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How the rich starved the world

Friday, June 6, 2008

Mark Lynas, NEWSTATESMAN, Publshed 17 April 2008

source

World cereal stocks are at an all-time low, food-aid programmes have run out of money and millions face starvation. Yet wealthy countries persist with plans to use grain for petrol. Plus Iain Macwhirter on how food prices are rocketing

The irony is extraordinary. At a time when world leaders are expressing grave concern about diminishing food stocks and a coming global food crisis, our government brings into force measures to increase the use of biofuels – a policy that will further increase food prices, and further worsen the plight of the world’s poor.

What biofuels do is undeniable: they take food out of the mouths of starving people and divert them to be burned as fuel in the car engines of the world’s rich consumers. This is, in the words of the United Nations special rapporteur on the right to food, Jean Ziegler, nothing less than a “crime against humanity”. It is a crime the UK government seems determined to play its part in abetting. The Renewable Transport Fuel Obligation (RTFO), introduced on 15 April, mandates petrol retailers to mix 2.5 per cent biofuels into fuel sold to motorists. This will rise to 5.75 per cent by 2010, in line with European Union policy.

The message could not have been clearer if the Prime Min ister, Gordon Brown, had personally put a torch to a pyre of corn and rice in Parliament Square: even as you take to the streets to protest your empty bellies and hungry children, we will burn your food in our cars. The UK is not uniquely implicated in this scandal: the EU, the United States, India, Brazil and China all have targets to increase biofuels use. But a look at the raw data confirms today’s dire situation. According to the World Bank, global maize production increased by 51 million tonnes between 2004 and 2007. During that time, biofuels use in the US alone (mostly ethanol) rose by 50 million tonnes, soaking up almost the entire global increase.

Next year, the use of US corn for ethanol is forecast to rise to 114 million tonnes – nearly a third of the whole projected US crop. American cars now burn enough corn to cover all the import needs of the 82 nations classed by the UN’s Food and Agriculture Organisation (FAO) as “low-income food-deficit countries”. There could scarcely be a better way to starve the poor.

The threat posed by biofuels affects all of us. Global grain stockpiles – on which all of humanity depends – are now perilously depleted. Cereal stocks are at their lowest level for 25 years, according to the FAO. The world has consumed more grain than it has produced for seven of the past eight years, and supplies, at roughly only 54 days of consumption, are the lowest on record.

The president of the World Bank, Robert Zoellick, has already warned that 100 million people could be pushed deeper into poverty because of food price rises caused directly by this imbalance between supply and demand. Even consumers in rich countries are suffering. We now pay higher prices for our food in order to subsidise the biofuels industry, thanks to measures such as the renewable fuels directive.

This is not just a short-term price blip, but the beginnings of a major structural change in the world food market. Population pressure – still something of a taboo subject – is also certainly playing a part. With the world population growing by 78 million a year, and expected to reach nine billion by the middle of the century, there are simply many more mouths to feed.

In addition, rapid economic growth in India and China has created tens of millions of new middle-class consumers, all demanding western-style diets high in meat and dairy products, thereby vastly increasing the quantity of grain required for livestock production.

Weather plays a major role, too: the FAO’s latest food situation brief reports that, in 2007, “unfavourable climatic conditions devastated crops in Australia and reduced harvests in many other countries, particularly in Europe”, while Southern Africa and the western United States have been hit hard by severe drought. Rising oil prices also increase the cost of food, as fossil fuels are important throughout the agricultural process, from tractor diesel to fertiliser production.

Inconsistency

The most important structural change, however, is the increasing interlinking of world energy and food markets. Once, food was just for people. Now rising demand for transport fuel – particularly in rich countries – is sucking supply away from the world food market and increasing the upward pressure on prices. In the words of Josette Sheeran, executive director of the UN World Food Programme (WFP): “We are seeing food in many places in the world priced at fuel levels,” with increasing quantities of food “being bought by energy markets” for biofuels.

Rising oil prices feed back into the process. With food and fuel markets intertwined, increases in the price of oil are shadowed by increases in the price of grain. The real-world result from this structural shift may be that hundreds of thousands of people starve in the next few years – unless policies promoting biofuels are urgently reversed.

This is not to suggest that government targets on biofuels are driven by some kind of malicious desire to starve the world’s poor. Indeed, both Brown and his Chancellor, Alistair Darling, have expressed concern about the food supply crisis and the role of biofuels in causing it. But for these two political leaders to voice their concerns while allowing the increased use of biofuels in the UK to be pushed forward – all in the same week – is nothing short of bizarre.

As Oxfam’s Robert Bailey puts it: “This inconsistency at the highest levels simply beggars belief.” The aid agency calculates that the RTFO represents a £500m annual subsidy from motorists and taxpayers to the biofuels industry – more than double the amount the WFP is urgently seeking from donor countries to try to mitigate the impact of food price rises on the world’s poor.

The EU, meanwhile, persists in the erroneous belief that biofuels can help reduce greenhouse-gas emissions. The main reason for its speedy introduction of the replacement fuel initiative was as a sop to motor manufacturers who were lobbying hard against proposed higher fuel economy standards. With biofuels, the EU hoped, it could cave in to the car industry while still getting reduction in emissions.

Yet recent research suggests otherwise: two major studies published in Science magazine in February showed clearly that once the agricultural displacement effects of the new fuels on rainforests, peatlands and grasslands are taken into account, emissions are many times worse than from conventional mineral petrol. In other words, it would be better for the climate if we just went back to fossil fuels. Biofuels are not a “necessary but painful” way of saving the climate; they are a calamitous mistake by almost every criterion, whether social, ethical or environmental.

Reversing the damage

The industry claims that “second-generation” biofuels, using by-products such as corn stalks and woodchip as a feedstock, will be able to redress the balance. But if this technological advance is achieved (and that is by no means certain) it could usher in an even worse scenario: the annihilation of the world’s forests. If all plant life was seen as potentially convertible for transport fuel, there would be nothing to stop what was left of the planet’s biosphere from being strip-mined to keep rich motorists on the road. There is no simple solution. Much of the increased biofuel demand comes from the US, where Democratic and Republican politicians alike have talked themselves into a dead-end search for “energy security” – with US-grown corn top of the list.

