Posted June 26, 2009 by
IATP's Steve Suppan is blogging from the U.N. Conference on the World Financial and Economic Crisis in New York.
At a certain point, the big numbers numb you. And at the U.N. summit on the financial crisis and development, the numbers are all big. The estimated total net capital loss from developing countries in the past year ($1 trillion according to the World Bank or $2 trillion according to the U.N. Conference on Trade and Development); the job loss projected by the International Labor organization (40-50 million this year; perhaps 100 million by 2010); the amount of money pledged by the G-20 countries to the International Monetary Fund ($750 billion) for loans to stabilize government finances. And this is to say nothing of the huge numbers that register social devastation to education, health, social welfare and environmental programs, particularly those in developing countries.
But what focuses the mind despite the blizzard of numbers are the consequences of business as usual. In the Civil Society Forum Statement to the conference, there is a firm commitment not to allow intergovernmental institutions and governments to return to business as usual. Rather than allow all global economic planning and governance to be handed down by a few governments, the IMF, the World Bank and the WTO Financial Services Agreement, the civil society organizations at the U.N. summit have proposed a governance role for the United Nations. The Commission of Experts advising the President of the General Assembly have likewise proposed ways to prevent a repeat of the financial deregulation that has triggered the economic crisis and humanitarian crisis we will live in globally for the next few years. In the brutal U.N. negotiating process, in which the G-20 opposed any substantive U.N. economic governance role, little has survived from these proposals except the possibility of discussing them further in a U.N. General Assembly Working Group. According to the Outcome Document to be presented today for formal approval by government delegates, a panel of experts is to advise the General Assembly on next steps.
Between now and mid-September when the General Assembly meets again, there will be hard negotiating about the mandate of the Working Group and whether civil society organizations may advise the panel of experts. This outcome is, of course, a very small victory, but not an insignificant one. Furthermore, IATP believes that within the terms of the outcome document there lies the possibility for the General Assembly to authorize the U.N. Conference on Trade and Development to take a much more active role in proposing ways to prevent the excessive speculation in commodity markets that have devastated trade revenues in commodity export-dependent developing countries. Today, IATP will discuss proposals to reform commodity futures markets with government delegates in a side event organized by the government of Tanzania.
When the General Assembly meets in September, the G-20 will also be meeting in Pittsburgh, Pa.,, to plan a different economic future than what we hope will be discussed in the Working Group. There will likely be more civil society organizations in Pittsburgh protesting the Wall Street bailouts than there will be in the fight for a U.N. Working Group on global economic governance. But that fight could well be more important than naming and shaming the beneficiaries of financial deregulation and their government allies.
Posted June 25, 2009 by
IATP's Steve Suppan is blogging from the U.N. Conference on the World Financial and Economic Crisis in New York.
Yesterday, at the opening plenary, government delegates agreed to adopt an outcome document that is the result of more than four months of intense and sometime bitter negotiations. According to the United Nations, another 100 million persons could lose their jobs by 2010, as a result of an economic crisis triggered by the deregulation of the U.S. financial services industry. Most of these jobs will be lost in countries without unemployment insurance, creating conditions for political instability in dozens of developing countries. This situation led the U.S. Director of National Intelligence Dennis Blair to tell the U.S. Senate committee on intelligence in February that the economic crisis had replaced terrorism as the number one U.S. national security threat.
IATP's President Jim Harkness participated in the initial meeting in October 2008 that launched the preparation of the negotiations process. IATP provided input on regulating commodity price volatility to the Commission of Experts advising the President of the General Assembly on issues to be addressed in the outcome document. IATP also contributed to a U.N. Conference on Trade and Development symposium that was part of the high-level conference (HLC) preparations.
Most of the ideas of the Commission of Experts to provide short-term economic stimulus to developing countries and to enhance the U.N.'s role in global economic governance were cut in the long and sometimes brutal negotiations. The United States and the European Union wish to keep economic governance in the hands of the World Bank and International Monetary Fund, where they have effective veto power over all decisions. The U.S. and EU proposed that the outcome document should only register the impact of the financial crisis on developing countries and welcome the work of the G-20 in proposing policies and promising financial resources for the IMF. The U.S.and EU wanted no commitments to consider the creation of new governance instruments and funding to complement the IMF and World Bank, both of which failed to warn member countries of the dangers of financial industry deregulation and liberalization through the World Trade Organization and free trade agreements.
