About IATP

The Institute for Agriculture and Trade Policy promotes resilient family farms, rural communities and ecosystems around the world through research and education, science and technology, and advocacy.

Founded in 1986, IATP is rooted in the family farm movement. With offices in Minneapolis and Geneva, IATP works on making domestic and global agricultural policy more sustainable for everyone.

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May 16, 2008

Growing Minnesota Biodiesel - Responsibly

Minnesota recently passed legislation to increase the biodiesel content of diesel fuel sold in the state from the current 2 percent to 20 percent by 2015. The Institute for Agriculture and Trade Policy, together with Minnesota farm and environmental organizations, worked with legislators to make sure that the mandate, which is the highest in the nation, will not only support the biodiesel industry, but will also specifically benefit Minnesota’s economy and environment and help us move forward towards the next generation of biofuels.

While the merits of mandates are debatable, if they are going to be put in place, they must incorporate provisions to ensure that Minnesota's farmers, economy and environment are the beneficiaries - not just a few multinational processors.

In particular the legislation included:

• A first–in-the-country palm oil ban (and possibly first in the world - if you know of others, let us know). Virgin palm oil cannot be used to produce biodiesel to meet the mandate, which will help assure that Minnesota does not contribute to environmental destruction and rainforest clearing associated with new palm oil production - a practice outlined in our recent report Biofuels and Global Biodiversity.
• Focus on Minnesota and Midwest production. The increasing levels of biodiesel content can only go into effect if Minnesota is producing at least 50 percent of mandated production level in-state from feedstocks produced in the US and Canada, assuring that this market share will benefit Minnesota farmers and biodiesel producers.
• Opening the door for the next generation. Five percent of the mandate needs to be met with biodiesel produced from non-traditional feedstocks (waste oil, algae, etc.), which will help diversify biodiesel production and assist with a shift away from food and feed crops such as soybeans.
• Assessing the costs and benefits. Reports to the legislature are required annually on price and supply of biodiesel, as well as the impacts of the mandate on the Minnesota biodiesel industry and the use of Minnesota crops and materials used for biodiesel production.

Here is the full text of the bill:

—Jim Kleinschmit

May 15, 2008

The WTO Will Not Solve the Food Crisis

If I hear Pascal Lamy say one more time that the Doha Round will help solve the current food crisis, I am going to explode! For months, the WTO chief has used every public opportunity (and then some) to push for the completion of the WTO’s trade round to solve the current food crisis. He is wrong.

The food crisis is the result of a series of circumstances, including alarmingly low stocks for staple foods—wheat, rice, and corn; high oil prices; poor climatic conditions in major food producing areas; and natural resources depletion. On top of this, more and more people can now afford dairy products and meat; and, rich countries have started to use food crops for biofuels to supplement oil consumption.

The WTO has nothing to say about most of these issues. The climate and energy crises are both outside the WTO's mandate and will likely remain that way. The WTO has no control over the oil oligarchy, OPEC, nor over biofuels policies in the U.S. and Europe. Nor does the WTO has a say over how the world plans to address the growing environmental crisis.

Instead, existing WTO agreements and the proposed Doha reforms are likely to intensify the food crisis. Further deregulation and liberalization will make agricultural markets more volatile and will strengthen the position of dominant players, mainly transnational agribusinesses like Cargill, Monsanto and ADM, in food and agricultural markets.

It is time to build a trading system that cooperates with international efforts to secure food for all. Trade agreements must allow governments to reestablish national and regional food stocks. Global commodity markets must be better managed. And it is time to create international competition laws to prevent transnational agribusinesses from abusing their market power. If Pascal Lamy could start proposing these steps we might start getting somewhere in resolving the crisis in our food system.

—Carin Smaller

May 14, 2008

Farm Bill a Missed Opportunity

The 2008 Farm Bill to be voted on by the House and Senate this week includes incremental gains for conservation, renewable energy, food aid and healthier, local food systems. However, it fails to reverse decades of deregulation that have increased agricultural market volatility to the benefit of global food corporations, and at the expense of farmers, consumers, rural communities and the environment.

