World / July 31, 2023

What Are the Real Reasons for the Global South Food Crisis?

Don’t ignore the role of financial speculation.

Anuradha Chenoy
Photo of cupped hands holding grain
Dhulki B.K holds junelo, a locally grown grain, in the district of Bajura in Nepal on March 5, 2022. (Rebecca Conway / Getty Images)

The global food crises, exacerbated by the Black Sea grain initiative’s end, disproportionately impacts  the Global South.  But will the resumption of these grain shipments bring closure to the extreme hunger rampant in many countries? Serious research provides solutions, if the underlying and real reasons for the crises are recognized and addressed. 

Factors like war, the breakdown of distribution and transportation (Russia-Ukraine), changed climate patterns (Pakistan floods), reduced exports from major exporters (India’s ban on selective rice exports) lead to price increases. However, decades of research has established that there is enough food production to feed the world; the problem of food insecurity lies elsewhere.

For example, wheat prices started increasing in 2021 and were pushed up after the Russian invasion of Ukraine and the imposition of sanctions. But global wheat production increased in the same period and could have compensated for this gap. Four  companies (Archer Daniel Midland, Bunge, Cargill and Louis Dreyfus) control 70 to 90 percent of global grain trade. They have made huge profits during the war as food grains became unaffordable and 345 million experience acute food insecurity. Olivier De Schutter, United Nations special rapporteur  on extreme poverty argued that these companies could have done more to prevent the hunger crisis in the first place. As African Union Chairperson and Senegal President Macky Sall said Africa has become collateral damage in the sanctions game. 

Similarly, fertilizer costs and natural gas prices soared after sanctions were placed on Russia. But studies like one from the Institute for Agriculture and Trade Policy reveal that the profits of the world’s nine major fertilizer companies increased even more than the rise in costs. Research from the International Food Policy Research shows that such concentration increases market exertion allowing producers to take advantage of price spikes in raw materials to the detriment of farmers. So this crisis was an opportunity for the MNCs—while billions of small farmers in low income countries were bankrupted. 

Private investment and foreign aid promote increased use of chemical fertilizers, and the use of high yielding and genetically modified seeds. These changes have made farmers in the Global South vulnerable. (Of equal concern, it is worth noting that these chemical fertilizers are big emitters of greenhouse gasses.)

Financial activity in commodity futures markets has also hiked prices. A report by the G-20 (2012) showed “excessive volatility” over future prices leads to serious flaws in the price systems and negatively impacts developing countries. Recommendations from experts like at the Global Development and Environmental Institute, among others, call for more effective reforms to reduce financial speculation.

Current Issue

Cover of April 2024 Issue

The FAO warns that the number of people facing acute food insecurity and requiring life-saving food assistance is growing at an alarming rate. Urgent steps are required to address the global food crises in a holistic way. Vulnerable countries might be supported in creating food reserves and buffer stocks. Further, there is an urgent need to limit the massive expansion and exposure of crops and lands to biofuels. Industrialized countries like the US for example use corn and soya for ethanol and feeding livestock. The competing demands drive prices upwards and create artificial shortages. The practice of  leasing  millions of acres of  lands to industrial agriculture, as in Africa also needs to be controlled. Such unregulated markets compromise the food production capacity of developing countries and dispossess small farmers. Food importing countries are then forced to use their dollar reserves to import food and fuel; the result,they fall into the debt trap. 

Experience establishes that agroecological technologies like crop rotation, natural fertilizers and pesticides and alternatives that were traditionally used should be encouraged and subsidized by governments in a rational and sustainable way. These would boost productivity, preserve soil quality,  increase output, and protect both farmers and land. Since the 18th G-20 Summit will take place in India in September, and global agriculture is high on the agenda, new regulations related to food security should be passed. 

