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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About Think Forward
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.
February 28, 2011
Commodity market reform: Wall street vs. the regulators
In contrast to the rapidity with which governments moved to use taxpayer funds to rescue the “too big to fail" banks in 2008, the pace of financial and commodity market reform since then has been agonizingly slow. One factor frustrating re-regulation is financial industry resistance to reform, aided in the United States by Republican Party efforts to reimburse the financiers of their November 2010 electoral victory with initiatives to defund the regulatory agencies responsible for implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Before dawn on February 19, the House of Representatives voted to slash the budget of the Commodity Futures Trading Commission (CFTC) by a third. “There would essentially be no cop on the beat,” CFTC Commission Michael Dunn said at a February 23 Senate hearing. CFTC Chairman Gary Gensler had told a House finance committee hearing that such a cut would not only cripple the CFTC’s ability to implement Dodd-Frank reforms, but would prevent his agency from investigating Ponzi schemes and market manipulation. The U.S. Senate is unlikely to support the House Republican assault on regulation, but the Obama administration’s proposal to levy a transaction fee to finance CFTC implementation and enforcement is facing stiff opposition.
However, budgetary sabotage of market regulation is not limited to the United States. IATP, in comments submitted on the revision of the European Commission’s Markets in Financial Instruments Directive (MiFID), noted that the European Securities Markets Authority could not coordinate information among the 27 EU member state market authorities with a staff of just 55, for both financial and commodity markets. The EU’s revised financial and commodity markets legislation cannot meet the Dodd-Frank requirement for a comparably rigorous regulatory system in order for foreign traders to access U.S. markets. On the other hand, if the Republicans and the financial services industry succeed in killing Dodd-Frank, EU traders will be able to access U.S. markets under the self-regulation standards of the Bush administration.
Later on February 19, the Group of 20 financial ministers issued a communiqué, which included calls for several more studies from international agencies, including the International Organization of Securities Commissions, the Organization of Petroleum Exporting States and the International Energy Agency, to determine the causes of “potential excessive price volatility” in commodity markets. The ministers called on their deputies to investigate the “underlying drivers” of that volatility and report to them at their next meeting, April 14–15 in Washington, DC. Noting the effect of “this volatility on food security,” the ministers called for greater investment in agricultural production. President Nicholas Sarkozy had announced that commodity market regulation and food security would be one of three top priorities of the French G-20 presidency in 2011.
Responding to U.S., Canadian and Brazilian opposition to President Sarkozy’s declaration on excessive speculation in agricultural commodities and the need to regulate that speculation, the communiqué delicately stated that its agreement on “indicative guidelines” of trade and financial “imbalances” would take into account the circumstances of “large commodity producers.” On February 14, an international group of nongovernmental organizations, including IATP, wrote to Brazilian Finance Minister Guido Mantega to urge him to discuss with French officials their proposal to the European Commission for an EU commodity regulatory authority. The NGOs argued that it was in the interest of all G-20 members that excessive speculation in commodities be regulated to prevent the speculative bubbles that have been destructive for food and energy security. The French proposal, if implemented, would help prevent such bubbles in EU commodity markets.
On February 16, another group of NGOs wrote to U.S. Treasury Secretary Timothy Geithner to urge U.S. leadership to prevent excessive speculation in agricultural commodity markets. The NGOs supported the G-20 commitment to make the trading of “standardized derivatives” more transparent, but stated that the exemptions sought for “customized derivatives” by the financial services industry would make a mockery of that commitment. Noting the 32-percent increase in the United Nations Food and Agriculture Organization Food Price Index in 2010, the NGO letter stated that the food insecurity and political instability that resulted from food price increases in developing countries was one component of a national security threat to the United States. Commodity market regulation could reduce that threat level. (See previous Triple Crisis posts on speculation and the food crisis.)
