Posted May 18, 2016 by Dr. Steve Suppan
A new report from Friends of the Earth (FoE), “Nanoparticles in baby formula: Tiny ingredients are a big concern,” will prompt a lot more commentary than can be summarized in this blog.
Two questions likely to be raised in all commentaries:
Answering these questions may seem as simple as, well, child’s play. The simple answer is if governments refuse to regulate, companies will do what they perceive to be in their economic interest. As anyone who has watched children play, their activity is not simple.
The FoE report should motivate these companies to withdraw the nanomaterials from their formula products, as requested in a FoE letter, which IATP has signed on to. It is difficult to forecast whether the sign-on letters to the FDA and the Occupational Health and Safety Administration (OHSA), urging them to regulate nanomaterials and nanotechnologies, will have any more success than past regulatory petitions and lawsuits. The letter to the FDA demands that the agency regulates nanomaterials and recall all brands of baby formula that incorporate nanomaterials, if the companies do not withdraw the products from the market. The letter to OSHA urged the agency to “adopt nano-specific regulations to protect workers from and inform them of potential exposure.”
FoE commissioned nanomaterial researchers at Arizona State University to test baby formula products purchased, at random, in retail outlets in the San Francisco Bay area. The laboratory detected four nanomaterials, including nano-hydroxyapatite (HA), which the European Union Scientific Committee on Consumer Safety has advised should not be used in cosmetic products. Conventional HA is a protein source derived from cow’s bones, but is also used as a stabilizer and an abrasive. Nano HA, particularly in its needle-shaped form, may act like other needle-shaped nanomaterials that cause lesions on the lungs similar to those causing lung cancer and mesothelioma.
Mayo Clinic researchers are investigating whether nano HA could result in an excessive and undesirable calcium intake. The companies apparently added the nano HA as a way to boost infant calcium intake without the added expense of using the greater volume of conventional HA. Other nanomaterials added to the baby formula likely aimed to achieve other technical objectives, such as retarding formula spoilage or increasing formula consistency.
The reluctance—indeed, refusal— to regulate nanomaterials and nanotechnology products is partly due to the general animus against regulation coming from Congress, at the behest of industry lobbyists, as purported “regulatory reform.” The procedural burdens and demands for an industry cost analysis, before rule implementation, has paralyzed U.S. rulemaking, This is now threatening to become a feature of the Transatlantic Trade and Investment Partnership (TTIP) under the guise of “regulatory cooperation.”
Yet, the known hazards of nanomaterials in baby formula, as reported by FoE, may force the FDA to undertake regulatory action to persuade the companies to voluntarily withdraw their nano-baby formula products from the market. If the products remain on the market, the reputation of the U.S. government’s massive promotion of and at least $24 billion investment in nanotechnology will be at risk of widespread consumer backlash.
Posted May 16, 2016 by Robert G. Wallace
Over the past year, the Star Tribune, the largest paper in the Minneapolis-St. Paul metro area, has published almost all its articles on the outbreak of highly pathogenic H5N2 in its business section.
The placement is telling and reminds us that the paper views the virus, which has killed 50 million poultry across 21 states, as a matter for food companies and investors. It seems the ecologies and epidemiologies in which we are all embedded are to be treated as mere subsets of commodity economics.
An update last week, published—where else? —in the business section, repeated unsupported declarations about the origins of the outbreak. The newspaper claims the virus originated in Asia; migratory waterfowl brought it here and spread it; and farmer error is to blame for the outbreak. Anything but the poultry sector itself.
In January, the Star Tribune reported on a University of Minnesota study funded by Hormel’s Jennie-O division, a funding source the newspaper failed to mention. The study reported that Upper Midwest farmers tilling fields near poultry barns, which produced clouds of fomites, likely helped spread the H5N2 virus early in the outbreak.
The study’s statistical analysis indicates other possible causes of the spread of the infection include the composting of infected birds near barns; the spatial proximity of infected farms; and the presence of truck-washing stations, which, deployed to stop the outbreak, may have helped spread it. In short, the Hormel-funded study suggests that the spread of H5N2 is the fault of both farmers and the state’s botched cleanup and that the problems are found in specific practices on-site.
These conclusions have led to instituting the "Danish entry" method of biosecurity, wherein farm workers must step into disinfectant, wash their hands, and change into their work clothes before entering the barn. Some farmers, the Star Tribune reports, have built enclosed walkways between barns and bought enough equipment to supply each barn separately.
The possibility that the industrial model itself resulted in a strain that hit only the region’s largest operations is left unconsidered in the study. The study’s conclusions, hardly a surprise, were locked in by the questions asked. “To identify possible risk factors,” its authors' write,
the University of Minnesota research team developed a detailed survey that asked turkey farmers questions about their farm and surrounding environment, presence of wild birds and farm management practices.
The study is honest as far as one accepts its initial premises. One must start somewhere as it is, and why not with such a preliminary survey? That seems reasonable enough. Setting aside the limits of case-control studies, including this one’s small sample restricted to Jennie-O farms, the analysis is righteous in its albeit simplistic risk modeling. And yet the study is also corrupt to its conceptual core.
As the study reports, spatial proximity represents nearly five times the odds ratio than the next factor, so why the undue focus on individual farm practices? What about the size, density and interconnectedness of monoculture poultry operations arrayed across whole counties? What alternate food models are left out when only Jennie-O farms make up the totality of samples?
What of the political power that agribusiness exercises on local counties, including staffing regulatory agencies? What are the consequences for the study’s scientific integrity when it fails to disclose the conceptual premises of its funding source? What critical scientific investigation is left afield and unpursued when land grant universities are turned into agribusiness R&D?
In contrast, poultry industries outside the United States appear to be turning away from such lucrative obfuscation. Starting late last November, France’s duck and goose sectors were hit across eighteen southwest departments or subregions by simultaneous outbreaks of highly pathogenic avian influnezas H5N1, H5N2 and H5N9.
“It is an unprecedented situation to see the emergence of three different strains in such a short time,” World Organization for Animal Health Director General Bernard Vallat told Reuters. A fourth strain, H5N3, was reported in December in the departments of Landes and Pyrenees-Atlantiques.
