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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Think Forward is a blog written by staff of the Institute for Agriculture and Trade Policy covering sustainability as it intersects with food, rural development, international trade, the environment and public health.

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Food Challenge

June 11, 2010

Superbugs, food coops and global hunger

Our latest Radio Sustain podcast is packed! First, Maryn McKenna, author of SUPERBUG, discusses the antibiotic-resistant MRSA—an epidemic that kills nearly 19,000 Americans per year—and why our reliance on antibiotics in agriculture is partially to blame.

Next, Lindy Bannister from the Wedge Natural Foods Coop in Minneapolis reflects on her recent trip to China with IATP president Jim Harkness, where they held a workshop to explore opportunities for consumer food coops in China (Read a blog post about their trip here.)

Finally, IATP's Karen Hansen-Kuhn describes the highlights and shortfalls of new food security legislation currently before Congress. Will U.S. aid have strings attached in support of genetically modified crops or allow countries facing hunger the flexibility to decide what types of agricultural practices are best for them?

Listen to the episode here (mp3) and let us know what you think!

Andrew Ranallo

June 09, 2010

Food reserves: Reports from Africa and Asia

At the food reserves meeting that IATP co-organized in Brussels, Belgium along with Collectif Stratégies Alimentaires and Oxfam Solidarity, I was particularly interested in reports from Africa and Asia. Speakers from the East African Farmers Federation (EAFF), the permanent Interstate Committee for drought control in the Sahel (CILSS) and West African Peasant Farmers Network (ROPPA) emphasized that before discussing food reserves, Africa needs broader investment in the agricultural sector to adapt to climate change and achieve food security. 

In terms of establishing food reserve programs, it seems there are some initiatives already underway. One such example is the East African Grain Council initiative, which is working to establish warehouses and warehouse receipt systems. The East African Commission also intends to establish a regional mechanism for the management of food reserves by 2012, which would include an information management system to track food stocks. In East and West Africa, there is the World Food Program Purchase for Progress initiative (P4P), which facilitates the local procurement of food. The Club du Sahel is working toward the establishment of regional food reserves with minimal contribution from participating countries. Farmer organizations and cooperative societies can play an important role in their respective areas by constructing and managing food storage facilities. They are in a position to assist in the reduction of post-harvest losses and to serve as information hubs.

Southeast Asia has its own programs underway. The Association of Southeast Asian Nations (ASEAN) already has an emergency rice reserve system that was established in 1979 and then amended in 1997. There is also the East Asia Emergency Rice Reserve (EAERR), which operates as part of ASEAN+3 (China, South Korea and Japan). It seems that neither of the programs was effective in responding to the most recent rice price crisis. Today, governments are working toward an ASEAN+3 Emergency Rice Reserve (APTERR) to better respond to shocks and food scarcity in the future. The Asian Farmers Association’s (AFA) position is that in order for a rice reserve mechanism to be effective, it must:

1.   be easily accessible to address emergencies and related needs;

2.   have safeguards so that it is not used to dump surplus rice;

3.   not undermine incentives for local rice production;

4.   have clear modalities (modes and triggers for access, price and/or volume shortages and mechanics of distribution of rice stocks from the reserves);

5.   be subject to regular participative review and assessment.

AsiaDHRRA, a Philippines-based NGO, is working with small-scale producers to establish community reserves based on local traditions and Indigenous culture. Their programs support food preservation techniques, local rice banks and community nurseries, prioritizing the needs of women farmers, facilitating access and ownership of land by small-scale farmers and building public consciousness.

I walked away from the meeting wanting to know much more about regional, national and community reserves programs that already exist or those that are in formation. Clearly, each region is approaching this discussion differently and varied approaches are needed even as we discuss the need for a globally coordinated system to support reserves.

Alexandra Spieldoch

June 08, 2010

Food reserves: Deepening the debate in Europe

I am back in the office after an exciting meeting on food reserves that IATP co-organized in Brussels, Belgium along with Collectif Stratégies Alimentaires and Oxfam Solidarity. A food reserve, simply described, is when food is set aside in times of plenty to be used in times of scarcity. This meeting was a follow-up to another discussion on reserves in Washington, D.C. that IATP organized in late 2009, as well as a global sign-on letter urging governments to review the potential of food security reserves to address hunger and agriculture market instability.

In Brussels, we continued the dialogue with farmers, academics, development agencies, government officials and UN agency representatives. Some basic points that I appreciated from the discussion:

  • Even though food reserves alone will not solve the global hunger problem, no long-lasting food security can be achieved without including reserves as part of the policy package.
  • While much investment is going toward increasing food production, this could very well lead to oversupply in the long run, creating more volatile markets; in this context, better managing our global food supply is worth pursuing.
  • While local and regional reserves programs are already underway in many regions, such as West Africa and Southeast Asia, a globally coordinated system for holding some grain stocks at the international level could also provide some insurance that prices won’t go too high or fall too low and that emergency food will be available in times of depleted stocks.
  • There was strong interest—but not an agreement—among the participants to support the UN Committee on Food Security as the most appropriate body to provide global coordination.
  • More focus is needed on defining what role the government versus the private sector should play.
  • International trade rules as they exist today do not hinder countries from being able to set up reserve programs.
  • Virtual reserves (as opposed to physical stocks) may help against speculative bubbles, but will not address other causes of price instability relating to food scarcity.

While there is much to sort out, it is clear that the international community is moving on this issue. France and Brazil have already set up working groups to discuss joint measures for food reserves as a means to curb volatility. Brazil, Russia, India and China have also announced an initiative to review reserves more closely.

Managing risk and volatility will be one of the thematic areas of the next UN Committee on Food Security session in October 2010. IATP, along with others, is working to ensure that farmers’ voices are central to these multilateral debates and that governments remain true to their obligations to ensure the Right to Food.

