Fair trade or free trade? Let your voice be heard on Minnesota’s future!
The Obama Administration is negotiating two new mega trade deals (one with Pacific Rim countries, another with Europe) entirely in secret, with the goal of further expanding the NAFTA-model of free trade. These trade agreements could have major impacts on Minnesota's farmers, workers, small business owners and rural communities. They could limit Minnesota’s ability to support local food and energy systems and grow local businesses. In order to stay up to speed, Minnesota has set up a new Trade Policy Advisory Council (TPAC) to advise the state legislature and Governor.
TPAC wants to hear from Minnesotans: What concerns do you have about free trade? What role could TPAC play in the future? Now is your opportunity to have a say in our future trade policy.Complete the survey and let them know future trade negotiations should be public, not secret. Help ensure the voices of all Minnesotans are heard in the development of trade agreements and that they protect local control and our quality of life. The free trade model has failed for Minnesota and we need a new approach to trade. Help ensure the voices of all Minnesotans are heard before trade agreements are completed, and that they protect local control, our natural resources and our quality of life.
Improving food security around the world is much more complicated than increasing grain production.
In 1999, IATP released a ground-breaking report called Feeding the World that debunked the oft-claimed argument that increased U.S. grain exports decrease global hunger. In reality, the report revealed, grain exports went overwhelmingly to wealthy countries, and almost not at all to the nations struggling most with malnourishment.
Today we've released an update of that report that takes a fresh look at the myths and facts around the notion of feeding the world. We wanted to know how things have changed in the twelve years since the original Feeding the World was published, and specifically, if the increase in U.S. grain exports we've seen over the last decade have made a dent in alleviating global hunger.
The short answer is no. U.S. grain exports still go overwhelmingly to wealthy countries. But at the same time, the story has gotten more complicated. One of the biggest changes since 1999 has been the emergence of China as a major grain importer—they are now the primary destination for most U.S. soybean exports. The Chinese government has made a very strategic decision to build up a hog industry based largely on imported soybeans (for more details, see the recent IATP report, Feeding China's Pigs. Some may argue that this has had a postive impact on Chinese food security, but in fact it has contributed to the demise of small- and mid-scale hog producers and leaves the country vulnerable when the cost of imported soybeans increases and in cases of crop loss and shortages.
On the whole, the connection between increased U.S. grain exports and decreased global hunger is just as dubious today as it was in 1999. Unfortunately, "feeding the world" is still used as an argument to promote everything from pesticides to genetically engineered crops to wasteful and ecologically harmful expansions of Mississippi River locks and dams.
Improving food security around the world is much more complicated than simply increasing grain production. We won't see sustainable decreases in hunger until we address the root causes of poverty and inequality. Creating programs and policies that help small- and mid-sized farmers here in the U.S. and around the world establish and maintain diverse, resilient farms where they can earn living wages and provide food for local markets is a great place to start.
IATP joined more than 100 civil society organizations in calling for countries to reject efforts to place agricultural soils within a carbon market.
As the global climate talks began this week in Durban, South Africa, IATP joined more than 100 civil society organizations in calling for countries to reject efforts to place agricultural soils within a carbon market. In Durban, negotiators will consider whether to approve a separate agriculture and climate work plan. Such a program “would lead to agricultural soils and agroecological practices being turned into commodities to be sold on carbon markets, or used as sinks to enable industrialized countries to continue to avoid reducing emissions,” the groups wrote in a letter to negotiators. Instead, the groups called for developed countries to fulfill their commitments for climate finance with direct annual contributions to the U.N.’s Adaptation Fund. You can read the full letter and the press release.
A big question in Durban is whether countries will build on the Kyoto Protocol and its series of binding commitments for greenhouse gas reductions, or replace Kyoto with a system of voluntary pledges pushed by the United States. IATP and eight civil society groups analyze this question in a new fact sheet titled: At Stake in Durban: A Climate Deal for the 1% or the 99%?
IATP’s Karen Hansen-Kuhn, Steve Suppan and Doreen Stabinsky will be reporting on the climate change negotiations in Durban. Stay tuned.
Bread is in high demand after it arrives at a bakery in Mozambique, where people have rioted over the high price of bread and other staple foods.
FAO produces an excellent state of the world's agriculture twice a year called Food Outlook (in all 6 U.N. languages). The latest, just out last week, includes the following startling fact: "This year’s global food import bill is expected to approach $1.3 trillion USD, with the cost of food purchases for the Least Developed Countries (LDCs) soaring by over a third from last year."
