Posted December 11, 2014 by Ben Lilliston   

AgricultureFinanceMarketsAgribusiness

Used under creative commons license from 91223108@N02.

The amazingly terrible new spending agreement reached by the House and Senate this week illustrates the heavy price we all pay for a government increasingly influenced by big corporate and financial industry donors.

This backroom deal has been marketed by some in Congress as a “monumental achievement” demonstrating how Washington can get things done. Instead, it’s really a stocking full of early Christmas gifts for corporate interests at the expense of the rest of us. Here are just a few examples relevant to food and agriculture issues:

  • In a loss for the environment and farmers, it cuts $402 million over ten years from the critically important Conservation Stewardship Program (CSP), including a reduction in 2.3 million CSP acres around the country. CSP rewards farmers for practices that protect natural resources, including those that improve soil quality and protect waterways.
  • In a big win for agribusiness, it prevents the Grain Inspection, Packers and Stockyards Administration (GIPSA) from implementing regulations on the livestock and poultry industry to prevent deceptive, anti-competitive and retaliatory practices against farmers and ranchers.
  • For the big meat companies, it sets the stage to weaken, and possibly eliminate, rules that require mandatory Country of Origin Labeling (COOL) for meat and poultry products.
  • For the Wall Street speculators, it rolls back financial regulation of the highly volatile derivatives market that helped cause the 2008 financial crisis and continuing economic devastation—including destabilizing markets for farmers and the world’s hungry.
  • For the oil and coal companies, it strips away efforts to stop funding coal-fired power plants abroad, and blocks any contributions to the international Green Climate Fund, wounding a critical step toward achieving a global climate agreement.

The icing on the corporate donor holiday cake is a rider to expand the influence of big political donors well into the future. Congressional negotiators, though no one will admit who, slipped in a provision at the end of the 1,603-page bill that would vastly increase the amount of money donors can give to national political parties to more than $777,600 each year, from a current limit of $129,600 per year, according to Common Cause. “These provisions have never been considered by the House or Senate, and were never even publicly mentioned before today,” said Fred Wertheimer, president of Democracy 21.

This reckless deal needs to be rejected immediately. And we need to get on with cleaning up our democracy from the corruption of corporate money. The good news is that a growing number of organizations in the union, environmental, social justice and food movement are recognizing that reform of our democracy is urgently needed. Efforts to pass a constitutional amendment to overturn the enormously damaging Citizen United ruling is gaining momentum. Strong reforms are also being won at the state-level, including some big wins in this last mid-term election.

Those working for a more fair and sustainable farm and food system have everything at stake in this fight to reform our democracy.  

Posted December 11, 2014 by Dale Wiehoff   

FoodGMOLabeling

Used under creative commons license from fleshmanpix.

The efforts by millions of citizens across the country to label food containing GMOs must have touched a nerve. The likes of DuPont, American Farm Bureau, Coca Cola and General Mills are lobbying hard to get a new bill passed that would prohibit state-based GMO labeling laws—also known as the DARK (Deny Americans the Right to Know) Act.

The Institute for Agriculture and Trade Policy invites you to join with the likes of the National Farmers Union, Organic Consumers Association and Right-to-Know Minnesota to tell Congress to reject H.R. 4432, The Safe and Accurate Food Labeling Act of 2014 and instead to support mandatory GMO labeling laws.

Don’t let agribusiness and big food keep us in the dark about what is in our food. Take action here!

Posted December 10, 2014 by Dr. M. Jahi Chappell   

Used under creative commons license from fishermansdaughter.

A polyculture of corn, beans, buckwheat, sunflowers and squash.

New research shows that production from organic agriculture shapes up better against input-heavy conventional agriculture than previously thought; meanwhile, evidence for the benefits of agroecology continues to accumulate

A new study was released today examining that evergreen chestnut (to mix metaphors): does “organic agriculture” have lower yields than “conventional agriculture”? Published in the prestigious scientific journal Proceedings of the Royal Society of London by researchers at the University of California, Berkeley, the study found that some previous estimates comparing organic agriculture’s productivity were too low. What’s more, they found that there was a bias in the data in favor of conventional agriculture, which means even their updated estimate may still overestimate in favor of the current resource-intensive, high-input systems that dominate much of agriculture today.

In common with several previous studies, they found certain practices boosted organic agriculture’s performance—specifically, the use of crop rotations and polycultures—cutting differences between organic and conventional systems by about a half, to 3–13%, instead of the overall average that they estimate at 15–23%.[1] This is unsurprising, given that projects using these practices—such as the thirty-year research trials at the Rodale Institute, and phenomenal research at Iowa State--have similarly shown the clear benefits of these practices.[2]

It’s very important here to emphasize one word there: benefits. Plural. Not just one. Practices of organic agriculture (and its big sibling, agroecology) have been shown to often increase biodiversity, decrease erosion, decrease chemical and nutrient run-off (and therefore water pollution), produce less greenhouse gas emissions and sequester more carbon than conventional systems—not to mention to provide more stability in yields and profits and resilience to extreme weather, vitally important factors to farmers as we continue in our trajectory of global climate change.

