There is constant speculation on the various causes of the global crisis. The developed countries and their multinational corporations (MNCs) are identified as the main culprits due to their constant manipulations on the free market system. Are the rich really the ones who orchestrated such catastrophic series of events to obtain unfair advantage for themselves, or is the effects of Globalisation and the rise of the developing countries to be blamed? I agree with the statement that the rich will benefit from the food crisis as the unfortunate turn of event was mostly caused by the one sided advancement of the developed countries who neglected the poor to achieve their aims.
Faced with record high oil prices and possible conflicts with oil producing nations, developed countries seek to find new viable sources to sustain their energy needs for continual growth and self-sustainability. Biofuel is seen as the ideal solution for the United States and they aim to divert a quarter of its maize to ethanol production by 2022. What they did not take into consideration was that such a policy will cause a huge increase in demand and price of corn. The growing diversion into ethanol has resulted in a 60 percent rise in corn prices in the past two years. While the prices of food products still remain largely affordable to the rich, the poor find themselves unable to cope. The number of people plunged into hunger increases day by day as the rich continue in their quest of achieving energy self-sustainability. The rich definitely stands to gain in this context while the poor suffers without both energy and food.
The dominance of the richer nations and companies in the international arena allowed them to manipulate the market achieve large profit margins. The combination of unfair trade agreements, concentrated ownership of major food production, dominance in major finance institutions, such as the World Bank, IMF and the World Trade Organisation, meant that poor countries have seen their ability to determine their own food security policies severely undermined. Poorer countries made to remove trade barriers to receive financial help but richer countries seldom remove theirs in return. Food dumping under pretext of aid by wealthy nations onto poor countries, coupled with falling commodity prices due to competition from other poor countries, have all combined to force farmers out of business. This further worsens the food shortage in the poor countries while allowing the rich to receive economic benefit. The rich stands to gain by driving the domestic producers of the poor countries out of business while allowing their MNCs to establish monopoly.
The rising affluence level in the world might also be a factor of the current food crisis, and in this case, the rich might not necessarily gain. Higher incomes enable more people to eat higher on the food chain. And with the rising long term demand in countries like China and India, where millions of increasingly prosperous people are eating more, countries must import food from other others to meet the demand. The World Bank estimates that by 2030 more than a billion consumers in the developing world will have sufficient income to eat a middle-class diet.To produce 1 pound of meat takes up to 7 pounds of grain. So with developing countries’ meat consumption expected to double in a generation, demand for grain will grow much faster. The large-scale reform of consumption patterns is unlikely. And for consumers from poorer nations, eating richer diets is one of the long-sought benefits of development. The rich do not stand to benefit and might even lose their dominant position on the top of the world.
The current food crisis is severely affected by nature. The current food crisis is also caused by natural disasters, and both the poor and the rich will suffer. Natural disasters can disrupt the production of crops. For example, a 2007 cyclone in Bangladesh destroyed approximately 600 million dollars worth of its rice crop, leading to rice price increases of about 70 percent. Also, the drought last year in north-central China combined with the unusual cold and snow during the winter will lead to greater imports, hence keeping the pressure on prices. Hence, both the rich and poor will suffer from the increase in food prices as it is a necessity, though the rich are better able to cope with the higher prices. Climatic changes might also be a cause of concern. The continual rise of temperature might severely affect harvest everywhere, falling by a fifth in South Asia alone. The cost of adapting the food system to climate change could be tens of billions of dollars, far exceeding available resources. The both the rich and poor will definitely not benefit from it.
In conclusion, the food crisis will have an impact on both the rich and the poor. However, the poor will be the ones to suffer the most as the increase in food prices represent a larger proportion of their income. On the other hand, the food crisis will only benefit mainly the rich as it was caused by the advancements of them.