The LDCs are the countries least able to pay these costs, of course. According to the FAO paper (available at the WTO website), this increase is not an increase in the volume of purchases, but almost all in the higher prices LDCs are paying. While prices have started to come down recently, these changes are not yet reflected in the import bills paid. The price increases are more marked because the U.S. dollar, the currency used in most international commodity transactions, has lost value over the year. The bulk of the cost in the LDC bill is in grains, although in the global total, it is animal protein (including fish) that is the biggest item.
It's a fact that should give everyone pause. It was a topic at last week's meeting of the WTO's Committee on Agriculture. The World Bank presented a paper that held countries' trade-distorting practices responsible for soaring prices. Argentina, predictably, took umbrage: it insists it is fully entitled to tax its exports (pity it does not extend the same courtesy to importers who wish to tax imports to support local production). If only it were that simple.
According to the WTO's account of the meeting, Egypt presented a proposal on behalf of Net Food Importing Developing Countries, the Arab Group and the African Group. The proposal would ask the Ministers who come to the December WTO Ministerial Conference to recognize that ensuring food security for their populations is governments’ first priority. The proposal asks the Ministerial Conference to direct the General Council to set up a comprehensive work program for least developed and net food-importing developing countries, to:
ensure these countries have access to adequate supplies of basic foodstuffs
consider new rules to exempt them from other WTO members’ export restrictions, particularly major exporters
help these countries have access to trade finance, e.g., through a revolving fund offering concessional terms
No decision was taken on the proposal. It remains to be seen if it will make it into the final declaration from the Ministerial Conference.
Whether or not it succeeds, it is surely long past time hunger got serious attention from the WTO and elsewhere. The politics of food do not readily accommodate the typical economist's modeling exercise. The revolutions that shook the Middle East this year are potent examples of this. Perhaps Argentina's blatant hypocrisy is, too.
Not that the WTO can do much—it has not the mandate nor the remit. But its rules are a problem. They do not contribute either the confidence or the flexibility required to ensure trade supports food security objectives. Devised to support the export interests of a handful of economically dominant countries, the Uruguay Round rules need urgent reform. The sooner the Doha Round is buried and the WTO gets on with being the permanent trade negotiating forum it was created to be, the sooner governments can get serious about correcting the imbalances of the Uruguay Round Agreements. Sixteen years on, it won't be too soon.
The latest Food and Community Fellows Digest brings together different perspectives of the many and varied ways culture and food interact. In his introduction, Editor Mark Muller writes:
Each fellow has provided their own perspective on the influence of culture on food. Culture has often been perceived as a barrier to better eating and best to be ignored. It’s more appropriate to consider culture—when respected and embraced—as a powerful driver for just and healthy foods. Below are brief stories of people doing just that. Enjoy!
Used under creative commons license from Paul Lowry.
Jon Corzine, former CEO of MF Global.
The fallout from the collapse of MF Global continues to reverberate around farm country. The firm’s demise is yet another painful case of how Wall Street’s recklessness is overwhelming under-resourced regulators and hurting people around the country. The response from Congress? Incredibly, an appropriations bill agreed by the Senate and House this week would slash the Obama Administration’s proposal for funding the nation’s commodity market regulator by a third.
MF Global, led by former CEO of Goldman Sachs and U.S. Senator Jon Corzine, gambled big on European sovereign debt and lost. The 230-year-old company is also a major commodity futures trader—acting as a clearing broker for clients that included, among many others, farmers and grain elevators. A broker like MF Global is required to keep their own investments and trades completely separate from client accounts, this ensures that clients are protected from losses sustained by the firm. But when MF Global declared bankruptcy, there was more than $600 million missing from client accounts. The Chicago Mercantile Exchange (CME) froze all of the companies’ assets and now many are having trouble getting all of their money back.
MF Global’s bankruptcy had an immediate impact on commodity futures markets (which include agriculture, energy and metals), slowing down the volume of trade, increasing volatility and roiling agriculture markets around the world, as far as Australia.
Some who didn’t even hold accounts with MF Global have been affected. Senator Al Franken wrote in a letter to regulators that Minnesota grain elevators, which had futures trading accounts with other firms that were tied to MF Global, have had their accounts frozen. “Unlike large Wall Street banks, elevators are not sophisticated financial actors and normally do not carry large cash reserves. A large loss of equity for grain elevators would have cascading effects on rural Minnesota’s economy, affecting everyone from large cooperatives to small farmers,” wrote Franken.
