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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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February 2008

February 29, 2008

Food Sovereignty in North America

Earlier this month, I attended the Canadian Dairy Farmers annual policy conference in Ottawa, Canada. I was to provide a U.S. perspective on the topic of food sovereignty. The Canadian Dairy Farmers represent over 15,000 farmers across Canada.

It was an enlightening and encouraging meeting with some surprising elements. For example, when I arrived there were 60 parliamentarians mulling the floor of the hotel, conversing with the farmers as part of an evening reception. When was the last time 60 congressional representatives showed up to an event in the U.S. to support and talk with small and medium farmers at an evening reception? I was impressed to see this kind of interaction that is now so foreign to the U.S. experience.

The next day, I spoke to a room filled with at least 150 farmers from all over Canada. Also presenting that day was the Canadian Minister of Agriculture, Canada’s lead agriculture negotiator at the WTO, and one of our longtime colleagues from the Brussels based group Collectifs Strategies Alimentaires.

I listened to the Minister of Agriculture publicly present his support for supply management programs in Canada. When was the last time the U.S. government and Congress was willing to even use the term "supply management" for fear of losing credibility in the policy debates toward a new Farm Bill? I also listened to the Canadian trade minister present his optimism that a Doha deal is in our grasp. He reiterated though that much hinges on U.S. offers to cut subsidies. Based on the fact that the U.S. let its Fast Track authority expire and the Farm Bill debate has been so hotly contested, it is hard to imagine how U.S. negotiators can do much to secure a deal – particularly in the context of the national presidential campaign. Wishful thinking does not a deal make...

Perhaps the most exciting aspect of the meeting is that the Canadian Dairy Farmers Association has adopted the concept of "food sovereignty" as a platform within its work plan and seeks to build alliances within Canada and with other allies around the world (see definition of food sovereignty included below). I was invited to speak about the potential for developing a platform around food sovereignty in the United States. I will share a few thoughts for reflection.

The first is that food sovereignty itself means very little in the U.S. context. Why would it? The U.S. government does not recognize the Right to Food, which is part of the International Covenant on Economic, Social and Cultural Rights (ICESCR). We have an historic opportunity to change the discourse around the Right to Food, including food sovereignty in the U.S., assuming that we in this country begin to talk in real terms about what has happened to our food system domestically and how U.S. policies have impacted farmers abroad. IATP’s Farm Bill series has helped to talk about what has happened to food, people and the environment in the U.S. as a result of the deregulation in agriculture.

Although Americans are starting to wake up to our changing environment (Fast Food Nation, Omnivore's Dilemma and such) much of the U.S. public still believes in the fairytale that U.S. food comes from small family farms across the country, that we are feeding the world with our U.S. food aid programs or finally that free trade has stabilized the global food system. In fact, it is just the opposite. We know that U.S. farms have become larger and more consolidated. U.S. farmers have been forced out of agriculture in droves, and our food system and health have been negatively affected because of shifts in domestic farm policy. Much of the world has criticized the U.S. for using its food aid programs to dump overproduced grains on other markets thereby undermining local farmers abroad. And, free trade has reinforced price volatility and corporate concentration of food. Moreover, failed trade and investment policies have hurt rural communities and increased dislocation of people through forced migration.

Now we need to go a step further in 2008, developing our messages in support of alternatives. What does food sovereignty mean and why do we support it? In general terms, Food Sovereignty is the right of peoples:

  • to define their own food and agriculture;
  • to protect and regulate domestic agricultural production and trade in order to achieve sustainable development objectives;
  • to determine the extent to which they want to be self-reliant;
  • [and] to restrict the dumping of products into their markets.

Food sovereignty does not negate trade, but rather, it promotes the formulation of trade policies and practices that serve the rights of people to safe, healthy and ecologically sustainable production. ‘Statement on Peoples’ Food Sovereignty’; (Via Campesina)

To me, this is a common sense agenda around which we can all support in the U.S. and abroad.

Alexandra Spieldoch

February 27, 2008

The Travesty of Child Labor

Mark Muller’s personal account of his work with a farmer cooperative in Honduras that uses child labor points to the complexities of this issue. As Mark suggests, there are many factors contributing to child labor, some domestic, some related to free trade. These include, but are not limited to extreme poverty, reduction in public spending in rural sectors, gender discrimination and lack of political power within communities.

