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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.

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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 14, 2009

Grain Reserves vs. World Hunger and Market Volatility

With world hunger surpassing one billion people, in a time of extreme market volatility, IATP's Sophia Murphy has authored a new report exploring the option of strategic food reserves. The report, "Strategic Grain Reserves In an Era of Volatility," was released today—a day before a public briefing on food reserves in Washington, D.C. tomorrow. That meeting will include representatives from Brazil, West Africa, Mexico, Canada and the U.S. to discuss their experiences with food reserves and how a new system of reserves might work.

Though food reserves have been used for thousands of years (China has run an ever-normal granary since 498 A.D.! More info in the report, pg 5.) they have fallen out of discussion in recent decades. Sophia Murphy's research examines the risks and potential benefits of grain reserves in our current socioeconomic atmosphere:

“Given the extreme volatility we’ve seen in agriculture in recent years, grain reserves deserve another look,” said Sophia Murphy in our press release announcing the new report. “There are no magic bullets. Reserves alone will not end chronic hunger, and many reserves have been poorly run. But with sufficient resources, clarity of purpose, and effective governance, reserves can play a key part in a food system designed to eradicate hunger.”

Check back for updates from the "Food Reserves: Facing the Hunger Challenge," briefing soon!

—Andrew Ranallo

October 07, 2009

Another take on the WTO and food systems

What can the World Trade Organization (WTO) contribute toward addressing global hunger? IATP asked four experts from the Philippines, France, India and the U.S. at last week’s WTO Public Forum in Geneva. You can listen to the discussion here.

Of course, there was the usual argument about whether trade liberalization helps or hinders food security, but there were other important points of consensus:

• Despite high-level calls and declarations to address the food crisis last year, nothing has been delivered to improve the coherence of global governance on food and agriculture: a major failure of the post-food crisis response.

• The WTO is still unable to take into account rural development and food security concerns in its treatment of agriculture. Instead, it consistently reinforces an unsustainable model, characterized in particular by market concentration. Ambassador Bhatia of India pointed to a few improvements, but insisted that they fall far short of the needs.

• The IAASTD report, a global assessment of agriculture at the turn of the 21st century, provides recommendations for the way forward on agriculture which WTO members should take on board to put the multilateral trading system back on track.

As the Doha negotiations remain deadlocked, IATP believes there is space to keep pushing on these issues. Next week, we will host a meeting in Washington, D.C. on the role of food reserves in responding to the global food crisis. We will also continue to push these issues at the World Summit on Food Security in November, at the WTO Ministerial Conference in December, and at the Copenhagen climate negotiations in December. Stay tuned!

—Anne-Laure Constantin

September 24, 2009

G-20 must boost social investment

At the top of the agenda for the upcoming G-20 meeting in Pittsburgh on the global economic crisis should be a commitment toward greater investment in social programs, according to Social Watch—a global network of civil society organizations.

Every year, Social Watch publishes a report evaluating the progress of over 60 countries in areas of poverty, inequality and human rights. IATP's Alexandra Spieldoch co-authored the U.S. chapter of the 2009 Social Watch report. The U.S. chapter looked at the crisis in housing, job losses, escalating domestic hunger and international engagement. It concluded that in the U.S., “blind loyalty to the `free’ market as the best arbiter of social, environmental and economic matters has created a `perfect storm’ of failing institutions, weak democratic infrastructure, and a safety net woefully inadequate to the scope of human suffering and displacement.”
  
The country reports found that developing countries are experiencing the brunt of the effects of the financial crisis, which further threatens their fragile economies and cuts off vital sources of foreign aid. The exclusion of these countries from forums such as the G-20 creates a further obstacle to implementing socially just policies. 

“The U.S. needs to lead not only in committing to global aid, but also in reforming how that aid is given," said Spieldoch in a press release on the report. "Aid must empower countries to produce their own food and better deal with the global economic crisis themselves. U.S. support for international human rights and the participation of all countries in developing a coordinated response to the economic crisis is essential.”
 
