/** dev.worldbank: 267.0 **/
** Topic: GLOBAL FAMINE **
** Written 7:33 AM Oct 16, 1995 by chosso@travel-net.com in cdp:dev.worldbank **
From: chosso@travel-net.com (M Chossudovsky)
16 OCTOBER 1995: THE FOOD AND AGRICULTURAL ORGANIZATION (FAO) CELEBRATES IN QUEBEC CITY ITS FIFTIETH ANNIVERSARY. YET THE INNER CAUSES OF FAMINE REMAIN CAREFULLY CONCEALED.
THE IMF-WORLD BANK SPONSORED MACRO-ECONOMIC REFORMS IMPOSED ON DEVELOPING COUNTRIES HAVE BEEN RESPONSIBLE FOR THE DESTRUCTION OF LOCAL LEVEL FOOD SELF-SUFFICIENCY AND THE OUTBREAK OF FAMINE. WORLD AGRICULTURE HAS FOR THE FIRST TIME IN HISTORY THE CAPACITY TO SATISFY THE FOOD REQUIREMENTS OF THE ENTIRE PLANET, YET THE VERY NATURE OF THE GLOBAL MARKET SYSTEM PREVENTS THIS FROM OCCURRING. THE CAPACITY TO PRODUCE FOOD IS IMMENSE YET THE LEVELS OF FOOD CONSUMPTION REMAIN EXCEEDINGLY LOW BECAUSE A LARGE SHARE OF THE WORLD'S POPULATION LIVES IN CONDITIONS OF ABJECT POVERTY AND DEPRIVATION.
THE FINAL ACT OF THE URUGUAY ROUND, THE ARTICLES OF AGREEMENT OF THE NEW WORLD TRADE ORGANIZATION (WTO)) WILL GIVE UNRESTRICTED FREEDOM TO THE FOOD GIANTS TO ENTER THE SEEDS MARKETS OF DEVELOPING COUNTRIES AND ESTABLISH "PLANT BREEDERS RIGHTS" TO THE DETRIMENT OF MILLIONS OF SMALL FARMERS.
THE NEOLIBERAL POLICY AGENDA IS NOT QUESTIONED. THE INCIDENCE OF FAMINE IS NARROWLY ASCRIBED TO POPULATION PRESSURES, CLIMATIC AND ENVIRONMENTAL FACTORS...
SINCE THE EARLY 1980S, GRAIN MARKETS ARE DEREGULATED UNDER THE SUPERVISION OF THE WORLD BANK, US AND EUROPEAN GRAIN SURPLUSES ARE USED TO DESTROY THE PEASANTRY AND DESTABILISE NATIONAL FOOD AGRICULTURE.
In the late 20th century, famine is not a consequence of "a shortage of food". On the contrary, famines are spurted as a result of a global oversupply of grain staples. Famine has become a Worldwide phenomenon: dearth and starvation are striking simultaneously in all major regions of the World; Sub-Saharan Africa, Northeast Brazil, South Asia, the Andean altiplano of South America, the former Soviet Union... From the dry savannah of the Sahelian belt, famine has extended its grip into the wet tropical heartland. A large part of the population of the African continent is affected. There are several million people in "famine zones" in India and Bangladesh. Moreover, in the labour surplus economies of South Asia and the Far East (eg. India, China, Indonesia), an important segment of the rural and urban population driven well below the poverty line due to the absence of employment opportunities, is seriously at risk.
Hunger and deprivation, however, are no longer limited to the Third World: the economic crisis is conducive to "a process of global impoverishment": unemployment, homelessness and low wages in the urban ghettoes and shantytowns, destruction of the independent farmer in Europe and North America... Low levels of food consumption and malnutrition are increasingly hitting the urban poor in the rich countries. According to a recent study, 30 million people in the United States are classified as "hungry"...
What are the underlying causes? The global TV image spotlights the victims of civil war, drought and flood. Famine in Somalia or Mozambique is mechanically ascribed to the "external" political and climatic factors: "the absence of rain carrying clouds and air pressure anomalies"... History is distorted, only the surface and colour of World events are disclosed. Somalia was self-sufficient in food until the 1970s; what precipitated the collapse of civil society? Why were food agriculture and nomadic pastoralism destroyed?...
Complex and far-reaching changes in the global economy have taken place since the early 1980s which redefine the structure of both industry and agriculture. The family farm is driven into bankruptcy, the agricultural producer looses control over the land which he farms. And in the developing countries, the peasantry is increasingly transformed into an army of landless seasonal plantations workers.
