Rising food prices around the world have dominated the news for the past several weeks. Riots have taken place in many countries as prices rise beyond what families can afford. Here in New Zealand, the rising price of dairy products is at the sharp end, but for the world’s poorest its the price of grain which is critical.
So with food prices rising, there must be a shortage, right? Surely it means more people competing for the same amount of food. This is the conventional view from the market but it’s not true. There is no shortage of food in the world. The problem is the price. The world’s poorest cannot afford to pay for food which is why every night 850 million humans go to bed hungry, with this number rising rapidly.
Last year, the grain harvest worldwide was 2.1 billion tonnes. It was 5 per cent higher than the previous year so with more food surely the price should be falling. But no. Less than half of this bumper harvest is available as food for human need. Most of the rest goes to feeding animals for meat production (760 million tonnes) and providing the growing demand for biofuels (100 million tonnes)
So there is plenty of food but the poor can’t afford it. Hungry kids in developing countries can’t compete with SUV drivers in countries like New Zealand or the appetite for meat in developed countries spurred by the growing middle class in India and China. We are all surely now aware that the grain needed to produce a single tankful of biodiesel for an SUV would feed a family in a developing country for a year.
There have been the predictable calls for genetic engineering to improve food production but just as with the so-called green revolution in the 1960s this is a facade. The food is there but we’ll all die waiting if we leave it to the amorality of the market to sort the problem.
Other calls for countries to open their markets to free trade are just as predictable and just as self-serving and futile. It is the free-market policies demanded of developing countries which go to the very heart of the problem. Pricing food on a world market favours those who can pay more to sustain a higher standard of living with the non-food use of food.
But there are good-news stories amid the gloom and suffering. We are in the middle of Fairtrade fortnight promoted by Trade Aid. It should be an encouragement to all of us to do even the small things we can as individuals to promote a better world in defiance of traditional market forces.
What makes Fairtrade products different is that they are imported from certified producers, usually co-operatives, which ensure a better return direct to the growers. For example, coffee growers in Guatemala and Ethiopia typically receive 10% to 15% more for their products from Fairtrade buyers. In some cases, depending on the world price for coffee, growers have gained up to three times what they otherwise would have received via local markets. Likewise, buying Fairtrade olive oil, dates and almonds from Palestine supports local communities under oppressive occupation.
The benefits go much further. More local schools and medical clinics being built. Sustainable development is taking a big step forward in areas where Fairtrade products are sourced at fairer prices.
These products are now widely available but our supermarket chains are reluctant to stock them. Next time you are in the supermarket look for the Fairtrade logo and ask the staff what fair trade products are stocked. A small dig in the market ribs of those addicted to profit-based economics will help lots of people get a fairer go.
Another good news story is Uganda. Amid the world-food crisis, this country in central Africa, which has had such a bloody, turbulent transition from colonial rule, is largely riding out the food crisis by ignoring years of bad advice. Uganda’s rice output has increased 2 1/2 times since 2004 and is expected to reach up to 180,000 tonnes this year. Amid rising food prices globally, the cost of rice in Uganda is much the same as it was before the food crisis.
The reason is tariffs. Against the neo-liberal advice from the likes of the World Bank and International Monetary Fund, tariffs have increased the price of imported rice and dramatically stimulated local food production.
The country is much closer to self-sufficiency and food security and points the way forward for developing countries. There’s an important lesson here for New Zealand, as well.