But, aside from the causes, child labor is a travesty and we must all be clear on this even as we seek to address the complexities before us. IATP has always opposed child labor - whether it is in Honduras, or historically among U.S. farmworkers and elsewhere.

Certainly, the recognition of international labor standards are part of the solution. But they are only the beginning, not the end to what needs to be done to promote social well-being, fair prices for farmers and fair wages for workers, and an end to hunger and extreme poverty. Labor standards do not address the fact that current trade and investment policies are purposefully designed to exploit cheap labor and hurt producers as a means to supply cheap goods to the global market. Labor standards do not address how small countries like Honduras are destabilized, in terms of trying to meet domestic development needs and compete in the global market. Cheap labor is considered the comparative advantage. No one is excluded in this post-colonial model of slave production. Not children, not old people, and not pregnant women sweating in the fields.

We need to move beyond the judgement and fairly simplistic notions from the North about how to address social alienation and injustice. It is in our commitment to one another and to our environment that we embrace comprehensive solutions, including advocating for international treaties that support basic human rights over the market. This includes garnering international support for the UN Convention on the Rights of the Child, the UN Declaration on Human Rights and the Convention on the Elimination of Discrimination Against Women – to name a few.

I highly recommend materials posted on the web site for the International Labor Rights Forum. For many years, this organization has been doing participatory research and labor rights campaigns to lift up the rights of women and children in all parts of the world. They have looked at Honduras and taken positions on CAFTA. They are looking at abuse on the plantations and working with people on the ground. They and others have done some incredible work to highlight the complexities and to build the voices of those who are so marginalized.

The cover story on the latest issue of Forbes magazine outlines the scope of the problem: there are 218 million child laborers around the world and seven out of 10 are in agriculture. The article lists some of the challenges that communities, labor groups and corporations are facing in parts of the world where child labor is common.

IATP’s Sophia Murphy also recommends a recent report by the International Labor Organization on how to end child labor.

IATP has always embraced complexity in its broader analysis of food and farming. We can't forget the voices of children in identifying the problems as well as the solutions.

Alexandra Spieldoch

Selling Free Trade

Sometimes it seems like free trade advocates will use just about any crisis to argue for the further deregulation of trade rules. Over the last decade, it has been argued that trade expansion would enhance democracy, fight terrorism, mitigate climate change, and stabilize global financial markets. IATP's Alexandra Strickner and ATTAC's Christian Felber set the historical record straight in a new commentary taking World Trade Organization Director General Pascal Lamy to task for cheerleading for further trade liberalization.

Ben Lilliston

February 25, 2008

Child Labor and Shades of Gray

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

“A liberal is just a conservative that hasn’t been mugged yet.”

I’ve always been bothered by that phrase, treating someone’s ideology as something that can dramatically change in a brief episode. But I have to admit that over the past several years, things that once seemed very black and white have now become several shades of gray.

Take child labor – there aren’t many issues that once seemed clearer. Children have a right to a childhood and an education. Can any form of child labor be excused?

Well last week I spent a morning working with a chili pepper producer cooperative here in southern Honduras. It’s an impressive business, where several of the community’s leaders have come together to generate an income source out of the poor soils on the incredibly eroded hillsides near the Nicaraguan border. I will be spending some time with this cooperative, and hopefully help them with some of the agronomic and marketing challenges that they are facing.

But when I arrived at the field being harvested that morning, I was taken aback by the age of some of the kids working in the fields. Many of them appeared to be about the same age as my seven year old. I have worked with farmworker families in New York State, and children have been part of the vegetable-harvesting labor force in the U.S. and most parts of the world, but this seemed to be a whole different level.
One of the directors of the cooperative must have seen the concern on my face, because he started to explain to me the rationale for children working the fields. He admitted it was illegal, but the families desperately needed the income that this work provided. He stated that a mother with children (very few men were in the fields) could earn up to 500 Lampiras (about $25) a day, much more than what is provided by other local jobs. The children are amazingly dexterous pickers, and on average they could probably pick the peppers twice as fast as I could.

Part of the reason that the work is appealing to the kids is that they get to spend their hard-earned money at the truck that serves as the mobile junk food market. Ironically, occasionally between songs blasting out of the truck radio would be a message from UNICEF alerting people that children are required to attend school.

So can I morally justify working with this cooperative? After a lot of pondering, I believe I can. First of all, if the options available to the kids were to either work the fields or to attend a well-run school where they could receive a good education, then of course they should be receiving the education. But I visited the school in the little village, and it’s hard to imagine a lot of education happening in the run down building with almost no resources. Whether the kids work the fields or not, a good education is simply not available.

