| The Guardian article goes on to attribute this crisis to 3 reasons:
1. Lack of investment in agriculture
2. Low wages
3. Concentration of agribusiness firms
Please indulge me as I share what they had to say on each topic.
First, there is a crisis of cultivation, especially in the developing world. This is the result of two decades of policy neglect: falling public investment in agricultural research, extension and support; aggressive trade liberalisation that exposed southern farmers to heavily subsidised marketing by northern agribusinesses; financial liberalisation that reduced cultivators' access to credit and made them prey to speculative forces that also affected prices. As a result, cultivation costs have increased even in years when crop prices are falling, and cultivation is becoming unviable in many countries.
Second, this has been associated with a depression in wages in developing countries, which means that mass purchasing power did not increase even when the economies were growing. So demand for food has not gone up, simply because the poor do not have the incomes to pay for it.
Third, there has been an increasing concentration of firms operating in global agriculture, with a few large agribusinesses coming to dominate both input and output markets. These companies are also the ones who benefit from government subsidies promoting ethanol, which divert land meant for food to the paradoxically more energy-intensive production of fuel for cars. This concentration is reflected in recent food-price trends: while world prices have fallen sharply in the past four months, retail prices of food in most developing countries have not fallen.
The article may be about the "third world" but these same 3 factors apply to the U.S. too. Furthermore, identifying 3 problems also gives us 3 no-brainer solutions: invest in agriculture, increase wages, and break up the enormous anti-competitive agribiz companies. Re: the latter - we've already even got the right law on the books - the Packers & Stockyards Act. We just have to enforce it (which Vilsack says he plans to do).
(For example, the four largest beefpackers went from owning over 80% of the market to over 90% of the market in the past year due to about 2 mergers... JBS merged with Swift, and then with Smithfield, and they tried to buy National Beef as well but the Bush admin actually blocked that one. Had they done that, then only 3 companies would have controlled over 90% of the beef market.)
About investing in agriculture... there has been ample research showing that organics can both sequester carbon from the atmosphere (thus preventing or slowing down global warming) AND better withstand the effects of global warming. We need a government that is willing to invest in agriculture by helping farmers - and in fact, urging farmers - to convert to organic, sustainable farming methods AND help keep the currently existing sustainable farms in business. |
