Food crisis: the price of capitalist greed that will kill us in hunger (report from the Philippines)

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The article that we are publishing below has been sent to us by the comrades of the Internasyonalismo group in the Philippines. It shows us the true worth of the crocodile tears shed by the Filipino ruling class, both in power and in opposition, for the suffering of the population as a result of a food crisis which is the result, not of poor harvests but of the capitalist economy's insatiable thirst for profit no matter what the cost. And the cost is paid both in the immediate by the working class and the poverty stricken masses struck by the massive increase in food prices, but also in the long term as the cynical irresponsibility of the capitalist class increasingly ruins the ecological system on which humanity's food production depends.

The article's analysis concentrates on the role of bio-fuel production and the degradation of the rice producing areas by over-farming. One point should be added in our view: the role played by the diversion of speculative capital from the US and European housing markets into the commodities markets - and in particular the futures markets for food. According to Jean Ziegler, UN Special Rapporteur on the right to food, while the use of grain for bio-fuels is the major culprit in the rise in food prices, 30% of the rise can be directly attributed to speculation on the commodities markets.[1]

The world food crisis hit the center stage of media attention only very recently, but it is a phenomenon that has been building steadily for decades. The food riots from Haiti to Bangladesh, from Pakistan to Egypt may have brought forth the issue of the soaring costs of basic commodities to the forefront of the world's attention, but the fact remains that they were all direct result of years of accumulated ravages of capitalism. For a time, national governments like the Arroyo regime tried to ignore the signs of the looming crisis, even when the prices of rice in public markets have soared to a 34-year high in the Philippines. The Philippine president even quipped that there was no such thing as rice shortage because it is "a physical phenomenon where people line up on the streets to buy rice. Do you see lines today?".[2]

The world is in the midst of an unprecedented worldwide food price inflation that has driven prices to their highest levels in decades. The increases affect most kinds of food, particularly the most important staples like corn, rich and wheat. According to UN Food and Agriculture Organization, between March 2007 and March 2008 alone prices of grains increased 88%, oils and fats 106%, and dairy 48%. A World Bank report on the other hand pointed out that in the 36 months ending last February 2008, overall global food prices increased by 83% and it expects most food prices to remain well above 2004 levels until at least 2015.[3]

In Thailand, the most popular grade of rice that sold for $198 a ton five years ago was quoted at a record high of more than $1,000 per ton on April 24, 2008 and it is expected to continue to rise according to traders and exporters due to tight supply.[4] The same phenomenon is repeated all over the world. In the Philippines alone, from the retail price of 60 US cents a kilo a year ago, the price of rice rose up to 72 US cents a kilo today. And in a country where 68 million of its 90 million inhabitants live on or under US$2 a day,[5] this has become a nightmare of horrific proportions.

The world food crisis is the inevitable result of the permanent crisis of capitalism since the late 1960s. Various national economies battled to stay afloat in a world of intense competition and capitalist profiteering in an already saturated world market. As a result, governments adopted economic policies that are geared towards encouraging the growth of industries that will inject more dollars into their respective economy rather than meeting the needs of their people. Combine that with unsustainable use of natural resources and the onslaught of industrial production for profit that is aggravating pollution levels and the emission of green house gases worldwide, humanity is now faced with the accumulated concoction of capitalist recipe for its own destruction.

In the field of agricultural production, the use of nitrogen and the over-aeration of soils to boost capitalist agricultural productions have destroyed the total productivity of the once fertile centers of agricultural production. And while it is true that the application of advanced farming methods at the onset of green revolutions worldwide brought about initial increases in productivity, we have also seen the gradual drops of agricultural production in many parts of the world. According to a report by the London-based Institute of Science in Society:

"In India, grain yield per unit of fertilizer applied decreased by two-thirds during the Green Revolution years. And the same has happened elsewhere.

Between 1970 and 2000, the annual growth of fertilizer use on Asian rice has been 3 to 40 times the growth of rice yields [8]. In Central Luzon, Philippines, rice yield increased 13 percent during the 1980s, but came at the price of a 21 percent increase in fertilizer use. In the Central Plains, yield went up only 6.5 percent, while fertilizer use rose 24 percent and pesticides jumped by 53 percent. In West Java, a 23 percent yield increase was accomplished by 65 and 69 percent increases in fertilizers and pesticides respectively.

However, it is the absolute drop in yields despite high inputs of fertilizer that finally punctured the Green Revolution bubble. By the 1990s, after dramatic increases in the early stages of the Green Revolution, yields began falling. In Central Luzon, Philippines, rice yields rose steadily during the 1970s, peaked in the early 1980s, and have been dropping gradually since. Similar patterns emerged for rice-wheat systems in India and Nepal.

Where yields were not actually declining, the rate of growth has been slowing rapidly or leveling off, as documented in China, North Korea, Indonesia, Myanmar, the Philippines, Thailand, Pakistan, and Sri Lanka.