We can put these elements together with the fact that yield increases in inbred lines and open-pollinated crops—that is, crops that would “breed true” in systems with farmer seed-saving and open-source seed development—have accounted for a large and increasing portion of the yield increases in the dominant hybrid crops developed and grown today (which do not breed true and thus thwart seed-saving, even when patents don’t simply bar farmers from doing so). Further, agroecological practices can provide many benefits to small family farmers—and research shows that small farms are more productive!

More and more, we are seeing solid and consistent evidence that “another world” of sustainable, healthy, just and equitable food systems is not only possible, but many parts of it are already here. We see it in support for agroecology, food sovereignty and food justice that stretches from farmers’ movements to scientists and scholars to scientific societies—growing voices calling for these principles and the growing efforts to implement them. We truly can move away from what I recently called the “biological deserts” that are conventional monocultures, and embrace science, practice, and movement towards a better, more agroecological, world.

[1] The most prominent previous estimate, calculated by Verena Seufert and colleauges, was 21-29%.

[2] I should note that the work at Iowa State is not based on organic agriculture—while they found that “grain yields, mass of harvested products, and profit in the more diverse systems were similar to, or greater than, those in the conventional system,” their diverse system still used “small amounts of synthetic agrichemical inputs”. Meanwhile, the new study discussed here found organic polycultures performed more poorly when compared to “conventional” polycultures. Two quick points to consider here: (1) agroecology, which we advocate here at IATP, includes many different practices, and while it seeks to minimize or eliminate synthetic inputs, as in organic, its practices are more diverse and the elimination of synthetic inputs is a vital goal, not its definition; and (2) as pointed out in Ponisio et al., a vast majority of research funding has gone into breeding crops that respond well to synthetic inputs—so there’s every reason to think that research investment in crops for organic polycultures can seriously reduce any yield gaps. Another way to think about this is the fact that, with careful driving and not speeding, you could increase the fuel efficiency of a Land Cruiser SUV by 10-30%, but this raising your fuel efficiency to 18mpg would not be as effective as finding a car designed to be fuel efficient. But we couldn’t have reached cars that get 50mpg or better if we hadn’t invested in the research to do so

Posted December 8, 2014 by     Sara Velander

The 20th session of the Conference of the Parties (COP), a body under the United Nations Framework Convention on Climate Change (UNFCCC), started on Monday, at the General Army Headquarters in Lima, Peru. With almost 30 tents set up across the premises, and thousands of representatives from governments and observer organizations running between plenaries, contact groups, and side events, the climate change negotiations are in full throttle.

The climate change negotiations in Peru are critical, because they will establish the foundation of a proposed new climate agreement expected to be finalized in Paris at the end of 2015. The convention’s primary objective has historically been on reducing greenhouse gas emissions. While vitally important, this approach has largely ignored the impact climate change has already taken on vulnerable regions around the world, particularly agricultural communities, that urgently need resources to adapt to an altered climate. Such communities also need funds to deal with loss and damage caused by severe weather events that have destroyed crops, increased salinization of soils, and diminished agricultural production.

For the final agreement in Paris, negotiators will consider issues like reducing emissions (mitigation), adaptation, finance, transparency of actions and support, capacity-building and transfer of technology.

But where will agriculture and land-use more broadly stand in these two weeks of negotiations? These issues fall within different tracks of the global climate talks, and are addressed in a variety of ways.

Most developing countries are including agriculture within what are called National Adaptation Plans (NAPs) and a loss and damage mechanism. These adaptation plans will provide more assistance for farmers to combat the impacts of climate change on their crops, livestock, soils and surrounding vegetation. At the COP in Durban (2011), developing countries agreed to assess the risks of climate change and what they need to adapt to extreme weather changes. In Lima, negotiators hope to clarify the funding available for developing countries to implement National Adaptation Plans. 

In Lima, several governments  have highlighted the importance of adaptation, in an attempt to establish and implement fair and progressive adaptation plans.  But in general, there are unfortunately few aspects of the negotiations moving on adaptation, which should be among the highest priorities in the negotiations.

Agricultural issues will also be covered under negotiations on land use, a subset of the climate negotiations on Agriculture, Forestry, and Other Land Uses (AFOLU). These negotiations specifically focus on measurement schemes of greenhouse gas emissions from land use. Land use is also becoming more prominent in discussions under the Clean Development Mechanism, a carbon offset tool that supports emissions-reduction projects in developing countries so that developed countries earn certified emission reduction credits – while continuing to pollute. Many NGOs, including IATP, have criticized carbon offsets as part of poorly regulated carbon markets.

Land use, particularly related to forests, is also present in the Subsidiary Body for Scientific and Technological Advice (SBSTA), a subsidiary body that among other things, provides the COP with scientific advice on methodological matters within the land use sector.  In the first week here, there have been further discussion on the safeguards and implementation of Reducing Emissions from Deforestation and Forest Degradation plus (REDD+). Negotiations will be building on the Warsaw Framework for REDD+ that was finalized from COP19 . Within this mechanism, developed countries offer incentives for developing countries to keep their forests standing in order to receive carbon offset credits and to curb deforestation from drivers like logging as well as agricultural and livestock expansion.

