The Political Economy of Famine - Andrés Gunder Frank

Tue, 18 April 2000
11:27:42 -0700
---------- Forwarded message ----------
Date: Tue, 18 Apr 2000 03:37:13 -0400 (EDT)
From: Gunder Frank <[EMAIL PROTECTED]>
Subject: Re:
The Political Economy of Famine
Andrés Gunder Frank

It has long been established that North and South agricultural producers and consumer DO compete in the SAME world market, which is one reason why the northern ones do subsidize 'family farm' agricultural production in US, Canada, EU [which latter did all it could to exclude East European agricultural competition].

And remember that the major rift at Seattle WTO delegates was between the US and Europe because the former kettle is calling the latter pot black, just because one uses price supports and the other income supports. And the Cairns [Aussie] group screams a plague on both your houses. All of these are primarily in grain and meat/dairy wich alos depends on grain.

Of course it is market UN wise absurd that the US be the major world grain exporter - also to Europe- and that crowded Europe be a meat exporter, and even if not that tehy not be importers of both products, not to mention sugar produced by highly subsidized beets in Europe and by subsidized beet sugar in California and subsidized cane sugar in Florida and Louisiana - which in turn depend, especially in California, on subsidized water that thus is not available to metropolitan areas.

Of course this highly subsidized agricultural production in the North OUT competes that from the South both on northern markets and in southern ones [and now East European ones too!]: eg. everywhere in the North, grain and meat from Argentina, Brazil, Central America, West Africa, Egypt; dairy in the form of powdered and canned milk anywhere that it undercuts local dairy producers who are driven out of business; since NAFTA very significantly subsidized US corn/maize is undercutting local Mexican producers and generating Chiapas uprising; I dont know about cotton, but probably also, and definitely tobacco - no smoking in the US is driving US tobacco companies into foreign markets in a big way -; and still sugar.

Poor Cuba. No cuota in the US and "world price" only elsewhere. Ah, but what is the 'world' price? it is the low one on the perhaps 20 percent of world sugar production that is sold on the low 'world' market as surplus over and beyond all the controlled/subsidized high price markets on which the bulk of world sugar is 'traded'.

That also means that the Soviet days US charge that Cuba was so heavily subsidized by the Soviet Union was a bogus calculation based on the difference between the also alos subsidized high Soviet price and the low world market price, which was low precisely because the US, EU and Soviets all traded at highly subsidized high prices.

No market competition? When Gorbachev prohibited some vodka, all sugar disappeared from the Soviet market and went into bathtub moonshine instead. It is hard to believe that Putin wants - as recently announced - to make the same mistake again.

Anyway, one could go on and on, but and another related main issue is genetically altered produce in and from the North competing with 'natural' products from/in the South, also collecting genes there, monopolizing them in the North, and then selling the products back to the South. That is called 'value added'!

I am sure that experts like Mark Ritchie in MSP and Manuel Lajo in Lima, which I am not, could supply far more and better evidence with documentation.

Andrés Gunder Frank

On Tue, 18 Apr 2000, Jeffrey L. Beatty wrote:

Date: Tue, 18 Apr 2000 01:00:32 -0400
From: "Jeffrey L. Beatty" <[EMAIL PROTECTED]>

Subject: Re: The Political Economy of Famine

[Apologies for multiple postings]

While some on these lists are more concerned with matters of rectitude in the present conflict in the Horn of Africa, I would urge that list members not lose sight of the more basic issue raised in the Sameh Naguib article.

Note the following paragraphs.

The logic of the world food market is particularly conducive to starvation. Advanced countries in Europe and North America, as well as Japan, produce over three-quarters of the world's exports of foodstuffs.

These countries maintain schemes to protect their agricultural production.

In general, people in these countries pay vastly inflated prices so that high and stable prices can be guaranteed to the farm and food processing sectors. One of the first results of this system is a decline in imports, which translates as a loss to Third World countries that export foodstuffs.

To keep the prices up, governments create massive stocks of foodstuffs, which are then taken off the market. World grain stocks exceed 200 million tonnes, while the shortfall of grain in the Horn of Africa will not exceed 10 million tonnes. The cost of storing food in Europe alone runs in tens of billions of dollars, but the massive cost of storing vast quantities of food leads governments to the "logical" conclusion that they must either process it into something else or simply dump it.

The fragile integration into the world market means that any serious fall in the demand for Third World exports leads inevitably to hunger. Without export earnings, it is virtually impossible for governments to subsidize food for the poor. Moreover, the peasant farmers can ill afford to buy the fertilizers, pesticides, oil and machinery to keep up their own subsistence farming practices, let alone producing cash crops.

I find this argument plausible, although it would be worthwhile to check into the degree to which agricultural commodity producers in the developing world are competing in the same product markets as developed country producers.

In many cases, the two groups of producers clearly produce different products. In any event, if we take the argument seriously, we can see a very direct way in which those of us, like yours truly, who benefit from U.S. farm income are arguably better off because of policies that make developing countries worse off. This is a point that should tweak the consciences of the middle-class agrarians of Europe, Japan, and
North America.

I mention this not only to nudge consciences, but also because Naguib's argument relies upon economics that even the most uncompromising classical liberal could not dispute. It indicates the degree to which a powerful critique of the existing world economic order can be developed without departing seriously from mainstream social science.

Radical critics of the existing world order should bear this in mind when relying upon dubious Marxist notions like the law of value or the diminishing rate of profit when making their case.

Jeffrey L. Beatty
Doctoral Student
Department of Political Science
The Ohio State University
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My professional/personal conclusion is the same as Pogo's -
We have met the enemy, and it is US

• Re: The Political Economy of Famine (fwd) md7148

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