Posted July 28, 2011 by Julia Olmstead
If you read our blog regularly, you know that IATP took a group of farmers, ethanol producers, and environmental advocates to Brazil in March to get an on-the-ground look at the environmental impacts of ethanol production.
This week, Ethanol Producer magazine published "Seeking Common Ground", a series of short interviews with three participants on the trip -- Nathanael Greene, from the Natural Resources Defense Council; Bill Lee, CEO of Frontline Bioenergy; and Joe Ludowese, a farmer and ethanol cooperative board member from Windom, MN.
As was the case in Brazil, these guys aren't afraid to call it like they see it. The discussion is provocative, even surprising at times. But don't take our word for it, read it here.
Posted July 26, 2011 by Ben Lilliston
Advancements in science sometimes boggle the mind. Take nanotechnology, for example. Researchers can now manipulate material at the atomic level to add various properties to new foods, plastics or consumer products. They can make products lighter, softer, or better able to retain moisture. There are now an estimated 1,300 products on the market that use Engineered Nanomaterials (ENMs).
Just as boggling as the scientific wonders of nanotechnology is the lack of regulation for this technology. The Environmental Protection Agency, like other U.S. regulatory agencies, has no regulations to ensure the health and safety of new nanotechnology products. For more, see our new report, Racing Ahead: U.S. Agri-Nanotechnology in the Absence of Regulation.
In agriculture, one of the major uses of nanotechnology is in pesticides. The EPA believes that there are already unapproved and unregulated pesticides in the marketplace that contain the bio-cide nanosilver. Experimental studies with laboratory rats indicate that inhaled ENMs can have “adverse lung effects.” Experiments with rainbow trout demonstrate that ENMs absorbed through the skin or consumed orally can move through different organs with toxic effects and can contribute to decreased reproduction.
Now, the EPA has taken the first step toward regulation. It is requesting comments until August 15, 2011 on its draft voluntary guidance for gathering data on pesticides that incorporate nanoscale materials. This data is essential to determining human health or environmental risks. Submit a comment now to the EPA and help protect human health and environmental safety.
Posted July 22, 2011 by Sophia Murphy
The U.N. Committee on Food Security is the foremost international and intergovernmental platform trying to address global food security and nutrition. To aid in this work, they created a High-level Panel of Experts (HLPE) on high food prices and food price volatility. I was fortunate enough to serve on a project team of the HLPE panel and our report was released this week.
Considering the HLPE was first constituted a year ago, got its first mandate from the October 2010 CFS meeting, met in December to decide how to proceed, and did not appoint a project team until March, the delivery of a report has been very quick. As one of the four members of the project team, working under the leadership of Benoit Daviron, of CIRAD in France, with Niama Nango Dembele with Michigan State University based in Bamako, Mali and Shahidur Rashid with the International Food Policy Research Institute (IFPRI) in D.C., I can confirm that it was, shall we say, and intensive effort.
The HLPE report explicitly considered high prices and price volatility, two issues that are often conflated. Though they are clearly linked, each raises a distinct set of issues, and they require a different set of policy responses. The report set up a framework with three scenarios of what is causing volatility: short-term (agriculture prices are always unstable because supply is inherently unpredictable and demand is relatively fixed), medium (cycles of investment cause surpluses, low prices and a loss of interest in the sector until surpluses disappear, prices spike, and investors get interested again); and, long-term (we are entering a period in which scarcity of natural resources coupled with large and growing demand will make much higher levels of price volatility the "new normal" for ag).
The report looks at international issues and domestic price volatility, and some of the evidence around the complicated mechanisms that link the two: price transmission. That is, to what extent do domestic prices in local markets reflect prices in international markets (typically set on commodity exchanges or at some of the major ports, such as New Orleans). This relationship is very important, but complicated.