The earnings of farmers in rich and poor countries alike are squeezed by a handful of global agro-industrial enterprises which simultaneously control the markets for grain, farm inputs, seeds and processed foods. One giant firm Cargill Inc. with more than 140 affiliates and subsidiaries around the World controls a large share of the international trade in grain. Since the 1950s, Cargill became the main contractor of US "food aid" funded under Public Law 480 (1954).
With the signing of the final act of the Uruguay Round, the articles of agreement of the new World Trade Organization (WTO)) will give unrestricted freedom to the food giants to enter the seeds markets of developing countries and establish "plant breeders rights" to the detriment of millions of small farmers. The acquisition of exclusive "intellectual property rights" over plant varieties by international agro-industrial interests, also favours the destruction of bio-diversity.
World agriculture has for the first time in history the capacity to satisfy the food requirements of the entire planet, yet the very nature of the global market system prevents this from occurring. The capacity to produce food is immense yet the levels of food consumption remain exceedingly low because a large share of the World's population lives in conditions of abject poverty and deprivation. Moreover, the process of "modernisation" of agriculture (including the Green Revolution) has led to the dispossession of the peasantry, increased landlessness and environmental degradation. In other words, the very forces which encourage global food production to expand are also conducive antithetically to a contraction in the standard of living and a decline in the demand for food.
The economic policy actions of G-7 governments and the Washington based international financial institutions tend to support this Worldwide restructuring of agriculture. "National agriculture" and the independent peasantry are undermined, demand and supply relations are remoulded. Global impoverishment since the debt crisis, tends to favour stagnation in the production of basic food staples while redirecting agriculture towards "high value added" non-staple and processed foods.
Throughout the developing World, food security is destroyed, the national grain market is displaced, grain prices are re-aligned with those of the World market and the peasantry is subordinated to the requirements of the global food monopolies. In turn, local-level merchants and money lenders as well as bureaucrats become increasingly tied into the interests of the food transnationals.
The food giants are not only the recipients of US "food aid", they have become "development brokers" in a wide range of agro-industrial projects funded under PL 480. With direct access to the World Bank, the US Department of Agriculture and the national governments, they exercise a dominant role in shaping the agricultural policy of indebted countries.
Since the early 1990s a similar reform pattern has affected the countries of the former Eastern block with devastating economic and social consequences. In September 1994, the Ukraine signed an agreement on macro-economic reform with the IMF which laid the basis for the restructuring of its agricultural sector. The IMF "shock treatment" implemented in October 1994 wreaked havoc: the price of bread increased overnight by 300 percent, electricity prices by 600 percent, public transportation by 900 percent... Combined with the abrupt hikes in fuel and energy prices, the lifting of subsidies and the freeze on credit will contribute to destroying Ukraine's breadbasket economy. In November 1994, World Bank negotiators were examining the overhaul of Ukraine's agriculture. With trade liberalisation (which is part of the proposed package), the door is open to the dumping of US grain surpluses and "food aid" on the domestic market. This would contribute to destabilising one of the World's largest and most productive wheat economies...
Since the early 1980s, grain markets are deregulated under the supervision of the World Bank, US grain surpluses are used (far more systematically than in the past) to destroy the peasantry and destabilise national food agriculture. The latter becomes, under these circumstances, far more vulnerable to the vagaries of drought and environmental degradation. Similarly, subsidised beef and dairy products imported (duty free) from the European Community have led to the demise of Africa's nomadic pastoral economy. European beef imports to West Africa increased seven fold since 1984 with the effect of displacing local level livestock producers. In the Sahel, the deregulation of the grain market under the supervision of the World Bank was initiated at the height of the 1983-84 drought with devasting social consequneces.
The decline and weakening of food agriculture in Sub-Saharan Africa, however, predates the era of IMF "shock therapy". It was largely a legacy of the colonial era: in the Sahel, the export crops occupied the best land. Whereas agricultural infrastructure, irrigation, extension services and credit were channelled in support of exports, traditional food crops (millet and sorghum) were steadily pushed into marginal lands, the so-called "grey area" of the arid Sahelian belt.
The debt crisis of the early 1980s marks a major turning point. The colonial-style cash crop economy is precipitated into a state of depression. The peasant's meagre cash income from export crops (eg. coffee or cocoa) was compressed as a result of the collapse of commodity prices, but there was nothing to fall back on because the life support system of traditional subsistence farming had been dismantled. Moreover, the cash crop economy combined with the commercial plunder of forest reserves had caused serious environmental damage and degradation of the soil. The cash revenues from export crops were insufficient to buy enough food. The famines of the 1980s and 1990s were, therefore, more severe and devastating than those of the seventies...