Unfortunately, most participants here believe the climate talks are on a path toward a weak agreement composed of voluntary pledges and no mandatory commitments by developed countries responsible for most of the greenhouse gas emissions.

There is an urgent need for negotiations to advance here in Lima, particularly for agricultural communities around the world dealing with the loss of crops and livelihoods due to climate-related weather events like droughts and floods. There is already another typhoon heading toward the Philippines that could repeat last year’s devastation. Farmers from across the world are calling for urgent action to be made in Lima to support aid for climate adaptation as a way to build climate resilience and empower farmers, as well as restore their lands degraded by these intensifying weather events. Further discussion on the guidelines and implementation of this aid for agricultural communities needs to be an integral part of the land use discussion at COP20.

Author Sara Velander studies Human Ecology at College of the Atalantic and is blogging on behalf of IATP from the climate talks in Lima, Peru.

Posted December 4, 2014 by Dale Wiehoff   

 Laguna Lake, San Luis Obispo, California

The Story of Drought has opened a new chapter in California this week, with a welcomed pouring rain storm: the most rain to fall in Los Angeles in two years. As California enters its fourth year of a drought, the immediate concern of the state’s water managers is that the rains will send the wrong signal to the population. But as crucial as water conservation is, the signal we need today is one that would begin to address the social, economic and political drivers that cause climate change.

Droughts are very slow weather disasters that can go unnoticed even as rain falls and ground water supplies are drying up. We keep saying that California and other western states are entering into the fourth year of a drought, but the real truth is, California and many areas of the west have been living for too long on borrowed water from aquifers and mountain snowpack that will not be renewed. The modern history of water in California going back to the destruction of the Paiute irrigation system and the Owen’s Valley water diversion are part of a pattern of mismanagement and abuse that is still reverberating today.

Like droughts, many of the underlying causes of climate change are not perceived as threats when first encountered. Three interconnected drivers that are major contributors to climate change are global trade, industrial agriculture and the petroleum production and consumption.

Some of the greatest losses to drought in in the west have been in agricultural where no water for irrigation and the lack rainfall has left many farmers and ranchers with barren fields, pastures and orchards. But long before the rain stopped falling in 2010, our agricultural economy was defined by low prices for farmers combined with price volatility and the absence of any system to manage supply production, all of which helped create the climate crisis we face today.

These conditions in agriculture have led to larger and larger farms deficient in crop or livestock diversity and dependent on the use of energy intensive petroleum-based synthetic fertilizers. Industrial meat production alone has become a significant source greenhouse gas emissions. And where does all the cheap grain and meat produced in this corporate controlled system go? Into a global trading system that reinforces through export dumping agricultural practices that cause climate change.

An example is the new $100 million powdered milk plant being built in drought prone western Kansas by the Chinese dairy company, Yili, and its partner, Dairy Farmers of America. It is projected that the plant will produce 80,000 metric tons of milk powder a year for export to China. This mega dairy project will add to the production of greenhouse gasses, deplete precious western water resources and as the final product is shipped thousands of miles away, the farmers in Kansas will be left with lagoons full of manure. It will be a colossal misuse of  energy, natural resources, and water and likely to leave Kansas dairy a step closer to becoming contract workers like most chicken farmers.

What starts out as a sunny day can turn to months and years of a terrible drought. The underlying causes of too many sunny days is very complex, but we if don’t begin to address the underlying forces that contribute to the climate change, all our conservation efforts will be for naught.

Posted November 26, 2014 by Dr. Steve Suppan   

FinanceMarketsCommodities

Used under creative commons license from 24354425@N03.

Library of Congress illustration from humor magazine Puck, published in 1901.

During the fight to pass and implement the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act of 2010, a favorite Wall Street lobbyist tactic was to organize small and large non-financial business owners to talk with members of Congress about the “unintended consequences” for Main Street of regulating Wall Street. Wall Street didn’t want to be seen as directly lobbying for continuing the regulatory exemptions that lead to the big bank bankruptcies and multi-billion dollar bailouts of 2007–2009. 

Instead the Chamber of Commerce, International Swaps and Derivatives Association and other lobby groups’ strategy used “Main Street” clients to promote the idea that global banks such as Goldman Sachs and J.P. Morgan should operate under many of the same rules as small businesses under Dodd-Frank. In sum, they argued, it is in the interest of Main Street business to not reform Wall Street “too much.”

For example, Dodd-Frank exempts municipal electricity and gas companies from having to put money down (margin collateral) to trade to manage their price risks in the commodity derivatives market. (Derivatives are financial contracts that manage the price risk of an underlying asset, such as wheat, oil or a mortgage interest rate.) Municipal companies must provide service to all, and the cost of posting margin collateral for each trade puts them in a competitive disadvantage with electricity and gas companies that can deny service to the poor. Through their lobbying associations, Wall Street banks argued that they are essential buyers and sellers of such derivatives contracts, and sought to benefit from this margin collateral and other Dodd-Frank exemptions for derivatives trading by commercial users of commodities.