The CFTC draft proposed rule on position limits to prevent excessive speculation on commodity markets is open for comment until March 28. The comment deadline on a draft proposed rule on agricultural swaps (currently unregulated, off-exchange trades) is April 4. Both rules, if implemented, would significantly reduce the damage to food security from excessive speculation.
This blog by IATP's Steve Suppan also appeared on the Triple Crisis blog.
February 24, 2011
Reflections on right to water
This week, the U.N. Independent Expert on the issue of human rights obligations related to access to safe drinking water and sanitation, Ms. Catarina de Albuquerque, will visit the United States, giving us an opportunity to pause and reflect: What does right to water entail?
1. San Francisco Chronicle with Bloomberg, Bolivia's Morales Seeks African Support for UN Water Proposals, February 6, 2011
2. Even though the advocacy work of organizations such as WaterAid has helped increase the awareness of the challenges of realizing right to water in rural areas, an area of increasing interest to the organizations it partners with, much of the responses are still focused on the gap in finances.
4. Women at the Center of Climate-friendly Approaches to Agriculture and Water Use, Annex 1: Sand mining, governance and right to water, http://www.iatp.org/iatp/publications.cfm?refID=107914
5. http://www.epa.gov/SoCal/tribes.html and http://www.winnipegfreepress.com/local/first-nations-to-alert-un-to-water-woes-116296654.html
6. U.S. commercial service: Mission Statement (Commercial Setting), Water Trade Mission to India, February 28 – March 4, 2011, Trade Mission Flyer Accessed February 15, 2011
February 23, 2011
Can food safety race to the top?
"Many argue that globalized trade creates a ‘race to the bottom,’ where the country with the weakest regulations or lowest wages ultimately sets the standards in the global marketplace," writes IATP's David Wallinga, M.D. in the Des Moines Register. "Something different may now be happening around food safety: Global forces are putting pressure on U.S. regulators to catch up with the rest of the world."
Dr. Wallinga writes that weak U.S. regulations on antibiotic use in meat and poultry production have blocked or limited U.S. exports in Russia, the European Union and several other countries. A Congressional Research Service report released in December also concluded that antibiotic use in the U.S., commonly used for growth promotion in confined animal feeding operations (CAFO), could affect future U.S. export markets for livestock and poultry.
"At some point, the economic costs of lost exports may override even the purported—and very suspect—economic benefits from the routine use of antibiotics in animal feeds," Dr. Wallinga writes.
You can read the full commentary here.
February 17, 2011
Is famine the new normal?
A version of this commentary appeared in Policy Innovations, a publication of the Carnegie Council.
When global food prices spiked in 2007-08, a hundred million people were added to the ranks of the world’s hungry, pushing the total number over 1 billion for the first time in history. Now, just two years later, we are seeing another food price hike, and more famine is likely to follow.
Earlier this month, the United Nations Food and Agriculture Organization (FAO) published its global food price index for January 2011. The agency’s index was at its highest level (both in real and nominal terms) since the FAO started measuring food prices in 1990. Food riots have already begun in Algeria. As history repeats itself and the second major global food crisis in two years takes shape, it is vital that we learn the lessons of the first crisis, and address its fundamental causes.
Food security depends on stable and predictable weather and markets, and access to resources—all of which have been knocked dangerously off balance in just the past few decades. Since the 1970s, human-caused climate change has brought more frequent extreme weather events worldwide. Farmers used to dealing with the prospect of a lost harvest every ten seasons now experience flood, drought or major pest infestations every second or third year. In 2010 and early this year, Australia, Argentina. China, Russia and Pakistan have all seen extreme weather events disrupt their agricultural production.
The second source of instability is an increasingly chaotic marketplace. In the name of free trade, the U.S. government and World Bank have spent the past three decades forcing the markets of developing countries to open to cheap imports, which undermined local food production. In a cruel irony, poor countries were also pressured to cut support for their own farm sectors, and even forced to sell off emergency food reserves, under the rationale that it would be more efficient to simply buy food on international markets. By 2006, more than two-thirds of the world’s poorest nations were dependent on food imports. Then came the wave of financial deregulation over the past decade, unleashing speculators onto commodity markets, and creating index funds that tied together commodity market prices for food, oil and metals like never before. But the leveraging, bundling and “innovative instruments” that were supposed to reduce risk in these markets had the opposite effect. The result has been a wildly volatile global food market, in which factors unrelated to actual supply and demand often drive prices.
