Global Hunger and Free Markets

Hunger is on the rise, and it affects one-sixth of all of humanity,  posing a serious risk for world peace and security.

World leaders gathered in the Italian town of L’Aquila for the G8 summit last month reported an estimated 1.02 billion people in the world go hungry. They warned us of social unrest if global hunger is not arrested. Consider this  information: between 2005 and 2008 food prices had increased by 83%. Though the crop prices dropped in the middle of 2008, the hunger crisis is far from over.

What is the solution to hunger? The G8 solution is total, unfettered free trade. Seconding the absurd G8 logic is World Trade Organization (WTO). Their argument in support is that increased competition reduces prices and thus enhances the purchasing power of the consumers. Free trade helps transport food from places where it can be produced efficiently to where there is demand. 

But World hunger is not a simple crisis of demand and supply. The super powers use free trade clauses to discourage measures taken by developing countries to stabilize price — such as controlling import and export and using price control public distribution systems. The import bans by third world countries have a purpose: to protect the poor and vulnerable against the global agricultural price fluctuations by ensuring food availability below world prices before allowing exports to other countries.

 The reality is that free trade can distort market forces of demand and supply. G8 has purposely got the math all wrong. Free trade NOT= freedom from hunger. Fortunately for the developing countries, UN thinks otherwise. ‘World Economic and Social Survey 2008′ conducted by UN holds market liberalisation responsible for the food crisis.  The advanced countries protect their farmers through subsidies, while simultaneously insisting the developing countries do not provide any subsidies to their farmers as it is against the free trade principles. The heavily subsidized agriculture has helped rich countries to capture third world markets and flood it with cheap, subsidized food. Poor farmers in developing countries for whom agriculture is the main occupation find subsistence farming unfavorable and financially unstable. The   policies  has converted developing countries that had once been self-sufficient, and even net exporters of agricultural products, into net importers and  made them more vulnerable to high prices brought on by the changing food supply policies of the exporting big bosses. Developing countries had, in the 1960s, an overall agricultural surplus of $7 billion, but by 1990s and 2000s they turned into net food importers. The reason people in countries classified as having “widespread lack of access” are unable to procure food is because they don’t have enough money to buy the expensive food.