Monday, July 7, 2008
The rich benefit from the current food crisis. To what extent is this true?
The current food crisis has impacted everyone, in one way or another. It is caused mainly by an increase in demand for biofuels and meat, an increase in oil prices, and to a lesser extent, a disruption is the production of crops. The current food crisis has been a controversial issue around the world as it has been argued that the rich and developed countries benefit from it at the expense of the poor, hence creating greater inequity and worsening the problem of poverty.
A well-known cause for the current food crisis is the increasing emphasis on growing crops that can be used for biofuels in the United States, Europe, and many other countries. Many developed countries are turning to biofuels in a bid to reduce pollution and to achieve sustainable development. Thus, producing corn to make ethanol is in direct competition with the use of these crops for food. Last year over 20 percent of the entire corn crop in the United States was used to produce ethanol. The US government also encourages the production of biofuels by giving out subsidies. A few companies in the rich world benefit from huge agricultural subsidies while the right of developing country governments to protect their own farmers is being whittled away. Hence the poor will suffer the most from the increase in food prices, while the rich will have an increase in income.
Farmland around the world is also being cleared to make way for development projects, which will benefit mainly the rich, and worsen the food crisis. For example, the fast pace of farmland conversion in China is causing alarm among top leaders concerned with food security and China’s ability to remain self-reliant in crop production. In China during 2000 to 2005, there was an average annual loss of 2.6 million acres as farmland is used for development. This loss of farmland is a direct result of China’s remarkable success in economic development over the past two decades, which has resulted in rapid urbanization and the conversion of enormous amounts of farmland into residential, industrial, commercial, infrastructure and institutional uses. Multinational corporations(MNCs) will benefit the most from this development as their profits will increase. On the other hand, farmers and people living in the rural areas will lose their livelihood. As a result, they will not have the income to enjoy the benefits of the development intended for them. Furthermore, countries such as China which are previously self-reliant in crop production may have to import food, and drive up the prices of food around the world. Therefore the rich and MNCs will benefit from the current food crisis.
On the other hand, most developed countries have abandon traditional ways of farming and turn to modern farming technology, which requires machineries and fertilisers. With the increasing oil prices, their costs will rise, and profits will fall. The food crisis may represent an opportunity for the poor to get out of the poverty cycle. For example, small farmers who are not reliant on expensive fertilizer or oil-fueled machinery can sell their excess produce at higher prices, which are still less than prices for food that might be trucked or flown in. It is also possible that the current food crisis may attract some of the world's urban poor back to the countryside to earn decent wages. A report released in April by the UN Educational, Scientific and Cultural Organization confirmed that farmers worldwide would benefit from reducing their dependency on fossil fuels and adopting practices that help protect their environments. Hence, the rich may not necessarily benefit from the current food crisis.
The current food crisis is also caused by natural disasters, and both the poor and the rich will suffer. Natural disasters can disrupt the production of crops. For example, a 2007 cyclone in Bangladesh destroyed approximately 600 million dollars worth of its rice crop, leading to rice price increases of about 70 percent. Also, the drought last year in north-central China combined with the unusual cold and snow during the winter will lead to greater imports, hence keeping the pressure on prices. Hence, both the rich and poor will suffer from the increase in food prices as it is a necessity, though the rich are better able to cope with the higher prices.
No matter what, the food crisis will be here to stay as one of the major world issues in the 21st century. The poor will always remain at the bottom of the economy unless something is done to help them. The rich will most probably stand to benefit from this food crisis and they are also the people who has the power to help these poor people get out of the poverty cycle. As quoted by Mahatma Gandhi , "Earth provides enough to satisfy every man's need, but not every man's greed." There will be less income disparity between the rich and the poor if the rich were to stop getting richer while the poor gains more. Food crisis will also be solved in the process of gaining income equity.
