We are in the midst of the worst U.S. drought since the 1950s, and some regions are to the point of the Dust Bowl-era 1930s. As expected, prices of corn, soybeans and wheat have increased significantly, causing a rise in food prices and putting a difficult squeeze on many livestock farmers.
Fortunately the Obama administration and Congress have stepped up and decided to ... purchase meat from livestock farmers to donate through food assistance programs? Open up sensitive environmental lands for haying and grazing? And if Congress gets its act together, possibly pass a livestock disaster aid bill?
Addressing the economic challenges of the drought will of course be welcomed by farmers throughout the Midwest. Yet, comparing the policy actions of today to other times of agricultural crisis, these initiatives appear woefully unimaginative and small. Policymakers are clearly missing the forest for the trees, and prefer to make a lot of noise about small policies rather than address structural issues.
It would be one thing if the food and agricultural economy tended to hum along fine and economic calamities were rare, but that is clearly not the case. If it isn't a drought, it's been a flood, or exploding energy costs, or food safety concerns, or Wall Street speculators, or skyrocketing land values. Our food system—the most important of production systems—is disturbingly vulnerable to events well beyond the control of farmers. And perhaps the most chronic of problems occurs when farmers produce an abundance of crops, when everything goes well, and commodity prices are driven down below the farmers' cost of production.
This year, Bike and Bite also celebrates the United Nation’s International Year of the Cooperative. Many of us love the notion of the cooperative. You may imagine a few people, probably college students, living together, sharing their food and responsibilities. Housing cooperatives are certainly prevalent, but cooperatives span the full spectrum of business. Most Minnesotans may not realize that our state has the highest number of cooperative businesses in the United States. According to the University of Wisconsin’s Center for Cooperatives’ research, over one thousand cooperatives from 16 different business sectors employ over 42,000 Minnesotans!
Why are there so many cooperatives in Minnesota? Scandinavian, German and Dutch immigrants brought the business model over from Northern Europe in the early 1800s where many cooperative businesses, particularly agricultural cooperatives, were thriving. Since, the popularity of cooperatives has grown immensely in part due to their high rate of success. An international study estimates that 64 percent of cooperatives around the world survive their first five years compared to only 32 percent of other business model types. Further, they estimate the survival rate of cooperative businesses is even higher in the American Midwest.
The reports of drought across the United States continue to worsen. Just this week, USDA decreased its estimates of corn harvests in “good to excellent” conditions to 24 percent. Corn futures are hovering near $8 a bushel, and wheat futures have started to rise as well. We won’t know for sure how much of the crop is affected for several weeks, but what seems clear is that the harvest will be down, perhaps 30 percent or more, and prices will be up substantially.
This kind of weather extremes have become increasing common around the world. The number of recorded natural disasters has doubled in the last 20 years, and the U.N. estimates that nine out of ten of those disasters are linked to climate change. All projections are that these problems will only increase with growing climate chaos. At the same time, a crop failure here doesn’t mean that crops have failed everywhere. Argentina, for example, is expecting a record corn and wheat harvest. So food crises and famines will likely rise, but where the supplies are located will become more and more variable.
With the U.S. government announcement last week that this year’s corn crop is expected to be much smaller due to an extended drought, agricultural commodity markets are yet again headed for high and unstable prices this summer. Is the world better prepared for the shortfall then it was in 2007? Certainly, the United States is not. To cite agricultural journalist Alan Guebert:
Indeed, according to CCC (Commodity Credit Corporation), there is not one teaspoon of sugar, one pound of peanuts, one slice of butter, one wheel of cheese, one bushel of wheat or even one chickpea in USDA’s pantry. CCC has nothing—nada, zip, goose egg—to release into the marketplace to slow or moderate what’s certain to be fast-climbing food prices in the coming months.
Today is the last day of the U.N Conference on Sustainable Development that is taking place in Rio de Janiero from June 20 to 22 of June. Over 100 heads of states (with a notable absence of Barack Obama), and governments are in Rio, participating in the plenary meetings and High-level Round Tables as a prelude to adopting the negotiation document. On the final day of the last preparatory committee, on the evening of June 15, the negotiations had come to a standstill. Brazil however, as a host nation, did not want Rio+20 to end in failure. As we suspected, Brazil opted to provide the negotiators with a new, watered-down draft that would cause minimal disagreements.
Brazil’s draft was negotiated over for the next four days and the new document. “The Future We Want,” was agreed upon by June 19, a day before the heads of states arrived and was called the “final draft text.” Before the high-level segment even started we had a text that was adopted by the negotiators, all but waiting for the endorsement of the final plenary. By the end of the day today we will know to what extent this document is tweaked to accommodate the interests of specific constituencies, but as of now the document remains more or less unchanged.