French poultry farmers have responded by moving to end industrial production as it has been long practiced. Biosecurity changes, similar to those Minnesota poultry farmers are now implementing, are being pursued, but with the understanding, long recognized in the scientific literature, that such changes are insufficient. Unlike in the U.S., sector-wide regulation is also now introducing up to a four-month break between flocks during which, farmers are expected to clean-out and disinfect their barns.
Many French farmers recognize the painful production loss that results from such a radical change as a necessary intervention. Deadly influenza is acting, as one farmer states it, as a “system boundary” for industrial husbandry. That is, raising so many genetically homogeneous birds in tight quarters inside barns and across agricultural landscapes is unsustainable. Industrial poultry represent so much food for deadly flu. Virulent strains typically burn out when susceptibles die off, but under the industrial model the natural cap on virulence is removed and the thousands of available birds permit such strains to spread unimpeded.
Other French farmers, already just surviving on thin economic margins, are choosing to sell off their operations. For them, the changes—loss in production and increase in biosecurity investment&mdas;are too costly to continue farming, even if costs are passed onto consumers.
Whichever choices farmers in France make, it is widely recognized across the commodity chain there that the industrial model is to blame for avian influenza's success.
American agribusinesses, the researchers who work for them, and the reporters who cover their outbreaks have avoided investigating the structural causes of the disease, a refusal treated here as much a matter of state pride as business as usual.
Rob Wallace is an evolutionary biologist presently visiting the Institute for Global Studies at the University of Minnesota. He is an advisor for the Institute for Agriculture and Trade Policy and has consulted on influenza for the UN's Food and Agriculture Organization and on ecohealth for the Centers for Disease Control and Prevention. His forthcoming book, Big Farms Make Big Flu, will be published in June.
Posted May 11, 2016 by Dr. Steve Suppan
Defenders of high-frequency trading (HFT) claim that they provide necessary capital to commodity derivative markets that enable commercial users of commodities to trade in “liquid” markets, i.e., to manage price risks by buying and selling what they want, when they want. However, HFT orders provide capital to the market milliseconds before computer-automated trading systems (algorithms) cancel those orders. In other words, HFT provides phantom liquidity by emitting trade order price and volume “noise,” but very rarely executed trade information that is usable by commercial traders. HFT administers nearly continuous micro-shocks to price formation.
Farmers and ranchers rely on derivatives markets to set benchmark prices and price trends for forward contracting of grains and oilseeds to local grain elevators and of livestock to stockyards. When HFT “hot money” creates price volatility and price surges with little, if any, relationship to supply, demand and other fundamental factors, derivatives prices no longer help forward contracting. The “hot money” traders induce price volatility not only on U.S. markets, such as the Chicago Board of Trade, but also on Chinese commodity markets.
An April article by a commodity trade advisor at Archer Daniels Midland, the agribusiness mammoth, asked “Who Are the Big Soybean and Grain Buyers?” His answer: “High Frequency Trading, Formula Trading, Algorithmic Trading; Any Name Works.” Then he erroneously added, “High frequency trading, whether it is in commodities, stocks or bonds, is being monitored by the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).” Monitoring suggests that HFT data are reported to the CFTC, which would then determine whether HFT entities are complying with CFTC rules. Alas, were it so.
HFT is not yet regulated, so HFT trade data are not reported to regulators. HFT positions are closed out before the end of the trading day making them not subject to position limits, which prevent market manipulation and excessive speculation by non-commercial traders. HFT data are not publicly available but can be purchased from such data-feed services as Thomson-Reuters, which advertises, “2 petabytes of microsecond, time-stamped tick data—dating back to 1996—covering more than 45 million OTC [over the counter] and exchange-traded global instruments.” Two petabytes are more than eight times all the data held in the U.S. Library of Congress, as of 2011.). According to 2013 testimony to the German Parliament by the Brussels-based NGO, Finance Watch, removing rules on minimum tick sizes (price increments) has given HFT trading strategies their competitive edge over trade conducted in historically meaningful price increments.
(Almost five years after the HFT crashed the stock exchanges in May 6, 2010, as chronicled by Michael Lewis’s book Flash Boys, the SEC HFT rulemaking was limited to proposing that HFT traders register with a self-regulating national securities organization. The SEC rule will apply to about 125 firms, who will be required to comply with the best practices of the industry’s Financial Industry Regulatory Authority.)
In December 2015, the CFTC issued a rulemaking proposal on automated trading systems. The proposal stated that the CFTC was not ready to propose a HFT-specific rule, though CFTC staff detected 35 mini-flash crashes in 2015 in oil prices alone. In March, IATP submitted comments on the proposed rulemaking, arguing that both the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act (Dodd-Frank Act) and HFT market events, studied by the CFTC, provide ample justification for the CFTC to write a HFT rule. Under the CFTC’s authority, such a rule should go beyond the CFTC’s proposed rule for addressing the computerized automation of trading of all asset classes under the CFTC’s authority.
Hostility to the Dodd-Frank Act remains intense on much of Wall Street and among the members of the U.S. Congress who receive electoral donations from Wall Street. A complaint of Dodd-Frank derivatives rules “reformers” is to claim that the rules hurt derivatives “end users,” archetypically farmers, but also including corporations who, e.g. package and sell their off-balance sheet debt as an “asset.” A House of Representatives subcommittee hearing on commodity exchanges on April 28 repeated that assertion. Committee members urged the CFTC to abandon its modest proposal, which would require traders to set aside a very small portion of their overall capital against possible losses and to put down a small amount of cash (margin) in order to trade, arguing that the measures would reduce liquidity and increase transaction costs to traders.
“Regulators must be mindful that any new rules do not inadvertently increase market participants’ business costs and constrain liquidity in the marketplace. While the rules may be aimed more towards financial institutions, the smaller end-users like farmers, ranchers, and small businesses rely on these intermediaries to manage their risks,” said Committee Chairman Mike Conaway. As IATP stated in a February blog, it is a time-honored practice for Dodd-Frank opponents to claim they are defending the interests of farmers and ranchers by seeking, for financial speculators, the same regulatory exemptions that CFTC rules already provide for farmers, ranchers and other commodity users.
What is truly strange about the industry-official pleadings of former CFTC Commissioner Scott O’Malia, former CFTC Chairman Walter Lukken and other hearing witnesses is that derivatives trading volume in all asset classes, and particularly in commodities, is at a near record high, indicating there are no liquidity or margin constraints to trading. According to an April report by the World Federation of Exchanges (WFE): “Commodity derivatives volumes increased 26 percent in 2015 [over 2014 volumes], exceeding 4.3 billion contracts traded. This growth meant that commodity futures surpassed single stock options to become the most traded class of derivative contract[s] in 2015.”
The WFE survey aggregates trade data reporting from 64 member exchanges, including those of Chicago, Atlanta and New York. The survey does not include off-exchange over-the-counter (OTC) derivatives, whose lack of adequate capital reserve and margin requirements helped to bankrupt some of the world’s largest financial institutions in 2008-09, when the value of those contracts collapsed. Of course, the survey does not include HFT data, since there are no rules to require exchanges to report that data to regulators.
As the IATP comment on HFT noted, much of commodity trading has shifted from the unregulated commodity index traders, who drove commodity prices and excessive speculation from 2007 to 2010, to today’s likewise unregulated HFT commodity traders. The Wall Street resistance to HFT regulation is part of a broader war of attrition, aided by members of Congress, to prevent implementation of Dodd-Frank at any cost.
In a remarkable policy brief in February, Better Markets showed how the CFTC Chairman Timothy Massad caved in to Wall Street lobbying and refused to advance Dodd-Frank mandated rules in the face of evidence of damage to market integrity both within U.S. borders and in cross-border trading designed to evade CFTC regulation. What makes Chairman Massad’s passivity very hard to comprehend is that he administered the $700 billion Troubled Asset Relief Program (TARP) of emergency loans for losses incurred on derivatives contracts that Wall Street couldn’t sell at any price. Perhaps the $20 billion that he announced TARP earned for the government, after the loans had been paid back, has lulled him into thinking that the next Wall Street-default cascade will result in just another public money mega-management challenge.
But the U.S. Federal Reserve Bank, and not TARP, did the heavy lifting in the Wall Street bailout. The Fed created more than $29 trillion in loans, with practically zero interest, on the full faith and credit of the United States to rescue the biggest U.S. banks, their global subsidiaries and foreign central banks that bailed out their private banks. Critics of the Fed’s 2007-2010 emergency loan program, while recognizing the necessity of the Fed bailout, are asking whether both Wall Street and the regulators have developed an unhealthy dependence on the Fed to rescue them from the next failure to regulate. Could unregulated HFT trigger another series of global financial institution defaults requiring another Fed scale bailout?
HFT is both a technological means to trade and a trading strategy. Unregulated HFT could transmit a new global financial contagion in a matter of minutes, if not seconds. “Kill switches” (shutdown algorithms) are supposed to stop HFT when prices become too volatile even for HFT trader algorithms to manage. By the time the kill switches function, HFT could have distorted agricultural derivatives prices—that are transmitted as the volatile U.S. forward contracting prices that the farmer or rancher has to accept as “fair”—because the next day’s price could be even more volatile and less predictable.
What happens if HFT traders transact unregulated cross-border trades on emerging market exchanges that lack reliable kill switches, but are wired to major market exchanges? Imagine that climate-change related debt is packaged in New York or London and traded as collateralized debt obligations (CDOs) on exchanges in Beijing or Nairobi. The underlying CDO “asset,” the climate-change related debt, is underpriced because corporate clients and banks of the CDO trade instrument inaccurately report or don’t report the climate change value at risk, a problem that the intergovernmental Financial Stability Board is currently surveying. (IATP submitted responses to the survey questions but the FSB has not published responses received.) According to another 2016 survey, “nearly half of the world’s biggest  asset owners are doing nothing to mitigate climate risk.” The survey estimates their climate risk exposure at $38 trillion. However, even this colossal sum underestimates the exposure because climate change adaptation costs are not reported in the survey.
HFT technology, by itself, cannot create a global financial crash. However, HFT technology can transmit and amplify a financial crisis when the at-risk value is large enough, volatile enough and unreported in public exchanges, such as underreported and underpriced bank and corporate climate risk exposure. To not regulate HFT because the technology can only transmit and not by itself create defaults among global financial institutions is the Icarus height of hubris.
The next global financial institution bankruptcies will likely not have the same asset class and trading-venue origins as those of the 2008-2009 defaults. What neither the CFTC nor the exchanges nor Wall Street will be able to restore after a HFT-driven market collapse is confidence that the financial markets will not prey on their citizens and that Washington will not condone and even abet these predatory practices. A sustainable economy cannot be built with rigged markets and cowed regulators.
Posted May 3, 2016 by Anna Claussen
In early March, farmers and rural residents of southeast Minnesota gathered for three intensive days of presentations, discussion and deliberation around the thorny issue of climate change. The Winona, Minnesota Climate Dialogue participants, most of them in shirts and jeans, were a blend of ages, cultural backgrounds and jobs. Some had lived in the community their whole lives, while others had moved to the area recently. All said they loved where they lived and cared about its natural beauty—ideally positioned where fertile farmland meets the deeply carved Mississippi River Valley. But, all certainly did not come to the table with any shared view of climate change or common political perspective.
There is a common misconception that you can’t talk about climate change in rural communities because the issue is considered too polarizing. Many would likely wage a bet that a climate discussion would paralyze Winona residents, divide them, and lead to more finger pointing than hand holding. But not here. Despite their differing viewpoints, the 18 participants in the Winona County Climate Dialogue produced a collective statement and action plan, crafted solely using participant input, based on six topical presentations from local experts on weather trends, energy use, water, insurance, public health and agriculture in Winona County.
The Winona plan acknowledged that climate change “will have a real measurable impact on our overall economy, our environment, fish and wildlife habitat, health, insurance rates and more. Individually and as Winona County” they deemed that “they needed to take action by working together to prepare for the future.” Better land and runoff management practices were identified as a top need for farmers, who work about 44 percent of Winona County’s total land area. Recognizing that urban and rural areas need to support each other, both financially and socially, support for farmers in adopting new climate resilient practices was identified as a priority action.
Some may ask, what’s the big deal? Well, when you look at what’s at stake for our country, and farmers and rural communities in particular, in the face of climate change and how our increasingly polarized democracy seems unable to respond to the climate challenge—this is a big deal.