This global double whammy of climate and financial instability has not hurt everyone. Volatility is good for the biggest players in any market. Many agribusiness companies are experiencing record profits now, as they did during the last food crisis. Some African countries will not be hit as hard this time precisely because they insisted on boosting local production instead of relying on global markets. But for the most part, poor farmers are struggling in this changed and hostile climate. No wonder famine has become the new normal.
If we consider world hunger an abomination, and not an investment opportunity, we need to make some big changes. Nearly everyone from the World Bank to the U.N. to the G-20 recognizes that investment is urgently needed to support small-scale farmers, particularly women, in countries facing hunger. Globally, 70 percent of the world’s food is grown on farms less than two hectares (4 acres) in size, tended in large part by women. Increased support should help farmers utilize sustainable practices that reduce costly inputs, produce higher yields and increase farm incomes. Food production for meeting domestic needs must take priority over cash cropping for export.
But there is much more to do. Funding to assist developing-country farmers in adapting to climate change is woefully inadequate. Countries and regions struggling with hunger need greater policy space to protect domestic food production and stabilize supplies. Food reserves should be reexamined as a key tool for addressing shortages, as well as stabilizing food supplies and prices for farmers and consumers. Governments need to get serious about implementing rules to curb excess speculation.
The destabilization of the global food supply, which took decades to achieve, can be undone. But it cannot happen if we fail to learn from the past and support new approaches that would bring greater stability and resilience to farming, markets and food systems.
February 16, 2011
Seattle city council weighs in on the Farm Bill
Another sign that the Farm Bill debate is attracting a much broader audience this time around: the Seattle City Council is weighing in with the Seattle Farm Bill Principles. Yesterday's news release states that one of the Council's aims is to "provide guidance to Congress on the importance of access to fresh and nutritious food and other critical issues as they begin considering the 2012 renewal of the Farm Bill." This goal is consistent with principles we've outlined as part of the Charter for a Healthy Farm Bill. The Seattle Council also hopes that the Principles can be a catalyst for dialogue between urban and rural leaders about the future of our food system. Let's hope so.
February 15, 2011
Upcoming webinar on health, justice and industralized meat production
Today’s predominant, industrialized farm animal production facilities raise huge numbers of livestock in small geographic areas, producing enormous concentrations of waste that pollute air and water. As a result, these Confined Animal Feeding Operations (CAFOs) create a number of problems for the health of the environment and the people living in it, including increased respiratory symptoms, antibiotic resistance and decreased quality of life. And like other highly polluting industries, CAFOs are disproportionately located in low-income areas and communities of color.
Next week, IATP will host a webinar that reports on the health effects of CAFOs on surrounding communities, and examines how public health researchers can collaborate with affected communities. For more than a decade, Steven Wing and colleagues at the University of North Carolina have been studying the health effects of hog CAFOs in collaboration with community-based organizations in eastern North Carolina. He’ll present their most recent findings, to appear in Epidemiology next month. Naeema Muhammad, from Concerned Citizens of Tillery, the lead community organization in this research, will discuss community involvement and how the research has contributed to organizing and public education efforts. Discussion will be moderated by the Institute for Agriculture and Trade Policy’s David Wallinga, M.D.
The webinar, Health, Justice, and Industrialized Meat Production, will take place on February 22 at 12 noon- 1pm EST. Join us and register today.
