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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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November 2007

November 26, 2007

Peru, Trade, and Immigration

David Bacon, a Senior Fellow at the Oakland Institute, has written a timely and insightful commentary in the San Francisco Chronicle on the link the between free trade deals and forced displacement leading to immigration.

Bacon writes, "Fourteen years ago, the promoters of the North American Free Trade Agreement promised that free trade would produce jobs. We hear the same claim today for the agreement with Peru, as well as the other agreements Bush has negotiated with Colombia, Panama and South Korea. NAFTA certainly produced some winners. Large corporations moved high paying jobs south of the U.S.-Mexico border in order to cut their labor costs and increase their profits. Mexico created a new generation of billionaires. But rising profits did not produce jobs."

Bacon elaborated on these points at keynote talk he gave at the Lessons from NAFTA conference we organized last month in Minneapolis. You can hear Bacon's talk here.

Bacon's commentary in the Chronicle concludes with a dire warning for Democrats in 2008, "Party strategists think Democrats can accept big contributions to support the Bush free trade program. They calculate that unions, workers, displaced immigrants and those hurt by the treaties have nowhere else to go in 2008. They're wrong. They could stay home - the Democrats certainly won't be giving them much reason to get out and vote."

Ben Lilliston

November 20, 2007

Trading for Aid

This week, representatives from the World Trade Organization, the World Bank, International Monetary Fund, the United Nations Development Program and trade and finance ministers are meeting in Geneva to discuss something called "Aid for Trade." The initiative is part of a deal struck at the 2005 WTO Ministerial in Hong Kong as an attempt to move the Doha Round of trade negotiations forward by helping poor countries take advantage of all the alleged benefits of a further liberalized trading system.

Late week, IATP's Trade Information Project (TIP) in Geneva, who has been following the Aid for Trade initiative from the beginning, outlined the status of Aid for Trade and some of the clear shortcomings, including:

* There has been no additional aid offered. Instead money will have to be diverted from other assistance, such as health and education, to accomodate trade. Overall development aid actually declined in 2006.

* It is unclear what conditions will be attached to Aid for Trade and whether those conditions will be used to perpetuate unfair trade rules and the current WTO agenda.

* Donors and agencies use different definitions of what counts as Aid for Trade, making pledges and assessments impossible to monitor.

* Priorities of Aid for Trade have been identified by WTO Director General Pascal Lamy, and significantly influenced by international agencies. Instead, priorities should be defined by recipient countries in consultations with all affected stakeholders.

What about fixing the international trading system itself, which has expanded inequities both within countries and among countries? Last year, IATP's Carin Smaller questioned whether the Aid for Trade initiative was being used as a consolation prize for a failed Doha Agenda. Recent projections and research by the World Bank, the UN and a variety of independent think tanks confirm that the poorest countries would be the biggest losers if the current proposals for the Doha Agenda were adopted. IATP's Steve Suppan and researchers at Tuft's Global Development and Environment Institute among others have written about this.

In a letter to WTO negotiators in July, over 90 civil society organizations from 35 countries criticized the Doha Agenda for being "manipulated to primarily serve the interests of the northern industrialized powers to expand market access for their transnational corporations." The groups called for two-year moratorium to re-think the current model and create "alternative trade regimes that are people, development and environment centered." Some alternatives for a fair trade system have already been proposed through the EcoFair Dialogue.

A discussion of alternatives to the Doha Round would be a better way for the WTO to spend a week.

Ben Lilliston

November 19, 2007

Following up with Cargill

This is a quick follow-up to our posting on a meeting with Rainforest Action Network and representatives from Paraguay, Brazil and Papau New Guinea. In that post, we heard from campesino leaders about the destruction of valuable ecological and community resources in the effort to expand agricultural production to be used as biofuel feedstocks - in some cases to be exported to other countries.

RAN's blog, The Understory, describes a meeting the group had later that day with Cargill and a letter they presented to the company outlining their concerns. The letter, describing what's at stake in each region, is powerful and gets to the heart of the question: who will benefit?

Ben Lilliston

November 16, 2007

MRSA and Animal Antibiotic Use

A new study published in the scientific journal Veterinary Microbiology should cause the Food and Drug Administration (FDA) to take notice. The study's findings suggest the agency might start looking at confined hog operations as a possible source for the deadly methicillin-resistant Staphylococcus aureaus (MRSA).

The study (unfortunately not available for free) is the first to show the antibiotic-resistant MRSA in North American hog farms and hog farmers (MRSA had already been found at European hog farms). Researchers found MRSA at 45 percent of the Ontario farms they studied and in nearly one in four pigs. Also, one in five pig farmers they studied carried MRSA.

There were almost 100,000 MRSA infections in 2005, and nearly 19,000 deaths in the U.S., according to a study published last month in the Journal of the American Medical Association (JAMA). Keep Antibiotics Working (KAW), which includes IATP, points out in a press release that HIV/AIDS killed 17,000 people that same year.

