Tuesday, June 03, 2008

Food, Fuel and the Escalating Crisis in Capitalist Globalization

Food, Fuel and the Escalating Crisis in Capitalist Globalization

Food rebellions, strikes illustrate potential longterm problems in both the developed and developing countries

by Abayomi Azikiwe, Editor
Pan-African News Wire

Over the last several months the world has experienced rapid increases in the price of both fuel and food. In the United States motorists are paying in excess of $4 per gallon for gasoline and at the same time they are spending larger percentages of their household incomes on food consumption as well as energy needs such as heating and electricity costs.

The response from the federal government has been to largely avoid any direct attention to these growing problems and to announce a so-called economic stimulus package which through some form of "wishful thinking", they have told working people that a check for several hundred declining US dollars will have a noticeable positive impact on the nation's ailing economy.

However, the current spike in fuel and food prices in the United States is taking place amid other important political and economic developments. The largest rate of home foreclosures since the Great Depression, the ever increasing annual military budgets to both finance the ongoing occupations of Iraq and Afghanistan as well as other adventures in Somalia and Colombia. Other policies implemented by the Bush administration and the Congress have lead to huge transfers of wealth from working class and poor families to the rich through tax cuts and massive trimming in public and social programs in the country.

At the same time further pressure is being placed on workers throughout broad sectors of the economy. In the auto industry, the crisis in overproduction and the declining spending power of individual households, has brought about significant declines in salaries for production workers, salaried employees and more importantly, the downsizing of tens of thousands of employees.

A recent strike at American Axle, where UAW members attempted to halt a 50% reduction in their pay scales and the elimination of major elements of their benefit packages, resulted in a settlement that will further reduce the living standards of not only those who work for the auto industry but its impact will be felt across the board.

It has already been announced that 19,000 workers will soon leave General Motors through buyouts and retirement plans. Despite this reduction in the workforce at GM, the company wants to eliminate even more workers in order to cut costs and to create space for the hiring of new workers at far lower salaries and benefits. Having workers perform the same tasks at lower wages only benefits the owners in their ever growing thirst for higher profit margins. These corporate policies, which have been in effect now for over two decades, further hampers the ability of working families to survive amid inflationary pressures and rising health care costs.

Mass Responses to the Crisis in Fuel and Food Pricing

During the months of April and May people in Africa, the Caribbean and Europe held mass demonstrations and strikes in response to the rising costs of fuel and food. The most militant of these actions in Europe have occured in France, Portugal and Spain, where fisherman and lorry drivers have struck in response to the rising cost of fuel and the price stagnation in the fishing industry.

In France, with its pro-US administration of Nicolas Sarkozy, workers have been engaged in actions now for several weeks. Fishermen from France, Spain and Italy have been meeting in Paris to map out long term strategies for responding to the current crisis. The fishermen are calling for direct assistance and subsidies to ease the impact of rising fuel prices and stagnate prices for their products. The European Commission has issued a statement saying that it will exercise some flexibility but has ruled out granted subsidies to the fishermen.

Thousands of fishermen marched in Madrid, Spain to the Agricultural Ministry demanding governmental intervention. They handed out 20 tonnes of fish to demonstrate the plight of their industry. Fishermen set off firecrackers and blew whistles to attract attention from the general public and government officials.

One banner held by the demonstrators stated that: "Soaring diesel plus cheap fish equals ruin for fishermen." Another chided Prime Minister Jose Luis Rodriguez Zapatero: "You are sending us to the cemetery."

In Barcelona one union leader said the entire fishing industry was at a standstill. Union leaders said that they could follow the lead of French workers by blockading the ports preventing all goods from coming into the country.

In France the government offered 100 million euros as an incentive for fishermen to return to work. On Thursday May 29 French police broke through the workers blockade and cleared Mediterrean oil depots of Fos-sur-Mer and Lavera and a Total refinery in the south at La Mede.

According to the BBC: "On the same day police clashed with fishermen who burned tyres in the Atlantic port of Lorient, while hundreds protested in Quimper, Brittany. On Friday, protesters blockaded the Channel port of Le Havre.

The BBC reports also says that: "Hundreds of farmers have also been blocking oil terminals near the cities of Dijon and Toulouse. In Italy, at least 5,000 fishermen are expected to strike, the main trade union Federcoopesca says. The government has already refused emergency aid to the industry."

In the so-called developing regions of Africa and the Caribbean the problems of rising fuel and food prices have created growing political tensions. In Haiti during April their were rebellions in response to the rising cost of Food.

In Somalia, which is under a US-backed occupation by Ethiopia, resistance efforts intensified at the beginning of May when women and youth took to the streets to express their outrage at the worsening humanitarian situation created by the United States foreign policy imperiatives in the region. The local currency in Somalia is virtually worthless leaving people without the ability to purchase food and other essential goods for their households.