You can read the full report at socialwatch.org.

—Ben Lilliston

September 04, 2009

Farm to Fork Dilemmas for Food Safety

Farmers markets and community supported agriculture (CSAs) are the ultimate in food traceability. But they make up only a tiny portion of the food system. The rest is more difficult. There's been a decade-old global push for an integrated food safety system from farm to fork. In the latest issue of Global Food Safety Monitor, IATP's Steve Suppan reports on why building a "farm to farm" food safety system is so difficult.

Steve reviews the political compromises that watered down the food safety bill passed by the House of Representatives in July, Nestle cookie dough contamination and private company testing, and the latest from the World Health Organization and Codex Alimentarius Commission on food safety.

You can read the full Global Food Safety Monitor here.

—Ben Lilliston

September 03, 2009

The WTO's Identity Crisis

In the latest issue of Geneva Update, IATP's Anne Laure Constantin reports on the unusually quiet summer at the World Trade Organization. Despite WTO Director-General Pascal Lamy's best efforts, there is no serious momentum to re-start the WTO's Doha round of negotiations to further liberalize global trade rules. The Obama Administration has yet to appoint a new WTO Ambassador. And an upcoming WTO ministerial in late November is more a formality than an attempt to advance negotiations.

The global financial crisis, the rising number of hungry people around the world and international negotiations on climate change have all usurped the WTO in international circles. Constantin writes that it is time for "a realistic assessment of the specific role of the WTO and a better definition of how it fits within the broader multilateral system when it comes to food."

Read the full Geneva Update here.

—Ben Lilliston

August 24, 2009

Do we need industrial agriculture to feed the world?

Okay, only fair to warn you. I do not answer the question here. Second, the subject is not really one for a blog, more for a book. But it's important to say short things as well as long. Third, I have a bias. We all do. In this case, it matters that I like Michael Pollan's writing and that I believe there is much wrong with conventional agriculture as practiced in the United States. You will see why that is relevant in just a moment. Now back to the question.

This one really matters. The world (I guess I mean governments, but also private companies and a lot of NGOs besides) is spending on agriculture like it has not in decades. So how the money gets spent is important. Is more of what we have already better than trying to grow (and process and transport and sell) our food differently? Can we do better? If so, how?

This blog is prompted by a recent short and angry piece from the CEO of the National Corn Growers Association—Rick Tolman—in the Delta Farm Press. His article drew my attention to another article, this one in the American Enterprise Institute's magazine, The American entitled "The Omnivore's Delusion" written by Missouri farmer Blake Hurst. The title is a play on Michael Pollan, "The Omnivore's Dilemma."

As I said, I am one of Pollan's fans—I think he writes persuasively and cogently; even if I do not always agree with him and find that he makes some issues too easy. So I was curious to see what Blake Hurst had made of it. Hurst writes well, which is always a pleasure. He makes some good points, too. But in the end, he fails to give his critics' point of view their due and thereby fails to persuade. Those who agree with him, people like Rick Tolman, are happy. But those who thought that conventional agriculture was the problem before will not change their mind after reading the piece. Sorry, but driving a tractor is no longer any kind of claim to special wisdom. The question on how we, as a planet, feed ourselves and the world deserves a lot more thought, humility and openness to debate. 

Rightly or not, farmers are having to fight hard to be heard, because they are not where the money is. They are not where the subsidies stick (they flow right back out the farm door), and they are outnumbered 440:1 (at a generous estimate) by the eating population (in the U.S. that is—in much of the world, those who grow food outnumber those who do not). As the most recent Farm Bill showed, the fight is no longer among farmers and between farmers and grain traders, or between food companies and consumers. The debate now engages doctors and public health experts, environmentalists and biologists, parents and school boards, anti-poverty organizations and churches, groups against racism, trade unions and a whole slew of more organizations. 