Numerous allegations of the banks’ abuse of the Federal Reserve’s Bank Holding Company Act regulation to allow banks to own and trade commodities in which they also trade derivatives contracts has lead the Fed to consider changing the regulation. Now, Wall Street is trotting out Main Street business representatives once again, this time in an attempt to get the Fed to allow Wall Street to continue to own and trade physical commodities, which are not covered by the Dodd-Frank reforms, to commodity derivatives contracts. Officials from these municipal utility companies are visiting legislators, including Dodd-Frank opponent and incoming U.S. Senate Finance and Banking Chair Senator Richard Shelby, whose committee oversees the Fed. It is not improbable that Senator Shelby invited the visits, following Wall Street lobbying.

The municipal officials complain that Federal Reserve Bank rules under discussion on big bank ownership and trading of physical commodities will harm Main Street gas and electricity service provision. Notwithstanding J.P. Morgan manipulation of electricity supply and prices, the Main Street officials agree with the Wall Street lobbyists that gas, electricity and other physical commodity prices will only be affordable if big banks are allowed to compete with Big Electricity (and little electricity) for supply and price. The Main Street lobbying trips are designed to defend the Fed rule that allows banks with huge and unique competitive advantages, such as access to the lowest interest rate Fed loans, to “compete” with commercial users of those commodities.

IATP criticized this rule in an April comment letter on proposed rulemaking. As we noted then, gas and oil prices affect the agricultural cost of production for such inputs as chemical fertilizer and diesel fuel.

The timing of the lobbying trips couldn’t have been better. The U.S. Senate Permanent Subcommittee on Investigations (PSI) held a November 20-21 hearing related to the release of a scathing 400-page report, “Wall Street Bank Involvement With Physical Commodities.” The two-year investigation found that bank ownership of physical commodities, such as operating oil and gas pipelines, coal mines and power plants, allowed them to control the physical supply of commodities in which they traded derivatives contracts. According to the report, the deregulatory erosion of banking laws, which separate commercial activities from banking activities, exposed the banks and commercial entities to “significant financial loss, catastrophic event risks, unfair trading, market manipulation, credit distortions, unfair business competition, and conflicts of interest.”

As in prior PSI reports on Wall Street trading of natural gas and wheat derivatives contracts, Senate investigators found troubling trading practices and regulatory failures. The latest commodities trading report concludes with recommendations for the Fed to change its rule, in order to prevent the banks’ “complementary activities” from undermining their “safety and soundness,” e.g., through losses due to commodity related environmental accidents.

The PSI, under Republican Party leadership beginning in January, is very unlikely to do any more investigation that will discomfit Wall Street. Indeed, the leadership has already characterized Dodd-Frank as “Obamacare for banks,” and indicated that the Republican majority House and Senate could vote to repeal all of Dodd-Frank or cripple it by refusing to fund its implementation and enforcement, in the name of defending community banks and, of course, Main Street. The PSI report and hearing are a bittersweet swan song for retiring Senator Carl Levin (D-Michigan), one the few Senators willing to investigate Wall Street.

The Republican Congressional majority will not be alone in government in the effort to gut Dodd-Frank.  A recent Republican appointee to the Commodity Futures Trading Commission (CFTC), Commissioner Christopher Giancarlo, released the text of a speech that indicated he intends to tear up CFTC regulations to implement Dodd-Frank. By posting the speech, intended for an industry group to which he had belonged, on the CFTC website, Giancarlo violated the spirit of President Barack Obama’s executive order prohibiting political appointees from appearing before industry groups with which they just had been associated. Giancarlo argues that unless CFTC rules are rewritten, derivatives contracts currently traded on U.S. markets by U.S. headquartered firms will migrate to foreign markets through the U.S. dealer broker’s foreign affiliates, resulting in the loss of “thousands” of jobs on Wall Street.

The carefully drafted and footnoted speech is the kind of document that the House and Senate majority party will cite as “evidence” of the need to repeal or “reform” Dodd-Frank. The House had cited several speeches by former Commissioner Scott O’Malia, who left the CFTC before the end of his term to become CEO of the International Swaps and Derivatives Association, in its report justifying a CFTC reauthorization bill (H.R. 4413) that authorized Commissioners to micro-manage even the length of enforcement subpoenas. The recent headlines of billion dollar fines for Wall Street violations of civil law reflect a cost that will diminish when political appointees vote on whether to investigate Wall Street firms that are financing the elections of both political parties.

Despite ample evidence to prosecute global bank executives for a broad range of financial crimes, the Department of Justice continues to avoid prosecution. DoJ apparently believes that the conviction of a handful of individuals will destabilize further a U.S. economy that suffered an at least $13 trillion loss as a result of the financial crisis of 2007–2009. Cities, both big and small, continue to suffer from Wall Street’s financial innovations that promised savings or profit that instead resulted in loss or greater debt. Main Street is doing itself no favors by continuing to enable Wall Street to operate with impunity. 

