Magazine of Socialist Action in Australia

World food crisis: Millions forced into poverty

Reading Time: 3 minutes

If you need proof that capitalism simply doesn’t work, it must be in the fact that already one sixth of the world’s population does not have enough food to eat.

The most recent massive spike in food prices has swept another 100 million into absolute poverty, surviving on less than $1 per day. “This is a silent tsunami” says Josette Sheeran of the UN World Food Programme.

World food prices have risen 83% in the last three years alone, according to the World Bank. In the year to March 2008, corn increased by 31%, rice 74%, soya 87% and wheat 130%. The devastating human consequences are ever more visible, as for the first time in 30 years we see food protests in many countries including Haiti, Bangladesh, China, India, Mexico, Yemen, Burkina Faso, Senegal Egypt, Cameroon, Indonesia, and The Philippines. World Bank president Zoellick said that 33 countries face ‘social unrest’ because of rising food prices.

But the problem is not just in ‘under-developed’ (ex-colonial) countries, but also in advanced capitalist countries. In the US, a record 28 million people live on food stamps. In Australia between 11 and 15% of the population live below the OECD measure of poverty, 50% of the median income.

The reason

There are several coinciding reasons for the price spikes: increased demand, climate crises, increasing energy prices, bio-fuel production and investor speculation.

For many years cheap commodities from China lowered world prices and kept inflation down. Now increasing demand for oil and raw material – including food – from China and India in particular are increasing prices. However, growth in foodstuff production is in relative decline. This is partially due to climate change.

In 2007, catastrophic floods hit 57 countries, while other countries’ harvests were affected by drought, fire and desertification. The sky-rocketing price of oil has increased the cost of food production, transport and the price of fertilisers, and are one reason that last year one-third of the US maize harvest went to the production of bio-fuels instead of food. (According to the World Bank a full tank of ethanol in a SUV uses the equivalent amount of maize that would produce bread and food for one person for a year.) What starker example could underline that capitalist production is about profit rather than human need?

Speculation has worsened the crisis. As the economic crisis spreads worldwide from the US, capitalists are switching from financial speculation to betting on safe commodities like food and raw materials, knowing that people need to eat to survive.

The Solution

In spite of the fact that we already possess the capacity to feed every mouth, what we produce and how it is distributed is not determined by this need. Instead, capitalist production is guided by a single motive: profit.

Trade unions will have to demand wage increases in line with inflation – linking a price index that truly reflects the cost of living to a sliding wage scale. There have also been calls for price controls, and the introduction and defence of subsidised food prices. Argentina, India and Vietnam have already either banned some food exports or placed export taxes upon them. But such measures do not automatically or permanently lower the cost of food and can drive small farmers into rebellion.

The long-term solution lies in taking control of the food supply out of the hands of speculators, the massive agriculture companies and the companies producing seeds, fertilisers etc. The labour movement must demand that these institutions be nationalised to allow for plans to be drawn up for the distribution of the current food supply to all, at reasonable prices.

Action must then be taken to immediately boost production. This would include major irrigation projects, among others, but also massive investment in agricultural techniques to remedy neo-liberalism’s chronic under-investment. Banks – which are now demanding state-funded aid to weather the financial crisis – should also be nationalised and their resources used to supply small farmers and nationalised corporations with cheap credit.

Such nationalisations would need to be democratically controlled, lest governments use this control to enrich themselves and their big-business allies. Workers’ control and management, combined with open accounting, can ensure equitable distribution without the development of a black market. Small farmers and retailers, including market traders, have to be given secure incomes and a place in food distribution.

On this basis, it would be possible to start to plan the increase in food production to meet need rather than the market. Fundamentally, this means altogether removing the system of capitalism.

By Will Kaplan


The COVID-19 pandemic has laid bare many of the problems with capitalism. The Socialist strives to explain the systemic causes of this crisis, and reports about the issues that are important to working people. We also help to organise struggles against the powers that be.

We don’t receive a cent from big business or governments. Our work is fully funded by our supporters. Even if half the people who read our website every month donated a few dollars each we would raise thousands to help our work!

We need organisations of struggle now more than ever, so if you support what we do please consider making a donation.

One-off or regular donations can be made securely HERE.