Monday, June 23, 2008

The Crisis of Food and Fuel Continues Around the World

The Crisis of Food and Fuel Continues Globally

Europe, Africa, US, Asia and Latin America deal with rising prices and shortages

by Abayomi Azikiwe, Editor
Pan-African News Wire

News Analysis

With the continuing rise in both food and fuel prices internationally the crisis has illustrated the failure of the world capitalist system to address the elementary needs of the majority of peoples throughout the globe. Although there has been much discussion surrounding this current situation in Europe, Latin America, Asia and Africa, the level of debate and political struggle inside the United States has been muted and obscured.

A corporate and right-wing governmentally-controlled mass media works closely with the ruling class interests in the United States to keep the most significant issues facing the country and the world out of the public view. Even the so-called public media, National Public Radio (NPR) and the Public Broadcasting System (PBS), are heavily subsidized by the multi-national corporations and the Bush administration.

Even the democratically-controlled Congress has maintained the status quo in regard to its failure to end the wars in Iraq and Afghanistan, to reverse the massive tax cuts to the rich and to open up the airwaves to political constituencies that represent the working class, women, the poor and nationally oppressed groups.

Consequently, the emphasis is often placed on the spouses and pastors of various presidential candidates rather than examining what each politician's views are in relationship to lowering fuel and food prices. The growing housing crisis, as exemplified by the millions of people in the United States undergoing home foreclosures, drastically lowering of property values and outright evictions, is largely described as the failure of individual households to take personal responsibility by signing mortgage contracts they cannot afford or to blame several hundred managers or executives in the mortgage and finance sector and to file criminal charges against them. This is being done without any real analysis of how the capitalist finance system is inherently corrupt as it is designed to rob whatever wealth that working people and the nationally oppressed have been able to accumulate.

Crisis in Europe sparks widespread labor actions

In western Europe during the month of June there were widespread strikes in Portugal, Belgium, France, the Netherlands and Spain among people in the fishing and trucking industries. These actions derived from the escalating rise in fuel prices which effected their abilities to make a living. The governments of these countries and the European Union have consistently refused to take action that would lower fuel and food prices consequently worsening the social conditions for workers and small business people in these nations.

The ongoing strikes and other protest actions in Europe have led to sharp disagreements between France and the European Commission over the nature of industrial fishing. On June 23 the French Fisheries Minister Michel Barnier asked the Commission "to explain its decision in an intelligible way." The European Commission had called for an early halt to the industrial fishing of bluefin tuna in the Mediterranean Sea.

This tuna from the Mediterranean is highly priced and is utilized in Japanese sushi cuisine which has grown in popularity throughout the international community. Yet its popularity is suspected of leading to a vast shortage in bluefin tuna in Europe. According to the European Fisheries Commissioner Joe Borg, the problems arise from the "countless failures to properly implement the rules, which have been agreed to at the international level, to manage the bluefin stock sustainably."

Borg alleged that eight French purse seine trawlers spent up to three weeks in the waters but they had "so far declared no catches." He continued by stating that there were eight similar vessels from Italy which, "according to official figures, overshot their quota by between 100 and 240%."

In addition, to this increase in fishing, Borg claims that at least eight spotter planes had also been involved in assisting the twalers to identify bluefin tuna shoals, "even though the use of spotter planes is completely illegal."

French Fisheries Minister Michel Barnier responded by saying these figures were based on pure estimates and not factual information. Barnier says that "only 52% of France's quotas were full."

On June 17 several hundred fishermen from France and Italy demonstrated at the European Commission's actions in Malta. They not only protested and chanted slogans against the quota system and its impact on the fishermen's livelihood, but threatened to block the island nation's harbours if Commissioner Borg, who is Maltese, refused to hear their concerns.

The internationally known environmental activist group Greenpeace has estimated that bluefin tuna stocks in the Mediterranean will be depleted. Sebastain Losada, a fishing expert for the environmental organization, told the BBC that "the number of boats is so big that within just a couple of weeks they can catch their whole quota, the current rules are insufficient."

Greenpeace has called for a ban on bluefin tuna fishing during the months of May and June, which is the breeding season in the Mediterranean Sea. Losada says that the fishing quotas adopted by the European Commission "should be in line with what scientists recommend."

