Humongous Profit escalates Food Crisis

This may be regarded as the essence of capitalism where extreme cornucopia and impoverishment exists side by side. The most prominent reason is that the profits of multinational corporations are knowing no bounds when a substantial part of the world is reeling under acute food crisis. What is most striking is that these huge margins of profits are originiating from giant agribusinesses. They are found to enjoy lofty earnings and profits like never before though it is driving millions of people towards starvation. This has also been joined by the speculation that through every approach is driving the the prices of basic foodstuffs out of the reach of destitute ones. It is worthwhile to mention at this juncture that the prices of essential commodities like wheat, corn and rice have increased exponentially during the last one year. This atrocious situation has compelled the destitues, who spend about 80 per cent of their income on food, to move into hunger and destitution. To the latest asessment of the World Bank 100 million people, if not more, are suffering from acute shortage of food, hunger and starvation. Furthermore, to the reports of Food and Agriculture Organisation37 developing countries are in the pressing need of food. In the meanwhile food riots and violent demonstrations at several parts of the globe have become the order of the day, ranging from Bangladesh, Cameroon, Uzbekistan to the United Arab Emirates, and much more.

On the contrary, in the same period, a number of world’s richest food companies are making phenomenal profits like never before. For instnace, Monsanto, regarding its net income for the three months up to the end of February, doubled the profit margin in comparison to the same period in 2007. The margin increased from from $543m (£275m) to $1.12bn and the profit from $1.44bn to $2.22bn. The same were also recorded with Cargill, Archer Daniels Midland and Mosaic. Both of Cargill and Archer Daniels Midland recorded in the same three months an increase of 86 per cent from $553m to $1.030bn and 42 per cent from $363m to $517m respectively in respect of net earnings. In the same period Mosaic Company, the internationally famous fertiliser company, increased its income by more than 12-fold, from $42.2m to $520.8m. This has been accomplished on the basis of a shortage of fertiliser responsible for a rapid reduction in harvesting in developing countries. This entire development had been termed by Benedict Southworth, Director of the World Development Movement, as immoral. He also stated that this huge amount was in no way being channelised to the farmers in the developing world.

It should be remembered that the escalating prices arise from an increased demand, which may also be artificial to a certain extent. Again, it may be the effect of the booming condition in biofuels that require vast amounts of grain along with increasing appetites for meat. However, this is not all. To many experts, like Professor Bob Watson of the Department for Environment, Food and Rural Affairs food speculation also plays a considerable role in this crisis. This has been found in the increase of index-fund investment in grain and meat by almost fivefold to over $47bn in the past year. Even recently the official US Commodity Futures Trading Commission through special hearings tried to assess the role of food speculation in intensifying the prices.

The sitaution is indeed serious and to solve the crisis leaders in the G8 summit of the world's richest countries are meeting shortly.