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| Source: FAO |
Food is one of the most basic of human needs. Routine
access to a balanced diet is essential for both growth and development of the
young, as well as for general health throughout one’s life. Although food is
mostly plentiful, malnutrition is still common. The contradiction between
plentiful global food supplies and widespread malnutrition and hunger arises
primarily from food being considered a commodity, just like any other.
For many millennia following the origin of our species,
humans were hunters and gatherers—an existence that one might think of as
tenuous. However, judging from archeological evidence as well as recent
examples, hunters and gatherers generally ate a diverse diet that supplied
adequate nutrition. For example, studies in the 1960s and ‘70s of the Kung of
southern Africa, foragers for literally thousands of years, indicate that
although they ate meat that they hunted, about two-thirds of their food was
plant-based—nuts (supplying more than one-third of caloric intake), fruits,
roots, and berries—and their diet provided approximately 2,400 calories a day.
The groups of hunter-gatherers were egalitarian, with everyone participating in
the provisioning of food.
Agriculture, which developed some seven to ten thousand
years ago, provided surplus food that allowed the development of cities and the
hierarchies and civilizations that went along with them—farmers, artisans,
priests, kings, warriors, scribes, and other functionaries. But just because
there was a surplus did not mean that people were better nourished than
hunter-gatherers. In fact, the narrowing of available foods used from the wide
variety in the hunter-gatherers’ diets, along with the reliance primarily on
grains to provide calories, is thought to have caused a decrease in the health
of early agriculturalists—as indicated by their decreased height compared that
of hunter-gatherers. In these agricultural societies surplus food production
was mainly appropriated for the use of the non-food producing classes. Most
pre-capitalist agricultural societies had many producers relative to
non-productive classes.
In some ancient empires imperial tribute took the form
of food shipped long distances from the place of production. North Africa, for
example, was the granary for Rome. Much of Chinese history involved
constructing infrastructure to store and provide food far from its place of
production. Nevertheless, in much of the world (including feudal Europe) food
was produced either by peasant farmers and consumed by their families or else
appropriated by landed aristocracies on a fairly local basis. What markets
existed were often on a barter basis and trade in food was in kind, without
becoming a commodity.
This changed with capitalism or generalized commodity
production. The endless accumulation of profits, the motive force of the
capitalist system, occurs through the production of commodities or services to
sell at a price in excess of the production costs. Production for the purpose
of sale and profit, instead of production for use, is a defining characteristic
of capitalism and essentially all commodity exchanges take place in markets.
During the early stages of capitalism, when most people still lived and worked on
the land, a large portion of food was produced to be consumed locally in the
rural areas and did not exist as a commodity. However, farmers near growing
cities and/or near water transport shipped food to the industrializing urban
centers.
The commodity nature of food became much more pronounced
as capitalism grew and conquered most of the world’s societies. Imperial powers
brought the peasants of their colonies into the money economy by extracting
monetary rather than in-kind taxes. The need to obtain money to pay taxes began
a process that converted a portion of the food produced into commodities.
The industrial phase of capitalism caused rural
populations to decline in Europe, North America, and Japan. People were forced
off the land and looked for work in the cities, moving to the growing
industrial centers. (Many also migrated from Europe to North America,
Australia, New Zealand, South Africa, and elsewhere.) The development of
canals, railroads, and road systems allowed for long-distance transport of food
within large landmasses. Advances in shipping by sea also greatly decreased the
cost of global trade in food.
Almost all of the crops and animals raised using the
scale and approach of industrial farming are sold as undifferentiated
commodities. Farmers sell their crops to buyers who resell the raw commodities
to be processed—or themselves process the raw commodity—with the semi-processed
commodities then sold to final processors/packagers who sell to wholesalers who
then sell to retailers who finally sell food to the public. Thus, the farmers
producing the bulk of food in the wealthy countries have become greatly
separated from the public that finally purchases their products—not just
physically, but also by the long chain of intermediaries between farms and
people’s tables. Farm mechanization has increased labor productivity, leading
to fewer farmers and larger farms. As industrial methods were applied to
raising crops and animals, the agriculture-input sector grew dramatically and
became highly concentrated—with relatively few companies now producing and
selling farm machinery, fertilizers, pesticides, and seeds. Industrialized food
systems also saw concentration and centralization of production and growing
monopoly power. For example, large integrated “protein” (meat) firms now
contract with farmers to produce poultry and hogs in large facilities under
crowded and inhumane conditions. Because corporations mandate that their
contractors be located near where they decide to build slaughtering facilities,
this frequently means long distance transport of feed. Beef cows are
increasingly raised in large feedlots.