Bob Zelenka of the Minnesota Grain and Feed told the Pioneer Press that “it’s a limited number of (Minnesota) elevators that are affected, but the amount of money at stake is pretty large.”
Rural bankers were furious, according to a DTN report from the Agricultural Bankers Conference last week. “Segregated is supposed to mean segregated. Why put more fear into an already volatile market?” said Joe Kessie, of Lake City Bank in Indiana.
The Dodd-Frank bill passed last year was to have launched a set of tough new rules to regulate commodity futures markets, among other provisions. But according to DTN, MF Global was one of the Wall Street companies that has aggressively lobbied against proposed Commodity Futures Trading Commission (CFTC) rules to limit the type of investments companies can make involving segregated funds. The CFTC has delayed issuing the rules under pressure from Wall Street.
CFTC Commissioner Bart Chilton called MF Global the poster child for greater regulation. A Reuters report found that MF Global has drawn more sanctions from the CFTC than any of its industry peers over the last decade—repeatedly for “risk supervision failures.”
But the CFTC’s capacity to fully enforce not only current law, but also the tougher rules being developed through implementing Dodd-Frank, is in doubt. A Congressional conference committee cut the Obama Administration’s proposal for CFTC funding by nearly $100 million. A recent blog by the watchdog group Better Markets says it all: “not funding the CFTC is like taking the police off the streets in a high-crime area, which is what Wall Street is. Risky trading in dark markets is highly profitable to Wall Street and very expensive for every other person in America.”
According to IATP analysis of project cost and benefit estimates, the carbon payments are negligible in the Kenya Agricultural Soil Carbon Project: at most a little over $1 per farmer per year for 20 years.
The Africa Biodiversity Network, ActionAid Kenya, the Pan-African Climate Justice Alliance and IATP held a workshop in Thika, Kenya in late October to discuss what is at stake for food producers and African agriculture as African governments head to the global climate talks in Durban in a few weeks to decide whether to launch an agriculture work program. Representatives of 55 civil society organizations including farmers organizations such as the Network of Ecofarming in Africa (NECOFA), the East African Farmers Federation, the NGOMA campaign (a food security campaign of smallholder maize and dairy farmers), and community- and faith-based development organizations such as the Anglican Church of Kenya-Western Region Christian Community Services, came together to discuss the politics of agriculture within the climate talks, the notions of “climate-smart agriculture” and what soil carbon offsets could mean for Kenyan agriculture and its food producers.
The World Bank has pressed African agriculture ministers to support a mitigation-focused approach to agriculture in the climate talks whereby carbon trading would deliver financing for agriculture projects that would sequester soil carbon and at the same time deliver adaptation benefits. The World Bank BioCarbon Fund-supported Kenya Agricultural Carbon Project is being showcased as the first-ever soil carbon project in Africa that will deliver “triple wins” for farmers. The project is likely to be a major highlight in the African Pavilion at COP 17. In September, African agriculture ministers issued a communiqué to “establish an agriculture programme of work that covers adaptation and mitigation” and to scale up technologies for “climate-smart agriculture.” However, the agriculture discussions remain deadlocked at the UNFCCC because of sensitivities around agriculture trade protectionism and the fact that it is being discussed under a legal framework that aims at reducing or removing agriculture greenhouse gases from the atmosphere (read: mitigation) in specific sectors rather than focusing on adaptation.
At the workshop, Esther Magambo, Coordinator of the Ministry of Agriculture’s Climate Change Unit, demystified the concept of “climate smart agriculture” (CSA) by stating that “it is nothing new” but that that the concept brings out the “hidden value” in sustainable agriculture land management systems and “that is carbon.” Currently, Price Waterhouse Cooper is being contracted in Kenya to undertake a study on Kenyan agriculture’s potential for carbon markets under the banner of CSA, while the Bank is helping the Kenyan government develop a framework for climate smart agriculture and the development of Nationally Appropriate Mitigation Action (NAMAs) plans.
PACJA briefed participants on the evolution of the climate talks and the engagement of African governments, while ABN discussed the impacts that various climate schemes have had on African agriculture and pressures on land. These included the conversion of large tracts of food producing land to jatropha or palm oil plantations for biofuels in countries such as Tanzania, Uganda, Ethiopia and Ghana. For instance, a failed jatropha project by Sun Biofuels left hundreds of Tanzanian people landless and jobless.