The link between the producers and consumers of food must not be broken. The Global South is dependent on food crops cultivated on small farms that reach consumers through local markets. When  food systems are dominated by multinational corporations, production and distribution is overtaken by them, and this link is threatened. As Michael Fakhri, UN Special Rapporteur on the Right to Food argues that without taking into account peoples’ real needs the disconnect will continue. A break in the link between local supply and local consumption signals a break of the global food economy. Global policy makers need to make serious and urgently needed changes that take into account the food system as a whole.

Thank you for reading The Nation!

We hope you enjoyed the story you just read. It’s just one of many examples of incisive, deeply-reported journalism we publish—journalism that shifts the needle on important issues, uncovers malfeasance and corruption, and uplifts voices and perspectives that often go unheard in mainstream media. For nearly 160 years, The Nation has spoken truth to power and shone a light on issues that would otherwise be swept under the rug.

In a critical election year as well as a time of media austerity, independent journalism needs your continued support. The best way to do this is with a recurring donation. This month, we are asking readers like you who value truth and democracy to step up and support The Nation with a monthly contribution. We call these monthly donors Sustainers, a small but mighty group of supporters who ensure our team of writers, editors, and fact-checkers have the resources they need to report on breaking news, investigative feature stories that often take weeks or months to report, and much more.

There’s a lot to talk about in the coming months, from the presidential election and Supreme Court battles to the fight for bodily autonomy. We’ll cover all these issues and more, but this is only made possible with support from sustaining donors. Donate today—any amount you can spare each month is appreciated, even just the price of a cup of coffee.

The Nation does not bow to the interests of a corporate owner or advertisers—we answer only to readers like you who make our work possible. Set up a recurring donation today and ensure we can continue to hold the powerful accountable.

Thank you for your generosity.

Anuradha Chenoy

Anuradha Chenoy, Adjunct Professor, Jindal Global University, retired from Jawaharlal Nehru University.

More from The Nation

Screenshots of media coverage of the World Central Kitchen attack.

The Outrage Over the World Central Kitchen Strike Shows the Strength of the Palestine Movement The Outrage Over the World Central Kitchen Strike Shows the Strength of the Palestine Movement

It's enraging that it's taken so long for this kind of backlash to happen. But it's happened only because of the tireless work of people dedicated to Palestinian liberation.

Y.L. Al-Sheikh

Men stand in front of an election campaign hoarding of the Bharatiya Janata Party featuring Indian Prime Minister Narendra Modi, in Varanasi on April 10, 2024, ahead of India's upcoming general elections.

Is India Still a Democracy? Is India Still a Democracy?

Narendra Modi has hollowed out institutions and targeted opponents, all the while sowing interethnic tensions.

Between Us, We Cover the World / Christophe Jaffrelot

Palestinians standing next to a vehicle in the central Gaza Strip, where employees from the World Central Kitchen (WCK) were killed in an Israeli air strike.

How US Intelligence and an American Company Feed Israel’s Killing Machine in Gaza How US Intelligence and an American Company Feed Israel’s Killing Machine in Gaza

Because it isn’t so much the bombs that kill but the list that puts civilians in the way of the bombs.

James Bamford

A demonstrator holds up a sign with

These Americans Won’t Pay for the War on Gaza These Americans Won’t Pay for the War on Gaza

As the Biden administration continues to give weapons to Israel, thousands of people across the country are protesting by refusing to pay their taxes.

Lucy Dean Stockton

Israeli Jews and Palestinians Standing Together

Israeli Jews and Palestinians Standing Together Israeli Jews and Palestinians Standing Together

Interview / July 31, 2023 What Are the Real Reasons for the Global South Food Crisis? A conversation about the biggest Jewish-Palestinian grassroots group in Israel. Jon Wiener…

Interview / Jon Wiener

Palestinians return to inspect the destruction following the withdrawal of Israeli troops in Khan Younis, southern Gaza, on Wednesday, April 10, 2024.

What Is Palestine’s Future After the Carnage? What Is Palestine’s Future After the Carnage?

Solutions crafted by outsiders to avoid, suppress, and restrict Palestinian agency are bound to fail. Palestinians should decide their own destiny.

Tony Karon and Daniel Levy