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Proletarian issue 24 (June 2008)
Feed the world? Overthrow imperialism
Why are food prices soaring?
There is ample cultivable land on the planet, which, given the level of agronomic knowledge now acquired by humanity, could feed the existing world population many times over. Yet hunger riots are breaking out across Egypt, Senegal, Haiti and beyond, as food prices crack the ceiling. Why?

Under capitalist commodity production, the cultivation, processing and transport of food commodities is subordinated to one overwhelming concern: that the capital invested in this branch of production, as in every other branch, must continue to expand itself (ie, profits must accrue) with sufficient velocity to keep capitalism afloat – and thereby keep the capitalist exploiters securely in place.

For a long time, as a result of hugely capitalised and technically superior agribusiness operating on a gigantic scale, basic foodstuffs commanded very low prices on the world market. As global food production outstripped effective demand (ie, the numbers of people who had money to pay for food), prices were depressed, wiping out the livelihood of countless small farmers. Farmer suicides in India were driven to near epidemic proportions.

Imperialism wept no tears, so long as it could turn this cheapening of food commodities to its cynical advantage. Cheap food became another weapon in the arsenal of oppression. Cheap food dumped onto poorer countries hobbled local economies, wrecking subsistence farming, throwing local trading relations out of kilter and forcing countries into dependence upon a narrow span of cash crops destined for export to the West – on the West’s own terms.

For good measure, this neo-colonial enslavement was enforced by the carrot and stick policy of the World Bank and the IMF – the carrot of loans (which undermined the independence of nations, impoverished their peoples and enriched the financiers with debt repayments) and the stick of ‘restructuring’ (by which tyranny everything that moved had to be privatised and the exploitation of the poor had to be intensified).

Market glut is a double-edged sword, however. Whilst it suited monopoly capital to use its ability to flood the market with cheap food (not to ‘feed the world’ but to enslave entire economies), it can never lose sight of the need to prevent prices falling so far as to destroy its own profit base.

The duty of monopoly capitalism in this regard is to do all within its power to rig the market in such a way as to push prices up. Such are the contradictions besetting capitalism in its highest and most decadent form: imperialism.

The hoarding and destruction of foodstuffs in order to keep the prices up is a well known crime against the world’s hungry, a crime which accompanies every crisis of overproduction. The waste of EU ‘butter mountains’ and ‘wine lakes’, the lunacy of ‘set aside’ grants to pay farmers not to grow food, are justly notorious.

Today, this wanton destruction is taking on new and sinister forms. Rather than just destroying crops after they have grown, or paying farmers not to grow them in the first place, reasons the capitalist, why not establish a monopoly in the supply of seeds? By building into these seeds a so-called ‘terminator’ gene, Monsanto hopes to prevent the farmer from supplying subsequent plantings from seeds kept back from previous harvests.

Yet more insidious is the state-subsidised growth of the bio-fuel industry. As Fidel Castro warned recently, this spuriously ‘green’ measure to lever affluent countries off their dependence on fossil fuels is in fact a fundamental attack on the foodstocks of a hungry world. What better way to jack up the profits on the products of agribusiness than to burn up an increasing proportion of the world’s cereal supply as fuel?

Weather conditions associated with global warming – itself a historical consequence of the anarchy of capitalist production – are certainly contributing to the rise in food prices. Yet even these freak weather conditions would have far less devastating consequences were food production not in thrall to big business.

Take the current drought in Australia, where rice production has all but collapsed. Whilst the scarcity of water could not but have put a dent in production targets, what is sounding the death knell on production of this crop – the staple diet of some importing nations – is the market-driven move from rice cultivation into the more lucrative cultivation of wine grapes.

In line with the general pattern of capital concentrating into ever fewer hands, smaller rice farmers are being forced to sell their fields and their water rights to bigger players, usually grape growers.

It is also true that, aside from monopolist attempts to rig the market, there are other current pressures arising spontaneously to keep food prices high, notably the growth in demand from China and the knock-on effect of soaring oil prices upon transport costs.

Yet even with all the inhibitions on production in place, the planet still managed to notch up a record global grain harvest in 2007, 5 percent up on 2006.

It is not any natural limit on earth’s fecundity that explains the failure of modern production to feed the world, but the crisis of overproduction itself – even though for the moment that crisis expresses itself through the seeming paradox of a dearth of foodstuffs on the market!

When capital can no longer find enough opportunities to expand itself through productive investment, it must resort to wilder and wilder speculation. Sure enough, what is now inflating commodity prices beyond all reason is the massive influx of surplus capital in pursuit of speculative profits.

The International Herald Tribune reports that “current economic uncertainty had led producers to hoard rice, and speculators and investors even see it as a lucrative, or at least safe, investment, like gold”. (‘As Australia dries, the world suffers’ by Keith Bradsher, 17 April 2008)

Meanwhile, rice-importing countries, their own production for the home market long since wrecked by imperialist dumping practices, can no longer afford to import their staple diet.

Elsewhere in the same newspaper, we are told that “The hedge funds are now active in commodities and are playing the futures contracts, where upwards of 30 million tons of soybeans for future delivery are contracted every day … Speculative purchases have no other purpose than to make money for the speculators, who hold their contracts to drive up current prices with the intention not of selling the commodities on the real future market, but of unloading their holdings onto an artificially inflated market”. (‘Speculators and soaring food prices’ by William Pfaff)

Capitalism needs to sell its commodities to solvent consumers, yet cannot prevent itself from impoverishing the very masses upon whose ‘effective demand’ it depends. Incestuous dealings on the futures markets may produce overnight fortunes for some, but will only hasten the onset of the crisis soon to engulf capitalist society.

Only socialist revolution can save the world from a downward spiral towards further repression and war. As Rajani Palme Dutt wrote in 1934:

“The more obvious and glaring expressions of this process [capitalist crisis], the burning of foodstuffs, the dismantling of machinery that is still in good condition, strike the imagination of all. But all do not yet see the full significance of these symptoms: first, the expression through these symptoms of the extreme stage of decay of the whole capitalist order; second, the inseparable connection of this process of decay with the social and political phenomena of decay which find their complete expression in Fascism; and third, the necessary completion and final working out of this process in war. For war is only the complete and most systematic working out of the process of destruction. Today they are burning wheat and grain, the means of human life. Tomorrow they will be burning living bodies.” (Fascism and Social Revolution)

For the hungry of the world, there can only be one solution: the expropriation of the expropriators.


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