My contribution was focused on the international side, from which a few overall comments emerge. First, there is genuine debate still on the role of excessive speculation; of course, lots of parties with a financial interest in blocking regulation are weighing in. But there are also substantive differences on how to frame the questions, and what to make of the evidence, as to whether the vastly increased activity on commodity futures markets (using new investment tools, as well) is a big problem, or just a new system that is taking time to settle in to place. Our report asked: How is all the new activity helping food security? And could find clear, positive contribution—speculation plays a part in the functioning of markets, but there is no added benefit from the deregulated system in place today, from a public interest perspective. The down-sides, however, are potentially enormous. So the report recommends a precautionary approach and significantly tighter regulation.
Second, there really is not any serious debate about either government support for industrial biofuel production or the arbitrary use of export restraints by the big commodity exporters: both directly fed into increased price volatility in 2008, and both are still real problems, creating uncertainty in markets where certainty is the objective (because people who are unsure whether they can afford food—let alone those who know they cannot—are obviously not food secure). But both are politically intractable and the countries that can afford to be more responsible refuse to accept new disciplines in either area.
Third, there is a glaring gap in multilateral governance around the use of food stocks. Without stocks, prices are inherently more volatile. Yet the U.S. (and some other countries) refusal to allow even a meaningful discussion of this subject in international policy arenas has blocked progress on this critically important question. Distracting talk of the history of buffer stocks is impeding a practical discussion of how to use existing stocks (most countries have some); how to use newer tools to make stocks more efficient; and how stocks can smooth supply as a short-term, but practical, response when trade fails. Ironically, it is very difficult to see how those countries—like the U.S., who believe trade is the answer to food security—will persuade others to come back to international markets if they refuse to accept the need for physical reserves, and not just promises of money to help poorer countries buy food when markets fail.
The report is one of three items that will inform the CFS debate on price volatility when it meets in October in Rome. The other two elements are the G-20 process (including the International Organization report written for the G-20 on price volatility and the G-20 Agricultural Ministers' Communiqé—see comments on that effort here), and a series of regional seminars on price volatility organized earlier this year by the Food and Agriculture Organization.
I hope you will read the report in full—there is much there, and it has been a real pleasure to work on. Our intention was to provide as open and honest an account of the situation as we could. The report will not please everyone, but I hope the HLPE will find it serves its intended purpose: to provide expert and non-partisan advice on an issue of critical importance to food security.
Posted July 21, 2011 by Julia Olmstead
What happens when you take a group of thoughtful people with quite radically different perspectives on agriculture and land use to Brazil? Really interesting conversations, for one.
In March, IATP took a group of farmers, researchers and environmental advocates to Mato Grosso, Brazil—the heart of that country's agricultural explosion. We were there to learn about Brazilian agriculture, and specifically, to investigate the effects of U.S. biofuel production on Brazil's land use—something known as "indirect land use change" (ILUC). Over about the last three years, ILUC has become a point of extreme contention between biofuel proponents and environmental advocates. This trip was an attempt to begin to bridge some of that contention. (Read our blog reports from the trip.)
During the course of the trip, we sat down with each participant to ask them about their perspectives on agriculture, Brazil and ILUC. You can listen to the interviews on iatp.org. There's something to learn from each interview, and we hope you enjoy them. You can also find preliminary information about our upcoming ILUC conference in Minnesota. We'll be posting more details, and a link to registration, very soon.
(Thanks to journalist Jacob Fenston, seen here with his microphone, for putting together these interviews.)
Posted July 20, 2011 by Mindi Schneider
It’s kind of like the running of the bulls in Spain, but much more exciting. Central authorities in China are gearing up to open the gate on the strategic pork reserve. Considering that in 2010, Chinese people ate, on average, 4.2 million metric tons of pork each and every month, the 200,000 metric tons of meat from the reserve doesn’t quite amount to a stampede. Still, the hope is that this flood of flesh will help reduce soaring pork prices, and cool the rampant inflation that’s causing many households in China to go without while worrying authorities determined to head off social unrest at the pass. Will it work? Doubtful. But that doesn’t mean that food reserves like this are any less of a good idea.
