The folks at Celsias posted a great article on the wide scale socio-political (and corporate) forces that are a major cause of current and previous food crises worldwide. A major point made in the piece is that bad economic policies/onerous conditionalities foisted upon nations receiving aid or loans from the IMF and World Bank, coupled with noncompetitive agricultural subsidies in rich nations have helped crush the food producers focusing on internal markets in many developing countries. They give the example of Haiti.
Thirty years ago, Haiti raised nearly all the rice it needed. What happened?
In 1986, after the expulsion of Haitian dictator Jean Claude â€œBaby Docâ€ Duvalier the International Monetary Fund (IMF) loaned Haiti $24.6 million in desperately needed funds (Baby Doc had raided the treasury on the way out). But, in order to get the IMF loan, Haiti was required to reduce tariff protections for their Haitian rice and other agricultural products and some industries to open up the countryâ€™s markets to competition from outside countries. The U.S. has by far the largest voice in decisions of the IMF.
Doctor Paul Farmer was in Haiti then and saw what happened. â€œWithin less than two years, it became impossible for Haitian farmers to compete with what they called â€˜Miami rice.â€™ The whole local rice market in Haiti fell apart as cheap, U.S. subsidized rice, some of it in the form of â€˜food aid,â€™ flooded the market. There was violence, â€˜rice wars,â€™ and lives were lost.â€
â€œAmerican rice invaded the country,â€ recalled Charles Suffrard, a leading rice grower in Haiti in an interview with the Washington Post in 2000. By 1987 and 1988, there was so much rice coming into the country that many stopped working the land.
â€¦ People from the countryside started losing their jobs and moving to the cities. After a few years of cheap imported rice, local production went way down.â€
Still the international business community was not satisfied. In 1994, as a condition for U.S. assistance in returning to Haiti to resume his elected Presidency, Jean-Bertrand Aristide was forced by the U.S., the IMF, and the World Bank to open up the markets in Haiti even more. â€” Counterpunch
Also of note:
Much of the news coverage of the world food crisis has focussed on riots in low-income countries, where workers and others cannot cope with skyrocketing costs of staple foods. But there is another side to the story: the big profits that are being made by huge food corporations and investors. Cargill, the worldâ€™s biggest grain trader, achieved an 86% increase in profits from commodity trading in the first quarter of this year. Bunge, another huge food trader, had a 77% increase in profits during the last quarter of last year. ADM, the second largest grain trader in the world, registered a 67% per cent increase in profits in 2007.
Nor are retail giants taking the strain: profits at Tesco, the UK supermarket giant, rose by a record 11.8% last year. Other major retailers, such as Franceâ€™s Carrefour and Wal-Mart of the US, say that food sales are the main sector sustaining their profit increases. Investment funds, running away from sliding stock markets and the credit crunch, are having a heyday on the commodity markets, driving prices out of reach for food importers like Bangladesh and the Philippines. – ENN
Hat tip Craig M.
Also of interest:
Life and Debt – a great film about the impact of the IMF’s structural adjustment plans on Jamaica
Confessions of an Economic Hitman – a somewhat smug but riveting book about the dark designs of the ‘unholy Trinity’ (World Bank, IMF, WTO), et al.
Oxfam’s Make Trade Fair Campaign
Update: Food Riots in Haiti [April 17, 2008]
â€¦Nor Any Drop to Drink: Water Privatization in Bolivia
Link of the Day 042408: A worldwide increase in the cost of food [NPR]