About IATP

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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Food Challenge

June 09, 2011

More evidence on speculators and food prices

Chart The G-20 agriculture ministers will meet on June 22–23 in France to discuss how to address the major challenges facing agriculture. A report issued this week by a U.N. agency on the growing influence of financial speculators on commodity markets, including agriculture prices, should be required reading.

"The 'financialization' of commodity markets has changed trading behaviour and significantly affects the prices of such basic goods as staple foods," reported the U.N. Conference on Trade and Development (UNCTAD) on Monday. The UNCTAD report documented the new forces of financialization in commodity markets beginning in 2004—and its role in steadily rising prices, accompanied by increasing volatility.

The study's findings, backed by interviews with physical traders and financial investors, determined that the rise of the commodity derivatives market had encouraged herding behavior to the point where financial investment, rather than market fundaments like supply and demand, increasingly influences prices. The report's findings concluded that acting against the majority of investors, even if justified by market fundamentals, may result in large losses. "It may therefore be rational for market participants to ignore their own information and follow the trend."

UNCTAD recommends greater transparency in commodity trading, internationally coordinated regulation of commodity exchanges, and direct intervention by market authorities to deflate price bubbles.

The UNCTAD report is consistent with a 2008 report by IATP on the damaging role of speculators in commodity markets, as well as a reader we published earlier this year, offering a variety of perspectives on this increasingly urgent problem.

Fortunately, stronger regulation of commodity futures markets is on the G-20 agenda. While agriculture ministers will discuss proposals to improve financial regulations later this month, G-20 finance ministers will make the final decision on those proposals. IATP outlined its concerns about the G-20 approach to commodity market reform in a comment to UNCTAD earlier this week.

As agriculture markets become increasingly volatile, it's becoming harder and harder to deny the deep and destructive influence that financial investors are having on the global agricultural economy. The G-20 agriculture ministers have an opportunity later this month to advocate for new, tough rules for commodity futures markets that will benefit both farmers and consumers.

Ben Lilliston

May 17, 2011

G-20 struggles to face up to agriculture price volatility

Last week, a background paper for the G-20 Summit of Agricultural Ministers on price volatility from eight international organizations appeared [1]. The paper, dated May 2, was presented last week to the sherpas who are preparing for the summit, to be held in Paris on June 23.  

The analysis treats the failures of international markets seriously. It provides a clear and useful explanation for why price volatility, so useful at low levels in the movement of goods, becomes a serious problem when price swings are too large. Yet the paper is fundamentally dissatisfying.

The start and end points of the recommendations (more so than the analysis) is how to ensure open market liberalization works. And even at that, ends up compromised by the politics of free trade, in which poorer countries can be held to a much higher standard than the richer countries that fund the international agencies providing the advice. So on the one hand, developing countries should further increase their dependence on international markets, while relying on finance (including loans) from the international system—finance that has a poor track record to date, both for timeliness and adequacy. On the other hand, the G-20 countries themselves can continue to disrupt those same international markets, asked only to moderate their public subsidies and mandates for biofuels.

The authors of the report do not question whether the emergence of high levels of volatility in international markets, at a time when international markets are more important to more countries’ food security than ever before, warrants a more fundamental rethink from the governments that are so central to agricultural trade (most of the them G-20 members). Given the mix of agencies involved in drafting the paper, and the critiques some of those organizations have provided of globalization, especially since the food price and financial crises in 2008, this is a pity.

New elements—fundamentally important elements—have been introduced into this final version of the paper, which is the third version to have circulated. For instance, the paper now discusses how to tackle very high levels of food waste, which plagues rich and poor countries alike, though for quite different reasons. Some of the more questionable claims (such as the need to increase food production by 100 percent by 2050) have been toned down, though they remain problematic (the final version suggests a 70-percent increase is needed).

Yet the recommendations are anything but bold. Volatility in international agricultural commodity markets is a problem that is both hurting G-20 interests and that G-20 member states could largely remedy. Instead of promising money to other countries, and thinking of new ways to manage risk, the G-20 need to look to their own policies to consider how to mitigate the causes of uncertainty that are feeding current levels of volatility.

The G-20 includes most of the major exporters of food. Most of the members continue to push for market access for their products—even those, such as China and India, that carefully control their domestic agricultural markets. The G-20 (and the companies they host) have a lot at stake in ensuring international markets function in ways that meet importers’ interests. G-20 members, such as Argentina and India, exacerbated the 2008 food crisis by taxing or banning certain food exports. Others, such as the United States, Canada and European Union persisted in biofuel subsidies that created pressure on demand, and raised prices, at a time when a number of countries were facing food riots. The implications of what the food exporting countries did were not lost on poor net food importing countries (known by the acronym NFIDCs), which are now looking with significantly renewed interest at the possibility of increased food self-sufficiency.

With hindsight, the failure of net food exporters to accept the legitimacy of NFIDC demands for safeguards to protect their access to food, while at the same time insisting on their right to distort international markets with domestic preoccupations was probably the last straw for the Doha negotiations. There is no sign, unfortunately, that the international organizations who authored the report have been given (nor yet taken) the leeway to comment on this crisis in the consensus that has shaped international trade policy since the early 1990s.

Members of the G-20 house the world’s largest agribusinesses, the commodity exchanges that set commodity futures prices, produce most of the grain-fed livestock and provide the subsidies and mandates that prop up the industrial biofuel industry. While the NFIDCs turn to diversifying their food security strategies to encompass more than increasingly unreliable international markets, the G-20 has it within its power to lessen the likelihood and the degree of volatility itself. They have a significant interest in using that power. Unfortunately, there is far too little in the IO contribution to the G-20 Agricultural Ministers’ Summit to help them achieve this realization.

[1] FAO, IFAD, UN HLTF, UNCTAD, and WFP, together with the World Bank, IMF, WTO and the OECD.

Sophia Murphy

April 19, 2011

Agriculture in rural India: How will it cope with free trade?

IATP's Shefali Sharma is part of a delegation visiting rural areas in India to assess the human rights impacts of the country's trade and investment policies.You can view her previous post here.

New Delhi – Last I wrote, I was embarking on a journey into some of the most rural villages of Southern India. Over a four-day period, our team met with groups of farmers—men and women—in the State of Andhra Pradesh. We travelled from west to east across Chittoor District and then took an overnight train to the Northern district of Medak, covering hundreds of kilometers.

