Press Release

2022: Let us end the food crisis

5 September 2022 by CADTM International

Foto de Jonathan Petersson en Unsplash

Many countries and their populations currently face a critical situation because of the rising prices of food or the impossibility of getting access to food in sufficient quantity. As the main cause is not the war in Ukraine, as repeated by several media, the global food crisis we are facing is actually a deep and structural crisis in the capitalist mode of production in its neoliberal stage.

The following data gives warning. From 2014 to 2021, the number of people suffering from severe food insecurity in the world increased from 565 to 924 million. In May 2022, the UN Council blew the whistle: other food crises are in the offing.

While the invasion of Ukraine destabilized several countries, the food crisis had started long before. Paradoxically, global food production has increased at a higher rate than the demographic growth for over half a century and the global cereal crop reached a historic high in 2021. So while we produce abundant food resources, one human being out of ten is suffering from hunger.

How is this possible?
The food crisis that hits the Global South so hard is thus not related to insufficient cereal production but to a distribution issue. It has to be remembered that several decades of structural readjustment policies imposed by he 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.

or 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.
have rendered most of those countries dependent on international markets and now have to rely on import of cereals and other food stuff to feed their populations. Roughly hit by the price increase in a time of crisis, those countries that had substantially reduced their local food production can no longer buy enough cereals. Let us emphasize too that while whole populations cannot access enough cereals to feed on, 10% of the cereals produced globally are used as fuel and 35% as fodder for farm animals.

Speculation on hunger must stop
The neoliberal model means that countries are brutally sensitive to food insecurity. I Big capitalist corporations control the financial markets and turn the commerce and distribution of farm and food products into a highly speculative market, thus taking advantage of the rise in prices and of hunger. Among recent factors that have aggravated the food crisis, a massive form of speculation has developed on the cereal markets as soon as Ukraine was invaded by Russia. The prices of wheat and corn artificially increased by about 50% over a fortnight.

As shown in the CADTM article, in the current conjuncture, rural populations of the South, deprived as they are of the value of the farm production, are still among the poorest, while on a global scale four transnational corporations of the North control 70% of the cereal market and garner huge profits.

For decades now, speculation on hunger and the logic of capital accumulation to the benefit of a minority have generated dramatic food crises. As they refuse to get at the deep lying causes of the crises they are responsible for, the major financial institutions and the States still carry out policies that favour the interests of agribusiness in defiance of the right of peoples to determine their food sovereignty.

Eradicating hunger is possible if we tackle structural causes
We cannot seriously claim that we are fighting hunger without identifying actors that benefit from the current situation and getting at its fundamental causes. The capitalist farming model relies on intensive export-oriented production and on the development of agribusiness. The grabbing of land and water resources is accelerating all over the world. The use of fossil energies, of pesticides and chemical fertilizers contributes to climate change and thus to recurring periods of drought. Regulations on the production and exchange of seeds that are monopolized by a few multinationals destroy the peasant seed systems. The marginalization of small-scale farming, which produces 70% of the World’s food, is becoming more acute.

Debt and so-called free-trade agreements are two major mechanisms of domination that generalize the neoliberal model of farm production, notably in countries of the Global South.
Promoting global food sovereignty means fighting against those structures of the capitalist productivist system. The CADTM network demands the cancellation of illegitimate debts in order to meet basic human needs, among which, access to food.

It adheres to the proposals drafted by la Via Campesina and considers that the solution lies in the urgent implementation of a project of food sovereignty that would be an alternative to the current domination of agribusiness. To eradicate hunger, it is vital to rely on a model of economic justice that radically breaks away from neoliberal policies that destroy agriculture in the South and ecosystems while sacrificing the food security of hundreds of millions of people on stock markets.

Among the proposals by Via Campesina developed in more detail in the article “International food crisis and proposals to overcome it”, we can pinpoint:

  • End speculation on food stuff and suspend the quotation of food stuff and other natural assets on stock markets;
  • Suppress structual adjustment measures imposed by large financial institutions that are responsible for countries of the South’s food dependence and prevents their achieving food sovereignty;
  • Develop local small-scal agroecology as an alternative model to productivist neoliberalism and place food producers, distributors and consumers at the heart of food policies ins the place of profits;
  • Support local small-scale agriculture by restricting imports and exports ;
  • Devote more public resources to agriculture in developing countries (those resources must support food production; financing of an agriculture without farmers must stop);
  • Stop plundering natural resources through extractivist policies and launch a global and popular land reform that will put an end to the grabbing of land, seed and water resources by transnational corporations and guarantee small producers a fair access to resources;
  • Stop the production of industrial agrifuel and stop public subsidies to those who produce it;
  • Recreate public food reserves in the South (particularly in cereals such as rice, wheat, corn, (re)create public bodies that grant loans to farmers and restore food price controls.
  • Guarantee that low income populations can benefit from low prices for quality food. VAT on staple food stuff must be suppressed. The State must guarantee that farmers can sell their production at prices that make it possible for them to improve their living conditions.

More information in Éric Toussaint and Omar Aziki’s article “The international food crisis and proposals to overcome it”.

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