From the early 1980s, a major revamping of the agricultural sector of developing countries was implemented. While experiences differ widely from one region of the World to another, the same economic reform package (under the guidance of the Bretton Woods institutions) was simultaneously imposed on a large number of indebted countries. Under World Bank supervision, trade barriers to grain, dairy products and meat from the rich countries were removed alongside the elimination of subsidies and preferential bank credit for farmers. The World Bank also encouraged reforms in the structure of land tenure and ownership which favoured the formation of larger land-units, the forfeiture of land by the small-holder, the transformation of indigenous land rights and the privatisation of communal lands.
While new "alternative" export crops were promoted, the reforms were also intent upon preventing the Third World farmer from "switching back into food production" for household consumption or for domestic sale. The commercialisation of food production and the taking over of the peasant economy by urban-based agro-business was also encouraged.
Developing countries were advised by the World Bank to develop new specialised export areas. In Senegal and Mali, for instance, a profitable fruits and vegetables business for export was developed in private plantations to the detriment of the peasant economy. In Bangladesh, village based shrimp farming supported by the World Bank encroached upon the development of paddy production with detrimental environmental implications. This boom in non-traditional exports did not last, however, because the same so-called "high value added" exports were developed simultaneously (under World Bank guidance) in a large number of countries leading to a subsequent collapse in prices.
Throughout the developing World, the pattern of "sectoral adjustment" in agriculture under the custody of the Bretton Woods institutions, was unequivocally towards the destruction of food security. Dependency vis a vis the World market was reinforced with a view to providing market outlets for US and European agricultural surpluses. "Food aid" to Sub-Saharan Africa increased by more than seven times since 1974, commercial grain imports more than doubled. "Food aid" however was no longer earmarked for the drought-stricken countries of the Sahelian belt, it was also channelled into countries which until recently were more or less self-sufficient in food. Food aid is never given it is always sold by governments on local markets invariably below the domestic market price.
Severe austerity measures were imposed by the Bretton Woods institutions on African governments, expenditures on rural development were drastically curtailed leading to the collapse of agricultural infrastructure. Under the World Bank programme, water was to become a commodity to be sold on a cost recovery basis to impoverished farmers. Due to lack of funds, the State was obliged to withdraw from the management and conservation of water resources. Water points and boreholes dried up due to lack of maintenance, or were "privatised" by local merchants and rich farmers. In the semi-arid regions, this "commercialisation of water" and irrigation leads to the collapse of food security and famine.
Since the debt crisis, the international financial institutions have moved away from the provision of credit in support of "real development projects". A new generation of "policy based loans" has been devised. Money was provided "to help countries to adjust". These World Bank loan agreements included tight "conditionalities": the money was granted only if the government complied with the structural adjustment reforms while at the same time respecting very precise deadlines for their implementation. The loan disbursements could be interrupted if the government did not conform. A peculiar and somewhat strange lending practice had been set in motion: the money granted in support of the "adjustment" of agriculture, was not meant for investment in agricultural projects. The loans could be spent freely on commodity imports.
Needless to say, the very nature of these loan agreements was conducive to the collapse of agriculture, since none of the money was channelled into investment. Another important objective was served, however: the adjustment loans diverted resources away from the domestic economy and encouraged countries to keep on importing large quantities of consumer goods including food staples from the rich countries. The result of this process was stagnation of the domestic economy, enlargement of the balance of payments crisis and growth of the debt burden...
While "external" climatic variables play a role in triggering off a famine and heightening the social impact of drought, famines in the age of globalisation are man-made. They are not the consequence of "a scarcity of food" but of a structure of global oversupply which undermines food security and destroys national food agriculture. Tightly regulated and controlled by international agro-business, this oversupply is ultimately conducive to the stagnation of both production and consumption of essential food staples and the impoverishment of farmers throughout the World. Moreover, in the era of globalisation, the IMF-World Bank structural adjustment programme bears a direct relationship to the process of famine formation because it systematically undermines all categories of economic activity, whether urban or rural, which do not directly serve the interests of the global market system. Import substituting industries for the internal market are dismantled as a result of the lifting of tariff barriers and the collapse of internal purchasing power, small artisans are impoverished, food farming is undermined in favour of export crops,... In turn, the State apparatus is undone through the imposition of fiscal austerity, civil society collapses and the Nation State becomes politically fragmented...
Michel Chossudovsky
Department of economics,
University of Ottawa,
Ottawa, Canada
fax 1-613-7892050,
E-mail: chosso@travel-net.com