Second, the kids can really earn a considerable amount of money for their family, and poverty has already taken away many of the joys of childhood. Picking vegetables is not an ideal childhood experience, but neither is drinking contaminated water or spending the day washing laundry. Despite the fact that it is hot, backbreaking work, the kids seem to make the best possible experience out of it, working next to their friends and enjoying the sugar-laden candies for sale on the truck.

I hope that, in my brief time here, I can help create some opportunities for sustainably grown, fairly traded products in this region. But without that option currently available, I have to think that some form of production and job creation is better than the alternative, which is most likely the continued migration of families away from the countryside and into overcrowded cities or to the country’s clothing factories.

Having kids myself, I can’t imagine how frustrating it is for the parents to have to rely on the labor of their children to make ends meet. Childhood labor won’t go away, though, without adequate income opportunities for the adults. And that seems to be a long ways off for many of the people here in southern Honduras.   

Mark Muller

February 21, 2008

Clinton campaign responds to huge beef recall

Senator Hillary Clinton has responded to the animal abuse at the Hallmark/Westland slaughter house and a subsequent recall of 143 million pounds of ground beef, much of it already consumed by school children. The response reflects just how difficult it is to propose policy while responding on the campaign trail to widely publicized events. (I go into more detail on the recall in a commentary that appeared in the St. Paul Pioneer Press on Feburary 19).

Senator Clinton’s food safety plan calls for a “thorough audit of our nation’s food safety system to locate weaknesses and gaps.” While there is nothing objectionable in this proposal, the system has been audited frequently over the past 20 years by the U.S. Department of Agriculture Inspector General, by the General Accountability (then Accounting) Office, by Congressional investigators, by academics and by non-governmental organizations. Their recommendations often have been “accepted” by USDA but seldom implemented. The deregulation of the food safety system and its replacement with de facto industry self-regulation that began in the Reagan Administration continues - audits, foodborne illness, and meat product recalls notwithstanding. For example, when testing determines that a company’s product is contaminated, the company may withhold the product from further government testing that would confirm the initial test and result, at the very least, in bad publicity for the company.

Senator Clinton’s proposal to increase resources for USDA food safety funding by 50 percent echoes many similar proposals. But the problem is not just funding level but the willingness of USDA management to use the funds appropriated by Congress for their intended purpose. USDA management used previous Congressional appropriations to add management layers and commission risk assessments to justify the need for less inspection. Despite the “continuous inspection” requirement of the Meat and Poultry Inspection Act, even large volume producers like Hallmark/Westland lack federal inspectors working fulltime onsite to inspect product. Instead management instructs federal inspectors to inspect the paperwork of plant inspectors who carry out industry “self-regulation.” A new Administration would have to stand up to industry’s attempts, with USDA management cooperation, to restrict federal authority and oversight of slaughterhouses and meat processors. 

The regulatory powers of the Food and Drug Administration are even weaker than those of USDA, as the multiple import product safety incidents have demonstrated over the past year. Reorganizing U.S. food safety under a single agency, as Senator Clinton proposes, along with many others, will do little to protect consumers, and indeed, the food industry, if current industry and management practices remain prevalent. If the next Administration extends the current "lite" federal oversight of industry to all products and outsources product inspection, as proposed in November 2007 by President Bush’s Interagency Working Group report, U.S. consumers will be yet more vulnerable to product hazards. The off-shoring and outsourcing of government inspection to private organizations that would certify products as safe for export may provide plausible deniability for the government and a corporate liability shield if imports harm consumers. But the privatization of government inspection and enforcement functions is very unlikely to prevent harm to consumers, the stated goal of the report.

Senator Clinton, and indeed, all candidates for federal office, should develop well-researched food safety policies for a new Administration and a new Congress. The Clinton campaign’s effort to respond to the Hallmark/Westland animal abuse and beef product recall has merely touched the tip of a very large iceberg.

Steve Suppan

February 19, 2008

Climate Solutions

Perhaps no industry will be more affected by climate change than agriculture. Cropping patterns, pests and plant disease, and access to water will combine to profoundly affect our ability to produce food. And rising fossil fuel prices will undoubtedgly affect fertilizer, pesticide and machinery costs for farmers. A 2000 report by IATP Board Member Steven Shrybman concluded that agriculture and the larger global food trade system, supported by free trade agreements and the World Trade Organization, was one of the larger contributors to climate change.

