Tuesday, October 26, 2010

The Hydra Feeds

"Behind the food crisis we face a severe agrarian crisis, he says. "Farmers have to struggle harder and harder in order to survive, because of low prices and turbulent markets. This is a paradox: for consumers prices keep rising, but for farmers, prices are too low to earn back their investments."

Where does the difference go to? "To food empires," Van der Ploeg says. "The market is more and more dominated by industrial trade conglomerates, like Ahold, Nestle, Cargill, and many more, governing production, processing, distribution and consumption of food. Those empires are able to manipulate markets and squeeze wealth out of agriculture. In this regime, small disequilibria in the markets translate into huge price fluctuations."

Empires don't usually own resources, but control the networks. "Both farmers and consumers are dependent on their entry points and exit points. They can set standards and prices." Governments are called upon not to distort markets and to liberalize trade, but these empires are the ones that distort the market, says Van der Ploeg. "If it's in their financial interest to grow asparagus, chicken, green beans or flowers in poor countries and sell it to rich countries, they do it, even if the population is starving."

No comments: