Sunday, July 6, 2008 @10:13 PM
the rich benefit from the food crisis. to what extent is this true?focushow the rich caused and manipulated the food crisis to their advantage, hence benefiting from it.
definitionsrichmacro level: developed countries which controls the world’s economy (WTO, UN, G8)
micro level: businessmen, MNCs in individual countries, higher income group
benefitgain advantage
yes1. the push for biofuels by developed countries such as united states.- due to the depletion of fossil fuels and to reduce its dependence on foreign oil ie. self-sustainability
- incentives provided by governments to further push for biofuels
- eg. ‘washington provides a subsidy of 51 cents a gallon to ethanol blenders and slaps a tariff of 54 cents a gallon on imports. in the european union, most countries exempt biofuels from some gas taxes and slap an average tariff equal to more than 70 cents a gallon of imported ethanol.’
the new york times, ‘the world food crisis’, 10 april 2008.- eg. ‘the international monetary fund estimates that corn ethanol production in the united states accounted for at least half the rise in world corn demand in each of the past three years’
the new york times, ‘the world food crisis’, 10 april 2008.- eg. ‘the growing diversion into ethanol has resulted in a 60 percent rise in corn prices in the past two years.’
the canadian press, ‘ethanol demand to push food prices 5% higher next year: economist’, 22 october 2007.
- developed countries benefit from reduction in taxes, and become more self-sustainable
- mncs benefit due to globalization
2. unfair trade agreements.- main source of income for poorer countries is agriculture
- the dominance of the richer nations and companies in the international arena has had a tremendous impact on agriculture. a combination of unfair trade agreements, concentrated ownership of major food production, dominance (through control and influence in institutions such as the world bank, imf and the world trade organisation) has meant that poor countries have seen their ability to determine their own food security policies severely undermined.
- poorer countries made to remove trade barriers but richer countries seldom remove theirs in return.
- in addition, most poor countries were strongly encouraged to concentrate more on exporting cash crops to earn foreign exchange in order to pay of debts.
- poorer farmers made to give up on their jobs, reducing the supply of food.
- food dumping (while calling it aid) by wealthy nations onto poor countries, falling commodity prices (when many poor countries had to compete against each other to sell primarily to the rich), vast agricultural subsidies in north america and europe (outdoing the foreign aid they sent, many time over) have all combined to have various effects such as forcing farmers out of business and into city slums.
- rich nations benefit from the unfair trade agreements that they set
3. asia's rapid urbanization.- in vietnam's bac ninh province, paddy fields are now bisected by a four-lane highway
- singapore-vietnamese joint venture will soon build a 1700-acre (700hectare) industrial park and township, turning this rural area into a satellite city.
- vietnam is losing about 99.000 acres of rice paddies every year to construction of cities, highways and industrial zones.
- mncs benefit as they are able to earn profit.
source: Time magazine. "No Grain, Big Pain".no1. current food crisis caused by natural disasters- natural disasters destroy agriculture fields
- eg. a 2007 cyclone in bangladesh destroyed approximately 600 million dollars worth of its rice crop, leading to rice price increases of about 70 percent
the daily star [bangladesh], february 11, 2008.- eg. the drought last year in northcentral china combined with the unusual cold and snow during the winter will probably lead the government to greater food purchases on the international markets, keeping the pressure on prices.
- both the rich and poor suffer due to inflation, but the rich are better able to overcome the problem due to their financial capability.
source: http://files.tikkun.org/current/article.php?story=200805210815103442. rising affluence- rising affluence due to globalisation, causing the growth of middle class in several countries such as china and india.
- the increasing demand for meat among the middle class is one of the causes of the increase in prices of food products such as corn and soybeans, as the use of maize and soy to feed cattles, pigs and poultry has risen sharply to meet this demand.
- eg. the world’s total meat supply was 71 million tons in 1961. in 2007, it was estimated to be 284 million tons. per capita consumption has more than doubled over that period. In the developing world, it rose twice as fast, doubling in the last twenty years alone.
new york times, january 27, 2008.- like the above example, both the rich and the poor suffer due to the increase in price of food products, both from grains and meat. however, the rich are able to manage the inflation more effectively due to the financial capability.