Our difficult task was to understand what small farmers in India grow, how much they keep for eating and how much they sell to the market. We wanted to understand if they can continue to sustain themselves and their consumption needs through growing food alone and whether they have access not just to food, but adequate nutrition all year long. 

We also wanted to understand whether a European Union–India Free Trade Agreement (FTA), currently under negotiation, would have an impact on their livelihoods. In particular, what role does dairy and poultry play for their income and food security and what would liberalizing investment with the European Union do to land access and natural resources for local farmers. Historically, the European Union has a habit of dumping both dairy products and poultry parts in developing countries, decimating small-scale dairy and poultry producers in the process. For example, Ghana’s poultry sector was wiped out when frozen poultry parts flooded Ghanian markets and the EU-India FTA is likely to include an “asset”-based definition of investment, including both “movable and immovable property.”

Photo 1 In the village of Yalakallu, we met both with small producers and landless agricultural wage workers (all photos here by Harneet Singh). Often the small farmers were also wage laborers because they did not have income all year from growing food and were forced to work for daily wages as income. A small farmer in the Indian context means ownership of as little as .5 to 5 acres of land. The farmers with whom we met owned on average only one to three acres of land. The bulk of their growing sustains food consumption for their families and any surpluses are sold to the local market. Water, however, is an acute problem in the village and most of the agriculture is rainfed. Increasingly erratic weather means heavy rains at unwanted times and drought in other parts of the growing season. These farmers have two growing seasons. They grow crops like rice, finger millet and vegetables in the rainy season (July to October), and grow lentils like red gram and green gram in the dry season (November to May or June). Some are also growing tomatoes and cabbage to sell to wholesale retailers, but because the prices of tomatoes had recently crashed, many of the tomato growers said they would be watching their tomatoes wither in the fields this year. 

Photo 3 For these farmers, dairy plays an important role because they receive payments every two weeks from cows and buffalo they raise on the farm while feeding them with crop residues from their own fields. Most of the farmers we talked with owned one or two cows that deliver 2–4 litres of milk a day. But a system of small traders delivers this milk to the local dairy. For decades, India has invested in developing a cooperative dairy sector that has been increasingly privatized over the past decade. Cheap imports of skim milk powder from Europe to make cheap reconstituted milk would certainly impact these small farmers.

Photo 2 It was immediately evident that their ability to withstand even a little risk was very small. Some farmers we talked with have tried ventures like small poultry operations (from 1000 to 5000 chicks) to supply to domestic chains, but when the chicks die or get diseases, the company they sell to can abruptly terminate the contract. These risky business arrangements can involve loans and indebtedness—a common feature amongst all of these farmers. Rising food prices haven't necessarily helped these farmers yet because the wholesalers and retailers have retained most of those gains. In other parts of the same district, farmers with up to five acres of land are contracting with domestic broiler chicken firms. They are raising up to 5000 chicks, taking out loans to do the initial investment in setting up these farms. At the end of the year, they earn about 100,000 Indian rupees—spending 50,000 INR on loan repayment, keeping the rest for themselves. The profit margins are low to minimal and debts pass over from year to year. Water for the chickens competes with water for their farms.

Our visit to the next neighborhood in Yalakallu was with landless Dalits (the lowest caste in India’s extremely hierarchical caste system). The women and men depend on wage labor and forest produce for feeding their families. Thanks to India’s public food distribution system, they are able to procure rice and sometimes lentils from government-subsidized ration shops at prices as low as 2 rupees per kilon but rising food prices mean their income brings less and less food. During these times, they compromise on food security—eating rice or finger millet with a watery juice of tamarind. In better times, their diet is supplemented with leafy vegetables and lentils, a key source of protein in these villages.

Owning livestock is difficult. Without land, farmers cannot supplement their income and nutrition through dairy or goats, though many of them keep raise poultry, feeding them with kitchen waste, and local chicken varieties are much hardier than chickens produced for the broiler industry.

It quickly became evident that these small farmers and landless laborers are facing obstacles when it comes to accessing land. Urbanization, real estate developers and industrial operations are increasingly fencing these people out of grazing land. Access to land is critical. Those who own land, even a small plot, can feed their families through most of the year, and have a much better chance at nutrition and healthier lives than their counterparts who live on wage labor alone.

The EU and India’s investment provisions will mean more demand for land and natural resources as EU investors look to extract minerals in India and set up mechanized processing plants. This has already been the case with Indian companies taking over land in the countryside. It also means greater competition for scarce water and electricity.    

We heard numerous stories over the last few days about the tradeoffs and choices these small food growers and agricultural laborers are making, even now. More difficult choices may not be far off.

Ben Lilliston

March 08, 2011

Reclaiming rights on International Women’s Day centennial

The year 2011 started with the news of food price hikes around the world pushing even more people, especially women, into hunger. But then along came images of women in Egypt in the forefront of a revolution to get rid of a government that has been in power for over 30 years! Victories such as the ones in Egypt are occasions for celebrating the strength and resilience of women even under the most oppressed circumstances, and their ability to defy prevalent stereotypes.

So, what will 2011, the 100th anniversary of International Women’s Day, bring for women?[1]

In the initial years, tragic events such as the "Triangle Fire" of 1911 (which killed more than 140 working women in New York City) became a focus of International Women's Day. Since its beginnings in Europe, International Women's Day has grown to become a day of recognition and celebration across the world. Drawing attention to the abject working conditions women faced, and to issues such as land rights and food security, domestic violence and trafficking in women, and at the same time expressing solidarity with sisters across cultures and regions, IWD has grown in strength and visibility.

Yet on this 100th anniversary, what is foremost in my mind are the continuing challenges that women and girls face. In least-developed countries, nearly twice as many women over age 15 are illiterate compared to men.[2] Girls account for two-thirds of children denied primary education, and 75 percent of the world’s 876 million illiterate adults are women.[3] And women and girls make up over 70 percent of the 1.3 billion people living on less than a dollar a day. They form the majority of the water poor and food insecure. Given that 75 percent of the poor live in rural areas, and that there is a gender dimension to rural-to-urban migration, it is safe to say that most of these women, living on less than a dollar a day, are in rural areas. It is their responsibility to eke out a living from their surrounding environment for themselves and any other family members dependent on them.