Hurst has his argument with Michael Pollan, but Pollan is just the journalist here—a smart, rhetorically astute, journalist. Behind Pollan are the people that inspired the stories that make Hurst angry—and Hurst's retort does not answer them. Because they, too, are farmers—some of them in a long line of farmers, and some of them new to the land. They are food workers, some of them living and working in conditions that have inspired latter day Upton Sinclairs to write about their condition (Eric Schlosser is just one for instance). And then there are the others—thousands of them, who, for myriad reasons, care about what we eat, how we grow it, and whether we can do better. 

Hurst opens with an attack on a man (nameless) who he overhears holding forth on all that ails the food system. The trouble for Hurst is, whether or not the man's diatribe is well informed, that man has a significant stake in what Hurst does. It is not a symmetrical relationship—Hurst would not presume, he tells us, to tell the man how to run his real estate or tax accountancy firm. All well and good. But actually, the man in question, just like every one of us, is directly involved in Hurst's business. We eat the food he grows, we pay to clean up the mess agriculture makes, we pay the costs of a grossly inefficient and market distorting farm bill—so we have a voice. Like it or not, agriculture in the United States is not "just another business." And with the somewhat hallowed ground of "feeding the world" comes a whole lot of necessary public oversight and meddling that is not optional, but just the way it is. 

There is a lot to respond to in Hurst's article, but let me focus on just one point: 

Hurst equates organic production with a return to 1930s technology. This would be news to people like Joe Salatin, whose farm Pollan is so enthused about in Omnivore's Dilemma. As Farhad Mazar with Nayakrishi Andolon in Bangladesh explained to me, organic production in his community is not about worshipping the past, but combining traditional knowledge with modern science, and respecting certain basic principles (e.g., do not use pesticides that kill the life you want to preserve on the farm, or that harm the farmer and the farm workers). Rather than organic agriculture being a vision that is frozen in time, or a movement inspired by romantic city dwellers trying to get in touch with Little House on the Prairie (as Hurst implies), it is more like Robert Frost's "The Road Not Taken," where the majority of U.S. farmers were pushed one way (industrial, increasingly concentrated, ever less diversified and ever more dependent on external inputs) and a few—now again on the ascendent, but still only about 1 percent of the total—chose to think about productivity per acre, not per plant; to think about how a symbiotic production cycle could be maintained among the sun, the rain, the plants and the animals (something Salatin's farm, as described so vividly in Pollen's book, brings alive). Alternatives to conventional agriculture are not historic relics. They are the future, and our present. 

The questions are: Do we know enough? Can we make it work well enough? Can we bring about the simultaneous changes required (in storage, transportation, distribution, processing, retail and standards) to make this a revolution now, or will it be more incremental and hesitant and messy? It will surely involve biology and genetics, but maybe not biotechnology to promote the use of particular pesticides and herbicides. It will surely involve the market, but maybe also functioning competition laws, and a radical reassertion of the public interest in food that is healthy for the planet and people alike. 

Farmer Hurst may not like what he hears about agriculture as he flies about the country, but he might want to pay a little more attention to the science and politics behind it. If Michael Pollan was it, he can ride his tractor in peace. Thankfully, Pollan is a sign of the times. Hurst might want to turn his attention to the President, for instance, and reflect some more.

—Sophia Murphy

August 04, 2009

Free Trade and Agriculture—a Bad Idea

The July–August issue of the Monthly Review features IATP's Sophia Murphy and her essay "Free Trade in Agriculture: A Bad Idea Whose Time is Done;"  an examination of the original promises of free trade in agriculture and what actually happened—particularly to developing countries.

The essay also outlines alternative agriculture trade strategies that could help address hunger, build sustainable local foods systems and improve a trading system full of widening disparities.

The full issue of the Monthly Review is also worth checking out. Titled "The Crisis in Agriculture & Food: Conflict, Resistance, & Renewal," it includes articles by Walden Bellow, Miguel Altieri and Peter Rosset among many others. 

