we must act now

we must act now before inequalities anddesperation within poorer countries as well as richerincrease even further

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Food crisis :The solutions

The first priority in alleviating this crisis must be to ensure food security in all
countries so that rapid and secure food supplies can be guaranteed for those
in need. Only by ensuring economic safety mechanisms that with certainty can reach the poorest people, the unemployed, waged workers and vulnerable
groups such as women can the international community prevent the financial
and economic crisis from worsening an already grim situation. This means that
the more than 70 developing countries already experiencing problems with
their balance of payments because they are struggling to pay their import bills
for essential food staples require help. Financial assistance must be granted
but without the same, failed policy conditionality from the international financial
institutions. The policies that contributed to the creation of this crisis cannot
be a part of the solution.
Another immediate action should be eliminating politically supported subsidies
that boost biofuel production while diverting food crops into fuel, as biofuel
production is heavily subsidised by industrialised countries and as a result,
biofuels are estimated to account for at least 30 percent of recent food price
Furthermore, more effective regulatory mechanisms are needed in the
agricultural commodity and futures markets, to limit and contain the speculation
that helped drive up food prices during 2008.
In the longer run, investment in rural infrastructure must be increased in
developing countries. Assistance to small-scale agricultural production in
developing countries would contribute to enabling the world to restore the
supply-demand balance for food at a lower price level. Such assistance must
take place under the right terms to achieve economic, social and environmental
sustainability including decent work and respect for international labour
standards for rural workers. The production of foodstuffs in developing
countries for domestic consumption at accessible prices is essential in
ensuring domestic food security and reducing poverty, by providing some
security against escalating world prices for basic commodities. The provision
of universal social protection, which the ILO is currently implementing a
major campaign to achieve, is another part of the international framework for
combating hunger.
The above combination of recommendations shows that there is no one, magic
solution to the global food crisis. Yet governments must accept their role. They
are failing when more than 963 million people are living in hunger and the
number of poor people increases by more than 150 million in one year due
to high food prices. In today’s interdependent world, that is not acceptable.
The international community must accept its joint responsibility to deliver an
effective right to food for all the world’s citizens.

The food crisis has affected everyone but most of all theworst off

The food crisis has affected everyone but most of all theworst off, those living at the
lower end of the income scale who spend 50 to 70percent of their income on food. The global food crisishas deprived them of one of their fundamental humanbasic rights, the right to be free from hunger andmalnutrition.

The sources of the food crisis

The sources of the crisis
The policies pursued by the international financial institutions since the 1980s
have been significant in determining why developing countries cannot ensure
food security for their own citizens. During the heyday of the “Washington
consensus” of the 1980s and 1990s, the International Monetary Fund (IMF)
and the World Bank supported market incentives by demanding that developing
countries phase out agricultural subsidies that otherwise could have helped
develop a strong domestic economy, and that grain buffer stocks be sold to
pay off debt. A continuous and erroneous fixation on trade liberalisation as the
answer to the world’s economic and social problems took focus away from the
vastly underdeveloped domestic agricultural sector in developing countries.
Many of those countries are now net importers of food, as opposed to their
status as net exporters in the 1960s, and with the incredibly high prices of
food commodities, it is clear that the policies of the IMF and the World Bank
failed in their purpose. At the same time, more deregulation in trade and financial markets has mainly
favoured agrofood multinationals based in industrialised countries and not the
working rural and urban poor across the globe. The effects of the world trade
system can be seen in the large increase of import bills of low-income food
deficit countries, which have more than doubled in five years. Contrary to the
promises of free trade advocates, successive rounds of trade liberalisation have
not ensured equity and food security for all. Much of the problem can be ascribed
to the multinational corporations that control the majority of international trade
in maize and other grains, as well as massive subsidies to large-scale farms
in the US and Europe that deprive developing country farmers of a place in the
market. Trade growth has so far brought monopolisation in world grain markets
and in banana, cocoa and tea trading, which has damaged the world food
system and not provided greater food security or advances in workers’ rights
to a decent life.
In an effort to make quick returns and seek new investment options away from
the traditional stock market, investors like hedge funds have sought out the
agricultural commodity market in search for high-yield gains. The massive
increase in speculative investment has been a contributing factor in driving up
prices of basic food staples. In a few years, investments in food commodities
and futures have grown twenty-fold because deregulation has allowed noncommercial
traders to seek profit gains in a relatively small market, causing
sudden volatility and turmoil.
Another part of the problem is that the world is getting more populous. By 2050,
more than 9 billion people will inhabit our globe. The strain on food availability is
estimated to rise in the future but already, as the middle classes in developing
countries like China and India grows and their blossoming economies allow
them to shift their eating patterns, pressure on water accessibility and grain
production is rising because meat and dairy products are in higher demand
than ten years ago.
Climate change will make matters worse: recurring droughts, flooding and other
climate change-related pressures resulting from increased greenhouse gas
emissions are a global challenge. Climate change disasters occur most often
in developing countries where failed harvests and poor crop yields can result in
people going hungry for months because the working poor can no longer afford
to purchase basic foodstuffs at new and higher prices. As the impact of climate
change intensifies over the coming decades, changes in weather patterns will
continue and food production will be put under even more pressure. However,
climate change cannot be tackled through simplistic advocacy of biofuels
without concern for their side-effects. While the production of organic material
for biofuels has diverted large amounts of food crops into the fuel tanks of cars,
it has only accounted for 1½ percent of global fuel supply.

