DebtContents
Hunger, Debt, and Structural Adjustment
"Do we really have to starve our people to death to repay our debts?" This dramatic question posed by Julius Nyerere, the former president of Tanzania, highlights the link between the burdens of debt and of hunger in our world today. This paper looks at the links between debt and World Bank and International Monetary Fund "structural adjustment programmes" on the one hand, and hunger on the other. The Coalition believes that a better understanding of these links will underline the urgency of seeking solutions to the external debt problems of countries where hunger is widespread. It will also lead to pressure for profound changes in present adjustment programmes that are exacerbating rather than solving the problem of world hunger.
The paper has been written on the occasion of the 150th anniversary of the Great Famine in Ireland. The commemoration of this tragic event is an opportune moment for Ireland to make a distinctive contribution to solving the problem of hunger and famine in our own times. The Debt and Development Coalition is convinced that an analysis of the negative impact of debt and structural adjustment on the lives of vulnerable populations should form a key part of this contribution.
The Situation
The FAO estimates that almost 800 million people worldwide suffer acute under-nourishment. Much larger numbers suffer from malnutrition and seasonal or temporary hunger. Some 12 million people die of hunger every year, and this number is unlikely to change much before the end of the century.
The greatest concentration of people suffering from hunger is in South Asia, although it is in Africa that we find the most rapid deterioration of the situation. The number of undernourished people in that region almost doubled in two decades, from 94 million in the years 1969-1971, to 175 million in 1988-1990. It is estimated that by the year 2010 almost 50% of the undernourished population of the developing world will be located in Sub-Saharan Africa, compared with 10% in the years 1969-1971.1
"Famine is simply hunger concentrated in time and space." Famines attract public attention (Ethiopia, Sudan, Somalia, Rwanda), but chronic, everyday hunger rarely makes the news. If famines kill millions through starvation and epidemic diseases, chronic hunger affects hundreds of millions through debilitation and illness, increasing mortality rate and falling life-expectancy. "Hunger affects first and foremost those who can neither produce nor buy enough food, even though there may be no national shortage. Women and young children, who are not given priority in the distribution of scarce food are the most threatened"2.
Women, although they produce up to 50% of staple foods in the world (70-80% in Africa) are often themselves the first victims of hunger. Even within the household they do not always enjoy equal access to food and income. In fact, they are generally the last to eat in time of want. "The food insecure are increasingly landless, urban, women, elderly and African."3
Causes
The causes of hunger and food insecurity are complex and multidimensional environmental, economic, political and social. However, in recent times we have seen another culprit Structural Adjustment Programmes (SAPs) imposed by the World Bank and IMF on heavily indebted countries so that debts to these and other institutions can be repaid and future loans obtained. The external debt of developing countries increased dramatically during the 1980s, and now stands at over $1,900 billion. The adjustment programmes typically include: currency devaluation, trade liberalisation, cuts in social spending, with women and children being the chief victims, privatisation of government-held enterprises, layoff in the public sector and wage suppression, high interest rates, credit restrictions. Export earnings which could instead be directed towards agricultural support are diverted to service the debt.
Available evidence leaves little doubt that the adjustment process often resulted in a sharp fall in the real purchasing power of some of the poor, and limited their ability to purchase food and other essential items. At the same time, the expected growth has not so far materialised in many countries.
More recently the FAO has stated: "It is now well accepted that a new class of poor has been created by adjustment" (FAO 1995)
There are a number of reasons why structural adjustment programmes represent a threat to the food security of the poor:
Promotion of Cash Crops
SAPs encourage the production of cash crops for export on the world market as a source of foreign exchange with which to pay the debts. In Uganda, for example, beans, which have always been a staple food and cheap source of protein, have now been transformed into a cash crop. This increases dependence on food imports. Yet because of SAP imposed currency devaluation, imports have become relatively more expensive, which increases the vulnerability of the poorest countries. Furthermore, cash crop promotion, involving mechanised farming and high use of agro-chemicals, damages the resource base (soil, water etc.) which is essential for long-term sustainable agriculture and food security. It is clear therefore, that the IMF manages, by its imposition of export promotion of cash crops and import reduction through currency devaluation, to actually be a major actor in bringing about a serious state of malnutrition and food shortage in many countries today.
