Food "Crisis "in Latin America

Food crisis in Latin America

Wheat, rice and other coarse grain production has risen over the last year and is expected to continue to rise through to 2009.[1] Despite the rise in production, prices have soared, increasing in 2006/2007 by 37% and 2007/2008 by 56%.[2] Overall, food commodities on the international market have risen 83% over the last 3 years and consumption is increasing alongside. According to the Canadian Food Grains Bank, over the last decade, almost every year the amount of cereals consumed globally have exceeded production.[3]

The Right to Food

The dramatic rise in food prices has precipitated political unrest in various countries throughout the world, and will continue to affect the political and social stability of countries where the basic right to food is being violated. As the U.N. Special Rapporteur on the Right to Food, Olivier de Schutter, states, “the right to adequate food is threatened to be violated on an unprecedented scale by the combination of a series of actions, by uncoordinated actors. None of these actors seeks to violate the right to adequate food. But none should be allowed to ignore the impact of its conduct on the right to food”.[4]

The Special Rapporteur makes clear that the crisis facing the world, particularly the world’s poorest countries, is not only a matter of humanitarian urgency, but a matter of fundamental human rights observation by all member states of the United Nations who have committed to the Universal Declaration of Human Rights, including the Right to food as is stated under Article 25, and their obligation under Chapter 55 of the UN Charter to ensure and promote the universal respect for, and observance of, human rights and fundamental freedoms.

Currently, it is estimated that there are 854 million people in a state of food insecurity in the world, the majority in Sub-Saharan Africa and South Asia. OF these 854 million, 54 million live in Latin America and the Caribbean. This is an avoidable situation, and therefore an unacceptable situation. As noted by Brasilian President Lula da Silva, the world food crisis ‘is, above all, a crisis of opportunities and distribution’.[5] According to economist Amartya K. Sen, famines are not only caused by environmental dynamics, conflict or market speculation, but by a “sudden shift in the entitlement set of certain segments of the population, who become vulnerable because they cannot work, or because the value of the services or goods they offer on the market has fallen”.[6]

The current “crisis”

Crisis is always an opportunity for change, and this particular crisis is presenting the world with the opportunity to re-think agricultural and trade practice. The two cannot be separated. The current crisis is being called a “silent tsunami” by the World Food Program (WFP) and threatens to plunge over 100 million people in abject poverty in every continent.[7] According to the Economic Commission for Latin America and the Caribbean (ECLAC), if drastic measures aren’t taken immediately, some 10 million people are estimated to fall into poverty in the region.[8]

A number of food exporting countries – like Brasil, Argentina, China, India and the US – have put holds or dramatically inflated export taxes on their exports to keep reserve stocks full for their own populations. The result has pushed food prices up even more and the 70% of developing countries that rely on food imports for the majority of local consumption are feeling the strain.

Although immediate responses to the emergency are necessary, long term structural adjustment must also be implemented. Taking into account the structural causes of the crisis which go beyond the immediate causes of poor crop production and natural disasters of the last few years, short and long-term solutions need to be considered from a bottom-up analysis with strong national ownership. Differing responses for differing countries is also necessary, as it was the “one size fits all” structural adjustment policies of the 80s and 90s, deregulating agricultural production, the dismantling of agricultural support and social protection that are now coming to haunt the poor and rich alike, as stated by Salil Shetty, Director of the Millenium Development Goals Campaign.[9]

Causes

The United Nations has identified six major causal factors for the current food crisis. In no particular order:

The first being the growing population boom in emerging economies like China and India. The increase in the urban-middle class in these countries has created higher demand for meat and proteins. The demand for a more protein-rich diet is a right no one questions, in fact in terms of development progress, this should be taken as a positive sign. However, for each calorie of beef to be produced, 9 calories of plants are needed; and 4.5 calories of plants are needed to produce one calorie of milk or egg.[10] This increase in demand has obviously affected supply which is finding it difficult to follow. This in part is due to the lack of sufficient agricultural investment – the second causal factor – parallel to the trend of dismantling agricultural subsidies and marketing boards begun in the 1980s and continued to be pushed today, under the tutelage of organizations like the International Monetary Fund, the World Trade Organization and the World Bank. While in the 1970s most countries in the world would have sufficient reserve stocks and agricultural capacity to buffer the current market shocks, structural adjustment programs have effectively castrated local agricultural sectors to absorb the impacts of international food demands.