Since 2000, yields have fallen further, to the extent that in six out of the past seven years, world grain production has fallen below consumption."[6]

The penchant for profit of a decadent system that is caught up with its own web of contradictions has resulted in the destruction of natural soil fertility to the point of exhaustion. While it is true that the world economy still produces more food than the world needs, a lot of what is produced and distributed through global capitalist trade perishes before it reaches the market and when it does arrive, millions of people just cannot afford to buy it anymore. In the final analysis, the endpoint of this crisis is the pauperization of the working class and the subjugation of the greater portion of humanity into abject poverty and destitution. Capitalism after all is primarily concern about accumulation of surplus value and never the satisfaction of the needs of society.

The "Rice crisis" in the Philippines

According to Arturo Yap, the Secretary of the Department of Agriculture of the Philippines, "We don't have a food crisis but, rather, a rice price crisis. All of us are looking for innovative solutions in our countries - how to address not only the issue of supply but also the issue of prices, how to [ensure] that poor families can eat." He said there are 5 five critical reasons behind the current "rice" situation in the Philippines that the government needs to address: First, there is a supply largely affected by an increased demand resulting from rising population; Second, the effects of climate change; Third, the booming demand for bio-fuels; Fourth, continuous conversion of agricultural lands to non-agriculture use; And finally, there is a neglect of irrigation facilities.

At first glance, one may find the so-called causes of the Philippine "rice" crisis as valid on its own. But the fact is behind it all is the undeniable truth that the very framework from which those enumerated causes arose is the ultimate caused of them all - the capitalist framework of production worldwide. First, the supply that is supposed-to-be affected by the increased of demand from rising population is but an excused of the fact that what has been produced by the world capitalist economy is more geared towards the production of surplus value than the satisfying of the needs of humanity. Second, the effect of climate change to agricultural production is by itself also a direct result of the capitalist framework of production. For instance, it is not industrialization itself that is responsible for changes in climate patterns, but "capitalism's overriding quest to maximize profits and its consequent disregard for human and ecological needs, except insofar as they coincide with the goal of wealth accumulation."[7] There is no doubt that there has been an appalling degradation of the environment at the hands of a world capitalist system driven by the relentless quest for profits and economic expansion. But the fact is, all bourgeois states, including the Philippine state that is recognizing the heavy costs of environmental degradation, are the same states that are protecting the profit motives of their respective national capitals and their political puppets to sabotage research and development of more environmentally friendly alternative fuel sources to power industrial production. Third, the so-called adverse effect of the booming demand for bio-fuels to agricultural production is by itself an outcome of all the states' policy, including Arroyo's government, to search for alternative fuels to ease the burden of the their industries' dependence on foreign oil supply. In addition to this, lowering the cost of oil expenses for "social" purposes also increases the capacity of each state for military production and war. It is not as much as environmental concerns that drives the policy of bio-fuels development, but the need of each national capital to insulate itself against the rising prices of crude oil in the world market and even to the extent of "aiding" the war efforts of all bourgeois states. It is interesting to note that as early as the Second World War, bio-fuels have already been used in the war efforts of both the Allied and Axis powers like the United States and Nazi Germany. In the case of the Philippines, logic of redirecting farm produce from the table to the needs of the bio-fuels industry is in consonance to the efforts of the Philippine government to produce more high value cash crops that can help sustain its own quest for additional sources of dollar revenues. Fourth, the continuous conversion of farmlands into subdivisions, golf courses, malls and industrial complex is also a direct result of government policies in agriculture, especially in the Philippines. The decades old Comprehensive Agrarian Reform Program (CARP) of the Philippine government was both a failure and a disaster. It is not only that CARP is a mystifying and reactionary program of the Filipino bourgeoisie that is supported by some Leftist organizations, but also because it is not an economically viable program. In the age and time where intense capitalist competition in the world market destroys small agricultural producers due to high cost of farming and rising debt, farmers are either forced to abandon their lands or submit themselves to precarious arrangements as contract growers of big corporations, a practice that is prevalent in Mindanao region of the Philippines.[8] As to the perennial problem of the utter neglect of irrigation systems in the Philippines, it is more a question of government mismanagement and corruption, an expression of the decomposition of ideological forms in capitalist decadence, where self-indulgence and the "every man for himself" mentality reigns supreme.

As what can be expected from a bourgeois state confronted with a crisis of great magnitude in stage of capitalist decadence, the Philippine state through the Arroyo regime responded to the crisis in the form of active state intervention - a move that is supported and fiercely advanced by all Leftist formations in the Philippines together with their effort to call for a legislated wage increase. As the pangs of the crisis intensifies, so as the mystifying efforts of the state to contain it. The Left and Right of the capital are one in raising the specter that "only the state" can save the workers and the poorest of the poor from the pangs of hunger and destitution. They completely ignore the fact that the state that they encourage to intervene more is the very organ that imposes the bourgeois dictatorship that is protecting the very source of enslavement and suffering - capitalism. In trying to be more "radical" in form and substance, various leftist currents pressed for the absolute and aggressive control of the state to society.