—Andrew Ranallo

July 20, 2009

At it again: the G-8 talks food

I doubt you missed it, even if you only caught a headline out of the corner of your eye: the G-8 leaders gathered for three days, July 8-10, (in what looked like a splendid meeting room) in L'Aquila, Italy (63 miles east-north-east of Rome). They meet every July, and every year I hope the very expensive habit will somehow have died a quiet death. No luck so far, but reportedly Angela Merkel of Germany agrees with me. I see that as a positive sign that change is nigh. Not that Merkel's proposal is all that useful—it sort of misses the point about exclusion. But it is better than just 8.

—Sophia Murphy

July 08, 2009

Land Grabbing

When the sharp rise in food prices hit in 2007, countries and corporations began looking for land around the world that could produce both food and biofuels. The focus of so-called "land-grabs" has been on countries in Africa, South America and Asia. But, different from past forms of colonialism, much of the land investment is being led by southern countries or companies based in the southern hemisphere. In a new article in Foreign Policy in Focus, IATP's Alexandra Spieldoch reports on the extent of global land grabs and analyzes their potential effects on food production and hunger around the world.

—Ben Lilliston

June 26, 2009

The consequences of business as usual

IATP's Steve Suppan is blogging from the U.N. Conference on the World Financial and Economic Crisis in New York.

At a certain point, the big numbers numb you. And at the U.N. summit on the financial crisis and development, the numbers are all big. The estimated total net capital loss from developing countries in the past year ($1 trillion according to the World Bank or $2 trillion according to the U.N. Conference on Trade and Development); the job loss projected by the International Labor organization (40-50 million this year; perhaps 100 million by 2010); the amount of money pledged by the G-20 countries to the International Monetary Fund ($750 billion) for loans to stabilize government finances. And this is to say nothing of the huge numbers that register social devastation to education, health, social welfare and environmental programs, particularly those in developing countries.
 
But what focuses the mind despite the blizzard of numbers are the consequences of business as usual. In the Civil Society Forum Statement to the conference, there is a firm commitment not to allow intergovernmental institutions and governments to return to business as usual. Rather than allow all global economic planning and governance to be handed down by a few governments, the IMF, the World Bank and the WTO Financial Services Agreement, the civil society organizations at the U.N. summit have proposed a governance role for the United Nations. The Commission of Experts advising the President of the General Assembly have likewise proposed ways to prevent a repeat of the financial deregulation that has triggered the economic crisis and humanitarian crisis we will live in globally for the next few years. In the brutal U.N. negotiating process, in which the G-20 opposed any substantive U.N. economic governance role, little has survived from these proposals except the possibility of discussing them further in a U.N. General Assembly Working Group. According to the Outcome Document to be presented today for formal approval by government delegates, a panel of experts is to advise the General Assembly on next steps. 
 
Between now and mid-September when the General Assembly meets again, there will be hard negotiating about the mandate of the Working Group and whether civil society organizations may advise the panel of experts. This outcome is, of course, a very small victory, but not an insignificant one. Furthermore, IATP believes that within the terms of the outcome document there lies the possibility for the General Assembly to authorize the U.N. Conference on Trade and Development to take a much more active role in proposing ways to prevent the excessive speculation in commodity markets that have devastated trade revenues in commodity export-dependent developing countries. Today, IATP will discuss proposals to reform commodity futures markets with government delegates in a side event organized by the government of Tanzania.

When the General Assembly meets in September, the G-20 will also be meeting in Pittsburgh, Pa.,, to plan a different economic future than what we hope will be discussed in the Working Group. There will likely be more civil society organizations in Pittsburgh protesting the Wall Street bailouts than there will be in the fight for a U.N. Working Group on global economic governance. But that fight could well be more important than naming and shaming the beneficiaries of financial deregulation and their government allies.

—Ben Lilliston

June 25, 2009

A Glimmer at UN on Global Financial Crisis

IATP's Steve Suppan is blogging from the U.N. Conference on the World Financial and Economic Crisis in New York.

