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re: 1 billion

May 9, 2009

In regard to 1 billion, I was asked by someone why I’m blaming capitalism when the Associated Press report itself states that:

Systemic problems — such as weak infrastructure and dependence on rain — are to blame for poor nations’ near-stagnant production. Bad roads in rural areas, lack of proper food storage facilities and a lack of irrigation infrastructure continue to keep farmers in poor countries from producing more, Diouf said.

The answer is simple. Because it seems to me that the system is inefficient when it comes addressing the needs of humanity.

According to one UNEP report, “over half of the food produced today is lost, wasted or discarded as a result of inefficiency in the human-managed food chain.”

Just look at how much perfectly good food is thrown away by grocery stores, for example. People actually make a living out of cooking and eating the perfectly good food they throw away. Hell, even Giles Coren, restaurant critic for the British newspaper the The Times, did a segment about it on the The F Word. (He ate a banana right out of the garbage, and then proceeded to have a picnic with everything they collected.)

And what about the 30 million tons of unwanted fish currently discarded at sea per year? How many people could that feed?

In addition, food that could go to feeding people goes instead to things like feeding livestock and the production of biodiesel. The same UNEP report underscored the fact that “over one-third of the world’s cereal harvest is being used as animal feed” and cautioned that “continuing to feed cereals to growing numbers of livestock will aggravate poverty and environmental degradation,” while Secretary-General Ban Ki-moon noted that “soaring food prices brought intense focus … on the inflationary role of biofuel production.”

The world as a whole — but especially wealthy, industrialized nations like Canada and the United States and other large producers like Brazil, China, the EU, India, etc. — has the capacity to produce enough food to feed those who can’t produce enough on their own, but due to the lack of profit involved it doesn’t.

As one article in Forbes illustrates, even though genetically modified seeds are the potential “saviors of the global hungry”:

In the past, there’s been little incentive to develop this new lab-grown abundance. Demand in the U.S. grows mostly in step with the population, which hardly grows at all. This led to the industry taking a bad rap for overproduction–for stuffing calories into Twinkies or letting crops rot in silos.

The bottom line is that under the current system, profit is the determining factor in agricultural advances, production, storage and distribution.

In the United States, for example, supply control policies were used to decrease overproduction until 1996 to control prices. Why? Because too much supply equaled lower prices, and lower prices equaled lower profit. And this “problem” isn’t just limited to the United States.

The Economic Times had a story earlier this year about wheat oversupply and profits in India. It notes that, “To add to the problem of too much unsold stocks, India is poised to reap another good harvest this year. In short, Indian wheat prices look set to plummet in a market where customers—corporate and retail—will be wooed with a vengeance.”

Of course many countries like Canada and the United States do distribute food aid to poor and famine-plagued countries, but not nearly enough. And it can be argued that they do so in order to get rid of surplus that might otherwise lower prices, and subsequently, profits. As Alan Maas puts it, “The effect is to keep food prices high at home and undercut competitors abroad, especially in developing countries—while the world’s poor go hungry.”

I may be wrong, but I’m convinced that the ICFI is right when they conclude that:

There is no solution to the farm crisis, however, within the framework of the capitalist market. A fundamental contradiction under the profit system is the accumulation of vast surpluses of agricultural commodities which cannot be sold at a profit, side by side with, on a world scale, enormous unmet social needs for food, clothing, and raw materials. Children starve in Africa and India while American farmers go bankrupt for lack of buyers. This contradiction can only be resolved when agriculture is integrated into a reorganized world economic system in which rational planning, not private profit, is the driving force.

I’m not trying to vilify capitalism, I simply don’t think that the capitalist system, at least the way that it’s currently structured, will ever be able to address the needs of humanity as a whole. So even though I think capitalism has contributed a lot to the development of society — a contribution which I sincerely appreciate — it has its limits; and I think the fact that an estimated 1 billion people will go hunger illustrates that.

As I’ve said before, perhaps socialism is the next evolution of economics that will lead the world to a wonderful new level of prosperity and cooperation, and then again, perhaps not. But ultimately, I think it all depends on what direction we want to take our global society.

I suspect that Adam Smith, the “father of capitalism,” was right in that the pursuit of self-interest will improve the general welfare, but only when we realize, as a collective whole, that we are all in this together. Otherwise, with the focus of production always on profit rather than need, I don’t see how anything will ever change.

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One Comment
  1. Someone commented:

    “I think you’re missing the point. The market model followed by the entire industrial world to some extent is extremely effective at producing huge quantities of goods and services at low prices and high standards. We could easily feed the world with the food we already grow.

    The problem isn’t greed on our part, its the outright inability to get the food to the people who need it. How on Earth can we ship food to parts of Africa where there are no paved roads? No airports? Where the nearest coastline is hundreds of miles away? Where theres a new government in place every 10 years, and militia groups control the country side?

    The logistics are the biggest problem, closely followed by corruption.”

    My response:

    “Well if that’s the problem, why don’t we just bring the people to the food? We can do that, can’t we?”

    Their reply:

    “We try. There are no roads, bridges, airports, etc., and attempts to invest in infrastructure, give loans, and grant charity have often failed.”

    Which is a good point. That’s basically the UN’s assessment too: http://www.un.org/Pubs/chronicle/200…4/0407p21.html

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