Food, Justice and Money in the 21st Century

A masterful review of whether the end of extreme poverty and widespread hunger are within our reach.

rice

The anger that this crisis produced is one that has, across the centuries, proven to be the most dangerous form of anger of all: anger in the belly.

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In The Reproach of Hunger (Simon and Schuster, 2015), Rieff, a leading expert on humanitarian aid and development, searches for the causes of this food security crisis, as well as what lies behind the failures to respond to disaster.Rieff cautions against the increased privatization of aid, as well as the interventions of celebrity campaigners, whose business-led solutions rob development of political urgency.

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The Reproach of Hunger

Food, Justice and Money in the 21st Century

I had asked most mainstream development experts in the year 2000 to name those factors they thought would most imperil their efforts to substantially reduce poverty globally in the new millennium, it is highly unlikely they would have mentioned a sudden, radical spike in the price of the principal agricultural commodities, and the staple foods made from them, on which the poor of the world literally depended for their survival. What seems obvious in hindsight — that the long period in which food prices had steadily declined would come to an abrupt end — seemed anything but obvious at the time. As Rajiv Shah, the then-administrator of the US Agency for International Development under President Barack Obama, put it, “by the late 1990s, global food security had mostly fallen off the world’s agenda.” The reasons for this were partly empirical (even if, self-evidently, in retrospect not empirical enough) and partly ideological, even in what was supposedly a post ideological age. The empirical part was based on what seemed to be a secular rather than temporary decline in the price of food staples, which, by 2000, were at an all-time low. The ideological part lay in the presumption that, in Shah’s words, “the success of the Green Revolution [in agriculture] had helped hundreds of millions of people in Latin America and Asia avoid a life of extreme hunger and poverty. Governments — developed and developing alike — assumed this success would spread and cut their investments in agriculture, allowing them to turn their attention elsewhere.”

They could not have been more wrong. At the end of 2006, the price of wheat, rice, corn, and soybeans—the four food staples that nearly three billion people who live on less than two dollars a day principally depend on not just as one element among several of their diets (as is the case in the rich world), but as the foodstuffs they almost exclusively depend on to avoid going hungry — began to rise vertiginously on world markets. By the time they peaked in early 2008, the price of corn had gone up by 31 percent, of rice by 74 percent, of soybeans by 87 percent, and of wheat by 130 percent, compared to what they had been in early 2007 at the beginning of what came to be known as the global food crisis.  

In many parts of the globe, the brutal secondary effects on the prices of food available to ordinary people in the market were almost immediate. In Egypt, for example, the price of bread doubled in a matter of months. In Haiti, the price of rice increased by 50 percent, while in South Africa, the price of maize meal increased by 28 percent. By some estimates, taken in aggregate the food bill for the world’s poor rose by 40 percent, while what soon came to be known as the global food crisis added 25 percent to the food import bills of many poor countries. And in thirty of the worst-affected countries across the globe, from Ethiopia to Uzbekistan, food riots broke out.

The significance of these riots was subsequently somewhat exaggerated. As every college student learns in freshman statistics, correlation is not causation. These were spasmodic episodes of civil unrest, not insurrections, let alone revolutions. And given the enduringly dire social and political conditions of the poor in those countries, to claim that the food crisis was the principal underlying cause of the conflicts seems too much like special pleading. But it is undeniable that the price spikes galvanized the poor in many countries in different regions of the world to a degree that, however briefly, seemed to be a genuine and at least potentially uncontrollable threat to the status quo.

Anger in The Belly

And to the poorest of the global poor, the so-called bottom billion of the world’s people who try to survive on less than a dollar a day, the threat was literally existential. For several billion more, any hope of “food security,” the term of art in the development world meaning that one can depend on getting enough — as well as the right things — to eat throughout the year, seemed to be evaporating before their eyes. And it was not only those who had joined in the food riots, but also the vastly larger number of people who despaired in silence who worried for their survival and the prospect of any better future for their children. To put it another way, what the food crisis meant for the poor was the very real prospect of going hungry, not because there would not be enough food, but because they would no longer be able to afford to buy it. The anger that this crisis produced is one that has, across the centuries, proven to be the most dangerous form of anger of all: anger in the belly.

In the rich world, there were many who reasoned that because the worst effects of the crisis were occurring in parts of the world where there had been huge population increases, brute demography had been at the root of what had taken place. But this was a fundamental misunderstanding of what had occurred; however counter-intuitive the thought may be, it was wrong. Instead, what had in fact taken place was not the “population bomb” finally exploding, to use the phrase coined by the neo-Malthusian American biologist and demographer Paul Ehrlich, leading inexorably to famine. For despite the fluctuating relationships between food consumption and food production, when the crisis began to unfold in 2007 there was (as there is as of this writing in 2015) more than enough food being produced to feed everyone alive. In the two decades preceding the 2007 crisis, global population increased by an average of 1.5 percent per year, and food production rose by 2 percent over the same time. If there was confusion about this among the general public, it was in considerable measure. The preponderance of media reports about hunger, at least those to which the general public in the rich world are exposed, focus on famines in the Horn of Africa or, in more sophisticated narratives, on hunger in rural India. This focus understandably gives the false impression that there are important food shortages, but in actuality the problem is food affordability, not availability.

But, important though it is, pointing out what the food crisis was not does little to explain how and why the global food system could have seized up to such an extent in 2007–2008. Nor does it shed much light on how even most agricultural experts and both governmental and nongovernmental development agencies through- out the world could have been taken by surprise in this way. In other words, if the effects of the global food crisis were obvious, its causes were much harder to get right. In part this was because, if anything, there were too many causes that could be credibly held out as having contributed to the disaster, and figuring out which had played major roles and which had played minor ones proved to be enormously difficult.