IATP continued the discussion on the politics of agriculture in the climate talks, and elaborated on the mechanics of the carbon market, and the role of carbon traders, speculators, project developers and other carbon consultants. We also demystified the potential for trading soil carbon on either regulatory or voluntary markets, including the fact that soil carbon credits were as low as ten cents on the Chicago Climate Exchange before it collapsed at the end of 2009. The participants learned that even REDD credits are a miniscule fraction of the voluntary market, let alone soil carbon credits. And linkages were made between food price volatility and the volatility in financial markets due to derivatives trading. Many participants were surprised to learn that carbon was a commodity traded like maize in trading platforms.
IATP also shared its findings on actual carbon payments to farmers in the Kenya Agricultural Carbon Project—which are a maximum of $1 per farmer per year over the project’s lifetime given a carbon price of $4 per ton. ActionAid Kenya also presented its findings from its studies on soil carbon markets and the impact on small producers. ActionAid’s s estimates the carbon payments for the Kenya project to be as low as 25 U.S. cents a farmer. It presented six reasons why soil carbon trading will not work for small producers.
The analysis that farmers won’t benefit significantly from carbon payments was corroborated in the afternoon by Magambo and Vi-agroforesty. Magambo was questioned as to why the government should endorse the carbon trading approach when farmers do not benefit from carbon payments. Magambo responded that the money to do extension comes from carbon credits, but that payments to farmers are “not much at all.” However, such projects should bring adaptation benefits. She added, “The icing on the cake will allow (farmers) to have a grading shed or improve part of a road they are using.”
Vi-agroforestry, the project implementor of the Kenya Agricultural Carbon Project, also presented on the project. The representative said that the math on carbon payments is negative when it comes to carbon revenue, but that the project enables co-benefits. He stressed the idea of using mitigation as way to fund adaptation. He added that small organizations cannot undertake such projects on their own. In Vi-agroforestry’s case, which is a large Swedish development organization that has been working in the region for over 25 years, the infrastructure was already in place with regards to extension. The World Bank provided all the support and expertise for the soil carbon methodology development and measurement, reporting and verification (MRV). In most instances, the organization setting up the carbon finance project including baselines and the project design document, MRV, must pay, up front, all these costs and/or pay back the financer for costs upon carbon payments. In this instance, Vi-agroforestry negotiated with the World Bank to not have to pay back the pre-financing costs.
One participant challenged the notion that mitigation and adaptation are the same thing. She said that this creates confusion and that in reality these concepts are two very different things for African farmers.
In responding to questions and challenges, Magambo admitted that the only place agriculture was being dealt with in the climate talks was under mitigation, but that if governments take care of their concerns, then adaptation could also be included.
Participants agreed that Kenyan organizations needed to work together to raise awareness of these issues and explain to farmers the reality regarding carbon markets. Many also expressed concerns that high expectations were being raised to farmers that soil carbon schemes deliver payments while in actuality they do not. There is a danger that farmers will abandon sound agroecological practices if the revenues they were expecting are not delivered. This message captures the urgent need to identify alternative forms of climate financing within the global climate talks that predictably supports farmers for agroecological practices that increase adaptation.
The tests focused on popular Thanksgiving canned goods—green beans, cream of mushroom soup, turkey gravy, creamed corn, cranberry sauce, pumpkin, and evaporated milk— and showed that single servings of almost half of the products tested had levels of BPA comparable to those linked to adverse health effects in the lab.
Levels of BPA were highly variable throughout the samples. For example, the sample of Del Monte Fresh Cut Sweet Corn, Cream Style purchased in Minnesota contained 221 parts per billion (ppb) while the same product purchased in California only contained 4 ppb. This variability among cans of the same product, as the report points out, “means […] consumers have no way of knowing how much BPA is in the canned goods they’re buying and consuming.”
The products tested included four cans, each purchased in a different state (including California, Massachusetts, Minnesota and New York), of:
Campbell’s Cream of Mushroom Soup
Campbell’s Turkey Gravy
Carnation Evaporated Milk (Nestlé)
Del Monte Fresh Cut Sweet Corn, Cream Style
Green Giant Cut Green Beans (General Mills)
Libby’s Pumpkin (Nestlé)
Ocean Spray Jellied Cranberry Sauce
If this list is looking like your Thanksgiving shopping list, don’t fret, the Breast Cancer Fund has prepared a list of can-free recipes and inexpensive replacements. Find them, and the full report, at www.breastcancerfund.org/thanksgiving.
Twenty years after the original Earth Summit, leaders will meet again in Rio de Janeiro to discuss the environmental limits to development.