"Last summer, when we raised the MRSA issue, the FDA told us that it had no plans to sample U.S. livestock to see if they carry MRSA," says David Wallinga, M.D., director of IATP's Food and Health program, in the KAW press release. "Given the latest science that hog farms may generate MRSA, we need Congress to give FDA and other relevant agencies the necessary funding and a sense of urgency. Sampling needs to be done as soon as possible."

For the last five years, IATP and KAW have been working to eliminate the inappropriate use of antibiotics in food animals because the practice is increasing the presence of antibiotic-resistant bacteria and threatening the ability of doctors to treat humans. Alex Koppelman of Salon writes a great piece explaining the link between antibiotic resistant bacteria like MRSA and the way confined food animals are raised. Earlier this year, IATP's Wallinga co-authored one of six studies in the journal Environmental Health Perspectives outlining the role of confined animal feeding operations (CAFOs) in infectious diseases and antibiotic resistance.

As the science advances, it is becoming clear that CAFOs have an enormous price tag that isn't fully calculated when we step into the supermarket checkout line to buy our meat and poultry.

Ben Lilliston

November 11, 2007

Biofuels and Development

As IATP's Sophia Murphy wrote this week, assessing the biofuel sector is complicated. In the U.S., the expansion of the biofuel sector is a hot button issue, due partially to higher food prices and partially to environmental issues (including water quantity and quality). But outside of the U.S., particularly in poor countries, the expansion of crop production to fill biofuel needs is downright incendiary.

Earlier this week, IATP hosted a tour coordinated by Rainforest Action Network (RAN), which has just launched its Rainforest Agribusiness campaign targeting Cargill, Archer Daniels Midland and Bunge. The tour included representatives from Paraguay, Brazil, and Papau New Guinea. The stories they told were eerily similar. Each talked about how these U.S.-based companies were working with their national governments to clear land for biofuel feedstocks and in the process destroying some of the world's most diverse natural ecosystems and indigenous cultures.

Francisco Avalos, a small farm leader from San Pedro, Paraguay, told us, "My biggest worry is the monoculture soy that is using the richest soil, forest and rainforest where indigenous campesinoes have lived. People are being displaced and it is displacing our culture and way of life. Our government and the transnationals are complicit in this lack of respect for human rights and nature."

Hiparidi Toptiro, an indigenous leader from the Cerrado region of Brazil, told us, "Agribusiness is having a party but not inviting the rest of us to join them." Toptiro characterized the experience of young boys from his region forced to work in sugar cane refineries as "a form of slavory."

Lynette Hamuga, a small farmer from Papua New Guinea, told us, "People are suffering. They are destroying our forests. Companies have made promises to landowners who plant palm that they will build new roads, schools, houses and hospitals. But I have not seen it. Only the company is getting richer and richer while the owner of the land suffers."

One of the incentives for developing country governments to expand production for biofuel feedstocks are loans from international financial institutions, explained George Laume, of the Center for Environmental Law and Community Rights, in Papua New Guinea.

Earlier this year, IATP's Jim Kleinschmit outlined key benchmarks for future development of the biofuel sector in the U.S., including an emphasis on farmer/community ownership, support for soil, water and wildlife habitat, and long-term environmental sustainability. From what we heard, none of these benchmarks for development are remotely being met in Brazil, Paraguay or Papau New Guinea.

As Lynette Hamuga told us, "What is development? Is development destruction? Is development people suffering? It is not in my language, so I don't understand."

Ben Lilliston

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

November 07, 2007

Searching for clarity on biofuels

IATP finds itself in an interesting place in the recent tidal wave of interest around biofuels. Our initial interest came from our work with local farmers and rural communities in Minnesota and surrounding states. These farmers and their communities were looking for a way to add value to their crops when prices were at record lows. The debate was far from today's discussion of food scarcity. In those days, maybe five to seven years ago, the focus was all on how to control apparent over-production, which was depressing prices and generating unsustainably large income support payments from the craziness that is federal U.S. agricultural policy. Exports had decidedly failed to expand in the wake of the Uruguay Round Agreements, despite the apparently authoritative promises of corporate traders and government officials alike.

Many U.S. farmers were already trade-sceptics, understanding that their problem was they sold something worth relatively little (corn or soy or wheat) to firms that turned it into something relatively valuable (meat or bread or Frosted Flakes). Farmers could also see that the reason the raw materials were not worth much was that very few firms were in charge of this process of adding value to grain, giving those firms the market power to keep prices low, even when global supply was not epecially high.

Then came biofuels, and a whole new, domestic market. Here was a chance to recapture some of that precious market power, and to make a contribution to reducing greenhouse gases at the same time.

Five years on, the scene is much more complicated. That surplus production disappeared in a few bad harvests, dried up by drought in the major grain-growing regions of the world (did someone say, climate change?). Prices for agricultural commodities have started to climb, while a number of people are pointing to the obvious (if simplistic) moral dilemma of using scarce land, water and soil for fuel rather than for food, especially in a country whose energy use is wholly unsustainable and largely responsible for climate change that is going to hurt some of the world's poorest (and least energy wasteful) countries. (Read here for IATP's take on aspects of that question.) Everyone wants a piece of the money they see attached to this latest craze and not enough people are honest about either the potential or the risks involved.

