World Bank Is Behind Food Crisis

Posted on Wednesday, April 16 at 17:25 by Ed Deak


There are many causes behind the world food crisis, but one chief villain: World Bank head, Robert Zoellick

        By Raj Patel

The Guardian (London) 16/04/08 "" -- -

For anyone who understands the current food crisis, it is hard to listen to the head of the World Bank, Robert Zoellick, without gagging.

Earlier this week, Zoellick waxed apocalyptic about the consequences of the global surge in prices, arguing that free trade had become a humanitarian necessity, to ensure that poor people had enough to eat.

The current wave of food riots has already claimed the prime minister of Haiti, and there have been protests around the world, from Mexico, to Egypt, to India.

The reason for the price rise is perfect storm of high oil prices, an increasing demand for meat in developing countries, poor harvests, population growth, financial speculation and biofuels. But prices have fluctuated before. The reason we're seeing such misery as a result of this particular spike has everything to do with Zoellick and his friends.

Before he replaced Paul Wolfowitz at the World Bank, Zoellick was the US trade representative, their man at the World Trade Organisation.

While there, he won a reputation as a tough and guileful negotiator, savvy with details and pushy with the neoconservative economic agenda: a technocrat with a knuckleduster.

His mission was to accelerate two decades of trade liberalisation in key strategic commodities for the United States, among them agriculture. Practically, this meant the removal of developing countries' ability to stockpile grain (food mountains interfere with the market), to create tariff barriers (ditto), and to support farmers (they ought to be able to compete on their own). This Zoellick did often, and enthusiastically.

Without agricultural support policies, though, there's no buffer between the price shocks and the bellies of the poorest people on earth. No option to support sustainable smaller-scale farmers, because they've been driven off their land by cheap EU and US imports. No option to dip into grain reserves because they've been sold off to service debt. No way of increasing the income of the poorest, because social programmes have been cut to the bone.

The reason that today's price increases hurt the poor so much is that all protection from price shocks has been flayed away, by organisations such as the International Monetary Fund, the World Trade Organisation and the World Bank.

Even the World Bank's own Independent Evaluation Group admits (<>) that the bank has been doing a poor job in agriculture. Part of the bank's vision was to clear away the government agricultural clutter so that the private sector could come in to make agriculture efficient.

But, as the Independent Evaluation Group delicately puts it, "in most reforming countries, the private sector did not step in to fill the vacuum when the public sector withdrew." After the liberalisation of agriculture, the invisible hand was nowhere to be seen.

But governments weren't allowed to return to the business of supporting agriculture. Trade liberalisation agreements and World Bank loan conditions, such as those promoted by Zoellick, have made food sovereignty impossible.

This is why, when we see Dominique Strauss-Kahn of the IMF wailing about food prices, or Zoellick using the crisis to argue with breathless urgency for more liberalisation, the only reasonable response is nausea.

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  1. by RPW
    Wed Apr 16, 2008 5:02 am
    India has more billionaires than any other country on Erath, evidently. And There is a movement afoot to remove small farmers from their holdings there, whereupon at least some of these billionaires can scoop up the land, and the ex-farmers will become labourers on the parcels they once owned & completely dependant on the largesse of the new owners...........

  2. Thu Apr 17, 2008 1:55 am
    Yes, the world billionaires and multi-millionaires do have a plan to eliminate much of the world`s population and enslave the rest. This ruling class has no conscience!

  3. by RPW
    Thu Apr 17, 2008 2:35 am
    There were riots in Haiti, Indonesia, the Philippines, and
    Cameroon over increasing food costs. ... 2008-04-15

  4. Thu Apr 17, 2008 3:45 am
    Meanwhile the world's farmers are getting bankrupting prices for their products, like our beef prices, about half of what they were 10 years ago, and millions of farmers have been thrown off their lands all over the world, here in the NAFTA countries, thousands committed and are committing suicides every year .

    All thanks to the WTO, the WB etc. conspiracies legalizing theft and starvation for the victims.

    Ed Deak.

  5. Thu Apr 17, 2008 3:59 am
    There's an excellent documentary that demonstrates just how the IMF, World Bank and others have devastated agriculture in Jamaica. These policies are in place all over the developing world.

