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International Trade Union Confederation (ITUC)

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TRADE UNIONS DEMAND ACTION ON WORLD FOOD CRISIS





Brussels, 8 May 2008 (ITUC OnLine): In response to the deepening global food crisis the ITUC has called on governments and world institutions to take far-reaching measures to guarantee food security for all. "This is an opportunity to completely revamp the failed policies which have led to this crisis, and it is vital that governments and the global institutions do more than just fiddle at the edges of a system which simply isn't delivering for the world's people", said ITUC General Secretary Guy Ryder.



"The factors behind soaring food and agricultural commodity prices are part of the same set of global policies which have resulted in massive global financial instability and intensifying climate change, and these three current global crises must be tackled through root and branch reform and effective regulation that can deliver decent work. Large parts of the global agricultural system are built upon poverty wages and violation of workers' fundamental rights. No durable solution to the crisis can be found unless the appalling worker rights record in global agriculture is addressed", Ryder added.



The ITUC welcomes the announcement by the United Nations that a UN Taskforce to tackle the global food crisis has been set up, to report to a Summit in June. One urgent requirement is for industrialised country governments to provide emergency grants and loans to developing countries that need it to offset the impact of sharply higher food prices. These should include funding of government programmes to provide basic foodstuffs at low cost, as well as longer-term programmes to increase food production. This would help compensate for two decades of structural adjustment programmes from the IMF and World Bank, and the impacts of the WTO Agreement on Agriculture which by "opening up markets" has had the effect of consolidating the dominance of agrofood multinationals and orienting developing country agriculture towards exporting food rather than building production for their domestic markets..



According to the UN, food prices have risen 57% in one year - and far more in the case of basic foodstuffs - and some 100 million people more than last year are facing serious food shortages. The IMF and World Bank have warned that hundreds of thousands could starve and that a decade of progress in poverty reduction could be cancelled out. Food riots have already spread to over 14 countries, including Haiti, Ivory Coast, Cameroon and Egypt and dozens of people have died. Since higher food prices most strongly affect those on the lower end of the income scale, inequality within countries will increase even further unless vigorous action is taken to protect the purchasing power of workers and the poor in developing countries.

The worsening crisis comes against a background of bleak announcements on the world economic slowdown. The IMF said on April 9 that the current crisis is the biggest financial shock since the great depression of the 1930s, and suggested that a world-wide recession was possible. On the same day, the World Bank published a report showing increased income inequality in 44 of 59 developing countries it surveyed, and concluded that countries in Sub-Saharan Africa would not reach the Millennium Development Goals in spite of recent strong economic growth in the region. Behind much of the growth figures has been the further hollowing out of domestic agricultural production, laying the grounds for the current crisis. Other regions are lagging in achieving the MDGs on child and maternal mortality, education, nutrition and sanitation.



Both the World Bank and the IMF, among others, bear responsibility for the current crisis by encouraging countries to dismantle government-run grain buffer stocks which could have played a vital role in alleviating current food shortages, in the name of deregulation and liberalisation. Much of the Bank's past focus in agriculture has been to encourage developing country farmers to shift to export crops, which contributed to the scarcity of basic foodstuffs for domestic consumption. The Bank has frequently opposed state marketing boards, agricultural research and feed banks while overseeing a systematic lack of investment in necessary infrastructure and promoting the privatisation of water and the dismantling of tariffs which generated revenue for support programmes, all leading to declining incomes for rural producers.



More recently the World Bank has promoted a shift to biofuel crops that constitutes another factor contributing to the worsening food shortages, a shift welcomed and encouraged by a number of governments, including the EU, Brazil and the US. The Director General of the UN's Food and Agriculture Organisation (FAO) Jacques Diouf said recently that 100 million tons of cereals were being diverted for biofuel production and that the quantity was estimated to increase 12-fold by 2017, while UN Secretary-General Ban Ki-moon called for a comprehensive review of policies on biofuels because the crisis in global food prices is partly caused by the increasing use of crops for energy generation and threatens to trigger global instability. The OECD has suggested that the European Union's plans to obtain 10 percent of its transport fuel from plants by 2020 will have little or no effect on climate change, and has expressed doubts that the technical means exist to produce biofuels without compromising the ability to feed a growing population. Indeed, doubts are rapidly growing as to the potential contribution of biofuels to mitigate climate change globally rather than exacerbating the problem. The IUF, the Global Union Federation whose coverage includes agriculture and food, has called for a moratorium on the expansion of biofuel production pending a full assessment of the social, employment and environmental impact. This call is set out as part of a broader analysis and set of recommendations for action in the recent IUF statement "Fuelling Hunger" http://www.iuf.org/cgi-bin/editorials/db.cgi?db=default&ww=1&uid=default&ID=579&view_records=1&en=1



Climate change is another major part of the escalating problem. Droughts are one of the main reasons for local food shortages and according to the UN's Intergovernmental Panel on Climate Change (IPCC), climate change will bring about increased droughts and desertification in some areas but heavier rains and flooding in others. This will severely disrupt food and agriculture systems all over the world and particularly in Southern Africa, South Asia and Brazil.

The role of a handful of multinational corporations that now control most the world's agricultural trade must also be borne in mind. Their effect has been to "internationalise" production, consumption and prices of food which has undermined national and local control over the very systems that are supposed to feed people. A small number of commodity trading companies and primary processors are exercising tremendous market power in global markets. These, along with food producing multinationals, many of which are integrated into energy and chemical companies, are reaping record profits while increasing numbers of people go hungry.



According to the FAO, long term approaches are needed to identify and address the root causes of food insecurity, including control and ownership patterns over land, agricultural inputs, distribution systems, as well as trade and commodity pricing and speculation. The UN Environment Programme UNEP has also pointed to the role of food-price speculation in global markets as a key factor in the crisis, and has called for a move towards sustainable agriculture as part of the solution - echoing a long-standing call of the IUF.



Yet those hoping that the April meetings of the IMF and World Bank would endorse coordination on an international level to counter the impact of the current financial, economic and food crisis were disappointed. Similar to the ITUC, which appealed for a "coordinated policy response" to a possible implosion of the financial sector, the G24 group of developing countries called for "active policy coordination" to mitigate the effects of a crisis that, though originating in advanced economies, is expected to have significant impact on poverty and food security in the developing world. But the IMF's communiqué last month refused to endorse such coordination and only called on member countries to be "coherent" in their individual actions.



"Workers and the urban poor in developing countries are the most directly affected by the high food prices and there could be no clearer manifestation of the failures of the current system than the inability of the world to feed its people. We call on world leaders to take immediate action to help those people and at the same time to prepare truly coherent long-term fundamental reform to respond effectively to the multiple crises that the global community faces at this time," Ryder said.



The ITUC represents 168 million workers in 155 countries and territories and has 311 national affiliates. Website: www.ituc-csi.org <http:www.ituc-csi.org>



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