US floods threaten more food price rises Phil Hearse

We are well into climate change and we are beginning to see how climate change will begin to have major social, economic and political effects. Climate change is a major system crisis, and as ever the question posed is "who will pay the price for the crisis". Of course, as we saw during the New Orleans flood and its aftermath, the answer from the capitalist class is "the poor, the third world, women and children, ethnic minorities - anyone but us".

The new flooding in the Midwest of the United States has destroyed major agricultural resources, especially grain crops. Although exact damage can't beguaged until the water subsides, early reports say that 20% of the soya crop and 10% of corn has been lost. According to the Chicago Tribune "It's too soon to say what the price impact will be, according to analysts, but dramatic production cuts in two key commodities increase the likelihood that consumers will be paying more for milk, meat, bread and poultry. Perhaps a lot more." (Chicago Tribune 15 June 2008)

The US losses make the food crisis worse, but what is the origin of that crisis? The mainstream media claims that increased demand from China and India is to blame. That is only very partly true and cannot explain the 43% increase in commodity prices oir the astounding 60% increase in food prices in the last year; the truth is that, as with oil, food prices are the victim of massive speculation by finance profiteers. Market traders who have never seen a bushel of corn or a barrel of oil, and who don't usually trade in those commoodities, are buying up vast iamounts in 'futures' ensuring an artificial shortage which means the price goes through the roof. This is the global equivalent of hoarding of foodtsuffs by gangster-traders during time of war and crisis. (1)

This criminal activity was pointed out by the representatives of Venezuela during the recent FAO conference on the world food crisis held in Rome. According to Kiraz Janicke "Venezuelan ambassador to the FAO, Gladys Urbaneja Duran, also objected to the [final conference] document saying it lacked a “genuine humanitarian spirit,” and aimed to present world hunger as merely a circumstantial crisis, when in reality it reflects a structural problem linked to the capitalist system and its mode of production and consumption.

"The current food crisis 'is the biggest demonstration of the historical failure of the capitalist model,” Urbaneja argued ...

"Urbaneja rejected the position of the US delegation, which claimed the reason for the current food crisis was rapidly increasing demand from India and China.

"The main reason for the rise in food prices isn’t growing demand from the Indian and Chinese markets, or the rise in petroleum prices,” she countered, “The main reason is that food has been turned into yet another object of market speculation.”

The key factors weakening local economics in developing countries are free trade treaties and the flooding of markets by US produce Urbaneja said."

In the epoch of neoliberalism, when domestic food production is crushed to make way for US-domiannated agribusiness, or where poor countries are forced to produce food for export when their own population is starving, the free trade model, speculation, insanities like using food for fuel ethanol, plus climate change combine together to create a toxic mix.

In March 2008 the US Department of Commerce published a flood risk map, showing above average flooding risk areas in pink/red. This map in the light of events seems eerily accurate and an induicator of catastrophes ahead.

Footnote
1. See Ian Angus' pathbreaking articles on the food crisis here and here