However, the outcome document provides for the creation of a working group of the General Assembly, advised by a panel of experts "to follow up on issues contained in this outcome document." This diplomatic achievement may seem like a weak solution to the economic crisis that has spread from Wall Street around the world. But many, including the mainstream media, dismissed even the possibility that the United Nations could agree on any terms of a document to establish a new framework for economic governance and to gather resources that would not be provided as loans by the IMF or the World Bank. The outcome document establishes that possibility.
At the first HLC multi-stakeholder dialogue today, IATP was among five non-governmental organizations selected to comment on the HLC outcome document and the opportunities it presented to involve U.N. agencies and civil society organizations in longer term financial institution reform and to implement short-term stimulus packages to prevent an economic breakdown in developing countries. So many government delegates wished to speak that IATP did not have a chance to do so. But Roberto Bissio of Social Watch, a long-time IATP ally, welcomed the outcome document and pointed to opportunities it presented for investing to protect the world's most vulnerable populations. Beverly Kneen of Jubilee South emphasized the need to direct non-debt generating money to developing countries by closing tax evasion loopholes, illegal capital flight, and repudiating illegally contracted debt, rather than allowing an IMF and World Bank-controlled debtors' crisis.
There is much to be done at the conference before the General Assembly formally adopts the outcome document on June 26. IATP will continue to work with groups from around the world to ensure that the challenge of the financial crisis to development, including rural development and food security undermined by deregulated commodity markets speculation, will be met.
Posted June 24, 2009 by
Remember when the cost of a loaf of bread rose rapidly last year due to skyrocketing wheat prices? A new Senate report says excess speculation by financial investors with no connection to actual wheat markets drove up prices for profit. These speculators were aided by lax enforcement from government regulators. The findings by Senate investigators are consistent with what we found in our report last year on the role of commodity speculation in the global food crisis.
Commodity futures markets have traditionally brought together buyers and sellers in a market, like the Chicago Board of Trade (CBOT), to bid, offer and finally settle on a price for the delivery of a certain quantity of a commodity (say, wheat) at an agreed time and place. The contract enables commodity sellers, such as grain elevator operators, to avoid sudden price drops and commodity users or traders to avoid sudden price increases, e.g., due to tight supplies, crops failures or logistical bottlenecks. Both buyers and sellers use futures contracts to “hedge” their price risk.
The report, by the Senate Permanent Subcommittee on Investigations, focused on the disruptive role of commodity index traders who have no connection to the real-world wheat market. Instead, these speculators were interested in buying low, driving up prices, and selling high for a spectacular profit. The Senate report found that commodity index traders increased their holdings from 30,000 wheat contracts in 2004 to 220,000 contracts in 2008. In each year since 2006, these commodity index traders held between 35-50 percent of wheat futures contracts.
What was the effect of all this new outside money entering the wheat market? The gap between prices on the CBOT and actual cash prices paid at grain elevators grew from about 13 cents per bushel in 2005 to $1.53 in 2008—a ten-fold increase. In other words, what was happening on the CBOT had little connection with actual supply and demand.
The Commodity Futures Trade Commission (CFTC) is supposed to prevent excess speculation by restricting traders to no more than 6,500 wheat contracts at a time. But the Senate report found that the CFTC allowed some commodity index traders to hold up to 10,000, 26,000 and even 53,000 contracts at a time.
Let's hope the Senate report spurs action. It makes a number of strong recommendations for reform, including limiting commodity index traders to 6,500 contracts (and potentially decreasing the number to 5,000). House Agriculture Committee Chair Collin Peterson has already introduced legislation to toughen regulations on commodity markets.
The United Nations is holding a summit on the global financial crisis this week in New York. IATP's Steve Suppan is attending and will address attendees today to call for international regulation of commodity exchanges. The chaos caused by big commodity index funds on the Chicago exchange reverberated around the world with higher food and energy prices. Tougher regulations in the U.S. will help global markets, but to ensure that speculators don't simply jump to commodity markets in London or elsewhere with weaker controls, a global approach is needed.
Posted June 22, 2009 by
Earlier this week I had the good fortune of visiting the Organic Valley cooperative in La Farge, Wisc., a tiny town nestled into that state's ridiculously gorgeous Kickapoo Valley. There's a lot to like about Organic Valley: their co-op model has made organic dairy production and organic farming a viable path for more than a thousand farmers, they prioritize sustainability in all that they do, and, well, their chocolate milk just rocks.