One key driver of the crisis beyond dispute was the rising price of oil which, beginning in late 2006, had a secondary effect on the price of the fertilizers needed for industrial agriculture. This type of farming has increasingly become the norm not just in the rich world but in much of the poor world as well, far more to the detriment of its masses of smallholder farmers. Another factor, seemingly episodic rather than systemic, was the severe weather in many parts of the world during 2006, ranging from drought in Australia, the world’s second-largest producer of wheat, to Cyclone Nargis, which hit Myanmar hard in the spring of 2008 and devastated that country’s rice production. In the rich world, the practice of diverting grain from feed for livestock to the production of biofuels (40 percent of US corn now goes to ethanol production) certainly played a role, as did the virtual takeover of the world’s commodities markets by speculators whose entry radically increased the volatility of these markets, causing wild price swings in the costs of food staples. In short, viewed as a discrete event, the 2007–2008 global food crisis had been, as the cliché goes, a perfect storm.

The New Normal

But while storms dissipate eventually, in the crisis’s wake in 2008, even after the prices of agricultural staples had declined sharply, it soon became clear that far from having been an anomalous event, the price rises were a more extreme but still emblematic manifestation of what, to borrow the image of the money manager Bill Gross about the post-2007 crash of the financial markets, was likely, over the long term, to be a “new normal” of secular price increases of agricultural staples. This supplanted the “old normal” in the last quarter of the twentieth century, which had been a process beginning with the establishment of price stability and then of price decline. And while he was admittedly extrapolating from a very short period, the senior World Bank official Otoviano Canuto was reflecting a broad consensus when he observed that this “new norm of high prices seems to be consolidating [in the second decade of the twenty-first century].”

Hunger and poverty are inseparable, and despite the many real successes in poverty reduction in many parts of the Global South, it is highly unlikely that these gains will be sustainable if rises in the price of staple foods significantly outstrip the rise in incomes of the poor as a result of sound development policies. That is why, at least assuming Canuto’s now widely accepted conclusion is correct, it is not too much to say that the entire global food system is gravely ill, and that the central question is how to reform it, if, indeed, it is not too late to do so.

But while there is wide disagreement about what needs to be done, there is surprisingly wide agreement that most, if not all, of the assumptions that undergirded the system in the later part of the twentieth century had either been wrong to begin with or simply no longer applied in the first decade of the new century, above all the conviction that food prices were likely to continue to decrease. Simply put, the evidence for the new secular trend toward higher food prices has accumulated to the point that it now seems all but irrefutable.

The trajectory is clear. After having fallen in 2008, food prices rose again, almost as sharply, in 2010 and 2011, then fell back and rose once more toward the end of 2012 and into 2013, at which point prices for corn on the world market were higher than they had been at the height of the 2007–2008 crisis. These subsequent rises in the cost of cereal grains and the realization among development specialists that the prices of food staples have not diminished all that much since 2007 have not received the same amount of attention in the global media. That does not make them any less ominous. In Mexico, for example, the price of tortillas, the most basic foodstuff in the diets of most poor people, was 69 percent higher in 2011 than it had been in 2006. In Indonesia, the average national price of rice reached a record in February of 2012. And it should be remembered that both Mexico and Indonesia are what the World Bank calls “middle income” countries. In much poorer nations like Guatemala, Haiti, Niger, Yemen, and Afghanistan, the effects of this “new nor- mal” of high food prices have been more damaging still to the lives of the poor and the life chances of their children.

That is the bad news, and it is, indeed, very bad news. But even the most dyed-in-the-wool pessimist would have to concede that it is by no means the whole story. As the British development economist Charles Kenny has argued, there is no reason to believe that global misery is so intractable a problem that it cannot be relieved. Even if one doesn’t agree with Kenny and like-mindedly optimistic colleagues that things are getting better and, barring environmental catastrophe, will continue to improve in ways that were all but un-imaginable half a century ago, they are right to insist that there has been a considerable amount of good news as well, above all in the extent of the progress that has been made over the past three decades. “The biggest success in development,” Kenny has written, “has not been making people richer but, rather, has been making the things that really matter — things like health and education — cheaper and more widely available.” 

Overall, the percentage of the poor in the global population has decreased steadily, even if in some of these countries, notably India, the number of those who have not benefited from these changes is far greater than those who have. There are now hundreds of millions of people in countries as varied in their political systems, the condition of their economies, and their approaches to chronic hunger as Brazil, China, Mexico, Vietnam, and India who are now eating more and usually, though not always, better (as the rapidly rising obesity rates in the developing world demonstrate) than previous generations ever did. Whether this has been the result of development aid or the economic growth and prosperity created in much of Asia and parts of Latin America over the past thirty years remains a subject of bitter dispute. The scope of this transformation, not simply the reality, is what cannot be denied — it is unparalleled in human history in terms of its effects on so many over such a relatively short period of time. By comparison, the general prosperity eventually created by the Industrial Revolution in Europe took far longer and affected far fewer people.

If one is being optimistic, it is possible to say that the 2007– 2008 crisis taught us at least to ask the right questions about hunger. But whether countries — rich, developing, or poor — will be able to come up with the right answers is another matter altogether.


Reprinted with permission from The Reproach of Hunger by David Rieff and published by Simon and Schuster, 2015.