Alexandra Spieldoch

May 20, 2010

The evolving relationship of NGOs and the UN

IATP's Sophia Murphy attended an invite-only meeting outside of Dublin earlier this week organized by the UN High-Level Task Force for the Global Food Security Crisis.

Home today from Dublin. I ducked in and out around the ash cloud—some 30 of the 150 or so expected participants at the Dublin meeting didn't make it when the airport shut down. A pity. It was a good meeting—serious, purposeful, good humored; a good mix of UN and NGOs, with a sprinkling of government officials. We were there to discuss the update to the Common Framework for Action in response to the Global Food Crisis (IATP's comments here). The discussions were all off-the-record, but here are a few thoughts on what happened. 

First, it is encouraging that the framework is being updated. The original wasn't bad—a bit patchy, some jarring assertions (to my eye) and a lot of good ideas. It was done in a rush, and that showed; though actually things done in a rush are not necessarily worse that things lingered over, especially when you involve some 20 or so UN agencies plus the World Bank (which is technically UN) and the WTO (which is explicitly, though controversially, outside the UN system). Anyway, well done to the High-Level Task Force team for pushing through with an update.

Second, the first go round involved no NGOs or civil society voices. This round has. Not that the document is consensus based, or even for NGO ownership. The Dublin meeting was a consultation, not the creation of any formal partnership. The document is intended for sign-off by the heads of all the agencies involved, and thereby to guide agency work related to food security. NGOs can walk away and bash at the CFA take II all they like, but it was a serious consultation, with time and enormous effort put into both acknowledging the written submissions (which came from some 51 NGOs and CSOs) and thinking how best to allow participation from the audience. 

Third, I used to work in NGO relations for the UN, with an office called the Non-Governmental Liaison Service. I have attended many of UN meetings, both on the UN side (helping UN agencies understand how NGOs work, and trying to get them to pay more attention to what NGOs could contribute) and on the NGO side, before and after my stint at the UN. I think things have come a long way since I was really involved in this kind of work in the 1990s. The whole culture has changed. While the UN is run by governments, NGOs represent a very different perspective that is invaluable. NGOs are on the ground, facing different constraints and opportunities. The interaction among the UN officials themselves seemed relaxed and constructive, with few turf lines drawn, and between the UN and NGOs, somehow natural and uncomplicated. It was a very welcome atmosphere. The meeting was co-chaired by Tom Arnold, CEO of the NGO Concern International, and David Nabarro, the UN Secretary General's appointment to head the task force. 

The draft still has to be finalized and is expected soon—possibly as early as mid-June. I think it will reflect this consultation and the ideas that were put forward—and will be the better for it. Moreover, I think the UN knows and appreciates that this is so. It was a good way to spend two days.

Sophia Murphy

May 17, 2010

Action on the global food security crisis

IATP's Sophia Murphy is attending an invite-only meeting outside of Dublin this week organized by the UN High-Level Task Force for the Global Food Security Crisis. 

Some 150 people have gathered in Malahide, Ireland, just along the coast from Dublin, for a two-day workshop to review the Comprehensive Framework for Action of the UN High-Level Task Force for the Global Food Security Crisis. First put forward in 2008, the High-Level Task Force is completing a review and update that has taken months. The task force has considered written submissions from some 51 NGOs (you can read IATP's submission here) and social movements as well as many meetings of the reference group created by the UN to guide the work. 

Today in Malahide, the review will take a further step in a two-day workshop, hosted by the Government of Ireland and the Irish NGO Concern. The draft revised document will be handled by six working groups: food assistance, social protection systems, food production and value chains, better managed ecosystems for food security and nutrition, trade and tax policies in international food markets, and information and monitoring systems. There are four cross-cutting issues that will be considered in all the working groups: the right to food, gender, nutrition and environmental challenges (e.g., climate change). Each working group will have two co-chairs, one from the UN system and one NGO representative. I'll be representing IATP as co-chair of the group on trade, taxation and markets with a representative of the World Trade Organization. 

The setting is beautiful, and the UN team has clearly worked very hard to do justice to the comments they received. They are working with Concern to get the most out of the next two days. The mix of organizational politics, institutional cultures and philosophical leanings should make for a lively debate. The trade chapter is particularly marked by clearly different understandings of how trade works and what it should do—the existing draft is not internally coherent, and from an NGO perspective, continues depressingly to rely on the Doha Agenda to do things to address the food crisis that it is patently unfit to do. Let's see if we can improve on things in the next 36 hours.

Sophia Murphy

Food reserves needed to respond to global food crisis

IATP helped organized a letter signed by more than 60 civil society groups calling for the United Nations to consider food reserves as a tool to address global hunger. Below, see the press release we sent out earlier today.

Food reserves needed to respond to global food crisis, civil society groups say
UN meeting in Dublin should focus on addressing agriculture volatility and hunger

 

Minneapolis/Dublin – Civil society organizations today called on governments and United Nations bodies to honor previous commitments to explore the potential of food reserves to address hunger and stabilize agricultural markets. The letter, signed by more than 60 groups, was presented at a UN meeting being held in Dublin on May 17–18 on the global food crisis.

The civil society letter challenged global leaders to “take decisive action to address the structural causes of food insecurity and to prevent a repeat of recent food price spikes. Food reserves are a valuable tool in improving access and distribution of food. They can strengthen the ability of governments to limit excessive price volatility for both farmers and consumers.”

The Dublin meeting was convened by the United Nations High-Level Task Force for the Global Food Security Crisis. Participants, which include representatives from governments and civil society organizations, will discuss the task force’s Comprehensive Framework for Action.

