Instead of increasing supply, releasing food stocks and trying to end the war in Ukraine, governments and central banks are hiking interest rates which will increase the debt burden for the food-starved poor countries. As I have explained in previous posts and UNCTAD concurs, central bank interest-rate hikes do nothing to control inflation created by supply disruptions, except to provoke a global recession and an ‘emerging market’ debt crisis.
If anything proves that famine and food insecurity are man-made rather than due to vagaries of nature and the weather, it is the current food crisis that is putting millions globally close to starvation.
The Russia-Ukraine war has highlighted the global food supply disaster but this was brewing well before the war. The food supply chain has been increasingly global. The Great Recession of 2008-9 began to disrupt that chain, based as it was on multi-national food companies controlling the supply from farmers across the world. These companies directed demand, generated the fertiliser supply and dominated much of the arable land. When the Great Recession struck, they lost profits, and so cut back on investment and increased pressure on food producers in the ‘Global South’.
The cracks in these fundamentals of food supply were accompanied by rising oil prices, explosive demand for corn-based biofuels, high shipping costs, financial market speculation…
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