Demonstrations also took place in Burkina Faso and Senegal in West Africa. These two former French colonies have suffered under the impact of globalization and neo-liberal policies. Their currencies are in decline and the rising debt-service ratios are hampering their ability to provide services to the population.

FAO Report Predicts Prices Will Remain High

A recent report issued by the Organization for Economic Cooperation and Development (OECD) and the Food and Agricultural Organization (FAO), two United Nations agencies, has predicted that between 2008-2017 food prices will stabilize after increases in the short term. Yet this purported stabilization in food prices will be at a higher level.

According to the report entitled: "OECD-FAO Agricultural Outlook 2008-2017": "World reference prices in nominal terms for almost all agricultural commodities covered in this report are at or above previous record levels. This will not last and prices will gradually come down because of the transitory nature of some of the factors that are behind the recent hikes.

"But there is strong reason to believe that there are now also permanent factors underpinning prices that will work to keep them both at higher average levels than in the past and reduce the long-term decline in real terms. Whether transitory or permanent, appropriate policy action for agricultural development and for addressing the needs of the hungry and the poor needs to take account of both these characteristics."

The report takes into consideration some of the changing characteristics in the global economy and their impact on rising food prices and growing food insecurity in the developing world. This food insecurity has also become more acute in the United States with the deepening economic crisis illustrated through the rise in unemployment and underunderployment, downsizing, rising fuel and energy prices and the decline in the real value of the US dollar.

The OECD-FAO Outlook says that the report "has been prepared in an environment characterized by increased instability in financial markets, higher food price inflation, signs of weakening global economic growth and food-security concerns. Although projections for agricultural commodity markets have always been subject to a number of uncertainties, these have taken on more importance in this year's edition."

FAO convened an international conference in Rome on June 3 to discuss the growing international crisis in food security. According to a BBC report on the conference: "The hosts of the Rome conference - the UN's Food and Agriculture Organisation (FAO) - has warned the industrialised countries that unless they increase yields, eliminate barriers and move food to where it is needed most, a global catastrophe could result."

Can It Happen Here?: Implications for the US Situation

In the United States there has been a significant rise in not only the price of food and other essential goods and services, but the impact of these increases have had detrimental effects on working families and the poor. This is clearly related to the crisis facing truckers and other tranport workers and networks due to the sharp rise in diesel fuel prices.

Truckers in the United States have complained and have staged limited protests against the rising price of fuel. Yet the price of fuel continues to rise without any relief being proposed or offered to the general public aimed at lowering gasoline prices. It is obvious that the Bush administration is not interested in placing any restrictions on the actions of the multi-national oil companies, who have, amid a growing economic downturn, reaped record profits over the last year. The only solution proposed by the pro-Oil policymakers is to open larger sections of the country to drilling.

These profits are not re-chanelled into the state sector to offset the negative impact these hikes are having on the working class and the poor. Consequently, unless there is an intervention on the part of the people, there will be more of same in the near future.

Activists and organizers in the United States need to give greater attention to the impact of rising fuel and consequent food prices. With the growing problems facing truckers in particular, it could seriously impact the ability of these drivers to get food into the stores across the country. Prices could soar leading to a run on the supermarkets and the potential for food shortages would be realized absent of any effective governmental action.

How could activists organize around such a crisis? Demands could be raised for the subsidization of the agricultural sector and the trucking industry. There could be price controls imposed on both the food industry and the oil industry. The release of millions of barrels of oil from the Strategic Petroleum Reserve (SPR) could be implemented by the federal government to meet the growing demand and bring about a reduction in prices at the pump.

However, in the long term this problem can only be solved with the nationalization of the oil industry in the United States under a socialist economic system. Through nationalization under socialism, the price of petroleum products would be controlled for domestic usage and consumption. The use of petroleum products in the areas of agricultural, commodities manufacturing and transportation would be carried out more efficiently and the surplus from the sales of these products and services could be re-invested in alternative sources of energy such as biofuels.

In addition, a serious national program aimed at developing a comprehensive public transportation system would not only conserve oil but also save significant amounts of money for individual households and at the same time take tremendous pressure off of the environmental degredations that are the result of outmoded means of energy production and usage.

These issues and demands must be raised by popular organizations since the current administration, and even most people in the US Congress, as well as state and local governments, are beholden to the oil and energy interests. The fact that people could raise these demands would heighten the level of contradictions between the multi-national corporations and various levels of government on the one hand and the interests of the people on the other and consequently intensify the class struggle inside the United States.
Abayomi Azikiwe is the editor of the Pan-African News Wire.

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