Posted December 6, 2013 by Shefali Sharma   

TradeWTOFood securityWorld Trade Organization (WTO)

Used under creative commons license from World Trade Organization.

Indian Trade Minister Anand Sharma

Update: The ministerial text was accepted on Saturday morning with minor changes to assuage Cuba's concerns. See a video report from Shefali Sharma regarding Cuba, Venezuela, Nicaragua and Bolivia's move to block consensus on the agreement on the morning of December 7. 

IATP's Shefali Sharma is reporting from the 9th WTO Ministerial in Bali, Indonesia.

3:00 a.m., Bali, Indonesia

The WTO’s “Bali Package” was supposed to have been adopted this early morning of December 7 after trade diplomats rolled in for a final meeting at midnight. Earlier in the evening, at 8:00 p.m. on December 6, the WTO secretariat had shared a set of decisions proposed by the chair that comprise the Bali Package. The meeting was originally scheduled to close by 5:00 p.m.. However, at the time of this writing, Cuba, Bolivia, Venezuela and Nicaragua have said to have blocked consensus and the meeting has been adjourned. Cuba’s major issue has been language in the Trade Facilitation decision on “freedom of transit” that fails to address the problems it faces with the U.S. embargo against Cuba. The meeting has been adjourned to reconvene sometime in the next hours.

A critical piece of the package is the decision on “Public Stockholding for Food Security Purposes.” This decision took up most of the negotiating time for two central parties: India and the United States. The final decision allows developing countries a “Peace Clause” which protects them from being sued at the WTO for implementing food security programs that violate the WTO’s rules to limit spending on “trade distorting” agricultural subsidies. The decision limits the Peace Clause to “traditional staple food crops” defined as “primary agricultural products that are predominant staples in the traditional diet of a developing country member.” It also puts in place a set of criteria for annual notification and transparency about these programs, which will be in addition to existing notification requirements at the WTO. The U.S. insisted that an additional “anti-circumvention” safeguard be put in place to ensure that subsidies that do not fall under the Peace Clause but have been notified as trade distorting are not increased as a result of this exemption. Pakistan got an assurance that such programs will not “distort trade or adversely affect the food security of other Members.”

The decision represents a hard fought victory for India. Before going to Bali, the U.S. government insisted that the food security programs in question would only be sheltered for four years under the Peace Clause. In other words, India spent its entire political capital on getting the Peace Clause for an indefinite period, “until a permanent solution is found” for how to fund public food reserves without running afoul of the WTO. In the last two days of the Ministerial, India was portrayed as the main obstacle to a successful outcome from Bali, which in turn was portrayed as essential to avoid the WTO sinking into irrelevance.

An important question is whether the decision introduces a “standstill” clause for any expansion of these public programs because the decision applies to programs “existing as of the date of this Decision.” If so, this would have an impact on developing countries who currently do not have such programs and for the expansion of India’s program. This is a major concern for India’s Right to Food Campaign which wants the inclusion of other staples such as pulses under the Food Security Act. Asked about this concern and one Indian representative responded, “That’s why this is an interim solution.”

The decision calls for a review at the 10th WTO Ministerial Conference, which will be held two years from now. The decision also lays out a work program for the adoption of a permanent solution in four years time, at the 11th Ministerial. For those of us who have long felt that WTO agriculture rules are biased towards agribusiness, too narrow and imbalanced, and inadequate to address food security and rural livelihood concerns, the work program is an entry point to reinvigorate the debate about the role that trade rules must play in ensuring food security (not impeding it) and the limitations of the existing framework measured against the achievement of that objective.

Posted December 4, 2013 by     Kathleen Schuler

Food and HealthHealthy LegacyAutismEnvironmentHealth

Used under creative commons license from buzzymelibee.

Now that autism affects one in fifty school-aged kids—up from 1 in 150 as measured in 2000—we should be asking ourselves some pretty serious questions about why so many kids have autism. Sure, we know that the health and educational systems are better at diagnosing autism, but better diagnosis explains only part of the increase. With exponential increases in rates of autism over the past two decades, there is more going on than better diagnosis.

As more kids are diagnosed with autism, most of our attention is focused on providing services. Serving kids with autism is essential, but there is also a need to examine the possible myriad of factors that might be contributing to this autism epidemic.  If we knew how to prevent autism, it would be our responsibility as a society to commit resources at our disposal to do so.

Preventing autism requires that we look at the whole picture. The bulk of research in autism has been focused on genetics, which plays a contributing role in risk for autism. Emerging from more recent research, however, is a pattern of links between risk for autism and environmental and dietary factors. While the etiology of autism is complex, with both genetic and environmental components, it is clear that the role of the immune system is key. A child’s prenatal and postnatal environments, including diet, clearly impact immune health. Autism is likely the result of multiple assaults on the immune system. One of these assaults then tips the person over a threshold into the autism state.