Posted November 20, 2014 by     Zhe Yu

AgricultureFoodFood security

Used under creative commons license from theworldfoodprize.

This year’s World Food Prize and Borlaug Dialogue, held from October 17–19, 2014 in Des Moines, Iowa once again brought together the big gun stakeholders in industrial agriculture, and provided many insights to the current framing on the global food security challenge.

Given the parallel celebration of the Borlaug Centennial marking 100 years since the birth of Norman Borlaug, it should come as no surprise that Sanjaya Rajaram was named this year’s World Food Prize Laureate. As Borlaug’s protege in terms of sustaining his legacy of wheat breeding, this award for Rajaram appears to reinforce the importance of remembering what Borlaug was said to have achieved, while also ensuring that current research efforts at the International Maize and Wheat Improvement Center (CIMMYT) in Mexico, where Rajaram is based, continue to be perceived to play an important role in meeting global agricultural research needs. It is also noteworthy to acknowledge that Rajaram was born in India but has become a naturalized Mexican citizen given that Borlaug pioneered many Green Revolution ideas and technologies in Mexico in the mid 20th century before subsequently institutionalizing them in India’s post-independence agricultural sector. Indian agriculture continues to be geared towards a commitment to use “modern” and “improved” crop varieties and inputs even as many small farmers face a variety of severe social, environmental and economic challenges that fundamentally threaten production levels and livelihood security of a significant proportion of its population.     

In this vein, the plenary sessions that were held did not depart from what continues to be an overwhelmingly productivist paradigm, grounded in unceasing faith in what are framed as neutral approaches to scientific research, technological innovation and financial investment and financialization. It seems that recent criticisms implicit in the discussions of agroecology, food sovereignty, food justice and local foods have not been able to significantly disrupt this technocratic discourse. The dialogue seemed to be a self-congratulatory echo chamber, largely oblivious to questions of equity, large-scale environmental pollution, alternative forms of production as well as the historical baggage of how the development of industrial agriculture was linked to the highly politicized Cold War project of establishing capitalist economies around the world. While there was acknowledgment of problems such as chemical overuse and land degradation, many of the solutions that were proposed were couched in terms of increased productivity, efficiency and “sustainable intensification.”

Many, if not all of the plenary sessions invoked the 9 billion by 2050 statement to frame the food security problem merely as one of increasing production levels and reducing absolute hunger both through “better” crops, physical technologies and cropping methods and the forging of value-chain infrastructures that will allow small farmers increased access to markets. There was also a whole-hearted embrace of the use of big data and precision agriculture with stakeholders such as the Bill and Melinda Gates Foundation massively investing in this area. On the one hand, this could lead to better understanding of local conditions with the intention of empowering farmers to appropriately adjust production techniques and use inputs more efficiently. One the other hand, this could further reinforce the notion that the food security challenge is merely a problem of management, not to mention the question of who will ultimately have control of the data and profit from it especially in the developing country context.

What stood out was a significant proportion of international delegates coming from various African countries, most of whom were relatively open to embracing what seems to be a concerted push to implement a New Green Revolution. Many desired to sustain the flow of “expertise” from Global North institutions into their respective countries. The absence of discussion about local agroecological solutions was palpable. There was also a considerable presence of high school students who participated through the parallel Global Youth Institute initiative that desires to get young people interested in working in the agricultural sector. The recent emphasis of Science, Technology, Engineering and Mathematics fields (STEM) in education has an explicit agricultural focus, given the recent founding of the STEM Food & Ag Council with the Lieutenant Governor of Iowa, Kim Reynolds and the President of Dupont Pioneer, Paul E. Schickler as Chair and Vice Chair respectively.  

Lastly, many speakers including the US Secretary of Agriculture, Tom Vilsack discussed the importance of better communicating the merits of biotechnology to the general population. This could be seen as an implicit acknowledgement of the resonance of concerns expressed by various civil society groups criticizing the development of genetically modified crops (GMOs). He also noted that there continues to be stark differences between the European Union and the United States on GMOs in the Transatlantic Trade and Investment Partnership (TTIP) free trade negotiations, desiring that EU policies would be more open to accepting such crops by conforming more closely to the US regulatory framework.

Overall, this technocratic and seemingly depoliticized discourse did not come as a surprise. Despite mounting evidence around the world of the negative socio-economic and ecological impacts of dominant, industrial modes of agriculture, the stakeholders at the “dialogue” double-downed on their continued faith in top-down technological and capital-centric solutions. Unless social, consumer and farmer movements continue to put pressure at different policy processes to alter the framing of the global food security challenge and forcefully put forth alternatives, the approaches and strategies that were discussed at the Borlaug Dialogue will go unchallenged. The stakes are as high as ever and continue to mount, and therefore the necessity of imagining and enacting radically different futures remains as relevant as ever.

Posted November 20, 2014 by Sophia Murphy   

World Trade Organization (WTO)

Used under creative commons license from glennharper.

Update 11/24/14: A draft of the U.S.-India deal on public stockholding for food security has been made available.