Unfortunately, this Farm Bill does nothing to reverse the trend toward windfall profits for global food conglomerates. These companies have succeeded in pushing an extreme agricultural market deregulation agenda over the past three farm bills, including this one.

Congress dismantled grain reserves, acreage set asides and other market management mechanisms in the 1996 Farm Bill. Since then, agribusiness companies have reaped enormous profits. For example, Cargill’s profits increased nearly 1000 percent from $280 million in FY1997-98 to $2.34 billion by FY2006-07. In April 2008, Cargill reported net earnings of $1.03 billion in third quarter earnings, up 86 percent from $553 million in the same period a year ago.

These same global food corporations saw increased profits when farm prices collapsed by 40 percent after the market deregulation of the 1996 Farm Bill, and they are making even more money now that food prices have risen to crisis levels. Market deregulation in effect privatizes crucial market information, which suppresses price transparency and price discovery. This, in turn, increases the ability of big firms to manipulate prices.

While the debate continues to rage over how many billions in taxpayer subsidies are needed to maintain a legitimate safety net for family farmers, it has been a few big corporations that have been the primary beneficiaries of our commodity programs. Researchers at Tufts University found that industrial animal factories, owned and controlled by these same corporations, enjoyed $35 billion in indirect subsidies by being able to buy feed crops at 20-25 percent below the cost of production – a practice supported by the last two Farm Bills. Unfortunately, these corporate beneficiaries have almost completely evaded scrutiny in the Farm Bill debate.

Two new reports, from the Union of Concerned Scientists and the Pew Commission on Industrial Farm Animal Production, have documented the negative public health, environmental and social impacts of this unsustainable model of industrial meat production. The UCS report calls for strengthening conservation programs and antitrust enforcement; while replacing commodity subsidies with price supports to curtail this multi-billion dollar, cheap-feed subsidy to industrial animal factories.

Another glaring failure of the pending Farm Bill was the lack of political will in the House-Senate Agriculture Conference Committee to strengthen antitrust enforcement. While there were peripheral gains in curtailing the worst abuses of increasingly exploitive contracts against farmers, a majority of the conferees caved-in to the corporate lobbyists on the more substantive market reforms, like the ban on packer feeding, that would have curtailed anticompetitive practices that deny independent farmers fair market access.

This lack of political resolve couldn’t have come at a worse time for independent cattle ranchers. JBS-Brazil has recently launched a takeover of two of the top five U.S. beef packers, National Beef and Smithfield; and the nation’s largest cattle feeder, Five Rivers Ranch Cattle Feeding. If approved by the Justice Department, the merger would make JBS-Brazil—currently the largest beef packer in the world—the largest beef packer in the U.S. as well. Passage of the packer ban would have provided federal regulators with an important tool to potentially block JBS-Brazil from acquiring Five Rivers, and thereby might have mitigated one of the most anticompetitive aspects of the acquisition.

On the positive side of the ledger, the new Farm Bill does contain important bioenergy incentives. One important new program is the Bioenergy Crop Transition Assistance Program, which would provide farmers with financial incentives and technical assistance to accelerate the growing of “Next Generation” bioenergy feedstocks. It is based on the Reinvest in Minnesota Reserve–Clean Energy bill recently passed by the Minnesota Legislature. IATP worked in collaboration with other groups and members of Minnesota’s Congressional delegation to adapt its primary concepts into the Farm Bill.

This new innovative program will help farmers produce ethanol with native prairie grasses and other cellulosic plants, thereby reducing the pressure to grow more corn for ethanol; a prospect that is becoming increasingly controversial by the day. We want to thank Senator Klobuchar and Representatives Peterson and Walz, for their leadership on the agriculture committees in supporting this initiative based on the “Minnesota Model,” and succeeding in getting it included in the final bill.