Indeed farming, the actual raising of crops and animals,
is only one part of the whole food system. The commodity nature of all parts of
the agricultural/food system—farm inputs, actual farming, purchasing and
processing raw agricultural goods, and wholesaling and retailing—means that
many different types of commodities are produced and sold. Farming itself has
been reduced to a component in a larger system of agribusiness, with many of
the remaining small farmers in the United States increasingly becoming
subcontractors to large corporations. The input side of agriculture was one of
the last sectors of the economy to go through concentration of ownership,
leading to fewer machinery companies, fewer “agrichemical” (fertilizer and
pesticide) companies, and fewer seed companies. A few input and
purchasing/processing corporations are able to exert near monopoly power. One
of the most recent developments in the inputs sector has been the creation of
transgenic (genetically modified, or GM) varieties of crops. Industry
consolidation was stimulated by the greater control exerted on prices (and
farmers), and today about 40 percent of the entire global seed market is
controlled by three firms—Monsanto, DuPont, and Syngenta.
Globally there is still a significant portion of food
produced on small landholdings for personal consumption or very local markets—in
Latin America, Africa, and Asia. However, in the United States, Western Europe,
and Australia (and now in Brazil, and even more recently, Argentina, Paraguay,
and Bolivia) crops are increasingly produced on large, highly mechanized farms
for either national or international sale. Most of these countries actively promote
large-scale production for export, to either obtain foreign exchange or to help
their international balance of payments situation.
Implications
There are a number of important
implications of the commodity nature of food production, processing, and
consumption. In capitalist economies, as noted, nearly all enterprise is for
the sake of producing commodities for sale—whether the “product” is an absolute
necessity such as food and health care, or a luxury such as a private jet plane
or a huge house. More and more of the natural world, including water supplies
and the very genes of life, are being brought under private control with the
aim of making profits, rather than to supply the needs of people.
However, there is a critical
contradiction when any basic human need is produced and sold as a commodity,
whether we are considering food, health care, drinking water, or shelter.
Capitalism naturally produces a stratification of wealth that includes the
unemployed, the working poor, a better-off working class, a middle class, and a
relatively small group of very rich individuals. The bottom strata of society—encompassing
the members of what Marx called the reserve army of labor—are absolutely
essential to the smooth working of the system. It allows easy access to labor
when the economy expands and helps keep wages down, as workers are aware that
they can easily be replaced.1 Even in a wealthy country such as the
United States the numerous unemployed and those in low-paying jobs cannot
afford all of their basic living costs—rent, electricity, transportation
(irrational patterns of development plus inadequate public transportation means
that cars are frequently needed to get to work), clothes, medical care, food,
etc.
Given that poverty in the United
States is not absolute destitution, the poor sometimes have options: they may
purchase more or less food of higher or lower nutritional value, skip meals,
get food stamps (now called SNAP, the Supplemental Nutrition and Assistance
Program), or receive food assistance from charities. The poor commonly have
little money left for food after rent and utilities are paid. In the summer of
2011, approximately 46 million people were receiving food assistance through
Federal programs, inadequate as it is. Still, despite the abundance of food, a
high average per capita income, and various forms of assistance available, some
50 million people in the United States are considered to be “food insecure.” Of
these, over 12 million adults and 5 million children have “very low” food
security, with one or more members of their households lowering their food
intake.
In some parts of the global South,
of course, conditions are far worse. The commodity nature of food results in
food price levels far above many people’s meager means, producing a lack of
adequate nutrition. The United Nations estimates that there are close to one
billion people worldwide who suffer from malnutrition. This leads to severe
health problems and death for millions. Food deprivation, though falling short
of severe malnutrition, is still a very serious condition. Hence, a sense of
injustice associated with rising food prices and unequal access to food was a
major factor spurring revolts in the Arab world over the last year.
Because food products are
commodities, and the whole point of the food/agriculture system is to sell more
and make more profits, there is massive advertising surrounding food,
especially the most profitable sector—processed foods. High caloric but low
nutritional-value foods, such as sugary breakfast cereals, are pushed on
children. And because these processed foods are relatively inexpensive and
available at local convenience stores that often do not carry higher quality
food like fruits and vegetables, the commodity nature of food is part of the
explanation for the surge in obesity, especially among the poor.