February 14, 2011
Inspiration from Egypt at the World Social Forum
Friday’s closing ceremony of the World Social Forum began with the news that Hosni Mubarak had resigned from office and led to a resounding cheer and celebration amongst the crowd. Egypt and Tunisia’s people-led struggles had reverberated throughout the forum with intermittent marches of Eyptians and those in solidarity. In between assembly sessions of social movements, climate justice groups and those gearing towards Rio+20, several of us protested outside the Eyptian Embassy in Dakar on Friday to show support to those assembling in Tahrir Square in Cairo. Even as we shouted slogans, news travelled that Mubarak had actually resigned, this time for real.
Inspiration from Egypt was visible among the Senegalese students, several of whom marched in protest against the current long-time Senegalese president. Other students asked us to sign petitions to end the military action in the Ivory Coast. But clearly, something is bubbling on the African continent as a result of Egypt and Tunisia.
The evening ended with the sun setting on the Atlantic ocean behind the stage and a call to action by among others, the climate justice groups and those organizing to the stop the next Earth Summit in the summer of June 2012 from becoming an “Earth grab” (in the words of Pat Mooney from the ETC Group). Speaking of the climate summit, he said, “Copenhagen was a tragedy, but Cancún was Treason…we have the next 15 months with a second Cochabamba gathering, the G-8 and G-20 summits, Durban and Rio to turn this around and we can! They (governments who endorsed the Cancún Climate agreement) have become too greedy and in their greed, they have lost their vision. We can provide it for them.”
The climate justice groups pledged to start a series of local, regional and national mobilizations that will culminate in international stop off points in the 15-month road map from Dakar to Cochabamba, G-20, Durban, Port Alegre in the next WSF and onto Rio. They demanded to set targets to achieve only a maximum one-degree temperature rise, curb greenhouse gases by 50 percent by 2017 and allow no offsets (read: carbon trading and buying the right to pollute in industrialized countries through so-called green projects in the global South). Needless to say, these are ambitious but science-based targets on what is actually needed to curb and reduce devastating global warming for future generations.
Our governments, and especially the United States, are far from these goals having pledged for voluntary national targets full of loopholes in the hope of some day arriving at an agreed limit of no more than a two-degree global temperature rise.
The real work on helping raise public consciousness and mobilize citizens towards urgent and just action from our governments on this 15-month journey begins now. Nothing short of the future of this planet is at stake.
IATP's Shefali Sharma is blogging from the World Social Forum in Dakar, Senegal.
February 11, 2011
Casino pushes away gamblers: banks warn regulators
After a 154-percent rise in the price of cotton futures contracts during the past year, the Intercontinental Exchange may require financial speculators to show “economic necessity” to buy more than 30,000 bales of contracts. Both hedge funds and index funds have jumped into the cotton market with no plan whatsoever to own the cotton long enough to take delivery on it. They are overwhelmingly betting “long,” i.e., for prices to increase, reports Gregory Meyer at the Financial Times. Nevertheless, according to a February 8 Reuters article, John Baffes of the World Bank said that there is no “conclusive evidence” that anything but supply and demand fundamentals explain the price climb in cotton and many other commodities over the longer term.
The larger backdrop of this extraordinary scene, where a major exchange is pushing away trades and their fees, is regulatory trench warfare in the U.S. Commodity Futures Trading Commission (CFTC) and the European Commission (EC). In both the U.S. and the EC, regulatory agencies are rewriting rules to regulate commodity trading as part of larger financial market reform efforts. Those who contend that there are no data to show that excessive financial speculation has been a major driver of commodity prices claim that “overregulation” will drive trades to unregulated venues. European banks have warned EC regulators that the banning of any trading practices in the revision of its Markets in Financial Instruments Directive (MiFID) could “exacerbate systemic risks.”
IATP responded to an EC request for comments on 148 questions regulators posed in a consultation paper about MiFiD. The questions covered the regulation of both financial and commodity markets. Europe does not have the equivalent of a U.S. CFTC, although the government of France has proposed that the EC develop legislation to create a European commodity regulatory authority. IATP suggested to the commission that the European Securities Market Authority, designed to coordinate the regulation of stocks and bonds, had neither the expertise nor adequate resources to coordinate the enforcement of market rules in the 27 EC member states.
