Caught in food pirates’ trap

In this critique of the food and agrarian policies pursued by the current Indian administration, Devinder Sharma laments its failure to draw the lessons from the social unrest in recent years caused by the debacle of similar development models elsewhere

On December 17, Mohammed Bouazizi, a 24-year-old vegetable seller in Tunisia, set himself on fire. Within weeks that fire spread fast, forcing Tunisian President Zine El Abidine Ben Ali to flee the country, deposing Egypt’s long-ruling autocrat Hosni Mubarak and threatening to overthrow Libya’s Muammar Qadhafi in a bloody uprising.

The tremors have still not died down in the rest of the Middle East. Yemen, Jordan, Bahrain, Morocco, Qatar, Kuwait and Saudi Arabia are simmering with discontent. The heat from the fire that began from Tunisia several weeks back is still warm enough to cause political upheavals. The Middle East fire is still smouldering. The revolt in the Arab world is the outcome of a mix of combustibles. But high unemployment and rising food prices have surely added fuel to the fire. Low investment in education, job creation and domestic food production had rendered these countries ruled by long-serving corrupt and dictatorial regimes highly vulnerable to political turmoil.

Political tsunami

With food prices spiralling in the past few months and with lack of employment opportunities, the bubble went bust.

Unlike the 2008 global food crisis, when 37 countries faced food riots, ousting the Haitian President in the process, spiralling fuel and food prices, especially since September 2010, have been even more piercing this time, resulting in a strong political tsunami. It all began when Russia, faced with extended drought and widespread wildfires, brought in an export ban till the next year’s wheat harvest, thereby propelling global prices to an unreasonable hike.

Deadly food riots were witnessed in September in Mozambique, killing at least seven people. According to news reports, anger was then building up in Pakistan, Egypt and Serbia over rising prices. In the first week of January, Algeria faced food riots. A few days later, Tunisia sounded the first bugle, ousting its President and Egypt followed. As early as in September, the Financial Times had reported that wheat futures had taken advantage, and that wheat prices internationally had gone up by 70 percent since January 2010. This happened at a time when there was neither a shortfall in production nor any appreciable rise in demand.

Grave crisis

Egypt, which imports nearly 50 percent of its food requirement, was hit badly when Russia decided to ban wheat exports. Many believe that the Switzerland-based commodities trading firm Glencore actually forced the Russian government, which had enough wheat reserves, to impose a ban on exports, thereby sparking a killing in the futures market.

The social and political unrest that has swept the Arab hinterland is a pointer to a grave crisis ahead. Although Dominique Strauss-Kahn, the head of the International Monetary Fund (IMF), agrees that the rising food and fuel prices in recent months are the major factors behind the massive anti-government protests, he suggests more of the same prescription: ‘As tensions between countries increase, we could see rising protectionism - of trade and of finance.’ Not drawing any lesson from the debacle of the dominant economic model of growth, business leaders from 17 private companies announced at the World Economic Forum at Davos in the last week of January the launch of a global initiative - New Vision for Agriculture - that sets ambitious targets for increasing food production by 20 percent, decreasing greenhouse gas emissions per ton by 20 percent, and reducing rural poverty by 20 percent every decade.

Political leadership

The 17 agribusiness giants include Archer Daniels Midland, BASF, Bunge Ltd, Cargill, Coca-Cola, DuPont, General Mills, Kraft Foods, Metro AG, Monsanto, Nestle PepsiCo, SABMiller, Syngenta, Unilever, Wal-Mart and Yara International.

All such initiatives are, of course, backed by the US Agency for International Development (USAID), the main driving force for promoting an industrial takeover of global agriculture. ‘We are witnessing an unparalleled opportunity right now for innovative, large-scale private sector partnerships to achieve significant impact on global hunger and nutrition,’ USAID Administrator Rajiv Shah said at Davos.

The writer is a leading food and trade policy analyst based in India.

Courtesy: Third World Network Features