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Economics of Hunger

by Robin Dennis & Ruthanne Landsness

‘Science for the People’ Vol. 7, No. 2, March 1975, p. 17 – 20

When Diogenes was asked for the proper time to eat, he replied, “If a rich man, when you will. If a poor man, when you can.” 

Two-thirds of the world’s population is malnourished and many people are starving this year. It is commonly assumed that a country does not produce enough food only if it cannot. If it were possible, the food would obviously be raised. Three reasons are generally given for widespread hunger: 

(a) A country’s farmers don’t know how to grow enough food. (Many international agencies are founded on this assumption.) 

(b) The resources of a country are physically limiting. (This fits into the neo-Malthusian argument of Limits to Growth.) 

(c) World-wide weather conditions are changing, becoming less conducive to crop production. 

Because discussion of agricultural production disregards the use, another major cause of hunger is usually excluded from consideration: that agricultural production is only indirectly related to feeding people, being instead an activity which is carried out primarily for profit. The most marketable and profitable crops tend to be produced. The hungry obviously do not have the money to provide a market for their needs. Agriculture has only an accidental relation to the needs of the local or national population. One must examine the economic system which manipulates the small producers rather than place the blame on the farmers’ greed. 

Several books and articles apply this thesis to ture within the United States. (See bibliography.) Here we deal with the causes of hunger on a worldwide scale. The premise is that hunger on a mass scale is a direct result of the production of agricultural goods for profit rather than for human need. 

The situation in Mexico illustrates the influences of the profit system upon agricultural production. In the fertile Ciudad Obregon region of Mexico, William and Elizabeth Paddock¹ found that most of the farmers considered their most profitable crop to be cotton, followed by soybeans and then wheat. The staple crops of Mexico are beans and corn. Wheat is considered a luxury crop, priced out of the reach of the majority of Mexicans. It is grown largely because it is the only crop which the farmer can plant during the winter and because of the price supports which are maintained by “the Mexican government. None of the crops considered most desirable by the farmers are food staples for the Mexican market. It is instructive to compare the compound rates of growth of production of the various major crops grown in Mexico from 1940 to 1962²: 

The leading items on this list are Mexico’s principal export crops. At the bottom of the list are the basic foods of Mexico. Thus the production of crops for export has increased three times as fast as the population of staple foods. 

A similar trend is found in other countries. The United Nations World Economic Survey of 1965 states that in Africa and Western Asia “Commercial agriculture developed very rapidly in some cases, but by far the greater part of its production was composed of export crops.” UN statistics also show that in the developing countries, the rate of growth of those agricultural products intended solely for export was 2.2 times greater than the rate of growth of the total agricultural sector during the period 1956 to 1964. 

Georg Borgstrom in World Food Resources³ states that farm equipment, fuel, fertilizer, and spray chemicals “that find their way to the agriculture of the developing countries have until quite recently been almost exclusively used to increase the harvest of export crops and to improve their profitability.” In fact, African Development Magazine⁴ reports that Nigeria’s modernization of its agricultural sector is motivated by the desire to sell to foreign markets. Raising food and meeting the needs of the people are not the primary consideration in this scheme. The most profitable crops are the ones most grown and developed. 

Cash Crops

The argument in favor of exporting cash crops and raw materials is that it is often cheaper to raise these crops and purchase food crops. For example, the tobacco crop which can be grown on one acre may yield profits on the international market that would allow the purchase of more corn than could be grown on the same acre. The catch is that those who own and sell the tobacco for a profit are not the same people who need to buy the com, and that the profits are not used to purchase food for these people. If the land owners or investors are foreign, the profits generally leave the country. In Zaire, Africa, the export crops are mainly grown on plantations owned industries are largely owned by the three largest meat-packing houses in Chicago. But even the profits from cash crops owned by local investors are not put into culation for buying food. For example, in Puerto Rico the local mercantile class invests its profits in real estate speculation, banking, and retail trade — the types of enterprise that don’t compete with the foreign monopolies. 

Another result of marketing food on the basis of profitability is to divert food products from the country where they are grown and needed to those which can offer higher prices. Food exports of the developing countries are maintained only at the cost of malnutrition and hunger at home. For example, the fish meal industry of Chile and Peru is owned primarily by American and Western European interests. Nearly half the protein taken from the Pacific comes from the fisheries off the coasts of Chile and Peru. Almost all the fish taken are converted into animal feed in the fish meal factories in these countries. Nearly the entire output of fish meal is 18 exported to Western Europe (approximately ⅔), the United States (slightly less than ⅓), and Japan. Yet the rate of malnutrition in Peru is one of the worst in Latin America. 