The rural landscape is comprised of forests, farms and rangelands that can capture carbon when managed appropriately; land and resources for wind, solar and other renewable installations; and most importantly, people and ingenuity to implement the transition to a low carbon economy. While only 15 percent of U.S. residents live in nonmetropolitan counties, these counties account for 72 percent of the nation’s land area, and, by extension, represent most of the nation’s energy production. Despite this fact, rural communities including farmers have often been overlooked in climate conversations; political debate and policy changes have tended to emphasize urban and suburban perspectives.
Thus far in the rural context, we have seen a failed approach that has separated climate policy from other community concerns. Proposed carbon reduction strategies like the Clean Power Plan are often viewed as stand-alone initiatives that don’t contribute to improved quality of life but actually increase economic inequities and costs for rural citizens. Worse, input from rural communities on climate policy like the Clean Power Plan is often an afterthought. For rural residents, who earn less, are more food insecure and have higher energy costs on average than their urban counterparts, such policies are not attractive.
There are, of course, real challenges to engaging rural communities on climate policy—and longstanding political obstacles that run much deeper than climate change. Of all the growing divides in our country, none is sharper than that between urban and rural lives. The divide between rural and urban is not just geographic, but more imperatively cultural, economic and political, and here in Minnesota the gap is widening. Furthermore, this divide plays out on both a macro level—between the heartland of the Midwest and the megacities of the east coast—and on micro levels—with discordant concerns, demands and needs between county residents and small town dwellers. City and rural are not equals by any demographic, political or cultural measure. Urban areas are growing and prominent; rural populations are shrinking and becoming increasingly culturally less relevant. The nation’s urbanites increasingly govern those living in the hinterlands, even as rural Americans still feed and fuel the nation.
The failure to effectively engage rural communities on climate change has severely limited our collective (rural and urban) ability to address the biggest challenge of our time. The unfortunate reality pointing to the urgent need for a new approach is that the Obama administration has had to entirely avoid Congress to enact the Clean Power Plan and negotiate at the United Nations level. The strategy of ignoring those obstacles, or trying to ram through them, has thus far delayed action on climate change. Instead, we badly need a new approach to rural engagement on climate change.
To get past politics and toward solutions we must first recognize that rural politics are uniquely personal. It’s a much more private experience to share your political beliefs with the people you see in Sunday service or at the cafe every week. For rural residents, existential issues on the national level are often seen in the same way as personal, physical considerations—A Clean Energy Economy: will the country turn its back on my community of coal miners? For the farmer who is not convinced that his water-logged crops will recover or the trucker worried that his road will get washed out, convention is preferable to change and experimentation. An inclusive national climate policy requires an approach that reduces risks (associated with climate change and other problems) while increasing opportunities for better livelihoods.
While many rural-based climate solutions are already happening on-the-ground, such as the massive expansion of solar and wind energy, biofuels and local food production, many of these developments are often not pursued because they are climate solutions. First and foremost they need to be community solutions. There are many other proven beneficial strategies that could be incorporated into climate policy, including prioritizing local ownership, sustainable development approaches, workforce training, etc. that would make sure climate solutions are also rural community solutions.
For the last year and a half, IATP and the Jefferson Center have organized a series of Rural Climate Dialogues (RCDs). The Dialogues are an effort to identify policy recommendations and direct action ideas developed through multi-day democratic deliberation, high school student contributions, community organizing and urban-rural technical assistance and advocacy partnerships to address the effects of climate change in rural communities. The RCDs use the innovative and time-tested Citizens Jury method for community problem solving and leadership development.
Each Dialogue gathers a randomly selected but demographically balanced group of citizens in a specific rural community for an intense, three-day moderated study and deliberation forum on local climate change impacts. In Winona County, that meant half men, half women. Five Democrats, five Republicans, and eight with no party affiliation. Sixteen white and two people of color. Ten from the city of Winona and eight from the county. Eleven worried about climate change and seven not worried. Ages and education levels were also balanced.
The participants are tasked with creating a shared, community-based response to changing weather conditions and extreme weather events. The conversations are completely citizen-driven; no one tells them what to think. The participants have the liberty, information and resources to produce their own recommendations that respond to community needs, priorities, concerns and values.
The Winona Rural Climate Dialogue does not stand alone. As the third in a series of RCD’s across the state, the Winona Dialogue confirms a shared concern for more responsible land use broadly, emphasizing the need for greater community support for farmers, who face agronomical, economic and social challenges as they transition to a more resilient, diverse agricultural system. There was a recognition by all RCD communities to take greater personal responsibility, but also an acknowledgment that some people in the community would be affected more dramatically in the face of changing weather. For example, people on fixed incomes would have to pay a higher percentage toward cooling their homes, given rising energy costs and participants identified that public decision making needed to take these inequities into account.
Later this year, a state convening will bring together the shared concerns, unique needs and the amplified agency found among all three Rural Climate Dialogues to engage policymakers, administration and agency staff in an effort to create stronger climate policies in the state, the region and the nation.
The dialogue process is far more than an exercise in community decision making; it’s the opportunity to rebuild democracy. Democracy requires informed citizens. Without positive, pro-rural voices or proposals on the table, climate change deniers have been able to focus on the additional burdens that new regulation or taxation would bring to rural America while ignoring all of the ways in which climate change itself will negatively impact rural America—and the opportunities for economic development in a new, clean energy economy.
Climate change can make people feel powerless. Therefore, democracy in action requires more than an informed citizenship. People also need to have agency—the feeling and actual power to do something about the problem, not just individually, but as a collective.
The Rural Climate Dialogue process is three-fold: through peer to peer collaboration it enables us to understand the climate challenge for the community; it builds an amplified on-the-ground network of cooperation to implement both policy and non-policy solutions; and then it reforms the political process so that our leaders (and the policies they pass) are influenced and include a more diverse network of citizens.
Conventional political thinking is that "climate" is too politically charged to discuss in rural America. The reality is that rural citizens are dealing with the challenges of extreme weather directly and are interested in being part of community and political solutions. Rural opposition to effective climate policy is not inevitable, and can be overcome by genuinely engaging rural residents in climate solutions. Most importantly, all communities, rural and urban, will benefit from supporting rural people and farmers in the transition to clean energy. But in the process we must capitalize on the opportunity to bridge a growing divide between urban and rural, in a manner that deliberately rebuilds democracy.
