January 2009

Thursday, January 29, 2009

IATP's Alexandra Strickner is reporting from the 9th World Social Forum in Belém, Brazil.

Wednesday, January 28, 2009

A press release from the University of Leeds last week announced a new study projecting that if current trends continue, China’s industrial growth and changing land use - combined with climate change - could threaten global food supplies.

"At the moment the Chinese government claims that China is 95% self sufficient in terms of grain supply," read the press release. "If China were to start importing just 5% of its grain (to make up a shortfall produced by low yields or change of land use to more profitable crops) the demand would hoover up the entire world's grain export. . .The pressure on grain availability for international grain markets could, in turn, have a huge knock-on effect. Poorer countries are particularly vulnerable, as demonstrated by the 2007-2008 food crisis.”

So why might China start importing more grain? The study points to decreasing harvests, increasing vulnerability to drought, low grain prices and the loss of high-quality farmland to urbanization. In fact, this is a message we’ve heard before. In 1995, Lester Brown published Who Will Feed China?, an entire book dedicated to the very topic of China’s demand for grain starving the rest of us. Here’s a good summary by the Worldwatch Institute.

Brown focused on the country’s growing population, loss of productive land to development, diminishing water supplies, rising demand for feedgrains as China’s diet became more meat-oriented, and the fact that---according to his calculations---China’s farmland productivity had peaked. He claimed that China would inevitably increase imports of grain, and that “China's rising food prices will become the world's rising food prices.”

Remembering the rather panicked response when Brown’s prediction was made (I was in China at the time, and some observers credited his book with an increase in government investment in agriculture the following year) and seeing the same basic hypothesis again being put forward ---15 years later---as a possible future scenario, the interesting question, it seems to me, is: “Why haven’t the Chinese starved us yet?”

Back in the 1990s, researchers from the scientific community did not take long to pounce on Brown’s methodology and assumptions, focusing on his serious underestimation of China’s arable land area. Not long after Who Will Feed China came out, remote sensing surveys revealed that China’s cultivated land area was 30-40 percent larger than Brown’s estimate. This underestimation led him to conclude incorrectly that there was little possibility for increasing productivity, (calculated as yield X area) and to over-estimate the relative severity of land losses from urbanization.

But from the perspective of agriculture and trade policy, there was another assumption in Who Will Feed China? that was just as dubious: the idea that China would fully integrate itself into the global food trade system, and buy large quantities of grain on world markets. The mainstream economics of the 1980s and 1990s told us that food was like any other tradable commodity, and therefore countries that had a comparative advantage in something other than food production should simply import food rather than growing it themselves. According to this logic, it is irrational and disruptive of the smooth operation of markets for governments to try to achieve food security through tariffs, subsidies or other policy measures. It was precisely in the name of eliminating “market distortions” that governments of developing countries were urged or forced by multilateral finance institutions and Western donors in the 1980s and 1990s to abandon subsidies for domestic food producers, open their markets to imports (even when those imports were being sold at below market prices), and sell off state-controlled grain reserves.

So, for example, among the 50 poorest countries on earth, between 1990 and 2005 net imports of rice increased by 124 percent, and those of wheat by 130 percent. (Over two-thirds of developing countries are now net food importers.) These countries, the ones who listened to the World Bank and IMF, are precisely the places where the food crisis has had the most devastating impacts. By contrast, China has experienced relatively small price increases, and no real food shortages. One important reason for this is the fact that China did not integrate itself into the global food system in the ways that many assumed they would. China’s history of famine---and famine-induced political turmoil---made a deep impression on the long memories of the country’s leaders. Despite having what is generally considered one of the more “open” economies on the planet in the manufacturing sector, China has maintained strong food security policies. These are not the loony, commune-level demands for self-sufficiency in grain that Mao decreed, but a sensible package of policy carrots and sticks: limits on the percentage of annual grain demand that can be imported, government grain storage, public support for ag research, subsidies for key farming inputs, preferential pricing for staple grains, and restrictions on the cultivation of biofuel feedstocks on arable land.

So although some of Lester Brown’s predictions did come true---China’s economy did grow rapidly, as people got wealthier their diets did change to include much more meat, more and more arable land continues to be swallowed up by urbanization----the massive imports of basic grains have not materialized, and China’s food security policies seem thusfar to have largely insulated it from the volatility of global grain markets. (Dr. Darryll Ray of the Agriculture Policy Analysis Center has written an interesting series of columns on this.)