A little over 10 years ago it was estimated that “women work two-thirds of the world's working hours, produce half of the world's food, and yet earn only 10 percent of the world's income and own less than 1 percent of the world's property.”[4] I have not been able to find a comparable figure for women’s involvement in food production systems in this decade, even though the trends in seasonal and annual male migrations away from rural areas likely have increased women’s share of work in food production.

Women are likely to be especially hard hit this year by the hike in agricultural prices. The U.N.’s food-price index rose 34 percent from a year earlier.[5] The price of onions increased by more than 60 percent in some South Asian markets, while that of tomatoes doubled in Middle East. According to World Bank estimates, 44 million people have been rendered food insecure by the recent rise in food prices. Even though we do not have a gender breakdown for these numbers, it would seem fair to assume that at least 70 percent of these 44 million are women and girls. 

But there are also reasons for hope. In several climate-challenged communities in Asia and Africa, women have taken a lead of developing climate-resilient food systems. Examples include that of women farmers of Mkuranga District [40 km south of Dar es Salaam] who came together under the umbrella organization, Muungano, to grow organic vegetables and process them for income and food security.[6] Similarly dalit women farmers, of Zaheearabad in India, practice dry-land agriculture in an attempt to adapt to climate change. By following a system of interspersing crops that do not need extra water, chemical inputs or pesticides for production, and by selectively applying farmyard manure once in two or three years depending on soil conditions, the women have been able to meet their food security and improve their livelihood options.[7]

Gender-based differences are evident in developed countries too. In the United States, the highest poverty rate is for rural female-headed households (37.1  percent), followed by female-headed households in other parts (27.1 percent); for single-male headed households these numbers were much lower (16.6 percent for rural and 12.3 percent for urban).[8] Thus in the United States too, food price volatility will be experienced most acutely by members of female-headed households.

However unlike in Africa and parts of Asia, here in the United States, agriculture is a male- (and machine-) dominated activity. In the few cases where women are principal operators, the farms tend to be smaller and tend to grow niche or specialty products.[9] The move towards, smaller, organic and local farms have seen an increasing number of women entering agricultural sector. But for many of them it is not viable as a primary profession yet. Even as we celebrate these efforts of women’s entrepreneurship, we must also make sure that these tasks do not remain as unacknowledged and underpaid as they have in the past!

Like their counterparts in developing countries, women in most developed countries bear a disproportionate burden of child rearing in a family. For poorer women, belonging to marginalized communities, this implies the additional burden of ensuring food security for family members, even as they lack access to resources or control over means of production. Thus both in developed and developing countries women are facing increased challenges in feeding their families. 

There are also promising calls for international policy initiatives. For example, releasing its 2010-11 edition of The State of Food and Agriculture report the FAO said yesterday: “If women in rural areas had the same access to land, technology, financial services, education and markets as men, agricultural production could be increased and the number of hungry people reduced by 100–150 million.”

This new focus on women in agriculture can cut both ways: more women in food production can ensure more food for families; but unless care is taken, women can end up being yet another instrument to achieve narrow development goals. It is necessary that this new focus is as much about achieving food security, and building a climate-resilient food system, as about the empowerment of women and their meaningful participation in decisions that affect their lives. Only such an approach can address the obstacles that block women from claiming their economic, cultural and social rights.

The centennial year, 2011, is an opportunity to recognize women’s role in advancing alternate food systems that are both just and resilient around the world. It is also an opportunity to stand in solidarity with women and girls across cultures and nations that continue to face tremendous challenges in realizing their social, economic and political rights as individual women, as mothers and daughters, and as community members.

[1] A hundred years ago, in 1911, the first International Women's Day (IWD) was organized on March 19. Following discussions in 1913, International Women's Day was transferred to March 8 and since then has remained the global date for IWD.

[4] World Development Indicators, 1997, Womankind Worldwide.

Shiney Varghese

March 02, 2011

Eyes on London for global food aid

Talks are taking place this week on an obscure but important piece of the multilateral system: the Food Aid Convention (FAC). Housed at the International Grains Council in London's architectural homage to financial services, Canary Wharf, the FAC involves just a handful of countries: Argentina, Australia, Canada, the European Union and its member States, Japan, Norway, Switzerland and the United States. These are donors (see this nice graphic from the Globe and Mail, part of a larger story, on who contributes global food aid). The convention is meant to provide a framework for negotiations on what counts as food aid, how much food aid each country will commit to humanitarian responses that year, and how to make sure nobody cheats, for example, by promoting exports under the guise of humanitarian aid.

Why is the FAC important? As we enter an era of declining aid dollars, disappearing agriculture surpluses, volatile markets and a rising rate of natural disasters, food aid—or, more properly, food assistance—is a small but vital piece of the web that can prevent death and maldevelopment linked to inadequate nutrition, while contributing to the bigger overall objective of strengthening food security through rural development.

The FAC is the place where a multilateral conversation can take place to make sure food assistance works. But the convention is hardly a perfect forum. For one, the lack of recipient countries as members skews the forum and its debates. Second, historically, member states have used the convention to set a minimum threshold for their food aid donations: actual donations can be far greater. Amounts over and above the food aid convention commitments are not bound by the rules. Third, the convention uses an increasingly obsolete measure to assess contributions: tons of wheat equivalent. Historically, food aid was dealt with by a committee on surplus food disposal—it was about solving an unwanted stock overflow for food exporters, not about responding to the universal human right to food. Today, most countries' food aid programs are more sophisticated and better calibrated to local realities. Most, though not all. The U.S. Congress continues to hold-out against significant reform of its much criticized food aid. (See our 2005 report on U.S. Food Aid).

None of these problems means a multilateral convention is not needed—nor that the FAC cannot be reformed and improved. But it is going to take more political will than has been on display recently. The last iteration of the convention was signed in 1999. The update was scheduled for 2004. Six years later, the convention has still not been renewed. Europe is threatening to walk away. And the U.S. refuses to accept the reforms that every other food aid donor has already made: to make food aid more responsive to need, and more careful not to disrupt food production and trade in the regions to where crisis strikes.