In the meantime, it’s worth discussing why pork prices are rising to such a degree, and what these increases mean for Chinese farmers.
Recall for a moment the so-called “world food price crisis” from 2007-08. Many analysts at that time chalked the rapid rise in food price up to “a perfect storm” of drought- and weather-induced crop shortfalls, increased demand for meat products in Asia, and declining grain stocks worldwide. Others added to this mix the impacts associated with diverting cropland to biofuel production, commodity speculation, legacies of agricultural trade liberalization in poor countries, and the political and economic power that a handful of transnational agribusiness firms wield in controlling the particularities of the global food system (working in conjunction with the WTO, various state governments, banks, the IMF, etc.). Let’s not forget that those agribusiness giants raked in RECORD PROFITS during 2007-08—the same time the number of hungry in the world surpassed one billion. The food crisis, which never went away, is a systemic crisis inherent in the way that food and agriculture are organized, legislated, controlled and experienced—and some of these mechanisms are at play in the “pork price crisis” happening in China today.
Food price is a complex beast, described only partially by basic economic theory. Yes, Chinese people on average are eating more pork than at any other time in the country’s history, and yes, national annual consumption accounts for half of all the pork in the world. These trends are labeled as “demand.” At the same time, the pork industry in China is a new frontier for both domestic and international investors, increasing the supply of pigs and pork, and spurring the development of an increasingly industrialized hog sector. Vertically integrated pork packers and retailers are bringing meat to China’s urban middle- and upper-class consumers in quantities that make the strategic pork reserve seem ridiculous. Increased supply, coupled with the hangover from decades of meat rationing and unfulfilled pork dreams certainly play important roles in the cultural drive for more regular pork dinners. But it isn’t the case that high pork prices are solely the result of supply not keeping up with demand, even if we factor in production shortfalls, rising costs of labor, urbanization, and overall rising production and living costs.
A quick and dirty way of looking at some of the other factors at play in this pork price crisis is to look at rising feed costs, and how they are experienced by different kinds of farmers in China. Regardless of production scale, feed is generally the highest production cost for pig farmers. To analyze rising pork prices, then, we have to also have a basic understanding of the dynamics of feed markets. My recent report, Feeding China’s Pigs, includes a historical look at the co-development of China’s feed and hog industries, and some of the implications of this “joint venture.” What’s most important here is that we begin to think of pork in China today as “corn on the hoof,” (and “soy on the hoof”), so that meat is properly analyzed as a complex commodity, which embodies the costs (economic and otherwise) and processes involved in producing it. Including globally traded grain in the calculus of pork price means that we’re back to the Chicago Board of Trade (CBOT), commodity speculation, powerful grain traders, deforestation, smallholder dispossession, massive greenhouse gas emissions, agribusiness profits, and on and on and on. Pork price and grain price are intimately linked, and are not just a matter of more people in China eating more pork while supplies fall for a number reasons. There’s politics to it all…
My concerns tend to center on how these kinds of issues affect the lives of the world’s most vulnerable populations, who, more often than not, are rural smallholder farmers. What does the pork price crisis look like for smallholders in China? Recent headlines tell us that farmers are doing well, capitalizing on high consumer prices. We heard that in 2007 and 2008 too. But who are these farmers who are making it big while everyone else complains and suffers from inflation?
Consider again rising feed costs, which increase the most important cost of pig production. There are “farmers” who can weather this storm, provided their operation is big enough to take advantage of economies of scale. If they run a vertically integrated firm that has its hands in feed production and animal husbandry at the same time, even better. These big dogs, who are becoming increasingly common and powerful in China, will likely be able to take advantage of high pork prices. They’ll make it. They might even profit handsomely. They’ll be supported by investment, technology, policy and subsidies. If clenbuterol didn’t ruin Shuanghui (Shineway), high feed costs won’t make a dent.