Yesterday, at the opening plenary, government delegates agreed to adopt an outcome document that is the result of more than four months of intense and sometime bitter negotiations. According to the United Nations, another 100 million persons could lose their jobs by 2010, as a result of an economic crisis triggered by the deregulation of the U.S. financial services industry. Most of these jobs will be lost in countries without unemployment insurance, creating conditions for political instability in dozens of developing countries. This situation led the U.S. Director of National Intelligence Dennis Blair to tell the U.S. Senate committee on intelligence in February that the economic crisis had replaced terrorism as the number one U.S. national security threat.

IATP's President Jim Harkness participated in the initial meeting in October 2008 that launched the preparation of the negotiations process. IATP provided input on regulating commodity price volatility to the Commission of Experts advising the President of the General Assembly on issues to be addressed in the outcome document. IATP also contributed to a U.N. Conference on Trade and Development symposium that was part of the high-level conference (HLC) preparations.

Most of the ideas of the Commission of Experts to provide short-term economic stimulus to developing countries and to enhance the U.N.'s role in global economic governance were cut in the long and sometimes brutal negotiations. The United States and the European Union wish to keep economic governance in the hands of the World Bank and International Monetary Fund, where they have effective veto power over all decisions. The U.S. and EU proposed that the outcome document should only register the impact of the financial crisis on developing countries and welcome the work of the G-20 in proposing policies and promising financial resources for the IMF. The U.S.and EU wanted no commitments to consider the creation of new governance instruments and funding to complement the IMF and World Bank, both of which failed to warn member countries of the dangers of financial industry deregulation and liberalization through the World Trade Organization and free trade agreements.

However, the outcome document provides for the creation of a working group of the General Assembly, advised by a panel of experts "to follow up on issues contained in this outcome document." This diplomatic achievement may seem like a weak solution to the economic crisis that has spread from Wall Street around the world. But many, including the mainstream media, dismissed even the possibility that the United Nations could agree on any terms of a document to establish a new framework for economic governance and to gather resources that would not be provided as loans by the IMF or the World Bank. The outcome document establishes that possibility.

At the first HLC multi-stakeholder dialogue today, IATP was among five non-governmental organizations selected to comment on the HLC outcome document and the opportunities it presented to involve U.N. agencies and civil society organizations in longer term financial institution reform and to implement short-term stimulus packages to prevent an economic breakdown in developing countries. So many government delegates wished to speak that IATP did not have a chance to do so. But Roberto Bissio of Social Watch, a long-time IATP ally, welcomed the outcome document and pointed to opportunities it presented for investing to protect the world's most vulnerable populations. Beverly Kneen of Jubilee South emphasized the need to direct non-debt generating money to developing countries by closing tax evasion loopholes, illegal capital flight, and repudiating illegally contracted debt, rather than allowing an IMF and World Bank-controlled debtors' crisis.

There is much to  be done at the conference before the General Assembly formally adopts the outcome document on June 26. IATP will continue to work with groups from around the world to ensure that the challenge of the financial crisis to development, including rural development and food security undermined by deregulated commodity markets speculation, will be met.

—Ben Lilliston

June 05, 2009

Cairns to Bali: Time for a new agricultural trade agenda

The group of 19 agricultural exporters known as the Cairns Group will meet June 7-9 in Bali, Indonesia. They will be discussing their position as a force within the WTO Doha negotiations on agriculture. The following opinion piece first ran on June 5 at On Line Opinion, an Australian e-journal for social and political debate. It was written jointly by Sophia Murphy and Adam Wolfenden.

Twenty-three years ago, in August 1986, Australia hosted a meeting of trade ministers from developed and developing countries. The parties were united by an interest in increasing their share of agricultural export markets and in containing the damage that U.S. and E.U. agricultural policies did to their export shares. The group was focused, committed and effective.

That was then. This week, Bali will host another meeting of the group—the 33rd Cairns Group Ministerial. Over time, the membership has shifted and evolved. Hungary, once a member, joined the EU and had to resign. There is one African member, South Africa. Today, there are 19 members of the group.