Lack of Supports for Small Farmers
Lack of support for small farmers follows from the above. By promoting cash crops, and cutting back on public expenditure, SAPs favour large monocropping farmers to the detriment of small subsistence farmers, who increasingly find themselves displaced to marginal lands with negative environmental consequences leading to even greater food insecurity or migrate to already overcrowded cities. Yet without state help many farmers simply cannot manage. One typical example is the following: Luis and Docelli, a couple from the south of Brazil, cultivated beans and maize, with the help of cheap credits made available to small farmers by the government. They grew enough for family needs, and sold the surplus in the local market to cover their other expenses. When the debt crisis broke in 1982 these low-interest credits dried up. The adjustment programme imposed on Brazil required incentives to be given to large farmers for cash crop cultivation. The family itself got into debt, had to sell the entire crop and all their possessions, and ended up in a small wooden shack in a poor area of the town of Sapiranga, somehow scraping a living. Their land was taken over by a large landowner growing soya beans to feed European cattle.
The removal of food subsidies is a further burden on the poor, as the cost of purchasing food goes up. As a result, household diet changes, less is eaten per meal and less meals per day are eaten. Malnutrition, particularly among children, increases, with irretrievable future consequences.
Gender Bias
The income earned from sales of cash crops generally accrue to the male and such income does not always benefit other household members. Women, in addition, have difficulty in obtaining credit and entitlement to land. In order to feed their families under deteriorating conditions, they are compelled to work longer hours. To do this they often seek help from their children a strategy which perpetuates the cycle from overburdened mothers to overburdened daughters, who are often deprived of schooling in order to stay at home and help. Where government expenditure has been drastically cut, public health and education services are severely reduced. In such situations social "safety nets" are woefully inadequate, and women in fact are the safety nets, carrying a disproportionate share of the misery imposed by adjustment. "Women adjust by finding more jobs that they can squeeze into 24 hours, by making rice last a day more, by eating less and working more. Women have become the 'coping mechanism', the 'major adjustment factor' for families in the midst of crisis. Women therefore carry not only the burden of their family's poverty, but the indebtedness and poverty of the whole society."4
Recommendations
It is essential to lift the debt burden of low-income food-deficit countries so that export earnings can be spent on improving food security, and developing a strong local economy generally, but there is a need for greater international political will to achieve this goal. There must be agreement that food security for vulnerable populations is a priority in any adjustment programme.
In the light of the negative effect of structural adjustment programmes on food security, a whole new approach to SAPs is required:
Support for Small Farmers: Along with cash crops promotion, SAPs should give priority to ensuring that support services are put in place for small farmers, whose traditional role in the production of food for local consumption remains vital. Food imports could then be used not to displace but to supplement local food production according as the need arose.
Most small farmers are women who are responsible for every phase of the food cycle. Adjustment should target women for particular financial and technical support for their role as farmers, food processors and managers of food supplies for the family. The particular obstacles that women face in this area, and which were outlined above, need to be addressed.
Land Reform: SAPs are now being influenced by the need to promote ecologically sustainable production. However they continue to ignore the need for agrarian reform. While the system of land ownership differs from region to region, equitable distribution and secure tenure of land is a precondition for sustainable agriculture. Bearing this in mind, adjustment should respect traditional land tenure and land use systems since they are more sustaining for communities and family units. This would set limits to the appropriation of vast tracts by landowners, foreign investors and Transnational Companies for cash crops or other use, e.g. tourist amenities. It would also help to shift the priority to local food production, and, therefore, to greater food security. In addition, adjustment should promote equal rights for women to inherit, purchase, own and determine the uses of land.