But the UK and the EU can reverse some of the damage by immediately ditching their own biofuels policies and providing vital aid funding, principally through the WFP, to help prevent widespread starvation in the short term. Politicians need to realise that there is no such thing as “sustainable biofuels”, either now or in the future. As for investors, they need to realise that pouring money into biofuels is a bad bet: subsidies will be quickly withdrawn when policymakers face up to the reality of their ghastly error.

In the meantime, millions face starvation and death from increasing hunger and malnutrition. There is no time to lose.

2008: the year of food riots

Egypt Thousands of demonstrators in Mahalla el-Kobra loot shops and throw bricks at police during protests at rising food prices and low salaries, as part of nationwide strike

Haiti At least four people killed in the southern city of Les Cayes after food prices rise 50 per cent in the past year

Côte d’Ivoire Police injure more than ten protesters as several hundred demonstrators demand government action to curb food prices

Cameroon Riots last four days and result in at least 40 deaths. Unrest is due to high fuel and food prices. Worst riots in country for 15 years

Mozambique At least four people killed and 100 injured following fuel price rises

Senegal Violent demonstrations in Dakar as prices of rice, milk and oil soar. Senegal imports almost all its food

Yemen Five days of rioting and a hundred arrests after the price of wheat doubled over two months. Protesters set up roadblocks in Sana’a and Aden

…and in Mauritania, Bolivia, Indonesia, Mexico, India, Burkina Faso, and Uzbekistan

Research by Jax Jacobsen

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Making a killing from hunger

We need to overturn food policy, now!

GRAIN

[See also this page with more documents and links]

For some time now the rising cost of food all over the world has taken households, governments and the media by storm. The price of wheat has gone up by 130% over the last year.[1] Rice has doubled in price in Asia in the first three months of 2008 alone,[2] and just last week it hit record highs on the Chicago futures market.[3] For most of 2007 the spiralling cost of cooking oil, fruit and vegetables, as well as of dairy and meat, led to a fall in the consumption of these items. From Haiti to Cameroon to Bangladesh, people have been taking to the streets in anger at being unable to afford the food they need. In fear of political turmoil, world leaders have been calling for more food aid, as well as for more funds and technology to boost agricultural production. Cereal exporting countries, meanwhile, are closing their borders to protect their domestic markets, while other countries have been forced into panic buying. Is this a price blip? No. A food shortage? Not that either. We are in a structural meltdown, the direct result of three decades of neoliberal globalisation.

Farmers across the world produced a record 2.3 billion tons of grain in 2007, up 4% on the previous year. Since 1961 the world’s cereal output has tripled, while the population has doubled. Stocks are at their lowest level in 30 years, it’s true,[4] but the bottom line is that there is enough food produced in the world to feed the population. The problem is that it doesn’t get to all of those who need it. Less than half of the world’s grain production is directly eaten by people. Most goes into animal feed and, increasingly, biofuels – massive inflexible industrial chains. In fact, once you look behind the cold curtain of statistics, you realise that something is fundamentally wrong with our food system. We have allowed food to be transformed from something that nourishes people and provides them with secure livelihoods into a commodity for speculation and bargaining. The perverse logic of this system has come to a head. Today it is staring us in the face that this system puts the profits of investors before the food needs of people.

Market realities

The policy makers who have shaped today’s world food system – and who are supposed to be responsible for averting such catastrophes – have come out with a number of explanations for the current crisis that everyone has heard over and over again: drought and other problems affecting harvests; rising demand in China and India where people are supposedly eating more and better than in the past; crops and lands being massively diverted into biofuel production; and so on. All of these issues, of course, are contributing to the current food crisis. But they do not account for the full depth of what is happening. There is something more fundamental at work, something that brings all these issues together, and which the world’s finance and development chiefs are keeping out of public discussion.

Nothing that the policy makers say should obscure the fact that today’s food crisis is the outcome of both an incessant push towards a “Green Revolution” agricultural model since the 1950s and the trade liberalisation and structural adjustment policies imposed on poor countries by the World Bank and the International Monetary Fund since the 1970s. These policy prescriptions were reinforced with the establishment of the World Trade Organisation in the mid-1990s and, more recently, through a barrage of bilateral free trade and investment agreements. Together with a series of other measures, they have led to the ruthless dismantling of tariffs and other tools that developing countries had created to protect local agricultural production. These countries have been forced to open their markets and lands to global agribusiness, speculators and subsidised food exports from rich countries. In that process, fertile lands have been diverted away from serving local food markets to the production of global commodities or off-season and high-value crops for Western supermarkets. Today, roughly 70% of all so-called developing countries are net importers of food.[5] And of the estimated 845 million hungry people in the world, 80% are small farmers.[6] Add to this the re-engineering of credit and financial markets to create a massive debt industry, with no control on investors, and the depth of the problem becomes clear.

Agricultural policy has completely lost touch with its most basic goal of feeding people. Hunger hurts and people are desperate. The UN World Food Programme estimates that recent price hikes have meant that an additional 100 million people can no longer afford to eat adequately.[7] Governments are frantically seeking shelter from the system. The fortunate ones, with export stocks, are pulling out of the global market to cut their domestic prices off from the skyrocketing world prices. With wheat, export bans or restrictions in Kazakhstan, Russia, Ukraine and Argentina mean that a third of the global market has now been closed off. The situation with rice is even worse: China, Indonesia, Vietnam, Egypt, India and Cambodia have banned or severely restricted exports, leaving just a few sources of export supply, mainly Thailand and the US. Countries like Bangladesh can’t buy the rice they need now because the prices are so high. For years the World Bank and the IMF have told countries that a liberalised market would provide the most efficient system for producing and distributing food, yet today the world’s poorest countries are forced into an intense bidding war against speculators and traders, who are having a field day. Hedge funds and other sources of hot money are pouring billions of dollars into commodities to escape sliding stock markets and the credit crunch, putting food stocks further out of poor people’s reach.[8] According to some estimates, investment funds now control 50–60% of the wheat traded on the world’s biggest commodity markets.[9] One firm calculates that the amount of speculative money in commodities futures – markets where investors do not buy or sell a physical commodity, like rice or wheat, but merely bet on price movements – has ballooned from US$5 billion in 2000 to US$175 billion to 2007.[10]