The membership is not the only thing to have evolved in the past quarter of a century. So has our understanding of food security, the strengths and limitations of a free trade agenda, and the complex geo-politics of multilateral deal making. Indonesia is not just a member of the Cairns Group. It is also a founder and leader of the group of developing countries that has pushed for more sensitivity to the issues of food security and rural employment in the context of the Doha trade negotiations (known as the Group of 33 or G-33). Other countries that belong both to the Cairns Group and the G-33 include the Philippines, Pakistan and Peru. These countries are all anxious to export agricultural commodities—hence their membership in the Cairns Group. But they are all also acutely aware of the importance of agriculture for domestic food security, rural employment and political stability. The volatility of world commodity prices and the damage done to domestic production by import surges have made policymakers (and the public) wary of free trade agendas.

When food prices spiked dramatically in the first quarter of 2008, net-food importing developing countries (NFIDC) were paying very close attention to global markets. What they saw was disheartening for the free trade supporters. Big exporters, among them Cairns Group members, imposed restrictions that limited export volumes because they were worried about food security at home, further increasing NFIDC import bills. The proposal that food security can be found in open access to a global pantry looks distinctly untrue. The countries that can afford to are bypassing trade altogether in favor of investment: If they cannot grow their own food at home, they do not want to depend on the market. Instead, they are buying or leasing land across the world’s poorest countries to grow their food on someone else’s land instead. The trade policy consequences of this new situation are nowhere reflected in Cairns Group interventions in the Doha negotiations.

The global food crisis has shifted the debate and with it the major players. Trade negotiations in Geneva fell apart in July last year because many developing countries, including some Cairn’s group members, were insisting on the need for trade rules that respect their need to protect their rural economies as they think best. Most developed countries, Australia at the forefront, denied them that right, insisting in effect that the right to export trumped all else. This is a fundamental divide within the Cairns Group membership and puts in question whether it can be continue to play an effective role.

It is time for an honest dialogue about these tensions. Australia, and with it New Zealand and Canada, need to show they understand what the Philippines and Indonesia (and with them, a sizable group of developing countries) are saying about the importance of agriculture beyond the export sector. Indeed, there are doubtless some farmers here in Australia with something to say on that subject. And there are tens of millions more in Indonesia, and across the member countries of the group.

There is plenty of work left to do for a forum that includes both developed and developing country members and that understands agricultural trade. Governments and communities need to have a range of tools at their disposal to be ready for the challenges that lie ahead. This includes a greater emphasis on policies that encourage local investment in local markets, support ecologically and economically sustainable small-scale farming, safeguard local production from dumping, implement genuine agrarian reform, and allow the use of different trade instruments, including quotas and tariffs. All ideas supported by proponents of food sovereignty. And some of them are already on the table in Geneva, thanks to the proposals of the G-33, which is chaired by Indonesia.

The Cairns Group no longer links a small group of like-minded countries. Rather it is a forum that links decidedly different views of how to regulate international trade in agriculture. What an opportunity their ministerial provides to think through agricultural trade rules that could work for the 21st century.

Sophia Murphy is based in Adelaide and is a Senior Advisor for the Institute for Agriculture and Trade Policy, Minneapolis.

Adam Wolfenden is the Trade Justice Campaigner with the Australian Fair Trade and Investment Network (AFTINET), a network of over 90 organizations and individuals concerned about trade and investment policy.

—Sophia Murphy

May 28, 2009

Have We Rejoined the World?

This commentary first appeared in the Huffington Post.

In some ways, it is difficult to critique the new administration without feeling like one is blowing the wind out of the sails at a time when the "global" boat needs support to stay afloat. The Bush administration's unilateral approach to foreign relations isolated the U.S. and made it difficult to work with the global community to solve some of our most difficult challenges. To assess the Obama administration's efforts to re-engage with the world, we will consider four areas where global leadership is urgently needed: reinvigorating the United Nations, climate change, the food crisis, and trade.

