THE COST OF living crisis in a rich country like Britain is bad enough but in the poorest countries, where the worst-off spend as much as 70% of their income on food, it can lead to mass revolts that bring down governments and end political regimes. A series of food price hikes after the 2008 financial meltdown led to food riots in 48 countries, while a second even higher bout of food inflation in 2010 led to the Arab Spring uprisings. The link between bread and revolution is evident again today on the streets of Sudan, Sri Lanka, Iraq and Iran.
With food prices the highest in decades, the world’s governments, thinktanks and mainstream press are worried that riots may once again become revolutions. Food is the basis for life. Our rulers know that a threat to its supply means instability and unrest dangerous to their global order. Yet even as they warn one another of the danger, the post-pandemic debts and domestic cost of fighting inflation mean the measures they take fall far short of solving the crisis.
From the Middle East to Horn of Africa
After the disruptions to the global supply chain caused by the pandemic, climate change-driven weather extremes also damaged harvests in 2021, precipitating global price rises of more than 30%. According to Oxfam extreme hunger is ‘increasing to a magnitude never seen before with a surge of nearly 25% since last year, and 80% since 2016’ with 34 million people one step away from catastrophe or famine.
Now the Ukraine war has accelerated the underlying trend of rising food and energy prices since Russia and Ukraine account for 30% of world wheat exports. Oxfam expects 263 million more people to fall into extreme poverty this year.
The crisis is global, but it is most concentrated in the Middle East and North Africa (MENA) region, the biggest food importer in the world. More than 60% of the wheat Lebanon imported in 2020 came from Ukraine. Egypt, the world’s largest wheat importer, is especially vulnerable as half of its imports come from Russia and another 30% from Ukraine. Somalia and Benin import all of their wheat from Russia and Ukraine.
Even countries which aren’t directly dependent on Ukraine or Russia for agricultural imports will still see a rise in food prices due to global shortages, increases in fuel costs and a reduced supply of fertilisers, of which Russia and sanctioned Belarus are major producers.
The Black Sea area affected by the invasion exports at least 12% of the food calories traded in the world. Ukraine has one-third of the world’s most fertile soil according to the UN Food and Agriculture Organisation (FAO) and is among the world’s largest exporters of sunflower oil, barley, corn, wheat and poultry. Forty per cent of wheat exports from Ukraine go to the MENA region.
On 9 March, Ukraine banned exports of grain and other food products to prevent a domestic humanitarian crisis. Though the country is now attempting to export some foodstuffs, Russia’s blockade of the Black Sea means only a fraction can reach the international market. Massive population displacement and army conscription have reduced the number of agricultural labourers, so there are fears the war will also gravely diminish the coming harvest.
The crisis last time
Many great revolutions began in the midst of riots and protests over food scarcity and high prices. In Russia in February 1917, after years of wartime privation, high food prices were the last straw for the thousands of women textile workers and housewives. Their International Women’s Day strikes and protests sparked a revolution that toppled the Tsar.
The Bolsheviks raised the three headline demands ‘bread, peace and land’ linked to the struggle for ‘all power to the Soviets’. The workers’ councils that arose in February spread to every factory, city and ultimately the peasant villages, revolutionising society. These events famously culminated in the October Revolution.
More recently the 2010 Arab Spring saw a wave of revolts across the Arab world linked to high oil prices and a big spike in food prices. Rulers were driven from power in Tunisia, Egypt and Yemen by huge demonstrations of protestors waving bread that morphed into mass strikes. In Libya a revolutionary movement swept the country. Protests across a host of other countries, including Syria, Bahrain and the UAE, were violently repressed.
The US sponsored these regimes. Hillary Clinton warned that ‘the region’s foundations are sinking into the sand’. The US had armed Middle Eastern states and imposed neoliberal polices on to them. Suddenly they told them to reform—or face their downfall.
Most did respond with concessions, such as emergency imports of food or restoring subsidies, but for many it was too late. Protests lit the fuse for general strikes and even local anti-police uprisings, such as in Suez, Egypt.
However, without revolutionary parties to advance a programme of workers’ councils and control, combined with demands to nationalise the imperialist holdings and repudiate the crippling debts owed to Western creditors, these protests’ victories were short-lived. Dictators were overthrown, only for the movement to discover that the promises of reformers were as empty as those of the old rulers. Now that we see similar crises developing in the same region, can the lessons be learned?
The anarchy of the market mystifies the causes of inflation. However, in the poorer countries this is politicised when governments remove subsidies protecting the poor from price hikes. Then the culprits are clear. Behind the elite of a particular country lie the dictates of international creditors and the IMF, which imposes neoliberal ‘structural adjustment’ programmes of cuts on the poorer countries in exchange for rolling over their unpayable debts.
Debt servicing for all the world’s poorest countries is estimated at $43bn in 2022. That is equivalent to nearly half these countries’ food import bills and spending on healthcare combined. Oxfam found that 13 out of the 15 IMF loans negotiated in 2021 required taxes on food and fuel. Kenya was forced to increase taxes on gas and food, while more than three million Kenyans, in the midst of a drought, face ‘acute hunger’ and nearly half of households have to borrow to buy food. Sudan, where 9.8 million are ‘food insecure’, has been required to scrap food subsidies.
As mass movements against poverty take off across the world, they should come together in international conferences like the social forum movement of the early 2000s, to create a common front and coordinated actions against the IMF, banks and food and oil monopolies.
Monopoly and market
Trade liberalisation, structural adjustment programmes and a capitalist model of agriculture bear the primary responsibility for hunger and poverty in underdeveloped countries.