In part, governments say they are waiting for their trade negotiating counterparts to conclude the Doha Round, where some new parameters for what should count as food aid are due to be decided. This never made much sense: Why give a trade forum dedicated to facilitating global commerce the power to set terms for humanitarian responses? In any case, the WTO has had no more success than the FAC in bringing countries to agreement on multilateral treaties. 

A group of NGOs monitoring the talks, the TransAtlantic Food Assistance Dialogue, has a background paper that sets out what is at stake and what reforms should be undertaken. Broadly, the need is for transparency, flexibility, a commitment to food volumes to protect capacity to deliver from volatile prices, a wider understanding of just what comprises food aid, and a role for recipient countries and the organizations engaged in food aid delivery in the treaty's governance. One of the pieces that IATP is watching especially closely is the proposal that countries' contributions to regional emergency reserves should count towards FAC commitments, a proposal outlined by Stuart Clark of the Canadian Foodgrains Bank. IATP is convinced that physical reserves of grain are an important tool for protecting food security. 

So, all eyes are on London. In the heart of the city that, perhaps as much as Wall Street, epitomizes global finance and global wealth, let's push our governments to take some simple, effective steps to do something for the millions who depend on food aid so they can survive and build for a better day. 

Sophia Murphy

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.

Jim Harkness

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.


Sophia Murphy

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.


Sophia Murphy

January 25, 2011

Will Obama's trade agenda undermine global food security?

During tonight's State of the Union address, President Barack Obama is expected to tout an expanded trade liberalization agenda as part of his plan to generate more U.S. jobs. But does this push to open up markets square with the Administration's plan to address global food security?

President Obama’s Feed the Future initiative promotes ending global hunger by bolstering food production by small-scale farmers—especially women, through programs led by developing countries. While the U.S. development agenda emphasizes increasing local food production in developing countries, the trade agenda pushes in the opposite direction, aiming to double U.S. exports in the next five years. In a new paper, IATP’s Karen Hansen-Kuhn documents how the Obama Administration’s agricultural trade policy is very much a continuation of past policies—policies that have undermined small-scale farmers and global food security. The paper identifies much needed reforms in U.S. trade policy to recognize current challenges associated with food security and climate disruptions. You can read the full paper here.

Ben Lilliston

December 16, 2010

More ideas for improving cereal markets in West Africa

After my fascinating meeting last week on a West African food security reserve, my second meeting in Ghana was also about cereals. It was a capacity-building workshop for the region entitled, Enhancing the Functioning of Cereals Markets in West Africa. The meeting was called by UNCTAD's Special Unit on Commodities, in partnership with ECOWAS, ROPPA (the association of West African farmers' organizations), and CILSS. The meeting considered two issues: warehouse receipts/warrantage (I'll explain in a moment!) and commodity exchanges. The meeting was rich in content and highly educational. It was fascinating—even though I was unable to stay for the last half day of meetings, and even though some tropical bug found it's way into my system so as to make the last 24 hours tiring and uncomfortable. 

So, first warehouse receipts and warrantage. Warrantage certainly sounds French, and if you look online, it seems the French use the word more, and are the only ones with online definitions. But I think the word must be from the English word "warrant," which in one of its several definitions means a written order from person A that instructs person B to pay a specified recipient a specific amount of money or goods at a specific time. In effect, warrantage refers to the system of using grain as collateral for loans. A financier (in most cases in West Africa, the money comes from a micro-finance institution) lends money to a farmer against grain that the farmer puts into a depot as collateral. In the simplest form, as practiced in Niger, the depot is locked with two padlocks—the farmer has one key and the creditor has another. The system was widely used in the U.S. and Europe in the 19th century. A warehouse receipt works in a similar way: the receipt entitles the bearer to a given amount of money in exchange for the grain stored in an agreed facility. Farmers are able to avoid selling their crop right at harvest time, when prices are low.

Warrantage is found all over the region, and judging from the presentations made by the conference, has seen plenty of success (see here for an account of how it has worked in Niger). The practice remains piecemeal, and there are plenty of questions including coverage, legal protections, ensuring standards and grades, and reforming the finance side to better reflect the constraints and opportunities of grain as collateral. Nonetheless, the conference presentations provided a heartening look at how to get credit into remote rural areas and meet a critical need in the struggle to strengthen food security.

The second topic was commodity exchanges. I have to say, I was far less convinced about the importance of such exchanges during the presentations I heard during the meeting. Commodity exchanges are expensive (it costs tens of millions of dollars to establish one). They require significant administrative oversight and capacity—not something available in abundance in many of the countries in the region. They work at very high levels of aggregation (the Nigerian exchange works with half-tonne minimums, which is a fraction of the minimum used in any of the export commodity exchanges, even within Africa). Aggregation on this scale immediately creates the need for intermediaries—possibly several—between farmers and the exchange. And then, I cannot see how the markets for food grains in West Africa need such a mechanism. The volumes of cereals moving around within the region just do not justify it, and there is no export of food grains to speak of from the region (unlike cotton and cocoa).  

I left before the end, so am hoping to see some kind of concluding report emerge of what others thought. The presenters on the commodity exchanges believed in what they were offering, I am sure. But I encountered more than one skeptic in my conversations around the breakfast table and over coffee. Overall, though, my take-away impression was of a big room full of people who are serious about the business of trading food in West Africa. The network of farmers organizations in the region, ROPPA, was not only present, it was a central pillar of the organization and execution of the meeting. It was heartening to see, and highly educational to listen to.

Sophia Murphy

December 14, 2010

West Africa takes action on the food crisis

While the world's governments gathered in Cancún, ultimately failing to reach a meaningful multilateral commitment to reduce greenhouse gas emissions to help save the planet, I was across the Atlantic in a different tropical country: Ghana. I was in Accra for a meeting organized by the Sahel and West Africa Club: a group of West African countries that meets under the auspices of the OECD.

The meeting was entitled Regional solidarity to address food crises. The discussion was focused on a single proposal, one already adopted in principle by West African governments under the auspices of ECOWAS (the Economic Community of West African States—the whole visit in Ghana was a veritable acronym soup, compounded by the use of two languages, English and French, so that the acronyms kept getting reshuffled in translation). The proposal is that the countries in the region sign an agreement by which any country in the group that faces a food emergency could call upon a regional food security reserve to help alleviate the crisis. The initial proposal is that countries earmark 5 percent of their grain reserves to be on call for emergencies anywhere in the region.