Food crops have many different
uses other than direct human consumption. They can be processed into a variety
of forms—breads (pitas, tortillas), potato chips, frozen dinners, pasta, ice
cream, etc. Corn is commonly processed to obtain industrial starch and sugars
(high in fructose). A relatively high percent of the corn and soybeans grown in
the United States are used to feed poultry and hogs as well as beef and dairy
cows (that, from an environmental point of view, should be eating grass and
legume forages that the bacteria in their rumens convert into usable energy and
protein for the animals). And with the push to lessen dependence on imported
oil and to have a supposedly more “green” source of liquid fuels—corn, soy,
rape, sugar cane, palm oil, and jatropha (a non-food crop raised only to make
biofuel) are being grown to produce either ethanol or biodiesel.
In the United States and Europe,
there are governmental mandates and subsidies encouraging production of both
food and non-food crops, which are then used for biofuel feedstocks. This is an
important part of the explanation for the tight markets and high prices for corn
and oil crops. A UN Food and Agriculture Organization report says: “By
generating a new demand for food commodities that can outbid poor countries and
food-insecure populations, industrial biofuels highlight the tension between a
potentially unlimited demand (in this case for energy) and the constraints of a
world with finite resources.”2 It was the search for another market for
corn that induced Dwayne Andreas, CEO of the grain purchaser/processor and feed
grain conglomerate Archer Daniels Midland (ADM), to gain influence over
politicians and spend lavishly on both Democrats and Republicans. ADM was the
main backer for the corn-to-ethanol industry and might be considered the grandfather
of the current mandate to mix a certain percent of ethanol with gasoline (in
the process of increasing from 10 to 15 percent).
The commodity nature of food by
itself limits access by the poor. Market pressures and incentives contribute to
the interchangeability of key food crops that can also be used for animals or
fuel production; the possibility to grow crops for strictly industrial use
instead of food, if the price is right; and huge amounts of hoarding and
speculation on agricultural commodities (see below). Land can be used to grow
crops for a number of purposes: food for people, food crops that are also
potentially feeds for animals, and industrial feedstocks (cotton, jatrohpa,
corn to make sugar or other products, and crops like hay which are strictly for
animals). Market prices guide farmers’ production. When ethanol prices
increase, more land goes into corn for ethanol. If cotton prices increase, a
portion of the land that would have gone to grow corn and soybeans will be
planted with cotton. Market prices also guide the ultimate utilization of crops
that have multiple uses. For example, should soybeans be used to make vegetable
oil for human use, be feed to animals, or be converted into biodiesel fuel? The
need to feed hungry people does not enter the calculation.
When a poor (so-called “developing”)
country attempts to solve its food problem primarily by encouraging farmers to
produce more, bumper crops tend to depress prices, thus helping the poor gain
greater food access. However, depressed prices may be problematic for farmers,
many of whom themselves are poor. This has happened recently in Zambia, where “massive
production can send prices tumbling. The smallest farmers, who are the least
productive, suffer doubly by producing little and getting paid a pittance for
the crop.”3 Thus, bumper crops in capitalist
agricultural tend to favor the larger farmers, especially those using inputs
such as irrigation and fertilizers that help produce high yields. However, the
resulting low prices may force large numbers of small farmers, many unable to
protect their crops from the vagaries of nature and lacking the financial
resources to weather hard times, into deeper poverty.
A new dimension has been added to
the phenomena of food as a commodity—a new land grab, with private capital and
sovereign wealth funds purchasing or leasing land in Africa, Asia, and Latin
America to produce food and biofuels for markets for the home countries of the
investors.4 As with food, the most basic input for
its production, soil, becomes a commodity ripe for either speculation or to go
to the highest bidder. In many countries of the global South, traditional land
tenure systems are thrown aside as land is purchased or rented under long-term
agreement by private capital or national sovereign wealth funds. The purpose is
either to make money, or to produce food or fuel (jatropha or other fuel crops)
for the “home” markets. This creates even more rapid “depeasantization” as more
farmers are pushed off the land and into city slums that have no jobs for them.
It is estimated that some 20 million hectares (50 million acres) have either
been sold or are under long-term lease to foreign countries or foreign capital.
