The profits of famine

by Raj Patel with Alexa Delwiche

The silent violence of malnutrition

It's no wonder the people of Southern Africa are starving in 2002 - they have been starving for over a decade. The Southern African Development Community reports that in Zambia in 1991, the chronic malnutrition (stunting) rate of children between the ages of 6 and 59 months was 39 percent.1 Since then it has increased to (and levelled off at) about 55 percent. At the same time, acute malnutrition (wasting) rates have thus far remained stable at 4.4% in Zambia. In

Malawi, the rate of chronic malnutrition has remained at 49% since 1990.2 It is only acute malnutrition that has slightly increased over the same period, by 1% for a total rate of 6 percent. The United Nations Development Programme (UNDP) estimated in 2000 that 35% of the people in the famine region were undernourished, with 54% of Mozambique's population undernourished.3 Among those most vulnerable to chronic hunger are women, children and the elderly. The UNDP reported in 2000 that 20% of children in the region under the age of five were underweight.

In 2002, rampant Southern African hunger was tipped over the official "famine" threshold by two years of bad harvests. That's one reason we're now hearing news of it. Another likely reason is that some Southern African countries aren't behaving as the US would want them to, and the word "famine", with the desperate urgency it conveys, helps put pressure on those governments. That sense of emergency also masks the question we must ask: why, even before the current food crisis, have so many people suffered for so long from chronic malnutrition?

The ingredients for hunger

Manmade famine isn't new in world history. For example, an 1878 study published in the prestigious Journal of the Statistical Society found 31 serious famines in 120 years of British rule in India and only 17 recorded famines in the entire previous two millennia.5 The reason for the change? According to Mike Davis' recent commentary, it happened because the British integrated the Indian food system into the world economy while simultaneously removing the traditional supports that had existed to feed the hungry in times of crisis - supports that were rejected as the trappings of a hopelessly backward and indolent society. And so, by the end of the 1800s, "Millions died, not outside the `modern world system,' but in the very process of being dynamically conscripted into its economic and political structures. They died in the golden age of Liberal Capitalism."6

This lesson was not lost on the first generation of African governments. At the beginning of the 1980s, African states had a very clear idea of what their economies and societies needed in order to flourish. In the Lagos Plan of Action7, heads of state called for a type of economic growth disconnected from the vicissitudes of the world market, relying on import-substitution policies, food sovereignty and trade within Africa, and, critically, a reduction in the level of external indebtedness that was systematically siphoning value out of Africa.

The World Bank disagreed, insisting in its Berg Report8 that state interference in the smooth functioning of the market was precisely the cause of low levels of growth.9 As most African governments were buried in debt, their futures mortgaged on declining commodity prices, the Bank's plan prevailed.10 Under the Bank's regime, African nations are forced to produce foreign exchange-earning (i.e., cash) crops to pay off increasing debt, and find themselves importing more and more food. In a perfect, stable market, this ought not pose a problem: the farmer will grow an export crop in which she or he has a comparative advantage, and will use the cash to buy imported food, goods and services. But in the real world, this model increases farming communities' vulnerability to a number of risks:

1. Commodity price fluctuations and decline: Primary commodity prices have been falling consistently for 30 years and have been exceptionally variable within this time frame. In part, the World Bank is to blame; its structural adjustment programmes enforced the export of a few key commodities in high demand in the North, putting Southern countries on the receiving end of volatile and decreasing prices for their exports.11

2. Currency fluctuations: Southern countries have also suffered fluctuations in the currency market. Even the most efficient farmers are unable to buy food on the world market if their currency is undervalued. Yet this is what every economic model suggests will happen when countries follow World Bank recommendations to liberalize exchange markets: the currency will depreciate and require stabilization, which these countries, because of their debt burden and structural adjustment obligations, cannot provide.12

3. Loss of food sovereignty: The World Bank and the international aid community tend to use the term "food security" to talk about the availability of food and people's access to it.13 Since the 1996 World Food Summit, Via Campesina, the international farmers' movement, has pushed for an alternative concept: food sovereignty, which it defines as "the right of countries and peoples to define their own agricultural and food policies which are ecologically, socially, economically, and culturally appropriate for them."14 The difference between these approaches lies in the issue of who controls access to food, seed, land and the market. Movement towards a free trade economy takes control away from the majority of rural people. This is a fundamental issue of justice, dignity and democracy.

Debt: the tie that binds

Vast debt was instrumental in forcing Third World governments to accept World Bank control.