On the other hand, most of the smallholder farmers I met in China in 2010 (and the millions I didn’t meet) won’t be faring so well. Even the smallest “backyard” farmer who raises only two pigs each year struggle to afford feed when the price increases as it has this year. These farmers are already excluded from cashing in on the booming pork market in a number of ways. They’re often far-removed from urban markets and contractors, and they can’t meet changing industry standards for lean pork. As retail standards in China start to look more like those in the US and elsewhere, fatty pork, though it’s preferred by most Chinese people and lends itself to Chinese cooking, is being replaced by pork with a lower fat-to-lean ratio. This kind of meat can only be achieved by raising pigs on grain, or at the very least, by feeding grain at the right point in the production cycle. Smallholders, if they have to feed grain to meet market standards, and if the price of grain increases even a little bit, are left out. The central government has been promoting cooperation among small farmers in an effort to help them realize economies of scale, but even these “specialized household farmers” (who raise pigs exclusively) are challenged by rising feed prices and fluctuations in pork price.
In this context, many smallholders give up raising pigs altogether, which can indeed strain pork supplies (today backyard farmers produce about 27 percent of China’s pigs, specialized household farmers produce 51 percent, and commercial operations 22 percent. These numbers are shifting dramatically as we speak, in the direction of larger-scale operations). The real crisis, however, comes when small farmers—who not incidentally account for about half of China’s population (depending in part on how we count migrant workers)—give up raising pigs for household consumption and for sale, can’t afford to buy pork in the market even infrequently, struggle to buy other high priced foods, and have nothing to eat but greens and a few other vegetables from their half-acre farm plots. This is where the idea of food security moves from being an abstract, state-centered political concept to a real life matter of whether or not households have enough food to eat. As one farmer put it, “The things pigs eat now cost more than what people eat.”
We don’t need to worry about whether or not China can produce enough pork to meet domestic demand (demand understood, of course, as a highly unequal construct). We do need to worry about whether that demand, and the supply of food (and feed) diverted to fulfill it, means that hundreds of millions of people are going to struggle to meet even basic dietary and livelihood needs. Income from family members working in factories and on construction sites in cities can help rural households with their food bills, but this is not a sustainable solution.
I shudder when I read this quote from a Financial Times article:
“With pork prices so high, today all we can afford to eat is this stuff,” she says, gesturing to green weeds growing among the debris in her yard.
 I’m not arguing that feed cost is THE cause of rising pork prices. I don’t think there is a single cause. For me, it’s primarily a structural problem, but looking at the feed industry in relation to the livestock industry is useful way in to thinking about the problem.
Posted July 15, 2011 by Ben Lilliston
America has a long, tragic and violent history of removing American Indians from the land. Remarkably, a host of maddening barriers remain for many Indians seeking access to their land. In December, the Obama Administration announced the $3.4 billion Cobell settlement in an attempt to address “fractionation,” or the division of hundreds of millions acres of communally-owned tribal land across the country, but is the settlement too little too late?
In the July issue of In These Times, IATP intern Alleen Brown reports on the remarkable legal and political obstacles American Indians continue to face in accessing their own land. IATP also has a version of the article on our site.
Posted July 13, 2011 by Dr. Steve Suppan
The Codex Alimentarius Commission is an overlooked international body with representatives of 136 governments, about 100 food industry associations, several intergovernmental organizations, and a smattering of consumer and other nongovernmental organizations. Codex food standards are recognized by the World Trade Organization (WTO) as authoritative, so seemingly small matters of wording in a standard often can have major international trade consequences. The Codex has a duel (and often conflicting) mandate to protect consumer health, as well as to write standards that facilitate international trade.