It is preposterous that the two most protein-needy continents, Africa and South America, are the suppliers of the largest quantity of animal protein feed in world trade. Georg Borgstrom states that “even hungry India has gone back to the pattern of colonial days and is viding peanut cake to feed the cattle of the United Kingdom and other European countries. In effect, India has become the biggest exporter of this item in the world market, though she needs every ounce of this valuable protein for her undernourished millions.”⁵ 

Economics of Dependence

The excess purchasing power of the affluent, oped countries largely dictates the flow of food items in the world market. Despite all the rhetoric about battling world hunger, the lion’s share of the food and animal feed moving in the world market is streaming into the well-fed Western world. For example:⁶ 

½ of all beans and peas 

more than ½ of the wheat 

¾ of the com 

⅗ of the soybeans 

9/10 of the peanuts 

¾ of the oilseed cake from soybeans and peanuts 

The domination of the world food market by the affluent fosters an imbalance in the values of the products exchanged. Agricultural exports provide the bulk (75–80%) of the total export trade of the developing countries and thus must provide the bulk of the foreign exchange earnings which are required for the importation of capital goods needed for development. A trade-off is created between feeding people and gaining foreign exchange. The balance of this exchange has continued to worsen. In 1966, prices received for foodstuffs exported by Western countries were 13% higher than the 1958 level while prices received from the sale of the same group of products exported by the developing countries were 11% lower. For minerals, the export prices of the Western countries had risen by 5% and those of the developing countries had fallen by 7%. Thus although the volume of agricultural exports of the developing countries increased by more than 50% between 1948 and 1966 the net gain in foreign exchange rose by little more than 10%. In a country such as India, where in 1970 agriculture accounted for 49% of the GNP, this does little to help feed the population and yet further increases the pressure to raise cash crops. 

The excess purchasing power of the affluent nations largely dictates the price and flow of food commodities on the world markets. The price of American food exports increased by 55% while the price of food imports increased by only 22%.⁷ When the USDA released a new low estimate of corn crops last August (1974) the price of corn futures rose to the allowed limit. 

America’s foreign customers scrambled to secure supplies. Japanese buyers placed orders for. more com than they bought in the past. Poor nations like India were forced to compete in an increasingly tight grain market. 

The underdeveloped countries have become increasingly dependent on the affluent nations for trade, both as a market for their cash crops and as suppliers of food. At the same time, the affluent nations are driving down their purchasing power. The U.S. was the leading exporter of 8 of the 20 commodities whose prices increased most rapidly between 1970 and 1973. The developing countries were the importers of the increasingly expensive foodstuffs including: 38% of the wheat, 55% of the soybean oil, 50% of the cottonseed oil, and 74% of the rice.⁸

The United States was the dominant exporter of these commodities. Between 1948 and 1964, the developing countries became more dependent on the West to purchase exports (70% in 1948 to 79% in 1964) while the West became less dependent on the developing countries (from 32% in 1948 to 23% in 1964). The result of this trend is that agricultural development in the Third World is becoming more dependent on international market forces and less influenced by domestic markets. This dependency and lack of economic autonomy maintains underdevelopment. 

Any efforts of the developing countries to escape their dependency relationships are resisted by the affluent countries, despite all the rhetoric to the contrary. 

• World Bank loans go for cash crop systems. In zania in 1972loans were made for the improvement of cotton and coffee crops, the establishment of tea smallholders, tobacco redrying plants, coffee eries and tea factories. (African Development Magazine, Sept. 1972).
• When India wanted to manage her own fertilizer plants, rather than have them run by U.S. oil panies, the U.S. held up food shipments to India to force her to capitulate to the oil companies. (Christian Science Monitor, Dec. 20, 1966).
• When India sought to barter with Burma for rice, rather than use precious foreign exchange, the. ternational Monetary Fund stifled the attempt quickly .⁹
• The U.S. CIA spent 8 million dollars, with the approval of Kissinger, to disrupt the economy of Chile under Allende. 
• The U.S. even cut off exports of soybeans and other agricultural products to our European trading ners at a time when an attempt was being made to pressure them into modifying their policies of cultural self-sufficiency and becoming dependent on our production.¹⁰ 

The Lesson 

It is important not to lose sight of the obvious — within the present economic system, people produce for the market. The result is that non-subsistence agriculture bears only a coinincidental relationship to the needs of the local populations in developing countries. Because discussion of agricultural production is still in terms of use, the false assumption is perpetrated that agricultural production is in fact dependent on immediate need. The simple-minded assumption that increasing crop yields automatically guarantees a better life for the majority of people is false because it disregards what is produced, who consumes the products, and who receives the profits of the enterprise. 

