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Multinationals Make Billions In Profit Out of Growing Global Food Crisis
Speculators blamed for driving up price of basic foods as 100 million face severe hunger
by Geoffrey Lean

Giant agribusinesses are enjoying soaring earnings and profits out of the world food crisis which is driving millions of people towards starvation, The Independent on Sunday can reveal. And speculation is helping to drive the prices of basic foodstuffs out of the reach of the hungry.0504 02 1 2

The prices of wheat, corn and rice have soared over the past year driving the world’s poor - who already spend about 80 per cent of their income on food - into hunger and destitution.

The World Bank says that 100 million more people are facing severe hunger. Yet some of the world’s richest food companies are making record profits. Monsanto last month reported that its net income for the three months up to the end of February this year had more than doubled over the same period in 2007, from $543m (£275m) to $1.12bn. Its profits increased from $1.44bn to $2.22bn.

Cargill’s net earnings soared by 86 per cent from $553m to $1.030bn over the same three months. And Archer Daniels Midland, one of the world’s largest agricultural processors of soy, corn and wheat, increased its net earnings by 42 per cent in the first three months of this year from $363m to $517m. The operating profit of its grains merchandising and handling operations jumped 16-fold from $21m to $341m.

Similarly, the Mosaic Company, one of the world’s largest fertiliser companies, saw its income for the three months ending 29 February rise more than 12-fold, from $42.2m to $520.8m, on the back of a shortage of fertiliser. The prices of some kinds of fertiliser have more than tripled over the past year as demand has outstripped supply. As a result, plans to increase harvests in developing countries have been hit hard.

The Food and Agriculture Organisation reports that 37 developing countries are in urgent need of food. And food riots are breaking out across the globe from Bangladesh to Burkina Faso, from China to Cameroon, and from Uzbekistan to the United Arab Emirates.

Benedict Southworth, director of the World Development Movement, called the escalating earnings and profits “immoral” late last week. He said that the benefits of the food price increases were being kept by the big companies, and were not finding their way down to farmers in the developing world.

The soaring prices of food and fertilisers mainly come from increased demand. This has partly been caused by the boom in biofuels, which require vast amounts of grain, but even more by increasing appetites for meat, especially in India and China; producing 1lb of beef in a feedlot, for example, takes 7lbs of grain.

World food stocks at record lows, export bans and a drought in Australia have contributed to the crisis, but experts are also fingering food speculation. Professor Bob Watson - chief scientist at the Department for Environment, Food and Rural Affairs, who led the giant International Assessment of Agricultural Science and Technology for Development - last week identified it as a factor.

Index-fund investment in grain and meat has increased almost fivefold to over $47bn in the past year, concludes AgResource Co, a Chicago-based research firm. And the official US Commodity Futures Trading Commission held special hearings in Washington two weeks ago to examine how much speculators were helping to push up food prices.

Cargill says that its results “reflect the cumulative effect of having invested more than $18bn in fixed and working capital over the past seven years to expand our physical facilities, service capabilities, and knowledge around the world”.

The revelations are bound to increase outrage over multinational companies following last week’s disclosure that Shell and BP between them recorded profits of £14bn in the first three months of the year - or £3m an hour - on the back of rising oil prices. Shell promptly attracted even greater condemnation by announcing that it was pulling out of plans to build the world’s biggest wind farm off the Kent coast.

World leaders are to meet next month at a special summit on the food crisis, and it will be high on the agenda of the G8 summit of the world’s richest countries in Hokkaido, Japan, in July.

Additional research by Vandna Synghal

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The Food and Agriculture Organisation reports that 37 developing countries are in urgent need of food. And food riots are breaking out across the globe from Bangladesh to Burkina Faso, from China to Cameroon, and from Uzbekistan to the United Arab Emirates.

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Islam and communism are causing these people to starve.

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Not that you care, but just to provide some insight; the solid majority of malnourished people in the world are in nations that are net exporters of agricultural products (i.e. they have embraced "free trade"). India & Brazil are #1 & #2 (in terms of pure numbers, I don't know about proportionality). Regardless, neoliberalism isn't feeding hungry people.

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I have no idea how some people justify cultivating large amounts of soy (which is also a driving force behind the destruction of the Amazonian rainforest) for export to chicken factories in Europe, while millions in that nation (Brazil) go hungry, instead of growing grains for to meet the nutritional needs of impoverished people living there.

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Please justify for us the morality of forcefully compelling someone to grow on his own land anything other than what he wishes to grow.

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When the land was taken by theft (through colonialism), & does not serve the needs of the people, then land reform is justified...

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Yes, make false statement to discredit what I am advocating (it happens a lot around here).

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EntheogenicPeace: I have no idea how some people justify cultivating large amounts of soy (which is also a driving force behind the destruction of the Amazonian rainforest) for export to chicken factories in Europe, while millions in that nation (Brazil) go hungry, instead of growing grains for to meet the nutritional needs of impoverished people living there.

Phred: Please justify for us the morality of forcefully compelling someone to grow on his own land anything other than what he wishes to grow.

EntheogenicPeace: When the land was taken by theft (through colonialism), & does not serve the needs of the people, then land reform is justified...

Phred: So are you saying these farms rightfully belong to the descendants of the blowgun wielding natives of AD 1508 or of the descendants of Portuguese settlers of 1550 or the descendants of slaves imported by the Portuguese settlers of 1550?

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What if that group of Native Americans stole the land from another group? What if this happened hundreds of times all the way back 10 - 15 thousand years when the first Native Americans reached that land? How would an international court in your fantasy world rule on this?

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I will let all here read my posts (& yours) & decide for themselves if the global agriculture system is working sufficiently.

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If you feel like making an insightful & articulate post...

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...in defense of the status quo, where stuffing chickens with food to get them as fat as possible in highly-confined areas is more important than seeing to it that millions (including many who work the land) don't have enough to eat, then please do so & everyone can read it & decide for themselves.

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I would hope that a majority at a site such as this one would reject the notion that what is taken by overwhelming force & maintained by force...

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If nothing else, your posts thus far have given everyone reading them a blueprint for perpetual war based on insatiable greed.

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Regardless of whatever you post, I'm no longer going to respond in this thread.

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I've presented facts on malnutrition, global agricultural economics & unjust land distribution.

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One thing about your logic & values system (not about agriculture): Since the U.S. government "worked" (well, it didn't... it sent other people's children to do that) to topple Saddam Hussein's government, it must now be the owner of Iraq & its resources.

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If it wants to use them in a way that screws the economic needs & aspirations of the majority there, then so be it; it did the "work" & now owns it & can decide for itself what it wants to do. Nobody has a right to tell it otherwise. If it also wants to send other people's children to do the work to topple the Iranian theocracy, then it will also assume control there & own the place & run it how it sees fit. Syria? Cuba? Venezuela? Same thing. Therefore, any aggressor anywhere in the world, since it "worked" to invade & occupy others, now owns the place(s) & has a right to run it how it sees fit. The statement that "war is the health of the state" applies perfectly here.

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