Losada surmised that approximately 50-60,000 tons of bluefin tuna is caught every year in both the Mediterranean and the Atlantic Ocean. He claims that the recommended scientific amount of fish that should be caught is only 15,000 tons at the most per year. Losada of Greenpeace added in the BBC interview that Spain had "authorised its Mediterranean fleet to fish for undersized tuna, which is completely illegal."

One week prior to the disagreement over industrial fishing, hundreds of farmers, jauliers and taxi drivers blocked roads into the Belgian capital of Brussels during the European Union Summit which was ostensibly convened to address the crisis engendered by the dramatic increase in fuel prices. Large convoys of taxis and lorries closed significant sections of the capital leading to chaos and massive traffic jams.

The demonstrations at the EU summit were demanding that the governments in the region take swift action to lower fuel prices which are hampering their ability to make a living wage. One solution advocated by the taxi and lorry drivers was the imposition of governmental subsidies to compensate for their losses. One farmer was quoted by Al-Jazeera news agency as saying that: "The economic situation, agriculture wise, is not fabulous, as everybody knows. This is why we are going to Brussels to show that we are against the OMC (open method of co-ordination) that the European Commission is trying to vote through."

Another farmer was quoted by the BBC as saying that: "We want a fair price for our milk and meat. The prices of fertiliser and animal feed have gone up, but the retail price for our produce has not."

Yet despite the growing problems associated with rising fuel prices, the EU summit in Brussels failed to reach an agreement on the issue. The EU leaders could only state that they would launch a three month study to come up with possible solutions. French President Nicolas Sarkozy was charged with drafting a report on the crisis by October.

In light of this indecisiveness in Europe, the price of oil has continued to rise. During the week of June 23 the price had reached another record-breaking level at $140 per barrel, which places enormous pressure on the energy-intensive industries such as agriculture, fishing and transport services. These have been the princial sectors where mass protests have taken place in western Europe in recent weeks.

In a national vote on June 12 in Ireland on whether to adopt the Lisbon Treaty, a set of reforms that would purportedly streamline the operations of the European Union, resulted in its rejection. Many people within Europe, including the French President Sarkozy, suspected that the Irish rejection of the Lisbon Treaty is a reflection of the widespread anger over the drastic rise in fuel and food prices and the total failure of the EU to effectively address the crisis.

Sarkozy has advanced proposals for a cut in the Value Added Tax (VAT) on petroleum in specific sectors of the economy such as trucking, farming and fishing. However, other EU members are saying that they cannot unilaterally carry out these policies. Germany and Sweden spoke out forcefully against the French proposals claiming that it would only lead to a distortion of the market demand and stall the long-term problem of continuing high oil prices.

Angela Merkel, the German Chancellor, stated at the conclusion of the EU Summit in Brussels, that: "Measures, especially of a fiscal nature, which have been regularly discussed and which at the end of the day will prevent the moves necessary to adapt to a changing market, should, from our point of view, be avoided."

The situation has become so serious in Europe that the EU announced that it would implement emergency measures to target those most severely affected by the impact of rising fuel and food prices. European Commission President Jose Manuel Barroso announced these plans on June 19.

According to the website, Barroso stated that the emergency measures are designed: "To assist poor households, he announced that the bloc would increase its budget for emergency food aid from 300 million to 500 million Euros per year. For the fishing industry, Barroso has proposed increasing the amount of direct aid the EU pays out to fishermen, on condition that this is accompanied by a reduction in fishing capacity. The package should be presented to the Council of Fisheries Ministers in Luxembourg on 24 June."

"Barroso also announced the creation of a fund to support agriculture in developing countries. Rising prices are 'a global problem, and even Europe cannot solve it alone. Governments are free to act with emergency measures for the most vunerable parts of society,' he said." (, June 23, 2008).

Adding additional political and consequently political pressures on the EU countries as they discussed energy prices, "Venezuelan President Hugo Chavez threatened to close the tap on oil exports to the EU and throw out European companies if the bloc goes ahead with tough new rules on returning illegal immigrants back where they came from. The rules, which allow for the detention of people for up to 18 months before their expulsion, were approved in Parliament on June 18 after a compromise was reached by member states." (, June 19, 2008).

Africa Grapples With the Agricultural and Energy Crisis

On the Africa continent and other so-called developing regions of the world, the problems associated with rising fuel and energy prices take on a more urgent character. Over the last several months there have been rebellions and mass demonstrations in various countries including Haiti, Somalia, Burkina Faso, Senegal and South Korea.