One of President Obama's first actions was to appoint a U.S. Ambassador to the United Nations and to give her cabinet-level status. The U.S. also announced that it would seek a seat on the Human Rights Council. Both of these moves are a direct statement to the world that the U.S. is back at the U.N. and ready for global dialogue. These are important symbolic gestures. Yet the administration has not pushed for the ratification of any important treaties or conventions, such as the International Covenant on Economic, Social and Cultural Rights, that most other countries around the world have approved.

The Obama administration has made great strides by publicly recognizing that a climate change agreement is needed. However, this isn't enough. As climate talks proceed, the U.N. Secretary General has indicated that the world cannot wait for the United States. The U.S., as the largest emitter in the world, must act in bold ways to cut greenhouse gas emissions. But the administration has not been forceful enough at the domestic and international levels in pushing for an approach that sets a real cap for polluters, resulting in real greenhouse gas reductions. The administration has yet to sign the Kyoto Treaty, and it is still sorting out its policy agenda in Congress. So far, its proposed emissions cuts are lower than what other countries are promising. The U.S. has made no commitments to provide funds to least-developed, small island, and land-locked developing nations--countries that are urgently preparing for climate change.

In its response to the food crisis, the administration pledged to double its long-term agricultural development assistance to more than $1 billion this year alone. Yet much of this money is earmarked for new technology to increase food production in developing countries instead of addressing the real problems: the need for more access to food and investment in sustainable production methods. President Obama has not come out in support of food reserves--either in the form of a strategic grain reserve in the U.S. or global and regional reserves to address hunger. Meanwhile, the crisis grows.

The U.S. trade agenda is mostly stalled so President Obama is slightly off the hook--for now--although at this point, his trade agenda appears not much different than that of the Bush administration. During the election campaign, Obama expressed support for the renegotiation of NAFTA but has since backed away from this position. He is also working to expand so-called free trade by finalizing the Panama and Colombia FTAs, as well as completing the controversial Doha talks at the World Trade Organization.

In a nutshell, one of the more encouraging aspects of the new administration is that it acknowledges the need to work together at the global level on a variety of fronts. However, beyond the rhetoric, the Obama administration has much work to do to change its relationship with the world. This is the crux of the matter.

—Alexandra Spieldoch

May 26, 2009

Food's Risky Business

In the latest issue of the Global Food Safety Monitor, IATP's Steve Suppan covers the communications challenges food companies and regulators face when food safety disasters strike. Suppan dissects the swine flu outbreak, new regulations on genetically modified foods in the U.S., Canada and Mexico, and the absence of traceability on the food chain. Back issues and subscription info (it's free!) can be found at the Global Food Safety Monitor page.

—Ben Lilliston

May 19, 2009

Responsibility for the Global Food Crisis

Bad agriculture and trade policy in the U.S. and the European Union, pushed aggressively through global institutions, has been a major driver in global hunger, finds a new paper IATP co-published today along with CIDSE, an international alliance of Catholic development agencies.

Global Food Responsibility, by IATP's Alexandra Spieldoch and Anne Laure Constantin, identified policy failures by the U.S. and EU, including: neglected agriculture programs, ill-advised economic adjustment policies, poorly regulated commodity markets and unjust trade rules. The overlapping effects of poor U.S. and EU public policy has led to a vulnerable global food system.

"The EU and the U.S. need to contribute to, rather than block, the establishment of an entirely new global model for food and agriculture," said Spieldoch in a press release on the report. The paper shows how the EU and U.S. could play a constructive role in addressing the global food crisis through a series of recommendations, including:

• An inclusive and binding global partnership for agriculture and food security that strengthens UN agencies, involves non-state actors and has a strong mandate;
• A substantial increase in aid for agriculture, delivered in line with the right to food;
• Respect for the multifunctionality of agriculture including ecological and social sustainability, access to land and water for small scale producers and greater use of local seed varieties;
• Measures to address price volatility, including food reserves and tight regulation on speculation;
• A shift in trade policies away from the quest for market access for European and U.S. agribusiness firms.