“Rising rates of hunger, and the loss of rural livelihoods—particularly in developing countries—has highlighted the urgent need to act,” said the Institute for Agriculture and Trade Policy’s Sophia Murphy, who is attending the Dublin meeting and will co-chair the working group on trade. “Food reserves make sense: putting food aside when it’s abundant, to use later when the need is greater. Governments have expressed interest in reserves, indeed, most governments operate a reserve in some form or another. Now is the time to get reserves working the way they should to protect food security and promote resilient rural communities.”

During the High-Level Conference on World Food Security in 2008, then again at the World Food Summit in 2009, governments recognized the potential of stockholding to deal with humanitarian food emergencies and to limit price volatility, calling for a review of reserves. But that review has yet to take place. In March 2010, Brazil, Russia, India and China (the BRIC countries) also committed to helping countries establish national grain reserves.

In the letter, civil society groups requested that the UN High-Level Task Force conduct a comprehensive review of food reserves by allocating resources and setting a firm timetable for completing the review in 2010. Additionally, they called on individual governments to increase foreign and domestic investment to achieve culturally appropriate local and regional food security reserves; establish an international commission on reserves, possibly coordinated by the FAO Committee on Food Security; support multilateral, regional and bilateral agricultural trade rules; and renegotiate the Food Aid Convention to include food security reserves. The full letter is available here.

Last year, IATP published “Strategic Grain Reserves in the Era of Volatility,” examining the potential role of reserves in stabilizing agriculture markets. IATP, Collectif Stratégies Alimentaires and Oxfam Solidarity will hold a civil society meeting in Brussels on food reserves on June 1–2.  For more details see our Food Security page.

Ben Lilliston

April 27, 2010

Exploring the Cuban food system

The latest issue of the IATP Food and Society Fellows’ Digest, Exploring the Cuban Food System, reflects on the fellows’ recent visit to Cuba examining sustainable and urban agriculture systems. As the new digest explains, despite the fundamental differences between the U.S. and Cuba, there was much to learn. As Food and Society Fellows Program Director Mark Muller writes, “The urban food production in Havana was very impressive, and the ingenious ways that people found to grow food provides a model for local foods enthusiasts in the United States.We in the land of plenty can learn something from those who have struggled so much against scarcity.”

Some key topics explored in the issue include:

IATP Food and Society Fellows in Cuba

Andrew Ranallo

March 19, 2010

Market deregulation and food security

Large financial institutions play a big role in our food system. From providing credit to farmers, to influencing commodity futures markets that ultimately play a role in setting food prices, big financial players deeply influence the food chain. The latest issue of Food Ethics magazine, published out of the United Kingdom, examines how the breakdown of our financial system has affected food security.

The issue includes articles on whether our finance system is set up to value the environment and hunger; the role of big financial speculators in creating volatility in food prices; food companies and tax avoidance; and how finance could best support a sustainable food system.

IATP's Steve Suppan contributes an article on the role of commodity market deregulation in the U.S. and global food prices. Suppan writes about how speculators like Goldman Sachs and Morgan Stanley dominated agricultural futures markets to drive prices up in 2007 and early 2008, and then down as they disinvested from the market.

Food Ethics editor Tom MacMillan writes in his introduction: "The bottom line is that governments need to make the link between food security and financial regulation, to support long-term investment everywhere from the biggest companies to the smallest farmers around the world. Better rules and practices could speed us towards a sustainable food system. Right now, though, our financial institutions have their feet on the brakes."

Ben Lilliston

March 08, 2010

“Oughta Be A Woman”—Celebrating International Women's Day

On March 8, 2010 and in this 15th anniversary of the World Conference on Women that took place in Beijing, China, we celebrate women worldwide as our leaders, our mentors, our mothers, our daughters, our sisters, our sources of strength. What does it mean to celebrate women in this world that is so mired in the multiple crises relating to international development, hunger, poverty and the environment? What does it mean to celebrate women in a patriarchal system of food and agriculture that marginalizes their voice? In fact, we cannot. Until we shift course from our current model of production, women will continue to suffer disproportionately even as would wish to celebrate them.

They are the majority of the world’s food producers and yet they have the least power. Eighty-five percent of farms that provide agricultural value-added crops to the global market are no more than two hectares and the majority of these are run—but not usually owned—by women, who lack access to land, water and other resources. Women are the main food providers in the world and are responsible for the care of their families in both rural and urban areas. As such, they are at the center of the ongoing global food crisis.

As we talk about solutions for the food crisis from a gender perspective, our approach cannot be to insert them into the global supply chain. Rather what women need most is to have their rights respected in relation to food, health, water, education, housing, land, work, and freedom from sexual discrimination and violence.

It is time for the world to truly celebrate women and get serious about implementing and strengthening their rights. Women are not waiting: We are moving. We are mobilizing for change.

Alexandra Spieldoch

January 08, 2010

The race for the world's farmland

The accelerated practice of land grabbing—where countries or corporations buy up agricultural land, usually in poor countries—is one of the most troubling responses we've seen to the sharp rise in food prices in late 2007 and early 2008. The Woodrow Wilson International Center for Scholars has published a valuable new book on the topic: Land Grab? The Race for the World's Farmland. It includes a diversity of perspectives on land grabs—including an article by IATP's Alexandra Spieldoch and Sophia Murphy on what this development could mean for food security and poverty reduction. Other articles cover potential "codes of conduct" for land grabs and regional case studies for Africa, Asia and Eastern Europe.

The NGO GRAIN is documenting land grabs around the world. Unfortunately, with rising hunger and energy prices we can expect this dangerous trend to continue.  

Ben Lilliston

January 05, 2010

Hunger and the human rights solution

As we step into a new decade, imagine we have an eraser to wipe away the tired yet relentless drive to further liberalize trade at nearly every corner—and instead, take a fresh look at what policies could help the over one billion people around the world without enough food to eat. How could we re-write trade and investment policies to support efforts by countries struggling with hunger to better feed themselves? How can we strengthen the resilience of agriculture to better adapt to climate change? How can we better stabilize highly volatile markets that make it so difficult for small scale farmers to make a living?