So what do we do about it? Peter Barnes, author and former President of Working Assets, has written an excellent new citizen's guide called Climate Solutions: What Works, What Doesn't, and Why. The short book gently dissects the limitations of poorly designed cap and trade systems currently being considered by Congress. The two main problems: 1) giving away pollution permits thereby reducing incentives to cut carbon emissions; 2) rising energy prices for consumers that will disproportionately hit middle and low income households.

To address these weaknesses, Barnes proposes a hard cap and dividend to reach an 80 percent carbon reduction by 2050. Under this plan, a steadily declining number of carbon emission permits would be auctioned off. Money from the permits would go directly into a trust which would give checks back to citizens to help offset rising energy costs. The Political Economy Research Institute outlines how such a cap and dividend approach would benefit middle and lower class families.

Steadily rising carbon prices would also make investments in cleaner energy, conservation and mass transit more cost competitive. And would spur the government to shift the enormous subsidies that currently go to the fossil fuel industry, as outlined in research by Doug Koplow at Earthtrack, toward renewable energy and conservation.

Barnes' book primarily focuses on U.S.-based solutions, both because of the U.S. historic contribution as the world's largest greenhouse gas emitter and because Congress and Presidential candidates are all talking about climate solutions. But he also puts forth some interesting ideas related trade and a global system for carbon reduction. On trade, he proposes carbon border fees on goods that have carbon fees lower than the U.S., basing the fee on the amount of carbon required to make the product and the carbon price differential between the U.S. and the exporting country. He argues that such an approach would protect U.S. companies who are lowering their carbon and encourage other countries to lower their carbon emissions.

A more ambitious proposal is an Earth Atmosphere Trust which would work similarly to his domestic proposal: A declining number of pollution permits would be auctioned globally and proceeds would go into a global fund. A portion of the fund would then be disbursed to people around the world on a per capita basis or to local institutions in an effort help the poor deal with increasing costs, and the rest invested into renewable energy and climate mitigation.

Dealing with climate change can be overwhelming. And the details matter in how we move forward. Barnes' ideas shed light on many of the tough choices we need to make going forward.

Ben Lilliston

February 14, 2008

Chicken Fight Over Antibiotics

Six years ago, IATP and the Sierra Club published the first study to test brand-name poultry products from stores for the presence of antibiotic-resistant bacteria. The study was at the beginning of our work to stop the routine and unnecessary use of human antibiotics in animal feed to make healthy animals grow faster - a practice the science shows is leading to more antibiotic resistant infections in people.

The study got lots of media attention and some expected criticism from the poultry industry, particularly Minnesota-based Gold'n Plump - which produced some of the chicken we tested. The company didn't dispute our findings of antibiotic-resistant bacteria on its chicken, rather they disputed the media coverage of our findings, arguing before the Minnesota News Council that a local TV story overstated the risks to consumers.

Fast-forward to 2008. Gold'n Plump's current marketing strategy for its "natural" chicken hinges on not using hormones (already banned in chicken) and not using antibiotics except to treat sick chicken. Minnesota/St. Paul Business Journal wrote about the company's research in 2006 which found that "freshness, health and food safety" were most important to customers. The company has billboards up all around the state touting their "natural" chicken without antibiotics. Certainly admirable progress from six years ago.

But the company has gone a step further to defend its label. In January, Gold'n Plump along with Perdue, Sanderson Farms and Foster Poultry asked for a temporary restraining order in federal district court, charging that Tyson Foods had continued to make false and misleading advertising claims that its chicken were "raised without antibiotics." In September, the U.S. Department of Agriculture told Tyson's to stop claiming its chickens were raised without antibiotics because of a dispute over whether the company's use of ionophores constituted an antibiotic. In December, the company and USDA reached an agreement on language related to their antibiotic use. Goldn Plump et al, working together under the banner of the Truthful Labeling Coalition, alleged that Tyson's is still using the old labeling. Although a District Court judge ruled against the restraining order, Conde Nast blogger Jack Flack writes about how the ruling is "not much of a win at all."

This legal ruckus among chicken companies shows how far we've come in six years. Poultry companies are actually fighting amongst themselves on how they can best market their chicken as antibiotic-free - instead of arguing that antibiotic-resistant bacteria aren't a risk at all. IATP and the Keep Antibiotics Working Coalition have had enormous success in pressuring meat and poultry companies to stop inappropriately using antibiotics, particularly those that treat humans.