I was invited to chair the working session entitled, "Policy coherence and institutional arrangements at the regional and international levels." I was also a rapporteur, invited to provide a concluding summary of the outcomes of the 1.5 day meeting, together with Ousmane Djibo of the New Partnership for Africa's Development (NEPAD).

The idea seems simple. The grain reserves exist—a number of the cereal boards were represented in Accra—but not every country has one. The need exists (the region suffers from shortfalls on a regular basis, but it's not always the same countries and regions in need). The governments have acted spontaneously to share food in the recent past (with Niger, in 2008). Indeed, the governments have agreed they want this reserve to happen. There is money—both with ECOWAS, and in NEPAD's food security budget (which is 35 percent of its total program budget).

And yet, somehow, the idea has yet to find a champion. A country that is determined to knock the right heads together to move from aspiration to action. CILSS (a forum on desertification that provides technical support to ECOWAS), has done some important intellectual legwork but now we need a project document and a working plan for 2011. The meeting in Accra came up with plenty of elements for such a plan—in fact, an entire series of proposed next steps that would allow the idea to take concrete shape, if put in place. They include mapping the existing warehouses where stocks are held, creating a mechanism for regular information exchange on both stock and overall production levels in the region, and organizing a program of formal exchanges among the cereal boards within the region, so that the staff can start to learn how the different boards work. Finally, a pilot proposal and budget are needed so that the idea can start to be tested in practice. A summary report will be made available on the conference website soon.

Unfortunately, it is less clear whether the people able to make those steps happen are ready to act. 

Let's hope they are. If 2008 was the year of the food crisis that forced a rethink of food insecurity and how to tackle it, I'd like 2011 to the year governments transformed their policy and made changes that really make a difference. Right now the policy world is in love with technology fixes to raise productivity. We've been there before. It matters, but it is not enough. We also need to rethink how the state, farmers and the private sector interact. Done right, food stocks offer a powerful tool. I'll write soon about further meetings in Ghana on two other possibilities: warehouse receipts/warrantage systems and commodity exchanges.

Sophia Murphy

October 21, 2010

UN Committee on Food Security concludes on positive note

IATP's Sophia Murphy was in Rome last week for the Food and Agriculture's Committee on Food Security meeting. A version of this report also appeared on the Triple Crisis blog.

The 36th meeting of the FAO’s Committee on Food Security (CFS) concluded in archetypal U.N. fashion: one and a half hours of apparently aimless milling about followed by a call to order, a 10-minute exchange during which it becomes clear that the milling about was actually about last—very last—minute negotiations, and, finally, adoption of the report by acclamation. So ended the first meeting of a revamped piece of the U.N. system—a small but fascinating piece.

Why fascinating? Because last year governments agreed to a major overhaul of the way the committee works, and to give the committee a preeminent role in the coordination of U.N. food security policy. The FAO, World Food Program (WFP) and the International Fund Agriculture and Development (IFAD) jointly run the CFS. There are several new mechanisms alongside, including one defining a Civil Society Mechanism to ensure adequate and accountable participation from the nongovernmental sector writ large, and a recently constituted High-level Panel of Experts (yes, another acronym: HLPE) that will be commissioned by the CFS to write reports and more generally to provide the benefit of independent advice and thinking.

The mood was upbeat at the end. Government officials seemed tired but satisfied. And the CSOs did, too. Not excited or exhilarated, but not angry or bored, either. A few governments seemed determined to damn with faint praise (sadly for this Canadian, Canada comes to mind). But others engaged. The United States, for instance, while hardly visionary, was constructive. The budget discussion was a painful rehearsal of so many of the U.N.’s budgetary discussions, along strictly North-South lines. On the other hand, on substance, the divisions were not so predictable.

There are procedural issues to work out for next year. The governments spent hours (and hours) negotiating the outcomes from a roundtable, which seemed a bit tangled. Why not just adopt the report, and spend the negotiating time on outcomes the governments themselves will have to implement? As it is, the HLPE will have its work cut out to make sense of the many proposals and to pick among them because it has nowhere near enough resources to do them all.

On the other hand, there has never been anything like the CFS before—no intergovernmental body was even attempting to concert governments’ responses to food security. Let alone an intergovernmental forum so open to CSO contributions. Particularly in an age when governments have accepted that food security is not a simplistic equation of total availability of grains worldwide divided by the total global population, the need for a CFS in the U.N. system is clear. It is a hopeful sign that so many governments came prepared to engage.

The biggest fight during the meeting was probably around land grabs and how to tackle them. Two processes have somehow emerged, in parallel, serving different audiences. One is under FAO auspices and is known as the Voluntary Guidelines on the tenure of land and other natural resources. The other as RAI, or the “Principles for Responsible Agricultural Investment that Respects Rights, Livelihoods and Resources,”— an interagency process (FAO, IFAD, World Bank and UNCTAD). It has angered many NGOs and CSOs because they have emerged without consultation and instead of starting with the universal human right to food, they build on various corporate social responsibility initiatives.The VG emerged from the 2006 International Conference on Agrarian Reform and Rural Development and have a better pedigree in terms of consultation and broader ownership by NGOs. Take a look at what the Special rapporteur on the right to food had to say: he should know.

For now, whatever happens next must happen soon. The international community has already sat by for too many years as national governments and investors have muddled and meddled in the highly (and rightly) sensitive issues of land ownership and land use. It was encouraging to see a fight in Rome, but it will be far more encouraging if the governments can actually act, and fast.

Sophia Murphy

October 15, 2010

Times they are a changing at the FAO

I'm writing from Rome, a beautiful city despite the cars. I'm attending the FAO's Committee on World Food Security, a once relatively sleepy piece of the sprawling UN system that last year was given a significant boost by a thorough revamp. Listening to the governments negotiate, agonizing over words (to launch or to discuss? To endorse or to notice? To act by the next session of the committee or at a future session of the committee?) I am mostly pulled back into memories of the days when a UN meeting was a regular part of my life.

But I am also struck by some differences.