The CFTC has requested comments on a proposed interim rule to limit the percentage of contracts that any one entity can control during a trading period. If approved by a majority of the CFTC commissioners, CFTC enforcement of the rule will prevent excessive speculation in the commodity contracts to which the rule applies. The initial position limits will be based on the exchange-traded data reported daily to the CFTC. As the huge volume of over-the-counter (OTC, non-exchange) trades are reported to the CFTC, a much larger trade data base will form the basis for setting more precise limits, to be revised annually as the volume and value of all trades in a commodity contract change. The deadline for comment is March 28. Under the authority of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFTC must approve 30 major rules by July 16, 2011.
CFTC Commissioner Michael Dunn, in Geneva to speak at a January 31–February 1 U.N. Conference on Trade and Development Global Commodities Conference, issued a statement through the U.S. Mission. Commissioner Dunn said that there was “little empirical data to support the commonly-repeated view that speculators caused the oil price spike in 2008.” In 2008, the CFTC exempted OTC energy traders from reporting their trade data to the CFTC, as is required daily of exchange traders, e.g., through the Enron loophole. Opponents of position limits have argued that no major commodity market regulatory reform is necessary, because there is no “empirical data” to show that excessive speculation caused and continues to cause extreme price volatility. IATP has argued since 2008 that there is plenty of very strong circumstantial evidence, including data analyzed in an article in the current Federal Reserve Bank of St. Louis Review, to show that excessive financial speculation has been a major commodity-price driver.
Reversing a commitment to safe energy production in Minnesota
The Minnesota State House panel voted earlier this week to repeal the moratorium on new nuclear power generation. While there is little chance this bill will be enacted into law in its current form, it demonstrates a lack of concern for the health and well being of all Minnesotans. The House panel vote follows the passage of a similar bill in the Senate.
February 10, 2011
A festival for social justice: reporting from the World Social Forum
It is now the fourth day of this great festival of ideas, discussions and debates about the key political issues of our times and the struggles taking place at local, national, regional and international levels to achieve social justice. The focus is inevitably on African issues of struggle and the various forces impacting local communities and national and Pan African trajectories. This World Social Forum (WSF) is timely given that the continent has become the focus of one of the biggest resource grabs since colonial times—be it for agrofuel demand of industrialized countries, land bought by other countries for their own food production needs, or land-based investment deals that take away community control of natural resources right before their eyes and in spite of their resistance. A large number of seminars and discussions here have focused on landgrabs and testimonies offered from across the continent and around the world. Groups and communities are discussing how to force companies and governments to uphold and respect human rights—social, cultural, economic and ecological—of communities and people; and how to stop the pillaging of dwindling natural resources through unregulated investment.
Set on the campus of Cheikh Anta Diop University, 40,000 students are milling amongst stalls, tents and sessions organized by hundreds of organizations; doing street theatre, picking up pamphlets, asking questions. Many of them are volunteers for the WSF and translating during organized events. Their interest and curiosity is inspiring. In fact, just a week before the forum, the new president of the university had decided to suspend the week holiday that was given by the previous president for students to freely attend WSF events. The new president reneged on that commitment and resumed classes, even taking back many classrooms that were assigned to WSF events. The first few days we found ourselves wandering into classrooms where students were patiently trying to sit through classes and shut out the noise and energy emanating throughout the campus due to the social forum. In spite of the logistical hurdles—and not knowing where the next event will be—civil society has rolled right along in making the forum a success.