Learn more about the Rural Climate Dialogues.
An abbreviated version of this blog originally appeared on the Farm Aid blog on April 29, 2016.
Posted May 2, 2016 by Dr. Steve Suppan
A long standing claim by the U.S. government and agribusiness lobby is that U.S. regulations on genetically engineered (GE) crops are science-based while European regulations are not. For example, an April 8 letter from the American Soybean Association to the U.S. Trade Representative Michael Froman and U.S. Department of Agriculture (USDA) Secretary Tom Vilsack, states that “approval of these events [three GE soy crops] is now needed for the EU Commission to have any semblance of a working biotech approval system.” A “working biotech approval system” is that of the United States, which invariably “approves” GE crops, i.e. deregulates them, on the basis of an agency review of data and studies, some classified as Confidential Business Information, submitted by the GE crop developer.
This approach has been in place for two decades. For example, a Food and Drug Administration letter to Monsanto in 1996 states, “Based on the safety and nutritional assessment you have conducted, it is our understanding that Monsanto has concluded that corn products derived from this new variety are not materially different in composition, safety, and other relevant parameters from corn currently on the market, and that the genetically modified corn does not raise issues that would require premarket review or approval by FDA.” A 2013 FDA letter to Monsanto regarding a GE soybean “event” deregulates the product, but does not approve it, in almost identical language.
From the inception of U.S. policy on GE crops, science-based risk analysis has been systematically subordinated to trade policy objectives. A U.S. biotechnology lobby and diplomatic offensive to prevent European science-based regulation of the newest generation of GE crops and animals has delayed the scheduled release in mid-April of an EU legal opinion about GE rules for what the transatlantic biotech industry calls New Breeding Techniques. U.S. officials warned that diverging from the U.S. (de-) regulatory regime would impede trade in biotechnology products in the context of the Transatlantic Trade and Investment Partnership (TTIP) Agreement negotiations. This latest subordination of science-based risk analysis to trade policy has a long history.
Documents discovered as a result of a lawsuit by the Alliance for Bio-Integrity against the U.S. Food and Drug Administration (FDA) show that FDA scientists vigorously protested in 1992 the draft “Coordinated Framework for the Regulation of Biotechnology,” a White House policy document. Dr. Louis Pribyl wrote of the draft, “What has happened to the scientific elements of this document? Without a sound scientific base to rest on, this becomes a broad, general, ‘What do I have to do to avoid trouble’ document. A scientific document is needed because there is very little (even when things are called scientific) scientific information supplied.”
The critical comments of Dr. Pribyl and other regulatory scientists discovered in the Alliance for Bio-Integrity lawsuit fell on deaf trade policy ears. The Biotechnology Science Coordinating Committee could not agree on the terms and scientific basis for the Coordinated Framework document, so the White House turned over U.S. biotechnology policy to the Council on Competitiveness, which finalized the draft in 1992
The Coordinated Framework remains the White House policy that dictates that U.S. agencies with statutory obligations to protect plant, animal, environmental and human health do so, but only to the extent of also promoting trade in the products of the biotech industry. In October 2015, the White House announced its intention to revise the Coordinated Framework to improve confidence in the U.S. regulatory system and to “Design a Long Term Strategy for the Regulation of the Products of Biotechnology.” IATP submitted comments in November.
The third question of five in the White House request for information about how to revise the Coordinated Framework, indicated that the “Long Term Strategy” would involve better public relations techniques. “How can Federal agencies improve their communication to consumers, industry and other stakeholders regarding the authorities, practices and bases used to ensure the safety of the products of biotechnology?” We answered that before Federal agencies devote more resources to focus groups, workshops and polling to improve communication about the agencies “authorities, practices and bases,” they should scrutinize what is being communicated, rather than merely the how of communication. Our response may well fall on deaf trade promotion ears.
To judge by the USDA’s April 13 deregulation of a GE mushroom designed to prevent browning and extend shelf life, there will be no fundamental change in the (de-)regulation of GE plants and animals. It appears they will continue to follow the Coordinated Framework mandate that U.S. agencies should promote trade in products of biotechnology. A powerful new GE process, CRISPR CAS-9, which makes it possible to edit plant or animal genomes much more quickly and extensively, modified the mushroom. The USDA deregulated it on the basis—once again according to information submitted by the product developer—that the CRISPR engineered mushroom did not contain an organism that is a plant pest or could potentially become a plant pest. By deregulating the GE mushroom, the USDA avoided having to conduct a pre-market safety assessment and issuing an affirmative approval of the product.
Used under Creative Common License from Test Biotech.
In an April 21 comment to the USDA on revising its biotechnology regulatory practice, we cited a recent editorial in Nature: “What is new is the advent of CRISPR . . . because it makes gene drives much easier to create and could dramatically accelerate the timeline for a potential release—accidental or intentional . . . efforts to understand the ecological consequences of a gene drive should be made an urgent priority.” The ability of gene drives to copy the CRISPR-edited DNA from one chromosome to another in every generation means, according to Nature, that “newly introduced DNA will speed through a population exponentially faster than normal.” For example, pathogenic mold from CRISPR engineered mushroom spoors could spread through a mushroom population at warp speed. Nevertheless, the USDA followed the instructions of the 1992 Coordinated Framework to (de-)regulate the GE end product only and not the GE process required to understand the ecological consequences of CRISPR-modified plants and animals.
In 2015, as the White House was beginning to revise U.S. biotechnology policy, it mounted, together with the Biotechnology Industry Organization and other lobbying groups, a successful campaign to prevent the European Union from adopting EU regulations on a new generation of GE crops and plants that would differ from U.S. deregulatory practices. Links to European Commission correspondence with lobbying groups and U.S. officials were published in a briefing released on April 21 by Greenpeace, Gene Watch and Corporate Europe Observatory.
Here’s just one example of U.S. government lobbying on behalf of the biotechnology industry: according to the briefing, on November 3, “the US mission [in Brussels] also sent a letter to the Commission warning it of “unjustified regulatory hurdles” for “New Breeding Techniques.” It also rather ominously said that “different regulatory approaches between governments to NBT classification would lead to potentially significant trade disruptions.” How could the United States determine that EU regulations were “unjustified” for NBTs when the EU Legal Opinion about regulating NBTs was not scheduled for publication until November 19?
