For well over a decade, IATP has advocated for alternatives to the current water governance regime that privileges profit over people, communities and ecosystems. In advocating against neoliberal approaches to solving water crises, we have argued for the promotion of the right to water and the right to food, for the precautionary principle and for the need to respect our common but differentiated responsibility to protect our commons.
This month, as the United Nations celebrates World Water Day, and as many organizations at the World Social Forum celebrate Water Justice Day, we offer Water Governance in the 21st Century: Lessons from Water Trading in the U.S. and Australia, a new paper that looks at the possibilities for water governance based on on cooperation rather than competition. We look at the experiences of water trading in Australia and North America for relevant lessons to help chart a path for just and sustainable water governance in 21st century.
IATP's Dr. Steve Suppan is blogging from Tunis, Tunisia, the site of the World Social Forum.
In Tunisia, important events begin with a poem. The interpretation technology was not working yet, but poetry is difficult to translate in any event. The opening session of the World Forum on Science and Democracy was no less significant because of a momentary technology glitch.
The very notion of science and democracy may seem antiquated or self evident. The Union of Concerned Scientists has a Center for Science and Democracy, which is petitioning the U.S. Food and Drug Agency (FDA) to allow FDA scientists to speak with the public about their work without vetting from their managers. But here, the birthplace of the democratic revolutions of 2011—called the “Arab Spring” by Western journalists—nothing is taken for granted. As a representative of IATP, the only U.S. NGO at a conference of about 200 academics and NGOs from around the world, I am surprised to discover what is taken for granted.
The newly elected Dean of the Faculty of Arts and Sciences of the University of Tunisia, our host, begins his welcoming remarks with a quote from the French-Algerian writer Albert Camus, writing in the midst of the Algerian revolution of the 1950s against French occupation of Algeria: democracy is to be able to choose and to allow one to choose without imposition. If this seems an odd way to open a quasi-academic conference, the quote from Camus prefaced an eloquent discussion of how scientists, such as the Swiss psychologist Jean Piaget and the U.S. anthropologist Gregory Bateson, show how human interdependence, beginning with mother and child, is the basis of all democracy.
The 16th round of negotiations for the Trans-Pacific Partnership (TPP) began this week in Singapore. That trade deal has the potential to become the biggest regional free-trade agreement in history, both because of the size of the economies participating in the negotiations and because it holds open the possibility for other countries to quietly “dock in” to the existing agreement at some point in the future. What started as an agreement among Brunei Darussalam, Chile, New Zealand and Singapore in 2005 has expanded to include trade talks with Australia, Canada, Malaysia, Mexico, Peru, the United States and Vietnam. Japan and Thailand are considering entering into the negotiations, and others are waiting in the wings.
And yet, despite the potential of this agreement to shape (and in very real ways override) a vast range of public policies, there has been very little public debate on the TPP to date. Governments have refused to release negotiating texts. Media attention on agriculture and the TPP has focused on New Zealand’s insistence on access to U.S. dairy markets and Japan’s concerns over rice imports.
While important, that debate is much too narrow. The TPP is not only about lowering tariffs. It has the potential to greatly expand protections for investors over those for consumers and farmers, and severely restrict governments’ ability to use public policy to reshape food systems. The fundamental causes of recent protests across the globe over food prices, the rising market power of a handful of global food and agriculture corporations, as well as the dual specters of rising hunger and obesity around the world, point to the need to transform the world’s food systems, not to lock the current dysfunction situation in place.
IATP has always argued that trade agreements need to respect and promote human rights, not drive a process of globalization that privileges commercial interests and tramples on public interests. In a new paper on land grabs, we reaffirm that position.
“Land grabs” are large-scale purchases or leases of agricultural or forested land on terms that violate the rights of the people who live on or near that land. The problem has commanded enormous public policy and media attention for the last few years. In our paper, IATP sets some context for the land grabs phenomenon. We focus on two forces that have contributed significantly to the problem:
The situation is compounded by climate change and the resulting destabilization of weather patterns, which in turn has made agricultural production less predictable. Climate change has made domestic food supplies less certain and exports, too. The United States, still a huge source of grains for international markets, lost 40 percent of a record large number of acres planted with corn to drought in 2012.
The sense of food insecurity has driven some of the richer net-food importers—countries such as Saudi Arabia and Kuwait—to invest in growing food abroad for import to their domestic markets. That is one driver of land grabs.
Washington D.C. is a gloomy place these days, with grey skies and a weirdly warm winter, the sour prospect of failure around the sequestration debate, and more cuts on the horizon. It’s possible, however, that on international food aid there just might be a silver lining to all that gloom. Reuters reports that President Obama might propose new rules in his March budget proposal that would make food aid reach more people, more quickly and more efficiently.
Since the 1950s, nearly all U.S. food aid has been shipped in-kind. There was a certain (though even then, not entirely positive) logic to that practice when this country had vast grain reserves, but that hasn’t been the case for years. Most donor countries now provide more flexible resources for local and regional purchases of food aid, and there has been pressure for years from development and faith organizations for the U.S. government to get with the times and make that shift.
There was a small breakthrough in the 2008 Farm Bill, which created a pilot program to test local and regional purchases of food aid. The evaluation of that experiment found that food aid purchased locally arrived, on average, in about 56 days, compared to 130 days for food purchased and shipped from the U.S.—and at lower cost. Early drafts of the 2012 Farm Bill would have expanded that program and made it permanent, but the Farm Bill, like so many others initiatives these days, is in limbo.