Abdolreza Abbassian, who works as a grain specialist with the United Nations Food and Agricultural Organization (FAO), said in a recent article published by Jack Chang, Tim Johnson and Shashank Bengali on June 22 in the McClatchy Newspapers that: "The world in running now to keep up with demand. Any interruption in the global picture affects supplies."

Abbassian was also quoted as saying that: "The hope is that these high prices will inspire more production around the world. During this transition, however, people in poor countries are going to be the most affected."

This above-mentioned article says that "already, some 800 million people suffer from chronic food shortages, and millions more could go hungry because of the widening food crisis. From 2007 to 2008, world prices for soybeans increased by 29%, while prices for wheat grew by 40% and rice prices jumped by 53%, according to a World Bank study. Food prices had stayed largely stable from 1995 until the end of 2006, the study found."

The article by Chang, Johnson and Bengali also points to the often stated reasons behind the recent rise in food prices. They state that: "The recent price spike was the result of problems such as unfavorable weather in grain-exporting countries like Australia and dwindling food stocks in Europe, according to the UN food organization. The coming year's food stocks promise to be thin as well, with floods in the U.S. midwest and political turmoil in Argentina cutting back grain production."

On the African continent many nations under colonialism had been targeted for the development of cash crops for export. Yet in recent years since national independence the continuing legacy of imperialist exploitation and unequal terms of trade have served to discourage agricultural production. Other factors in the stagnation in African agricultural is the drop in the prices of crops on the international market, the rising costs of machinery, which is taking place when incomes have not substanially risen on the continent.

Without a strong industrial capacity based upon the concrete needs of African countries, the cost of imported agricultural machinery that would generate higher yields of food for domestic consumption as well as export, serves as a serious impediment to resolving these problems. It is estimated that farms in Africa are only one-fourth as productive as the world average. In the hardest hit region of the continent, in the sub-saharan countries, the majority of the nations are currently importing most of their food. A recently released FAO report indicates that of the 37 most severely affected nations in the world, 21 of these countries are located in Africa.

In a statement released by the Africa Progress Panel, which is chaired by the former Secretary-General of the United Nations, Kofi Annan, it criticized the developed countries for not honoring its pledges to provide more assistance to African countries. The panel was established to monitor the progress made by the Group of Eight (G8) countries who made a commitment in 2005 to transfer billions of dollars in aid to various African nations aimed at alleviating poverty.

The Africa Progress Panel accuses the G8 over being short some $40 billion in providing the pledged assistance. The statement by the Panel said that: "Funding shortfalls against the 2010 targets should be addressed immediately, through a special plan to meet the pledge made at Gleneagles (Scotland)."

In a June 16 article published by Al-Jazeera, it says that: "The report, 'Africa's Development: Promises and Prospects', said debt relief agreed at the summit had been significant because poor countries had increased spending on health and education, over and above the amount of relief.

"But unless rising food prices were halted and reversed, there would be a significant increase in hunger, manlnutrition, and humanitarian emergency. In the immediate term, the supply of food to the world's most vulnerable citizens must be increased by raising the level of financial assistance."

To quote from the document issued by the Africa Progress Panel, it says that: "Four basic drivers appear to be stimulating rapid growth in demand for food commodities: (1) rising living standards in China, India, and other rapidly growing developing countries, which lead to increased demand for livestock products and the feedstuffs to produce them; (2) stimulus from mandates for corn-based ethanol in the United States and the ripple effects beyond the corn economy; (3) the rapid depreciation of the U.S. dollar against the Euro and a number of other important currencies, which drives up the price of commodities priced in U.S. dollars; and (4) speculation from new financial players searching for better returns than in stocks or real estate, also stimulated by the declining dollar."

However, it appears that this panel has limited faith in the ability of African nations to raise the level of agricultural production on their own. Perhaps the rationale for continuing to request that the western capitalist nations increase their assistance to Africa is that it is in their best interests to prevent widespread hunger and social unrest. What the report does not take into consideration is the growing crisis within Europe and the United States itself stemming from rising unemployment, growing trade deficits, the energy crisis, national debt, racial divisions and unrest as well as the ongoing wars of occupation carried out by the United States, the United Kingdom and their allies.

