Food Fight


By Joe Romano,
Marketing Manager

Striped_Hyena_food_fightYou know, if I listened to Michael Dukakis long enough, I would be convinced we're in an economic downturn and people are homeless and going without food and medical attention and that we've got to do something about the unemployed.

— Ronald Reagan

Recently, we have seen regimes taken down by masses of people flooding the streets demanding that the long-term corruption of leaders like Hosni Mubarak of Egypt and Zine el Abidine Ben Ali of Tunisia be brought to an end. But why now?

The throngs that filled the streets of Tunis and Cairo over these last weeks had many concerns — unemployment, authoritarian rule, lack of opportunity and expression -- but these uprisings came now, at least in part, because of the rapid rise of the cost of food.

In Tunisia, hundreds have been killed in food riots that caused a hungry population to mob the capital. President Zine el Abidine Ben Ali promised to reduce the price of staples such as sugar, milk and bread, but it was too late and he soon fled the country, fearful of losing his life.

In Egypt, a nation that was one of the world's leading wheat producers just a few decades ago, we have seen breadlines and similar protests. Their leader, Hosni Mubarak, has also stepped down and it is believed that he has also fled the country.

Even in relatively rich Libya, a third of the people live in poverty and hunger while the leaders have siphoned off all of the oil wealth and stashed it in foreign bank accounts.

As we go to press, there are protests that have arisen all over the Middle East and the world: in Iraq, Bahrain, Yemen, Iran, Jordan, Syria, Algeria and even China.

This is all happening as the global price of wheat is skyrocketing. There are rice shortages all over Asia. The UN just released a report stating that food prices are higher than they have ever been. Ever.

And, food prices are on the rise. According to the USDA, food inflation is going to "accelerate" into 2011.

Here at GreenStar, we have cause for concern. Not just because of any potential price increases this may cause us, but because these food shortages have caused people to rise up and fight for the very values our co-op has come to stand for:

Value 1) Local, Natural Food

There are several factors at play here. One is the kind of shift in production we have seen in a country like Egypt. It started in the 1980s, according to Marie Brill of the advocacy group ActionAid USA. Almost as soon as Mubarak took power in 1981, Ronald Reagan, together with the World Bank and the International Monetary Fund, asked Egypt and other developing nations to stop growing their own food and convinced them to import commodities like wheat. Up until this time, Egypt had been a "bread basket" nation, producing a large percentage of the world's wheat locally and growing enough food to feed its people.

Now Egypt is the world biggest importer of wheat. According to Brill, "As Egypt became more and more dependent on [imported] wheat, Egypt also became more and more vulnerable to price hikes and price volatility." If countries like Egypt had created local food economies instead, they would not be at the mercy of wheat prices that have skyrocketed 114 percent over the past year, or corn that has risen by 88 percent. There might not have been riots in the streets.

Value 2) Concern for the Environment

Another silent cause for the food instability in these countries appears to be climate change. Part of the cause for soaring food prices was the unprecedented heat wave and drought that destroyed over 40 percent of Russia's wheat harvest. Here in the US, unusually warm weather stunted corn crop growth in the Midwest. "I think we are seeing some of the early effects of climate change on food security," says environmental analyst Lester Brown of the Earth Policy Institute. "Fourteen degrees Fahrenheit above the norm — that's pushing the envelope. I mean, FOUR degrees would be a lot." Vice Admiral Dennis McGinn would agree. In 2007, he and the other members of the military board of advisors for the Center for Naval Analysis wrote an influential report on the security implications of climate change.

"The adverse effects of bad weather caused by climate change act as a threat multiplier for instability in critical parts of the world," Admiral McGinn says.

Both men would agree that it is difficult to make a direct connection between climate change and political upheaval.

"There are usually many underlying causes," said McGinn, "but climate change may well be one of them."

"If you have long term droughts and crop failures, and in other parts of the world too much water in the form of flooding, you have added pressure to the already existing fault lines in fragile societies with fragile governments, and certainly Egypt would fall under that category," he added. This shortfall then leads to financial speculation, which artificially raises the price of the remaining crops.

Value 3) Responsible Economic Structures

Remember junk bonds, bad mortgage peddling and betting against the market? Now investors are betting crops will fail. Federal Bank Chair Ben Bernanke is driving a policy called Quantitative Easing 2 (we tried it before), which essentially means that the Fed has been overprinting money for the last two years. The "fake money" is being used to speculate in food commodity markets, artificially driving up the cost of food, and creating bad business for everyone concerned.

Indeed, the European Union has identified this as such a problem that they passed a resolution late last month after this unrest had begun to take place. According to the European Parliament website, the resolution stated that climate change and commodity speculation are among the main factors threatening global food security.

Hungry people are also being forced to compete with biofuels for their food. So, tragically, one attempt at combating climate change turns out to be a major contributor to the rising cost of food. Up to 40 percent of the already-reduced corn crop this year went to produce ethanol. According to Lester Brown, "that's enough grain to feed 350 million people." Since 2006, the US Congress has given tax credits that cost US taxpayers $6 billion a year. This tax credit also inflates food prices, because there is less corn left to feed livestock and people. "There is no doubt at all that expansion of the ethanol industry has increased the cost of producing meat, dairy, eggs and food around the world," says Bruce Babcock, an agricultural economist at Iowa State University. All of these manipulative policies contribute to the spiraling cost of food around the world and cause hardship for food consumers in the Middle East and even here at home.

Value 4) Social Justice

Some might ask, where is our unrest? As we go to press, tens of thousands of workers are filling the streets in Wisconsin, as that state's governor, Scott Walker, acts to restrict the right of unions to bargain. State workers, including teachers, have refused to show up for work. They are being asked to pay more for their health care and pensions while corporations and billionaires are given tax breaks.

This may seem like an insensitive comparison at a time when people are protesting age-old injustices in other countries and are trying to balance deep inequalities. But ponder this: the US has worse economic inequality than Egypt according to a scientific measure — the Gini coefficent, which statistically measures distribution of assets and is used as a measure of social equity.

According to the CIA World Fact Book, the US is ranked as the 42nd most unequal country in the world, with a Gini coefficient of 45. Egypt, in contrast, is ranked as the 90th most unequal country, with a Gini coefficient of around 34.4. We are the only developed nation in the world that has such clear social inequity.

As these conflicts continue, watching the issues unfold in the context of the choices we make here at GreenStar will inform the decisions we make today, and will help us to make clear decisions regarding our own society in the days ahead.

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Membership Manager

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