The situation today is untenable. Look at Haiti. A few decades ago it was self-sufficient in rice. But conditions on foreign loans, particularly a 1994 package from the IMF, forced it to liberalise its market. Cheap rice flooded in from the US, backed by subsidies and corruption, and local production was wiped out.[11] Now prices for rice have risen 50% since last year and the average Haitian can’t afford to eat. So people are taking to the streets or risking their lives to journey by boat to the US. Food protests have also erupted in West Africa, from Mauritania to Burkina Faso. There, too, structural adjustment programmes and food-aid dumping have destroyed the region’s own rice production, leaving people at the mercy of the international market. In Asia, the World Bank constantly assured the Philippines, even as recently as last year, that self-sufficiency in rice was unnecessary and that the world market would take care of its needs.[12] Now the government is in a desperate plight: its domestic supply of subsidised rice is nearly exhausted and it cannot import all it needs because traders’ asking prices are too high.

Making a killing from hunger

The truth about who profits and who loses from our global food system has never been more obvious. Take the most basic element of food production: soil. The industrial food system is a chemical-fertiliser junkie. It needs more and more of the stuff just to keep alive, eroding soils and their potential to support crop yields in the process. In the current context of tight food supplies, the small clique of corporations that control the world’s fertiliser market can charge what they want – and that’s exactly what they are doing. Profits at Cargill’s Mosaic Corporation, which controls much of the world’s potash and phosphate supply, more than doubled last year.[13] The world’s largest potash producer, Canada’s Potash Corp, made more than US$1 billion in profit, up more than 70% from 2006.[14] Panicking now about future supplies, governments are becoming desperate to boost their harvests, giving these corporations additional leverage. In April 2008, the joint offshore trading arm for Mosaic and Potash hiked the price of its potash by 40% for buyers from Southeast Asia and by 85% for those from Latin American. India had to pay 130% more than last year, and China 227% more.[15]

Table 1. Profit increase for some of the world’s largest fertiliser corporations

Company Profits 2007 (US$ million) Increase from 2006
(%)
Potash Corp (Canada) 1,100 72%
Yara (Norway) 1,116 44%
Sinochem (China) 1,100 95%
Mosaic (US) 708 141%
ICL (Israel) 535 43%
K + S (Germany) 420 2.8%

Source: Compiled from corporate reports

While big money is being made from fertilisers, it is just a sideline for Cargill. Its biggest profits come from global trading in agricultural commodities, which, together with a few other big traders, it pretty much monopolises. On 14 April 2008, Cargill announced that its profits from commodity trading for the first quarter of 2008 were 86% higher than the same period in 2007. “Demand for food in developing economies and for energy worldwide is boosting demand for agricultural goods, at the same time that investment monies have streamed into commodity markets,” said Greg Page, Cargill’s chairman and chief executive officer. “Prices are setting new highs and markets are extraordinarily volatile. In this environment, Cargill’s team has done an exceptional job measuring and assessing price risk, and managing the large volume of grains, oilseeds and other commodities moving through our supply chains for customers globally.”[16]

Table 2. Profit increase for some of the world’s largest grain traders

Company Profits 2007 (US$ million) Increase from 2006 (%)
Cargill (US) 2,340 36%
ADM (US) 2,200 67%
ConAgra (US) 764 30%
Bunge (US) 738 49%
Noble Group (Singapore) 258 92%
Marubeni (Japan) 90* 43%*

Source: Compiled from corporate reports
*Data is for Marubeni’s Agri-Marine division only.

Absent from this list is Louis Dreyfus (France), a private agricultural commodities trader with annual sales in excess of US$22 billion, which does not report its profits.

Managing and assessing are not so difficult for a company like Cargill, with its near monopoly position and a global team of analysts the size of a UN agency. Indeed, all of the big grain traders are making record profits. Bunge, another big food trader, saw its profits of the last fiscal quarter of 2007 increase by US$245 million, or 77%, compared with the same period of the previous year. The 2007 profits registered by ADM, the second largest grain trader in the world, rose by 65% to a record US$2.2 billion. Thailand’s Charoen Pokphand Foods, a major player in Asia, is forecasting revenue growth of 237% this year.

The world’s big food processors, some of which are commodity traders themselves, are also cashing in. Nestlé’s global sales grew 7% last year. “We saw this coming, so we hedged by forward-buying raw materials”, says François-Xavier Perroud, Nestlé’s spokesman.[17] Margins are up at Unilever, too. “Commodity pressures have increased sharply, but we have successfully offset these through timely pricing action and continued delivery from our savings programmes”, says Patrick Cescau, Group CEO of Unilever. “We will not sacrifice our margins and market share.”[18] The food corporations don’t seem to be making these profits off the back of the retailers. UK supermarket Tesco reports profits up 12.3% from last year, a record rise. Other major retailers, such as France’s Carrefour and the US’s Wal-Mart, say that food sales are the main factor sustaining their profit increases.[19] Wal-Mart’s Mexican division, Wal-Mex, which handles a third of overall food sales in Mexico, reported an 11% increase in profits for the first quarter of 2008. (At the same time Mexicans are demonstrating in the streets because they can no longer afford to make tortillas.[20])

It seems that nearly every corporate player in the global food chain is making a killing from the food crisis. The seed and agrochemical companies are doing well too. Monsanto, the world’s largest seed company, reported a 44% increase in overall profits in 2007.[21] DuPont, the second-largest, said that its 2007 profits from seeds increased by 19%, while Syngenta, the top pesticide manufacturer and third-largest company for seeds, saw profits rise 28% in the first quarter of 2008.[22]

Such record profits have nothing to do with any new value that these corporations are producing and they are not one-off windfalls from a sudden shift in supply and demand. Instead, they are a reflection of the extreme power that these middlemen have accrued through the globalisation of the food system. Intimately involved with the shaping of the trade rules that govern today’s food system and tightly in control of markets and the ever more complex financial systems through which global trade operates, these companies are in perfect position to turn food scarcity into immense profits. People have to eat, whatever the cost.