I have been participating in events and discussions related to climate change, food sovereignty and natural resources. Many of the sessions are trying to make sense of the outcome in Cancún (COP 16) for climate change and what civil society needs to do differently in the run up to Durban, South Africa, who will host the next major climate meeting at the end of this year. Groups from South Africa are here and already organizing themselves to host civil society organizations in order to create a loud and resounding voice condemning the paltry pledges made by governments in Cancún to reduce greenhouse gas emissions. Many groups feel that trying to convince governments inside negotiating halls at the COPs will not create the urgent shift we need to see in the climate talks towards binding and ambitious targets for drastically reducing greenhouse gases. There is an acute realization that social awareness and mobilization needs to take place locally with specific strategies to shift national positions on climate change. For Africa, anything above a one-degree global temperature rise will mean drastically reduced cropping seasons, much greater incidences of severe and unpredictable weather with dire consequences for food production and hence food sovereignty. The Pan African Climate Justice Alliance is trying to influence national processes around the continent moving towards Durban.
The United States and Europe, however, still determine the fate of the climate treaty and the international targets that will be set. Without a sea-change in U.S. public opinion on climate change as a key responsibility it is hard to see how we can keep the United States government from undermining entirely an international regime that must stop and reverse global warming.
Roughly six months after Durban will be the 20th anniversary of the Rio Summit—known as Rio+20—where governments will come together with possibly new proposals on dealing with the major environmental problems of our times. It was at Rio, 20 years ago, that the U.N. Climate Treaty was created, in addition to the Convention on Biological Diversity (CBD). Despite these efforts we have drastically worsened our global situation—on both the climate change and biodiversity front.
Several groups have come together at the WSF to begin organizing toward Rio+20. They see the meeting as a major opportunity to reframe the debate moving forward in this decade and want to link awareness building and social mobilizations in the next 16 months that include COP 17 in Durban and onward to Rio in the middle of 2012.
Finally, numerous discussions are also taking place on the linkages between the food, climate and financial crises, their impact on Africa and impacts on small producers. IATP participated in events organized by the Fellowship of Christian Councils and Churches in West Africa (FECCIWA) on climate change, food sovereignty and the food crisis, as well as an event on “Fighting against price volatility and regulating agricultural markets” organized in conjunction with CCFD-Terre Solidaire, a Catholic French NGO, Mooriben (an organization from Niger engaged on creating food security at the local level, including food reserves), Afrique Vert Mali (Green Africa Mali) and GRET, a French development NGO. In addition, we will be involved in the WSF convergence process today and tomorrow where civil society groups who have been meeting throughout the week will come together to see how we can move forward with our plans on both climate and Rio+20. For IATP, we are interested in seeing how the issues of speculation in carbon and commodity markets, agriculture offsets in the climate negotiations, and their impacts on small producers, can be part of the discussions and strategies to build awareness and counter negative proposals and impacts.
Onward to day five.
IATP's Shefali Sharma is blogging from Dakar, Senagal at the World Social Forum.
February 09, 2011
Let’s Move (our thinking) on childhood obesity
Today is the one year anniversary of First Lady Michelle Obama’s Let’s Move initiative to blunt the epidemic of obesity in children. It marks an important fight against a wave of future chronic disease that threatens our national security, our economic growth and the solvency of our healthcare system.
The obesity epidemic began just about three decades ago. What I reflect upon this anniversary, however, is the much more recent sea change in public health thinking that Let’s Move signifies.
At the core of the White House work to curb obesity – as well as the work of the Centers for Disease Control and the Robert Wood Johnson Foundation, – is the now accepted view that changes to our children’s environment, particularly around food and physical activity, have been key factors triggering the epidemic.
If environmental and policy change helped bring about this epidemic, then it makes sense that the CDC and other public health experts now see changes to government policy as one of the most effective ways to make sustainable, healthier changes to our children’s food environment. Change can be driven by policies at the local level, or at the national level like Let’s Move or the upcoming 2012 Farm Bill. Building support for these common sense policies in the health community is a key aim of an initiative I’m working on called Healthy Food Action.