At the same time, the salvos flying between chicken companies, and consumer confusion around what the industry's labels actually mean, point to the need for a level playing field for all. That's why we need Congress to pass the Preservation of Antibiotics for Medical Treatment Act. This Act would keep all the chicken, pork and beef companies from adding important human medicines to their animal feeds for animals that aren't even sick.

Maybe we can even get Goldn Plump's support?

Ben Lilliston

February 12, 2008

On "War and Peace" and a Second-best World

I am immersed in rereading Tolstoy's classic, "War and Peace." It is a new translation by Pevear and Volokhonsky and it is marvelous. I read the book first as a teenager, partly for show, and mostly because I love books. But if I loved the novel the first time around, I can appreciate so much more of it now.

Take Tolstoy's digression on the various strategists and generals who advise the Russian Emperor, Alexander I, as Napoleon threatens and then crosses into Russian territory. I was struck by the description of Pfuel, a German "theorist-general." Tolstoy is unkind to the Germans in his description of Pfuel (see Book II, Part I, Chapter X if you want to read Tolstoy's views on how various European nations exhibit self-assurance). But what stood out was this quote, "Pfuel was one of those theorists who so love their theory that they forget the purpose of the theory -- its application in practice."

The quote leapt out at me because it applies so readily to the debates on free trade. These debates involve too many rounds of one side, usually people living the consequences of a policy, saying, "This does not work!" And those on the other side, usually people who have the power and position to advise, but who do not live with the negative consequences, saying, "That is because you did not try hard enough. You didn't follow all the policy prescriptions - go back and try harder." At what point can we abandon a world driven by mathematical economists, to get back to our real, imperfect world? A theory of perfect markets is a wonderful intellectual tool, but it cannot substitute for public policy.

In the end, the pure theorists can only take the same grim satisfaction as Pfuel, who does not deem Napoleon's campaigns in Austria, Prussia and Russia to be worthy of the label war, because they don't conform to the theory of how a "proper" war is waged. Yet the cannons and rifles are fired, the soldiers are killed, and the local population and their crops are raped and pillaged, as the hundreds and thousands of men, women and horses that make up the armies and their entourage seek food and fuel to survive. A war by any other name?

During the 1990s, governments created the World Trade Organization, refused to deal pragmatically (let alone morally) with the debt crisis, and insisted on privileging private interests in trade agreements, investment pacts and development spending. At the same time they signed Agenda 21, the Convention on Biological Diversity, the Convention on Tobacco Control and a dozen other agreements that committed them to putting the pubic interest ahead of private gain for a select few.

So who is winning this war of ideals? Tolstoy's Prince Andrei says a battle is not lost by the side that loses the most soldiers, but by the side that runs away. For those of us who do not believe that free trade is the answer to every public policy problem we face, it is time to stop running. More importantly, however, it is time to stop fighting, too. After all, Tolstoy was a pacifist. It is time to focus on the pragmatists, guided by a vision of a better world, but not enslaved to a theory that ignores people's experience.

In her 2006 WIDER Annual lecture, Nancy Birdsall, President of the Center for Global Development, points out how economic policies that ignore existing inequalities exacerbate them. In her lecture, Birdsall points out that the "level playing field" so beloved of trade negotiators and their economists does not reflect the real world, with the result that their policy prescriptions increase poverty and disparities among countries.

Untidy though it may be, so-called "second-best" economics grounded in the real world is richer, more interesting, and much more likely to recognize the whiff of gunpowder than the first-best crowd. Read Dani Rodrik on the subject - he is clear and succinct on the differences.

Whoever wins the U.S. election in November, let us hope he or she is firmly guided by a respect for diverse opinions and a refusal to embrace ideal solutions, where the messy question of who loses and what will happen to them is left for someone else to answer.

Sophia Murphy

February 08, 2008

WTO Continues Off a Cliff

Earlier today, the World Trade Organization put out yet another draft text of trade rules for agriculture. Negotiators continue to press on, despite a growing consensus that further trade deregulation is not what is needed to address increasing global inequities between rich and poor.

In a press release we put out today, the director of IATP's Trade Information Project, Carin Smaller, summed it up this way, "The text looks like a bad repair job. The Chair of the Agriculture negotiations, Ambassador Falconer, has filled in some of the holes, but the basic design remains fundamentally inadequate. The walls of the house are crumbling down. This latest paint job is not going to fix the problem.”

