July 2007

Sunday, July 22, 2007

It's not easy - but somehow the WTO has kept its head firmly planted in the sand for over six years now, trying vainly to force down the throats of members a trade agreement based on an outdated and discredited model for globalization. The Doha Round at the WTO was launched in 2001 just a few months after the September 11 terrorists attacks. IATP was one of the few U.S. groups in the tiny country of Qatar during the negotiations and saw firsthand as WTO members grappled with the attacks and the uncertainty of what would come next. It was that uncertainty that brought member countries together for a tentative and vaguely worded deal allegedly to help design rules to promote development in the poorest countries.

But the goodwill from Doha was never based on a consensus for trade as a model for development. Or more specifically, that further trade liberalization was the answer. The conflicts that split the WTO apart in Seattle returned in Cancun in 2003. Some slow progress was again made in Hong Kong 2005, only to be split again last year when talks broke down.

This month, over 90 civil society organizations from rich and poor countries wrote WTO trade ministers calling for them to stop the charade and end the Doha Round. The groups wrote, "Instead of coming up with a set of multilateral trade rules designed to increase the capacities of developing countries to create new jobs, eliminate poverty and build sustainable economies, the Doha Agenda has been manipulated to primarily serve the interests of the northern industrialized powers to expand market access for their transnational corporations."

The letter cites a steady stream of research since 2005 from the UN, World Bank and academic researchers showing that the push within the Doha Round to further expand trade liberalization would not benefit the WTO's poorest countries.

As IATP's Trade Information Project points out in its latest Geneva Update, a break from the Doha Round is essential to understanding what has gone wrong with the WTO brand of globalization: "An honest reflection on the implementation experience, something governments committed to in Article 20 of the Uruguay Round Agreement on Agriculture itself, would set the stage for quite a different agenda, one that included measures to redress the imbalances and inequities of the first agreement, and one that looked harder at the impediments to realizing a 'fair and market-oriented' trading system."

The Doha Round isn't going anywhere. As WTO members meet at the end of this month in a last gasp to revive the Doha Round, they would be wise to lift their heads out of the sand, take a deep breath of fresh air, and as civil society recommends in their letter, start a process to create "alternative trade regimes that are people, development, and environment centered."

Sunday, July 22, 2007

Here we are right in the middle of writing of the 2007 Farm Bill and the debate hasn't changed much over the last decade - it's still about subsidies. There's a whole host of organizations claiming to represent the interests of the environment, taxpayers, poor country farmers, and free traders who want to slash subsidies. In response, mainstream farm groups are circling the wagons and pushing for largely an extension of the current system with some slight changes.

But what about a middle ground that protects farmer income and reduces subsidies? This month, over 30 organizations sent a letter to House Agriculture leaders explaining how to get there. The proposal should sound familiar - it's based on long-proven tools of supply management to ensure farmers receive fair prices from the marketplace, and not bailouts from taxpayers. The U.S. sugar program, which ensures a fair price for farmers and costs the government nothing - angering the big food companies to no end - is an example of how this can work.

Drs. Daryll Ray and Daniel De La Torre Ugarte at the Agriculture Policy Analysis Center at the University of Tennesee have written frequently on the benefits of a system that manages supply. Their report, Rethinking US Agriculture Policy, explains why many who wish to simply slash subsidies won't get their desired result in the countryside. Namely, farmers will continue to over produce with the same accompanying low prices and environmental degradation.

The strength of a supply management approach is that it's based on a fundamental American ideal - that the market should pay people an honest price or wage for their work. Employers in the U.S. are required to pay workers a minimum wage. Why shouldn't the food companies be required to pay farmers a minimum price? It's also based on basic business 101: supply needs to match demand.

A stable price for commodity crops would have benefits for a broad range of constituencies. As IATP's Dennis Olson puts it, "Whether you’re a corn farmer facing the uncertainty of this year’s harvest, a venture capitalist investing in an ethanol plant, a family dairy farmer wondering what your feed prices might be by the end of year, or a consumer wondering if food prices will rise, you have a stake in a stable, affordable supply of grains in the supply chains. Strategic grain reserves would help reduce the dangerous volatility that can harm everyone.”

Many have dismissed a supply management approach to the Farm Bill as politically impractical. But it deserves a fresh look, particularly in light of recently volatile corn prices, which make the costs of various subsidy programs nearly impossible to predict for the future. An updated supply management system that includes new ideas to support environmental benefits and the development of new crops for the bioeconomy could help achieve the goals of players on all sides of the subsidy debate.

Thursday, July 19, 2007

This month, the USDA announced that the amount of U.S. land planted to corn had increased an incredible 18.5 percent, up to 92.9 million acres. The corn boom is directly tied to the ethanol boom, which in the U.S. is almost exclusively dependent on corn. Most believe that an ethanol system built entirely on corn is unsustainable in the long run. And we're already seeing some environmental fall-out with government officials predicting the so-called dead zone in the Gulf of Mexico will be the biggest ever this year, due to increased runoff from nitrogen fertilizer used to grow corn entering the Mississippi River.

An article in the June 15 issue of the journal Science points toward a solution. Researchers, led by the University of Minnesota's Nick Jordan, conclude that an expansion of perennial energy crops to feed the bioeconomy will diversify Midwest farms and bring a series of economic and environmental benefits. They found that many of the environmental problems in agriculture are associated with commodity program crops (particularly corn and soybeans), including the degradation of water quality with sediment, nutrients and pesticides, disruption of wildlife habitat, emission of greenhouse gases and degradation of air quality.

Perennial cropping systems on the other hand are more resilient because they actually reduce soil and nitrogen loss, and have greater capacity to sequester greenhouse gases, while improving wildlife.The authors propose a $20 million annual federal investment in the 2007 Farm Bill to look at policy approaches to compensate farmers for the production of environmental benefits in growing perennial energy grasses.

When considering the size of the Farm Bill, $20 million isn't much to ask to help push the bioeconomy toward long-term sustainability.