Not everyone accepts the public health perspective. Sarah Palin, for example, has suggested that Let’s Move is tantamount to government interference in our lives. But it’s a core public health principle of the CDC and the world's leading obesity experts that individual eating behavior doesn't take place in a vacuum. Rather, unhealthy environmental and policy changes influence and constrain individual behaviors. One cannot walk to school when there are no sidewalks, where it’s unsafe, or where the neighborhood school has been closed. Similarly, school children are unlikely to choose drinking water where water fountains have been dismantled, vending machines only offer soda, or where the soda is cheaper than healthier alternatives.
Let’s Move has galvanized moms, doctors, school officials, Wal-Mart and soda companies to start acting as part of a community-wide effort to make our kids’ environments healthier. Voluntary efforts are great. But so long as public policy supports unhealthy environments, we will make limited progress. Now that we’ve moved our thinking, Let’s Move policy.
Women at the center of climate-friendly approaches to agriculture and water
Extreme weather events consistent with climate change are already playing havoc with the livelihoods and food security of much of the world’s poor. This is particularly true for arid and semi-arid areas of the global South. Yet, most proposals for agriculture being discussed at the U.N. global climate talks and elsewhere focus on new technological developments, like genetically engineered crops. But these approaches are based on still unproven claims and do not fully consider their impact on the natural world.
In a new paper, IATP’s Shiney Varghese examines proven agricultural practices that reduce greenhouse gas emissions and strengthen resilience to climate change through a case study of the Tamilnadu Women’s Collective in India. The collective, a federation of village-level women’s groups with over 150,000 members—the majority of which belong to the lowest caste—follow three principles for food security: 1.) empowerment of women; 2.) democratic local governance; and 3.) multifunctional agriculture.
Shiney will present her findings at the United Nations in New York on February 22 as part of a workshop, titled “Climate Adaptation Challenges from a Gender Perspective.” The workshop is expected to contribute towards the fifty-fifth session of the U.N.’s Commission on the Status of Women. You can learn more about how the Tamilnadu Women’s Collective is using traditional knowledge and practices to increase food security and climate resilience by reading the full paper here and at www.iatp.org.
February 08, 2011
Have your say on land grabs and food price volatility
Back in October, I blogged on the recently constituted High-level Panel of Experts (HLPE) associated with the U.N.'s recently revamped Committee on Food Security (CFS), which brings together the three U.N. food agencies (the Food and Agriculture Organization (FAO), the International Fund for Agriculture and Development (IFAD), and the World Food Program (WFP)). The HLPE is tasked by the CFS to write reports and more generally to provide the benefit of independent advice and thinking.
Following a meeting of the HLPE in December, the experts have chosen to focus on two (huge) topics. A process of consultation and writing is underway. The topics are land tenure and international investment in agriculture and price volatility. Comments are open to the public—send your comment to the moderator, or register at the forum and you can post (you will have to be approved by the moderator to proceed). The deadline is February 10.
From there, the HLPE is to develop a draft paper on each topic, which will then be posted for a second round of comments. So go ahead—these are some of the biggest issues of our time. Have your say!
And send us your thoughts on IATP's contribution.
February 07, 2011
Public health cost of global (corn) trade
Last week Mexico paid a U.S.-based corn processor, Corn Products International, Inc. (CPI) $58.4 million in accordance with a 2009 North American Free Trade Agreement (NAFTA) tribunal decision. The case illustrates the important intersection of U.S. trade policy with food and public health.
Corn Products International, Inc. provides corn “ingredients” to the global food, beverage, brewing and pharmaceutical industries. The company brought the 2003 case claiming that the Mexican government—by putting a tax on soft drinks sweetened with high fructose corn syrup instead of sugar—had discriminated against CPI in order to protect Mexican cane sugar producers. Ruling in CPI’s favor, the NAFTA tribunal required Mexico to compensate CPI for its lost revenue.
CPI is only one among many cases brought by corporations under NAFTA’s little known Chapter 11. Chapter 11 enables corporations, or individuals, to sue the three nations signing NAFTA—Canada, the U.S. or Mexico—when they believe an action by those governments adversely affects their present or future profits.