The urgent need for a policy rethink

The larger backdrop to this perverse food market situation is the global financial system, which is now teetering on its flimsy axis. What began as a localised housing loan collapse in the US in 2007 has unravelled into something far more serious, as people realise that the emperors of the global financial system have no clothes. The world economy is living on debt that no one can pay. While central bankers and Lear jet executives try to patch the holes and restore confidence, the underlying truth is that the system is close to bankruptcy and no one in power wants to take the necessary tough measures: not the IMF, nor the World Bank, nor the leaders of the world’s most powerful nations. Not much more than public relations glitter can be expected from the G8 meeting in June.

Similar problems lie at the heart of the food crisis: an ideologically driven elite has forced countries to wrench open markets and let the free market run, so that a few megacorporations, investors and speculators can take huge payoffs. Many countries have lost that most basic power: the ability to feed themselves. This loss, coupled with the corruption that plagues our countries and trading systems, shows that neoliberalism has lost any legitimacy that it might once have had. It is a measure of how out of touch these ideologues are that many now openly call for more trade liberalisation as a solution to the food crisis, with some even proposing that the rules of the WTO be changed to prevent countries from imposing export restrictions on food.[23]

The World Bank president, Robert Zoellick, has tried to win the world over with his call for a “New Deal” to solve the hunger crisis, but there is nothing new about it: he calls for more trade liberalisation, more technology and more aid. Today’s food crisis is the direct result of decades of these policies, which must now be rejected. While immediate action is necessary to lower food prices and to get food to those who need it, we also need radical changes in agricultural policy so that small farmers around the world gain access to land and can make a living from it. We need policies that support and protect farmers, fishers and others to produce food for their families, for the local markets and for people in cities, rather than money for an abstract international commodity market and a tiny clan of corporate boardroom executives. And we need to strengthen and promote the use of technologies based on the knowledge and in the control of those who know how to grow food. To put it another way, we need food sovereignty, now – the kind that is defined and driven by small farmers and fisherfolk themselves.

Social movements around the globe have been struggling to promote such a reversal of strategy, only to be dismissed as unrealistic and backward by those in power, and often violently repressed. The glimmer of hope in this crisis is that the situation can be reversed. Peasant organisations have concrete proposals about what needs to be done to resolve the crisis in their countries, and governments should listen to what they are saying. Already some governments are talking of a policy change towards food self-reliance.[24] Others are starting to question the fundamental rationale of pushing for more free trade. Neoliberal hawks at the top of the global food policy pyramid have lost whatever credibility they may think they once had. It is time for them to move out of the way so that the visions of food sovereignty and agrarian reform that come from the grassroots can take their place and get us out of this hellish mess.


Going further:


References

1 Bloomberg, quoted by the BBC, London, 14 April 2008, http://news.bbc.co.uk/2/hi/business/7344892.stm

2 BBC, “Action to meet Asian rice crisis”, London, 17 April 2008, http://news.bbc.co.uk/2/hi/business/7352038.stm

3 See http://www.riceonline.com for daily reports. With many Asian rice exporters out of the game, needy countries from Asia and Africa are turning to the US market where prices are going through the roof.

4 Brian Halweil, “Grain harvest sets record, but supplies still tight”, Worldwatch Institute, Washington DC, http://www.worldwatch.org/node/5539

5 Katarina Wahlberg, “Are we approaching a global food crisis?”, World Economy & Development in Brief, Global Policy Forum, 3 March 2008,

6 Food policy expert interviewed on Radio France International, Paris, 20 April 2008.

7 “UN food chief urges crisis action,” BBC, London, 22 April 2008, http://news.bbc.co.uk/2/hi/americas/7360485.stm

8 Sinclair Stewart and Paul Waldie, “U.S. food producers, speculators square off”, Globe and Mail, Toronto, 23 April 2008,

9 Ibid. and Paul Waldie, “Why grocery prices are set to soar”, Globe and Mail, Toronto, 24 April 2008,

10 Paul Waldie, “Why grocery prices are set to soar”, op cit.

11 Bill Quigley, “USA role in Haiti hunger riots”, ZNet, US, 23 April 2008,

12 World Bank, “Can the world market for rice be trusted”, Box 1 on p. 52 of “Philippines: Agriculture Public Expenditure Review,” Technical Paper, World Bank, Washington DC, 2007, http://go.worldbank.org/TGRSK19300

13 Potash and phosphates are two of the main ingredients in chemical fertiliser.

14 David Ebner, “Saskatchewan: A lot more than wheatGlobe and Mail, Toronto, 11 April 2008,

15 John Partridge and Andy Hoffman, “China deal sends Potash soaringGlobe and Mail, Toronto, 17 April 2008,

16Cargill income up sharply in third quarter”, World Grain, Kansas City, 14 April 2008,

17Tightening belts,” The Economist, London, 10 April 2008,

18 Jonathan Sibun, “Unilever profits surge despite price pressures,” Daily Telegraph, London, 3 November 2007, http://tinyurl.com/6p8tcx; and, “Get set for more price hikes: Unilever chief,” Business Standard, India, 16 March 2008, http://tinyurl.com/694cqn

19 Foo Yun Chee, “Major European retailers post higher profits for 2007,” Reuters, 6 March 2008, www.iht.com/articles/2008/03/06/business/RETAIL.php

20 Associated Press, “Wal-Mart de Mexico’s 1Q profits rise 11 percent on higher sales, cost controls,” 8 April 2008,

21 Monsanto, Annual Report, 2007.

22 DuPont, Annual Report 2007, and “Syngenta anuncia cifra negocio en progresión 28 por ciento primer trimestre”, EFE, 22 de abril 2008,

23 Isabel Reynolds, “WTO should pressure food exporters – Mandelson”, Reuters, 23 April 2008,

24 See, for example, recent comments from West African farmers and officials: Noel Tadégnon, “Le ROPPA préconise une pression sur les autorités politiques pour soutenir l’agriculture africaine,” APA, 23 April 2008, http://www.apanews.net/apa.php?article61599; and, “Réunion extraordinaire du Conseil des ministres de l`UEMOA, hier : 200 milliards pour freiner la flambée des prix,” Le Nouveau Réveil, Abidjan, 24 April 2008, http://www.lenouveaureveil.com/a.asp?n=290011&p=1903

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Bird flu in eastern India:

another senseless slaughter

GRAIN (grain.org)

The carnage of poultry in the eastern Indian state of West Bengal (abutting Bangladesh’s western border) is a striking testament to the failure of the global response to the bird flu crisis. Years have now gone by since the H5N1 strain of the disease emerged, and yet today in West Bengal we see that things have not moved from square one.