Although IATP pushed hard to include another provision to require that biorefineries receiving federal support must be at least 51 percent community-owned, that provision was watered down to become one of several criteria that must be considered under the new bioenergy program. However, another provision does require that wages paid by federally supported biorefineries meet prevailing union wages in the region where the plant is located. Like local ownership, this important provision will help keep the wealth generated by the new bioeconomy circulating in rural communities, and not just siphoned off by Wall Street investors.

The Farm Bill agreement would also significantly bolster spending for conservations programs. For example, the bill would allocate $12 billion to a revamped Conservation Stewardship Program, which would help bring an estimated 115 million acres of working farm and ranch lands under improved conservation management practices over the next 10 years.

In supporting local food systems, one important provision would allow local and state governments to provide a “geographic preference” through federal procurement programs for locally grown foods. Another provision would provide funding for new local and regional food supply networks, including $33 million in mandatory federal funding for the Farmers Market Promotion Program. Additionally, the inclusion of a revamped country-of-origin labeling provision, along with allowing the interstate shipment of state-inspected meats, should increase marketing opportunities for independent livestock producers.

Another important provision is the inclusion of the Diversity Initiative, a policy package developed by unified rural and urban agricultural interests of African American, American Indian, Latino, Asian American and other small farmers and ranchers all across the United States. This package redresses outstanding issues of civil rights violations and significant land loss suffered by minority farmers because of inadequate policies at the United States Department of Agriculture, including a $75 million investment in the Socially Disadvantaged Farmer Outreach Program.

In the area of food aid reform, the bill includes a scaled-down pilot program that would allocate $15 million dollars annually to experiment with cash purchases for international food aid. A 2005 IATP report, U.S. Food Aid: Time to Get it Right, outlines the enormous problems in the current program. The report documents how the current program can result in the dumping of surplus commodities on developing countries’ markets in a manner that undermines local farmers, and can therefore harm long-term food production capacity. This pilot project is an important, albeit small, step forward in reforming the current U.S. Food Aid regime.

Finally, the Farm Bill extends the sugar program at a crucial time when it is under siege from the final phase-in of deregulation mandated by the North American Free Trade Agreement (NAFTA). It contains a new program that would use the growing sugar surpluses created by NAFTA and other free trade agreements to supplement corn ethanol production. This program could help stabilize corn prices, but also raises new questions about how much sugar and ethanol imports from outside of North America should be regulated.

Renewal of the Sugar Program, and the accompanying sugar ethanol provision, would provide more time for Mexican and U.S. sugar growers to continue pushing for an alternative agreement for “managed trade” for the sweetener market in North America, rather than simply standing by and allowing unbridled NAFTA deregulation to go forward unabated. We fear that the deregulation of the North American sweetener market will result in the destruction of the U.S. and Mexican sugar industries, which in turn will launch another wave of migration of farmers and workers who would be displaced from the Mexican sugar market that would rival the migration caused by U.S. corn dumping into Mexico in the 1990s.

Despite these incremental gains, the new Farm Bill does little to change the overall unsustainable direction of U.S. commodity policy. Neither the payment caps, nor the experimental revenue insurance program contained in this Farm Bill, challenge the premise of market deregulation. At the same time, the 1996 dismantling of publicly held grain reserves has left regulators without one of the most important tools to stabilize rising food prices in times of extreme market volatility such as we are experiencing today.

The so-called “commodity reforms” will do nothing to reverse trends toward increased market concentration, speculation and manipulation, indirect cheap feed subsidies to industrial meat production, increasingly volatile agricultural markets, or rising food prices.

It‘s time to rethink the fundamental assumption from the Enron era that market deregulation solves all problems. We need to reconsider an appropriate level of government intervention to mitigate inevitable market failures, such as those we are now experiencing with high levels of damaging market volatility.

For starters, Congress should consider how to best go about re-establishing strategic grain reserves to stabilize commodity prices, and to secure some predictability of feedstock availability for investors in the new bioeconomy. Additionally, Congress should hold hearings to review and, when appropriate, block pending and future mergers like JBS-Brazil; to explore the role that corporate speculators are playing in causing increased volatility in commodity markets; and to identify additional agricultural market reforms to increase price transparency and curtail damaging commodity speculation and price manipulation.

