3. How American agricultural surplus affected food habits of the world

3.1 Background

I interned as a commodity trader analyst with a commodity-trading firm in Austin, Texas. As part of process of understanding the agricultural commodity markets, I read a lot of literature. To understand the influence of big commodity trading companies, I read a book called ‘Merchants of Grain’. I made a few notes from the book. Since they are very interesting and instructive, I have included them here.

 3.2 The Problem

The major challenge for the American agriculture officials after the Second World War was to find a market for its agriculture produce especially grain. Problem was that rest of the world, especially the developing world, did not have enough money to buy American agriculture produce.

3.3 The Solution

Americans found a way to finance its exports by loaning the amount to the importers under PL 480 and other such programs.

Corn was greatest American food surplus. Some of the methods to deal with corn surplus were:

1.   Americans started eating steak (cattle meat), which was derived from corn fed cattle. In purely energy terms, it is a wasteful use of corn. On an average, it takes seven kilograms of grain to add one kilogram of weight to a beef animal, and two and three kilograms of grains respectively to the same job for chicken and hogs. But Americans had too much grain, which made it economical to use it for livestock. The United States became hooked to steak because of cheap grain.

 

2.   Other countries were induced to buy corn. The rich countries bought corn and soybeans to feed their livestock. While it is difficult to argue that American agricultural produce should not had been sent to countries with tight food situations, it changed food habits in many poor nations, which fundamentally altered their ability to feed themselves in best of situations. People were sold the hypothesis such as ‘bread was nutritious’, ‘well rounded diet including meat produced taller, stronger Asians’, ‘food imports combated food inflation in economies of developing countries and freed labor and capital for industrialization’.

3.4 The implications

This had important economic, political, and social implications for other countries. Many people who had become accustomed to eating wheat during the war did not continue to live in climates suitable to growing wheat. If they had to continue eating bread, they had to import wheat. Conquerors had always influenced the diet of the conquered but Americans influenced diet more than others. The Japanese got exposed to eating wheaten bread. In fact, it was considered patriotic in Japan to eat bread (traditional Japanese diet did not have any wheat). The Koreans were supplied ‘soft wheat’ for making bread.

3.5 Case Study of a developing country

Looking at the case of Zaire one can see the effect on the developing countries. Zaire’s dependence on the foreign wheat developed gradually. Bread was an unknown food until arrival of colonialists in the nineteenth century. Much later, some wheat was planted in Kivu region, adjacent to Burundi and Ruanda, but the main food crops were maize and maniac. Europeans continued to import small quantities of floor for their needs. After Zaire became independent in 1960, the United States shipped some flour under the PL 480 program. 

The population of Kinshasa swelled, and the government paid cash for imported flour. The credit for cash was made available by the foreign governments. It was cheaper and considerably easier to import flour to feed rural migrants than to increase agricultural production and improve the rural transportation and distribution systems. Or possibly, the dominant group had more to gain economically from imports than to develop their own market. This led to steady increase in the bakeries and other methods of food distribution. Chinese help led to increase in rice production.

Against this backdrop, white maize grew widely, but it did not find a market in Zaire. Manioc root remained the stable food of tribes and the villages but it did not find a market in the towns and cities, which paid for their produce.

It was then that the multinationals arrived. Continental arrived in 1967 when the bread was displacing the traditional food. They established a modern flourmill near Kinshasa. Bread had important psychological connotations. It was the staple diet of the colonial masters and was adopted by the elite. Because of the effect of the imitation, bread consumption identified with the progress and modernity for the masses (it is just like meat being adopted by elite in India).

There were practical and economic reasons too for bread’s popularity. The supply of the bread was more dependable than the manioc, which was carted from the surrounding countryside. Bread was relatively inexpensive, and it tasted better than manioc.

In the end when the price of bread increased, Zaire was forced to pay for wheat (even though it had would have enough other kinds of grain to feed it population if other forms of grain were not systematically discriminated against). Zaire had to pay for wheat when it would have paid to invest the money for economic development. It is not my argument that priority of the Zairian government led by Mobutu was economic development. But the money could be used for something better in a desperately poor nation.

3.6 Conclusion

To put things in perspective, it is not right to blame America and multinationals for problems in other countries. It is the economic development of the countries concerned, which lead to starvation deaths. After all, if the economies were developed they would have no difficulty in paying for food grains, as other industrial nations do not. Japan and the United Kingdom import large part of their food supplies from the United States. But they never face any problems.