In a flash, one of the world’s most dynamic areas of poultry farming has been practically ruined, a priceless stock of biodiversity wiped out, and the livelihoods of millions of poor families pushed to the brink. This has been caused not so much by bird flu as by the response to it. Three weeks after bird flu was officially confirmed on 15 January 2008, when massive culling operations were launched, the death toll stood at a shocking 3.7 million birds.

More is yet to come. The central government has now issued a directive to neighbouring states to cull all poultry in a 5-km-wide belt surrounding West Bengal. Those affected by this “pre-emptive” cull are understandably outraged. Poultry farmers in Orissa, one such neighbouring state, are taking their protests to the streets and to the state’s High Court. They say that the culls will destroy their livelihoods and the area’s rich poultry diversity. They also point out that such culls will only encourage an influx of smuggled poultry imports from elsewhere.

West Bengal - Bird Flu - Woman crying

A resident of Jhero village in Hooghly district of West Bengal bursts into tears before handing over her pets to health workers for culling – http://tinyurl.com/3442sz

There was heavy resistance to the culls in West Bengal too. During the first wave of culls, when it may have been possible to contain the disease, poultry owners refused to participate because of low compensation rates and, most disturbingly, because some local officials were taking a big cut of the compensation. A few culling teams even stopped work to protest against pressure from local officials to sign false cull certificates to boost their compensation claims. Reports also came in of culling teams leaving sacks of birds to rot in fields and unprotected villagers gathering near to or even participating in the cullings, putting into question the merits of culling as a means of safeguarding human health. The situation appears to be even worse in neighbouring Bangladesh, where, despite a mass culling campaign, bird flu has spread to more than half of the country’s 64 districts since March 2007.

The response to bird flu in West Bengal needs to be seen for what it is: a political decision to safeguard the interests of the big poultry producers at the expense of the small-scale sector. In India as a whole, thanks to heavy government support, poultry production has been growing at a rate of nearly 20% per year, with most of the growth occurring through the expansion of large-scale integrated production, largely for export and largely in the midst of areas with thriving backyard and small-scale poultry producers. The situation is no different in West Bengal, where a number of big integrated poultry firms have set up in recent years. The largest, Arambagh Hatcheries, part of the B.K. Roy agribusiness group, is now an important player in major export markets, such as Japan and the Middle East, and politically very well connected at home. To keep its trade lines open, a company like Arambagh cannot operate where bird flu is present – hence the drive to stamp the disease out by a mass cull. This is a reality of corporate poultry farming that all communities need to be aware of: if a big poultry company sets up in or near to your community, when a disease like bird flu breaks out, whether or not your birds are affected, they will be culled and your traditional poultry practices may even be outlawed. The culls in West Bengal have now been followed by a 3-month ban on small-scale poultry production.

If there’s one thing that people in West Bengal can be sure of, it is that bird flu will strike again, if it ever leaves. The virus, like many other diseases, is entrenched in the poultry industry in Asia. Thailand and Indonesia now know this, as do China and Vietnam. India, faced with its third bout of bird flu in two years, should also now understand. Bird flu cannot be completely eradicated: it has to be managed.

map of west bengal

A map showing West Bengal (dark shading) bordering Bangladesh – http://tinyurl.com/3b2dge

Paradoxically, the key to effective management of bird flu lies with the very small-scale poultry systems that have been so devastated by the responses to the disease so far. The great advantages of these traditional systems when it comes to bird flu are that they are small-scale and local – serving mainly local markets and utilising local breeds and feeds. All this keeps the disease contained and at low levels. In these circumstances, highly pathogenic diseases like bird flu, in the rare cases where they enter smallholdings, tend to burn themselves out quickly. Disease can, of course, still be a problem, but, with some minimal support, farmers can easily handle it, as has been shown with another poultry killer – New Castle Disease (Ranikhet).

Unfortunately, in West Bengal, as in most places around the world, governments provide virtually no support to this sector, dismissing it as “backyard” and not worthy of the tremendous support provided to the poultry companies, even though these small-scale systems have served the food needs of rural and urban markets for generations. Instead, the goal of almost all poultry development programmes worldwide is to scale-up small poultry holdings and push the farmers into using high-yielding varieties and costly feeds supplied by big poultry companies. It should not go unnoticed that the outbreak of bird flu in West Bengal began in a big state-run hatchery. And this is typical of other outbreaks. Bird flu only shifts from an isolated incident to a major outbreak once it gets into a large farm, where it rapidly amplifies and spreads through the many channels emanating from it – the sale of eggs, chicks or spent layers, the trade in live birds, the dumping of waste, the movement of workers or even the aerial dispersal of the virus.