—R. Dennis Olson

May 09, 2008

Fair Trade and Volatile Markets

Earlier this week, IATP met with leaders of coffee farmer cooperatives from Latin America who sell in the certified Fair Trade market. In this case, they sell to Cooperative Coffees, a fair trade, green bean importer. Peace Coffee - a 100 percent, organic and fair trade company owned by IATP - is a founding member of Cooperative Coffees and hosted the farmers.

The representatives came from farm cooperatives in Bolivia, Peru, Mexico, Columbia and Guatemala. The challenges they described brought on by rising prices of all types of commodities were similar. Like other sectors, the coffee market has also been extremely volatile in recent months.

"In our lives we have to deal with changes all the time. But we haven't had any kind of contingency plans in our country for these changes," said Carlos Reynoso, of Manos Campesinas in Guatemala.

Policarpio Ali Cruz, from FECAFEB in Bolivia, told us that the price of gas there is about $8 a gallon, and the country is experiencing a 17 percent increase in inflation from last year. Despite the fact that the country exports oil, its citizens are still paying a high price.

Cruz described the results of U.S. aid policies in Bolivia over the years. Unfortunately, the story is similar in many developing countries around the world who have become dependent on imports. "Donated U.S. flour has eradicated wheat producers in Bolivia," said Cruz. "There are now plans for government support to try to bring back wheat producers."

Wilman Sotelo from Fondo Paez Cooperative in Columbia told us, "The volatility in prices has to do with global commodity exchanges." He pointed to speculation of commodities in global markets as a source for rising prices. Sotelo explained that one of the strengths of the fair trade system is more direct relationships with buyers, "so that we can get out of this system of commodity markets. We are building strong organizations where people are aware and think long-term, rather than getting taken in by a little more price" in the short-term.

Elmer Pena Silva, of CENFROCAFE in Peru, pointed to the damage caused by the devaluation of the U.S. dollar. "In spite of the fact that prices for coffee have been at high levels, the farmers are receiving less value," said Silva. He called for a more open-pricing system in commodity markets that would include more open contracts, rather than secretive, private contracts that allow for big buyers to manipulate the market.

The response to rising commodity prices was similar among these fair trade producers."The dialogue with our producers is to encourage more sustainable practices, protecting the forests and water and using less fertilizers," said Reynoso.

Sotelo emphasized the need to diversify further what cooperatives grow to include more food as a response to the volatile prices.

The meeting brought home once again how rising commodity prices, particularly oil and food, are affecting everyone - even within a fair trade movement built on economic and environmental sustainability.

—Ben Lilliston

May 08, 2008

Presidential Candidates and Food Prices

We've been hearing a lot from Presidential candidates on rising gas prices. But what about rising food prices? What is their plan to address increasing volatility in U.S. agriculture markets? And how will the candidates reform trade and aid policies to help countries around the world facing food shortages get the immediate help they need, as well as strengthen their own food production systems?

In a new commentary titled "Will the Food Crisis Finally Get the Attention of Presidential Candidates?" IATP's Alexandra Spieldoch and Dennis Olson offer some advice for the next Administration:

"Some have called for more laissez-faire policies that would support expanded trade as a response to the current food crisis. This approach is a dangerous one, particularly for net-food importing countries that lack food reserves and production capacity, making them the most vulnerable to price fluctuations that we are experiencing today."

Last month, IATP's Anne Laure Constantin outlined additional concrete steps to address the food crisis at the international level. Look for more from IATP on the food crisis in the coming weeks.

—Ben Lilliston

May 06, 2008

Biofuels and Biodiversity

The biofuel sector has grown so rapidly around the world, we are all still coming to grips with its impact - both good and bad - on the farm and food economy. A new report by IATP's Dr. Dennis Keeney and Claudia Nanninga finds that the first generation of biofuel feedstocks is exacerbating many of the environmentally-destructive practices of the current industrial model of agriculture. Specifically, the biodiversity of several of the major biofuel-producing countries is being threatened as feedstock production extends onto native vegetation.