The food crisis has not gone away

Food prices have diminished somewhat but the food crisis has not gone away:
as long as the factors that caused it have not been tackled, it remains all too
likely to return in the near future. And almost one billion people live in constant
hunger. With the attention of the international community turned to the global
financial and economic crisis, the real danger is that the world hunger situation
may deteriorate even further.
This report has been prepared to highlight these risks. Workers suffered
significantly from the food price explosion over recent times, and the trade
unions that represent them are demanding action. The global financial and
economic crisis makes this more, not less urgent. As the UN’s Food and
Agriculture Organisation (FAO) warns, the economic crisis and the current
credit crunch combined with temporarily lower prices of some agricultural
commodities might lead farmers to grow less food, and if this should transpire,
the world will have to brace itself for another dramatic rise in food prices in
the coming year.
If anything useful is to come out of the food crisis, we will have to learn from
past mistakes. Now is the time to act, and if the international community is
determined to halve the number of hungry people by 2015 in line with the
Millennium Development Goals (MDGs) of the UN, serious political will and
commitment is needed. The trade union movement is demanding more
investment in the agricultural sector and universal social protection coupled
with respect for core labour standards to bring about the decent and sustainable
production of food and other agricultural products. The right to food must be
considered a basic human right for everyone.
Guy Ryder, ITUC General Secretary, March 2009

Financial assistance must be granted but withoutthe same, failed policy conditionality

Financial assistance must be granted but withoutthe same, failed policy conditionality from theinternational financial institutions. The policies thatcontributed to the creation of this crisis cannot be a partof the solution.

the world truly not able to feed its hungry?

The rise in food prices during 2007-2008 affected people everywhere: from
those living in extreme poverty in Africa to consumers in industrialised countries,
from the rural poor in Latin America to mine workers in Asia. The question that
must be answered is how it came to this. Is the world truly not able to feed its
hungry? And how can we prevent this from happening again?
We have witnessed social unrest, riots and demonstrations because people
have been unable to put food on their tables. Children have been affected
because their parents cannot afford to pay both for school fees and meals at
the same time, and as a result they have been forced into labour to help support
their families. These are just some examples of the recent developments caused
by rising food prices that this report will examine.
The following chapter will look at the evidence at hand: how workers’ purchasing
power is being diminished, how economic recession is causing declining
consumption and job losses, and how drought across the African Horn is driving
large parts of its population close to starvation. This report serves as a wakeup
call – we must act now before inequalities and desperation within poorer
countries as well as richer increase even further.


Unfortunately, in many developing countries, the effect of the global rise in food
prices can be measured, not only by a decline in purchasing power, but also
by the number of children having to leave school to help their families make a
living. If a family has to manage without adequate levels of food and perhaps
unable to care for the whole household, then extra hands are needed, and that
includes the hands of children as well. Surviving on a day-to-day basis becomes
more crucial for the poor in developing countries than ensuring education for
their children, even though education provides the means to combat poverty.

