Who will benefit from the soaring grain price

15:22, May 05, 2008

The skyrocketing price in grain is descending into a sweeping grain crisis endangering the global grain security. The U.S-led affluent countries are currently producing powerful food industry groups and even conglomerates, which tend to concentrate all these years. The food groups have input in a wide range of agricultural areas covering seeds, fertilizers, pesticides and machinery. As a result, the concentration has distorted the framework of the global agricultural production as well as the food systems, and made the groups and conglomerates the biggest winner in the elusive crisis with no signs to cease,

Grain price set up a new wave of crisis

Due to the fact that U.S capitalizes on most of its agricultural subsidies to commercialize the agricultural products, the prices of these products have been forced low. The powerful food industry groups and conglomerates, therefore, emerged and stepped toward concentration throughout the years. Apart from the input in grain production, the power of these groups has extended to the food sales. The U.S has accounted for 50 percent in the global top ten retailers. Thus, a food chain has come into being with its production process totally under the control of the capitalized agriculture.

Developing countries confront challenges

The capitalized food groups further reached their hands out to other countries. They are convinced that if various countries and nations establish the self-sufficient food systems of their own accord, the economic interest of these food groups as well as the state interest of the U.S would be diminished. Therefore, the merchants of the food groups would collaborate with politicians to push forward the international free trade of the agricultural products, and incorporated it into the system of World Trade Organization in 1990s.

Presently, the U.S is playing the double role of being both the largest exporter and the largest importer of agricultural products, as it is considering building up a monolithic world grain system monopolized by the U.S. Under the framework of free trade of agricultural products, the leading agriculturally developed countries have kidnapped the whole world’s agricultural production and confined the agricultural production of deferent countries to the same chariot. The weak countries have no alternatives but either to subsidize the grain production or to surrender the grain market. It is evident that the answer will fall on the latter, as the weak countries suffer a severe shortage of fund and are thus unable to subsidize their farmers.

The U.S has in recent years resorted to the weapon of grain, and successfully destroyed the self-sufficient grain systems in many developing countries. The U.S practice conducted in these developing countries include putting their farmers out of business, transforming their agriculture into genetic, petroleum, chemical and machinery industries, forcing them to purchase seeds, fertilizers, pesticides and machinery produced by the U.S.

Several decades ago, for example, the U.S food companies processed mackerel and tuna---the cheap nutrient for Ghanaians into canned food and pet’s food, and it sold well in the U.S market, resulting in the fact that the poor Ghanaians could not afford the fish with its selling price suddenly shooting up. Ghana, as the supply base of raw materials and cheap labor, gained merely 9 percent of the sales turnover.

According to the International Monetary Fund, the inflating grain price is mainly caused by the sudden rise in grain demands. However, the rise in grain demands is due to the wild pursuit of biofuel by the developed countries, in which the U.S also leads the trend. Analysts estimated that 30 percent of the cereals in U.S were used to produce ethanol in 2007, doubled compared with 2006.

By People's Daily Online

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