But just because disaster hasn’t struck yet doesn’t mean it never will. The fact that Lester Brown had a few assumptions wrong doesn't change the validity of the basic argument that we live in a finite world and that the US is exporting a development model that is disastrously unsustainable. The vulnerabilities pointed out in the University of Leeds study are real as well, and their focus on climate change as a source of growing instability adds urgency to their findings. Meanwhile, there are economists in China who want to abandon the notion of domestic food security altogether, and the country's leadership seems confused on this issue. China’s demand for soya has skyrocketed in the past year, and there are large imports of many other non-staple products. The government seems to have burned through most of its grain stores. The gap between the incomes of farmers and city dwellers continues to grow, and the government’s chief response in 2008 was to promote land consolidation and pledge further support for unsustainable chemical and bioengineered agriculture. The government has assumed that the labor-intensive export manufacturing sector would absorb people fleeing the difficult lot of the farmer.  But the global economic slowdown means tens of millions of laid off workers who returned to their rural hometowns for Chinese New Year this week have little to celebrate.

Tuesday, January 27, 2009

IATP's Alexandra Strickner is reporting from the 9th World Social Forum in Belém, Brazil.

From January 27-February 1, the 9th World Social Forum will take place in Belém, in Pará state, Brazil. The city is one of Brazil's busiest ports, about 60 miles upriver from the Atlantic Ocean. Belém is built on a number of small islands intersected by channels and other rivers.

Monday, January 26, 2009

There's been ongoing debate about the healthfulness of high fructose corn syrup (HFCS), but no one talked about mercury contamination. Until now, that is. 

Two new reports issued today show that commercial HFCS is routinely contaminated with mercury, as are many foods and beverages where HFCS is a major ingredient. Read more about it at: www.iatp.org.

0109_mercuryreport One chemical critical for making HFCS is caustic soda. It used to be that nearly all caustic soda came from chlorine plants using something called mercury cell technology. Caustic soda from those plants, many of which are still operating, can be contaminated with mercury. Mercury-grade caustic soda can then contaminate the HFCS and other products made from it with mercury. Newer, mercury-free processes for making chlorine and caustic soda are available, and more efficient as well.

An environmental health officer with the Food and Drug Administration discovered the problem several years ago. She tested 20 samples of commercial HFCS and found mercury in about half of them (9/20). But then the FDA did nothing about it, apparently for years. Now retired from the FDA, she and co-authors published their findings today in the peer-reviewed journal, Environmental Health.

Learning of the issue, the Institute for Agriculture and Trade Policy went out and bought 55 kinds of soda pop and beverages, salad dressings, chocolate milk, barbecue sauce, yogurt and other items where HFCS was #1 or #2 on the label.

 

We found total mercury detectable in about a third of them. They include some of the most widely recognized brands in America, many of them marketed to children. Table A of our larger report gives the full list of what we found.

 

The good news is that in 2007, then-Senator Barack Obama introduced a bill that would phase out mercury cell technology in chlorine plants. Let's hope he carries on that effort in the White House.

 

We also suggest that food companies stop buying their HFCS from plants still using outdated mercury cell technology, and that consumers stop buying their food products until they’ve done so.

 

This is a source of mercury we shouldn’t have to put up with.

Friday, January 23, 2009

Many people in Minneapolis, including entire neighborhoods, lack access to healthy, affordable and culturally appropriate foods. Last year, IATP organized a series of roundtable discussions with Minneapolis community members to talk about the food they buy. Participants represented a diversity of ages and backgrounds, and discussed their personal experiences and perceptions regarding food access in their communities.

Several key themes emerged from the discussions:

  • Improving access is critical to increasing consumption of healthy foods. Simply knowing what
    to eat is not enough; people need sources of affordable, accessible food to make those healthy
    food choices.
  • “Access” means more than physical access to food. Other factors, including affordability, time to
    prepare food and cultural traditions, are often important in determining whether people will buy
    and consume healthier food.
  • Farmers markets and other community-based initiatives are important and successful ways to
    increase access to healthy foods. However, they must be coupled with efforts to influence public
    policy and address the larger societal and environmental issues that hinder access to and
    consumption of healthier options.

LF_O_4 You can read more about the roundtables here. The discussions drew the connection between food produced locally and health. This year, IATP will be working with the city on a new initiative called Homegrown Minneapolis, designed to increase the number of farmers markets, expand community gardening and urban agriculture, and boost the use of locally grown foods in restaurants and grocery stores.

Minnesota has the potential to be a national leader in local food use and production. An October study published in the Journal of Extension found that Minnesota had the potential to meet 90 percent of its food needs through local production—the highest percentage in the country.

We'll be following policies and market developments that affect local food systems at our new Local Foods Web page.

Tuesday, January 20, 2009

As he was sworn in today, President Barack Obama made the case for big ideas. Small, incremental changes aren't going to cut it. In a new book, Thinking Big, IATP and the Progressive Ideas Network combine bold ideas with specific policy proposals for the Obama administration.

IATP's Jim Harkness and Alexandra Spieldoch write about how the United States can re-engage with the world through a new era of multilateralism grounded in human rights. Such an approach would involve: greater engagement with the United Nations and the international treaty system; leading on climate change and other global environmental challenges; support for a new set of trade rules that reflect the public interest (not just private corporations); and using food sovereignty as a lens to assess global food and agriculture policies.

