In recent years the global food market has sustained a massive shock as a result of COVID-19, supply chain disruption, extreme weather, international turmoil and other factors. The prices of staple crops have risen sharply and food shortages have appeared in many parts of the world. The United Nations, the World Bank and other international agencies have warned, “It’s the story that keeps getting from bad to worse,” and the world may be facing “the worst humanitarian crisis since the end of the second world war.” Meanwhile the U.S., the architect and driving force behind the Ukraine crisis, is reaping the benefits. Several major U.S. agriculture giants are making a fortune out of the food crisis.
The Growing Food Crisis
At present, global food supply chains are under assault, international food prices are soaring, many low-income countries are struggling and the number of hungry people is rising. Both Ukraine and Russia are major grain exporters and Russia is also a leading fertilizer exporter. The escalating crisis in Ukraine and Western sanctions against Russia have pushed up the cost of fertilizer, leading to higher food prices.
According to data released by the U.N. World Food Program, the number of people facing severe food insecurity globally has more than doubled since 2019 to 345 million, and more than $22 billion is expected to be needed in 2022 to meet emergency requirements. A spokesperson for the agency pointed out that the current food crisis is unprecedented, with the four major factors being regional conflict, climate change, the COVID-19 pandemic and rising prices. Since the escalation of the crisis in Ukraine, access to food has become extremely difficult for many people in the “global south.”
President of the World Bank David Malpass said in April that the crisis in Ukraine had pushed up global food prices, hitting the poorest people the hardest. According to World Bank estimates, for every percentage point increase in food prices, 10 million people around the world will fall into extreme poverty.
In addition, the rise in energy prices affects transportation and production, also contributing somewhat to higher food prices and exacerbated the food crisis. Maximo Torero, chief economist at the Food and Agriculture Organization of the United Nations, recently said that if the Ukraine crisis continues, Russia and Ukraine may significantly reduce exports of wheat, corn, fertilizers and other products this year and next. Soaring prices of fertilizers and other products will make them unaffordable for many farmers in other regions and will affect yields and drive food prices higher.
The ‘Driving Force’ of the United States is to Blame
The situation in Ukraine is a major reason for the current food emergency, and the United States is to blame for “pouring fuel on the fire” of the crisis. The U.S. and its allies have imposed extreme sanctions on Russia, aggravating obstructions in the global supply chain, already affected by the COVID-19 pandemic, and leading to soaring international food and energy prices.
According to the West’s narrative, the food crisis is specifically blamed on Russia’s military action against Ukraine. However, analysts have pointed out that the situation in Ukraine has developed to where it is today because of the United States constantly squeezing Russia’s strategic space in a quest to assert its own dominance.
The U.S. Treasury Department released a document in July, claiming that Russian agricultural products, agricultural equipment and medicines were not covered by U.S. sanctions and that the U.S. supported efforts to reduce global food shortages. However, Russian Foreign Minister Sergey Lavrov pointed out at the end of July that the U.S. promise to apply exemptions to Russian food supplies was unfulfilled. Russia is a major grain exporter and the current food crisis has been exacerbated by sanctions affecting Russian exports. U.N. Secretary-General António Guterres has recently called for unfettered access to global food and fertilizer markets for Russia.
Those ‘Behind the Scenes’ Reap the Benefits
The U.S. has been behind every global food crisis since World War II. A few countries, such as the United States, have manipulated the system of global trade in food, built up dominance and repeatedly made huge profits from food crises.
Analysis released by the Johns Hopkins University School of Public Health notes that in the 1950s, with prompting from the U.S. government, agriculture in the U.S. began to merge and integrate, eventually industrializing and forming a number of large multinational enterprises involved in seeds, fertilizers, food processing, the grain trade and so on. Through these corporations the United States has locked in its dominance of the global food system.
Of the four giants controlling the world’s grain trade — namely ADM, Bunge, Cargill and Louis Dreyfus — the first three are U.S. companies. U.S. agricultural giant Monsanto controls a significant portion of seed production. In a study of the global food crisis of 2008, the academic Eric Holt-Giménez pointed out that in the final quarter of 2007, even as the crisis was unfolding, ADM’s profits went up by 20%, Monsanto’s increased by 45% and Cargill’s rose by 60%.
Today, these companies are taking advantage of the Ukraine situation to make a fortune. According to reports, the share prices of ADM and Bunge have risen sharply with the escalation of the Ukraine crisis, with ADM’s shares rising 27% since the start of the year. British newspaper The Guardian reported in May that the wealth of billionaires in the food and energy sectors has grown significantly in the past two years because of a surge in commodity prices caused by the COVID-19 pandemic and the Ukraine crisis. For example, the Cargill family now has 12 family members who are billionaires, up from eight before the COVID-19 pandemic.
Danny Sriskandarajah, the chief executive of Oxfam GB, commented that it was morally indefensible that people are dying of hunger in East Africa while the wealth of the world’s super-rich was growing as a result of soaring food and energy prices.