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	Scarcity in an Age of Plenty by The Guardian / Financial Times   June 16, 2008   Scarcity in an Age of Plenty, by Joseph Stiglitz.   Around the world, protests against soaring food and fuel prices are mounting. The poor and even the middle classes are seeing their incomes squeezed as the global economy enters a slowdown.   In the US, real middle-class incomes have not yet recovered to the levels attained before the last recession in 1991.   When George Bush was elected, he claimed that tax cuts for the rich would cure all the economy’s ailments. The benefits of tax-cut-fuelled growth would trickle down to all, policies that have become fashionable in Europe and elsewhere, but they have failed. Tax cuts were supposed to stimulate savings, but household savings in the US have plummeted to zero.   They were supposed to stimulate employment, but labour force participation is lower than in the 1990s. What growth did occur benefited only the few at the top.   The financial sector has failed to create products to help ordinary people manage the risks they faced, including the risks of home ownership. Millions of Americans will likely lose their homes and, with them, their life savings.   The world needs to rethink the sources of growth. If the foundations of economic growth lie in advances in science and technology, not in speculation in real estate or financial markets, then tax systems must be realigned.   Why should those who make their income by gambling in Wall Street’s casinos be taxed at a lower rate than those who earn their money in other ways?   Capital gains should be taxed at least at as high a rate as ordinary income. In addition, there should be a windfall profits tax on oil and gas companies.   Given the huge increase in inequality in most countries, higher taxes for those who have done well — to help those who have lost ground from globalisation and technological change — are in order, and could also ameliorate the strains imposed by soaring food and energy prices. Countries, like the US, with food stamp programmes, clearly need to increase the value of these subsidies in order to ensure that nutrition standards do not deteriorate. Those countries without such programmes might think about instituting them.   Two factors set off today’s crisis: the Iraq war contributed to the run-up in oil prices, including through increased instability in the Middle East, the low-cost provider of oil, while biofuels have meant that food and energy markets are increasingly integrated.   Although the focus on renewable energy sources is welcome, policies that distort food supply are not. America’s subsidies for corn-based ethanol contribute more to the coffers of ethanol producers than they do to curtailing global warming.   Huge agriculture subsidies in the US and the European Union have weakened agriculture in the developing world, where too little international assistance was directed at improving agriculture productivity.   Development aid for agriculture has fallen from a high of 17% of total aid to just 3% today, with some international donors demanding that fertiliser subsidies be eliminated, making it even more difficult for cash-strapped farmers to compete.   Rich countries must reduce, if not eliminate, distortional agriculture and energy policies, and help those in the poorest countries improve their capacity to produce food.   * Joseph Stiglitz is university professor at Columbia University. In 2001, he was awarded the Nobel Prize in economics. His latest book is Making Globalization Work.   June 9 2008   Food aid declines to near 50-year low. (Financial Times)   Food aid volumes sank last year to their lowest level in almost 50 years as rising agricultural commodity prices – particularly for wheat, corn and rice – hit donors’ budgets, a United Nations report will say on Tuesday.   The Food Aid Flows report estimates global deliveries dropped last year to 5.9m tonnes – the lowest level since records began in 1961 and 15 per cent below the figure for 2006. The previous record low was set in 1973, also when the world was facing a food crisis.   The report, by the UN’s World Food Programme, warns that the resources available for food assistance need to increase in order to address negative effects of higher prices. “There is an urgent need to reverse this [downward] trend,” the report says.   “Prices are likely to remain high in the next few years. This could jeopardise the prospects for the Millennium Development Goals and [the] fight against hunger and malnutrition.”   The warning comes as corn prices hit a fresh high of $6.73 a bushel on Monday, up 48 per cent since January. Soyabean and wheat prices also moved higher, further threatening to increase the cost of food aid this year.   Traders said the increase in charges for foodstuff commodities was due to a surge in farming costs caused by record high oil and fertiliser prices, and bad weather in the US, Argentina and China.   Global food aid volumes have declined steadily since 1999, when they stood at 15m tonnes, but the drop accelerated last year as agricultural commodity prices surged.   Wheat prices rose by 122 per cent between 2000 and 2007, corn prices climbed 86 per cent and rice prices surged 62 per cent. The cost of shipping food also doubled last year, further eroding donors’ budgets.   Henk-Jan Brinkman, head of food security, policy and markets at the WFP and one of the report’s authors, said the quantities of agricultural commodities that could be bought declined as prices rose because most food aid organisations had fixed budgets and little availability to raise more funds.   The increase in costs hit non-governmental organisations’ food aid operations particularly hard, with a 19 per cent reduction in volumes last year. Multilateral organisations, such as the WFP, suffered a 14 per cent decline, while bilateral government-to-government aid schemes, with deeper pockets fell 13 per cent. Visit the related web page