GlobalFoodChallenge A new book, edited by FIAN's Armin Paasch and IATP's Sophia Murphy, makes a convincing case that by putting human rights, particularly the right to adequate, healthy food, at the center of economic and development policy we can better address hunger in the short and long term. The Global Food Challenge, with contributions by some of civil society's leading thinkers on food security and trade policy, outlines a series of proposals to integrate established human rights law into multilateral and bilateral trade negotiations. It includes chapters on trade policy, foreign investment, women's role in food production, speculation on agricultural commodities and climate change, and food security. 

The book includes contributions by IATP's Alexandra Spieldoch and the UN Special Rapporteur on the right to food, Olivier De Schutter, among many others. You can read the Executive Summary and find the full book on our Web site

Ben Lilliston

November 17, 2009

Faster and Further in the Fight Against Hunger

IATP's Alexandra Spieldoch is blogging from Rome at the World Summit on Food Security.

 

At the summit today, there is a buzz of government delegates and media inside the halls of the Food and Agriculture Organization here in Rome. Unfortunately, the summit is a bit stale and out of sync at a time when so much more is needed. For example, governments adopted the final declaration on the morning of the first day of the summit, even as there are two more days of negotiations and roundtables to go before the summit officially ends. The declaration in and of itself isn’t bad. It isn’t groundbreaking either. In fact, it distinctly falls flat in terms of any new approaches being put forth.

 

In the declaration, governments support the Global Partnership for Agriculture, Food Security and Nutrition (GPAFS) without much clarity around what this kind of coordination actually means. They reference the sense of urgency to act and to coordinate actions that increase production and trade among other things, even as it is clear now that this approach has contributed to the failure of the food system and that different responses are needed. The declaration supports a stronger Committee on Food Security (CFS), a central part of the Global Partnership, and a coordinating structure. This is an important move in terms of increasing coordination and putting the emphasis on the important role of the UN, where it should be. Yet we also know there is the parallel track, which is the G20 push for a global trust fund to address hunger to be housed at the World Bank; this effort is moving very quickly outside of a UN process and is seemingly unaccountable to the broader commitments being made in Rome. Governments also commit to substantially increasing overseas development assistance (ODA) without giving targets or timeframes.

 

The declaration references the need to examine possible links between speculation and agricultural price volatility and the need to examine the role of reserves. This isn’t new language, but it is important. From IATP’s standpoint, it is right on track. It is a concrete measure that governments must get behind. In fact, some already are. In a press briefing yesterday, France and Brazil announced they will take concrete measures to curb price volatility and to regulate predatory investments in farmland (land grabs), expressing the importance of regional grain stocks. Farmer-owned, publicly-managed food stocks are a critical policy tool for improving the livelihoods of smallholder producers and to eradicating hunger and poverty.

 

In short, we have the tools to improve global food security. Now it is a question of political will. If the message from governments and the UN is that hunger is a collective tragedy and hungry people cannot wait, then leaders must invest in what is needed to change this horrible path that does not have to be.

Alexandra Spieldoch

November 16, 2009

World food summit: rhetoric or action?

Today at the World Summit on Food Security, there was plenty of lofty rhetoric. United Nation's Secretary-General Ban Ki Moon told delegates that "food is a basic right" and "our job is not just to feed the hungry, but to help the hungry feed themselves." And according to Bloomberg, Pope Benedict XVI  cited "greed which causes speculation to rear its head even in the marketing of cereals, as if food were to be treated just like any other commodity."

Fine words. But, like so many of the international meetings the past two years on the food crisis, missing from the various statements of government leaders were clear financial commitments and regulatory reforms to address failures in agricultural markets, like speculation.

When it comes to action, the summit represents an opportunity for the Obama administration to lead on a global stage (and according to a new USDA report released today, food insecurity is also hitting close to home). Just prior to the summit, IATP and over 20 other U.S. based organizations wrote to the Obama Administration with 10 ideas for action at the summit. Unfortunately, thus far,“Our officials, along with U.S. agribusiness, are spreading the myth that more intensive production can feed the world, a message that is not only incorrect but dangerous in terms of its harmful impacts on sustainable livelihoods for the majority of food producers, and its exacerbation of the converging climate, economic, water and energy crises,” the U.S. groups wrote. 

Today, we also delivered a specific proposal to government officials at the Rome meeting, urging their support for food reserves as a tool to better manage food supplies and address extreme volatility in agriculture markets. Last month, IATP and ActionAid USA organized a briefing in Washington on food reserves and how they might be used at the national, regional and international level.

IATP's Alexandra Spieldoch is in Rome following the discussions, briefing government officials and working with civil society organizations. Government leaders still have two more days to step up. 

Ben Lilliston

November 06, 2009

Betting on climate change: the carbon derivatives market

This week in Barcelona negotiators are making one more attempt to resolve some of many differences for a new agreement to implement the United Nations Framework Convention on Climate Change (UNFCC). There are three UNFCC “flexibility mechanisms” intended to enable countries to meet their Greenhouse Gas (GHG) reduction commitments. One mechanism is the buying and selling of “carbon allowances,” i.e., permits to pollute, and “carbon offset credits,” largely based on agricultural or forestry projects to reduce or avoid GHG emissions. Industrialized countries claim that Article 17 of the Kyoto Protocol authorizes them to extend the primary carbon trading market into the world of financial derivatives.