Here are a few thoughts to get us started: 1. biofuels have many feedstocks and can be made in more than one way. What is true for corn grown in Minnesota and processed by a farmer-owned ethanol plant will not necessarily hold for palm oil grown in Malaysia and processed in Germany, or even for soybeans grown in Minnesota to make bio-diesel for local use. 2. Different countries and regions have different allocations of arable land and water: they can and should consider the potential to use that land to generate energy on its merits. It may make sense to use agricultural crops for energy in one province or region and not in another within the same country. 3. We need to distinguish public investment from subsidies. Where can the state make a contribution to overcome the myriad distortions that plague energy and agricultural markets, to protect an important new opportunity? Where are programs designed simply to pay farmers, or processors, to continue with the bad old unsustainable agriculture? There is a difference - we need to develop and agree on the standards by which we will distinguish good public expenditure from bad.

How about starting with commodities that are local, fairly priced and sustainably grown? And all in the context of an energy policy that is about reducing use--in the case of the U.S., reducing energy use dramatically. It sounds easy but it isn't. We have to move away from the increasingly shrill nature of the debate now in progress and back to grounding the discussion in something more tangible. Not biofuels: Yes or No? But Biofuels: What kind? Where grown? How used? For What? Who benefits? Those are the questions IATP is asking -- see here and here for short analyses of very different aspects of biofuels production.

It would be a pity for the biggest new market in a generation to evaporate in bad policy choices and greed. Just as it would be criminal to allow energy-hungry rich countries to continue their bid to commandeer the land of the developing world. There is more than one good way out of the seeming impasse - let's explore some options.

Sophia Murphy

November 05, 2007

Reforming Food Aid

When a non-profit whose mission is to "fight global poverty" turns down millions of dollars in government money - it should turn heads. That's exactly what CARE International did this summer when it announced it would no longer participate in the U.S. Food Aid program. Why? Because the program is so poorly designed it does more harm than good to the world's poor.

As IATP's Sophia Murphy outlines in this commentary, and more extensively in this report with Kathleen McAffee, instead of helping countries experiencing famine purchase food in their region from the closest source, the U.S. program mandates that 75 percent of food aid be U.S. grown and shipped to the country of need. The result is exhorbitant transportation costs, huge time delays when the need is urgent, and the undercutting of local and regional farmers in the country in need.

The General Accounting Office (GAO) testified before Congress in October that U.S. food aid had declined by 52 percent in tonnage between 2001 and 2006 because of increases in business and transportation costs. In other words, we are spending the same amount of money, but helping feed fewer people.

This isn't rocket science. Nearly every other country in the world has reformed their food aid programs toward a more cash-based/local purchase system because the efficiencies are clear. Fortunately, the Senate Agriculture Committee has taken a small, but important step toward reform by including a $25 million a year cash for local purchase pilot program.

This small reform in food aid is a good first step that should be included in the final version of the Farm Bill.

Ben Lilliston

November 01, 2007

Can Congress Stand Up to Agribusiness Inc?

Next week, the U.S. Senate will have an important opportunity to level the playing field for farmers and ranchers in the marketplace. The Farm Bill coming out of the Senate Agriculture Committee includes important provisions to restore fair markets (see discussion of Livestock Title here). When the bill reaches the Senate floor, there will undoubtably be attempts to gut those provisions as agribusiness lobbyists go to work. And as IATP's Dennis Olson wrote recently, it is an increasingly concentrated agribusiness sector that has reaped most of the benefits from past Farm Bills.

Most economists agree that if the top four companies control over 40 percent of a market there is some level of market manipulation going on. If that's the case, it's hard to explain the lack of government action to protect farmers and ranchers in agricultural markets.

According to a study published by the National Farmers Union by University of Missouri professors Mary Hendrickson and William Heffernan, markets that exceed the four company/40 percent threshold include: beef packers (83%), pork packers (66%), broilers (58%), turkeys (55%), flour milling (top 3 at 55%), and soybean crushing (80%).

For several decades the USDA's office in charge of ensuring market competition, along with the Justice Department's Antitrust division, have said idly by as the agriculture sector has rapidly concentrated. In some cases, the USDA has actually blocked enforcement of competition laws. In the real world, this means that farmers have fewer companies to buy from (seed/inputs/equipment) and fewer companies to sell to. Instead of being able to bargain for the best price, farmers and ranchers have to take what is offered.

Ultimately, competitive markets are important for farmers, consumers and taxpayers. Farmers stand a better chance of getting fair prices. Consumers can have more choices in the marketplace. And taxpayers wouldn't have to pick up as much of the bill, as they do now when the big agribusiness companies push farm commodity prices down below what it costs farmers to produce it.

Unfortunately, the House Farm Bill did not address competitiveness in agriculture markets. To keep competition provisions in the Farm Bill, Senators will have to stand up to one of the most powerful special interests in Washington. Agribusiness is one of the biggest campaign contributors and spends tremendous amounts of money lobbying. It won't be easy.

Ben Lilliston