Just ahead of the G-20 Leaders’ Summit in Brisbane, Australia (November 15-16, 2014), India and the United States announced a breakthrough in their trade negotiations impasse over agriculture. That fight had brought trade negotiations to a crashing standstill in July after the few months of tentative optimism among negotiators that followed the eleventh-hour agreement in at the Bali Ministerial Conference in December 2013. Confidence in the multilateral rules-based trading system had reached an all-time low, and while the response was muted (an agreement between two WTO members is not the same as an agreement among all), the media coverage made it clear the news of the U.S.-India agreement was very welcome in trade circles.

Should the rest of the world share this excitement? The discussion underlying the fight between India and the United States has important implications for countries’ ability to set policy to promote food security and control their food systems—and the role the WTO and the multilateral system should play in that effort.

The India-US agreement means the 2013 Bali WTO Ministerial Conference will likely have an outcome after all: the Trade Facilitation Agreement1 is now widely expected to go ahead. India had been refusing to sign the agreement unless there was “substantive movement” on the Bali decision to revise the rules governing food security stocks within the WTO Agreement on Agriculture. In the agreement, the U.S. has agreed it will not challenge India’s spending on food stocks until the negotiations at the WTO on stocks are concluded, granting India what is called an indefinite peace clause for its programs.

How did we get here?

The first move in the negotiating dance came from the Group of 33 in the months before the Bali Ministerial. The G-33 is a group of developing countries that coordinate their work on agriculture at the WTO out of a shared understanding that developing countries should have greater flexibility under the rules to manage imports to protect rural livelihoods and national food security objectives. IATP provided a brief discussion of the G-33 proposal last year.  There were three main points to the proposal:

  1. That developing countries be allowed to exempt the cost of public purchases of commodities for public stocks even if they are bought at prices above “prevailing market prices” or disposed of for less (for example, if the stocks are distributed at subsidized prices through public distribution programs).
  2. That the rules governing the calculation of the Aggregate Measure of Support (AMS) 2 are out of date, inappropriate and lock in privileges for richer countries and should therefore need to be updated.
  3. That the assumption that any purchase of public stocks, no matter how small a share of the total production of the commodity, affects the whole market should be relaxed, as it exaggerates the effect of public purchases on prevailing market conditions, and inflates the numbers used to measure public support for agriculture.

In the last few weeks ahead of last year’s Bali Ministerial, there was no agreement on the G-33 proposal. India had become the strongest proponent of the proposal by then, and the United States its most vocal opponent. The heart of the G-33 proposal was already lost; instead of the points outlined above, the fight was down to the question of a peace clause—a guarantee that existing food distribution programmes would be exempt from challenge under the AMS rules until the rules on stocks were clarified (see here for more detail).

The United States went to Bali declaring it would not concede this point, and that if the Bali Ministerial was a failure as a result, it was not that big of a deal; the WTO’s importance as a dispute settlement body would continue to give the organization relevance. Such defeatist talk proved unnecessary. Late night and past-the-deadline talks did eventually produce an outcome for Bali (IATP was on the spot). India claimed that outcome included an indefinite peace clause. The U.S, it turns out, did not see the agreement that way. Then in July, when it came time to sign the other part of the Bali Declaration—an agreement on Trade Facilitation—India refused, saying that it would not move forward on this aspect of the Bali outcome without tangible progress on food security stocks. Months later, they have reached agreement on an indefinite peace clause.

Astute readers may now have noticed the import of the deal: it is in effect a clarification of what G-33 countries were fighting for in the last weeks before the Bali Ministerial (fully one year ago), and what India claimed, in accepting the Bali Declaration, that it had already won. When India sought a stronger reference to this provision, however, the United States would not oblige. Now it has. As breakthroughs go, this one feels decidedly modest.

Why it matters

The point of diplomatic breakthroughs is not always their substance, of course. If the objective is to keep the WTO breathing, the deal has done its work. India has claimed a big victory, while the United States, for its part, insists it was India that compromised in giving up its insistence that substantive progress on the new language for public food stocks was needed before it would sign an agreement on trade facilitation. India’s Prime Minister was said to be preoccupied over the summer months with elections in two large states that he did not want to jeopardize for his party by appearing to challenge the very popular National Food Security Act, which was passed by the previous government, and which is at the heart of the fight over public food stocks. As in the United States, talking up the national interest in the face of international pressure plays well to the crowd in India. 

Nonetheless, there is substance to the fight. First, there are technical issues that have not been sufficiently explored. For example, Pakistan has complained loudly that its own exports will be threatened by the food stocks if India should sell its surplus stocks on international markets at prices below the cost of acquisition. Many say, though none for attribution, that the United States government actively encouraged this line of argument among a handful of developing country negotiators, knowing that this was a strong message in a trade context but not one that would have credibility if it came from one of the world’s agricultural exporting powerhouses (not to mention a government that continues to subsidise a significant share of the crops it grows for export). In truth, it is not immediately obvious that Pakistan’s fears are well founded. India’s exports have historically been of inferior quality grain, for the most part. Moreover, the size of the procurement implied by the new food security act suggests that India will hardly have enough production to meet its own targets. There are many questions about the value of the food security act in terms of its ability to meet India’s significant food insecurity challenges, but the likelihood of significant dumping on export markets seems improbable.