	Small Farmers "underserved" by Rome Food Summit say advocacy groups by Ida Wahlstrom OneWorld   Jun. 5, 2008   As the UN summit on the global hunger crisis comes to a close today, advocacy groups are demanding greater attention be afforded small-scale and women farmers.   Several groups representing small farmers complained that they were not given much chance to participate, even as heads of state talked about programs to help them.   “The serious and urgent food and climate crises are being used by political and economic elites as opportunities to entrench corporate control of world agriculture and the ecological commons,” said La Via Campesina, an organization of farmers, indigenous people and farm workers, in a statement.   "The main causes of the world food crisis are not being dealt with and the world"s food producers -- the farmers, fisherfolk, agricultural workers and indigenous people -- have been shut out of the discussion," said Via Campesina, a global social movement representing more than 150 million small producers from five continents.   In fact, "rural women produce between 60 and 80 percent of food in most developing countries," pointed out Yifat Susskind from MADRE, an international women"s human rights organization. For this reason, Susskind continued, "women"s human rights and capacity to produce food should be central to a global New Deal on agriculture."   Farmer and civil society leaders held a peaceful demonstration in Rome on Tuesday, the first day of the Summit, to voice their concern that millions are going hungry while "the corporations that control the global food system are making record profits."   The farmers and their representatives were forcibly removed from the Summit premises after a demonstration outside the press room expressing their "outrage" that issues of corporate control and food speculation were not being adequately addressed at the Summit.   While activists say many issues were left out, world leaders did discuss "the need to expand emergency aid and social protection; calm the markets with sound trade, reserve, and regulatory policies; change the biofuels policies that spur high food prices; and invest much more in agriculture," said Joachim von Braun, director general of the International Food Policy Research Institute (IFPRI).   Food shortages and rising prices have increased malnutrition and spread starvation where food was already scarce. Some 850 million people around the world were short of food before the crisis began to escalate, says the UN, which believes that number will soon approach 1 billion.   Analysts blame the escalation of the food crisis largely on rising fuel costs, erratic weather patterns, the widespread diversion of food crops for biofuels, and, paradoxically, rising incomes in poorer countries, which have increased food demand and diminished global reserves. As food has become scarcer, financial speculators have become more active, buying up food at low prices and driving prices even higher.   As the Summit was wrapping up, MADRE issued the following statement: In Guatemala, women from MADRE"s sister organization now spend 80 percent of their sweatshop earnings on food. In Port-au-Prince, Haiti, where MADRE works, mothers are preparing "cookies" of mud, oil, and sugar to feed hungry children. In Sudan, women MADRE works with now routinely go without food in order to ensure a meal for their children. In Iraq, where food costs now exceed many people"s incomes, MADRE is reaching out to women struggling to feed their families.   Vivian Stromberg, MADRE Executive Director, said today, "We know that putting money into women"s hands ensures that it will be used to meet household needs. By partnering with local organizations, MADRE seeks to strengthen community-based women"s initiatives and builds women"s capacity to respond to future crises."   This is coupled with MADRE"s efforts to create local, sustainable solutions to hunger. These include women-run seed banks in Nicaragua and Panama, agricultural cooperatives in Sudan and Mexico, and small-scale organic farms in Guatemala and Kenya.   Via Campesina published the following information on the Web site of their U.S.-based partner organization, Grassroots International: “The issues of corporate control and speculation, which are leading causes of recent spikes in food prices, are not being discussed by the government delegations and the international agencies meeting in Rome to debate solutions to the crisis.   "We are outraged that such fundamental aspects of the food crisis were nowhere on the agenda for the Summit," says Paul Nicholson, member of the International Coordinating Committee of Via Campesina.   Activists contrasted the record profits of agribusiness corporations during the latest reporting financial quarter of 2008 with the estimated 100 million people in the world who now, alongside 800 million or so others, are hungry because they cannot afford to eat. Profits for Monsanto, the world"s largest seed company, were up 108 per cent, while Cargill and Archer Daniel Midlands, the world"s largest food traders, registered profit increases of 86 and 42 per cent respectively. Profits for Mosaic, one of the world"s largest fertiliser companies, rose 1,134 per cent.   Via Campesina said the main causes of the world food crisis are not being dealt with and that the world"s food producers -- the farmers, fisherfolk, agricultural workers and indigenous people -- have been shut out of the discussion. In previous high-level FAO events, civil society was given more space to express its views and to have a dialogue with the delegates.   "We are concerned that this Summit will only reinforce corporate control of the food system and lead to a further destruction of the way of life of indigenous peoples and their survival," says Saul Vicente Vasquez of the International Indian Treaty Council and one of the supporters of the action. "It is time for indigenous people and other food producers to take charge of food policy."   * Read "The world food summit: a lost opportunity", by Sue Branford from Open Democracy via the link below. Visit the related web page
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