A new poll by BBC World backs up the idea that the WTO bubble contains different air than the rest of us. In a survey of people in 34 countries, 64 percent felt that the benefits and burdens of globalization had not been shared fairly. The weight of opinion in 22 countries was that "economic globalization, including trade and investment" is growing too quickly. And this poll was taken before the global stock market fall in mid-January.

IATP will put out a more detailed analysis of the new WTO agriculture text next week.

Ben Lilliston

February 04, 2008

Farmer Agreement Offers Alternative to NAFTA’s Failures

On January 1, 2008, the North American Free Trade Agreement (NAFTA) came into full effect after a 15-year phase-in for more sensitive agricultural products like sugar, white corn, beans and dairy. This means the last remaining tariffs are no longer legally binding, including those on sugar imported from Mexico to the U.S., and vice versa. Additionally, the Mexican government will no longer block imported high fructose corn syrup from the U.S., which competes directly with sugar in the Mexican sweetener markets.

The expected fallout threatens to hurt sugar farmers on both sides of the border. This threat is so dire, that it has provided an impetus for Mexican and American sugar growers to reach an historic agreement to modify the final implementation of NAFTA. 

First, let’s look at the chaos NAFTA is expected to bring to sugar markets in the U.S. and Mexico.

An expected import surge of U.S. corn syrup will likely displace Mexican sugar from the Mexican sweetener market. Mexican sugar growers also face the prospect of increased U.S sugar imports, because the current U.S. cost of production for sugar is less than in Mexico. Moreover, increased imports from other countries have created a substantial U.S. surplus of sugar that could be dumped into Mexico.

In the U.S., sugar displaced from the Mexican market by corn syrup could be exported to the U.S. This could overwhelm the delicately balanced U.S. inventory management system, already under siege by increased imports from World Trade Organization (WTO) and Central American Free Trade Agreement (CAFTA) obligations. 

All these threats taken together would likely depress sugar prices below the cost of production on both sides of the border, resulting in a shutdown of most of the North American sugar industry. 

However, there is more at stake here than the fate of an agricultural commodity. Sugar is Mexico’s largest remaining agricultural industry. According to the U.S. Department of Agriculture Foreign Agricultural Service, there are an estimated 158,000 sugar farms in Mexico that average 10 acres in size. These farms supply 58 mills located in 15 of the country’s poorest 35 states. The Mexican sugar industry directly employs more than 300,000 workers, including cane cutters, seasonal field workers, and factory workers; and indirectly supports another 2.2 million jobs. 

The NAFTA-mandated destruction of the Mexican sugar industry would likely cause a new wave of immigrants to try to find work in the United States. This new migration would rival the well documented surge of Mexican migration caused by U.S. export dumping of yellow corn into Mexico facilitated by NAFTA over the last decade.

Thus far, Mexican sugar farmers have been spared the devastating effects of dumped imports because the Mexican government has refused for 15 years to deregulate their sweetener market.  Just as importantly, U.S. sugar growers have had enough political clout to defend their own sugar program that—unlike other U.S. farm programs—manages inventories, prevents overproduction and export dumping, and guarantees farmers a fair price at no cost to U.S. taxpayers.   

For decades, high fructose corn syrup has competed with sugar in an increasingly integrated sweetener market. In fact, the rules for this sweetener war under NAFTA have been continually in dispute literally since the signing of the agreement in 1994. As NAFTA forced Mexico to deregulate its sweetener market, cheaper U.S. corn syrup began taking market share away from Mexican sugar growers, especially in the soft drink market. Mexico tried to protect its sugar growers: first with anti-dumping measures; and then with a tax on corn syrup. However, the U.S. government, on behalf of the Corn Refiners Association (including Cargill and Archer Daniels Midland), dutifully challenged Mexico’s actions before international trade tribunals under both NAFTA and the WTO, and won.

Significantly, the agreement reached by U.S. and Mexican sugar growers sets the stage for managing the sweetener market between the two countries in a way that could benefit farmers in both countries. Specifically, the deal would modify the implementation of full NAFTA deregulation of Mexican and U.S. sweetener markets by:

·         Building on a provision currently included in the pending Farm Bill that would allow the use of some sugar to produce ethanol as a means to manage excess supplies.

