The war on Ukraine, food insecurity and capitalism

June 24, 2022
Grain supply shortages have been worsened by Russia's war on Ukraine, but the problem pre-existed the war. Photo: Levi Rotich/Pexels

The war in Ukraine has made an already critical food crisis worse. Fingers point to grain supply shortages as an almost causal factor in global food insecurity, but the problem is far deeper and linked to the economic system that turns food into a profitable commodity.

Ukraine and Russia account for more than a third of global grain production. From the moment the first shot was fired, it was obvious that grain shipments and production would be seriously dislocated.

The food crisis did not start with Russia’s war. Famine, shortages of staple foods and food insecurity has developed alongside the deeper crisis of capitalism.

Acute hunger levels — the number of people who can’t meet short-term food consumption needs — rose by nearly 40 million last year. War has always been the main driver of extreme hunger and now the Russia-Ukraine war is adding to the risk of hunger and starvation for many millions more.

What had always been a problem became even more acute from the time of the global financial crisis (GFC) of 2008. In the years before, multinational corporations had taken control of global food production.

One billion people across the world work in agriculture and food production. Just 10 multinational corporations — Nestle, Coca Cola, Unilever, Danone, General Mills, Kellogg, Mars, Associated British foods and Mondelez — control the production and distribution of the world’s food.

These companies determine what is to be grown, how land will be used and how production will be distributed. Above all else, it is profit-driven.

The GFC meant a massive cut in profits, which led to less investment and a rise in poverty in the Global South.

World Bank figures show that global food production rose steadily for decades but, after the economic collapse following the GFC, production fell to 1965 figures.

The food crisis is global. Most obviously this affects those in the developing world, but the poor in the affluent West are becoming poorer and food insecurity becomes a sign of this crisis.

Food insecurity is a feature of poverty. In the year before the pandemic, 15 million children in the United States were living in poverty. One in six Australian children live in poverty.

People’s capacity to feed themselves depends on the health of capitalism. Aspiring investors are able to trade on a food and beverage futures market. The morality of such investing is appalling, but no more than buying shares in companies like Raytheon that manufacture weapons for the armies of the world.

The rationale behind the capitalist economy is simple: if it is profitable, it is good.

The global food crisis shows the downside of such a rationale. During the GFC, food prices spiked. Things briefly settled before spiralling again in 2011. During the pandemic, we saw another crisis in food production, distribution and pricing. Now, there is the war in Ukraine.

Absolute global poverty had been declining, but since the GFC, the trend has reversed. Oxfam reported in April that as a result of growing global debt, the pandemic and the war in Ukraine, there may well be more than 800 million people around the world living in acute hunger by the end of the year.

The problem is so big the International Monetary Fund (IMF) is concerned it will lead to political instability.

IMF Managing Director Kristalina Georgieva said in April that for several countries, the food crisis comes on top of a debt crisis. 

“Since 2015 the share of low-income countries at or near debt distress has doubled, from 30 to 60%. For many, debt restructuring is a pressing priority … We know hunger is the world’s greatest solvable problem. A looming crisis is the time to act decisively — and solve it,” she said.

The IMF may call for “decisive” action but the IMF facilitates capitalism’s growth and helps to ensure that nation-states remain in thrall to capitalism. An engine house of capitalism, such as the IMF, is unlikely to tackle the causes of the problem.

In the meantime, the war rages on and, with it, the problems of food, hunger and misery are exacerbated. The establishment media will continue to incorrectly focus on the war as being the single factor causing such hardship.

Whether Ukraine mined its ports, thereby making grain transportation virtually impossible, is not the issue. Whether Russian grain is or is not affected by embargoes, or whether it is blocking exports, is not the issue.

The fact remains that the war is making a crisis of capitalist production even worse.

Releasing global food stocks, increasing supply, along with serious attempts to end the war rather than prolonging it are all necessary.

International institutions like the World Bank and the IMF have done nothing to ease the global debt crisis. US treasury secretary Janet Yellen is concerned that inflation “is reaching the highest levels seen in decades. Sharply higher prices for food and fertilizers put pressure on households worldwide — especially for the poorest. And we know that food crises can unleash social unrest”.

Yellen is right to be concerned. After all, the crimes of capitalism make social unrest inevitable.

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