As part of IATP’s preparations for the UNFCC summit, December 6–18 in Copenhagen, Denmark, as a member of the Commodity Markets Oversight Coalition (CMOC), we helped to draft and signed an October 30 letter to Senators John Kerry and Barbara Boxer. The CMOC does not take a position on the overall Senate energy and climate change bill. Instead the letter outlines dangers that the carbon derivatives market poses to the realization of U.S. GHG reduction goals. The letter notes that Congress has yet to agree to fundamental reforms to the financial and commodity derivatives markets in which carbon derivatives would be traded. Indeed, there is strong opposition to most of these reforms from the financial services industry, which has created new loopholes in draft legislation that could induce extreme price volatility in derivatives markets, including that for carbon. Volatile and confusing carbon price signals would delay and inhibit investments in GHG reduction technology. Such investment delay would be a global warming accelerant.

To reduce the likelihood of extreme carbon price volatility, the CMOC letter calls for mandatory exchange trading—in other words, no more trading in the shadow banking markets. This demand is strongly opposed by the Coalition of Derivatives End Users, who claimed in an October 2 letter, that being forced to post the margin requirements to trade on exchanges would harm their economic interests. Most of the signatories to the letter—which originated when the U.S. Chamber of Commerce, acting on behalf of the taxpayer, bailed out  “too big to fail” banks—will be trading carbon derivatives.

The CMOC letter also calls for banning commodity index funds and exchange-traded funds from trading carbon derivatives. In a November 2008 paper, IATP showed how the bundling of agricultural futures contracts into index funds was partly responsible for the extreme price volatility in agricultural futures contracts. The role of index funds in driving price volatility was confirmed in a June 24 U.S. Senate investigation of excessive speculation in wheat contracts. This price volatility made the use of futures contracts by both U.S. farmers and developing country importers too expensive and unpredictable. The price increases contributed to food riots in more than 30 countries, according to the United Nations Food and Agriculture Organization (FAO).

Finally, the CMOC letter called on Congress to commission studies on the effects of a carbon derivatives market on agricultural, energy and other non-agricultural futures contracts. The Commodity Futures Trading Commission (CFTC) estimates that by 2017, the carbon derivatives market will trade $2 trillion in contracts. In 2008, the estimated value of all CFTC regulated contracts was $4–5 trillion dollars. No climate change bill should be passed before Congress has had time to review studies on carbon derivatives price volatility and the effect of carbon derivatives on other futures contracts, including contracts where carbon is bought to offset financial risks in the deregulated world of “mixed swaps” (i.e., with both security and commodity features).

Steve Suppan

October 28, 2009

Monsanto and Pioneer duke it out over biotech corn, farmers take the hit

There is an old African saying “Whether elephants make love or war, the grass suffers.” The two elephants in the agricultural seed business are now making real war, although they have been wary of each other for years. Monsanto, a relatively recent entry into the business, has become the “dominant male” in the battle after moving to acquire a large number of formerly independent seed companies. Pioneer, content for years to be the premiere corn breeder in the world, has found itself suddenly defending its turf and trying to find ways to move into the new biotech ball game. The Des Moines Register recently covered this ongoing saga.

Monsanto has long been targeted as a corporate villain. From dioxin-laced Agent Orange for Vietnam to the industrial chemical, polychlorinated biphenyl (PCB), Monsanto was known as producer of persistent, deadly chemicals.  Lassotm, the alachlor-based pre-emergent grass herbicide with a long list of toxicity issues, was their first foray into agricultural chemicals.

Monsanto’s bottom line was being hurt by lawsuits and clean-up costs associated with dioxin and PCB pollution. Enter Roundup™ (glyphosate), launched in 1976. This is the chemical that made Monsanto the powerhouse it is today. Glyphosate is a broad spectrum nonspecific herbicide that has low acute toxicity and does not persist in the environment. It should be noted however that many questions remain regarding the long-term toxicity of glyphosate.

By 1982 they had the first genetically modified plant cells. Depending on definitions, humans have been genetically modifying crops for thousands of years. More correctly, these are termed transgenic crops, which involves inserting a gene that is not acquired by pollination. I have used genetically modified (GM) because it has become the standard term. Now plant life is patented, permitting GM companies to control technology, and prohibit use of seed from the GM crop.

In 1926, Henry A. Wallace and others founded the Hi-Bred Corn Company in Des Moines to develop and market the expanding hybrid seed corn business. Pioneer was added to the name in 1936. They moved into soybean seed operation in 1973, and soon became the leading corn and soybean seed producers. Pioneer gained the number the one corn seed sales spot in 1982 from its longtime rival, Garst. Pioneer, when I first came to the Leopold Center in 1988, was a family company: friendly, environmentally aware and benevolent. Its advances were based on classic plant genetics, not biotechnology. It was not to last.

Monsanto bought its way into the seed business by acquiring established companies including the number two seed corn producer, Garst. This predatory approach (Monsanto often paid more than market value for the seed companies) combined with its big breakthrough—developing genetically modified corn and soybeans resistant to glyphosate—gave them a huge market advantage. This initiated the trend to GM crops that is now dominant in the seed industry.

The predator habits of Monsanto long made Pioneer nervous. Patented Roundup Ready soybeans were first introduced by Monsanto in 1996. One year later, Pioneer had biotech corn and soybeans on the market, buying the technology from Monsanto. Pioneer Hi-Bred was purchased by DuPont (20 percent in 1997 and the remainder in 1999). Lawsuits began soon after.

By 2000, corn borer protection had been added by Monsanto (called YieldGardtm) and Pioneer had to enter into agreements to use the Monsanto technology in its corn. Pioneer paid big bucks to use the Roundup Ready and YieldGard traits. Now Monsanto is suing Pioneer over infringement of these patent rights and Pioneer is moving ahead with a new set of seed traits called Optimum GAT. Monsanto saw red, and has countersued. Monsanto also became very unhappy when Pioneer recently co-sponsored an anti-Monsanto seminar in St. Louis, the home of Monsanto. The issues are complex, and involve “stacking” of seed traits. This means that genetic characteristics for two or more traits are included in a single seed. Often these stacked seeds have not had full evaluation regarding their safety and efficacy. In the meantime, Pioneer slipped to No. 2 in seed sales.