·         Managing sugar supplies used for ethanol production separately from sugar used for human consumption; a prudent step given the growing controversy over fuel versus fuel.   

·         Limiting import surges of Mexican sugar exports to the U.S. caused by displacement of Mexican sugar from the anticipated import surges of high fructose corn syrup being dumped by multinational agribusinesses into Mexico.

·         Managing the two countries’ sugar re-export programs to provide a smoother and more predictable transition to a more integrated North American sweetener market. 

·         Providing Mexican and U.S. sugar growers with preferential market access to North American sugar markets—both for human and ethanol consumption—while still fulfilling the two countries’ existing WTO and other international trade commitments.

·         Establishing a Joint Mexico-United States Sugar Commission to resolve future disputes, rather than leaving them up to secret NAFTA tribunals.

The agreement has been circulated among appropriate government officials in both countries, and various options have been suggested for moving the agreement forward.

The mutual threat of lost markets and livelihoods has compelled Mexican and U.S. sugar farmers to work out an agreement that will give both sides a fighting chance to survive. The deal could help resolve the endless trade disputes and uncertainty that have wreaked havoc in the sweetener market since NAFTA was signed. It could curtail the otherwise inevitable increase in cross-border dumping of sweeteners that threatens to irrevocably damage the North American sugar industry, which is so important to both the Mexican and the U.S. economies. Finally, it could help us avoid another displacement of Mexican agricultural workers who will be forced to migrate north if we allow NAFTA to be implemented unencumbered.

For more information on the connections between agriculture, trade and immigration, go to Trade Observatory.

R. Dennis Olson

February 01, 2008

More corn. More GMOs. More Pests?

We've written about the environmental drawbacks of major increases in corn production in the U.S., particularly related to nitrogen runoff into waterways. But another potential problem is looming. Biotech company Monsanto (manufacturer of Bt corn) reported in January that in an effort to cash in on high corn prices, fewer farmers are planting biotech crop refuges designed to control pests. One important outcome could be the dimished effectiveness of a valuable pest control tool for organic and sustainable farmers.

Currently, farmers who plant genetically engineered Bt (bacillus thuringiensis) corn and cotton are required to set aside part of their land to protect against pest resistance. The target is the corn borer and corn rootworm. Engineered Bt corn has the pesticide inserted into the cells of the plant. The pest dies after eating the Bt corn. From a pest control standpoint, the concern is that if too many pests eat too much Bt corn, over time they will develop a resistance to Bt, and the technology will lose its effectiveness. In order to protect Bt corn, the Environmental Protection Agency (EPA) requires farmers to plant at least 20 percent of their corn acres with non-Bt seed to delay insect resistance to Bt traits. The idea is that any pests who are starting to develop a resistance to Bt will mate with others living in the refuge - and thus dilute the development of resistance.

But here's where the credibility of the set aside program breaks down. The EPA doesn't monitor its implementation. It's up to the biotech companies who do the monitoring by calling farmers on the phone and reporting back on compliance. It's hard to see how the industry is a disinterested party in documenting compliance. So when Monsanto reports a potential problem - it's worth paying attention.

In January, Monsanto's Scott Baucum told attendees at the Illinois Crop Protection Technology Conference at the University of Illinois that compliance with the crop set aside system declined in 2007. While Baucum wouldn't say how much compliance had declined, 2006 overall compliance ranged from 80 to 95 percent.

Monsanto and the National Corn Growers Association are so concerned about non-compliance that they have kicked off a new education campaign with postcards to their members and billboards in top corn producing states about the need for farmers to plant Bt refuges, according to DTN (sub required).

The development of pest resistance to Bt could be significant for organic and sustainable farmers. In its natural form, Bt is derived from a soil bacterium that naturally repels plant pests and has been used as a last line of defense by organic or low-chemical farmers in a spray form for decades. Since the natural Bt spray degrades in sunlight and evaporates from plant surfaces within a short period of time, farmers don't have to worry about Bt residues contaminating food or building up in the soil.

After decades of low-priced corn, often below the cost of production, there is enormous pressure on farmers to take advantage of rising corn prices. The potential for increased pest resistance is yet another reason why we need the federal Farm Bill and state policies to help us shift toward more diversified and resilient cropping systems. The biofuel boom has certainly played a role in the massive growth in corn acres and higher prices. But it has also accelerated the need to build a biofuel system based on perennial energy crops.

Ben Lilliston