The third factor is that of climate change. Climate change will affect rains, increase the frequency of droughts and average temperature, and threaten the availability of fresh water for agricultural production. In Sub-Saharan Africa, arid and semi-arid areas are projected to increase by 60-90 million hectares, and the Intergovernmental Panel on Climate Change has estimated that in Southern Africa yields from rain-fed agriculture could be reduced by up to 50 percent between 2000 and 2020.[11] In Latin America, out of the ordinary heavy rainfall caused flooding in Bolivia, Haiti, Nicaragua, the Dominican Republic and Ecuador, causing a significant loss in food production in 2007and creating an acute food security emergency in these countries.[12]

The fourth factor is the rise in energy costs. With petroleum prices being at record highs – US $120 a barrel in May 2008 – the costs of food production have increased, mostly because of the effect on the price of inputs like fertilizers and pesticides as well as the increased costs of transporting inputs and outputs. This is a problem which also reflects the structural dilemma of food distribution and the reliance that most developing countries have on food imports. Instability and conflict in major oil producing nations like Iraq, Iran, the Gulf of Mexico and Nigeria have demonstrated that although the demand for petroleum remains constant, the supply is vulnerable to political and social instability, again reflecting structural realities which require further analysis and a critical approach. According to the International Food Policy Research Institute (IFPRI), this factor has been a major factor in the massive move of US and European farmers to agro-fuel production.[13]

This brings us to the fifth major causal factor, which is the agro-fuel boom. In the United States, as much as one third of all maize (corn) production now goes to agro-fuels, up from 5% a decade ago, and subsidies for agro-fuel production vary between US$ 11 billion to US$ 13 billion every year.[14] These subsidies are the same that have distorted the agricultural market over the last few decades and compromised the competitive advantage of farmers in developing countries. Agro-fuel production also jeopardizes access to land, as food production and fuel production compete for arable land in all countries; this leads to deforestation (Haiti, Brasil, Guatemala), violent conflict (Colombia, Guatemala, Haiti), and ethical dilemmas as the use of land and food products are used to fill gas tanks in foreign countries while local populations starve. According to the IFPRI, increased demand for agro-fuels has contributed to 30% of the rise in cereal prices.[15] The focus on maize and sugar cane for agro-fuel production and the consequent increase in costs, particularly for maize, have forced populations that have historically relied on maize for their diets to switch to production of other crops, such as rice and wheat (among others), consequently increasing demand and prices. In addition, the increasing demand from US, Canadian and European markets for agro-fuels are moving farmers in developing countries to focus productive energies on agro-fuel production of products such as oil-palm, red beets and sugar cane. Brasil already has devoted arable land the size of Netherlands, Luxembourg, Belgium and Great Britain combined for agro-fuel production.[16] In addition to increasing food costs, the benefits of agro-fuels are now being thoroughly questioned. As the Special Rapporteur states:

“there is now mounting evidence that too many hopes have been placed in agrofuels. First, it is clear that agrofuels cannot constitute an alternative to reliance on fossil fuels: the U.S. National Academies of Sciences found that even if all the corn and soybeans produced in the U.S in 2005 were used for bioethanol production, this would only replace 12% of the country’s gasoline demand and 6% of its diesel demand.27 Second, in their current mode of production, the impact of agrofuels on the environment has been shown to be clearly negative, both because of increased deforestation and because of the nitrous gas emissions released in their production. Thus, a recent issue of Science published conclusions according to which ‘converting rainforests, peatlands, savannas, or grasslands to produce food crop–based biofuels in Brazil, Southeast Asia, and the United States creates a ‘biofuel carbon debt’ by releasing 17 to 420 times more CO2 than the annual greenhouse gas (GHG) reductions that these biofuels would provide by displacing fossil fuels’.28 Another study by Nobel price-winning chemist Paul Crutzen, a specialist on the ozone layer, suggests that growing and burning biofuel crops may in fact raise, rather than lower, greenhouse gas emissions, although the impacts of rapeseed biodiesel, primarily used in Europe, and of corn bioethanol, dominant in the U.S., are significantly worse in this regard than those of cane sugar bioethanol, as mainly produced in Brazil.29 Third, we understand that we have grossly underestimated the quantity of energy required to produce agrofuel, and the quantity of water involved in the processing of crops for that purpose, in a world in which water scarcity is rightly seen as a pressing issue. Finally and most importantly, we have come to realize that diverting crops from the production of food and feed to the production of fuel leads to a pressure upwards on the international markets for agricultural products, which endangers food security”.[17]

The last factor is speculative market investment. Large investors have been focusing their moneys in energy markets other than oil, given the volatility of the market, beginning in 2002. Investment in corn, soybeans, wheat, cattle and hogs in 2007 was at US $47 billion, up from US $ 10 billion in 2006, again reflecting increasing demands in the global market for higher protein diets in emerging countries and agro-fuels.[18] This has obviously affected the prices of these commodities on various trade boards such as the Chicago Board of Trade.[19]

Effects in Latin America and the Caribbean

From the 2007 “tortilla wars” in Mexico up until recent violent protests in Port-au-Prince, Latin America and the Caribbean are seeing the consequences of rising prices food prices.

It is clear that the crisis is hitting the most basic of staple food products, such as rice, corn, beans and wheat. A coalition of farming organizations in Mexico recently sent a comunicado to President Calderón, warning that if prices aren’t stabilized, there could be a return to the “tortilla wars” of 2007.

