Food prices are rising around the globe. Foodstuff prices soared by 40 percent between 2006 and 2007, according to the United Nations. Basic staples in the diets of billions—rice, wheat and corn—now cost more than double what they did just one year ago. (Globe and Mail, March 29)
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Demonstrators have taken to the streets against rising tortilla prices in Mexico, villagers have clashed with police in eastern India, and thousands have marched for lower food prices in Indonesia. Protests even have hit Italy. The price of spaghetti has doubled in Haiti; the high cost of miso is impacting Japan.
The United States—the headquarters of finance capitalism—is facing the worst case of food inflation in nearly 20 years. According to the U.S. Bureau of Labor, wholesale food prices rose nearly 7.5 percent in 2007, with egg prices up 56.4 percent; dairy products up 23.7 percent; vegetables, 19.9 percent; and fruit, 4.2 percent.
Recently, the U.N.’s World Food Program warned that it will have to ration food aid to cope with soaring grain prices, unless it gets an emergency cash infusion of $500 million.
What is behind global food inflation?
At bottom, it is the for-profit, capitalist system—a system that produces and distributes goods and services solely to maximize profits; not to meet the needs of humanity.
Food produced for profit
Although fundamental to sustaining human life, food is not immune from the dictates of capitalist markets. These markets are driven by profits only.
The price of food is directly related to the price of other commodities. Transporting food and other goods is more expensive for a number of reasons: Record oil prices driven by heightened demand, imperialist occupation and insecurity in major production areas, a weak U.S. dollar, and investor movement from riskier stocks and credit-based securities to “safer” commodity markets.
Droughts, weather, desertification of arable land and other severe weather events linked to global warming have assisted in pushing food prices higher. And rising food and oil consumption due to rapid economic expansion in China and India has boosted demand.
Another primary cause of food inflation is ethanol production to create biofuels in the United States, Brazil and Europe.
Ethanol production is a clear example of the anarchy of capitalism and capitalist markets. The diversion of corn crops from food to fuel production is taking food out of poor people’s mouths for the sake of profits.
The U.S. government and their big capitalist backers are spearheading the ethanol craze. The energy bill passed by Congress and signed by Bush in December 2007 calls for refiners to replace 36 billion gallons of gasoline with ethanol by 2022, up from about 7 billion gallons today. About half of that will come from ethanol made with corn. At present, nearly one-third of corn production in the United States is used to produce ethanol.
This massive shift from corn-for-food to corn-for-fuel has caused the price of corn to double since 2006, pushing up the price of chicken, beef and poultry—livestock fed with corn. The cost of livestock byproducts such as milk, eggs, meat and cheese is also up.
Wheat is becoming more expensive as farmers devote more acreage to grow corn in the rush to satisfy the demand for ethanol. Flour price hikes have caused bread costs to jump fourfold in the United States and even higher in other countries. Because of the ethanol boom, the price of all crops worldwide has gone up.
Demand for ethanol is fueled by the opportunity to make profits in a new market. Meanwhile, workers and oppressed people are being forced to skip meals and go hungry—not because food prices must rise or because there is not enough food to go around.
Since the mid-1970s, the world has produced enough food to provide everyone with an adequate diet. However, there is no equitable distribution system.
Food could be much cheaper; however, under capitalism there is no incentive to distribute any commodity without turning a profit. While this is fine for the capitalists, the poor get left out.
The capitalists, however, become vulnerable when the economy dives unexpectedly and a crisis arises—then, things can spiral quickly out of control.
‘Revolution of the hungry’
The squeeze of high food and energy prices has become a catalyst for social unrest in oppressed countries in Africa, Asia and Latin America, and richer countries in Europe and North America.
As of December 2007, 37 countries faced food crises, and 20 had imposed price controls on foodstuffs. Numerous food exporting countries, including Argentina and Vietnam, have moved to cap or tax exports of key farm products in order to quell domestic inflation and unrest.
Some governments are trying to tackle the issue individually, but the crisis has permeated the global capitalist economy. Protectionist measures, local tariffs and food subsidies can at best temporarily shield a single country’s population from the volatility inherent in the capitalist markets.
In Egypt, where bread is up 35 percent and cooking oil 26 percent, the pro-imperialist government proposed ending food subsidies and replacing them with cash payouts to the needy. The plan was put on hold after it sparked public uproar. Last week, the government ordered the army to increase the production and distribution of subsidized bread.
The unpopular Egyptian regime fears the crisis could intensify into an insurrection similar to or greater than the 1977 uprising in which 70 people died after the price of bread and other subsidies were hiked.
“A revolution of the hungry is in the offing,” said Mohammed el-Askalani of Citizens Against the High Cost of Living, a protest group against ending the subsidies. (AP, March 30) A general strike has been announced for April 6.
Egypt is just one example. Higher food and cost of living prices will continue to plague workers and the oppressed as long as food production is organized on a capitalist basis. Under capitalism, there is no centralized mechanism to distribute food affordably to people who need it—profits rule.
The whims of capitalism become daggers aimed at the oppressed masses. But the daggers can turn on the capitalists when people can no longer afford to buy what they need to live. This sort of reaction is what we see in the food uprisings around the world.
A centralized system of production and distribution is needed. Central planning on a socialist basis removes profits from the equation entirely, thereby doing away with the negative affects of capitalist commodity markets on the working class.
Socialist Cuba has accomplished this goal on a national level. Even in its most difficult times after the overthrow of the Soviet Union, the Cuban people never faced starvation. Food is produced and distributed to everyone based on need. Cuba is seeking to expand the favorable distribution of goods beyond its borders with trade agreements such as the Bolivarian Alternative for the Americas.
To truly alleviate hunger, centralized socialist planning is needed on a worldwide scale. Only then we can end food insecurity and live in a world where abundance is enjoyed by all.
