Food and energy billionaires pocket $453bn windfall, as cost of living crisis set to push hundreds of millions into extreme poverty

As food and energy prices rise to their highest level in decades, billionaires in these sectors have seen their fortunes rise by $453 billion in the last two years – equivalent to more than $1 billion every two days, a new Oxfam report reveals today.

Global food prices have spiraled by over 30 per cent in the past year and 62 new food billionaires have been created over the last two years. Cargill, one of the world’s largest food traders, now counts 12 family members as billionaires, up from eight before the pandemic. 

The Cargill family, along with just three other companies, controls 70 per cent of the global agricultural market.

Profiting from Pain is published as governments, business leaders and billionaires meeting at the World Economic Forum in Davos for the first time in person since the pandemic began and as rapidly rising food and energy prices hit the incomes of the poorest hardest. Oxfam recently warned that rising inequality could push as many as 263 million more people into extreme poverty in 2022, reversing decades of progress.

People in low-income countries spend more than twice as much of their income on food than those in rich countries, with those living through drought and conflict particularly vulnerable. In East Africa 28 million people are at risk of severe hunger.

Unprecedented and dramatic increases have seen 573 new billionaires created during the two years of the pandemic, at the rate of one every 30 hours. Billionaires’ combined wealth now stands at $12.7 trillion, equivalent to 13.9 per cent of global GDP – a three-fold increase, from 2000 when it stood at 4.4 per cent. The fortunes of the richest 20 billionaires are greater than the entire GDP of Sub-Saharan Africa.

The research also found that five of the largest energy companies – BP, Shell, TotalEnergies, Exxon and Chevron – are making a combined profit of $2,600 every second. Their profits are at a five year high, having increased by 45 per cent and earnings growth for the industry far outstrips that of any other.

Danny Sriskandarajah, Oxfam GB Chief Executive said “It is morally indefensible that people in East Africa are dying of hunger while the fortunes of the world’s super-rich are fuelled by skyrocketing food and energy prices.

“At a time when hundreds of millions more people are facing extreme poverty, there can be no excuse for governments not to address gargantuan profits and wealth in order to ensure that no one is left behind.

“Introducing wealth taxes, for example, would raise huge sums that could help vulnerable groups to survive this crisis and build a better future. Here in the UK, a windfall tax on energy companies would be a strong place to start to help all those who are struggling to eat and heat their homes.”

The International Monetary Fund, Organisation for Economic Co-operation and Development and EU have all proposed that governments impose windfall taxes on energy companies’ record profits to support people facing rising energy bills. Italy has become the first country to do so. In the UK the proposal has received cross-party support and latest reports suggest this is something the Government is considering.

Record-high global food prices are sparking social and political upheaval and the UN recently estimated more than 193 million people across 53 countries are experiencing acute hunger. In the UK, inflation has soared to nine per cent, its highest level for 40 years and four in five of England’s poorest households will struggle to heat their homes by October, according to analysis by the Resolution Foundation.

The pandemic has also created 40 new pharma billionaires. Pharmaceutical corporations like Moderna and Pfizer are making $1,000 profit every second from their monopoly control of the Covid-19 vaccine, despite its development having been supported by billions of dollars in public investments.

Covid-19 is already set to drive the biggest systemic increase in income inequality ever seen, with a particularly disastrous impact on women who have been disproportionately pushed out of employment. Increased unpaid care work has prevented millions of women from rejoining the workforce; the gender pay gap has now widened and is projected to take 136 years to close, up from 100 before the pandemic.

Oxfam recommends that governments urgently:

• Introduce one-off solidarity taxes on billionaires’ pandemic windfalls to fund support for people facing rising food and energy costs and a fair and sustainable recovery from Covid-19. Argentina adopted a one-off special levy dubbed the ‘millionaire’s tax’ and is now considering introducing a windfall tax on energy profits as well as a tax on undeclared assets held overseas to repay IMF debt. The super-rich have stashed nearly $8 trillion in tax havens.

• End crisis profiteering by introducing a temporary excess profit tax of 90 per cent to capture the windfall profits of big corporations across all industries. Oxfam estimates that such a tax on just 32 super-profitable multinational companies could have generated $104 billion in revenue in 2020.

• An annual wealth tax on millionaires starting at just two per cent, and five per cent on billionaires, could generate $2.52 trillion a year —enough to lift 2.3 billion people out of poverty, make enough vaccines for the world, and deliver universal healthcare and social protection for everyone living in low- and lower middle-income countries.