The object of any type of aid must be to foster the material and intellectual independence of the country receiving it. China was lauded in African Development Magazine for giving aid to further autonomy and independence. The New York Times (July 27, 1974) contrasted China, a country that has remained autonomous by choice, and India, a country that has been under colonial rule and that now imports much Western technology. “By some estimates, per capita production of rice and wheat is actually higher in India. But serious malnutrition which affects roughly a third of the Indian population appears to have been banished from China.” 

The lesson is that hunger is as much a function of the social structure as it is of agricultural “progress.” What the guise of aid, like the transfer of Western agricultural technology, is simply the imposition of the capitalist system, in which production exists for the market. Inherent in this system is the maintenance of underdevelopment and hunger.

>> Back to Vol. 7, No. 2 <<

BIBLIOGRAPHY

1. Allaby, Michael, Who Will Eat? Tom Stacey, Ltd., London (1972). 
2. Anon., “Agriculture’s Growth Hit by Poor Transport Facilities,” African Development Magazine (Aug. 1972). 
3. Anon., “Agro-lndustry Becomes Big Business,” African Development Magazine (Aug. 1972). 
4. Anon., “Rural Development Bank Brings Growth to Countryside,” African Development Magazine (Sept. 1972). 
5. Borgstrom, Georg, World Food Resources, lntext Educational Publishers (1973). 
6. Cox, Idris, The Hungry Half, Lawrence and Wishart, London (1970). 
7. FAO, “The World Food Problem in Relation to Trade and Development.” Mo. Agric. Bull. of Agric. Econ., 17, (May 1968). 
8. Frank, Andre Gunder, Lumpenbourgeoisie Lumpendevelopment, Monthly Review Press (1972). 
9. Galeano, Eduardo, Open Veins of Latin America, Monthly Review Press (1973). 
10. Greene, Felix, The Enemy, Vintage Press (1971). 
11. Jalee, Pierre, The Pillage of the Third World, Monthly Review Press (1966). 
12. The Third World in World Economy, Monthly Review Press (1969). 
13. Lelyveld, Joseph, “A Major Breakthrough for Farm Output Appears Remote in China,” New York Times (27 July,1974). 
14. Paddock, Wm., and Elizabeth Paddock, We Don’t Know How, Iowa State University Press (1973). 
15. Rothschild, Emma, “The Politics of Food,” The New York Review of Books (16 May, 1974). 
16. “Running Out of Food,” The New York Review of Books (19 Sept., 1974).
17. Schertz, Lyle P., “World Food: Prices and the Poor,” Foreign Affairs, 52 (April 1974). 
18. Shonfield, Andrew, The Attack on World Poverty, Vintage Press (1962). 
19. Stamp, Elizabeth, “The End of Cheap Food,” New Internationalist (April 1973). 
20. “Food and Nutrition: Is America Due for a National Policy,” Science, 184, 548-550 (3 May, 1974). 
21. Hard Tomatoes-Hard Times, by Jim Hightower, Schenkman Press (1973). 
22. The American Food Scandal, by Wm. Robbins, Morrow & Co. (1974).
23. Food Price Blackmail, by the Agribusiness Accountability Project, Washington D.C.

REFERENCES

1. Paddock, Wm., and Elizabeth Paddock, We Don’t Know How, Iowa State University Press (1973).
2. Paddock, Wm., and Elizabeth Paddock, We Don’t Know How, Iowa State University Press (1973).
3. Borgstrom, Georg, World Food Resources, lntext Educational Publishers (1973).
4. Anon., “Agro-lndustry Becomes Big Business,” African Development Magazine (Aug. 1972).
5. Borgstrom, Georg, World Food Resources, lntext Educational Publishers (1973).
6. Borgstrom, Georg, World Food Resources, lntext Educational Publishers (1973).
7. Rothschild, Emma, “The Politics of Food,” The New York Review of Books (16 May, 1974).
8. Rothschild, Emma, “The Politics of Food,” The New York Review of Books (16 May, 1974).
9. Shonfield, Andrew, The Attack on World Poverty, Vintage Press (1962).
10. Schertz, Lyle P., “World Food: Prices and the Poor,” Foreign Affairs, 52 (April 1974).