Yet in West Bengal, while the backyard sector was being crushed, the big farms, even those in affected districts, were given special treatment. During the ban on the sale and movement of poultry in Kolkata (Calcutta), the state capital, which was later extended to the entire state, the 12 largest poultry companies had exclusive permission to continue supplying city markets and luxury hotels if they could show that they adhered to “biosafety” norms. Such norms, however, have not kept bird flu out of the big poultry farms in West Bengal, nor did they in the western state of Maharashtra during the 2006 outbreak, nor now in Bangladesh, where the disease is currently racing through the larger farms. Instead, in West Bengal there is reason for concern that outbreaks in these bigger farms may not be properly reported. A year ago, when news spread of an unusual die-off in a farm owned by Arambagh Hatcheries, the company denied access to inspectors, with the apparent blessing of the Animal Resources Development Minister, who told reporters, “Nobody can walk into a hatchery without prior permission”. Contrast this with the West Bengal government’s current mobilisation of a police squad to carry out search-and-destroy missions for backyard poultry in poor villages.

resistance in west bengal

“Don’t kill chicken” – resistance to the mass culling of fowl

The official response to bird flu in West Bengal was very short-sighted. Other options could have been pursued, with a more nuanced approach, reflecting the importance and context of small-scale poultry in the state. The ban on the movement of poultry could have been followed by focused surveillance and education, combined with targeted culls at infected farms, and vaccination, especially in the early days of the outbreaks. This would also have helped to build long-term defences against future outbreaks. It might not have satisfied the big poultry companies, because the low-level persistence of the disease would keep export markets closed, but it would have safeguarded the interests of the millions in West Bengal whose livelihoods and food supply depend on small-scale poultry production.

One month before the outbreaks in West Bengal, these issues were on the table at a major international conference on bird flu in New Delhi. Yet, throughout the outbreaks in West Bengal, the international community and its UN agencies have hardly been visible. The US and Japan did meet with state officials, but only to check on their export supplies and, in the case of the US, to offer some technical support and equipment and to verify the global availability of stocks of Tamiflu syrup for children. Once again, the UN’s Food and Agriculture Organisation (FAO) was silent about the irreparable loss of diversity that the cull would entail and the alternatives to indiscriminate culls that have been successfully deployed in other countries. The message raised at the conference in Delhi by some within the FAO ranks, about the need to consider the social impacts of responses and the importance of “targeted” culls, was quickly forgotten. Not that such matters are high on the agenda of the international community anyway, judging from the disturbing inability to resolve international disputes over the sharing of virus samples and vaccines. The row that flared up in February 2007 over patenting issues – between the powerful pharmaceutical interests, led by the US and the UK, and the poor countries most vulnerable to bird flu, led by Indonesia – has yet to be resolved. The nasty politics even surfaced during the West Bengal outbreaks, when Indian officials accused Bangladesh of not sharing their bird flu virus samples.

Sadly, with not nearly enough being done to address the deeper structural issues at the root of the global bird flu crisis, the story in West Bengal will be repeated where and when the disease strikes next.


References

R. Ramachandran, “Caught Unawares”, Frontline, Vol. 25, No. 3, 2–15 February 2008: http://www.hinduonnet.com

Suhrid Sankar Chattopadhyay, “Avian epidemic”, Frontline, Vol. 25, No. 3, 2–15 February 2008: http://www.hinduonnet.com

Kounteya Sinha, “Bengal pays for not paying dues”, Times of India, 18 January 2008, http://tinyurl.com/3468as

Subir Bhaumik, “Bird flu cull hit by ‘corruption’”, BBC News, 29 January 2008, http://news.bbc.co.uk/1/hi/world/south_asia/7214854.stm

“People in West Bengal cry foul over compensation for birds’ culling”, Asian News International, 22 January 2008, http://tinyurl.com/36fuqb

Dilip Bisoi, “Orissa in a fix as move to cull birds lands in legal tangle”, Financial Express, 11 February 2008, http://tinyurl.com/34ckvl

“Bird flu in N 24 Parganas, organised poultry also hit”, Express News Service, 30 January 2008: http://www.expressindia.com

“Bird flu: West Bengal misses hidden poultry”, Sify News, 4 February 2008: http://sify.com/news/fullstory.php?id=14599392

“‘No poultry ban in Kolkata’ but none to be found in markets”, Express India, 31 January 2008: http://www.expressindia.com

“Fears allayed in flu cry”, The Telegraph (Calcutta), 22 February 2006: http://www.telegraphindia.com/1060222/asp/calcutta/story_5876730.asp

“Avian flu fear, 45 km from outbreak site” The Telegraph (Calcutta), 19 January 2008: http://www.telegraphindia.com/1080119/jsp/siliguri/story_8799764.jsp

“US offers help to contain bird flu outbreak in WB”, Times of India, 28 January 2008, http://tinyurl.com/37lu4q

Anni McLeod, FAO, “Mitigating social and economic impacts: Livestock sector perspective”, International Ministerial Conference on Avian and Pandemic Influenza, New Delhi, India, 4–6 December 2007: http://www.fao.org/avianflu/en/

Going Futher

Government of India, “Influenza Pandemic Preparedness Plan”: http://mohfw.nic.in/Influenza%20Pandemic%20Preparedness%20Plan.pdf

GRAIN, “Viral times – the politics of emerging global animal diseases”, January 2008: http://www.grain.org/seedling/?id=532

GRAIN, “Germ warfare – livestock disease, public health and the military–industrial complex”, January 2008: http://www.grain.org/seedling/?id=533

GRAIN, “The top-down global response to bird flu”, http://www.grain.org/articles/?id=12

GRAIN, “Fowl play: the poultry industry’s central role in the bird flu crisis”, February 2006: http://www.grain.org/briefings/?id=194

GRAIN, “Bird flu resource page”, http://www.grain.org/m/?id=84

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The UN Food and Agriculture Organization is currently holding an emergency summit in Rome that will be focusing on the current global food crisis, but rejuvenating and protecting agriculturalists does not seem to be on the agenda.

In the past couple of months the attention of the world has been directed at the issue of food availability and production, but poor people across the world have felt its effects for years.

Global food prices have risen 83% over the last three years while recent price rises have only accelerated this trend. According to the FAO, there has been a 45% increase in their world food price index during just the past nine months while the Economist’s own food price index puts wheat prices 130 percent above last year’s levels.

This has hit the developing world particularly hard, and not just because poorer people spend a relatively higher proportion of their income on food. Previous bouts of neoliberal structural adjustment at the request of financial institutions already placed many national economies in a precarious state and often led directly to higher food prices.

This general situation combined with recent price rises has contributed to the wave of food riots that has taken hold in countries as diverse as Haiti, Indonesia, Mexico, Bangladesh, Burkina Faso, Egypt, Senegal, Cameroon, Morocco, Yemen, Somalia and the Philippines – showing with crystal clarity the global scale of the problem.