On the other hand, the question of whether India’s purchasing policies will encourage surplus production appears not to have been raised in the negotiations. This is extraordinary if you consider the history and intent of the WTO Agreement on Agriculture, which emerged out of a heated struggle to end U.S. and E.U. policies that paid farmers a minimum price for their production without effective volume controls. If there is a policy that is known to work to raise agricultural output—and, potentially, to generate surpluses that will either depress prices or will have to be stored at public expense, or both—it’s a price floor for production.

But these questions are not really at the heart of the matter. Though worlds apart, the United States and India are both relatively rich countries. They are both heavily invested in globalization, they both have powerful domestic constituencies that include a tendency towards xenophobia and they both maintain contradictory policies on trade and agriculture (though the U.S. inconsistencies have a much  greater effect on international commodity markets). Both have the economic means and the political might to better align trade and food security policies than they actually do; neither seems especially intent on that objective. Nor is either country paying all that much attention to the needs of the 180 or so countries that do not belong the G-20 and that face significant trade and food security challenges of their own.

Food security is often characterized as resting on four pillars: supply, access, nutrition and stability. Trade is usually considered a supply issue—it is one of the three components of food supply, with production and stocks. But trade is also a factor in food access, affecting food prices, livelihoods, economic growth and income distribution patterns. Trade also has nutrition effects, potentially diversifying diets but also leading in some instances to higher intakes of sweet and fatty processed foods, which exacerbates health challenges. Finally, and linked to price effects, trade is a component of food stability, both positively where it can help make up production shortfalls (production is more variable at the local and regional level than it is globally) and negatively, when price volatility in international markets is transmitted to domestic markets, as happened in a number of countries in the wake of the 2007-2008 food price crisis, and in the subsequent price spikes.

To be relevant, trade rules have to manage this complexity. Currently, those of us looking at international negotiations on food and agriculture face two unappealing options: the WTO with an outdated negotiating agenda (from Doha) and held prisoner to an inability to reach a decision on almost anything on the one hand; and, on the other, a series of bilateral and plurilateral agreements, such as the Trans-Pacific Partnership and the Trans-Atlantic Trade Partnership that in effect distil mostly the trade issues proposed first in Singapore in 1996 (investment, services, public procurement, intellectual property rights)—issues rejected by most developing countries as not part of their trade agenda. It’s hard to see any way around the multilateral system that will not exclude the smallest and least powerful countries. And it’s hard to see the most powerful countries making the effort to ensure the multilateral system works for all. The India-United States agreement will not hurt that effort, but the true test will come in whether the WTO membership is ready to hear and respond to the concerns of low-income, net food deficit countries: the countries that depend on trade yet have no protections in the rules as they are now written and implemented.


1.The trade facilitation agreement is about the regulations that govern the movement of goods across borders, including imports, exports and goods in transit. The agreement is supposed to cut the time that goods wait to clear customs. It includes measures for cooperation between customs authorities, as well as provisions for technical assistance and capacity building. A critical review of the agreement by GDAE at Tufts Univeristy is available here.

2. The Aggregate Measure of Support (AMS) is a calculation of how much money governments spend on agricultural production, exempting only the spending that is specified under other articles of the agreement. (See more detail in IATP’s Agreement on Agriculture Glossary).

Posted November 17, 2014 by Jim Kleinschmit   

Industrialized MeatBioeconomyClimate ChangeFoodFood ReservesRural Development

Used under creative commons license from usdagov.

The last few years have not been good for the factory farm industry.  High prices for corn and other crops (in part driven by the growth of ethanol) made feed costs incredibly high, while at the same time, environmental and animal welfare advocates have been winning ballot and marketplace battles to shift more meat production out of intensive confinement and industrial systems.  Hog and cattle producers have been hit by disease, drought and weather related disasters, resulting in losses in both sectors. 

But the winds are changing, and not in a good way, if you live downwind from a factory farm manure lagoon.  With the collapse of commodity prices and the expected bumper harvest this year, corn and other grains are expected to be plentiful and sell well below the cost of production.  Prices for pork and beef are at or near record highs, while the “blend wall” for ethanol is limiting the ability to shift much more corn into that alternative market.  Transportation jams in the rail and barge systems have made local cash prices for grains plummet. This development has devalued the direct export (and even in some cases domestic coastal) markets, but increased interest in local value-added opportunities. 

Meat is the most obvious of those opportunities. As IATP details in a new report, the big meat companies acknowledge this reality in their increasing focus on export markets, and could further accelerate that trend with a successfully completed Trans Pacific Partnership trade deal. Add in successful corporate-sponsored efforts to take away local control and regulation—crystalized in the ALEC-sponsored “right to farm” legislation pushed in many states—and you’ve got the perfect scenario for an explosion in factory farms. 

