The United Nations Food and Agriculture Organization (or FAO) has come forward in a report warning that the cost of food internationally is close to a crisis level. The last time it was this high was in 2008 when speculation got out of hand due to the global financial crisis.
Right now global food imports will be about a trillion dollars this year.
According to FAO estimates barley will decrease 35%, corn by 12% and wheat by 10%.
Now what is causing most of the increase in cost? The new increase in cost is the recently announced new round of “quantitative easing”. The US government Federal Reserve’s policy of creating money from thin air is causing the world food prices to increase because food is priced in US dollars.
According to a Guardian article:
“the $600bn of QE announced by the Federal Reserve would hurt consumers by pushing up prices of soy, wheat and other staple foods … Commodities are considered a safe haven when the dollar is falling. There is also an incentive for producers to seek higher prices to offset the falling value of the dollar.”
As we are all aware, last year the world’s hungry increased to a billion people, but it is down this year to 925 million. This means halving the world’s hungry by 2015 is not to going to happen. Is anyone surprised by this?
Last year sub-Saharan Africa suffered a monstrous 45% hunger rate and that a child died every six seconds from hunger.
The FAO also warns us that the free market is not going solve the hunger issue either. The forces of supply and demand are not going to preserve human life in this coming crisis. Even the threat of starvation and the profit that can be made from it will not be enough to encourage people to grow food.
“Cereals, however may not be the only crops farmers will be trying to produce more of, as rising prices have also made other commodities attractive to grow, from soybeans to sugar and cotton … consumers may have little choice but to pay higher prices for their food … the international community must remain vigilant against further supply shocks in 2011 and be prepared.”
The report also notes that a major cause of the food shortage is global warming and its effects on the weather. It stated that is was the “primary driver of wheat production shortfalls”.
All this is directly caused by capitalism. The US attempt to take away the export market from China has resulted in quantitative easing. The profit motive has dragged farmers away from planting more food. The refusal to even acknowledge global warming has caused food shortages. Every single bit of this coming crisis is caused directly by capitalism.
It is become ever more increasingly clear that socialism is needed not just to have a better world, but for us even to just survive.