, and Marx have consigned them. Indeed, one year before Hobsbawm’s book was published, Via Campesina was founded in 1993, and over the next decade this federation of peasants and small farmers would become an influential actor on the agriculture and trade scene globally. The spirit of internationalism and active identification of one’s class interests with the universal interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. of society that was once a prominent feature of workers’ movement is now on display in the international peasant movement.

Certainly, de-peasantisation and de-agrarianisation have greatly advanced with globalisation, with local self-subsistence production no longer, in many places, the escape that it usually provided for peasants who are caught up in market relations. Summing up a research on ’disappearing’ peasantries, Deborah Bryceson writes that under conditions of rapid globalisation and neglected peasant hinterlands, peasants crossing international borders now provide a massive supply of labour for global capital. Although psychologically, many of these peasants still have the notion of a piece of land as a fallback in times of need, in fact, ’as a class, they face proletarianisation by the force of global commodity and labour markets combined with government indifference. [11]

Yet the belief that the land is waiting, as a refuge of last resort, continues to persist among many peasants-turned-workers, among them those rural migrants in China who are returning en masse to the countryside as factories close owing to the spreading global recession. [12]Indeed, peasants continue to show an extraordinary persistence to survive as a class, and perhaps nothing underlines this more than Mexican peasants who continue to plant corn for subsistence despite their having been priced out of the market by imported corn dumped by the United States. In other areas, small farmers have confounded those who have preached their demise by showing that labour-intensive small farms can be far more productive than big farms. To cite just one well known study, a World Bank report on agriculture in Argentina, Brazil, Chile, Colombia and Ecuador showed that small farms were three to 14 times more productive per acre than the large farms. [13]

Perhaps the most significant recent development in the long struggle of the peasants as a class has been their organising internationally to protect their interests from the steamroller of industrial capitalist agriculture. Via Campesina - translated as the ’Peasant Way’ - has not only been effective in mounting opposition to the World Trade Organisation WTO
World Trade Organisation
The WTO, founded on 1st January 1995, replaced the General Agreement on Trade and Tariffs (GATT). The main innovation is that the WTO enjoys the status of an international organization. Its role is to ensure that no member States adopt any kind of protectionism whatsoever, in order to accelerate the liberalization global trading and to facilitate the strategies of the multinationals. It has an international court (the Dispute Settlement Body) which judges any alleged violations of its founding text drawn up in Marrakesh.

(WTO); it has also offered an alternative paradigm for agricultural development called ’food sovereignty’. The analysis and appeal of groups like Via Campesina resonate widely because the ability of capital to absorb labour is so limited under the conditions of inequitable globalisation that in recent years, there has been a return to the countryside of significant numbers of both ex-peasants and semi-proletarians, such as the ex-urban dwellers that have driven the land occupations of the Movimento dos Trabalhadores Rurais Sem Terra or Movement of the Landless (MST) in Brazil.

Indeed, not only in the South but also in the North, one witnesses farmers and others who seek to escape the dependency on capital by reproducing the peasant condition, where one works with nature from a limited resource base to create a condition of autonomy from the forces of capital and the market. The emergence of urban agriculture, the creation of networks linking consumers to farmers within a given region, the rise of new militant movements for land - all these, according to Jan van der Ploeg, indicate a movement of ’repeasantisation’ that has been created by the negative dynamics of ’Empire’ and seeks to reverse them. Under the conditions of the deep crisis of globalisation, which is felt widely as a loss of autonomy, ’the peasant principle, with its focus on the construction of an autonomous and self governed resource base, clearly specifies the way forward. [14]

Production paradigms in conflict

Romanticism, says Collier, is at the root of the increased salience of small-scale agriculture as an alternative to globalised farming in progressive circles. In this he is joined by some intellectuals of the left like Henry Bernstein, who refers to partisans of the new peasant movements as the ’new populists’, implying their similarity to the Narodniks of pre-revolutionary Russia. But however their conditions and vicissitudes are analysed by the intellectuals, some of whom even question the label ’peasant’ to describe many of them, small food producers are gathering allies, including many of the governments of the South, which torpedoed the Doha Round of the WTO by their stubbornly hanging on to their advocacy of ’Special Safeguard Mechanisms’ (SSMs) against agricultural imports and the designation of key commodities Commodities The goods exchanged on the commodities market, traditionally raw materials such as metals and fuels, and cereals. as ’Special Products’ (SPs) exempt from tariff liberalisation to protect local production, much of it by small-scale farmers. This resistance stemmed not only from the pressure exerted by groups like Via Campesina, which was not negligible, but to a growing sentiment in official circles that corporate industrial agriculture could not be allowed to completely restructure the global economy without any accountability.

More broadly, with environmental crises multiplying, the social dysfunctions of urban-industrial life piling up, and industrialised agriculture creating greater food insecurity, the ’peasant way’ has relevance not only to peasants but to everyone threatened by the catastrophic consequences of global capital’s vision for organising production, community, and life itself. It is this that lies at the heart of the ’romanticisation of the peasant’ that exercises Collier so much.