Nearly 1 billion people are currently suffering from hunger around the world and increasing in number. What further evidence do we need that the current system is broken and systemic change is needed?

—Ben Lilliston

May 14, 2009

Land grabs

During the past year, mainstream media coverage of major global crises—food, water, climate and economic—has focused primarily on the latter. But recently, more and more news organizations are shedding light on an issue intimately linked with all four crises: land grabbing. This largely exploitative practice wherein rich countries and corporations purchase farmland from poor countries (often without the landowners’ consent) has sparked international outrage over what is being called “new colonialism.”

IATP's Alexandra Spieldoch recently discussed land grabs at the Woodrow Wilson Center for International Scholars' event Land Grab: The Race for the World's Farmland. Visit our Trade Observatory to watch her presentation and to find out more about this alarming trend.

—Allison Page

May 13, 2009

A New Framework for Food and Agriculture?

IATP's Alexandra Spieldoch blogs from the 17th Session of the UN Commission on Sustainable Development (CSD) meeting in New York.

The start of the second week of the CSD is focused on policy recommendations for agriculture, rural development, land, drought and desertification, and Africa. Governments are wrangling over the language of the text, most of which is still bracketed. Much of the contentious language in the final meeting document relates to trade and investment. As governments comb over the text, civil society organizations have come from around the world to weigh in.

IATP and the Global Policy Forum organized a side event, "Global Policy Reform of Food and Agriculture: Strengthening Norms, Rules, Political Consensus and Action," based on two conclusions:

First, the climate, financial and food crisis are interrelated, revealing woeful inadequacies in our current multilateral policy framework and the urgent need for reform. Countries desperately need tools to ensure that macroeconomic and trade policy will no longer undermine local and national food systems.

Second, we are no longer operating in a "business as usual" framework for understanding agriculture. Based on current crises, political will and new models for governance must emerge from the CSD and all other relevant international meetings taking place in 2009 (including the High-Level Meeting on the Financial Crisis in June, the UN Summit on the World Food Crisis in November, and the global climate talks from now through December).

At our event, we were honored to receive the Chair of the CSD-17, Gerda Verburg, Minister of Agriculture for the Netherlands. Ms. Verburg spoke about how agriculture is often seen as part of the problem and not enough as part of the solution to feed the world, to support regional and local initiatives, and to ensure that producers are in control of the investment taking place. She made these basic points:

• Food and water should be the top of any policy agenda related to sustainable agriculture;
• Governments must create an enabling environment for the CSD-17 recommendations to be implemented;
• Efforts to promote sustainability must be balanced so as to equally support people, the planet and profits;
• Safety nets are essential so as to address those who are marginalized; and 
• Recommendations from the CSD-17 must shape proposals on agriculture and climate that will be developed this year.

These comments were largely welcome. However, some participants were skeptical because economic liberalization in the agricultural sector is still being put forth by so many governments at the CSD-17, which undermines the potential for a positive conclusion to these negotiations.

In today’s discussion, lead authors from the IAASTD (International Assessment on Agriculture, Science, Technology and Development), signed by 60 governments, outlined key policy options for new rules in agriculture in support of equity, women, small-holder producers, sustainability, biodiversity and food security. 

Participants also reviewed the potential for a rights-based approach to policy reform. This approach would prioritize the empowerment and participation of small-holder producers and other vulnerable groups. It would recognize the inter-divisibility of rights, including those related to food, water, land, women and health. It would hold governments accountable for national obligations, but also for regulating the impacts of their trade and investment policies abroad. 

To be clear on what is and what isn’t being discussed officially, there is no mention of the IAASTD in the negotiated text of the CSD-17. Some governments are not even aware that it exists. There is also no agreement on the inclusion of human rights in the text. There are few official spaces for civil society to engage with the governments. Few small-scale farmers are present to participate and to represent their views. There is so much to do. We can and must do better.

—Alexandra Spieldoch