Considering the well-documented and extensive problems associated with factory farms (human health impacts, animal welfare problems, food safety, negative water and soil impacts, greenhouse gas emissions, etc.) this is definitely not something that rural America needs more of.  Rather than allow this bounty of grain to be soaked up and devalued through cheap and dirty meat production, we should instead use this rare opportunity of surplus to prepare for the future.  A publicly held food reserve is an obvious, appropriate response to what we know is coming with a changing climate—more volatile weather and precipitation, higher temperatures, higher rates of disease and pests—all of which are expected to reduce agricultural production. A well-managed reserve would soften the impact of any future drought or reduced harvest, while also helping to stabilize prices for farmers and consumers alike.

Instead of growing dirty meat production, we need to be focused on what the market wants.  Consumers are increasingly demanding and willing to pay for meat that is produced in ways that are better for the animal, us and the environment. Organic is the most recognized and highest value sector, but free-range chicken, grass-fed beef, and sustainable pork production, are other growing, higher-value markets responding to an increasingly educated and choosy consumer base.

In the face of climate change and the indisputable negative impacts of factory farms, the choice should be clear: Do we use the opportunity the record crop production offers to build a public grain reserve and focus on more valuable and sustainable meat production or do we take the route “big meat” wants and waste that grain on a cheap meat and dirty system that devalues our communities, environment, workers and the animals? The answer we give to the market and our policymakers on this critical question will impact all of us, not least our rural communities.

Posted November 13, 2014 by Karen Hansen-Kuhn   

Local FoodTradeTTIPTPPProcurementFree trade agreements

Communities across the United States and Europe are working to transform local economic systems so that they are more sustainable and equitable. Many states and communities are utilizing public procurement programs to support those efforts, especially bidding preferences for healthy, locally grown foods, energy or transportation programs that create local jobs and fair markets. Especially in the aftermath of the Great Recession, Buy American programs have helped ensure that taxpayer-funded programs create local jobs and serve social goals. Farm to School programs that incentivize purchases from local farmers have grown in all 50 U.S. states and many European countries. Innovative efforts are also underway to expand this approach to other institutions such as hospitals, universities and early childcare programs like Head Start.

In a move that could undermine those important initiatives, the European Union has made the opening of U.S. procurement programs to bids by European firms one of its priority goals for the Transatlantic Trade and Investment Partnership (TTIP). IATP published a new report today, Local Economies on the Table, which takes a look at what those proposals could mean.

The EU has been insistent on the inclusion of procurement commitments at all levels of government, for all goods, and in all sectors. At a speech in San Francisco, French trade minister Nicole Bricq declared, “Let’s dream a little with respect to public procurement. Why not replace ‘Buy American’ which penalizes our companies with ‘Buy Transatlantic’ which reflects the depth of our mutual commitment?”

It’s easy to see why this appeals to EU officials. It is an enormous market. It’s a lot harder to understand why local governments in the U.S. would want to give up their authority to shape procurement contracts to serve local economies and job creation. And because the negotiations have taken place in secret, it’s a mystery who decides whether these local governments would be bound by the rules in the trade deal.

At the start of the TTIP talks, local foods and Farm to School activists raised questions about whether farm-to-institution programs could be at risk in TTIP. Advocates for fair and sustainable food systems urged the negotiators to commit to keep these important programs off the table in the trade talks, raising the issue in a January 2014 letter from sustainable foods groups, a February 2014 letter from the Maine Citizen Trade Policy Commission, as well as at various presentations at official stakeholder events held at negotiating sessions. Of course, these and many organizations on both sides of the Atlantic have also raised broader concerns about the lack of transparency in the trade talks, the dangers of investment rules that allow foreign investors to sue governments over public interest laws, and proposals to “harmonize” regulations in ways that could undermine progress towards more sustainable food systems.

The negotiations are still happening behind closed doors. However, some meeting reports and negotiating proposals have been leaked, providing new insights into how TTIP might affect local foods and rural communities. While a new leak on procurement indicates that the EU may refrain from requesting commitments on school lunch programs, there is little question that procurement preferences to strengthen local economies continue to be a target of EU negotiators.

The demand to open up public procurement programs to foreign investors is not unique to TTIP; it has been a significant issue in the talks for a Trans Pacific Partnership (TPP) as well. But the EU is being asked to give up so much in TTIP in terms its food safety, energy and other standards, even its reliance on the Precautionary Principle. In exchange, the EU is seeking unfettered access for its companies to what seem to be elusive state and local procurement markets. It’s a bad deal for both sides. These proposals in TTIP could very well undermine local decision-making and innovative efforts to rebuild local economies in ways that are sustainable, healthy and fair.

We need a different approach, starting with transparency. Both the U.S. and EU governments should publish negotiating text indicating which sectors and federal, state and local agencies are contemplating procurement commitments and who would make those commitments. In the meantime, we in the U.S. should call on Congress to reject Fast Track Authority, which would give the administration the power to negotiate trade deals in secret and present the resulting agreement to Congress for an up or down vote, no amendments allowed. This is an outdated and inadequate process to negotiate agreements with such far reaching consequences.

Read IATP’s new report, Local Economies on the Table, for more. 




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