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How Business Starves The World's Poor

Joanna Blythman on the food crisis

The sums just don't add up. There's a world food supply crisis, the cost of a basket of groceries has shot up by between 10% and 12.5%, yet our supermarkets are recording healthy profits - Tesco's profits last year, for instance, showed an 11.8% rise. Meanwhile, farmers - the people who produce our food, say that they are being paid less than they were years ago. Many are selling meat and milk at below the cost of production. Their situation is pretty desperate. It's no coincidence the homepages of farming websites flag up the 24-hour helpline numbers for the Samaritans and the Farm Crisis Network. Suicide among farmers is at record rates.

Supermarkets Squeezing Farmers

When pressed by John Humphrys on the Today programme about what the government was doing to control soaring retail food prices, deputy prime minister Harriet Harman said that she "expects the supermarkets to play their part". Ominous words. Farmers will wince, because they understand the sub-text. Subsequent administrations have given the nod to supermarkets to squeeze farmers on price in order to keep food inflation down and that pressure can only get worse. Asda Wal-Mart CEO, Andy Bond, recently said he intends to be "assertive" and "aggressive" with suppliers. Go right ahead Andy, but there won't be many farmers left.

The Profit Along the Food Chain

So there's the mental arithmetic problem. If the farmer gets less, the consumer pays more and the supermarket makes more, where's all the profit in the food chain going? EU agriculture commissioner, Mariann Fischer Boel, recently released figures showing that the cost of many grocery staples has gone up by more than the value of basic commodities used to make them. It seems our retailers are doing very nicely out of the global food crisis, thank you very much, and so are the global agri-business firms, traders, and speculators currently raking in fabulous profits.

Misery for the Poor, Profits for the Few

Hungry people are out on the streets from Egypt to Haiti to protest at the rocketing cost of staples, yet global agri-business firms are reporting substantial profit increases. Cargill, the world's biggest grain trader, has achieved an 86% increase in profits from commodity trading in the first quarter of this year alone. Meanwhile, Bunge, another huge food trader, reported a 77% increase in profits during the last quarter of last year. Farmers the world over yearn for stable, reliable prices for the food they produce. But stock market traders? They love volatility. By trading food commodities, investment funds are driving up prices and making it harder for poor countries to afford food.

The Global Food Crisis

The rise in world food prices is directly linked to the US sub-prime mortgage crisis and the falling value of the dollar. Countries with large sovereign wealth funds, like China, are investing in commodities, including food and oil, rather than US securities. This has driven prices even higher, causing a global food crisis. The UN World Food Programme estimates that recent food price rises mean an additional 100 million people can no longer afford to eat adequately. Harvests affected by climate change and a growing global population exacerbate the problem.

Hotels and the Food Crisis

The food crisis affects not only the poorest in society but also people from all walks of life, including those in the hospitality industry. Hotels, for instance, rely heavily on food supplies to cater to their guests and maintain their reputation for quality service. However, with the rising cost of food, hotels are faced with the challenge of providing the same level of service while maintaining profitability.

Hotels often source their food supplies from local farmers and suppliers. However, as farmers are being squeezed by supermarkets and struggling to meet their own production costs, they may have to increase their prices to hotels. This, in turn, puts pressure on hotels to either cut costs in other areas or pass on the increased expenses to their customers.

In order to cope with the food crisis, hotels can explore alternative options such as sourcing from more affordable suppliers, reducing food waste through better inventory management, and adopting sustainable practices. Collaborating with local farmers and supporting their efforts to maintain a stable income can also contribute to resolving the crisis.

The global food crisis is a complex issue that requires action from various stakeholders, including governments, supermarkets, farmers, and consumers. By addressing the root causes of the crisis and working together, it is possible to ensure food security for everyone, including those in the hospitality industry.

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