One possible source of U.S. intelligence about unpublished EU documents on the NBTs is a continuation of U.S. National Security Agency spying on EU officials and European corporations, first brought to light by former NSA official Edward Snowden. Erich Pica, president of Friends of the Earth U.S., said of the most recent revelations of NSA commercial espionage, “The spying on European Union and French embassies is characteristic of the secretive and ruthless style of contemporary trade and investment negotiations.”
Whatever the benefits may be for the corporations at whose behest and with whose input the TTIP is being negotiated, the benefits that President Barack Obama declared to be “indisputable” during an April 24 dinner with 29 U.S. and German CEOs do not include strengthening democracies. Surely, German Prime Minister Angela Merkel, whose personal cell phone calls were monitored by the NSA, must harbor doubts that such a ruthless trade negotiations process can produce a trade policy product that is supported by a majority of Germans.
Finally, consider the impact of the U.S. TTIP negotiating process on the transatlantic biotech industry strategy to “harmonize” EU rules on GE crops down to the U.S. deregulatory practice. If what is required to import GE soybeans and other crops in European member states is to emulate the U.S. practice of not regulating the processes by which a new and more powerful generation of GE plants and animals is created, how long will it be before EU scientists are asking themselves, as FDA scientist Dr. Louis Pribyl did of the draft Coordinated Framework in 1992, “What has happened to the scientific elements of this document?”
Or more broadly, since scientific evidence and principles have been subordinated to a trade policy that relies on U.S. espionage to obtain TTIP negotiations advantages to set the terms of the agreement, will TTIP “succeed” only by weakening both science and democracy in Europe, as well as in the United States?
Posted April 29, 2016 by Ben Lilliston
The controversial new trade deal, the Trans-Pacific Partnership, has been a tough sell for the Obama Administration. The top four Presidential candidates oppose its passage and support in Congress is waning. The road to TPP approval got a little tougher when 161 food, farm, faith and rural organizations sent a letter to Capitol Hill urging lawmakers to reject the deal.
“The main beneficiaries of the TPP are the companies that buy, process and ship raw agricultural commodities, not the farmers who face real risks from rising import competition. TPP imports will compete against U.S. farmers who are facing declining farm prices that are projected to stay low for years,” the organizations wrote.
At a time when the farm economy is struggling, the 12-nation TPP is being sold as a boost to farmers. But many farm groups are not buying it. “Trade deals do not just add new export markets—the flow of trade goes both ways—and the U.S. has committed to allowing significantly greater market access to imports under the TPP,” the groups explained.
An IATP paper earlier this month raised concerns about the impact of increased imports of milk and whey protein concentrates from the largest dairy exporting company in the world, based in the TPP country New Zealand. U.S. dairy farmers are already suffering under a climate of extremely low prices.
“Low prices are already forcing local dairy processors to pour raw milk from U.S. dairy farms down the drain,” says Steve Suppan, senior policy analyst at IATP. “Under the TPP, dairy processors can import even more cheap, low-nutrient dairy products at the expense of U.S. farmers. The TPP serves the interests of a handful of the largest dairy product manufacturers and exporters, while setting the terms to force most U.S. dairy farmers out of business and further impoverish rural communities.”
Last week, IATP joined faith, development and sustainable agriculture organizations in urging Congress to reject the TPP because of the impact the deal would have on developing country farmers. The TPP also covers important agricultural policy areas such as investment, procurement, labeling, food safety and patents for new technologies like genetically engineered crops. The stringent rules and dispute system under the TPP make it easier to successfully challenge and overturn domestic laws, as happened last year to country of origin meat labels.
Posted April 21, 2016 by Karen Hansen-Kuhn
The EU is being asked to give up a lot in the Transatlantic Trade and Investment Partnership (TTIP), especially its relatively higher standards on food and chemical safety. It’s also asking for a lot in return, including the massive opening of U.S. public procurement to bids by EU firms. A new leaked memo from the European Commission shows just how much they want to open up those markets. It’s a bad tradeoff for both sides.
The March 29 European Commission non-paper addressed to its Trade Policy Committee titled “TTIP–Messages on public procurement” begins with the assertion that, “Public procurement is a key component of the TTIP negotiations and an area where almost all Member States have offensive interest, and in consequence the EU has been requesting a substantial market opening in this area.” The short paper provides arguments against the idea that U.S. procurement markets are already fairly open and accessible to European companies. The memo also takes aim at local decision making on procurement and preferences for small businesses.
Procurement contracts cover a broad range of public spending on all kinds of goods and services, from massive roads, transit, renewable energy and construction projects to much smaller Farm to School programs or university cleaning service contracts. Since it is taxpayer-funded spending, these programs often have conditions designed to benefit local economic activity. In the case of Farm to School programs, for example, preferences are given for healthy, locally grown foods, benefitting both farmers and students. Most often that kind of preference will be one of several criteria (including cost) used to judge the best value of a given bid for the community, but this public spending is often directed to improving the public good. Small business and minority set asides (which allocate a certain percentage of procurement contracts to those groups) can help to address past injustices and level the playing field so that those firms can effectively compete with much larger corporations.
From the start of the TTIP talks, the EU has insisted on the opening of public procurement contracts for all goods, all services and all levels of government. Its initial position papers indicated that it would target 24 U.S. cities (New York, Los Angeles, Houston, Philadelphia, Phoenix, San Diego, San Jose, Jacksonville, Austin, San Francisco, Columbus, Fort Worth, Charlotte, El Paso, Memphis, Seattle, Denver, Baltimore, Washington, Louisville, Milwaukee, Portland and Oklahoma City), as well as the remaining 13 states not already covered under the Government Procurement Agreement (GPA, a plurilateral agreement at the World Trade Organization), for procurement commitments. Subsequent leaked texts indicated its interest in commitments from counties, as well as public institutions like hospitals or universities. The new non-paper reiterates its ambition for commitments reaching municipal levels, noting that, “No U.S. city or county is currently committed in the GPA. But some cities procure more than States. For instance, New York [City] procures more than 17Bn USD every year and it is not yet covered.”
