Commentary | Global agribusiness

How the globalization of the food supply is starving world’s poor

When the price of a commodity increases, the number of people who cannot afford it increases too. Food and water are no exception.

The World Health Organization estimates that “about 2.6 billion people … lack even a simple ‘improved’ latrine and 1.1 billion people have no access to any type of improved drinking source of water.” According to the United Nations Food and Agriculture Organization (FAO), 925 million people are “undernourished.” The resulting annual rates of disease and death are in the millions, largely affecting children.

In January of this year, the FAO reported that “world food prices surged to a new historic peak … [which] clearly show[s] that the upward pressure on world food prices is not abating.” This is despite a massive surge in investment in global agribusiness. For instance, the International Finance Corporation (IFC), a World Bank group, “has made [the global] agribusiness a priority … combin[ing] investments and advisory services to help the private sector address higher demand and escalating food prices in an environmentally sustainable and socially inclusive way.” Bullshit.

Between 2000 and 2009, the IFC increased its annual investments “across the agribusiness supply chain” by approximately 670 per cent, to $2 billion. So why are the practices of global agribusiness investors making the world, on the whole, hungrier? The privatization, globalization, and deregulation of the world’s food supply chain and food trade “from farm to fork,” means that pressure from the excessive consumptive demands of rich foreign markets, such as ours, drives the price of food out of the reach of the poor local populations where investments in food production are made.
The story doesn’t end there. When poor countries develop major economic problems and ask for our help, the International Monetary Fund, World Bank, and World Trade Organization take the opportunity to hoodwink them. We promise to rescue and “develop” floundering economies through loans. These are contingent upon risk management in the form of Structural Adjustment Programs (SAP) and bilateral trade agreements. These are Trojan horses.

Essentially, we assess a country’s resources, and in return for “investment,” require them to restructure their economy. This typically involves large foreign corporations gaining the right to harvest a country’s resources, and to turn the country into a production engine of goods for trade in the global market. Increases in gross domestic product (GDP) are meant to trickle down to the local population, but because the corporations are foreign-owned, so are most of the profits. Promised local development and wealth generation never happens, quite the opposite.

When this restructuring is applied to agriculture, the situation is even worse. A 1997 article in Culture and Agriculture puts it plainly: “Despite the growth in the GDP, structural adjustment does not appear of much help to the agricultural sector. In theory, devaluation, by lowering the relative price of farm commodities on the international market, should make a country’s agricultural exports more competitive. However, it is by no means certain that increased exports compensate for the loss of purchasing power of a cheaper currency.” After this required restructuring, poor countries can’t even afford to buy the food they are forced to produce.

Because local governments accept SAPs under extreme duress, appropriate industrial and labour regulations are never put into place. Local firms, in this case farms, are forced out of business. Populations are displaced as enormous swaths of traditionally managed land are converted into factory farms. Our companies loot and pillage with abandon, often resulting in ecological and social disasters that ultimately deepen the crises these companies were supposed to help relieve.

On top of all this, the implementation of poorly-planned factory farming can destroy their local environment. Arable land is exploited to the point of infertility. Irrigation systems are not properly developed, and coupled with abusive use of pesticides and fertilizers, local water systems become deeply damaged, which can devastate the ecosystems they support.
While globalization and privatization of the world’s food supply might be great for the bottom line of large companies headquartered in the well-fed developed world, they are also starving the developing world.

To be continued next week with “The World’s Water.”

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