Chapter 11 imparts rights to international investors that go well beyond those present in existing international trade agreements (e.g., the GATT and WTO), and has important ramifications for public health. In one of the most well-known Chapter 11 cases, the Mexican state of San Luis Potosí refused to grant a permit to U.S.-based Metalclad Corporation to operate a hazardous waste treatment facility and landfill in La Pedrera. The Mexican state also created an ecological preserve in the area where the facility was located. Metalclad brought its case and in 2000 the NAFTA tribunal ruled that Mexico’s establishment of the ecological zone and failure to grant Metalclad a permit was “tantamount to expropriation,” requiring Mexico to pay Metalclad $15.5 million in compensation.
These Chapter 11 rulings also illustrate two relatively recent phenomena: 1.) the costs to Mexican farmers and consumers of the NAFTA-led, ever-increasing economic integration between Canada, the U.S. and Mexico [i], and 2.) the increasing legal rights granted to corporations relative to governments. NAFTA Chapter 11 makes it more difficult for governments to protect public health because corporations or individuals may legally challenge regulations they believe are adversely affecting their financial investments.
As costs of chronic disease rise, along with global challenges to public health, the public health community cannot afford to ignore the often subtle, yet powerful, influence of the legal and economic trends of globalization. For more information on such issues, check out the American Public Health Association’s Trade and Health Forum and the Center for Policy Analysis on Trade and Health.
Sarah Clark is a former IATP intern and master's degree candidate in international agriculture and trade policy at Tufts University.
[i] Sarah Clark, Corinna Hawkes, Sophia Murphy, Karen Hansen-Kuhn and David Wallinga, “Exporting Obesity: How U.S. Food and Farm Policy is Transforming the Mexican Consumer Food Environment,” [forthcoming]
February 02, 2011
An ounce of prevention...
Press attention has again focused this past month on rising food prices. As Financial Times journalist Javier Blas tells us, panic buying has now reared its head, completing the already present factors of crop failures, export restrictions and food riots that were the trademarks of the 2007-08 food price crisis. Last week, Algeria added 800,000 tons to its January imports, bringing the monthly total to 1.7 million tons—that is already roughly a third of the normal annual purchases for a country that is one of the world's biggest wheat importers. Saudi Arabia has announced it will double its wheat purchases in 2011, to create a stockpile equivalent to a year's demand.
Wheat was already on the food crisis watch list—it's a heavily traded commodity (around 18 percent of the world's wheat crosses an international border) that's in relatively short supply after some bad harvests in some of the regions that supply world markets. Rice is the other big food crop. There, the market is much thinner (about 7 percent of total production is traded internationally). Rice is in relatively plentiful supply, but prices are also rising because importers such as Indonesia and Bangladesh have placed much larger orders than usual on the world market.
Needless to say, such unusually big purchases are only going to drive prices higher. But it is not Saudi Arabia that will worry about the cost. No, that concern is going to fall on much poorer countries, whose governments buy a lot less grain but whose treasuries can much less well afford it.
For all the talk and pledged money to help the world's hungry after the last food crisis, it seems the world is poised for another food crisis.
Yet the issue is on the global policy agenda, and on the overseas aid agenda as well. The discussion on price volatility is focused on several issues: the need for greater regulation of commodity and futures exchanges; the need for greater transparency of information regarding stock levels; the proposal to ban or curtail export controls; and, the possibility of creating strategic food reserves at regional and global levels to curb short-term price fluctuations. All of these are important. None are solutions to chronic hunger. But the uncertainty in commodity markets is doing nobody a favor, except the firms poised to profit from their superior information and deeper pockets.
The public interest needs prices high enough to ensure natural resources are sustainably managed, while farmers and farm laborers earn a decent income for their work. This is wholly compatible with food at prices people can afford. Tackling the causes of unwanted volatility in world food markets is a central part of the solution. Not sufficient on its own but absolutely necessary.