The Politics of Food

UN General Assembly: Study of the Problems of Raw Materials and Development: Note by the Secretary General

(A/9544 and A/9544/Add. 1)

UN Conference on Trade and Development: Problems of Raw Materials and Development: Note by the Secretary General of UNCTAD

(UNCTAD/OSG/52 and UNCTAD/OSG/52/Add. 1)

“We are all feeling depressed,” the German foreign minister, Mr. Scheel, declared last month at the United Nations. “Things cannot go on like this. No one with a clear head and a feeling heart should still be able to sleep calmly…. We are stumbling in the dark.”

At the April Special Session of the UN General Assembly, called to discuss problems of raw materials and development, speakers from all countries agreed that the oil crisis is part of a larger world crisis of trade and inflation; that inflation is exported, like a sickness, or like petroleum, in the pipelines and grain tankers of world trade. This recognition of interdependence was useful, but vague. Both Secretary Kissinger and Sheik Yamani warned, for example, that in a “global inflation” all countries would lose—a warning that ignored the extent to which the richest developed countries, as well as the oil-exporting countries, are winners, at least so far, in the world inflation.

Certain documents presented at the UN Special Session give a clear and shocking view of the course of the economic crisis, and specifically of the crisis in food and fertilizers. A study by the UN Conference on Trade and Development (UNCTAD) warned that the consequences of the inflation are particularly grave for the “largest and poorest” developing countries, and could bring a “serious deterioration in levels of food consumption.” For the developed countries, “the prospective trade deficit on oil account, large though it is, represents only a very small percentage of the total GNP”—no more than 2 percent of GNP for the United States, even without considering the increased profits of US oil corporations. The costs of inflation in imports are borne to a disproportionate extent by the poorest countries; the benefits of inflation in exports are gathered by a few developing countries, and by the developed world generally.

“In view of the accelerated pace of the increase of primary and manufactures prices during 1973,” the UNCTAD report states, “it is important to keep the full two-year perspective in mind, particularly when analyzing the impact of the sharp rise in petroleum prices.” So far, in the world inflation of 1972-1974, the developing countries have suffered more from increases in the price of food, fertilizers, and manufactured goods, which they import largely from developed countries, than from increases in the price of oil.

According to the report, the cost of the food and fertilizer imports to the developing countries increased by $5 billion in 1973, and is expected to increase by another $5 billion in 1974. The “corresponding increase” in the cost of oil imports to these countries was $1.2 billion in 1973, and will be about $7 billion in 1974. This projection does not allow for an increase in the volume of oil imports, or of food imports, made necessary by poor harvests now feared in India in 1974. The fertilizer price rise “began in 1972, before the recent increase” in the price of oil, which is needed in fertilizer production.…

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