But I wasn't there for the milk, I was there to check out their innovative on-farm biodiesel program. Organic Valley biodiesel guru Zach Biermann, along with Jake Wedeberg, have designed a mobile biodiesel press--a trailer that holds everything they need to make biodiesel from oil seeds (or waste grease). They can move the trailer from farm to farm, so farmers who want to grow their own oil seeds (Zach and Jake have been experimenting with camelina and sunflower seeds) can process their own fuel on-farm.
Earlier this year, Organic Valley teamed up with the Sustainable Biodiesel Alliance (of which IATP is on the board of directors) to field test that organization's Baseline Practices for Sustainability, a set of guidelines to ensure sustainable biodiesel.
You can see the biodiesel trailer in action next month (and learn a lot more about sustainability and farming) at the Kickapoo Country Fair, July 25-26. IATP will be hosting a workshop on sustainable biodiesel. Join us! I’ll be there with chocolate milk in hand.
Posted June 19, 2009 by
A recent article in the Guardian newspaper reports that China will enact its first animal welfare law soon. The law appears to be a backlash against the widespread practice of local governments slaughtering dogs en masse in response to outbreaks of rabies, which is widespread in China.
“In the past month alone, authorities in Hanzhong, Shaanxi province, rounded up and killed 22,000 dogs after eight people died of rabies. Pet lovers were also up in arms after authorities in Heihe, Heilongjiang province, announced a cull of every dog in the town after an outbreak.”
The law is being drafted by legal experts in the Chinese Academy of Social Sciences, in consultation with groups such as Britain’s Royal Society for the Prevention of Cruelty to Animals and the International Fund for Animal Welfare.
I find the new law noteworthy for two reasons.
First, for what is left out of the law, which draws a bright line between pets and other animals. The vast majority of domesticated animals in China pull carts and plows, provide wool or get eaten, and there is still no official consideration of how they should be treated. That last category is of special interest, since its numbers have exploded in recent years. Per capita annual meat consumption in China went from 25 kilograms in 1995 to 53 kg in 2008 (This is still only about half of what Americans eat). As demand has grown, the structure of meat production in China has also changed. The happy barnyard pigs and chickens feeding on table scraps are increasingly being replaced by factory-farmed animals, as documented in this report from Brighter Green. Drawing on Chinese and Western sources, the report describes a rapid increase in Concentrated Animal Feeding Operations (CAFOs) in China and the attendant problems, which range from systematic mistreatment of animals to massive increases in pollution from releases of untreated manure into waterways. Is respect for basic farm animal welfare too much to ask of a developing country? Perhaps. Yet, looking at the wide range of social and environmental costs associated with CAFOs documented in the report, I can’t help but think that both animals and people would be better off with a different system.
Despite the fact that farm animal welfare is not yet on the menu, the development of this law certainly shows how far China has come from totalitarian dictatorship, where in 1958 Mao was able to mobilize the entire country to kill sparrows because he thought they competed with humans for food. The kooky man vs. nature ethos is gone, for starters. (The sparrow-killing campaign backfired, of course. Sparrows eat insects, and with bird numbers successfully reduced the locust population exploded, wiping out harvests in the early 1960s.)
Furthermore, the ad hoc and localized nature of the current rabies campaigns is an outcome of the decentralization of governing authority in China during the 1990s, which has hobbled efforts to get coordinated public health responses in the country to any threat short of avian flu. (Local governments hid their SARS data for weeks as that epidemic spread.) And finally, we see in this new legislation the political clout of the new urban middle class. Dogs have been tolerated rather than doted on for most of Chinese history. When I spent time in Chinese villages in the 1980s and 1990s, dogs were regarded by most folks as kickable, garbage-eating burglar alarms. The return of widespread pet dog ownership didn’t really hit its stride until the late 90s, when dogs of all shapes and sizes became a must-own for wealthy city dwellers.
This law--which has no conceivable link to the economic or political agenda of the Chinese Communist Party--is evidence that the economic power of China’s yuppies is increasingly translating into political power.
Posted June 19, 2009 by
Caroline Merrifield is blogging from China about her experiences working on a traditional farm in rural China.
My name is Caroline Merrifield. I'm a rising senior at Harvard concentrating in Social Studies. I'm writing from a small organic CSA on the outskirts of Beijing called "Little Donkey Farm." It was set up on experimental land owned by Renmin University in Beijing. I've spent the past couple of days weeding cabbage and staking cucumbers, preparing, eating, and cleaning up after meals with all the farm interns and managers, and trying de-jet-lag my Chinese vocabulary.
