9.22.2015

Agriculture and the Changing World Economy
Food Issues Book Club, The Politics of Food Supply Chapter 6

Hello all!  Welcome to the NOiG Food Issues Book Club, wherein I read books about food stuff, summarize each book by chapter, and then attempt to apply that book chapter's ideas to the New Orleans food environment and my own experiences.  Fun right?!  Check out previous installations here.  I'd love it if you'd read along and join in!  And now, without further ado...

The Politics of Food Supply, Chapter 6:
Agriculture and the Changing World Economy - the U.S. Food Regime, 1945-1990

Summary:

After years of grain surpluses through the 1950s and 1960s, the US and the rest of the world were taken aback by famine and imminent starvation around the globe in the 1970s.  The U.S. and other developed nations had been providing international food aid throughout the time of surplus.  "With such increasing production in and agricultural assistance from the United States and other industrialized nations, why did the world face a food crisis in the 1970s?"  There were two main attributes to this food shortage: a reduction in grain supply due to growing conditions issues, and a sudden population growth.  While policymakers assumed that increasing the food supply was all that was necessary to alleviate the shortage, the problem turned out to be far more complex.

International power plays manipulated the flow of food aid in the 1960s.  For example, in the late 1960s the U.S. withheld food aid to India - on which it had grown dependent - over political disputes.  "Food aid was used in similar ways to exert influence in a number of other countries, including Bangladesh, Cambodia, Chile, Egypt, Iran, South Korea, Vietnam, and even the Soviet Union," some of the very countries that then experienced famine in the 1970s.  "Additionally, the United States scaled back its food aid programs during this food crisis.  Consequently, international food aid was often unreliable, even dire at times."

No gas, no food.
Another factor was the so-called "green revolution" - a shift in agricultural production toward mechanization for increased production - which of course relied heavily on petroleum, both to run the machinery and in the use of chemical fertilizers and pesticides.  While this technology increased yields, "the green revolution made nations more vulnerable to economic shifts such as the sharp increase in oil prices in the early 1970s."  The oil crisis and the food crisis were thus intrinsically linked.

While growing conditions, population growth, food aid, and oil prices all contributed to the food crisis, the situation was even more complex than the interactions of these factors.  To understand the food crisis, we must understand the international "food regime."  A food regime is shaped by "the extent of state regulation and direction of agricultural trade flow" within, to, and from the hegemon, the country leading the food regime at a given time.  When lesser entities depend on a flow of basic commodities from the hegemon, or when the hegemon begins to consume mass quantities of a lesser nation's products, dependence is created, economies and labor are rearranged, and food security is undermined.

As the hegemon of the early 20th Century, for instance, Great Brittan's food regime relied on heavy imports and free trade.  The U.S.'s acquisition of the hegemon position in the 1940s flipped this regime on its head, with the U.S. relying on strongly regulated agriculture and heavy exports of basic commodities.  "Supply management was the foundation of the U.S. food regime based on national protection and agricultural trade flowing to the periphery."  International food aid was one avenue through which the U.S. exported commodities - and is its favored method of dumping agricultural suplus.

A British family receives US food aid after WWII.
While the Marshall Plan of 1948 provided a recovering Europe with food as well as machinery and fertilizer to help rebuild its agriculture, PL 480 of 1954 sent only food to "peripheral" developing nations "with little effort to build up agriculture." Helping these countries provide themselves with food was not a goal.  "With European agricultural markets essentially closed off by the mid-1950s, the United States turned to Europe's former colonies to dispose of its agricultural surpluses - most notably, wheat."  (Incidentally, this increased consumption of wheat in these countries to rise exponentially.) 

Why, after decades of efforts to manage supply, was there so much agricultural surplus to dump?  Because U.S. efforts at controlling supply tended to not only be ineffective, but in fact have the opposite effect.  By restricting acreage but subsidizing based on volume of commodity produced, policies encouraged farmers not to create less of a commodity, but to increase production of that commodity per acre.  Agricultural technology turned its energies, then, toward that aim.  "After the Second World War, a technological revolution in chemical fertilizers, pesticides, and herbicides, as well as the spread of mechanization, allowed farmers to significantly increase their productivity (that is, production per acre)."

Technology allowed production per acre of most commodities to double between 1945 and 1970.  In this way, supply management policies actually created greater supply.  Importantly, "demand for these commodities did not keep up with the growing supply."  Wheat and cotton particularly suffered market instability due to surplus in the 1950s.  Corn had fewer issues as it was absorbed by the growing livestock industry and its development of concentrated animal feeding operations.  Increasing meat consumption worldwide continued to prevent too much corn surplus for the next several decades.  And yet there was still surplus corn, and it went to food aid.

This growing surplus of commodities was the primary driver behind PL 480, which sought to create international commodity markets via food aid.  Increased exports, including those for food aid, reduced government costs s by increasing market price (and thus reducing subsidy payouts), and by reducing the costs of surplus commodity storage (because there was less to store).  "Thus, the policy rested on the contours of the food regime.  ...  PL 480 firmly established the flow of agricultural goods from the core to the periphery."

The problem, simplified.
To return to the chapter's initial question: how did food crisis arise during a time of widespread agricultural surplus? The short answer is that international food aid - fueled by the U.S.'s commodity surpluses, which were, ironically, created by our attempts at reducing commodity quantities - actually caused the crisis.  It did so by disrupting local agricultural economies and creating dependence on aid that was unsteady.

"PL 480 did not emphasize building up agriculture in other nations, but instead centered almost entirely on supplying cheap agricultural imports.  The consequence was essentially to destroy much local agriculture in the periphery because local producers could not complete with subsidized imports.  ...  When the Soviet Union purchased record amounts on U.S. grain between 1972 and 1974, grain became less abundant and prices rose dramatically.  The result was a financial squeeze that put many food-importing countries on the brink of starvation."

Discussion:

This is a long chapter, and it takes its sweet time getting around to the point of what caused the food crisis of the 1970s.  When it gets there, it only spends half a paragraph on the topic.  Frustrating.

The bottom line is this: U.S. food aid reduces food stability and can even cause famine.  It is not a genuine humanitarian effort, but one sprung from the self-serving need to keep market prices high.  Sure, that's good for "farmers," as long as we understand that "farmers" are the people who own the land, not the people who work it.  U.S. food aid is undertaken in ways that at best fail to account for the impact on the economies of aided countries, and at worst intentionally disrupt those economies to expand our own international markets.  We are not the good guys.  We never have been.

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