The level of debt is staggering. The Bank itself suggests that debt is "unsustainable" if it is above 5% of the total gross national product of a country.15 Meanwhile, Zambia, for example, is paying three times as much in debt service as on health care.16

But the debt level isn't the whole story. Debt is also a discipline wielded over Southern economies. High levels of external debt mean foreign creditors call the shots. And when countries with limited foreign cash decide which creditor gets paid and which has to wait, they always put the World Bank first. This special position gives the Bank considerable power. On behalf of itself and other creditors - and in return for an increased line of credit - it imposes conditions on the governments that owe it money. These conditions, though clothed in the
language of impartial economics, are nevertheless political decisions. Ideas about interest rates, exchange rates and the "appropriate" level of unemployment are always politically motivated17 and always justified by talking about untouchable, mysterious phenomena like "investor confidence."18 Governments transform their economies to make them "credible" places for investors to come, and to pull back capital that has flown the country in the wake of structural adjustment policies.19 Investors who want to be "confident" about Southern economies essentially control those economies, overseeing outflows of resources and wealth that invariably make the lives of the people in those countries less democratic and less secure.

Trade: the gift that keeps on taking

Within Southern Africa - where, for example, tobacco production has expanded by 50% per year over the past three years in communal, small-scale and resettlement areas20 - the most desirable land is continually used for export agriculture, and food production is sacrificed to boost agricultural production. After each year's harvest the soil is often left unprotected, accelerating erosion.21 And small farmers are pushed ever farther into marginal land. This marginalization is not trivial: it affects the African majority, who remain wage labourers and small-scale farmers without savings or capital to devote to expansion.

Export and foreign exchange-oriented trade has consigned most African farmers to shrinking returns. The declining real price of all primary commodities forces many farmers to sell what land they have to pay the debts their crop income can no longer sustain. Still, even until the 1990s in Southern Africa, government-run marketing boards protected farmers by assuring a fixed price for their crops, published in advance. Structural adjustment decreed the effective elimination of marketing boards in favour of private buyers. Now, in addition to enduring direct exposure to international market fluctuations, farmers are often unsure when private buyers will next appear and are thus forced to sell cheap to the first trader.22 Finally, many remote areas remain unserviced by private traders, who prefer to buy from a few large farmers near better roads.

The World Bank's policies of increased trade, lower government spending on health and education, and increased debt have made poverty blossom. As Giovanni Arrighi, a scholar of the world economy, has noted: "In 1975, the regional GNP per capita of Sub-Saharan Africa stood at 17.6 percent of `world' per capita GNP; by 1999 it had dropped to 10.5 percent."23 And in these countries, the removal of social supports to redistribute what little there is has rendered the poorest destitute.

Between 1996 and 2001, the population living below the poverty line in Zambia rose from 69% to 86 percent. Twenty-eight million people, or 51% of those living in Lesotho, Malawi, Mozambique, Swaziland, Zambia and Zimbabwe, live below the national poverty lines.24 And we know that the face of the poorest 10% is likely to be black and female25: since women are responsible for 70% of food production in Africa, the shift away from food production towards export production has been extremely detrimental to them.26 Men's leaving the farm for wage labour makes women responsible for all domestic responsibilities as well.

A shortage of food?

Famine is not caused by a lack of food but by poverty.27 For example, according to the World Food Programme (WFP), there are no shortages of food products in the markets in Lesotho.

However, two-thirds of the population live below the poverty line and half are classified as destitute. Purchased cereals comprise 75% of annual food needs for Lesotho's poor28, and over 70% of the households classified "very poor" in Lesotho have no cereal in reserve.29 Rapidly escalating prices and vanishing incomes are a lethal combination. The people of Lesotho cannot afford to buy the food that is available.30

The situation is similar in Malawi where, in 2001, the International Monetary Fund (IMF) told the government to slash its strategic grain reserve from 165,000 metric tons (MT) to between 30,000 and 60,000 MT. The IMF advocated this on cost grounds, and because erroneous data persuaded them that the coming year's harvest would increase stocks. A year later, when people were already beginning to die of starvation, the IMF denied disbursement of a $47 million tranche of loans to the Malawian government amid accusations of impropriety in the government's efforts to mitigate the famine.31 The government accused the IMF of causing the famine, while the IMF blamed the government for corruption before admitting that it had, perhaps, behaved insensitively. Horst Koehler, managing director of the IMF, said at a British parliamentary hearing: "[I]n the past we (the IMF) have not given enough attention to poverty and social safety nets when proposing structural changes. But structural changes are always accompanied by dislocation. We must live with permanent change in order to achieve economic growth in developing countries ... [developing countries] should be able to produce food for themselves -
and we should help them strengthen capacity to produce food."32

Meanwhile, thousands were starving, and grain was being stockpiled by speculators betting that
the famine would drive up maize prices - behaving, in short, precisely as they ought in a free market with high demand and a tight supply.