After the disastrous financial collapse in 2008, the commodity and financial market regulatory reform process on both sides of the Atlantic has been a series of promising but halting steps, all too often two steps forward and one step back. This week the EU Parliament decided not to take that one step back, when it withdrew a resolution to object to standards for the centralized clearing of over-the-counter (OTC) financial and commodity derivatives contracts. Such a centralized system is essential for effective market regulation. Joost Mulder, of the Brussels-based NGO Finance Watch, said, “the decision to withdraw the resolution is a victory for the real economy.”
The new standards will make transparent pricing and other information previously hidden in the privately negotiated, but market-dominant, OTC contracts and will prevent a repeat of the 2008-09 cascades of counterparty defaults. According to the standards, Centralized Clearing Platforms (CCP) authorized by the European Market Infrastructure Regulation (EMIR), would ensure that the counterparties to an OTC contract are credit worthy and able to cover their losses. Lack of centralized clearing of OTC trades (called swaps) was a major factor in the financial industry crisis of 2008-09, which triggered taxpayer bailouts of the industry and a real economy crisis on both sides of the Atlantic, wreaking price havoc in agriculture and energy markets.
Last year international food markets suffered their third price spike in five years. The trigger was a terrible drought in the United States—a major agricultural producer and exporter. An unstable climate met low levels of international grain reserves, while U.S. ethanol gobbled up maize supplies. The resulting high and volatile prices struck yet another blow at the world’s already fragile food systems.
This is exactly the scenario we warned of a year ago when we published Resolving the Food Crisis, a comprehensive assessment of the international community’s response to the global food price crisis.
High and volatile food prices in international markets will continue until structural reforms to trade, finance and agriculture are put in place to address the real drivers of the food crisis. It’s time for meaningful limits on financial speculation, reformed mandates for biofuels made from food crops, a system of internationally coordinated public food reserves and strong regulation on land investments. Donors should continue to invest in developing country agriculture, respecting their commitment to recipient country leadership. If the private sector engages, it, too, must respect the rights of the people it engages with.
Here is our review of progress on these issues in 2012:
Funding for agricultural development: Instead of renewing their 2009 L’Aquila commitment to invest significant aid money in agriculture, the G-8 group of powerful nations rolled out the “New Alliance for Food Security and Nutrition.” Most of the funding comes from private sector partners like Monsanto and Yara, a global fertilizer company. The aid comes with strings: To qualify, governments must “refine policies in order to improve investment opportunities.”
In 2010, journalist Frederick Kaufman wrote in Harper’s Magazine about how Wall Street speculators wreaked havoc with wheat markets and, in turn, helped drive the 2008-09 food price crisis. Now, he’s out with a new book titled Bet the Farm: How Food Stopped Being Food that goes into depth on how the increasing financialization of food effects farmers, consumers and global hunger. Research for the book brought Kaufman to farms, food science research labs, agribusiness giants, the United Nations and the Chicago Mercantile exchange. Bet the Farm is an accessible, sharp critique of how our food system has become increasingly captured by the big banks and giant food and agribusiness companies. Kaufman graciously accepted our invitation to answer five questions about the new book.
You write about the remarkable growth of the pizza industry, not only here but around the world. How has that impacted the agricultural economy?
As the Rome-based Committee on World Food Security begins preparing principles for “responsible agriculture investment” (RAI), its advisory body, the High-level Panel of Experts (HLPE), gets ready to revise its report on “Smallholder agriculture investment.” It is hoped that the RAI principles, if crafted with input from small-scale food producers and those advocating for their rights, become internationally accepted principles to govern international investment. If so, the RAI principles could pave the way for multilateral and bilateral investment treaties that respect small food producers, prevent egregious practices of transnational corporations that have led to landgrabs and livelihood loss, and more positively encourage agroecological investment in small-scale producers.
The HLPE, an advisory body to the Rome-based Committee on World Food Security, has received at least 65 comments into the first draft of its report, Investing in smallholder agriculture for food and nutrition security. This report could be a significant contribution into the RAI process. Many civil society groups support the HLPE and its process, not only because it has civil society representation, but also because its ultimate objectives are to help the CFS have “more informed policy debates and improve the quality, effectiveness and coherence of food security and nutrition policies from local to international levels.” This report on small-scale food producers is its sixth report in three years with previous reports addressing critical issues affecting the global food system such as food price volatility, land tenure, social protection and climate change.
On January 19, Deutsche Bank (DB) issued “Questions and Answers on investments in agricultural commodities”. The DB stated that after an internal examination, it was resuming investments in agricultural derivatives contracts that it had suspended since March 2011. Nongovernmental organizations had successfully pressured the DB and a few other European banks to “stop gambling on hunger” due to the banks’ concern about risk to their reputations. The World Development Movement had organized an October 2011 letter signed by 450 economists to the Group of 20 (G-20) demanding an end to bank speculation on agricultural contracts, so the DB was an early adopter of the investment moratorium.
The derivatives contracts include both the regulated futures and options contracts that farmers and food manufacturers use to protect against price decreases and increases respectively, and the unregulated over-the-counter (OTC) contracts. The DB’s internal investigation, bolstered by non-cited studies of unnamed agricultural economists, found “there is little empirical evidence to support the notion that the growth of agricultural based financial products has caused price increases or volatility.”