Self-reliance and Trade: One of the chief obstacles to the development of self-reliance by Third World countries is unequal trade. Trade liberalisation measures agreed at successive GATT negotiations, and now taken over by the World Trade Organisation, do not make for either free or fair trade in the South. The subsidised export of surplus food from the North depresses local food prices and further discourages continued investment in local food production. SAPs should support highly indebted countries in protecting their indigenous food industry from the "dumping" of surplus food stocks from the North. In fact, "structural adjustment" should be promoted in the North so that the export dumping of farm surpluses arising from over production is brought to an end.
Security requires a complex combination of policies such as land reform, trade measures, sustainable production etc., specific to the country in question.
Furthermore, adjustment should balance its support for cash crop exports (whose price is declining), with support for diversification into non-traditional crops which would not be affected by oversupply, and therefore lower prices. In this way income from exports would rise. This support could take the form of research and development, extension, infrastructure, marketing and price incentives.
National Food Security Programmes: We are advocating the establishment of National Food Security Programmes as an integral part of adjustment, of which state supported measures to strengthen the food security of vulnerable groups should be an accepted part. Where adjustment leads to higher food prices, the right of the state to stabilise the prices of essential staple foods should be recognised and permitted. Well designed subsidies on basic foods should be retained in any programme so that the hungry can always have access to food. In this respect it is essential to recognise the fundamental difference between subsidies used in the North, which protect the farming constituency but sustain overproduction and distort world-markets, and subsidies used in developing countries to guarantee food security and access to food by the most vulnerable groups in the society. Adjustment should also increase access to food through other channels such as income-generating schemes, with safety-net actions in hunger-prone areas. Public services such as primary health-care and well-targeted nutrition interventions, as well as the state's capacity to prepare for and respond to famine situations, should not be undermined by SAPs. Ensuring food security requires a complex combination of policies such as land reform, trade measures, sustainable production etc., specific to the country in question. The adjustment process should therefore aim at helping local governments to design national food security programmes, with the coordinated support of bilateral donors: EU, FAO, and other suitable bodies, as well as with the full participation of local NGOs and small farmers. Allowing a major say to small farmers, especially to women farmers, is crucial to the effectiveness of such programmes.
CONCLUSION:
Some Lessons from the Irish Famine
While external indebtedness was not a feature of the Irish economy 150 years ago, there are some disturbing parallels between Ireland during the Famine and developing countries today under SAPs parallels, for example, such as: inequitable distribution of land, laissez-faire economic policies amounting to the ideology of the "free-market", export of grain while people were starving (although the poor could not have afforded to buy it), dependence of the poor on one species of potatothe "lumper"which was very vulnerable to blight, etc. Such parallels should not however obscure the many differences which are noted in writings about the Irish Famine, but should alert us to the structural connections between poverty and hunger, and to the fact that structural solutions must be applied. The Coalition believes that external indebtedness and, as a consequence, World Bank and IMF imposed Structural Adjustment Programmes as at present designed, are one of the chief structural causes of poverty and hunger today. An overhaul of SAPs so that their primary focus includes food security is urgently needed. Cancellation of the debt of the severely Indebted Low-income Countries so that growth achieved benefits their agrarian population and that their economies can compete on the world stage is required for global economic justice. Otherwise the projected increase in world poverty and hunger will continue unabated.
1. International Agricultural Development, July-August 1990.
2. Seed and Surplus, An Illustrated Guide to the World Food System, Bertrand Delpeuch, C.I.I.R. 1994.
3. Liaison Committee of Development NGO's to the European Communities, 1994.
4. Piglas-Diwa 3, Philippines.
Jubilee 2000 Campaign Jubilee 2000 (Ireland) represents over 70 groups demanding debt cancellation by the year 2000.. It is a practical solution to the problem of unjust debts which enslave a billion people in the Third World. Here's how you can help: * Sign the Jubilee Petition * Organise a signing event in your locality * Write to politicians and the President of the World Bank, asking for debt cancellation by the year 2000.
Contact address: Debt and Development Coalition, All Hallows, Grace Park Road, Drumcondra, Dublin9. Phone/fax: 01-8571828
| Previous - Next Contents |