Recommendations:The right to food

The right to food
Article 11 of the International Covenant on Economic, Social and Cultural Rights
obliges states to take the necessary measures to achieve the full realisation of
the right to adequate food. Along with the FAO Voluntary Guidelines on the Right
to Food, adopted in 2004, and the Universal Declaration of Human Rights, Article
25 (1)122, the international community has in fact the tools at hand to guide all
UN member states in ensuring food security for all. If this human right is to be
realised, measures must be adopted, both at international and at national level,
which can protect the world’s vulnerable people from food insecurity such as
the recent price increases of food commodities. New monitoring, legislation,
coordination and participation measures are needed to prevent increasing levels
of food insecurity. States must recognise “the fundamental right of everyone to
be free from hunger”123 and implement the mechanisms at hand in the FAO
Voluntary Guidelines and not just treat them as empty rhetoric. In order to give
full meaning to the words, Article 11 of the International Covenant on Economic,
Social and Cultural Rights and the FAO Guidelines must become accepted in all
international fora as a leitmotif for future policy developments that addresses
the right to food.
This would mean, for example, that the international financial institutions would
not implement policies as they did in the 1980s to stop financing agricultural
self-sufficiency in developing countries in order to promote export-based crops,
expecting somehow that the earnings would be adequate to cover importing
more food staples. Higher prices of food and volatility across commodity markets
have shown the grave repercussions of this approach. The IMF and the World
Bank must instead adopt policies that emphasise food buffer stocks, higher
investment in agricultural infrastructure, and respect for rights of workers, small
producers and women, in order to promote the right to adequate food.
Under the WTO Agreement on Agriculture, the last ten years of liberalised trade
in agricultural commodities have not brought many of the promised benefits for
most parts of the developing countries. It is imperative that any new international
trade agreements prioritise the right to food, not undermine it. This consideration
should be given hierarchy over commercial considerations in negotiations such
as those under the Doha Round, for example in discussions of contentious
issues such as the Special Safeguard Mechanism (SSM). Whether the Doha
Round will contribute to world food security must be considered before entering
into final discussions, to avoid potentially disastrous implications for decent work
of agricultural workers and the rural poor. Where necessary, trade agreements
must be revised to ensure that priority is given to providing sufficient levels of
nutritious food at reasonable prices. Again, all these implications would derive
from treating the right to food as a fundamental human right.
Essentially, the world needs an effective, regulated global market that does
not undermine food security. It should be a market that delivers in a timely way, without strings attached, to those countries that can never become
self-sufficient in food. The current model – based on restrictive trade rules,
financialisation of food and in favour of agribusiness – is the wrong route, as
this report clearly portrays.
The effectiveness of improved implementation of the right to food takes its point
of departure in a food production and distribution system that is environmentally,
socially and economically sustainable. This requires that all governments take
responsibility in ensuring that food is available, distributed and guaranteed to
all those in need. The right to food should be centred on those who produce
food, such as waged agricultural workers, not the agribusiness multinational
corporations that have been benefiting from the high agricultural commodity
prices so far. Of course not all developing countries have the capacity for food
self-sufficiency, and therefore the policies pursued must allow for diversity and
flexibility. But by putting sustainable food production and distribution at the
heart of policies, people’s right to food will be recognised as both a priority and
a prerequisite for development.
A revision of biofuel policies
Biofuel production increases pressure on arable land, hence diverting food
intended for human and animal consumption, and at times it takes place on
the basis of violation of workers’ rights. Furthermore, researchers estimate
that the current generation of biofuels is not as environmentally sustainable as
was hoped for, and that the level of production is scarcely enough to replace a
fraction of the consumption of oil reserves.
As a result, the current path of biofuel production is not sustainable. The right to
food must not be endangered by blending mandates, subsidies and tax breaks
encouraging governments to boost production even further to the detriment
of poor peoples’ livelihoods. The international community must reassess their
biofuel policies, proposed goals and targets with a view to modification given
the linkage between turning food crops into fuel and rising food prices. A
careful examination of which plants are used as feed for fuel is needed, with a
view to converting land back to food production where necessary.
These concerns need to be included in new international standards on biofuel
production that incorporate environmental and fundamental human rights,
such as the right to food and respect of workers’ rights, within international
guidelines for biofuel production.
Additional investment in agriculture
There is an opportunity embedded in this crisis and all countries should learn
from it, so as not to repeat old mistakes but instead look forward and make a
change. In Africa and in many other regions, the agricultural sector has been
significantly overlooked for more than twenty years, and greatly enhanced
investment is needed in order to enhance domestic agricultural production.
The international community must be prepared for reforms and investments if
we are to stabilise, restore confidence in and improve the world food system.
This can take place in several ways. First, developing countries must have the capacity to achieve their right to
food, eradicate poverty and implement much needed land reforms. In fora
such as the WTO, the rights for developing countries to differential treatment
and for developing countries (especially the least developed) to have adequate
flexibility in the implementation and interpretation of various WTO agreements
must be respected, otherwise economic and social development will not easily
be attained.
Second, by providing adequate technical assistance to poorer developing
countries, they can enhance their agricultural production for domestic
consumption. Some of the most significant problems during the last twelve