The Leftists "criticism" that what the state is doing is "not enough" - "raising" budget for agriculture, giving "rice subsidy" to the "poorest of the poor" and the state competing with private traders in buying and selling rice - and that it lacks "political will" clearly show that the former want absolute state control. They even go to up to the point of brandishing their age-old dogma of party dictatorship and totalitarianism - the complete and all encompassing control of the state like the so-called socialist countries that they defended as the "remnants" of the October Revolution.

There is no solution to the crisis within capitalist system

The Right and Left of the capital are one in advancing programs of mystification that hides the fact that there is no solution to the crisis within the system. The contradiction between the forces and the relations of production is already at its peak. No reformist and temporary interventions by the state can alter the fact that whatever solution it can formulate within the bulwarks of capitalism will only lead to more intense crisis and destruction of the environment. Every effective solution that it can formulate will only mean a much heavier burden to the working class and the toiling masses. Even if the state will exercise absolute control of the economic life of society, the crisis will continue to intensify as a result of the saturation of the world market and inability of the population to absorb the excessive production of commodities within a system that owes its life to competition and profit. History has already proven that state capitalism and totalitarianism are futile reaction of capital faced with permanent and intensifying crisis. The fall of USSR and Eastern Europe in 1990s bears witness to this fact.

The solution of the crisis is not within the dying system but outside of it. It is in the hands of the only revolutionary class bearing the seed of future communist society - the working class. The solution is not within the bulwarks of capitalism, nor is it in the path of reforms and peaceful transformation of capitalism to socialism. The solution is not within absolute control by the state of economic life of society, but in the destruction of capitalism itself along with the bourgeois state that serves as it machinery of domination.

In other words, the solution of the food crisis is destroying the system of production based on market and profit and establishing a system based on the absolute production for human needs. And the first step towards this direction and toward the revolutionary transformation of society is not in the legalistic and reformist approach of various leftist organizations, nor is it in the hands of an absolutist state intervention. It is not through the peaceful and "legalistic" road of "lakbayan" (protest caravans and long marches) popularized by Leftist formations in the Philippines. It is not through the road of trade unionism either. It is in the hands of the working class itself[9] that is confronting the attacks of the capital in its own terrain through its own unitary organs of struggle - the workers' assemblies, the prefiguration of the workers' councils.

Workers of the world, unite! It is only through this path of class unity that will usher in the inevitable culmination of the proletarian movement: the world proletarian revolution.

Internasyonalismo, 7th May 2008

[1] See the Environment News Service for a report in English, or the United Nations site for a report in French.

[2] Gil C. Cabacungan Jr., Arroyo warned on rice crisis, Philippine Daily Inquirer, March 24, 2008.

[3] "The rising trend in international food prices continued, and even accelerated, in 2008. U.S. wheat export prices rose from $375/ton in January to $440/ton in March, and Thai rice export prices increased from $365/ton to $562/ton. This came on top of a 181 percent increase in global wheat prices over the 36 months leading up to February 2008, and a 83 percent increase in overall global food prices over the same period.(...) The observed increase in food prices is not a temporary phenomenon, but likely to persist in the medium term. Food crop prices are expected to remain high in 2008 and 2009 and then begin to decline as supply and demand respond to high prices; however, they are likely to remain well above the 2004 levels through 2015 for most food crops" (Rising Food Prices: Policy Options and World Bank Response, p. 2, our emphasis).

[4] "Bangkok, April 24 - Benchmark Thai rice prices leapt more than 5 percent to a record high above $1,000 a tonne on Thursday, and traders in the world's top exporter warned of further gains if buyers Iran and Indonesia step into the market". (Reuters, Thai Rice Climbs to New Record Above $1,000 a Tonne, 24/04/2008 - posted on Flex News)

[5] National Statistics Office, 2006 Family Income and Expenditure Survey, Released Date: January 11, 2008.

[6] "Beware the New ‘Doubly Green Revolution'", ISIS Press Release 14/01/08

[7] Como, "Imperialist chaos, ecological disaster: Twin-track to capitalist oblivion", International Review n°129 - 2nd Quarter 2007, p.2

[8] "The Soyapa Farms Growers Association employs 360 contract workers, both adults and children. The association was formed at the initiative of Stanfilco six years ago, when it convinced members to grow bananas. It's not a cooperative-each grower retains ownership of their individual plot, and each has an individual contract to sell their bananas to Dole." (Banana War in the Philippines - Posted on July 8th, 1998 by Melissa Moore at

[9] "That the emancipation of the working classes must be conquered by the working classes themselves, that the struggle for the emancipation of the working classes means not a struggle for class privileges and monopolies, but for equal rights and duties, and the abolition of all class rule." (The International Workingmen's Association, General Rules, October 1864, our emphasis).

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