The appeal to the west for more assistance to African nations comes across as a naive request based upon thinking from a by-gone era of ever-increasing industrial and commercial growth. The African Progress Panel states that: "In the immediate term, the international community must increase the supply of food aid, by increasing assistance to the World Food Programme as well as other channels of delivery. The WFP is requesting additional emergency food aid funding in the amount of $750 million. Recent aid announcements by G8 governments are heartening and may cover some of the WFP's most urgent needs but commitments are yet to be made for 2009 and beyond. Food prices have been steadily rising for some years now and there are no signs of a reversal in this trend; until better longer term arrangements are put in place, the WFP's work will need to be sustained in order to deliver food aid to the most vunerable populations in Africa and elsewhere."

Despite this appeal to the western capitalist nations for more assistance to Africa, Mrs. Graca Machel of Mozambique and South Africa, a member of the Africa Progress Panel, also emphasized in a recent article that the continent's leaders and people must take responsibility in planning and working toward long-term solutions to the food production crisis.

Machel states that: "The panel is thus calling for more than immediate outside aid to alleviate problems of high food prices. As Africans, we must take responsibility for the fundamental, structural problems with agricultural productivity on our continent. With the lowest use of fertilisers in the world, average grain yield in Africa is less than one ton a hectare, equivalent to just 25% of the global average. Our population has increased, yet African agricultural yields have stagnated since the early 1960s."

Another response to the growing problem of rising food and fuel prices in Africa has been the call for another "Green Revolution." Yet the continuing unequal terms of trade and the rising prices for agricultural inputs and the decline in the level of wages on the continent despite statistical economic growth over the last decade, will serve as a major hurdle for Africa seeking to rapidly increase food production.

In an article published in The East African by John Mbaria on June 15, 2008, entitled, 'Green Revolution' Comes Under Fire Again', he states that: "In the absence of a co-ordinated approach, the push for a Green Revolution in Africa will not benefit millions of farmers but will instead severely affect their resilency even as it realises a boom for big-bucks biotech corporates, a new report says. Prepared by the Canada-based Erosion Technology and Concentration Group--a respected research and conservation organisation--the report predicts that the mistakes made during the first Green Revolution will be repeated in the second one."

The report is highly critical of the forced usage of genetically modified crops on the African continent as a possible solution to the problem of food deficits. A program called the Alliance for a Green Revolution for Africa (AGRA) has been rejected by a number of so-called civil society organizations on the continent at the World Social Forum held in Kenya during 2007.

Mbaria says in the article that: "The problem, it seems, is the company that Agra keeps. 'When Agra hired two key players formerly connected to Monsanto's biotech division, it further guaranteed anger from the entire anti-globalisation movement,' adding that the alliance with Monsanto entrenches suspicions that it will ultimately introduce genetically modified organisms to unsuspecting African farmers."

Africa must develop its own strategy for affirmatively addressing the rise in fuel, energy and food prices. The solutions cannot be found through demands for increased western aid or the establishment of unequal parternships with capitalist corporations who have their own agendas for pushing products and methods that will ultimately enrich the multi-national firms.

What African leaders must also realize is that the western capitalist nations are undergoing the most serious economic, political and social crises since the Great Depression of the 1930s. As a result there will be more militaristic and imperialist efforts to further subjagate African and other so-called Third World nations for the sole purpose of the economic exploitation of their natural resources as well as labor.

The outsourcing and off-shore production strategies of the United States and other imperialist nations are not designed to benefit the workers, poor and nationally oppressed within its own borders or to foster growth and development in the nations of Africa, Asia, the Middle-East and Latin America.

The US Dimension to the Current Crisis in Food and Fuel

In the United States the rise in both food and fuel prices is taking place amid a broader economic downturn which encompasses several trends within the present phase of world capitalism. The over-dependence on oil within the world system of capitalist production has driven several American administrations to seek a permanent occupation of those areas which are large repositories of oil.

Many within the anti-war and peace movements in the United States have repeatedly emphasized that the effort to dominate major centers of oil production drove the Bush administrations in 1990-91 as well as 2002-2008 to center its foreign and domestic policy around the weakening and eventual destruction of the government of Iraq. Today, after over five years of direct occupation of Iraq, the nation is still not under containment by the US occupation forces and its allies.