There is the technology - someone now has the job of typing amendments into a computer, projected onto huge screens, so that everyone can see the text as it changes. There is the technique - maybe it was just a good day, but the working group report backs were exemplary. Short and on message. Not something I would have expected the system to be good at. But most revolutionary, really, is the presence of civil society organizations - the CSOs. CSOs are a part of the revamped committee, you see. So in the parsing of the sentences that goes into creating a government agreement, you see Via Campesina and FIAN and Oxfam asking for (and getting) the floor, just as the governments do. No governments first rule, no pre-agreed rules about which topics can be addressed. The CSOs spent days in advance discussing the agenda and drafting agreed language themselves. 

Now let's see if all this change adds up to a Committee that can fulfill it's promise. This year will be too early to tell, but so far not bad. I'll know more when I get into the building this morning and find out what was decided after I left at 11pm last night.

Sophia Murphy

October 12, 2010

Who benefits from volatility?

By nearly all accounts, agriculture prices worldwide have entered a new era of volatility. Earlier this year, wheat prices shot up an additional $3 a bushel over two months due in large part to concerns around a wheat export ban in Russia. This week, corn prices have risen dramatically due to a USDA report issued Friday, finding a less-than-predicted corn crop this year.

This era of extreme volatility dating back to the 2007-08 global food crisis has contributed to the nearly one billion people worldwide suffering from hunger. This week in Rome, the U.N.'s Food and Agriculture Organization (FAO) is hosting a five-day conference on efforts to address global food security. The meeting comes on the heels of an emergency meeting at the FAO last month focused on increased volatility in grain markets.

Of course, agriculture production has always experienced ups and downs due to a variety of factors—from the weather to pests, economics or war. Traditionally, one of the simplest tools to smooth out agriculture markets is to establish reserves: putting food aside in times of plenty to release in times of scarcity. This week, IATP published a series of short primers on: why we need food reserves, food reserves in practice, what's next on food reserves, and the WTO and food reserves. IATP's Sophia Murphy is attending the FAO meeting in Rome to speak on a panel focusing on volatility, where she'll be making the case for food reserves.

Some kind of food reserve is just common sense, right? Who could be against food reserves and efforts to stabilize agriculture prices? Who profits from volatility in agriculture markets?

Yesterday's press release from Cargill announcing that profits jumped 68 percent this quarter provides a clue. As Cargill CEO Greg Page stated, "Our results were led by the food ingredients and the commodity trading and processing segments, both of which experienced resurgence in volatility across agricultural commodity markets. The change put Cargill's global breadth, trading and risk management skills more acutely into play as we worked with customers to help them manage their price risk and raw material needs."

As agriculture commodity prices remain volatile, agribusiness companies like Cargill and ADM (up $388 million last quarter) with a global reach and diversified holdings throughout the food chain are uniquely positioned to benefit, and so far, they have.

Ben Lilliston

October 08, 2010

Global food funds necessary, but not enough

The Obama administration continues to push for new investments to end global hunger. As part of that effort, Bloomberg news reports that the U.S. will urge other nations attending the upcoming G-20 Finance Ministers meeting and the World Bank/IMF meeting this week to contribute to the Global Agriculture and Food Security Program (GAFSP). GASFP was set up last year to channel funding requests for agricultural development. So far, the U.S., Canada, South Korea and Spain (along with the Gates Foundation) have contributed $880 million.

On the plus side, the fund is driven by host-country requests through partner agencies. Rather than setting up a cumbersome new set of rules and procedures, developing country governments can work with multilateral agencies like the International Fund for Agricultural Development, World Food Program and others, using their existing procedures. Some of those agencies, especially IFAD, have a long history of working with small-scale farmers and including women farmers. GAFSP’s steering committee includes donor and recipient governments, as well as representatives from Southern and Northern civil society organizations.

On the other hand, there is reason to be skeptical of a food security fund housed at the World Bank. Over the last 20 or so years, the bank’s structural adjustment programs required trade liberalization, privatization and cuts in public credit, technical assistance and other support to agriculture. In 2007, the World Bank’s own Internal Evaluation Group recognized that its under-investment in African agriculture, and its over-reliance on the private sector, had been a dismal failure. Since then, the bank has committed to mend its ways, but whether new programs housed at the bank can really contribute to food sovereignty—each country’s right to democratically determine its own path to achieve food security and the right to food—remains to be seen.

Obama is right that substantial new investment in agriculture is needed. But, as always, the devil is in the details. Over the last few years the FAO’s Committee on Food Security (CFS)—which meets next week in Rome (IATP's Sophia Murphy is attending and will report back)—has undergone a thorough reform process. It now includes active involvement by family farmers, urban poor, women, indigenous peoples and development organizations from the Nouth and Sorth. Can GASFP coordinate with the CFS to learn from experiences and priorities around the world? Will it support agro-ecological methods built on local knowledge and priorities or will it advance GMOs and other technological fixes? More money for sustainable agricultural development is necessary, but definitely not sufficient to end hunger.

Karen Hansen-Kuhn

September 28, 2010

NAFTA dumping on Mexican farmers

One of the most dramatic effects of deregulated trade has been an increase in agriculture dumping. In agriculture, dumping takes place when an agribusiness firm exports a crop—say, corn—at a price that is below what it costs the farmer to produce it. Dumping gives agribusiness an advantage in the importing country's market—and often puts that country's farmers out of business, making that country more dependent on imports for its food supply. Trade rules at the World Trade Organization (WTO) and regional trade agreements like the North American Free Trade Agreement (NAFTA) limit what countries can do to protect their farmers from dumping, including policy tools like tariffs or certain types of subsidies.

A few years ago, IATP published a report looking at dumping by U.S.-based agribusiness on world markets for five major crops: corn, soybeans, wheat, rice and cotton. We found a sharp increase in dumping following the enactment of the WTO's Agreement on Agriculture and the 1996 Farm Bill—which stripped away the last remnants of supply-management programs and encouraged U.S. farmers to over-produce. 

Earlier this year, Tim Wise at the Tufts University's Global Development and Environment Institute released a new report looking even deeper into the damaging effects of dumping. In this case, the effects of dumping eight U.S.-produced agricultural products on Mexican agriculture after the passage of NAFTA. The numbers are astounding. Prices paid to Mexican farmers were depressed nearly $1 billion a year from 1997–2005 due to dumping. You can find more details at GDAE's website.

