In the popular imagination, Queen Marie Antoinette is believed to have sparked the French Revolution when she said of the starving poor, “Let them eat cake”. True or not, the price of food is again a dangerous political issue. Warning signs are coming from around the world that food price increases will cause major social unrest in the poorest as well as the richest nations.
Yesterday the Russian government signed an agreement with food producers and retailers to freeze the price of bread, cheese, milk, eggs and vegetable oil until the end of the year. The Kremlin pretended that the controls were a voluntary measure by the food industry, but it is known that “they were told to fix prices voluntarily – or else”, according to observers in Moscow. Putin’s move is clearly an attempt to keep the electorate quiet in advance of December’s elections. Nevertheless, the move shocked many in the ruling oligarchy who have got rich from the free market capitalism introduced after the end of the Soviet Union in 1991 and who thought price controls were a thing of the past.
But it is not only Russia which is faced with a crisis. Speaking in London yesterday, United Nations Food and Agricultural Organisation (FAO) chief Jacques Diouf said that rocketing food and energy prices could trigger political upheaval and riots in developing countries. The FAO’s food price index in July stood at its highest level since it was begun in 1990, and is almost 70% higher than in 2000.“If food prices continue to be high, there are risks of riots. If you combine the increase of oil prices and the increase of food prices, then you have the element of a very serious crisis in the future,” he said.
Food costs account for the bulk of people’s income in the world’s poorest countries, including Niger, Guinea, Burkina Faso, Yemen and Mexico. Diouf estimates that 854 million people around the world are severely malnourished, most of them in Africa and Asia. Soaring prices are also causing hardship in North Korea, where the cost of rice has doubled from this time last year.
But wealthy food producing countries like the UK and Canada are also affected. This week, the leading Canadian economist Jeff Rubin warned that America’s policy of subsidising ethanol has led to a 60% rise in corn prices in the past two years. A bushel of corn now sells at nearly $4. High corn prices are disastrous for poor Latin Americans who use corn for tortillas. Corn is also a major animal feed so its price affects meat prices and derivatives like corn syrup used in processed foods. Nonetheless the Bush administration plans to raise US ethanol production from one billion gallons in 2000 to 35 billion in 2017 and the Canadian government has pledged a $1.5 billion investment over seven years to promote fuels like ethanol.
In Britain, the price of a loaf has gone up from 80p on average to 91p in the last year, while minced beef has increased from £1.08 a pound to £2.21 amidst warnings that the era of cheap food is over. The Department for Environment, Food and Rural Affairs admits that food security was becoming a “matter of concern”. The looming food crisis is the clearest indicator that unbridled capitalist globalisation under the free trade system enforced by the WTO and other global bodies is an unmitigated disaster.