Multinationals make billions in profit out of growing global food crisisSpeculators blamed for driving up price of basic foods as 100 million face severe hunger
Market shoppers inBy Geoffrey Lean, Environment Editor , one of the countries that is experiencing acute food shortages and rising costs
Sunday, 4 May 2008
Giant agribusinesses are enjoying soaring earnings and profits out of the world food crisis which is driving millions of people towards starvation, The Independent on Sunday can reveal. And speculation is helping to drive the prices of basic foodstuffs out of the reach of the hungry.
The prices of wheat, corn and rice have soared over the past year driving the world's poor � who already spend about 80 per cent of their income on food � into hunger and destitution.
The World Bank says that 100 million more people are facing severe hunger. Yet some of the world's richest food companies are making record profits.last month reported that its net income for the three months up to the end of February this year had more than doubled over the same period in 2007, from $543m (�275m) to $1.12bn. Its profits increased from $1.44bn to $2.22bn.
Cargill's net earnings soared by 86 per cent from $553m to $1.030bn over the same three months. And, one of the world's largest agricultural processors of soy, corn and wheat, increased its net earnings by 42 per cent in the first three months of this year from $363m to $517m. The operating profit of its grains merchandising and handling operations jumped 16-fold from $21m to $341m.
Similarly, the, one of the world's largest fertiliser companies, saw its income for the three months ending 29 February rise more than 12-fold, from $42.2m to $520.8m, on the back of a shortage of fertiliser. The prices of some kinds of fertiliser have more than tripled over the past year as demand has outstripped supply. As a result, plans to increase harvests in developing countries have been hit hard.
The Food and Agriculture Organisation reports that 37 developing countries are in urgent need of food. And food riots are breaking out across the globe fromto , from to , and from to the .
Benedict Southworth, director of the World Development Movement, called the escalating earnings and profits "immoral" late last week. He said that the benefits of the food price increases were being kept by the big companies, and were not finding their way down to farmers in the developing world.
The soaring prices of food and fertilisers mainly come from increased demand. This has partly been caused by the boom in biofuels, which require vast amounts of grain, but even more by increasing appetites for meat, especially inand ; producing 1lb of beef in a feedlot, for example, takes 7lbs of grain.
World food stocks at record lows, export bans and a drought in Australia have contributed to the crisis, but experts are also fingering food speculation. Professor Bob Watson � chief scientist at the Department for Environment, Food and Rural Affairs, who led the giant International Assessment of Agricultural Science and Technology for Development � last week identified it as a factor.
Index-fund investment in grain and meat has increased almost fivefold to over $47bn in the past year, concludes AgResource Co, a Chicago-based research firm. And the official USheld special hearings in two weeks ago to examine how much speculators were helping to push up food prices.
Cargill says that its results "reflect the cumulative effect of having invested more than $18bn in fixed and working capital over the past seven years to expand our physical facilities, service capabilities, and knowledge around the world".
The revelations are bound to increase outrage over multinational companies following last week's disclosure that Shell and BP between them recorded profits of �14bn in the first three months of the year � or �3m an hour � on the back of rising oil prices. Shell promptly attracted even greater condemnation by announcing that it was pulling out of plans to build the world's biggestoff the Kent coast.
World leaders are to meet next month at a special summit on the food crisis, and it will be high on the agenda of the G8 summit of the world's richest countries in Hokkaido, Japan, in July.Additional research by Vandna Syngha
Daripada Abu Umarah iaitu al-Bara' bin 'Azib radhiallahu anhuma, katanya: "Kita semua diperintah oleh Rasulullah s.a.w. untuk melakukan tujuh perkara, iaitu meninjau orang sakit, mengikuti janazah, menentasymitkan orang yang bersin, menolong orang yang lemah, membantu orang yang teraniaya, meratakan salam dan melaksanakan sumpah."