From June 16 to 19, the Brazilian government organized a series of sustainability dialogues, including those on water food and energy. The discussion on food security had an exceptionally strong panel with several advocates of agroecolgy. However, what was said in the dialogues was not reflected in the negotiating text and it is disappointing to see no reference to agroecology in this final draft.
As the G-20 Summit in Los Cabos came to a close yesterday, various civil society observers expressed their disappointment at the lack of ambition in the leaders’ statement, particularly on food security and food price volatility. ActionAid’s Neil Watkins commented that, “With food prices swinging wildly and the planet burning, this was the moment for bold proposals from the G-20. Instead, on food security and climate change, the G-20 turned in last year’s homework, content to reaffirm old plans and commission more studies.” Others echoed these concerns, damning with faint praise the mild proposals to exchange information and support agricultural innovation, as well as criticizing the narrow focus on increasing productivity.
The problem is not only that the proposals are so lacking in ambition, but that the G-20 is evolving from an informal crisis-management confab to a rigid and undemocratic structure that serves to lock in policy changes in other multilateral forums. The minor mention of emergency reserves means that efforts by the World Food Programme or the FAO to expand beyond limited national reserves will be stymied, and the G-20’s heavy reliance on the "Business 20" (B-20) for policy guidance will likely mean that critical approaches to regulate public-private partnerships will remain off the table. G-20 recommendations effectively limit input by the other 173 U.N. member countries in these big decisions, to say nothing of the lack of channels for civil society engagement.
When the Heads of State of the G-20 countries meet in Los Cabos, Mexico on June 18–19, they will have plenty to discuss—not least, the fragile global economy and the instability of international finance. Food security is on their agenda as well. Yet after the intense focus on agriculture and food security under the leadership of France, both ahead of and during its time as host of the G-20 in 2011, this year’s efforts are low-key.
The host government, Mexico, is preoccupied with national elections in July. The President chose to advance the Heads of State summit to mid-June, ahead of the election, rather than wait for later in the year, when G-20 summits are more normally held. The change of program has left the different working groups without much time to do their work. Mexico also chose a much narrower set of issues for the Agricultural Ministers’ contribution this year: agricultural productivity growth, with a linked focus on small family farms.
From north to south, Mexican farmers are facing some of the most severe climate instability they’ve ever confronted. The northern states are suffering from what the Mexican government has called the worst drought the country has ever experienced; rain just won’t fall, and the crops that have been planted have dried up. In the south, they’ve had year after year of devastating floods, the result of which has been devastating topsoil loss on the uniformly hilly terrain.
Elias Ventura, a small-holder corn farmer in the state of Oaxaca, told me about the hopelessness of this situation when we sat next to each other yesterday at the seminar IATP is co-hosting this week in Mexico City, “New Paradigms and Public Policies for Agriculture and Global Food Systems,” in advance of next week’s G-20 meeting in Los Cabos, Mexico. He said that he’s had either too much rain, or not enough, and that getting a good harvest under the unpredictable new weather extremes (that he said are the result of climate change) seemed like an impossibility. I asked him if the Mexican government provided any support when his crops failed and he gave me a resolute “No.” Not only would he be without the income that the crop would provide, but his community would have to adjust to a sharp decrease in food availability. This challenge Mexican farmers and rural communities face in the wake of climate change stands in stark contrast to the risk-management program the U.S. Senate has proposed for the 2012 Farm Bill, which would guarantee up to 90 percent of farmers’ revenue if crops fail or prices fall, but there are some similarities.
IATP’s Shiney Varghese is in Rio participating in the Rio+20 Earth Summit.
Today, as we go into the last day of the official negotiations on the outcome document referred to as the “Future We Want,” well over half the document still remains bracketed. It is clear that the current world leadership is not able to deliver us a consensus document, let alone the future we want. It is still possible that the Brazilian government, as the host of this once in a generation event, might step forward and submit an entirely fresh document fashioned out of thin air, for the world leaders to sign, and save their face. Unfortunatley, it's a certainty, like the 2010 Cancún Climate Agreement brokered by the Mexican government, that this document will be watered down to the least common denominator issues.
So, what are the contentious issues blocking agreement? The primary disagreements appear to be around the Rio Principles, which the G-77 and allies insist on putting back in the text, and others, such as the U.S. government, do not want to be included.
Another seriously contested topic is on the so-called "green economy." Developing countries see sustainable consumption and production as central to any discussion on green economy, while the U.S. does not. The U.S. and several EU countries see ecosystems services (placing a market value on nature) as key to the green economy, while the G-77 and allies would prefer not to have it included at all, preferring a reference to ecosystem protection.
Thus, yesterday in the second working group on the green economy, a frustrated G-77 refused to continue negotiations until there was more clarity on implementation mechanisms.