End to Subsidies Can Slow Food Inflation

Global food prices may be soaring, but scarcity of food is not the root cause, according to Eric Holt-Gimenez, Executive Director for Food First/Institute for Food and Development Policy, who spoke at the 2008 Ecocity World Summit. Globally prices for basic foods have increased 83% in the last 3 years, and 45% of that increase has occurred in the last nine months alone, said Holt-Gimenez, citing data from the Food and Agriculture Organization of the United Nations. This inflation has lead to protests around the world.

However, this year, there were record harvests and record profits. In the 2007-8 harvesting year, more corn was produced than ever. Factors that may appear to compound the food shortage include drought, rising meat consumption, higher oil prices, and agro-fuels in demand of maize, but Holt-Gimenez presented different root causes.

He cited the imposition of harmful Structural Adjustment Policies by the IMF and World Bank that remove tariff barriers and dismantle food economies of Latin American countries as contributors to the food run-up. With the "Free Trade Mania" that began in the 1990s, Holt-Gimenez says that we are seeing heavy subsidizing of products from the global north, which are then shipped to the global south for consumption. Often, this means imported food is less expensive than locally produced food for global southerners.

I was surprised to learn that these subsidies total $1 billion a day. He says that halting subsidies to our farmers would more than cover the cost of foreign aid to struggling countries. An additional problem is that large companies such as ADM, Cargill, and Bunge have formed powerful partnerships that concentrate wealth and form a monopoly within the industry

The remedy? Holt-Gimenez says we need to combine the agro-fuels and food management systems and to "develop the regulatory structures, programs, and incentives for conservation and food and fuel development alternatives," according to a paper he authored for Brazil's Landless Workers Movement.

Additionally, we must address the myth that agro-fuels are the answer to our energy problems; growing agro-fuels does not lead to the creation of rural development and good jobs for global southerners.

Holt-Gimenez believes a moratorium on agro-fuels would halt the creation of an artificial market and push the development of second-generation, more efficient agro-fuels. We cannot "consume our way out of over-consumption."

California's central valley is having an agricultural crisis of a different nature, according to Carol Whiteside, Founder and President Emeritus of the Great Valley Center. Rapid urbanization is endangering this highly productive and fertile area of farmland. Growth pressures from an influx of immigrants, relocating coastal residents, and high birth rates are creating demand in the housing market.

One of Whiteside's first plans was to create easements on farmland, directing urbanization to less delicate soils. This was unsuccessful, as farmers could profit over $400,000 for an acre sold to a developer, versus $25,000 for an acre of peach orchard.

Whiteside says that the support community around farmers is crucial, providing water, labor, and public policy. Without such a system, the temptation to sell for profit becomes greater. If you cannot prevent the growth of cities, Whiteside thinks you should control and slow it instead.

Sacramento's Blueprint project is one example. The idea is to generate a strategic growth plan that will direct urbanization to more appropriate areas. She expressed concern for this plan, as it is highly dependent on constituent participation and cooperation from politicians.

Whiteside spoke of several other obstacles within the region. Central food distribution points are needed. Farmers must have access to the large markets like Safeway where most consumers shop, and they also need assistance in meeting food safety requirements.

Future city and county planning should include nearby farmland to ensure that food transportation to large urban areas is not only affordable, but feasible given the short shelf-life of many products. Whiteside believes that resource needs should be addressed on a regional scale to ensure food safety and security, and that cities and rural areas can be designed to be mutually beneficial. We may not be successful in the very first round of attempts, but "if we start the process, we will have a basis for improvement."