I'm here as part of an exchange of sorts. Last summer, the graduate student who is overseeing Little Donkey Farm, a woman named Shi Yan, came to Minnesota under the auspices of IATP to work on Earthrise Farm, a small organic CSA. I was an IATP intern at the time, and I helped to translate some of her blog entries for the IATP Web site. Now it's my turn to learn about Chinese sustainable and traditional agriculture by working and living on Chinese farms.
I'll be spending a week here at Little Donkey and then I'm off to Hebei Province. I'll be staying with a traditional farm family in a village where students from Renmin University have started an experimental organic farm. I'll add pictures when the internet here is a bit faster. So far, life at Little Donkey has been incredibly interesting - but as it's my turn to clean up, I should sign off for now.
Posted June 18, 2009 by
Few things are as fundamental to good health as healthy food, grown well. And yet the reality of our times is that the easiest, most available, most "affordable" food is typically the least healthful. I'm talking about packaged and heavily processed foods high in calories, additives and saturated fats and low in nutritional value.
Well, the American Medical Association has seized leadership in starting to build a healthier food system by passing new policy this week at its annual meeting, pledging that the organization will support health care systems that model healthy, ecologically sustainable food systems. And the AMA commits itself to support a 2012 Farm Bill that brings us closer to a Healthy Food Bill. To find out more, read the Sustainable Food report from the AMA's Council on Science and Public Health, on which the new policy is based. Additionally, check out the AMA's own press release and comments from Health Care Without Harm, of which IATP is a founding member.
David Wallinga, M.D.
Posted June 18, 2009 by
Stepping into the Riverview Theater earlier this month, I didn't know what to make of the scene. The theater was packed: 700 people had come to a sold-out documentary about food. The film is called Fresh. There had been no paid media advertisements. No prominent reviews in the entertainment press. Aside from a few local media mentions, it was primarily a word-of-mouth affair organized on the fly in just a few weeks, led by Birchwood Cafe, IATP and the Land Stewardship Project.
The film does an outstanding job of portraying the local and sustainable food movement in the U.S. But the energy in the Riverview Theater told just as powerful a story about this exploding movement.
We sat down with the film's director Ana Joanes to discuss why she made Fresh and what she hopes the audience will get out of the film.
Posted June 15, 2009 by
Calculating the carbon footprint of corn-based ethanol (including indirect effects around the world) continues to be a political hot potato that threatens congressional negotiations to address global climate change. Earlier this month, we outlined some of the key issues in this debate between House Agriculture Chair Collin Peterson (D-MN) and Henry Waxman (D-CA), the lead author of the House climate bill.
In the Saturday issue of the Minneapolis Star Tribune, IATP President Jim Harkness, Michael Noble from Fresh Energy and Patrick Moore of Clean Up the River Environment, co-authored a commentary that offers a proposal to break the deadlock.
They write: "Indirect land use change (ILUC) is real, but ILUC calculations need more research and development before they are used in policy. We need to better understand the links between what happens here in the Corn Belt and what happens in the rainforest, and we must figure out how to quantify indirect effects. Combining a commitment to do this research with a commitment to account for these emissions would be a better approach."
Read the full commentary.
Posted June 12, 2009 by
Agriculture is rapidly finding itself at the center of the climate change debate at national and international levels. In the U.S., members of Congress from farm states have threatened to block climate legislation unless agriculture is explicitly included as part of an offset program (including support for chemically intensive no-till practices, Grist's Tom Philpott reports). And this week at the global talks on a new climate pact in Bonn, farming was mentioned for the first time within the negotiating text.
Yesterday in Bonn, IATP co-organized a discussion on the effects of global climate change on agriculture and agriculture's potential to mitigate greenhouse gas emissions. You can view the PowerPoint presentations of Doreen Stabinsky of Greenpeace International, IATP President Jim Harkness and Lim Li Lin of Third World Network. The International Institute for Sustainable Development has a rundown of the discussion as well as photos (scroll down to the bottom).
One of the most complicated questions associated with including agriculture in climate talks is how new rules to reduce greenhouse gas emissions could affect efforts to combat global hunger. As we reported in March, the global climate, food and water crises are interconnected. We cannot effectively address each separately. Or as IATP President Jim Harkness noted in a Reuters story from Bonn, "We ignore these connections at our peril."