The High Price of Hunger

Farmers need to make more money to feed the world


| September-October 2011



the-high-price-of-hunger

REUTERS / Carlos Garcia Rawlins

The world’s farmers need a pay raise, or else, come mid-century, the other 7 billion of us may not have enough to eat.

As the Earth Policy Institute notes, the world produced more grain than it consumed throughout the ’70s, ’80s, and ’90s. Today, those surpluses are gone. While the world harvested 20.4 million tons of grain between 2001 and 2010, it consumed 20.5 million tons. In October 2009 the United Nations’ Food and Agriculture Organization (FAO) reported that world food production would have to increase 70 percent by 2050 to adequately feed the planet’s growing population. In developing nations alone, this would require an investment of $83 billion a year. And, the organization noted, “farmers and prospective farmers will invest in agriculture only if their investments are profitable.”  

In the 21st century, market power is concentrated in a very small number of food corporations and supermarkets that buy food worldwide. The food corporations minimize their input costs by paying farmers less for farm commodities. The power of the farmer to resist downward price pressure has weakened, as farmers in rich and poor countries alike now compete intensely with each other to sell at the lowest possible prices.

At the same time, the manufacturers of fuel, machinery, fertilizer, chemicals, seeds, and other necessities have grown much larger, more globalized, and more powerful. When farm commodity prices rise, the industrial firms increase the price of their wares. In 2008, when grain prices rose 80 percent, fertilizer prices went up as much as 160 percent, and oil was $160 a barrel.

Farmers are trapped between muscular global food firms that drive down the prices of their produce and muscular industrial firms that drive up the cost of their inputs. Cheap food prices also reduce national and international investment in agriculture, as investors consider farming less profitable than other opportunities. Because of these investment disincentives, farmers cannot readily adopt more sustainable and productive techniques. As a result, world food output is increasing too slowly to meet rising demand, overall farm productivity gains are sliding, and yield gains for major crops are stagnating.