    <b>Life and Debt</b>
    Former Prime Minister Michael Manley was elected on a non-IMF platform in 1976. He was forced to sign Jamaica's first loan agreement with the IMF in 1977 due to lack of viable alternatives-- a global pattern common throughout the Third World. At present Jamaica owes over $4.5 billion to the IMF, the World Bank and the Inter-American Development Bank (IADB) among other international lending agencies yet the meaningful development that these loans have "promised" has yet to manifest. In actuality the amount of foreign exchange that must be generated to meet interest payments and the structural adjustment policies which have been imposed with the loans have had a negative impact on the lives of the vast majority. The country is paying out increasingly more than it receives in total financial resources, and if benchmark conditionalities are not met, the structural adjustment program is made more stringent with each re negotiation. To improve balance of payments, devaluation (which raises the cost of foreign exchange), high interest rates (which raise the cost of credit), and wage guidelines (which effectively reduce the price of local labor) are prescribed. The IMF assumes that the combination of increased interest rates and cutbacks in government spending will shift resources from domestic consumption to private investment. It is further assumed that keeping the price of labor down will be an incentive for increasing employment and production. Increased unemployment, sweeping corruption, higher illiteracy, increased violence, prohibitive food costs, dilapidated hospitals, increased disparity between rich and poor characterize only part of the present day economic crisis.

    Life and Debt

  6. Thu Apr 17, 2008 4:55 am

  7. Thu Apr 17, 2008 4:55 am

  8. Thu Apr 17, 2008 8:58 am
    I think you have mislayed the blame. Globalization of sorts is inevitable, what is at fault here is more to do with Corporatism and a system that puts Corporations over the Will of People.

  9. Thu Apr 17, 2008 1:08 pm
    The Real News has a timely piece:
    <b>How World Bank policies led to famine in Haiti</b>
    Raj Patel: International trade rules have ravaged Haiti's domestic food production

    Food riots in Haiti caused the deaths of five people last week, including a UN peacekeeper, and forced the country's prime minister out of office. The country is "a place of terrible turmoil," Raj Patel, of UC-Berkeley's Center for African Studies, tells The Real News Network. Patel, author of Stuffed and Starved: The Hidden Battle for the World Food System, lays the blame for Haiti's dire situation at the feet of the global trade system, which has forced Haitians to buy imported food staples, despite the existence of a once-robust agricultural economy. ... sview=item

  10. Thu Apr 17, 2008 2:29 pm
    I'm disappointed that our PR friend toro didn't come back with some beautiful statistics showing that, thanks to globalization, and corporate oligopolies, food production is increasing, farmers are getting more and more, and prices and hunger are down.

    Wish somebody would show this to ranchers around here, going broke by the dozens with their calves fetching .75 cents and less per pound in the markets controlled by 2 companies, when the official break even point is around $1.10, although I have seen "statistics" showing more likely $1.25.

    The same goes for the once self sufficient Indian milk industry, where thousands of farmers have committed suicide and now Wal-Mart offered to the government to take over the whole food supply system of the country.

    Meanwhile, here in BC we now have Chinese garlic etc. on the shelves and formerly food self sufficient European countries are flooded with South American products.

    Then the idiot economists and governments want to have more and more oil to be "more efficient".

    Ed Deak.

  11. Thu Apr 17, 2008 3:05 pm
    "Ed" said
    I'm disappointed that our PR friend toro didn't come back with some beautiful statistics showing that, thanks to globalization, and corporate oligopolies, food production is increasing, farmers are getting more and more, and prices and hunger are down.

    <img src="/includes/fckeditor_2.4.3/editor/images/smiley/msn/thumbs_up.gif" alt="" /> I'm sure his ears are burning and he'll find his way back before long.

  12. Thu Apr 17, 2008 3:35 pm
    Somehow the thing missed in this mess is the saME ELEMENTS BEHIND THE kyoto SCAM are running the world bank and mandating food into bio-fuel because it is "green". Meanwhile more and more petroleum reserves are appearing and they are desperately trying to shut down the OIL SANDS for their silly GW agenda.

  13. Thu Apr 17, 2008 4:22 pm
    "sasquatch2" said
    Somehow the thing missed in this mess is the saME ELEMENTS BEHIND THE kyoto SCAM are running the world bank and mandating food into bio-fuel because it is "green".

    Try some facts for a change. It was Monsanto, ADM et al. who lobbied years ago to make E85 a law, to increase subsidies to corn farmers and started the whole corn-to-fuel crime wave.

    ... and stop shouting

  14. Thu Apr 17, 2008 5:02 pm
    Godwin's law of mimetic discussion states: "As a Usenet discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches one."

    I think we should institute a 'Sasquach2' law, that defines the number of posts before the discussion is derailed toward Gore/Suzuki/Global Warming. "This thread will have a Sasquach factor of '4'"

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