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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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Local Advantage

July 07, 2008

Wal-Mart and Local Food Economics

Last week, Wal-Mart announced a new commitment to "go local" and source more locally-grown fruits and vegetables. Where did this come from? Is Wal-Mart's announcement a signal that the global food economy is undergoing a major shift toward local - or just opportunistic corporate marketing? Or maybe a little of both?

First, let's strip away the spin from Wal-Mart's press release explaining the decision to go local. The company touts the positive economic impact of its local food purchasing for local economies. But as Stacy Mitchell writes in the Big Box Swindle, the Wal-Mart model doesn't much care about local community economic development. Wal-Mart claims benefits for local farmers, but the company has a dubious record of squeezing every last cent out of suppliers around the globe. It's reasonable to assume that paying family farmers a fair price isn't at the top of Wal-Mart's list of priorities. The Ethicurean writes about other reasons to be skeptical of Wal-Mart's motives. (Last month, IATP signed onto "Consensus Standards" for the Big Box economy to challenge companies like Wal-Mart to do better on labor, environmental and community rights, and improve purchasing practices.)

In setting the pr aside, we find Wal-Mart's emphasis on reducing "food miles." While this is couched as an effort to reduce greenhouse gas emissions - we are also told it is part of the company's effort to "cut shipping costs" in order to "keep produce prices down." Put simply, this new commitment to buy local food is about saving transportation costs in light of rapidly rising oil prices.

Over the last several years, IATP and others like Bill McKibbon have trumpeted the benefits of local food systems for the environment, farmers and rural communities and public health. But the case in immediate, narrow economic terms that a local food system is cheaper for consumers has been tenuous. Maybe Wal-Mart, in these days of $140 a barrel oil, is starting to make that case.

—Ben Lilliston

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March 25, 2008

This volunteer experience is brought to you by Wal-Mart, Cargill, Pepsi-Cola…

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

Anyone who has traveled in Latin America knows to expect to drink lots of soft drinks. Coke and Pepsi have woven themselves into the fabric of society amazingly well. Every family that we have visited here, including some that are very poor, have given us a glass of soda. As much of the available water has bacterial concerns, for most travelers visiting a home or in many restaurants, the healthier choice is the sugar-filled, carbonated option.

The distribution network developed by these companies is stunning. Coke and Pepsi trucks ramble down these horrible secondary roads to small villages that even many local Hondurans don't know exist. And more often than not, the little stores in these villages will have a large advertising sign, graced with a Coke or Pepsi emblem.

It has been several years since I've traveled in Central America, and what has surprised me this time is how often I am buying from multinational corporations in addition to Coke and Pepsi. Here in Choluteca, Honduras there are two supermarket-type stores. The fancier store, with air conditioning, is called Maxi-Bodega. It is located on the outskirts of town just off of the Pan-American Highway, next to the Pizza Hut and Wendy's. It has the look and feel of corporate, chain store ownership.

The second store, Dispensa Familiar, is located in the old part of town and does not have the same corporate feel as Maxi-Bodega. It is close to where we live, and seems to be the store of choice for the middle class of Choluteca. Unfortunately, these two stores are just two sides of the same coin - they are both owned by Wal-Mart. And in both stores one can readily by meat products from Cargill, cereals from General Mills, prepared foods from Kraft, etc.

To be honest, the presence of multinationals is one of the reasons we chose this location. We figured an occasional trip to Pizza Hut would help our kids cope with the radical transition we've caused in their diets. And as much as I like to eat local, I also love the opportunity to buy imported lettuce, cheese, apples and wheat flour. I expected to have some of my money go toward multinational corporations, but it is happening more than I anticipated.

To a surprising degree, the food dollar of the upper and middle classes of Choluteca are captured by multinational corporations. There certainly remains a thriving local market, particularly for the region's plentiful tropical fruits, meats, and other staples. But for many other necessities of life, the Wal-Mart supermarkets have become a preferred option.

I've been asking around to try to find out why so many people here shop at Wal*Mart. Just as in the United States, Wal*Mart has excelled at conveniently providing low-cost goods. Rather than wandering around the cramped public markets and buying from a half-dozen different vendors, the supermarkets provide shopping carts, parking lots, spacious aisles, competitive and set prices, and credit card sales. For the wealthier people in town that have cars, Wal*Mart is much, much more convenient.

It raises the question of how much of the food dollar is actually staying in the community. I'm sure that as we slowly learn more about Choluteca, we'll find more local stores and get savvier with using the public market. Similarly, it took us a little while to get situated in Minneapolis and take advantage of the co-ops, CSAs and other opportunities to eat and shop locally.

How beneficial has globalization been for the Choluteca economy? They are dependent on selling tropical fruits, sugar, and shrimp into the global economy at wholesale prices (and many of these exporters are foreign-owned companies). In return, the local consumers are purchasing some of their food, much of their clothing, and all of their electronics from global markets at retail prices. The few products that have remained local tend to be the low-value commodities like corn and beans. Having access to computers and the like is a huge benefit, and the city of Choluteca has certainly benefited from being the region´s shopping hub. But overall, the trade patterns appear to leave the region further behind, particularly the rural communities that have few economic development opportunities.

—Mark Muller

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January 23, 2008

That Ungrateful Middle Class

In his January 16 column in the New York Times, Professor Steven Landsburg criticized Republican Presidential candidates for pandering to displaced workers in Michigan, counter to the free trade dogma that he supports. We have benefitted greatly from the cheap products that international free trade provides, he asserts. Can’t these politicians leave well enough alone and let us all be thankful for everyday low prices?

