The profits of hunger
The Nation - July 31, 2013
Najma Sadeque
What would it take to capture Mr Nawaz Sharif’s attention on wider food matters? He is celebrated as gourmet and banquet king, but that does not extend lower than the middle class. The failed PPP promised “roti, kapra, makan”, but conveniently avoided land reform. How is food or cotton or shelter possible without land?
Sixty-five years of satiated feudal mindsets confirm that full stomachs are not conducive to parliamentarian empathy for basic needs and real priorities. Fascination is limited to the expensive and visible -- taxis, laptops, and the now-scuttled bullet-train. Or inadequate publicity shots like 10-dollar equivalents for income-support.
What good is it that Pakistanis abroad remit home $12 billion a year? Or that exports fetch 25 billion, but are cancelled by imports of twice that? Or that, according to government statistics, the per capita income is supposedly $1380 this year?
Even if per capita income is lowered to $1,000, it still averages Rs 100,000/- for every woman, man and child. Or about 600,000/- a year for a family of six, or 50,000/- monthly per family, to live on. That’s healthy if underestimated money that the poor are entitled to as their rightful share of resources that come free from nature and not from government or man-made sources. Even if half that money rolled backed into taxes for public services and not-so-public expenses, it would mean good living standards and upward mobility. Yet, none of that wealth gets redistributed meaningfully.
There was a time when colonial abuse was the main reason for food shortages and famine. After independence, some unwritten rules prevailed, ensuring access to community lands that were off-limits to privatisation; that, unlike other goods, food was a basic need and, therefore, could not be so commodified to be bought and sold at will.......and withheld from the penniless hungry.
The problem was that the West did not see it that way. Most post-independence governments turned into local colonials, further driving inequalities.
Markets emerge naturally everywhere for producers and buyers. In the US, where large-scale agriculture and thousands of tons of grain in huge silos were the norm for seven decades, highly sophisticated markets emerged, especially for exporters who would commit to a certain price at a future date. It was a kind of insurance that protected both farmer and buyer against sudden price surges elsewhere. These auction markets worked well because they were regulated by the government.
Then in 1990, over the protests of most developing countries against joining the World Trade Organisation (WTO), all global agricultural markets were deregulated in the name of an impossible “level playing field”. Not that WTO, which is not even run by governments but corporate reps, acted in isolation. It was always the intention of the World Bank and the International Monetary Fund since 1944 to deregulate anything and everything in the world that could possibly be traded - into borderless markets akin to colonial days.
People keep forgetting or are unaware that these two financial institutions were not created to assist poor countries, whatever the rhetoric, but to keep the colonial trade mechanism for raw materials going -- without which industries of the naturally less-endowed West would collapse; and to determine - or undermine -- the relative values of the many different south currencies involved. Or that WTO is a private body created by mostly American multinational corporations, aided and abetted by the US government, succeeded in doing away with protectionism for developing country farmers against unequal foreign competition with price supports, tariffs and other mechanisms that stabilised local prices.
Where previously small farmers had access to local and national markets, they were suddenly excluded from preferential treatment in their own country as citizens, and displaced by a handful of global corporations seizing control of most of the world’s staple grains trade. We are actually lucky our small farmers are so small, they can serve only locally. But the unrestrained middlemen and industries defeat them.
Double standards prevailed: the South had to end agricultural subsidies, but the US could continue with an annual average of $15 billion; as did the European Union’s annual 50 billion Euros (which may be halved now).
For centuries, governments have maintained grain reserves, not only to help stabilise prices, but also offset crop failures from drought that are part of nature. Most governments, including our own, irresponsibly stopped doing so.
But it is not food shortage that the world suffers from today, but overproduction, gross waste, and speculation. Food is no longer a right in practice: you don’t eat if you can’t pay. Grain traders withhold supplies until prices reach a peak, so when reserves are down, they can make a killing. Worse, the speculative investors bet on grain ‘futures’, further drive up prices.
Most disastrously, the big, unregulated, financial institutions have become the biggest gamblers after adding food to non-food commodities. In fact, the commodity users no longer dominate the commodities markets; the financial institutions do, such as Goldman Sachs and Morgan Stanley. While food prices go through the roof, millions starve. Pegging rupees to a dying dollar isn’t helpful; we need a de-linked domestic rupee to fix our economy, mass employment and food security back to sovereignty.
Developing countries that were previously self-sufficient food exporters, have now become net importers because they were misled into believing that they could always obtain food cheaply on the international market. The very opposite happened. Even George Soros warned about risks.
The UN Conference on Trade and Development (UNCTAD) has called for an international agreement to prevent ‘excessive’ speculation in commodities markets, but that is not good enough. Speculation on food staples should be banned altogether. And if WTO and the financial institutions won’t do it, then responsible governments should put their foot down in the public interest.
Many developing countries have started to try and correct their mistakes, which is neither easy nor quick under bullying or blackmail, IMF, WTO, and USAID-style.
While waiting for that distant day when all tax evaders are brought into the net and stolen billions returned -- if ever -- the PML-N should remember the PML’s original written commitment on the eve of partition to restore land to the tiller, and do so at least with state land, even if it can’t stomach land reform yet. To build up the urgently-needed modern storage facilities so we don’t keep losing to rodents and rain. To remember farmers were the original entrepreneurs and they remain indispensable to industry; and that the rural masses are both producers and market. That makes for permanent votes.
