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close this bookExploding the Hunger Myths - High School Curriculum (FF, 1987, 173 p.)
close this folderLesson 5: Rich world, poor world?
View the document(introduction...)
View the documentActivity 1: Life on the farm
View the documentActivity 2: Selling food
View the documentActivity 3: Who suffers, who benefits?

(introduction...)

COMMON ASSUMPTION: People in poor countries have little in common with people in rich countries.

DESCRIPTION

This lesson asks students to investigate the parallels between the people of the industrialized and underdeveloped countries. Students will document the food situation for U.S. producers and consumers and compare it with the situations of third world people.

ACTIVITY 1

Life on the Farm is a reading, discussion, and interview exercise comparing the lives of farmers in the West African country of Senegal with those of farmers in the United States. It concentrates on the development of export-based agriculture, farmers' loss of control over production, and farmers' loss of land.

ACTIVITY 2

Selling Food has students look at techniques used to sell food and compare the effects of advertising on people's food purchases. They read about international infant formula marketing and then investigate food advertising in the U.S. media.

ACTIVITY 3

Who Suffers, Who Benefits? is a problem-solving exercise in which students role-play several groups of people affected by export agriculture. The activity helps point out that we in industrialized countries do not benefit in the long nun when farmers and workers in underdeveloped countries work for low wages and in poor working conditions.

BACKGROUND FOR THE TEACHER

Terms like rich country and poor country mask the fact that hunger exists in both industrialized and underdeveloped countries. They allow us to think of hunger as only occurring "over there." This leads to an us-versus-them mentality that blinds us to all that we have in common with the people of the third world.

There are inequities in food and wealth distribution in countries with low gross national products (GNP) such as Ethiopia and in countries with high gross national products such as the United States. In both countries, the poorest 20 percent of the people have very little land or income.' In both "poor" and "rich" countries, we see increasing concentration of resources in the hands of fewer people. Ever greater amounts of many countries' resources are geared to export production, producing goods to be sold to those who can afford them in other countries. Throughout the world, we also see customs, tastes, and traditions falling victim to marketing and advertising strategies.

Consider the plight of most U.S. farmers. When selling their crops, farmers must compete with thousands of other producers and so they are "price takers" - they have no control over the price they receive. But the manufacturers who sell farmers seeds, machines, and fertilizers face much less competition. As activity 1 demonstrates, just a handful of companies dominate sales. The same holds true among the buyers of major farm commodities. Just a few large food processors and grain traders buy virtually all American grain. Thus the corporate sellers of farm supplies and the corporate buyers of farm commodities are "price makers" - they can always increase their prices to ensure themselves a profit. But farmers cannot. They are caught in the middle.

Thus the prices farmers must pay for supplies - including the price of money (interest rates) - go up while the prices farmers receive for their commodities do not. The profits farmers earn from each acre fall, and more and more acres are required just to make ends meet. Farmers who can stay in business are those who are wealthy enough or have off-farm income to allow them to squeak through the lowest price dips.

Farmers without enough savings or non-farm income often lose their land because they mortgage it to pay for the costs of farming. As described in the handout Hard Times in the Heartland, farmers can borrow money on the equity they have in their land - the difference between what they owe on the land and the current market price. When land values went up in the 1970s, farmers could borrow more money on the same piece of land to invest in farming. But then prices for crops fell. Many farmers couldn't make their loan payments and had to sell off land.

With more land on the market, the market price of land went down, too. Then the banks had to tell the farmers their land wasn't worth enough to back up the loans. Unless the farmer comes up with money to pay back some of the loan, or more property for security, the banks often foreclose - demand full payment or take the land immediately to try to cut their losses.

Through this process, income from farming becomes concentrated in fewer and fewer hands. By the early 1980s, the richest 1 percent of farmers received about 60 percent of net farm income.

Farmers in industrialized countries and in underdeveloped countries face many similar problems. They lack control over what they produce. More and more of their production is geared to the export market, where fluctuations in demand are much more extreme than in the domestic market. They find themselves becoming debt-ridden in order to stay in business. They cannot control the prices they must pay for materials or the prices they are paid for their products. Large numbers of farmers are losing their land and moving to cities or becoming tenants on the land they formerly owned.