Ultimately, the battle between globalised agriculture and the new peasant movement will hinge on the question of food production carried out under different paradigms - a global market-driven paradigm on the one hand and a local-market centered paradigm on the other. To people like Collier and Bernstein, the latter is no solution, with Bernstein asserting that ’advocacy of the peasant way largely ignores issues of feeding the world’s population, which has grown so greatly almost everywhere in the modern epoch, in significant part because of the revolutions in productivity achieved by the development of capitalism. [15]

Partisans of the peasant way hotly dispute this, claiming that peasants and small farmers continue to be the backbone of global food production, constituting over a third of the world’s population and two thirds of the world’s food producers. [16]
Indeed, according to agroecologist Miguel Altieri:

’Millions of small farmers in the Global South still produce the majority of staple crops needed to feed the planet’s rural and urban populations. In Latin America, about 17 million peasant production units occupying close to 60.5 million hectares, or 34.5 per cent of the total cultivated land with average farm sizes of about 1.8 hectares, produce 51 per cent of the maize, 77 per cent of the beans, and 61 per cent of the potatoes for domestic consumption. [17]

From the perspective of the defenders of peasant agriculture, it is capitalist industrial agriculture, with its wrenching destabilisation and transformation of land, nature, and social relations, that is mainly responsible for today’s food crises, and it points to a dead end both socially and ecologically. For instance, to capital, food, feed, and agrofuels are interchangeable as investment areas for capital, with rates of profit determining where investment will be allocated. Satisfying the real needs of the global majority is a secondary consideration, if indeed it enters the calculation at all. To the critics of capitalist agriculture, it is this devaluation Devaluation A lowering of the exchange rate of one currency as regards others. and inversion of real relations into abstract relations of exchange - otherwise known as commodification - that is at the crux of the crisis of the contemporary food system.

This article is taken from the author’s upcoming book Food Wars, published by Verso Books. Food Wars will be available in July 2009. We are grateful to Women in Action for permission to reproduce this article from their publication.

Published byTransnational Institute




Footnotes

[1Paul Collier, ’The Politics of Hunger: How Illusion and Greed Fan the Food Crisis,’ Foreign Affairs, Vol. 87, No. 6 (Nov-Dec 2008).

[2Paul Collier, The Bottom Billion (Oxford: Oxford University Press, 2007).

[3Gerardo Otero and Gabriela Pechlaner, ’Latin American Agriculture, Food, and Biotechnology: Temperate Dietary Pattern Adoption and Unsustainability,’ in Gerardo Otero, ed., Food for the Few: Neoliberal Globalism and Biotechnology Revolution in Latin America (Austin: University of Texas Press, 2008), p. 50.

[4Lim Li Ching, ’A New Green Revolution,’ Development, Vol. 51, No. 4 (December 2008), p. 572. The IAASTD is the equivalent in the agricultural sciences of the Intergovernmental Panel on Climate Change on global warming issues.

[5Paul Collier, ’The Politics of Hunger: How Illusion and Greed Fan the Food Crisis,’ Foreign Affairs, Vol. 87, No. 6 (Nov-Dec 2008), p.73.

[6Ibid., p. 71.

[7Ibid.

[8World Bank Neglects African Farming, Study Says,’ New York Times, Oct. 15, 2007.

[9Eric Hobsbawm, The Age of Extremes: the Short Twentieth Century, 1914-1991 (London: Abacus, 1994), p. 289

[10Ibid., p. 291.

[11Deborah Bryceson, ’Disappearing Peasantries? Rural Labor Redundncy in the Neo-liberal Era and Beyond,’ in Bryceson, C. Kay, and J. Mooij, eds., Disappearing Peasantries (London: Intermediate Techology Publications, 2000), p. 313.

[12101 East, Al Jazeera, Dec. 19, 2008.

[13Frances Moore Lappe and Joseph Collins, ’Why Can’t People Feed Themselves?,’ in Douglas Boucher, ed., The Paradox of Plenty (Oakland: Food First, 1999), p. 65

[14Jan van der Ploeg, the New Peasantries (London: Earthscan, 2008) p. 276

[15Henry Bernstein, ’Agrarian Questions from Transition to Globalization,’ in A. Haroon Akram-Lodhi and Cristobal Kay (New York: Routledge, 2009), p. 255.

[16Wayne Roberts, cited in Philip McMichael, ’Food Sovereignty in Movement: the Challenge to Neo-liberal Globalization,’ Draft, Cornell University, 2008.

[17Miguel Altieri, ’Small Farms as a Planetary Ecological Asset: Five Key Reasons why We Should Support the Revitalization of Small Farms in the Global South,’ Food First, 2008; http://www.foodfirst.org/en/node/2115

Walden Bello

is senior analyst at the Bangkok-based Focus on the Global South and the International Adjunct Professor of Sociology at the State University of New York at Binghamton.

Other articles in English by Walden Bello (16)

0 | 10

CADTM

COMMITTEE FOR THE ABOLITION OF ILLEGITIMATE DEBT

35 rue Fabry
4000 - Liège- Belgique

00324 226 62 85
info@cadtm.org

cadtm.org