One of the most interesting developments in American politics recently was the passage by the House of Representatives in Washington of a $165 billion supplemental to continue the military occupations of both Iraq and Afghanistan. Attached to this bill was a provision to extend by thirteen weeks the unemployment benefits for those who are eligible. What became the headline in the corporate press was the provision authorising the thirteen weeks extension of unemployment benefits and not the continuation of the failed policies in Iraq and Afghanistan. This was done to make it appear that the Congress and the President are concerned about the current economic crisis in the country.

The runaway spending on military occupations and the maintenance of repressive regimes by the United States around the world, can no longer reap any semblance of economic benefit for working and oppressed people inside the country. This is clearly illustrated in the ongoing wars in Iraq and Afghanistan which have deepened the economic crisis facing the capitalist system. The wars are increasing profits for the military production firms, the para-military security companies and the oil conglomerates, however, the overall standard of living in all categories including, real wages, health care benefits, education quality and attainment, and social cohesion, the United States is falling behind other western industrialized capitalist states as well as some developing states in the so-called Third World.

A mortgage crisis which has affected finance capital in both the United States and Western Europe, has not only illustrated the weakness and fragility of the present economic system but has spun off new areas of social dislocation and declining living standards. Millions of working people and the nationally oppressed are facing homelessness, while the administration spends billions every day to maintain wars that they cannot possibly win against people who have commited no crime or act of war against the United States.

The rising cost of oil, which is also a by-product of the "permanent wars of occupation", has increased the cost of production and transport of food and other consumer goods. With the declining wages of people within both urban and rural communities throughout the United States, many are finding it difficult to meet their needs for both transportation and food.

In a recent article in the Christian Science Monitor published on June 11, 2008, entitled "Sticker Shock at the Supermarket", it says that: "With food prices up 6 percent from last year--flour alone has gone up 87 percent--and gasoline prices up by more than a dollar since 2006, the receipts are adding up, causing a 'dramatic' shift in kitchen-table decisions from Albuquerque to Atlanta, says Maura Daly, spokeswoman for the charitable hunger-relief organization America's Second Harvest in Chicago.

"The struggle to put healthy food on the table is tough enough as meat, egg, and veggie prices are rising fastest. But a 15 percent increase in soup-kitchen lines nationwide since last year indicates that many families are struggling to put any food at all on the table.

"New evidence of the difficulty: 1.5 million more people use food stamps than a year ago, a 5.7 percent increase, according to the Department of Agriculture."

These problems relating to food deficits in the United States serve as a basis for understanding the sentiments of people on the African continent and other parts of the world. In an article published on June 16, 2008 in Al-Jazeera on the Africa Progress Panel report refered to above in this article, it emphasizes that: "Developed nations should review subsidies for biofuels as the growth of crops as an energy source may be hurting food production and contributing to global food price rises."

In another article published in the Detroit News on June 23, 2008, entitled: "Higher Corn Prices Lead to Call to Modify Biofuel Rule", by David Shepardson, it states that: "Massive flooding in the Midwest has ruined millions of acres of crops, spurring record corn prices and raising serious questions about whether the United States can meet new requirements for using corn-based biofuels in the nation's car and trucks.

"A sweeping federal energy bill signed into law in December 2007 requires the production of 9 billion gallons of biofuels this year, nearly all of it corn-based ethanol, up from 6.5 billion in 2007."

It is at this point that we begin to come full circle in the global crisis. There are food shortages both in the United States and the developing world with increasing labor agitation and discord in Europe. We have witnessed food rebellions in many nations in the Global South while people in the United States are spending more of their declining income on rising prices for food and fuel.

In South Korea, hundreds of thousands of workers have demonstrated and struck in opposition to a trade pact with the United States which requires the importation of beef. This is a country which has been occupied militarily by the United States since 1950 and it still technically at war with its neighbor, the Democratic Peoples Republic of Korea (DPRK). Therefore, despite the military might and political will of the United States, billions of people around the globe are charting their own independent path.

What will be significant in the struggle to reverse the current chaos in the international capitalist marketplace, is the role that working and oppressed peoples will play in the transformation of the economic system to one which is much more in line with the needs of the majority of the world's population. As the crisis grows deeper in the United States and other western capitalist states, the peoples of these countries will increasingly understand the link between the problems of food and fuel prices in the developing world and their own plight inside the developed countries.
Abayomi Azikiwe is the editor of the Pan-African News Wire. PANW articles have been published in various publications and website throughout the international community.

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