As food production becomes increasingly concentrated, so does food distribution and marketing. While there are 20,000 food manufacturing firms in the United States, fifty of those companies control about two-thirds of the industry's assets. Large companies continue to buy out small companies every year. The monopoly control of food can increase prices for all. Witness the breakfast cereal market - over one hundred different types of cereal virtually all controlled by three companies. Such monopoly control of the food industry results in as much as $20 billion in overcharges to consumers each year.

Advertising plays a major role throughout the world, teaching consumers new food habits and influencing their choice of products. The displacement of traditional foods by sodas, chips, and sweets has serious nutritional and economic effects. This is especially true for the poor, be they in New York or Nairobi. If their food dollar goes to buy low-nutrition food, there is nothing left for foods their bodies really need. Every day we are exposed to hundreds of messages about food. Packages, billboards, magazines, and television and radio commercials are influencing our tastes and food habits. In underdeveloped countries, food companies have used advertising to create markets for imported food products. An ad used in Africa in the 1970s appealed to parents' desire for their children's success with a picture showing a healthy African boy and the statement "He'll be smart. He'll go far. He'll eat bread." This ad equated intelligence and success with eating a nonindigenous food (wheat) that will not even grow well in much of Africa.

A problem with falling into the rich world, poor world mentality is that we can begin to believe that somehow we in the industrialized countries benefit from the poverty of workers in underdeveloped countries. We fail to see that in the long nun we do not benefit, we actually suffer. In the case of bananas, for example, plantation workers receive only 1 to 2 percent of the selling price of bananas. Only 11 percent of the money the consumer pays even stays in the country where the bananas are grown. Eighty-nine percent of the cost of bananas goes to the companies selling and distributing the product. If workers received double the wages they now receive, it would not substantially increase the grocery store price of bananas. The banana companies would only have to give up a small proportion of their profits.

Many underdeveloped countries, such as the Philippines, Hong Kong, and Malaysia have set up free trade zones with laws that prevent workers from organizing unions for better working conditions or higher wages. Transnational corporations move their manufacturing facilities away from the industrialized countries to take advantage of these free trade zones. Again, the prices to U.S. consumers do not drop significantly when products are grown or made by low-paid workers. A study by the AFL-CIO recently examined two brand-name shirts, one made in the United States and one made in Singapore. The shirts sold for the same price in the United States, but the shirt made in Singapore cost about half as much to produce, thus benefiting the transnational corporation.


Mexican peasants and the green revolution

The examples above demonstrate that the consumer in developed countries does not actually benefit a great deal by buying goods produced by poor workers. We can also see that enforced low wages and poor work conditions can actually hurt consumers in developed countries.

One way poor work conditions can hurt the consumer in developed countries is illustrated by the "circle of poison." This phenomenon occurs when companies in the United States and Europe export dangerous pesticides (often illegal where they are produced) to underdeveloped countries. To save time and money for the growers of crops, these pesticides are often used without proper equipment or instruction. Sometimes stocks of illegal pesticides are sold cheaply to dump remaining supplies. The illegal or dangerous chemicals damage the health of workers who grow the export crops, and the residues of these pesticides return to the developed country in imported food.

Hungry and poor people do not remain passive. Where adequate food, health care, and a decent salary are denied - as in the case of many free trade zones and agricultural plantations - people try to improve their lives. They may organize unions, strikes, boycotts, or educational campaigns. They may try to form cooperatives or other alternative work situations. In many countries, such as Guatemala and the Philippines under Marcos, these attempts at organization have been violently struck down by the armed forces. We often see our tax dollars being used to give aid to armies fighting their own people. (Lesson 6 covers the role of aid and development more fully.) Increasing amounts of people's incomes (in both the developed and underdeveloped countries) are feeding a growing militarization throughout the world. Ultimately, this hurts us all.

QUESTIONS TO EXPLORE

1. How has farming changed in the United States and abroad in the last century?
2. Why are farmers in different countries losing their land and being forced to move to cities?
3. What influences people to buy certain foods? Does advertising promote informed choices?
4. What are some problems with marketing food as just another product like stereos or cars?
5. How can export agriculture affect growers, farmworkers, and consumers? What are some of the effects in the exporting and the importing country?
6. What are some ways hunger and poverty affect everyone?