By Donella Meadows

–May 7, 1987–

The simultaneous occurrence of hunger and of mountains of surplus food is obscene. It’s also expensive. And it’s persistent, in spite of hunger-reduction and surplus-reduction policies of many governments the world over.

Last year the United States, Japan, and Europe spent $100 billion to protect their farmers against low prices caused by agricultural overproduction. Half that amount went to farmers; the rest went to bureaucracy and to storage of unsold grain, butter and milk.

The surplus grain stock of the European Community in 1984 was enough to feed fifty times the combined populations of Ethiopia and the Sudan that year. India now has 25 million tons of unsold grain, enough to feed all the hungry people in India.

About 500 million people in the world are chronically hungry. Most of them are children. More than 30,000 of them die each day of hunger-related causes.

The problems of hunger and glut persist, says Ferenc Rabar, because we attack them as separate problems. They are not separate. They both arise inevitably from the normal operation of the world food system. They can’t be solved separately, he says, but they can be solved together.

Ferenc is a Hungarian economist who founded, ten years ago, a research group at the International Institute of Applied Systems Analysis (IIASA), to learn how the world food system works.

With remarkable international cooperation, teams in places such as the U.S., East and West Europe, and many Third World countries constructed computer models of their nations’ agricultural production, consumption, and government policy. These models were then linked at IIASA into a simulated world trade network.

The resulting megamodel reproduces the pulls and tugs of the actors in the world market, each constantly adjusting to the others. If the Japanese eat more meat, the price of American corn goes up. If the Russians have a good harvest, the price of wheat goes down and Nigeria can afford more imports. If the U.S. floods the market with cheap corn, Europe puts up trade barriers. And so forth.

The model shows that the rational actions of farmers, consumers, and governments produce the conjoined problems of hunger and glut. Those problems are produced relentlessly, under many different changes tested in the model system:

A drought in India increases hunger in India. A drought in Kansas increases hunger in India even more.

If a Green Revolution raises agricultural production in the Third World, much of the increase is exported, gluts go up everywhere, hunger is reduced only slightly.

If Americans eat less meat, world meat and grain prices fall. Moderate-income consumers eat more for awhile, until enough farmers have been put out of business to re-equilibrate the system. There is only a small decrease in the number of hungry people.

If 50 million tons of free grain are dropped into the world market each year, like manna from heaven, most of that grain is used to feed animals. Lower prices wipe out farmers. Manna does not get to the hungry.

If all the agricultural trade barriers of the developed countries are removed, food prices rise, farmers are better off, the rich countries’ economies grow faster. Poor countries import less food. Gluts decrease somewhat. Hunger hardly changes.

The world distributes food through markets — markets distorted by government policy, but markets nonetheless. People who have no money are simply bypassed by markets. In rich nations gluts pile up, because people there are already buying all the food they want. Poor nations, where food is needed, don’t have the money to buy it. More production, lower trade barriers, manna from heaven, all these changes cause market readjustments, but they don’t bring the hungry into the market.

A really free market, free for labor too, can reduce hunger and glut. If migration barriers are removed in the IIASA model, people go freely to land and jobs and earn or grow enough to feed themselves. Surpluses go down. Farmers and nations prosper. Of course, Ferenc says, that would never happen in the real world. Migration barriers protect not only the high wages of domestic laborers but also the cultural identities of nations.

But there is another successful policy. It combines three changes that make little difference separately but add together to eliminate both hunger and glut:

– worldwide agricultural trade liberalization, – a foreign aid program that transfers income from the rich countries (0.5% of their GNPs) to the countries where hunger is greatest. – investment of that aid in development projects that generate income for the poorest people.

Under this combination of policies, the entire world economy grows faster. The economic gain in the rich countries is more than enough to finance the aid flows.

When Ferenc showed me that calculation, I found it hard to believe. I have not been conditioned to expect win/win solutions. But this one was worked out painstakingly, country by country, price by price, year by year, and agreed upon by economists from 20 nations.

I didn’t need a computer to see that it made sense. Instead of handing billions of dollars to farmers not to grow food, why not use those dollars for real economic development, so people who need food can buy it for themselves?

Copyright Sustainability Institute 1987