Or, check out the video interview we did with Tim at a major meeting of Mexican farm groups last month.

Ben Lilliston

September 27, 2010

Rethinking the fundamentals of food security

After a lull in public attention over the last couple of years, rising food prices are back in the spotlight. A spike in prices triggered in part by the Russian export ban, and a deadly food price riot in Mozambique have rekindled the debate on global food security. The UN Food and Agriculture Organization (FAO) convened a special meeting on global grain prices last Friday, concluding that measures are needed to increase market information and transparency in agricultural trades. Olivier de Schutter, the UN special rapporteur on the right to food, released a new report on the need to address speculation on commodity markets. He called for regulation and the establishment of food reserves, along with a renewed focus on agroecological methods to increase food production in developing countries.

The last food crisis in 2007-08 highlighted some of the underlying problems of the broken global food system: decades of neglect of investment in agriculture; the foolhardiness of relying on trade for food security; and the vulnerability to wild swings in prices caused by deregulated speculation on commodities. World leaders have made some important new commitments to increase spending and attention to agriculture. And there have been some important first steps toward a new approach in the United States.

The recent financial reform legislation increases transparency and puts new limits on commodity speculation. The Obama administration’s Feed the Future initiative and bills under consideration in Congress would increase spending on agricultural development, emphasizing production by small-scale farmers, especially women farmers. The Global Food Security bill sparked a vigorous debate on the kind of research needed to strengthen local food production. Family-farm, faith, environmental and social justice organizations slammed the initial emphasis on GMOs, insisting on agroecological approaches that protect and build upon local knowledge and reduce dependence on imported inputs. Compromise language now broadens the approach to include research on technologies appropriate to local ecological and social conditions, including ecological agriculture, conventional breeding, and genetically modified technology. Of course, how this will all eventually play out on the ground in developing countries is what really matters.

In addition to how food is produced, it is also vital to ensure that people have access to it when and where they need it. Feed the Future and the Global Food Security Act are silent on the question of food reserves. They do provide for some increases in local and regional procurement of food aid. The USAID budget for local food aid expanded to over $280 million last year. This is a breakthrough in U.S. food aid programs, which up to now have overwhelmingly supported in-kind shipments of food purchased in the United States, transported by U.S. shipping companies, and distributed by U.S. agencies and NGOs. Several GAO reports have documented how much more in-kind food aid costs than locally procured food.

The USAID humanitarian assistance program is an important step. Unfortunately, it is still dwarfed by the in-kind food aid programs which continue at about $2 billion a year. There is no doubt that food aid saves lives in times of disaster, and that droughts and flooding and the consequent crop failures could become even more frequent as global warming destabilizes production. There will clearly be times when it makes sense to ship U.S. food to respond to a crisis. But the current approach to food aid skips any assessment of whether it would be cheaper or faster to buy food locally or regionally in developing countries. And it is unlinked from the root causes of food crises, including the vital importance of local production of food in markets controlled by local people. The default is in-kind aid because that’s what we’ve always done. Never mind the fact that the U.S. no longer holds public food reserves. Or that nearly all other countries providing food aid made the transition to local and regional procurement years ago.

These first steps towards increased investment in agriculture and experiments with locally procured food aid matter. They just aren’t nearly enough.

By Karen Hansen-Kuhn

Ben Lilliston

September 23, 2010

Time to put food reserves on the table

Agriculture prices have always experienced their ups and downs. But in recent years, those ups and downs have become more sharp and extreme. And the result has been deadly to many of those around the world facing hunger.

Tomorrow the UN Food and Agriculture Organization will hold a special meeting to examine extreme volatility in global grain prices. The meeting was brought on by the recent spike in the price of wheat and concerns that the the world will once again experience escalating food prices - similar to what happened in 2007-2008.

Historically, one of the key tools that communities and governments have used to temper the inevitable swings in agriculture supply has been reserves. Food reserves set aside food in times of plenty and release food in times of scarcity.

Unfortunately, a several decade push toward market deregulation has discouraged the use of reserves. But the recent extreme highs and lows in agriculture prices have spurred a resurgent of interest  -  not only at the international level, but at the regional and local level too. In our press release today, we call on the FAO to consider the establishment of food reserves. And we issued a new report by Sophia Murphy on how the international trade rules treat food reserves.

Special UN Food and Agriculture meeting should put food reserves on the table
Reserves could help stabilize increasingly volatile agriculture markets

Minneapolis/Geneva – When the UN Food and Agriculture Organization (FAO) holds a special meeting on increasing volatility in agriculture prices on Friday in Rome, governments should consider the establishment of food reserves to help stabilize the marketplace, according to the Institute for Agriculture and Trade Policy (IATP).

Food reserves, which set aside food in times of plenty and release food in times of scarcity, can be established at the local, regional, national or international level. Traditionally, food reserves have helped to stabilize prices for both consumers and farmers. But a several-decade push for market deregulation has discouraged the use of food reserves in recent years.

IATP released a new report today, “Trade and Food Reserves” by Sophia Murphy, examining how international trade agreements treat food reserves. The report found that while World Trade Organization rules actually give countries plenty of flexibility to establish food reserves, trade rules do create obstacles to the public policies that would be needed for them to function effectively.

“Trade and food reserves should be seen as complementary tools for tackling the inherent instability in agriculture markets,” said Murphy. “The pendulum has swung too far toward a deregulated market, which has hurt both farmers and the world’s hungry. In this age of climate change, it is time to establish reserves as an insurance policy against market disruptions, like those we’ve seen this year in wheat.”

The FAO special meeting will examine recent spikes in food prices, primarily wheat, in an attempt to avoid a repeat of the 2007-08 food price crisis that led to a sharp increase in global hunger. The FAO Committee on Food Security will meet in October 2010 to further discuss food price volatility. Experts agree that many of the ingredients for another crisis are still in place, despite efforts to address unregulated speculation in global commodity markets and some of the other causes of volatility.