Monsanto now licenses these traits to about 200 seed companies. Their powerful monopoly has blocked competition. They will not even allow experimenters to evaluate the seed corn for efficacy in other environments.

During this time, the price of seed corn and Rounduptm escalated rapidly. But now Monsanto is starting to lose money on its Roundup herbicide, mainly because it is off patent and others are now undercutting Monsanto on price. Furthermore, the pent up demand for glyphosate in South America had raised prices earlier, but this market now is being met.

So what does all this mean? I first encountered Monsanto in the early 1970s when at a regional research meeting in St Louis they invited the committee to tour their operations. At that time they were just getting into biotech and no one really saw its potential to make money.Then, about the time I was getting the Leopold Center programs underway, Roundup Ready soy field trials were under way on a site east of Ames. I had a tough decision to make on funding for field work that might involve GM materials, and decided we would not fund such work, but it soon became hard to delineate the lines between GM and non-GM. When Pioneer went over to Roundup Ready, and then both companies began stacking genes, I knew the game was lost. 

Genetically modified corn and soybeans dominate, especially in countries with high input agriculture. Claims that GM crops will “Feed the World” abound, especially around the time of the World Food Price presentations earlier this month. Other claims include the lowering of pesticide use and lessening of soil erosion. 

Monsanto now bills itself as a Sustainable Agriculture company! 

These are issues deserving of future blogs. I worry about how the world’s farmers are being shortchanged in the quest for improved and adapted seed varieties at reasonable costs. Now they cannot save seed for fear of the Monsanto cops taking them to court and ruining their lives. The seed industry is no longer competitive because about 90 percent of it is in the hands of two companies and the cost of seed is out of reach of small farmers. I worry about how the food system is now dependent on genetically engineered corn, soybean, cottonseed, canola and sugar beets (recently taken back off of the market). GM wheat, rice and other staple crops could follow as pressure continues to adopt these crops. The industry essentially says "We build it, you will use it."

We need to be smarter about these crops, question each claim and insist the government enforce antitrust laws. We should  resist the claims that they will solve the food shortage in countries where their use will do more harm than good. Specifically, this means the next food frontier, Africa, must not become a new “Green Revolution” based on the failed western world high technology model, rooted in GM crops.

Dennis Keeney

October 23, 2009

The Power of Food Reserves: Volume 4

One of the political challenges in talking about food reserves, at both the national and international level, is that they are too often dismissed as a tool that has failed. Of course, food reserves have seen success and failure. And because many reserves have been mismanaged, agriculture economist Dr. Daryll Ray reminds us, "We need to delineate between the concept of the reserve and the way it's administered."

Roger Johnson, President of the National Farmers Union, addressed this political obstacle at a meeting we organized with ActionAid on food reserves last week. "At this point in history, we've entered an era that government is looked upon as the problem, not the solution. And that the private sector should be in charge of everything, including food aid."

"There is this sentiment that reserves are an old idea," said Johnson. "Nobody wants to talk about an old idea. The other side will say, 'we tried that, it didn’t work.'" But he believes that there is a new political opportunity to gain wider support for reserves, and that could involve emphasizing the benefits for consumers and the disadvantaged of the world.  

"Reserves accomplish a lot of the same things whether you are a farmer or consumer," said Johnson. "The predictability in pricing is a good thing for both. It is essential for lesser developed countries. If they are going to become more developed, the most common way to grow is through agriculture."

Larry Mitchell, former CEO of the American Corn Growers Association, emphasized the national security implications of not having a food reserve. "Our current reserve is in the hands of multinational corporations," said Mitchell. "We are one short crop away from being at the mercy of their benevolence. We need a public option for food."

"This is pretty scary to me," said Mitchell. "When we went to war in March 2003, we had less than a day’s worth of corn and soybeans. The impacts of a reserve are well-past hunger. It is also an issue of national security. I know why we are at war in the middle east. I don’t know who we’ll be going to war with when we need food."

Mitchell compared the deregulatory effects of the 1996 Farm Bill on agriculture to the repeal of the Glass-Steagall Act in 1999 on the banking industry. He emphasized the need to return to sound food management through a food reserve. A new reserve system could include more than just traditional grain and would benefit both the livestock industry and the emerging bioeconomy.

"Most farmers I know are willing to give up $7 corn if they can get a consistent and guaranteed $4, and a proper food reserve can help us accomplish that," said Mitchell.

Victor Suarez, IATP board member and director of the National Association of Rural Commercialization Enterprises in Mexico, highlighted the urgent need for government intervention in agricultural markets, not only to address the food crisis, but also as a counterweight to big agribusiness companies.

"When we start talking about strategic food reserves what we’re really talking about is state intervention into the market," said Suarez. "Markets are not self-regulating, particularly with regards to food. There’s always been a need for organized societies to prevent risks. In Mexico, when food prices rise, the free market logic is that people simply stop eating. One thing we have learned is that organized small farmers cannot confront alone organized monopolies. It is in no way a free market."

Instead, Suarez stressed the need for people and governments to work together to address the breakdown in the global food system—because we all are affected.

You can find video interviews, powerpoint presentations and more blog postings from our meeting on global food reserves at our web site.

Ben Lilliston

October 22, 2009

The Power of Food Reserves: Volume 3

Details matter. This was clear in discussions about food reserves at a meeting last week we organized with ActionAid. How food reserves are run, by whom, and with what purpose, are all critical factors in determining whether a reserve is successful.

There is increasing interest in food reserves at the local, regional and international levels as a way to help better manage our food system. We heard two proposals about how institutions might best manage the details of food reserves.