Below is a press release from today:

Biofuels Contributing to Changing Land-Use Patterns, Affecting Biodiversity – New Report

Minneapolis – Increasing production of crops for biofuels is exacerbating agriculture’s impact on biodiversity in many parts of the world, finds a new report by the Institute for Agriculture and Trade Policy (IATP).

The report, “Biofuel and Global Biodiversity,” is by Dr. Dennis Keeney and Claudia Nanninga and is available at: www.iatp.org. The paper includes case studies of three regions that have been growing much of the feedstock for biofuels around the world: the U.S., Brazil and Malaysia/Indonesia.

“Ethanol and biodiesel are being overlaid on a broken agricultural production system,” said Dr. Keeney. “Many of the biodiversity impacts of biofuel feedstock production are not inherent to biofuel, but are more a symptom of damaging agricultural production systems and policies.”

The report found that in the U.S., increased corn planting is reducing the diversity of crop rotations and threatening wetlands and acreage set aside for conservation. In Brazil, greater sugarcane production for ethanol is moving into the fragile, diverse Cerrado region, and soy production for biodiesel is contributing to significant destruction of the Amazon rainforest. Perhaps the largest loss of biodiversity is occurring in the rainforests of Malaysia and Indonesia, where palm oil plantations are rapidly being established to feed the growing demand for biodiesel in Europe and elsewhere.

The paper found that the biofuel industry has expanded due to two complementary drivers: the increase in the price of crude oil and national policies to encourage the production and use of biofuel. It concluded that future policy solutions need to focus on:

• Protecting rainforests and fragile, native ecosystems and indigenous lands – The most significant biodiversity threat is from biofuel feedstock production that extends onto native vegetation;
• Making sustainability a priority in all biofuel production – Policies should encourage more sustainable production of existing biofuel feedstocks – and accelerate the transition to more sustainable next generation biofuel feedstocks;
• Moderating price volatility in agricultural commodities – An updated supply management system could stabilize market prices and reduce incentives to encroach on native vegetation;
• Redesigning our agricultural and energy sectors – Agriculture and energy policies should prioritize local production and use.

“Public policy has been a major driver in the development of the biofuel industry,” said Jim Harkness, IATP President. “In moving forward, smarter policy is crucial if biofuel production is going to protect and enhance – rather than decimate – global biodiversity.”

—Ben Lilliston

May 05, 2008

Monsanto and Agriculture Reporting

My old friend Russell Mokhiber at the Corporate Crime Reporter wrote last week about Learfield Communication's recent decision to cancel the show of farm broadcaster Derry Brownfield for comments related to Monsanto on his April 16 show. Brownfield criticized Monsanto for its ruthless tactics in enforcing seed patents with farmers. He quoted from an excellent article in the May issue of Vanity Fair by Donald Bartlett and James Steele, which chronicles the company's heavy-handed legal tactics.

The legal threat for farmers from biotech seed companies is not new. This issue spurred us to publish the report GMO Liability Threats to Farmers in 2001. The Center for Food Safety has documented over 100 cases where Monsanto has sued farmers over patent issues.

But aside from topic of Brownfield's last show, Mokhiber's story really points to a darkening shadow hanging over the dwindling number of farm and agriculture reporters in the U.S. - particularly at farm radio shows, magazines and weeklies. These farm media are heavily dependent on major agribusiness companies for advertising revenue. And as the U.S. agribusiness sector has become further concentrated, the agriculture press is forced to rely on fewer companies for a larger slice of their advertising.

The result is that the mainstream farm press, with a few exceptions, often misses big parts of the story when they cover hot button issues like the Farm Bill, trade agreements or rising agriculture prices. It is impossible to fully cover agriculture without reporting on how big companies benefit from the system. And more importantly, the whole story cannot be told without explaining how farmers' interests are distinctly different from major farm press advertisers like Monsanto and Cargill.

