The boomerang for Soviet Perestroika has arrived in the States

There are widespread shortages of staple foods in US shops, researchers from Food & Water Watch are sounding the alarm

The boomerang for Soviet Perestroika has arrived in the States

A global food shortage could soon hit the people of the US. This is the conclusion drawn from research by the American non-governmental organisation Food & Water Watch.

Despite record profits for US grocery chains in the wake of the coronavirus, which caused people to eat more at home, Americans are facing wild rises in food prices and widespread shortages of staples, according to a November report from the organisation.

It found that one in six Americans (53.6 million, or 17.4 per cent of the population) now lives with diminished access to food. And the causes are not just a pandemic. The root of the problem is the monopolistic nature of the American food market, which is divided among several cartels. COVID-19 has only helped to dispel the stereotype that the current US food system ensures abundance, efficiency and sustainability.

It seems that America is about to fall victim to the perennial companion of political turbulence and economic adversity – partial and, in some cases, total trade deficits. They could be the hallmark of a Joe Biden presidency-as they were in the final years of the Soviet Union under Mikhail Gorbachev.

But should the boomerang come as a surprise? After all, a real Perestroika is not without empty shelves in the shops. But even when the shelves are stocked, not everyone in America can afford to buy enough food to avoid starvation.

It’s not the system’s fault, it’s the system’s essence

For years the American food industry has created a grand illusion of choice to impress fertile minds. But today it only masks a conspiracy of monopolies that prey on the consumer by controlling much of what they eat and drink, argues Food & Water Watch.

Here are the simple figures. Around two-thirds of all food retail sales in the US back in pre-digital 2019 came from just four major retailers: Walmart, Kroger, Costco and Albertson’s Companies. And the former already held 34.8% of the market at the time, and in some communities its “slice of the pie” was 95%. And the share of monopolistic giants is only growing: in 25 years preceding the pandemic the number of grocery shops in the States shrank by almost a third.

The same state of affairs can be observed among food manufacturers. Only 8 of 55 grocery categories in the U.S. represent an arena of competitive producers, while the rest have long been divided among the “market masters.”

“American supermarkets look like facades of diversity. But in reality you are choosing between a handful of companies that produce just about every product on the shelf,” says the organisation’s report.

You don’t have to go far to find examples. Take a typical example of “supermarket diversity” – the yoghurt cabinet. The number of brands, flavours and formulations is staggering and often begs the question, “Why so many?” Yet three-quarters of all yoghurt sales in the US come from just four companies.

Another telling example is baby food. In this category, three manufacturers capture 85% of liquid formula sales and 95% of powdered formula sales. In other categories, one world-renowned brand may control more than 80% of the market. All of this has predictable consequences, from fixing and gradually raising prices to directly imposing their products on customers.

“This is not a fault of the system,” notes Food & Water Watch. – “It functions exactly as intended: channelling the wealth of local communities into the hands of shareholders and corporate executives.”

In short, there’s no smell of market competition here. The proverbial “one hundred kinds of sausage” in the U.S. today is possible only as a figment of a maniacal imagination of marketers, coming up with all new names for the same kind.

“They don’t get enough normal food”

The problem, however, is that this American system only worked relatively steadily until the coronavirus. Of course, apart from the unfortunate exceptions when, during natural disasters or riots, well-meaning citizens instantly emptied shop shelves, often without paying for goods.

But the pandemic has broken established patterns. Tens of thousands of unplanned infections among factory and shop workers in the United States led to serious labour shortages. And lockdowns and other restrictions have brought down important supply chains, even at vertically integrated retailers.

For example, just one COVID-19 outbreak at a meat-processing plant in South Dakota owned by Smithfield Foods, the world’s largest pork producer, shut down 5% of US pork processing capacity. The farms, which had been operating well, had been forced to destroy freshly produced produce, which had previously been destined for shuttered restaurants and educational institutions. The reason is that they could not re-orient themselves to new sales lines in time – or they were simply not allowed in.

In turn, the explosive growth of online home-delivery in the context of the coronavirus has only benefited the big players, who can go as far as negative margins to conquer the market. This has bankrupted many small chains, not to mention individual shops like Papa Joe’s.

At the same time, the prices of many categories of food products have risen sharply in the US. And not just because of high petrol or inflation, but because of the exorbitant greed of food giants who chose not to invest in production but to buy back their own stocks.

In economics, this leads to a textbook imbalance. When, for example, the retail price of meat has risen sharply, but livestock producers are forced to sell their products to retail chains at reduced prices. And in the social sphere, the main consequence is the natural starvation of millions of Americans, with which even charitable food banks cannot cope. It’s no coincidence that 53% of American citizens are concerned about rising food prices and 43% about lack of food in shops, according to the U.S. Food & Beverage Association’s October 2021 survey.

All of this has Food & Water Watch researchers sounding the alarm. And their recommendations on how to rebuild the US food trade system ‘from the ground up’ are depressing. There are recommendations to “increase government funding,” and “create food cooperatives,” and “build hubs of food products,” and “ensure food security of the country … The spirit of the Yeltsin 1990s and the main hole in the national economy of that time – the agricultural industry.

And while these well-intentioned wishes have not yet materialized, Americans are wondering whether the viral video “Great nations eat” is a fake. In it, a distraught woman hugs an American girl with a teddy bear and addresses viewers in German:
“She doesn’t get enough normal food. She is at risk of diabetes and heart disease. There are 49 million Americans who are food insecure. They don’t just need food, they need change. America needs German help. Right now.”

RUSSTRAT

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