Dr. Daryll Ray, of the Agricultural Policy Analysis Center at the University of Tennessee, outlined two central functions of a reserve: 1) to mitigate short-term disruptions or sudden demand; and 2) to stabilize world prices for consumers and farmers.

Ray pointed out that while critics have pointed to the costs of reserve programs, the costs of not having a reserve program can be enormous; including factors often not calculated by economists such as hunger, poverty, loss of food security and political destabilization. Ray suggested that poor management had unfairly given reserves a bad name. "We need to delineate between the concept of the reserve and the way it's administered," said Ray.

Food reserves can be useful at multiple levels, according to Ray. At the local level, families often use reserve concepts through traditional canning and freezing. But there are also different options for farmers, communities and local governments to store food in a shared facility. At the national and regional levels, reserves can be coordinated through governments and federations of cooperatives.

At the international level, with a goal toward stabilizing world supply and prices, Ray proposed an institutional framework similar to how the U.S. Federal Reserve operates. It would be politically independent, composed of regional chairs, and ultimately legitimized by the UN Commission on Trade and Development (UNCTAD) and the Food and Agriculture Organization (FAO).

"Food reserves are just one component of a food security system," said Ray. "We also need to look at production, infrastructure and increasing the purchasing power of people who are hungry."

Robin Willoughby of Share the World's Resources discussed food reserves within new efforts at the multilateral level to address a failed global food system. He emphasized that the context for reserves is very important. Food reserves are designed for a number of purposes, including: 1) to stabilize prices; 2) for humanitarian reasons; 3) for export promotion through regional trade blocs; or 4) to mitigate speculation.

He pointed out that there are severe institutional constraints to putting together a global food reserve. Global institutions have a patchwork of overlapping mandates with no obvious place to oversee such a system. And many of the most important actors (including smallholder farmers) are excluded from global discussions.

Because of these constraints, Willoughby proposed a Global Food Security Convention. It would encompass a new vision for food and agriculture that is based on human rights and multilateral cooperation. It would be based on three pillars: legal (human rights); political (inclusive and democratic); and technical (implementation).

You can watch video interviews and view powerpoint presentations from presenters at the global food reserve meeting at our web site. Next, we'll look at food reserves within the context of the U.S. and Mexico.

Ben Lilliston

The Power of Food Reserves: Volume 2

In a bow to the power of markets, the U.S. removed the last traces of its grain reserve program in the 1996 Farm Bill. The result have been damaging across the board, with increasing volatility in agriculture markets—along with big swings in farm subsidies from year to year. But other countries see the continuing value of food reserves and are using them in creative ways to serve a variety of different purposes.

At a meeting on food reserves we co-organized with ActionAid last week, we heard about how two of the world's biggest agricultural exporters, Brazil and Canada, use food reserves. And how West African countries, struggling to provide enough food for their people, are using food reserves at the local level.

Celso Marcatto, of ActionAid Brazil, described the role of the state-controlled food company CONAB. While plagued by mismanagement in its early years, Brazilian President Luiz Inácio Lula da Silva instituted a series of reforms beginning in 2003 to refocus its mission. CONAB's purpose is two-fold: to ensure there is enough food in times of crisis and to help stabilize markets to limit speculation. In 2006-07, CONAB helped stabilize the corn market through the release stocks. In 2008, despite the dramatic spike in global prices for rice, CONAB's reserve program helped to stabilize prices within Brazil. "It was possible for Brazil to pass through the food price crisis without suffering too much," said Marcatto.

CONAB also helps run the Brazilian Procurement Program, known as PAA. The program purchases food from smallholder farmers and donates it to social organizations addressing people in need. The program also works with smallholder farmer organizations to help them set up their own reserves. The result is more stable prices for smallholder farmers and greater food access for those who  are hungry.

Marcatto and other civil society organizations are now targeting Mercosur, a regional trade agreement that includes most of South America. Currently, Mercosur is completely focused on commercial issues. "The idea is to pressure Mercosur countries to discuss hunger more seriously, said Marcatto. "We want Mercosur to be a policy space to support efforts to address hunger regionally—including reserves and support for small-scale farmers."

Ian McCreary, a former member of the Canadian Wheat Board and now with the Canadian Foodgrains Bank, relayed the history of the international wheat agreement, which was launched at the end of World War II and included 47 countries. While there were certainly bumps, the agreement was largely successful until it was finally broken in 1969. McCreary said the wheat agreement offers some important lessons in looking forward, particularly the importance of good governance and accountability. Ultimately, we must ensure that stocks aren't used to punish other countries as the U.S. did in the mid-1980s when it released its wheat stocks onto the global market and devastated other wheat producers around the world, according
to McCreary.

McCreary had three recommendations for food reserves moving forward: 1) they should be commodity-specific; 2) they should be nation- and region-specific, and governance must be strong in those areas; and 3) there needs to be international disciplines to ensure that hardships are not externalized on other countries.

"We have to have a mixture of intervention engaged not as a cleanup factor, but to take the rough edges out of the marketplace. The process of reserves fits within that context," said McCreary. 

Saliou Sarr, of the West African Farmers' Network (ROPPA), sees food reserves in an entirely different context. ROPPA is a network of 16 countries. His region's challenge is to increase their own food production to feed their people, and reduce their dependency on aid from other countries. Sarr pointed to a confluence of factors contributing to hunger in the region, including: the lowering of food stocks in the U.S., Europe and China; structural adjustment programs pushed by the World Bank that discouraged public investment in agriculture; and limitations on the use of tariff protections imposed by the World Trade Organization.

