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Market Famines

Yves Engler

13th February, 2009

The millions of people in Niger who died during the recent famines, did so because the IMF pressured its government to tax food and the poor simply couldn't afford to save themselves

Starving children get media attention, well-fed imperial economists don’t. Yet modern history shows they are usually two sides of the famine coin.

Over the past month thousands have died of starvation in Niger, but all the while food has been available. The poor simply don’t have the money to pay rising food costs, so they starve.

In the spring the International Monetary Fund pressured Niger’s President Mamadou Tandja to implement a 19 per cent value added tax with foodstuffs included. The tax was added even though food costs rose more then 75 per cent in the previous five years. Concurrently the main income of country’s nomadic – livestock – fell a quarter in value, leaving the poor with less money to purchase basic foods.

When international groups began drawing attention to the worsening food crisis, the interests of the ‘market’ were placed above those of the poor. ‘The Niger government,’ the August 7 London Observer reveals, ‘under instruction from the IMF and European Union, at first refused to distribute free food to those most in need.’ The powers that be did not want ‘to depress the market prices’ that benefited wholesalers and speculators.

Two summers ago famine hit Ethiopia not long after ‘aid’ institutions controlled by western governments pressured the country to eliminate intervention in the agricultural sector. The Wall Street Journal reported that, ‘the government, under pressure from international lenders and aid donors, was pulling out of the grain markets in favour of an underfunded and inexperienced private sector. However, little provision was made to support this fledgling free market with storage facilities, transport and financing.’ (July 1, 2003) At first, reducing government involvement didn’t appear to be a problem since, according to the newspaper, Ethiopian ‘grain harvests in the latter half of the 1990s averaged 11 million tons annually, about four million tons more than in the 1980s. In the bumper years of 2000 and 2001, harvests hit more than 13 million tons.’ Improved harvests concealed the wrongheaded nature of market-based agricultural policies. Larger harvests actually exacerbated the eventual food shortage.

As the state reduced its role as price stabiliser, farmers began to produce less, since big yields brought less income. ‘A 220lb bag of corn that could go for $10 in good times,’ the Journal reported, ‘was getting as little as about $2 – and that was less than half the standard production costs.’ Farmers who produced for sale decreased their production or focused on subsistence crops. Suddenly food became scarce and thousands died.

Similar to the situation in Ethiopia, in 2002 there was a famine in Malawi. The World Bank, IMF and EU pressured the Malawian government to reduce its grain reserves from 167,000 tonnes down to 30,000t. Malawi was pressured to reduce grain reserves for ideological reasons and to pay off a $300m loan to a South African bank. The sell-off caused a drop in local prices, reducing many farmers’ ability to produce. It also resulted in a smaller drought reserve. In human terms, these ‘market’ policies resulted in the unnecessary deaths of countless individuals.

Pressure to reform agricultural security has developed across Africa. ‘The [World] Bank has long prodded poor African governments,’ according to the Journal, ‘to privatise their agriculture sectors and abandon any type of farming subsidies.’ Likewise, IMF ideologues oppose the state as food security guarantor. Commodity boards that fixed producer prices and collected farmers’ produce are being abolished and the task is being handed over to an incapable or unwilling private sector. In addition, subsidies to small farmers are being curtailed.

The supply of food, however, is too important to be left up to the market, which is why most rich countries have supply management systems and plans for food security. Many African nations are under huge pressure to follow policies that no rich country follows. Unfortunately, unnecessary famines exacerbated and even brought about by forced economic liberalisation are nothing new. In Late Victorian Holocausts Mike Davis recounts the circumstances surrounding a number of horrific famines in India, Brazil and China between 1870-1900.

In the late 1870s and 1890s, between 30 and 60m people died during famines in those three countries. The reason, Davis argues, is that ‘free’ market reforms exacerbated ecological devastation. British imperialists undermined domestic agricultural security, consciously destroying China and India’s long-established food security systems. According to a British statistician, who analysed Indian food security measures in the two millennia prior to 1800, there was one major famine a century in India. Under British rule it was one every four years.

On top of the roughly 20 million Indians who died from starvation, India’s economy stagnated. In 1800 India’s share of the world’s manufactured product was four times that of Britain. By 1900 India was almost totally under British control and the ratio was 8-1 in England’s favour. Likewise African economies that have adopted neoliberal reforms have stagnated or declined. If the North American media allowed Niger’s starving child a few words she might tell the neoliberal economist, ‘free markets and food don’t mix, unless you’re trying to kill me.’

This article first appeared in the Ecologist October 2005

 

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