The threat of political instability and the whiff of revolution has galvanised the World Bank, the UN and the governments of richer nations – hence the attention that this current spike in prices is receiving. However, with crisis comes opportunity. As Naomi Klein has counseled us in her book the Shock Doctrine – neoliberalism works best when societies are prepared for its implementation via societal “shock.” Debt and hunger – both products of rising food and oil prices – are generating just such a shock. So while there is a fear of instability, there is also a sense of opportunity.

Long hindered measures such as expanded cultivation of Genetically Modified Crops are being pushed as solutions to the crisis. At the same time, the much-maligned practice of biofuel (or agrofuel) cultivation is being defended by its corporate and governmental advocates. The lines have been drawn and battle has been joined in Rome, where the future of global agriculture is being fought over.

Crisis, which crisis?

A battle it certainly is. Simply put, there are two sides to the summit, offering two versions of “crisis.” What version of crisis we accept is crucial to formulating policies to combat its effects – the fate of whole ecosystems and peasant populations hinges on what we believe drives higher commodity prices. Do we blame rising demand and tight supplies, or the early effects of climate change? Or do we seek answers in the role that financial speculation, neoliberal restructuring and biofuel cultivation play alongside those other factors?

The first version, which serves the interests of the international finance institutions, is represented by developed nations such as the U.S., the UK and global agribusinesses like Monsanto, Cargill, BP (biofuels) or Syngenta. It focuses on the role that increased demand from China and India and tightened supplies are playing in driving prices skywards. Meanwhile, farmers in Africa and elsewhere remain too unproductive, with dilapidated road systems unable to transport their produce to market. They are hence in need of “modernization.” Along with that, the leaders of the FAO and the World Bank agree, must come technological innovation. The language of a “new Green Revolution” is being mobilized, with GMOs in the vanguard.

The second version wells up from peasant organizations such as Via Campesina, and is represented by a clutch of eloquent NGOs such as Practical Action, Food First, GRAIN, Movement for the Global South and the World Development Movement. Its diagnosis of the current crisis is far deeper. Rather than being a short term rise in food and oil prices, this version tends to see the crisis as rooted in the longer-term neoliberal project. Food prices in poor countries have been allowed to rocket by the system in which consumers are now embedded – with government run distribution networks dismantled, grain stores abandoned, large corporations dictating prices and highly indebted nations and farmers converting to export crops to earn highly prized foreign currency.

In short, the first version counsels not business as usual, but business as usual – enhanced. Big agriculture, techno-fixes, market liberalization – all of this must expand. The second counsels systemic reform as advocated by small farmers. Inevitably the two continue to collide as the battle for global agriculture intensifies.

The question then becomes, do we attack and reform the system or do we strengthen it? The stakes could scarcely be higher.

Grain, grain everywhere, and not a loaf to eat

However, despite the atmosphere of crisis and very real spiraling prices, the truth is that food supplies are not particularly tight. There is no Malthusian crisis on the near horizon, at least not owing to climate change or the exhaustion of arable lands to cultivate.

2007 saw a record global grain harvest. As the May 2008 Food First paperFrom Food Rebellions to Food Sovereignty: Urgent call to fix a broken food system“ puts it, this is “at least 1.5 times current demand” while “ In fact, over the last 20 years, food production has risen steadily at over 2.0% a year [and] the rate of population growth has dropped to 1.14% a year.” In 2006, 854 million people were food insecure. The food system was starving people well before this current crisis.

What has changed is that the contours of the global food market have dramatically shifted. While forty years ago, developing nations as a whole had a food export surplus of $7 billion, by 1980 that had shrunk to $1 billion and, according to Food First, “the southern food deficit has ballooned to US $11 billion/year.”

This is the “result of systematic destruction of southern food systems through a series of northern economic development projects.” These projects are by now familiar – structural adjustment programs which gutted local storage, distribution and marketing systems, huge subsidies to European and U.S. farmers, “free trade” agreements which locked in liberalized agricultural markets, the “green revolution” which primarily benefited large farmers and corporations while making many small farmers dependent upon chemical inputs to farm marginal lands.

Many of these “projects” were piloted by the World Bank and IMF, yet it is the World Bank that is stepping up to the plate to propose crisis measures. On May 29, the Bank announced the launch of a $1.2 billion “fast-track facility for [the] food crisis” including $200 million in grants “targeted at the vulnerable in the world’s poorest countries.”

Haiti ($10 million), Liberia ($10 million) and Djibouti ($5 million) are the first nations to receive such assistance, although as Bank chief Robert Zoellick says, this is part of “longer-term solution that must involve many countries and institutions,” including the FAO, meeting in Rome.

It must also include benefits for corporations and encouragement of GM crops. In an “Outlook Paper” circulated before the Rome summit, the Secretary General of the OECD Angel Gurria wrote that “The way to address rising food prices is not through protectionism but to open up agricultural markets and to free up the productive capacity of farmers, who have proven repeatedly that they will respond to market incentives.”

FAO Secretary General Jacques Diouf wrote in a press release last week that “high food prices represent an excellent opportunity for increased investments in agriculture by both the public and private sectors to stimulate production and productivity” adding that “Governments, supported by their international partners, must now undertake the necessary public investment and provide a favourable environment for private investments.”

The agenda for the summit is clear – more of the same, with the World Bank back at the helm. The systematic destruction continues.

A brave new World Bank

Critics of the World Bank have long questioned its motives in dispensing aid to poorer nations and have attacked the conditionalities that it has attached to its loans as a means of opening up undeveloped economies to corporate predation. Yet the IMF and World Bank have stumbled in recent years, partly due to their failed policies, but also due to a credit glut brought on by spiraling oil prices. Smaller nations have not needed the services of the global institutions and their power has begun to wane. But with the credit crunch and rising food prices, some nations are headed back to the trough.

Eric Holt-Gimenez of Food First, thinks that this represents an opportunity for the World Bank to regain some of its lost influence. As he told me, “For the World Bank, the food crisis comes at a perfect time.” With the credit glut and countries turning away from the Bank, “the challenge became how to get countries of the global south to borrow again.”