It also takes aim at measures that condition procurement spending, including the Berry Amendment (which requires local content for Defense spending on clothing, food and other supplies), Buy America provisions and small and medium enterprise (SME) set asides, saying that “According to the most recent U.S. GPA statistical report, the value of SME set asides is worth 38 Bn USD for GPA covered contracts at the Federal level and 92 Bn USD for all Federal procurement.’’
It is not at all clear who would decide if New York City, for example, were to be bound by procurement commitments in TTIP. Could Mayor Bill de Blasio sign on? Or perhaps the City Council? Would there be any kind of public consultations with local small businesses or unions over that decision? These are not rhetorical questions: the next round of TTIP negotiations will happen the week of April 25 in New York City, where presumably that issue will be very much on the table.
The Commission also targets federal local content requirements, complaining that “European companies are often obligated to change their supply chain partially or fully in order to comply with buy-local provisions and to establish a local business/manufacturing/assembly plant in the U.S. in order to fulfill U.S. requirements.”
EU firms can already bid on many U.S, state and local procurement contracts, whether as foreign firms or through locally established subsidiaries. In fact, the non-paper notes that between $102-188 billion in U.S. procurement markets are already open to EU firms. What is being challenged in TTIP are preferences for local content or ownership by small businesses. Analysis by the Canadian Centre for Policy Alternatives of similar provisions in the Comprehensive Economic and Trade Agreement (CETA, the EU-Canada trade agreement) argues that these provisions would go well beyond preventing discrimination against EU firms to instead ensure unconditional access, especially for municipal governments and provincial entities that had been kept out of previous trade deals. They note that the procurement commitments in CETA, “are extensive, and will substantially restrict the vast majority of provincial and municipal government bodies from using public spending as a catalyst for achieving other societal goals, from creating good jobs to supporting local farmers, to addressing the climate crisis.”
Because of its critical role in promoting local development, procurement is an issue that has largely been left out of global trade negotiations. It is one of four “Singapore Issues” (along with investment, competition policy and trade facilitation) that developing countries have flatly refused to negotiate at the World Trade Organization (although some commitments were made on trade facilitation in recent years). Instead, some 45 countries (including the U.S. and the 28 EU member countries) negotiated and joined the plurilateral GPA. In that accord, the U.S. lists specific sectors that are excluded from commitments (such as Farm to School Programs), as well as continuing preferences for small and minority-owned businesses.
So far, USTR seems cool to the EU procurement proposals. But while the details of U.S. negotiating objectives on procurement in TTIP have not been published (or leaked), this push to eliminate local content requirements is entirely consistent with U.S. trade policy with other countries. The new 2015 National Trade Estimates Report on Foreign Trade Barriers complains about local content requirements in procurement rules in Algeria, Angola, Argentina, Brazil, China, Egypt, Ghana, India, Indonesia, Kazakhstan, Kenya, Kuwait, Malaysia, Nigeria, Paraguay, Philippines, Qatar, Russia, Saudi Arabia, South Africa, Thailand, Turkey, United Arab Emirates, Venezuela and Vietnam, and in several cases details the pressure it has exerted on those trading partners to drop those preferences.
So, like so many trade issues, it’s not a question of the U.S versus the EU, per se, but rather the corporate interests driving the trade agenda on both sides. On the U.S side, that includes pressure to “harmonize” EU food safety standards to allow for sales of GMOs, beef produced with hormones and chlorine-rinsed chicken. On the EU side, it seems to be pushing aside U.S. procurement programs that favor small businesses and local producers. Either way, it’s a bad deal to trade off local standards in Europe for local economies in the U.S.—one that should be soundly rejected.
Posted April 21, 2016 by Dr. M. Jahi Chappell
The Committee on World Food Security (CFS) is the foremost international and intergovernmental platform trying to address global food security and nutrition challenges. The current version of the CFS emerged following the food crises of 2008 as a result of a reform process that sought to increase stakeholder participation, especially participation by those engaged in small scale food production systems. Its High-Level Panel of Experts on Food Security and Nutrition (HLPE) mechanism was created in 2010 as part of the reform to be “the science-policy interface of the UN Committee on World Food Security (CFS),” and “aims to improve the robustness of policy making by providing independent, evidence-based analysis and advice at the request of CFS.”
Since its establishment, the HLPE has taken on issues related to food security and nutrition, including last year’s report “Water for food security and nutrition,” which was co-authored by IATP senior policy analyst Shiney Varghese.
At its recent October 2015 session, the CFS decided that the HLPE will prepare a report on Nutrition and Food Systems, which is expected to be presented at CFS 44 in October 2017. As an initial step in this process, there was an “e-consultation” to seek feedbacks, views and comments on the relevant issues. Comments contributed by IATP’s Senior Staff Scientist, Jahi Chappell, were posted to their e-consultation website, and are reprinted below:
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Posted April 18, 2016 by Shiney Varghese
Twenty years ago, on April 17th, 19 members of the Brazilian Landless Workers Movement (MST) were killed during a peaceful action to obtain land for farming and other livelihoods. Since then, this day has been called the International Day of Peasants and Farmers Struggles—a day of action to put small-holder food producers, such as peasants, landless workers, farmers, fishermen and pastoralists, back in control of their natural resources—land, waters, seeds, breeds—as well as food processing and marketing systems.
The word ‘peasant’ has not been doing well: an Ngram search reveals that its use peaked in 1968, and by 2000, its use was down by half. In a way, this decline reflects the fate of peasant agriculture. The term ‘peasant’ carries connotations of subsistence economy and small holdings. It often has connotations of minimal engagement in the market economy, but also minimal damage to environment. And with the neoliberal turn and globalization, peasant agriculture has increasingly been integrated into larger economies.
But this integration has been on terms deeply unfavorable to those people. Many have become landless because of the consolidation of farms. This process of dispossession is not confined to the spread of industrial agriculture; it extends to all investments that require acquisition of lands belonging to marginalized farming communities, indigenous peoples and pastoralists. In many cases, government policies have compelled those who have held on to their land to adapt to industrial agriculture based on chemical fertilizers, high cash inputs and intensive irrigation. This has left many of them deeply indebted, causing, for example, the rash of suicides in agricultural communities in India. Many have been forced to migrate to urban areas at least seasonally because they find agriculture by itself now an unviable activity.