A standing item of contention on the Codex Committee on Food Labeling (CCFL) for two decades has been whether or not to recommend to the commission the adoption of a labeling standard for foods with genetically modified ingredients. The United States and several other exporting countries of genetically modified organisms (or “foods derived from modern biotechnology” in the Codex terminology) had opposed any labeling of GMOs as “misleading even if true.” The justification for opposition was that even though governmental adoption of any Codex standard is voluntary, the adoption of a GM labeling standard would become an unfair trade barrier. However, at a June 16 meeting, the U.S. Codex Office announced that it would not oppose the adoption of a Codex guidance on the voluntary labeling of GMOs.
On July 5, Consumers International (CI) welcomed the commission’s adoption of a text to allow voluntary labeling of GMO products. IATP likewise congratulates the commission for deciding to allow governments to inform consumers of what they are eating with less fear of WTO-authorized trade retaliation. This is no small victory for consumers. However, The Codex text did not support the mandatory labeling that CI and IATP have sought. (The final labeling text and report of the July 4–9 commission meeting have yet to be posted on the Codex web site.) Governments that choose to label genetically modified commodities or foods with GMOs will be able to justify such labeling as a risk-management tool. For example, consumers who may suffer allergic reactions to GMOs, will now have the opportunity to identify what food or foods may have triggered their reactions. Such identification may aid medical personnel to speed the recovery of food allergy patients and GMO labeling will help enable them to avoid future allergic reactions.
For the implementation of GMO labeling to avoid a WTO trade dispute over an alleged unfair trade barrier, the labeling will have to apply to both imported GMOs and domestically grown or produced GMO food products. Nevertheless, the question arises, why did the U.S. government and the agricultural biotechnology industry it has served for more than two decades decide to allow the voluntary labeling guidance to be adopted?
There are at least three main reasons for the decision to allow adoption of Codex labeling guidance. First, and self-evidently, because the labeling is voluntary and not mandatory, the U.S. government and U.S. companies will not have to adopt the standard. The U.S. government and industry-presumed commercial advantage to not label exports of GMO agricultural products will be maintained.
Secondly, the biotechnology industry continues to set U.S. agricultural trade policy through the revolving door that has remained spinning in the Obama administration. For example, on March 31, Sharon Bomer Lauritsen, vice president for agriculture and food of the Biotechnology Industry Organization, was named to serve as an assistant U.S. Trade Representative in its Office of Agricultural Affairs. She will report to another former biotech industry official, Isi Siddiqui, the chief U.S. agricultural trade negotiator. Governments that adopt Codex voluntary guidance for U.S. GMO exports could find their own export prospects diminished through both tariff and non-tariff trade barriers without the bother and expense of a WTO trade dispute.
Thirdly, and perhaps least obvious, U.S. food import controls continue to be weak, as confirmed by a mid-June report by the Inspector General of the Food and Drug Administration. U.S. importers have little liability to worry about in the event of a food product recall, whether or not GMO, because of the food industry’s and FDA’s weak food recall capacity. Gathering evidence to determine the locus of liability for foodborne illness requires a strong food traceability and recall system. Neither the food industry nor the U.S. Congress has supported paying for such a system.
These reasons and more should not overshadow the victory that consumer organizations have won in gaining for consumers the right to know what they are consuming. But neither should the scope of the victory be over-estimated. The implementation of the Cartagena Protocol on Biosafety and the Food and Agriculture Organization (FAO) Treaty on Plant Genetic Resources for Food and Agriculture have been stymied by U.S. diplomatic efforts on behalf of the biotech industry, industry “seed purity” initiatives and World Bank loan program incentives to adopt GMOs as the platform for a “Second Green Revolution.”
If the adoption of GMO labeling is restricted to European Union member states, which are now under huge pressure from the European Commission to end its “zero tolerance” policy for so-called “low incidence” of GMOs in nominally non-GMO imports, then the victory of the biotech industry will be sweet. Consumers will have to swallow whatever agribusiness serves up in imported commodities and food—labeling, and consumers' right to know, be damned.