Rising food prices have fortunate effects for the Bank. As Holt-Gimenez continued, “The world food crisis solves both the problem of over-accumulation of finance capital and the problem of overproduction of grain, that neither biofuels nor the beef industry is capable of sopping up.”

Meanwhile, Holt-Gimenez expects the Bank to “prepare the field with its loans and conditions for the spread of industrial (GMO) seeds and inputs” – allowing corporations and the Bank itself to pose as “saviors” through the spread of high-tech methods. Echoing Klein, he calls this “Another fine case of “disaster capitalism” at work” as human misery prepares the ground for renewed capital accumulation, against the wishes of those it purports to serve.

A summit of deception?

The FAO Summit has attracted a host of activist organizations to propose an alternative vision of agricultural reform and to resist the model being pushed by the World Bank and the leadership of the FAO. Eloquent statements have been issued from groups such as Via Campesina, Food First, GRAIN, and the International Planning Committee for Food Sovereignty (IPC). In the press, excellent diagnoses of the crisis and calls to action have appeared from Walden Bello alongside Raj Patel’s book and testimony on Capitol Hill.

There has been no shortage of high quality writing on the issue, and certainly no shortage of passion. A bottom-up alternative to corporate-led agricultural globalization is readily available. As GRAIN writes in its statement “Peasant organisations and their allies have clear, viable ideas about how to organize production and services and how to run markets and even regional and international trade. Ditto for labor unions and the urban poor, who have an important role to play in defining food policy.”

Unfortunately, the problem is that those in power simply aren’t listening. The FAO has shut its ears to alternative notions of agricultural development, turning its Rome summit into a rubber-stamping exercise that will put profits before people and land.

This is shown in heartbreaking detail by the FAO’s own preparatory documents for the summit. As with all gatherings of international institutions, the FAO has consulted its “stakeholders” although some decidedly more closely than others. When it consulted its “civil society” stakeholders, the result was perhaps the most thorough analysis of how to solve the food crisis yet delivered.

From raising awareness of consumption patterns in the developed world, promoting sustainable farming practices, setting up a framework to tackle climate change without harming rural livelihoods to disseminating information on climate change and methods of cultivation, the civil society stakeholders made some sensible recommendations for the FAO.

It recommended that bioenergy (in the form of sustainably harvested local sources such as plant products or animal dung) be promoted instead of biofuels. It argued that the FAO should demand that governments adopt measures to prevent the dispossession of rural people for plantations and carbon offset schemes. It proposed that the FAO promote seed sharing and document and disseminate indigenous knowledge. It advocated the protection of biodiversity by local peoples, while it also called for the Right to Food to guide global agricultural policies, not the right to profit.

It has also been roundly ignored.

Patrick Mulvany, senior policy adviser at UK based NGO Practical Action (and a participant in the civil society consultation) told me that at a 2 June plenary meeting with FAO officials, activists from Via Campesina attacked the FAO process. Speakers from the peasant activist group, which had been shut out of February’s consultation meetings, called the summit a “sham exercise” while others questioned why recommendations from the consultation were completely absent from the summit agenda.

Not only that, but participants also asked FAO staff where the findings of the FAO convened International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD) had gone. That report, which recommended support for small scale agriculture and attacked biofuels and intellectual property rights, is similarly absent from the summit agenda.

As Mulvany puts it, the feeling is that the whole consultation was “a token exercise so that [the FAO and World Bank] could say that there was a consultation with civil society.”

At the summit itself, civil society representatives have been dismayed to discover that they alone will be forced to enter via the venue’s rear entrance. When inside, they will be permitted only a 90-minute forum with an agenda set by the FAO. Meanwhile, according to Mulvany, a private sector round-table upstairs will be addressed by Kofi Annan, the FAO’s head Jaques Diouf and representatives of agribusiness giants like Monsanto and Syngenta.

Other attendants see the summit as a stage for leaders to use to enhance their images. Helena Paul, head of UK based not for profit Econexus, told me that “The summit has become “Important” (with a capital I) chance for leaders to come to make their pronouncements.” While the leaders strut, Paul continued, and aid pledges trickle in, “pledges are not going to address the underlying crisis. They cannot address the problems of monoculture and industrial agriculture.”

The palace under siege from the peasants

The Rome summit seems to have been designed to ensure the “exclusion of civil society voices” – in Mulvany’s words – but this is an aim which reflects the parlous state of neoliberal dominance, rather than its strength. A 1km exclusion zone policed by Italian PM Silvio Berlusconi’s caribinieri many exclude the persons of the global poor, but the neoliberal consensus is under sustained and potentially mortal assault from all sides.

Campaigning groups have long questioned the legitimacy of the international trading system which privileges subsidized U.S. or European made products. But recent work has also demonstrated the severe shortcomings of the first “green revolution” – with increasing pesticide use and soil degradation. Others have demonstrated the superior productivity of small farmers, while numerous studies have forced proponents of GM crops onto the defensive.

Alternative power blocs have arisen to challenge international financial institutions and to push for solutions to the food crisis – as in Latin America. India, meanwhile, has imposed restrictions on grain exports and begun to reestablish supports for small farmers. Malaysia has proposed a barter scheme trading palm oil for rice. Biofuels have been knocked off their pedestal and their proponents are now scrambling to designate them as “sustainably produced.”

This is, as Mulvany told me, an “interesting conjuncture and an exciting time” – opening a window for resistance to climb through into the precincts of the global citadel. As Holt-Gimenez reminds us though, it is also a dangerous time, with governments pleading for “support” from the World Bank and a new wave of corporate enrichment likely to masquerade as charity.

What happens in Rome might not determine the future of global farming, but it may be a turning point in the fight for a fair, sustainable, bottom-up world of fields, watersheds, forests, grasslands and valleys.

Alternatively, we could – as Holt Gimenez puts it – “ask an arsonist to put out a forest fire.” I know who I’d trust to put our global food system right.

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see also:

Fowl play: The poultry industry’s central role in the bird flu crisis
Starvation: The Planned Road to World Revolution

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