You can view a short video, read the table of contents or connect with the progressive organizations who contributed at the Thinking Big Web site.

Tuesday, January 13, 2009

Last night, 60 Minutes ran an excellent piece on the role of Wall Street speculators in driving the price of oil up and then down. The piece, produced by Leslie Cockburn, concluded that over the last several years, speculation dictated oil prices more than the traditional fundamentals of supply and demand. The show chronicled the influence of large financial investors, including Goldman Sachs and J.P. Morgan, on oil prices. And it explained the role of congressional legislation, passed in 2000 and pushed by Enron, to deregulate the commodity futures market and open the door for speculators.

The role of speculation in driving volatility in oil prices mirrors the conclusions of our paper last year on the role of speculation in driving agriculture price volatility and contributing to the global food crisis. Many big commodity index funds bundle oil and agriculture commodities together. So, when the price of oil shot up, so did the price of agriculture commodities.

As the New York Times editorial board pointed out last week, President-elect Barack Obama's nominee for the Commodity Futures Trading Commission is Gary Gensler, a former Goldman Sachs investment banker who actually oversaw the drafting of the key 2000 bill that deregulated the commodity futures market and contributed to increased speculation. As part of his confirmation hearing, Gensler should explain his support of the disastrous 2000 bill, what he'll do to fix it, and outline what steps he will take to limit excessive speculation in food and energy.

Friday, January 9, 2009

Ian Austen of the New York Times had an excellent article Wednesday on oil extraction from the tar sands in Alberta, Canada. Canada is now the largest oil supplier to the U.S. The article outlines the various environmental concerns of this extremely energy intensive operation, including impacts on greenhouse gas emissions, water pollution and migratory birds.

One important driver the article doesn't get into is the role of NAFTA in tar sands development, or more specifically the role of NAFTA's Proportionality Clause (see analysis by the Parkland Institute and the Canadian Centre for Policy Alternatives). This clause is so crazy it's hard to believe. It actually requires Canada to make two-thirds of its domestic oil production and 60 percent of its current natural gas production available for export to the U.S. These requirements stay in effect, even if Canada needs these supplies for domestic purposes. There is little question that Canada's NAFTA-burden is contributing to further tar sands development.

Tuesday, January 6, 2009

At the beginning of a new year, it's always worth looking back on the good work of the last year before we are humbled by the work to come. Thanks to John Nichols of The Nation for toasting the good work being done by progressives—people and organizations—in 2008. We thank him for naming IATP as the "Most Valuable Policy Group" for our work on the global food crisis, particularly two papers by our Trade and Global Governance team: Commodities Market Speculation: The Risk to Food Security and Agriculture and Bridging the Divide: A Human Rights Vision for Global Food Trade.

If 2008 was the year of crisis (financial, food, climate, etc.), let's hope 2009 is the year of solutions.

Monday, January 5, 2009

Last week, on January 1, the North American Free Trade Agreement (NAFTA) celebrated its 15th anniversary. You weren't invited to the party? Don't feel left out: neither were most U.S., Mexican and Canadian citizens. Over the last 15 years, NAFTA has become short-hand for a disastrous U.S. free trade agenda that has trampled over workers, farmers, consumers and the environment.

Nafta_4_issue Will we see a change in U.S. trade policy in 2009? During last year's election, President-elect Barack Obama pledged to "amend the North American Free Trade Agreement." According to the campaign's Web site, "Obama and Biden believe NAFTA and its potential were oversold to the American people."

Earlier today, 60 civil society organizations (including IATP) sent a letter to Obama urging him to follow through on his promise to renegotiate NAFTA. The letter prioritized ten areas for renegotiation: agriculture, energy, foreign investment, financial services, the state and services, employment, migration, environment, intellectual property rights and dispute settlement provisions. The recommendations are based on a set of proposals developed last year by civil society organizations from the U.S., Mexico and Canada.

In a press release, IATP's Dennis Olson commented on the need for new agriculture rules under NAFTA: "To be effective, any new approach to trade must take into account that agriculture and food are unique and should not fall under the same trade rules as TV sets. Countries must have the policy flexibility to address the current global food crisis."

As the debate about NAFTA takes place in the U.S., it's important to recognize the damage this agreement has caused to all three countries. As Kevin Gallagher and Tim Wise of Tuft's Global Development and Environment Institute wrote recently in the Guardian, "Estimates vary, but Mexico probably gained about 600,000 jobs in the manufacturing sector since NAFTA took effect, but the country lost at least two million in agriculture, as cheap imports of corn and other commodities flooded the newly liberalized market."

Job creation and revitalizing the staggering U.S. economy will be at the top of the new Obama team's agenda in 2009. A new approach to trade, and NAFTA, will have to be an essential part of any economic recovery plan.