In Haiti, Prime Minister Jaques Edouard Alexis was forced to step down after protests of the expensive cost of living and increasing costs of food, which are exacerbating the already dire situation of the country’s population. The protests left 6 people dead and dozens injured.

People also took to the streets in Argentina, protesting the cost of tomatoes which had risen above the cost of meat. Venezuelans are being forced to wait in queues to purchase basic food stuffs, and in Guyana an 80 per cent rise in the price of rice and a 50 per cent increase in the cost of chicken triggered protests and a strike by sugarcane workers. The government promised to issue seeds and urged people to cultivate idle land.

A regional Food Summit, convened by Nicaragua’s Daniel Ortega, brought together 16 Latin American and Caribbean leaders the first week of May to discuss the crisis facing the continents. Delegations from Mexico, Honduras, Guatemala, El Salvador, Costa Rica, Belize, Panama, Haiti, the Dominican Republic, Dominica, Cuba, St. Vincent and the Grenadines, Bolivia, and Venezuela participated in the summit which concluded with a proposal from the Venezuelan delegation. President Hugo Chavez has offered to establish a US$ 100 million agricultural fund to finance alternative small-scale agriculture projects, such as a regional grain bank and other programs. The summit participants – except El Salvador and Costa Rica – signed a collective statement to the United Nations General Assembly, declaring a state of emergency and urging the UN to tackle the food crisis when it convenes in September.

Possible Responses

The crisis is not going to disappear any time soon and most likely will become worse in the coming months.

Some ideas for action:

- Encourage policy changes: the recent change in Canadian policy which allows Canadian food aid to be bought locally will improve the local situation; changing trade policies which favour large-scale agricultural production through subsidies and dumping laws to favouring small scale local production. US policy however requires all food aid given must be US agricultural products. However there has been growing talk in the NGO community to ease this restriction, as well as from President Bush, who believes 25% of food aid should be allowed to be purchased locally.

- Pressure governments to match their dollar figure in immediate food aid to that of long-term development assistance (roads, irrigation, subsidized seeds, access to water). These should be country specific project intended to improve local agriculture in states which import food.

- Become aware of our eating habits in Canada and the US that we bring to Latin America. Much of the grain production that could be utilized to feed starving populations around the globe are used to feed livestock which satiates our exaggerated need for meat, poultry and pork products which mass-produced, causing consequent environmental degradation as well as affecting world food prices.

- Buy local, direct from the farmer if possible. Or join a Local Bulk Buying Club, which prepares weekly pick-ups for their members. If no such organization exists, talk to neighbours and other community leaders to see if there is interest in creating one.

- Visit MCC programs in various countries which work in food security, through learning tours or other kinds of visits. First hand experience will greatly improve knowledge and subsequent action

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[1] FAO, Crop Prospects and Food Situation, No. 2, April 2008

[2] FAO, Crop Prospects and Food Situation, No. 1, February 2008

[3] Canadian Food Grains Bank, “Backgrounder: Why are Food Prices Going Up?” http://www.foodgrainsbank.ca/uploads/Why%20are%20food%20prices%20going%20up%20-%20backgrounder.pdf

[4] Analysis of the World Food Crisis, Olivier De Schutter, United Nations Special Rapporteur on the Right to Food, New York and Geneva, May 2, 2008.

[5] Speech from President Lula da Silva, conference of the Food and Agriculture Organization (FAO) held in Brasilia, 16 April 2008.

[6] A. K. Sen, Poverty and Famines, (Oxford: Oxford Univ. Press,) 1981.

[7] World Food Program, “WFP says high food prices a silent tsunami, affecting every continent”, April 22, 2008

[8]Carin Zissis, “The Food Crisis and Latin America”, Council of the Americas, April 24, 2008.

[9]Salil Shetty, “Analysis: World Food Crisis and MDGs”, April 28, 2008

[10]Analysis of the World Food Crisis, Olivier De Schutter, United Nations Special Rapporteur on the Right to Food, New York and Geneva, May 2, 2008.

[11] Ibid.

[12] FAO, Crop Prospects and Food Situation, No. 2, April 2008

[13] Joachim Von Braun et al, “High Food Prices: The What, Who and How of Proposed Policy Actions”, International Food Policy Research Institute, May 2008.

[14] Ibid.

[15] Ibid.

[16] Eric Holt-Gimenetz, “The Great Biofuels Hoax”, Global Policy Forum, June 25, 2007.

[17] Analysis of the World Food Crisis, Olivier De Schutter, United Nations Special Rapporteur on the Right to Food, New York and Geneva, May 2, 2008

[18] David Kesmodel, Laurent Etter and Aaron O.Patrick, ‘Grain Companies’ Profits Soar As Global Food Crisis Mounts’, The Wall Street Journal, 30 April 2008,

[19] Analysis of the World Food Crisis, Olivier De Schutter, United Nations Special Rapporteur on the Right to Food, New York and Geneva, May 2, 2008