In response to the food crisis in the region, ROPPA has taken multiple approaches to food stocks, including public stocks, stocks at the farm level and at local food banks. In public stocks, their experience has been troubled, undermined by political mismanagement. But local food banks have been more successful in Bali, Niger and Burkina Faso. There, a committee at the village level buys grain during harvest when prices are low. Then, they use collective storage, and sell it to families in need throughout the year at a price that is affordable. This model has been limited because of the lack of production capacity. Right now, they are exploring food reserves at the village and family level, to work alongside greater access to credit and seeds,  to help build production and ensure there is enough food.

"We think a good mastery of the management of stocks at the world level should include capacity building for production, active policies that give priority to internal markets, and reinforce regional integration," said Sarr. "People can have sovereignty with regards to their food supply."

You can view video interviews and powerpoint presentations of participants at our meeting on global food reserves at our Food Security Web site. Next, we'll look at proposals for how food reserves might work in a global context.

Ben Lilliston

October 21, 2009

The Power of Food Reserves: Volume 1

Make no mistake, the food reserve—a tool as old as food production itself—is a powerful idea. Most people think it's just common sense. The idea is simple: put some food aside in times of plenty to ensure there is enough in lean times. But a meeting we co-organized with ActionAid in Washington, D.C., last week, revealed how strongly this common sense idea challenges the free market ideology that permeates our global food system.

IATP's Sophia Murphy succinctly explained how reserves help address market failures that have plagued both farmers and consumers: "Reserves are really about how to make the market do its job better. They can put a floor or ceiling on prices in the face of monopolistic or oligopolistic markets."

We decided to organize the food reserve meeting for two main reasons: 1) the failure of agriculture markets is just too glaring to ignore. The FAO announced last week that the world's hungry has now reached 1.06 billion people; 2) countries, regions and international institutions are re-examining agriculture policy, particularly the role reserves might play to stabilize food systems.

Our first session gave an overview of the global issues around food reserves. Sophia pulled from an IATP report released last week outlining four main reasons food reserves are being considered: 1) to correct market failures; 2) to smooth volatile prices; 3) to complement and regulate the private sector; 4) for emergencies. Sophia also discussed the limitations of food reserves when it comes to addressing global hunger: reserves will not solve poor agriculture production which plagues many countries, or address chronic (as opposed to short-term) hunger that is often tied to people simply not having money to buy enough food.

The failure of global food markets has created a ripe political moment to assess reserves. "There is a new awareness among governments that food really matters—and a sense among governments that they've lost a lot of the tools that they've had when food is not available," Sophia told participants.

Chris Moore, at the United Nations World Food Program (WFP), reported that both donor and recipient countries are seeking advice from the agency on best practices for running food reserves. The WFP, the world's largest food assistance agency, is already using a variety of food reserves. Moore described reserves in Haiti and other Central American countries, community cereal banks in Cameroon and the Sahel region of West Africa, and a multi-partner national grain reserve system in Mali. The WFP is working with West African countries to assess a regional system to help multiple countries coordinate national stocks.

For countries assessing whether a reserve is the right tool to use, Moore outlined a series of key questions: What do we want reserves for? What other options have been tried? Can you ensure the reserve is well-managed? What transparency rules are in place? Can a regional group integrate reserves and food security needs across borders? And finally: How can reserves fit within a path toward food security?

Hui Jang, of the USDA's Foreign Agricultural Service (FAS), had a starkly different view on reserves. The FAS's mission is to expand U.S. agriculture exports. She argued that reserves distort relationships between supply and demand. And that the existence of a reserve does not guarantee stability. She cited the recent price spike in rice, even though many Asian countries had been building up their reserves for several years. Despite the reserves, countries stopped exporting and prices shot through the roof. Countries will undermine an international or regional reserve system because they will act in their own interest in times of crisis, Jang reported.

Instead, she proposed a financial reserve where countries struggling with hunger could purchase grains and inputs (seeds, fertilizer, machinery, chemicals and the hiring of consultants to boost production). In addition, she proposed a series of other tools to help poor countries like adding futures markets, catastrophic bonds, improved infrastructure and  crop insurance.

Jang's presentation follows the strong support for technological fixes (particularly biotechnology) to address global hunger pushed by her boss, USDA Secretary Tom Vilsack, at the newly minted National Institute for Food and Agriculture, and Bill Gates at the World Food Prize meeting last week.

But the growing consideration of food reserves around the world indicates that most aren't holding their breath for the next technological quick fix. Many see the market failures we are experiencing in agriculture as structural and ultimately requiring government intervention to ensure that everyone has enough healthy food to eat and farmers are paid a fair price.

You can view powerpoint presentations and video interviews with participants at our food security page. In our next blog, we'll report on how other countries and regions are using food reserves as a tool. 

Ben Lilliston

October 07, 2009

Can food reserves address global hunger?

Almost since the beginning of time, people have put food away in times of plenty to ensure they have food in times of need. Many countries, including the United States, have utilized food reserves over the years for a number of reasons like addressing hunger, stabilizing food prices and ensuring a fair return to farmers.

Now, as global hunger has surpassed one billion people, and the global cereal stocks/to use ratio has tightened, there is talk at the international level of food reserves. At the G-8 meeting in July, leaders agreed to explore: "The feasibility, effectiveness and administrative modalities of a system of stockholding in dealing with humanitarian food emergencies or as a means to limit price volatility need to be further explored." These sentiments were further supported at the G-20 meeting in Pittsburgh last month.

In light of this interest, IATP and Action Aid are co-sponsoring an open briefing, "Food Reserves: Facing the Hunger Challenge" in Washington, D.C., on October 15. Representatives from Brazil, Canada, West Africa, Mexico and the United Kingdom will meet with U.S. agriculture experts to discuss:

  • past experiences with food reserves at the country and regional level;
  • what role international institutions might play within a food reserve system;
  • the opportunities and pitfalls of a strategic grain reserve in the U.S.

We hope you can join us. Watch the below video with IATP's Alexandra Spieldoch to learn more about the food reserve meeting.

Ben Lilliston