Dr. Landsburg is a professor at the University of Rochester. I grew up outside of town there and it’s a region that I know well. Were there any suitable jobs in the region, I might never have left. To understand why candidates feel the need to pander about job losses, I suggest Dr. Landsburg take a short drive north and west of the University’s campus.

Like many rust belt cities, Rochester has suffered shocking urban decay. Certainly, the social upheaval of the 1960s and 1970s was a large driver for the urban decline. But like a good band-aid, a strong economy has mended these social conflicts in other parts of the country.

As Dr. Landsburg drives outside the Rochester city limits, he would pass the enormous Kodak manufacturing facilities that once employed my father, my uncle, and for one summer, me. But Kodak and Xerox (also based in Rochester) have struggled in a new global marketplace, and shed local jobs in favor of production elsewhere.

My father’s generation joked that Kodak was growing so quickly that someone simply needed to walk and chew gum to get a job there. My generation jokes that we might as well have our class reunions in North Carolina because everyone seemed to be moving south for jobs.

Traveling west out of Rochester, Dr. Landsburg would soon come to several towns well known for apple production. But since China crushed the market with incredibly cheap apple juice concentrate, the apple industry has languished. Many orchards close to Rochester became housing developments, some have been replaced for lower-value corn production, and others just lie dormant.

And then, just north of the orchards is massive Lake Ontario, which creates the micro-climate that allows apples to thrive, as well as the water supply that attracted so much industry in the 19^th and 20^th centuries. But due to pollution and the decline in several fish species, commercial fishing no longer exists. Since Rochester isn’t using much of the water, corporations and other regions of the country have proposed taking the water somewhere else. Our proud Great Lakes economy has reached the point where selling off natural resources is an economically attractive option.

Dr. Landsburg implies that policymakers in regions like Rochester should simply let the market work, despite the questionable track record of that strategy. Of course, I get excited about great deals when I’m shopping, but I do take umbrage at a narrowly focused economist criticizing desperately needed local economic development strategies.

We’re not going to get very far by selling fast food to each other. Economies need production, whether it is agricultural products, manufactured goods, computer software, or tourism. Reducing our economy to exclusively cheap prices denigrates labor, devalues family and community, and ignores quality of life.

Unlike Dr. Landsburg, I applaud proposals that bring value back to our communities. Getting government out of the economy does not create a free market – it just leaves the market to the whims of the multinational corporations. Low prices are not enough.

—Mark Muller

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November 08, 2007

Local Foods: a Global Idea

IATP has always had a strong local dimension to its work. The Institute was founded during the U.S. farm crisis of the 1980s, with a vision toward strengthening local action with an understanding of global pressures. Twenty years later, IATP's work on local food systems has taken on a new level of importance.

It was with real pleasure, then, that I recently learned about something that is local for me, in Adelaide, Australia. Friends of the Earth Adelaide has launched a sustainable food and agriculture campaign, called Reclaim the Food Chain.

Since most of my work is taking place 10,000 miles and more away, in either Geneva, Washington or Minneapolis, events happening locally take on a particularly rosy glow. Mind you, it took a global search to alert me to what was happening in my own backyard - I learned about the campaign in a regular email I have set-up from Google that alerts me to new internet postings related to "trade and agriculture." This time I caught an article by Joel Catchlove that talks about food sovereignty and a conference held last February in Mali, where Joel went as a delegate for Friends of the Earth Australia (scroll down at the link below to find his article on the conference, which was all about food sovereignty).

One dimension of the campaign is called The Urban Orchard, which is a monthly meeting place for people who want to swap and share their garden produce, and to give or take workshops on gardening and post-harvest processing. The inaugural session was held November 3rd and apparently went very well.

Another dimension is the production of some informative factsheets--nanotechnology, genetic engineering, agriculture and climate change are just a few of the topics already addressed, in clear and simple language with references for further reading.

It is the perfect place for a local food campaign, too. Year-round, one can eat excellent food in South Australia and sacrifice little. If Australia as a whole counts as local, there is almost nothing that cannot be grown or raised. But even just within the state the climate allows an enormous variety of foods to be grown. The outstanding question is water use - there is an acute water crisis in Australia, and our state is not exempt. For today, I am just happy to have met some colleagues on my own doorstep that share IATP's commitment to local food, informed by their analysis of global forces as well as an instinctive preference for buying from communities they know and work with. I suggested they try IATP's idea of a chef's local food "pie cook-off". Let's see where the campaign goes next.

—Sophia Murphy

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September 03, 2007

After the Flood

A few weeks ago, heavy rains flooded a stretch of land along the Minnesota and Wisconsin border that is home to hundreds of organic farmers. Reports have been devastating - with many individual farms reporting hundreds of thousands of dollars in damages.

Aarick Beher and Gretta Wing Miller have made a powerful short video capturing the challenges facing these farmers - both from the weather and the marketplace. The video raises some of the unique challenges that make organic farmers particularly vulnerable to weather-related disasters, including the issue of flood insurance. Many organic farmers can't afford flood insurance. Those that do usually have conventional flood insurance - meaning that they are compensated according to prices for conventional crops, not organic crops which are usually much higher. Organic expert Jim Riddle explains some of these issues in an article published in Agrinews.

Last year, IATP and the Wedge Coop started the Sow the Seeds Fund to help support local food systems. Because so many farmers in this region supplied food coops and grocery stores in Minnesota and Wisconsin, in the short-term the Fund will focus its resources on helping these farmers get back on their feet. Food coops in both states have already collected tens of thousands of dollars in contributions - a real testiment to how committed consumers in both states are to local farmers. But as Beher and Millers' video shows, much more will be needed.

Please consider taking a minute and contributing to the Sow the Seeds Fund to support sustainable and organic farmers in the Midwest.