As pandemic profits increase, so does hunger

By Joseph Opoku Gakpo

July 29, 2020

Big food and agriculture companies that are making vast profits in the midst of the COVID-19 pandemic are being urged to invest some of that windfall in the world’s hungriest people and smallholder farmers.

The call comes as an Oxfam International report, “The Hunger Virus: How COVID-19 is fueling hunger in a hungry world”,  warned that by December 2020, more people will be dying from COVID-19 related hunger than the virus itself. The organization projects that COVID-19 induced hunger could kill up to 12,000 people per day unless drastic steps are taken to deal with the world’s food security challenges.

As food insecurity worsens with the global spread of the pandemic, eight of the world’s biggest food and beverage companies have paid shareholders over US$18 billion in dividends since January 2020, the report says. That figure is reportedly 10 times more than what the United Nations (UN) says it needs to stop people from going hungry. The UN in April made an appeal for US$2 billion to help vulnerable populations deal with COVID-19 related food security challenges.

“This is the problem some of us have had with unregulated capitalism,” George Osei Bimpeh, country director of SEND Ghana, a civil society organization working to reduce inequalities among poor households, tells the Alliance for Science. “As much as we seek to promote business interests, that should be guided by a high sense of moral duty. It is very unthinkable that business owners and shareholders are reaping so much from the unfortunate scores visited on citizens, farmers and poor people by COVID-19.”

The report expresses concern about “worrying signs that some companies are using the pandemic to take advantage of consumers.” The Food and Agriculture Organization (FAO) Food Price Index, which tracks the average price supermarkets and other retailers pay for basic goods from farmers, has on the average fallen steadily since January 2020.

Consumer prices on the rise

Meanwhile, consumer prices are going up in many countries as a result of disruption to local production and supply chains, inflation and panic buying, the report observes. For example, consumer prices in the United States increased an average of 36 percent, but farm income fell. Powerful and dominant agricultural traders, food and beverage corporations and supermarket chains, which dictate the price and terms of food trade, are focusing on maximizing profits by paying producers who shoulder most of the risk associated with food production “poverty wages.”

“We need to appeal to the moral conscience of business owners, especially those that derive their existence from agriculture, to basically look at the issue of profit sharing,” Bimpeh says. “Not in the context of shareholder interest. But in the context of interest of farmers. In this case, the windfall profits accruing to large firms must go back to farming communities where they derive their raw materials from.”

Bimpeh wants to see the big companies invest some of their windfall profits in strengthening agricultural systems in rural areas, as well as local social protection initiatives being run by government and humanitarian organizations. He also urges the big agricultural firms to directly support farmers and the poor.

“Most of these farmers work through cooperative systems,” he says. “They can easily be identified.  Even where cooperative unions do not exist, farmers can easily be identified in the rural communities and the most impoverished parts of the agrarian economy for support.”

Inequality reaches extreme levels

The Oxfam report says inequality across the globe has reached extreme levels. While nearly half of the world’s population lives on less than US$5.50 a day, the world’s 2,200 billionaires have more wealth than 4.6 billion people combined. The report says the pandemic is exploiting and exacerbating these inequalities, as the poorest people are most impacted by loss of jobs and income.

“These inequalities trap millions in poverty and in hunger,” the report observes. “With the poorest families whose spending on food totals as much as half of their income, even the smallest increase in food prices or drop in income can cause them to skip meals or to eat less nutritious food.”

These huge inequalities mean the small-scale farmers who produce more than 70 percent of the food in Asia and sub-Saharan Africa, as well as the more than 1.7 billion people who work on farms, plantations, fishing boats and in processing factories, are unable to produce enough food or earn enough income to escape hunger and poverty.

Bimpeh is pushing for the establishment of “a strong linkage between agricultural production and social protection programming so we can devote resources to spending on agriculture in a way that will alleviate the suffering that majority of rural poor farmers have had to go through.”

He adds: “The corporate world must heed this call, not just as a corporate social responsibility, but to live up to a moral duty that is required of them now more than ever before.”

Burkina Faso farmer Wiledio Naboho is urging corporate entities to remember that their businesses will not survive if rural farmers do not outlive COVID-19. “We depend on each other,” he tells the Alliance for Science. “Without us, businesses can’t survive. Their raw materials are coming from farmers. They can fund a lot of farmers’ projects. They should fund farmer projects like access to mechanization like tractors. They can support farmers by facilitating our access to funds from banks.”

Worsening hunger worldwide

The report warns that 121 million more people, the majority of whom are rural, poor farmers, could be pushed to the brink of starvation this year as COVID-19 disrupts the food supply chain and causes widespread unemployment as humanitarian aid declines.

The report identifies the West African Sahel region, Yemen, Venezuela, South Sudan and six other countries/regions most at risk of hunger because of COVID-19. Over the last 11 years, the Sahel region of West Africa, which consists of Burkina Faso, Chad, Mali, Mauritania, Niger, Nigeria and Senegal, has had the fastest growing hunger crisis in the world. About 13.4 million people were estimated to be in immediate need of food assistance across the region between March and May 2020.

Now, the situation is worsening. Border closures have caused sharp increases in the price of imported food and agricultural products across the region, with Mali seeing prices increase by 10 percent, on average, and Nigeria seeing increases of 30 percent.

“Millions are already struggling to eat even once a day, and many more are relying on very volatile incomes,” the report observes. “Women, who often go without food so they can feed their children, are at particular risk.”

Naboho is living these challenges firsthand in Burkina Faso. “Really, COVID-19 has impacted us as farmers negatively. First, it’s limited our access to quality seeds. And also, the few [seeds] we have are sold at a high price. Secondly, access to food is limited because of lockdown. In our case last year, we didn’t get enough yield because of lack of rain and some plant diseases,” he says.

“So, COVID1-9 came to add more sorrow to my people. I can tell a lot of families don’t have food to feed themselves. COVID-19 somehow has revealed the weaknesses of our government on food security,” Naboho adds.

The report says governments in lower-income countries have failed to invest in agriculture and the rural economy over the years, leaving small-scale producers without the infrastructure, information or technology they need to access markets, improve productivity and adapt to an increasingly hostile climate. For example, over the four-year period between 2014 and 2018, only eight African countries adhered to recommendations of the African Union and consistently spent more than 10 percent of their budget on agriculture. More than 40 countries spent far less. And in times of low financial investments, large-scale agribusinesses are often prioritized, while investments in small-scale producers are woefully neglected.

Anthony Morrison, chairman of the West Africa Chamber of Agribusiness, wants rural farmers organized into stronger associations so they can demand their due. “How organized are the players in the rural agricultural sector? They have to be in stronger cooperatives so they can play roles in policy design, formulation and implementation,” he says. “We should also see an increase in existing subsidies so pro-poor beneficiaries can have access.”

Image: A young African farmer works the soil on his village farm. davide bonaldo/Shutterstock