—Ben Lilliston

May 02, 2008

May Day in Southern Honduras

IATP Senior Fellow Mark Muller is working in a volunteer program in Honduras through July. He is blogging periodically on his experiences there.

Sometimes it can feel like we work in a little bubble. It's good to get out of that bubble sometimes to see how much others share IATP´s core concerns like keeping farmers on the land, respecting human rights, protecting the Commons, and keeping government and corporations accountable. I spent yesterday at a wonderful May Day celebration in Choluteca, Honduras, where hundreds of people marched in support of these issues. The hundred degree weather didn´t seem to phase people.

It was an impressive merging of labor unions, campesinos, human rights groups, environmentalists and the faith community. Unfortunately, it seems more difficult for these disparate groups to come together in the United States. Here are some photos below of the May Day celebration.

—Mark Muller

May 01, 2008

Parkinson's and Pesticides

A growing body of research links Parkinson's Disease to exposure to pesticides. Last week, the Toronto Globe and Mail reported on research efforts to understand how pesticides used in potato fields cause the kind of brain damage seen in people with Parkinson's.

IATP and the Collaborative on Health and the Environment have published a new fact sheet on the connections between Parkinson's and pesticides and other environmental causes. It was written by Jackie Hunt Christensen, former director of IATP's Food and Health program. The fact sheet outlines the causes of Parkinson's, including detailed information on a number of pesticides that have been strongly linked to the disease in animal studies. It also includes some helpful tips on minimizing your exposure to environmental risk factors for Parkinson's.

The Globe and Mail reports that in response to recent research Ontario announced a ban on sale and use of certain types of pesticides in gardening to reduce health risks. We need more such efforts by governments to assess and reduce the public health risks of pesticide use. 

—Ben Lilliston

April 29, 2008

UNCTAD XII is Over. . .More Work Ahead

IATP's Alexandra Spieldoch and Anne Laure Constantin were in Accra, Ghana for the United Nations Conference on Trade and Development (UNCTAD) XII meeting through April 24. They blogged periodically on events in Accra.

I'm now in Geneva, back from Accra and UNCTAD XII. I've not yet recovered from an intensive week of civil society activities, meeting with officials and enjoying the sun and heat of the West African capital. But my head full of new ideas for how to advance our work, in collaboration with other individuals and institutions, as a contribution to make trade work for development.

I find that what’s most exciting about these international conferences is the number of people you meet and the opportunity to exchange perspectives. These discussions enrich our work back home. Over the course of the week, we co-sponsored or attended events on: commodities, biofuels, the future of the WTO, African women and food sovereignty, the food crisis and free trade agreements. All of them were informed by very different perspectives, from civil society, business, governments, etc. The fact that the conference took place in Africa gave us an opportunity to understand better the realities in that region in relation to agriculture and trade.

To be frank, the outcome of the conference in itself was a disappointment. As Alexandra highlighted in her earlier blog, there has been no genuine attempt by the UN to free itself from the neoliberal agenda for development and growth. The final Accra Declaration sadly lacks any kind of ambition. Some of the language is contradictory, reflecting the hard compromises that Member States had to strike to finally come up with a text. UNCTAD’s role in enhancing intergovernmental dialogue on the links – and possible contradictions - between globalization, development and poverty alleviation, is being severely constrained. While developing countries had ambitious proposals in these areas, the outcome was less space for these discussions to take place within UNCTAD.

The dramatic food crisis now spreading around the world was part of every single conversation in the Conference Center. We are satisfied that there seems to be more focus on the need to support agriculture in developing countries in order to increase food supplies. However, we are very concerned that there is no fundamental reconsideration of how to most effectively support agriculture development: how can governments believe that more of the same will solve the crisis?

If the UN is not able to offer bold proposals for how to address the crisis, then who is?

In the end, this conference was only one step on our way. In the months ahead, IATP will keep advocating in favor of a reform of international agriculture trade rules, so as to address the new challenges posed by climate change, rising oil prices, speculation in financial markets and corporate power in agriculture. Stay posted!

—Anne-Laure Constantin