Who benefits from famine?

It's a continuing tragedy that still today, when we know what causes famine, we continue to witness it. Why does it persist? To answer this, we need to ask a still more painful question: Who benefits from famine?

Consumers in the US and EU do well by having food and agricultural products that are cheap compared to the true cost of production. But the greatest beneficiaries are the transnational food corporations that market the food and control our food systems. Altria, the Philip Morris group of companies, which includes Kraft and Miller, made over $8 billion in profits in 2001.33

In the past six months, Switzerland-based Nestle SA posted profits of a little under $4 billion on sales of $29 billion.34 To put this in perspective, the entire gross domestic product for all six countries in the famine region was a little over $20 billion in 2001.35

These corporations depend on cheap inputs, such as the agricultural products grown in the Third World, to make their food processing profitable. In fact, with the decline of every currency in Southern Africa against the US dollar and the oversupply (and hence falling prices) of primary commodities, food industry inputs have never been cheaper. And profits never higher.

The role of US policy

Such profits would never be possible without the constant mentorship of the US government. It has a 20-year history of first generating hunger through macroeconomic policy that, while selling itself as "austere," systematically enriches large corporations and impoverishes working families. Then the government hen-feeds the hungry with the surplus food this policy produces.36

This two-step trick was perfected within the US. In 1981, Congress told the US Department of Agriculture (USDA) to reduce the storage costs associated with its dairy support programme.

Simultaneous cuts in welfare provisions for the poor and the incipient recession provided a ready market for the surplus.37 Now this discipline is being applied in Southern Africa as a way to force open markets for US-produced genetically modified (GM) grain.

The US GM grain stockpile, created through the vast, ongoing subsidy of US agriculture38, needs a home. This grain cannot be sold to the EU or Japan because of their embargoes on genetically modified food for human consumption. The figures for US farm exports tell the story: US corn exports to the European Union shrank from $426 million in 1995 to $1 million in 1999.39

Particularly while EU and US negotiators are bickering over US farm support in the run-up to the World Trade Organization ministerial conference in Cancun, Mexico, in 2003, explicit subsidies for agribusiness aren't in vogue.40 But food aid serves as a de facto means of product support and has an unimpeachable veneer of humanitarianism, and the US Agency for International

Development (USAID) spends over $1 billion a year buying American crops from agricultural corporations and shipping them to the starving. By insisting that this food aid be purchased from US companies, Congress is able to support US industry while appearing to help the Third World.41 United Nations agencies (the World Health Organization (WHO), the WFP and the UNDP) have all lauded the safety of GM food. However, no independent scientific human trials of GM food have yet taken place. And scientists in Africa remain concerned at their inability to limit the sort of genetic pollution that resulted from GM contamination of corn in Mexico.42

In recent months, many countries in the region have protested a food aid arrangement that they see as a cynical ploy by the US to dump its GM corn on a captive and starving market. However, discreet threats to slash non-food aid budgets and suspend funding for other projects soon brought these countries into line. Except Zambia.

Glimmers of an alternative in Zambia

The Zambian government has recognized that the problem is the lack of food available within the means of the poor. Their short-term solution is to reject the output of US agribusinesses (which are subsidized at a rate of $1 million in taxpayer dollars per hour). Instead, they have purchased grain from domestic and regional suppliers and made it available to the hungry. This approach directly threatens US business interests. But it has begun to feed the hungry in Africa. Of course, it needs to be supplemented by more enduring social change for the poor - investment in education and health, serious measures to tackle HIV/AIDS and land reform are key issues, and ones that cannot be resolved with the vast debt that currently shackles the region.

Yet bypassing the US aid industry is a heaven-sent idea, because it gives governments of poor countries some control of their economies and their farming systems.

--------------
Raj Patel, Ph.D., is a policy analyst at Food First and Alexa Delwiche is a research intern.
Food First/Institute for Food and Development Policy. www.Food First is a US-based non-profit think-tank which highlights root causes of and value-based solutions to hunger and poverty around the world. The above is extracted with permission from "The Profits of Famine: Southern Africa's Long Decade of Hunger", which was published as a Food First Backgrounder (Vol. 8, No. 4, Fall 2002). (c) 2002 by Food First.

