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Fighting With Pinpricks: Solving the food crisis

Published: May 2, 2008
Section: Opinions


In the last few weeks, newspapers around the world—including this one—have been awash with stories about the global food crisis. In Haiti, Prime Minister Jacques-Édouard Alexis resigned following food riots; in Pakistan and Thailand, unrest is so high that the military must guard food stocks; all over Asia, governments have restricted the export of food staples. Even the US has been hit by rising food prices; shockingly, consumers must now restrict themselves to a mere 80 pounds of rice per supermarket visit.

With all the media coverage, one might be forgiven for thinking that the crisis has something to do with our not having enough food to feed the 6 and a half billion people on earth. This is simply untrue. In fact, the disturbing irony of this crisis is that there exists today more than enough grain to feed every man, woman, and child alive. Food production per capita has steadily increased since the 1960s while world population growth has been slowing since the 1980s. The reason why starving people are rioting around the globe has little to do with food shortage and more to do with two longstanding injustices: animal genocide and global capitalism.

The first problem is that more than one third of the grain produced globally goes not to feed humans but to feed animals who, if left to their own devices, wouldn’t eat it. Absent human intervention, animals like cattle, goats, sheep, and chickens would forage among wild grasses and legumes for sustenance. Unfortunately, since the early 20th century, untold billions of these animals have been imprisoned in industrial farms and force fed, among other things, cereal grains only to be viciously slaughtered for human consumption. Indeed, every one pound of meat produced for wealthy Westerners to eat requires enslaved animals to consume seven pounds of grain which alternatively could be used to feed poor people in Asia, Latin America, and Africa. Since 2006, the amount of grain wasted in this barbaric form of production grew by over 100 million tons, which is a major reason for the current crisis.

Animal genocide, while tragic, is not the only cause of the food crisis; in fact, the crisis is profoundly bound up with the crisis of global capitalism. As I’ve already explained, the problem is not that humans have too little food; on the contrary, it’s that food costs too much for the world’s poor. One of the biggest reasons for the recent spike in food prices is the rapid growth of food speculation.

As the sub-prime credit crisis wrecked havoc on the economy, investors unloaded their increasingly worthless paper assets and searched for a safer bet. What they found was the food commodity market. These markets were devised to allow farmers to finance their production on the basis of money they expect to receive from future sales. It works like this: farmers sell speculators a contract promising some of the food they expect to produce in the future. They then take the money from the transaction and use it to finance the production of food they’ve already sold.

Since the advent of the subprime crisis, deals of this nature have increased by over twenty percent. The problem is the real return on food commodities is about five percent. The paper assets which the new food speculators are trying to replace, on the other hand, had much higher rates of return. To compensate, these speculators purchase enormous numbers of contracts and hold on to them in order to drive up prices. Once the prices rise, they sell off these products on the market—which is artificially inflated because of their actions—and pocket a much higher profit than normal. The overall effect is the rapid increase in food prices which has left so many people hungry and angry.

The food crisis is a stunningly simple problem to solve. If, for example, the US and European Union governments mandated a 15% cut back in meat production, consumers in wealthy countries would have to pay a little more for filet mignon, but everybody in the world would have enough grain to eat. If, instead, there were stricter regulations on food speculation, the crisis would likewise be alleviated. The problem is that those with the power to take these steps have an economic interest in maintaining the food crisis. The result will be, as Hugo Chavez pointed out last week, “a massacre of the world’s poor” so that the wealthy can have a little more money in their pockets and a little more meat on their plates.