Like all major globally traded commodities, the international food trade is heavily monopolised. Wheat, maize and rice together provide nearly half of the calories consumed around the world. Most low-income countries rely on imports of these staples. According to the IPES food thinktank, ‘Seven countries plus the EU account for 90% of the world’s wheat exports, and just four countries account for over 80% of the world’s maize exports’.
These core grains are produced mainly by large-scale agribusinesses in imperialist countries, which dominate the markets alongside a few semicolonial producers. Food production is geared towards those who can pay for it, so more and more grain goes to feed livestock to produce meat for the richer countries. Up to 40% of US maize is turned into ethanol hyped as an alternative to fossil fuels.
In many countries, including the MENA region, the demise of local food production can be traced back to their integration in global markets. ‘Development’ policies driven by the IMF and World Bank resulted in nations shifting from the cultivation of staple foods to the cultivation of profitable crops for export, creating food dependency.
Four giant multinationals—Archer-Daniels Midland, Bunge, Cargill, and Dreyfus, the ‘ABCD’ grain monopolies—control 70–90% of the global trade in the major grains, worth hundreds of billions of dollars. These control large reserves of grains, their levels unreported so any attempts to plan food supply or block monopoly hoarding and price-fixing are frustrated. US-based Cargill made its biggest profit ever in 2021, $5 billion, and will likely top that in 2022, while the Cargill family has gone from eight to 12 billionaires since the pandemic.
One expression of capitalism’s declining profit rates is the way capital has increasingly flowed into mergers and financial speculation since the 1990s, building bigger global monopolies and seeking higher profits from the huge asset bubbles. As a commodity under capitalism, there is no wall separating food and the financial markets. Trillions in derivatives such as futures dwarf the actual quantities and value of physical food, oil and other commodities they are based on. Speculation can at times act back on real prices, driving them up further.
While production, not speculation ultimately determines prices in the medium and long term, in the short-term price volatility and rises can be attributed to speculation. Big banks like Goldman Sachs make millions, while prices spike and people starve. The banks and economists deny this, but the IPES reports that over ‘just 9 days in March 2022, the price of wheat on futures markets jumped 54%. This is despite global wheat stocks being high relative to historical trends’ and ‘a relatively comfortable supply level.’
Russia’s invasion of Ukraine has seen more speculative money flow into commodity linked funds. Just as speculators buy defence stocks during most wars, so in this one they are buying up food and oil stocks, gambling that their price will rise.
Sixty per cent of low-income countries are now debt-distressed, as energy costs hit their economies and government finances. The cost of living crisis is morphing into a third world debt crisis and possibly a global recession. Oxfam reports that food and fuel billionaires are adding another billion dollars to their fortunes every two days: ‘The pandemic and now the steep increases in food and energy prices have, simply put, been a bonanza for them. Meanwhile, decades of progress on extreme poverty are now in reverse.
Nationalising the ABCD and other food and fuel monopolies, the banks and finance houses, and cancelling or repudiating the debts of the poor countries are the way to create a sustainable, equitable, and effective—i.e. democratically planned—food sector, under the control of workers from the sector and consumers.
Feeding people or capitalism
Capitalism first emerged as a revolution in agricultural technique and social relations, with ‘free’ waged labour replacing medieval serfdom. It has seen a series of lesser transformations since, creating a large-scale, technologically based agriculture and world market for basic agricultural commodities.
This economic system has consistently created enough food to feed the world, with food production growing consistently faster than the population. Despite right wing arguments blaming overpopulation in the poor countries, the problem is not natural, but social.
Capitalism’s progressive economic role compared to previous modes of production ended long ago. Even as huge agribusinesses and plantations mechanise farming and concentrate it in huge operations, hundreds of millions in the poorer countries still herd or labour for their subsistence on small patches of land with rudimentary tools.
The result is millions of peasants every decade are driven off the land as big multinational companies and speculators buy it up. They end up in the giant slums of megacities like Cairo and Mumbai, but capitalism can no longer develop industry and jobs to absorb them as it did in the industrial revolution of the 19th century. Instead, stagnant or falling profit rates in production drive low growth, low investment, low productivity, piling up poverty and unemployment.
In capitalism’s heyday, Marx uncovered a “general law” of capitalist production: ever more productive machinery expelled workers from the production process, creating a surplus population, the ‘reserve army of the unemployed’. Now, as capitalism declines, it’s even worse. Giant international monopolies dominate markets, undercut small producers and peasants and force them into the cities in search of work, but can’t provide them with the jobs or wages to buy the necessities of life. Inequality, precariousness and poverty have increased since the crisis-ridden 1970s, even in the richest countries, before skyrocketing since 2008.
This economic rot at capitalism’s heart is being compounded by what bourgeois economists like to call ‘externalities’. Runaway climate change increasingly undermines agriculture with floods and drought, particularly in fragile environments, and locks whole regions, such as the Horn of Africa, into a vicious circle of poverty, climate change and conflict.
The shocks of pandemics and wars further stress production, markets and prices – and the livelihoods of millions. Billions are poured into arms races and conflicts by ruling classes. These extra costs just drive the capitalists to bear down more on workers and the semicolonial world to shore up profitability.
Capitalism has demonstrated its inability to meet the basic needs of most of the world’s population, as well as its total incompatibility with the survival of the ecosystem we rely on. It’s time for humanity to seize hold of the industries and technologies that capitalism can no longer develop in a progressive way, and build a new, socialist world based on democratically planned production for need not greed. Today’s mass struggles for ‘bread, peace, and land’ can win victories and lay the basis for new workers’ parties and a new, Fifth International, paving the way for the coming social revolution.