“In Africa they are calling it the land grab, or the new colonialism. Countries
hungry to secure their food supplies—including Saudi Arabia, the Emirates,
South Korea (the world’s third largest importer of corn), China, India, Libya,
and Egypt—are at the forefront of a frantic rush to gobble up farmland all
around the world, but mainly in cash-starved Africa.”5
The “highest and best use” of any
commodity is where it can get the best price, regardless of the social,
ecological, or humanitarian consequences. One small example of the
contradictions that arise from this is a result of the growing market in the
North for quinoa, a grain grown in the Andes that is especially nutritious
because of its balance of amino acids. This benefits farmers by increasing crop
prices, but at the same time it means that this traditional and nutritious food
is becoming too expensive for local people.6
Another implication of the
commodity nature of food is that it is increasingly subject to speculative
price movements. Raw commodities such as metals and food crops have become a
prime target of speculators who want to bet on the price changes of tangible
products, rather than completely relying on the complex bets embodied in many “financial
instruments.” The Chicago Board of Trade (CBOT, owned by the Chicago Mercantile
Exchange), opening in 1848, is the oldest organized foodstuffs futures and
options trading exchange. Throughout most of its history the CBOT and the other
commodity exchanges were used primarily by those interested in hedging prices
because they bought, sold, or used the physical products—farmers, buyers, and
food processors. It was a sound way to protect your business against the
vagaries of weather and competition. But with the financialization of the
economy everything has become fair game for speculation, so food and other
agricultural products (as well as other raw commodities) have become just more
bets that can be made. With the so-called “Commodity Futures Modernization Act,”
commodity markets were deregulated in 2000 and “structured” financial products
were developed to allow various types of speculation. In addition to straight
bets on individual commodities, commodity index funds (pioneered by Goldman
Sachs) begun to track prices of commodities. The amount of money in these funds
increased from $13 billion in 2003 to $317 billion in 2008. As U.S. hedge fund
manager Mike Masters explained: “Speculators today have about 70 percent of the
open interest in commodity markets. Ten years ago, they controlled roughly 30
percent of the market.”7 With so much money flowing into the food
commodity markets, prices are driven up in a speculative upswing. This, of
course, does not mean that commodity prices will only keep going up—they
fluctuate based on economic conditions, world food stock levels, crop yields,
rumors, and fads. But speculation drives prices up and down further and faster,
and as a result contributes to hunger for many—sometimes millions—when prices
peak, and to the ruin of small producers when prices crash.
When food—a basic necessity for
human health and survival that is currently produced in sufficient quantity to
feed everyone in the world a basic nutritious diet—is a commodity, the results
are routine hunger, malnutrition, premature deaths, and famines when tight
supplies result in exceptionally high prices. There are examples of farmers and
the public organizing alternative ways to grow food for people instead of the
market—such as Community Supported Agriculture (CSA) farms in which people
purchase (frequently on a sliding scale according to ability to pay) a share of
the produce during grown during the season. These types of arrangements between
farmers and the public are encouraging because they demonstrate an alternate
approach to food. However, the only way to guarantee that food reaches all
people in sufficient quantity and quality is to develop a new system that
considers food a human right and no longer considers it a commodity. Only then
will we be able to fulfill the slogan, “Food for People, Not for Profit.”
NOTES
1.
↩ For a discussion of the reserve army see
Fred Magdoff and Harry Magdoff, “Disposable Workers: Today’s Reserve Army of
Labor,” Monthly Review 55, no. 11 (2004): 18–35.
2.
↩ High Level Panel of Experts on Food
Security and Nutrition, “Price volatility and food security,” Committee on
World Food Security, Rome, July 2011, http://fao.org.
3.
↩ Samuel Fromartz, “The Production
Conundrum,” The Nation, October 3, 2011, 20–22.
4.
↩ GRAIN, “The New Farm Owners: Corporate
Investors and the Control of Overseas Farmland,” in Fred Magdoff and Brian
Tokar, eds., Agriculture and Food in Crisis: Conflict, Resistance, and Renewal (New
York: Monthly Review Press, 2010).
5.
↩ Margareta Pagano, “Land Grab: The Race
for the World’s Farmland,” The Independent, May 3, 2009, http://independent.co.uk.
6.
↩ Simon Romero and Sarah Shahriari,
“Quinoa’s Global Success Creates a Quandary at Home,” The New York Times, March
19, 2011, http://nytimes.com.
7.
↩ Deborah Doane, “As food speculators make
money, the world’s poorest suffer,” CNN Opinion, June 22, 2011, http://cnn.com.
By Marc Frank, Reuters, January 9, 2012