Over the last month, U.N. agencies, Member States and civil society groups have been busy: they made well over 600 contributions toward Rio+20, the next United Nations Conference on Sustainable Development (U.N. CSD), to be held in Rio de Janeiro in June 2012. The inputs submitted by the stakeholders will be assembled into a compilation document by the United Nations Department of Economic and Social Affairs (UNDESA), where a Rio+20 Dedicated Secretariat has been established to support the U.N. CSD bureau in steering the preparatory process leading up to Rio+20. The compilation document will form the basis for developing the draft that will be negotiated at Rio+20.
As I said in an earlier blog, Rio+20 will mark the 20th anniversary of the first Earth Summit, held in the same city where heads of states came together to address what was then seen as the priority issue: environmental limits to development. If anything the situation is much worse now.
IATP’s contribution begins with a look back, “Twenty years after the Rio Earth Summit, the planet is in a deeper environmental, energy and financial crisis. The period has also seen increasing political and social crisis in many regions. Several leaders have recognized that ‘business as usual is not an option.’ We could not agree more. [..]”
With its focus on the green economy, Rio+20 attempts to address one of the negative consequences of the development path we have followed: environmental degradation. As a market-based mechanism that helps address issues related to environmental crisis, it is believed that the “green economy” will help the world achieve sustainability.
In the submission, we argue that this assumption ignores the role of global capital and finance. A green economy divorced from social, political and financial concerns will not help address the multiple crises the world faces today. The decisions made in Rio will help guide global and national governance policies that determine whether we are able to bring about the transformational change that we need.
The question before us remains: Do we want to protect a world where some can live in comfort while the rest perish or languish in poverty, or do we want to move towards a just world where everyone lives within earth’s limits? The Report of U.N. Secretary General to the second Preparatory Committee meeting towards Rio+20 helpfully notes that, the task at hand is “of fundamentally shifting consumption and production patterns onto a more sustainable path.”
To help achieve the shift toward overall sustainability, with equal attention to all three pillars of sustainable development (social, economic and environmental), the green economy has to be focused on more than what it currently focuses on: simply environmental sustainability. Such a shift calls for paying close attention to the differing socioeconomic realities of the developing world, to the specific needs of the vulnerable communities of global south—especially its women. This will determine whether the green economy will become yet another means for satisfying the greed of global capital, or help meet the needs of communities and countries in need.
Gandhi’s words, to his secretary Pyarelal (1947) that, “Earth provides enough to satisfy every man’s need, but not for every man’s greed” may be as relevant today as it was half a century ago amd could help guide the Rio negotiations.
Led by the budget-slashing Super Committee, most eyes in Washington are focused on how to cut government programs. Right now, the Agriculture Committee Chairs are in the late stages of a secret negotiation on how much farm and food programs will be cut. With the rising budget deficit, what choice to we have? So, the Beltway story goes.
But a new animated movie released this week tells a different story. The Story of Broke, from award-winning Internet filmmaker Annie Leonard, makes the case that government does have enough money to invest in a sustainable and fair economy. “It turns out this whole ‘broke’ story hides a much bigger story—a story of some really dumb choices being made for us, but that actually work against us,” says Leonard.
IATP served as a partner organization for the Story of Broke. Check it out below:
The reformed Committee on Food Security includes the participation of 11 constituency groups, including farmers, fisherfolk, women and NGOs, who coordinate their efforts to influence global food policies.
Since the first food crisis erupted in 2008, there have been a number of debates at the multilateral level about why our food system is failing and what needs to change. One important outcome is that a broader range of groups are weighing in on the issue, and finding the right forums to do so. The Committee on Food Security (CFS) brings together the Food and Agriculture Organization (FAO), the World Food Program (WFP) and the International Fund for Agricultural Development (IFAD)—the three leading U.N. food agencies—along with donor governments and agencies, and creates a new space for civil society input. The reformed CFS includes the participation of 11 constituency groups, including farmers, fisherfolk, women and NGOs, who coordinate their efforts to influence global food policies.
Such a participatory process can be messy, but it can also yield innovative solutions and new agreements on how to deal with such issues as food price volatility and land grabs. IATP’s Sophia Murphy attended the latest meeting of the CFS meeting in Rome last month. In a new commentary, she discusses what emerged from those discussions, and how the narrower agreements reached by the G-20 may be undermining those accords.
Think Forward is a blog written by staff of the Institute for Agriculture and Trade Policy covering sustainability as it intersects with food, rural development, international trade, the environment and public health.