Those who protest face brutal state repression, even killing. The last month saw several such killings, drawing international condemnation from around the world: Honduran Indigenous leaders Berta Cáceres on March 2 and Nelson García on March 15 for fighting against dams and displacement, Guatemalan environmental activist Walter Manfredo Méndez Barrios on March 16, and South African anti-mining activist Sikhosiphi Bazooka on March 22. The farmers protest in the Philippines (that resulted in several farmers being killed in police action earlier this month) is attributed to the “government’s policy of systematic land grabbing combined with the intensified El Nino” that pushed farmers and indigenous peoples of the Philippines to heighten their struggles in defense of their right to land and life. On April 7, MST members Vilmar Bordim and Leomar Bhorbak were killed in an ambush by Brazil’s State Military Police and private security forces of the logging company Araupel in an MST encampment on land that had been declared public by the Brazilian Justice Department.
These people and their allies continue to fight for a different vision of agriculture, justice and sustainability. It is not possible, nor even in many cases desirable, to go back to the world of peasants—that world was not necessarily either egalitarian or capable of providing secure livelihoods through the year. But an alternative vision must put them, family farms and smallholder food production at the center. By now, we know that there are many environmental externalities associated with industrial agriculture, with its primary focus on increases in grain production. Polluted waters, salinized lands, depleted ground water levels, disappearing forests, greenhouse gas emissions from factory farms and extensive paddy field cultivation are all decreasing biodiversity and fresh water availability.
Around the world communities are finding ways to counter these effects through a different vision: agroecology, which has food sovereignty and people-centered agriculture and food systems at its core. Peasant communities are at the core of this turn to agroecology for many of their practices were agroecological by default. Given a conducive policy environment that ensures access to land and other resources, family farms could build on these practices to develop an alternative to industrial agriculture that is not only sustainable—climate resilient, water and biodiversity conserving—but also helps build the foundations for a healthy and fair food and agricultural system.
On April 18, several members of the U.S. Food Sovereignty Alliance1 and the U.S. Friends of the MST organized an action in New York City in solidarity with the social movements in Brazil and around the world to push for food sovereignty and agrarian reforms and in support of International Day of Peasants and Farmers Struggles.
At the same time, more than 50 faith, development and sustainable agriculture groups (including IATP) are calling on the U.S. Congress to reject the Trans-Pacific Partnership, which has the potential to impact the food security and sustainable development of communities, especially in signatory countries. This effort follows a similar letter released last week rejecting the agreement because of its potential impacts on access to essential medicines. A different vision of trade and economic justice is both possible and imperative and can support the struggles of frontline communities around the world for food sovereignty and ecological sustainability.
1. The US Food Sovereignty Alliance is a network of US based organizations that works to end poverty, rebuild local food economies, and assert democratic control over the food system. USFSA members believe that all people have the right to healthy, culturally appropriate food, produced in an ecologically sound manner. As a US-based alliance of food justice, anti-hunger, labor, environmental, faith-based, and food producer groups, we uphold the right to food as a basic human right and work to connect our local and national struggles to the international movement for food sovereignty. IATP is a member of the US Food Sovereignty Alliance.
Posted April 15, 2016 by Ben Lilliston
It’s campaign season—a time when the pervasive influence of money in our political system seems to slap us in the face with each new political ad. This weekend, tens of thousands of people and more than 200 organizations will rally in Washington to demand Congressional action to address the corrupting role of big money in our political system that has shifted into overdrive following the Supreme Court’s disastrous Citizens United ruling and to protect voting rights under attack in states around the country. This effort for political reform, called Democracy Awakening, is essential if we hope to transform our farm and food system to one that is fair for farmers, protects the environment and climate and produces enough healthy food for all.
The challenges that we face in our food system are too big, too complex and there is too much at stake, to allow a handful of largely multinational corporations such disproportionate political influence. In food and agriculture policy, the power of corporate money in our political system is literally everywhere. In the last Farm Bill, the crop insurance industry flexed its muscles through more than $57 million in lobbying firepower to shift government payments to benefit the industry. From buying state ballot initiative wins on GMO labeling and pro-factory farm “Right-to-Farm” rules, to rolling back financial reform that wreaked havoc in agriculture markets, to blocking the fight to increase the minimum and tipped-minimum wage—the fingerprints of corporate money and influence seem to be omnipresent.
One of the clearest examples of big money influence is the prize at the top of the multinational corporate and financial industry agenda—new free trade deals. To the surprise of many in the political establishment, the proposed Trans-Pacific Partnership (TPP) is unpopular among primary voters and has drawn the ire of Presidential candidates in both parties. The trade deal involving 12 Pacific Rim countries was negotiated largely in secret, shaped by advisory committees dominated by corporate interests.
To lay the groundwork for the TPP, Congress needed to pass Fast Track trade authority last year. Fast Track gave President Obama the right to conclude TPP negotiations in secret and present a final version of the deal to Congress for a simple up or down vote. The corporate interests that invested heavily in the passage of Fast Track are a virtual who’s who of inside-the-beltway power: the U.S. Chamber of Commerce, US Business and Industry Council, American Natural Gas Alliance, Bayer, Caterpillar, Coca-Cola, GlaxoSmithKline, Koch Industries, Pfizer, Dow Chemical, JP Morgan and Kraft Foods, among others. At the end of the day, according to Maplight, corporate interests supporting Fast Track contributed more than nine times as much money to House members ($197 million), compared to interests opposing Fast Track ($23 million). That investment paid off with the passage of Fast Track in June 2015.
Now the focus of corporate lobbying has now shifted toward the TPP, where corporate lobbying, and specifically lobbying from agribusiness, has jumped. The rejection of the TPP by leading Presidential candidates has slowed momentum for the TPP, but there is talk of Congress considering the controversial trade deal in the lame duck session (after the election and before the next President and Congress take office).
The Democracy Awakens rally and growing movement to reform our political system is critical for determining the future of our farm and food system. Rally supporters, including IATP, are calling for Congress to pass five bills that will take a big step forward toward reasserting the power of citizens in our political process. Those bills are:
The Presidential campaigns for both parties has produced some unexpected results—much of which is linked to growing discontent over how our government works and who it represents. A recent New York Times poll supported what many others have found—that there is strong support for addressing excess money in our political system. It’s time for Congress and the President to pay attention.