People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 18

May 11, 2008



Bushspeak: 'You Starve For Our Prosperity'

THE concerted efforts by US president George Bush and the European Union to blame the so-called increases in consumption of food articles in India and China as the main cause for the current global food crisis cannot be brushed aside as senseless ranting. Earlier, US secretary of state, Ms Condoleezza Rice, set the ball rolling by targeting the improvement in the diets of Indians and Chinese as the main reason for this crisis. These are all attempts to mask the real cause for the current global crisis which is due in the main to the massive shifts towards bio-fuel in the West and due to speculation in trading which is the hallmark of imperialist globalisation.

Apart from being ridiculous, these comments are a brazen admission by the industrialised West that their levels of prosperity are mainly dependent upon the levels of impoverishment and malnutrition in the developing world. Having plundered for centuries through colonialism, they seek to continue to fatten themselves by a similar plunder through current phase of imperialist globalisation, whose hallmark is the sharp escalation of inequalities.

However, let us first consider certain facts. According to the US Department of Agriculture, the per capita consumption of grain in the USA is 1046 kg compared to 178 kg in India, i.e., five times more. The per capita consumption of poultry is 45.4 kg in the US, 16.2 kg in EU, while it is 1.9 kg in India. So, who is eating more?

There is a global wave of food price inflation. The United Nation’s World Food Programme (WFP) - the largest distributor of food aid - describes this as a “silent tsunami”. The Economist informs that food riots are erupting in many place across the globe at once. This inflation is pushing billions of people back below levels of absolute poverty globally. Merely to distribute the same amount of food as last year, the WFP would need an extra $700 million this year. For us, in India, this means the further widening of the hiatus between `shining’ and `suffering’ India. This will swell by many lakhs the already huge numbers of children (50 per cent) and pregnant mothers (78 per cent) suffering from malnutrition.

As it is, currently 78 per cent of Indians live on less than Rs 20 a day. According to official data, 1,36,324 farmers have committed distress suicide between 1997 and 2005. The per capita consumption of cereals has declined from 468 gms in 1990-91 to 412 gms in 2005-06. The consumption of pulses, the main source of protein, declined from 42 gms (72 gms in 1956-57) to 33 gms during this period.

Even if we were to presume that Indians are consuming more food, its impact on the global economy would be felt when Indian exports to the global market are significant. The fact is that India’s share in the total world exports is a mere one per cent. Of this, the export of agricultural products is a sheer 11.7 per cent. Indian consumption patterns, thus, in no way, contribute to the global food crisis.

Fidel Castro had warned a few years ago that a global foodgrain crisis is imminent given the large-scale shift towards bio-fuels. Bush, however, defends the shift anointing himself as “an ethanol person” stating, “I think it makes sense for America to be growing energy. I’d much rather be paying our farmers when we go to the gas pump than paying some nation that may not like us”.

The entire growth of global maize production is being diverted towards bio-fuels. The World Bank informs that the production increase of 51 million tonnes between 2004 and 2005 was absorbed by the USA alone for ethanol production. The EU has declared that by 2010, nearly 6 per cent of fuel should be bio-fuels. To fill up an average tank with bio-fuel, the amount of maize required is equivalent to the per capita annual human consumption, as staple diet.

The current run-away rise in the prices of food articles can be mainly explained by speculation in the foodgrains commodity exchanges globally. This is directly related to the current recession in the USA triggered by the sub-prime home loan crisis that has left many a global financial giant on the brink of bankruptcy. In order to cut their losses, global speculators have chosen to shift their operations of `derivative’ trading to the commodity exchanges.

The multi-commodity exchange in India averages volumes of over $3 billion a day. During the financial year 2007-08, the cumulative value of trade in this derivative market was a whopping Rs 40,65,989 crores. This is the dimension of speculative trading which is making huge super profits. In order to make such super profits, the government must be made so helpless that it should not have large stocks to dampen the spot prices at any moment. On the other hand, private trade must have adequate stocks to intervene to keep the prices high. For this to succeed, it is necessary that no effective mechanism for distribution of foodgrains must exist in the country. This is precisely what has occurred, in India, under liberalisation resulting in this price rise. Thus, it is not inflation but speculation that is being imported.

Take just one example of guar seed. Total production in 2005-06 was 6 lakh tonnes. The volume of futures trade was 1,692.6 lakh tonnes valuing Rs 2,92,664.59 crores. With such a staggering levels of speculative trading relentlessly pushing up the prices, the only way to provide relief to the people in India, is by prohibiting speculative derivative trade in 25 essential commodities.

In order to protect this speculative international finance capital, the prime mover of imperialist globalisation, George Bush & Co., are seeking to divert the world’s attention by blaming the consumption patterns of Indians and the Chinese. The real face of imperialist globalisation, however, cannot be masked.