months have been seen in the net food-importing countries; they have suffered
the most due to the soaring food prices because domestically produced food
was scarce. If some of those countries could be enabled to become active
growers of staple agricultural products (as they once were, in many cases),
food safety could be restored and the high price of food could be lowered.
Another necessary recommendation is to favour improved food storage once
again and ensure an efficient distribution system to alleviate any crisis in the
future. Grain reserves were close to zero when the food crisis was at its highest
and could therefore not be used as a means to stabilise the markets. Focus on
the must needed investment in rural infrastructure in developing countries must
stay on the international agenda; access to input such as seeds and fertilizer
must be prioritised. But without storage facilities, proper roads and access to
harbours and other transport facilities, the small-scale farmers in developing
countries will not be able to reach urban markets to sell their products. Good
infrastructure must be a further part of the recovery package, therefore.
Many developing countries need to implement land reform policies to divide
ownership more equitably so that tenants and landless workers can have
access to land. Some countries need to implement further legal reforms to
ensure equal land ownership and inheritance rights for women.
Furthermore, there is a lack of freedom of association especially among rural
workers. A large percentage of waged agricultural workers live in poverty
despite working more than 12-14 hours a day and the rights of migrant workers
in the fields and plantations are often overlooked. Decent labour legislation in
accordance with ILO standards must be enforced and implemented for all if
conditions for peasants and agricultural workers are to ameliorate. It is only
through the creation of decent jobs and decent working and living conditions
that sustainable economic development, the right to food and the elimination
of poverty can be achieved.
A world encompassing decent work, decent wages & social protection for all  The food crisis has illustrated the need for social protection schemes across
the globe. Those hit the hardest had no safety nets when prices were at their
highest in July 2008, and even though prices have dropped since then, the
lasting impacts of high prices will be felt among the poorest for a long time to come. Only by establishing social safety nets can the vulnerable be protected
from increased food price volatility in the future.
Despite some declines, in January 2009 prices are still 30 percent higher
than two years ago, and a rise in workers’ wages have not followed this steep
rise in prices. Effective trade union action in raising wages is a further part
of the solution to the food crisis. The problem inherently wrong in the food
crisis from its beginning was not a lack of food, but the fact that working
poor could not afford to purchase food because of the skyrocketing prices.
The problems of poverty wages in the agricultural sector, hazardous working
conditions, discrimination against women and the lack of decent work across
large parts of the globe must be tackled. Through a strengthening of trade
unions, working people can reclaim their right to adequate food at reasonable
prices and at the same time assist in the development and implementation of
new agricultural policies, intended to improve their livelihood and to stimulate
economic growth.
The re-regulation of international markets
The global financial and economic crisis is threatening to impact the real
economy to an extent we cannot yet fully anticipate and is spreading to
emerging and developing economies. Over recent months, financial sectors
have been at times paralysed, hitherto stable currencies have collapsed and
world economic growth has almost come to a standstill. The social and political
instability that inevitably follows this crisis will affect working families and the
poorest across the globe, especially vulnerable groups including women.
People already suffering under the food crisis and having lost a large part
of their purchasing power as a result of soaring food and commodity prices,
especially in developing countries, will now have to come to terms with wage
stagnation, job and pension losses as a result of the financial crisis. This
intolerable situation cannot be allowed to prevail; the trade union movement
considers it essential to begin working on a more inclusive, just and democratic
system for the governance of global markets. A new structure of international
economic governance must encompass a reassertion of trade unions and
strengthen the role of the ILO.
As described in the last chapter, to a large extent the global food crisis emerged
due to enhanced global financial volatility as speculators looking for rapidly
rewarding assets, especially after the crash of the US sub-prime mortgage
market, turned to the agricultural commodity markets. UN organisations such
as the United Nations Environment Programme (UNEP) and the UN Conference
on Trade and Development (UNCTAD), and even the IMF, all agree that
speculation in agricultural commodities were an influential factor in driving up
prices at a rapid rate in 2008. In March 2008, wheat prices reached a level
60 percent higher than could otherwise be explained by normal supply and
demand factors.
The international community must take responsibility to ensure that
agricultural commodity speculation does not again contribute to growing world food insecurity once the markets have stabilised. Food is not a commodity
like precious and raw metals or energy – nor should it be treated that way.
The global financial markets, comprising investment banks, hedge funds and
pension funds, in part also responsible for driving up food prices by speculating
heavily in commodity index funds, should be not allowed to gamble with the
fundamental human needs of the world population. But at the moment, there
is no multilateral framework or agreement that can respond to excessive
global speculation in food prices. What is needed are far tighter re-regulatory
measures, concerted through government interventions, that could limit and
contain financial speculation on commodity markets.

ITUC, International Trade Union Confederation
March 2009

This report has sought to show the causal factors that provoked the soaring food prices over recent months and to illustrate some major solutions to overcomingthe crisis. It is clear that another food price surge like that cannot be allowed to happen again, as it did in 2008 simply due to lack of adequate anticipation andaction by the international community. World leaders and governments have the means and the decision-making power to ensure adequate food for everyone.History will judge us harshly if we fail to ensure everyone can enjoy that right.

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