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Notes

1. SADC-FANR Vulnerability Assessment Committee, "Zambia Emergency Food Security Assessment Report," August 2002.
2. SADC-FANR Vulnerability Assessment Committee, "Malawi Emergency Food Security Assessment Report," August 2002.
3. United Nations Development Programme (UNDP), Human Development Report 2002, UNDP, 2002.
4. UNDP, Human Development Report 2002.
5. M. Davis, Late Victorian Holocausts: El Nino Famines and the Making of the Third World.
6. M. Davis, Late Victorian Holocausts: El Nino Famines and the Making of the Third World.
7. Organization of African Unity, "The Lagos Plan of Action for the Economic Development of Africa 1980-2000," Geneva: Organization of African Unity, 1981.
8. World Bank, "Accelerated Development in Sub-Saharan Africa: An Agenda for Action," Washington, DC: World Bank, 1981.
9. G. Arrighi, "The African Crisis: World Systemic and Regional Aspects," New Left Review
15, May-June 2002: 5-35.
10. K. Danaher and A. Riak, "Myths of African Hunger," Food First Backgrounder, Spring 1995.
11. B. Peters, "The Third World Debt Crisis - Why a Radical Approach Is Essential," Round Table 354, April 2000: 195-204.
12. See R. Greenhill and A. Pettifor, report from Jubilee Research at the New Economics Foundation," a report from Jubilee Research at the New Economics Foundation, London, April 2002.
13. For a compendium of definitions, see the USAID policy determination of food security PD-19, April 13, 1992.
14. See Voice of the Turtle
15. G. Arrighi, "The African Crisis: World Systemic and Regional Aspects."
16. UNDP, Human Development Report 2002.
17. World Bank, World Bank Development Indicators 1999.
18. I. Grabel, "Creating 'Credible' Economic Policy in Developing and Transitional Economics," Review of Radical Political Economics 29(3), 1997: 70-78.
19. Capital flight, the phenomenon of money leaving one country in search of higher returns in another, prevents at least 25 African countries from being net creditors instead of net
debtors. This is an example of the sort of disciplining that financial markets can dole out to poorer countries. See Greenhill and Pettifor for more.
20. UNDP, Human Development Report 2002.
21. SADC-FANR Vulnerability Assessment Committee, "Zimbabwe Emergency Food Security
Assessment Report," SADC, August 2002.
22. P. Rosset and A. DeGrassi, A New Green Revolution for Africa? Not yet published.
23. G. Arrighi, "The African Crisis: World Systemic and Regional Aspects."
24. UNDP, Human Development Report 2002.
25. World Bank, World Development Indicators 1999.
26. World Bank, World Development Indicators 1999.
27. K. Danaher and A. Riak, "Myths of African Hunger."
28. SADC-FANR Vulnerability Assessment Committee, "Lesotho Emergency Food Security
Assessment Report," SADC, August 2002.
29. SADC-FANR, "Lesotho Emergency Food Security Assessment Report."
30. World Food Programme (WFP), "Food Shortages in Lesotho: The Facts" WFP, September 2002.
31. S. Devereux, ""State of Disaster: Causes, Consequences and Policy Lessons from Malawi"" ActionAid.
32. S. Devereux, "State of Disaster: Causes, Consequences and Policy Lessons from Malawi."
33. Fortune Magazine Online
34. Nestle SA, 2002 Half Yearly Report
35. World Bank, World Development Indicators 1999.
36. F. Lappe, R. Schurman and K. Danaher, Betraying the National Interest, New York: Grove, 1987.
37. M. Lipsky and M. Thibodeau, "Feeding the Hungry with Surplus Commodities," Political Science Quarterly 108(2), 1988: 223-244.
38. A. Mittal, "Giving Away the Farm: The US Farm Bill," Food First Backgrounder, Summer 2002.
39. USDA economic research service.
40. Of course, this doesn't stop the OECD countries' subsidizing their agriculture to the tune of just under $1 billion a day. It just means that they're doing it more discreetly.
41. Food First, "Food Aid in the New Millennium - Genetically Engineered Food and Foreign Assistance," fact sheet, December 2000, and "New Food Aid: Same as the Old Food Aid?" Food First Backgrounder, Winter 1995.
42. ETC Group, "Genetic Pollution in Mexico's Center of Maize Diversity," Food First Backgrounder, Spring 2002




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