Food reserves are receiving increasing support from governments internationally. At the G-8 meeting in Italy last year, some 30 governments and a wide range of intergovernmental organizations recommended that a system of stockholding be explored. The Comprehensive Framework for Action, a joint UN-system (including the WTO, World Bank and IMF) response to the global food crisis, also includes reserves as a policy tool recommendation. And a series of intergovernmental efforts to explore food reserves includes ASEAN (Association of Southeast Asian Nations) and the four BRIC countries (Brazil, Russia, India and China).

Earlier this year, IATP joined 60 civil society organizations from around the world calling on the UN to take action on food reserves. Last year, IATP’s paper “Strategic Grain Reserves in an Era of Volatility” reviewed why governments have historically used reserves as a tool to manage volatility. IATP has co-hosted two meetings, in Washington, D.C. and Brussels, on the role of food reserves in tackling the food crisis. You can find background on the meetings and publications at IATP’s Food Security web page.


Ben Lilliston

September 10, 2010

World Bank on land grabs: Proceed with care

A much anticipated World Bank report was released a few days ago on a controversial but important issue: foreign direct investment in land, particularly in poorer countries. Dubbed "land grabs" by the critics, a surge in investor interest in buying or leasing land abroad was one of the unexpected but dramatic responses to the surge in food prices in 2007-08. For a while, newspapers were full of stories of big but vague deals between foreign companies and governments of land in some of the world's poorest countries (as well as some not so poor countries). In the most publicized case, in Madagascar, it was a bid for nearly half the country's arable land in 2008 by a South Korean firm, Daewoo, that tipped a country already rife with political dissent into demonstrations that overthrew the government. We have commented on the phenomenon from time to time, and Alexandra Spieldoch and I wrote a chapter on the issue for a book published by the Wilson Center in D.C.

It won't be hard to find fault with the World Bank report. It's a highly politicized issue, and the World Bank has a long and controversial history of financing investment in natural resource extraction in projects that fail to meet appropriate social and environmental standards. Too often, the WB fails to meet its internal standards. The audience of NGOs, in any case, is likely to be skeptical at best.

Without jumping into that controversy here, I think it's worth underlining some of what the report has to offer. First, as the authors say themselves, this is an issue where there has been considerably more talk than action. The report estimates that only 20 percent of the proposed ventures have actually started production, for example. Other data, though some of it only goes up to 2006 and therefore predates the big explosion of interest, suggests that a significant share of the investment is actually domestic. That is, while it's clear that a lot of land has started to change hands, it seems not all of it—in some countries not more than 10 percent of it—is being signed over to foreigner entities.     

Second, the report does not pull punches as to the (many) areas of concern that the investments give rise to. For example, the report says:

However, countries with poorer records of formally recognized rural land tenure also attracted greater interest, raising a real concern about the ability of local institutions to protect vulnerable groups from losing land on which they have legitimate, if not formally recognized claims.

Many of these same countries face chronic food shortages, are regular recipients of food aid from the World Food Program and have suffered from historically poor governance. 

Third, the report makes a few points that need attention, with or without large-scale land deals. First, there is a significant gap between the actual and potential output of much of the world's existing farmland, especially in sub-Saharan Africa. This gap should be narrowed. Second, land rights need urgent attention and regulation in many local, national and international contexts, whether it be the struggles of indigenous peoples the world over, of women confronted with patriarchal customary laws, or of the landless, such as Brazil's landless workers (MST), forcibly occupying abandoned land in the name of their right to survive. Large-scale investments by foreign governments and companies bring attention to a much broader set of struggles for justice related to land. The World Bank report makes the point that, looking ahead, land is only going to get more valuable. In that process, the poor (and otherwise marginalized) will be dispossessed unless direct measures are taken.

There's plenty more to say on this topic, and on the report itself. For now, I think it's worth welcoming this contribution to the debate, not least for shining a carefully documented and thoughtful light on what has been and all too opaque and alarming trend.

Sophia Murphy

August 03, 2010

Environments, individuals and the food gap

With 30 percent living below the Mwinnepoverty line, Hartford, Connecticut, is nearly the poorest city in the United States according to the 2000 Census. From 1979 until 2003, Mark Winne served as Executive Director of the Hartford Food System a grassroots nonprofit organization “dedicated to fighting hunger and improving nutrition." This experience, as well as co-founding multiple food policy organizations (including the Community Food Security Coalition) has given Winne a unique, multi-level view of food insecurity.

Our food system today is at an interesting junction: While the organic and local food movements are gaining momentum at an unprecedented rate, hunger, food insecurity and obesity are higher than ever. At IATP's event "Closing the Food Gap" last night, Winne continually returned to the central question: Where does responsibility lie? With the individual or in the food environments we have created? Winne proclaimed to have "one foot firmly planted in each camp," despite also being aware that in today's food environment—especially in low-income communities where healthy food is often scarce—one must be extremely strong, and discerning, to make healthy decisions.

So what changes are necessary to make healthy food more accessible and individuals more prepared to make the decision to eat healthy? Winne listed environmental changes as simple as building more supermarkets, altering bus routes to reach healthy foods, building farmers markets in food-scarce neighborhoods and efforts like community-owned grocery stores like People's Grocery in West Oakland.

On the individual level, Winne spoke of competing with the barrage of billboards, soda machines and television ads that children are exposed to by including more food education—cooking, preparation and nutrition—in our schools' curricula. And, on a larger scale, encouraging participation in "food democracy." As the food industry becomes more centralized, and more powerful, are we truly able to impact what food enters our communities? Yes, Winne admitted, as consumers we are able to vote with our dollars, but we are competing with powerful corporations. Low-income neighborhoods often become overrun with fast food operations while supermarkets are nowhere to be found—what good is a vote when nothing on the ballot is beneficial? 

Winne's answer? Food Policy Councils. Yes, the national fight must continue through avenues like the Farm Bill and the Child Nutrition Reauthorization Act, but local change can happen now. State and local policy councils are springing up across the country thanks to Winne's model of interacting constructively with local and state government to bring about change. Justice, not charity: Individuals, taking responsibility for the environment in which they live, to help bring healthy, sustainable solutions to hunger, and diet-related illness. 

For more information, check out Mark Winne's books Closing the Food Gap and the upcoming Food Rebels, Guerrilla Gardeners, and Smart-Cookin' Mamas: Fighting Back in an Age of Industrial Agriculture

Andrew Ranallo