IATP's latest fact sheet, Autism: What Do Environment and Diet Have to Do With It? by Kathleen Schuler, MPH, explores countless studies that point to increased risk of autism and autistic behaviors from numerous environmental toxin exposures, including:

  • Pollution. Living near a pollution site, hazardous air pollutants, and residence near a freeway.
  • Pesticides. Residence near agricultural pesticide applications and prenatal exposure to the organophosphate pesticides.
  • Phthalates. Prenatal exposure to phthalates.
  • Heavy metals. Exposure to environmental neurotoxins including mercury, aluminum, lead and cadmium. 
  • Persistent organic pollutants. Prenatal exposure to high levels of PCBs and DDE (metabolite of DDT).
  • Parental occupation. Mother’s occupational exposure to exhaust and combustion products and parental work at night or in handling of solvents.

Environmental toxins like mercury and pesticides cause adverse neurodevelopmental impacts through altering gene expression and interact with dietary factors that can either protect or cause harm to health. Specific nutrients play critical roles in metabolic processes that detoxify and eliminate harmful toxins from the body. For example, deficiencies in zinc and magnesium may interact with toxic metal burdens to increase risk for autism. There is emerging evidence that faulty gene expression may play a role in autism and that environmental and dietary factors are key factors in gene expression.

What about prevention?

We have more to learnabout the factors that contribute to autism but we already know enough to apply public health approaches to prevent and treat autism. Education of women of childbearing age and expecting parents on environmental and dietary factors linked to autism could help reduce exposures that might trigger autism. Behavioral interventions for children with autism could be supplemented with dietary interventions. Numerous studies point to the benefits of nutritional supplements for patients with autism. Prenatal care should include an assessment of nutritional status and a close look at treating and preventing metabolic disorders that increase the risk of autism.

While we know that there’s no one chemical or no one exposure that causes autism, implementing policies that prevent unnecessary exposures to neurotoxins and hormone-disrupting chemicals is a smart public health prevention strategy. One of the first policy steps to reduce exposures to toxic chemicals is to reform the Toxic Substances Control Act (TSCA), the outdated and ineffective law that allows thousands of toxic, untested chemicals to continue to be used in consumer products, including in food packaging, without basic information about effects on human health.

In addition to federal action to reduce exposures to toxic chemicals in our environment, state action to protect citizens, especially children, from toxic chemicals in everyday consumer products is also important. Implementing policies such as addressing chemicals in children’s products, as proposed by Minnesota’s Toxic Free Kids Act, will contribute to a healthy environment for the optimal growth and development of our children. To get involved visit Healthy Legacy's Facebook page or contact them at healthylegacy@cleanwater.org.

Read IATP's Autism: What Do Environment and Diet Have to Do With It? by Kathleen Schuler, MPH.

Posted December 2, 2013 by Dr. Steve Suppan   

FinanceMarketsMarket speculation

Financial Stablity Board (FSB) press conference, November 8.

This blog was originally published November 26, 2013 in an alternate version by the Post Globalization Initiative.

Following the global financial industry default cascade of 2008-09, the Group of 20 (G-20) industrialized countries established the Financial Stability Board (FSB) in 2009, to coordinate policies among FSB members to prevent another global financial crisis. The most recent FSB Plenary took place on November 7–8 in Moscow.

Because the economic consequences of the financial collapse, following more than a decade of deregulation and non-regulation of the industry, have been so severe and widespread, the expectations of the FSB to reform the broken global financial system are high. Frustration with the slow and halting pace of reform extends even to the head of the New York Federal Reserve Bank, who commented in a November 7 speech that some of the world’s Too Big To Fail banks appear to lack respect for regulation and even the rule of law. 

(The Institute for Agriculture and Trade Policy (IATP) is member of a consortium of NGOs and academics that recently released a report on international financial institution performance, which included a review of the FSB. IATP contributed a short evaluation of the realization of G-20 commitments to regulate over-the-counter derivatives, the financial instruments at the center of the 2008-09 debacle. The value of these financial instruments are derived from the price of an underlying asset, e.g., wheat, oil or an interest rate. I discussed the FSB report to the G-20 on OTC derivatives regulatory reform in one presentation to the Post-Globalization Initiative’s G-20 Counter Summit, September 5-6 in St. Petersburg.)

FSB members include G-20 financial regulatory agencies, international institutions, such as the Bank for International Settlements (BIS), international standards setting bodies, such as the International Organization of Securities Commissions (IOSCO) and financial regulators from five non G-20 industrialized countries. FSB also encompasses six regional consultative group of financial regulators from developing countries and the Commonwealth of Independent States, including Russia. Given the differences of financial industry structure and regulation between G-20 and developing country jurisdictions, according to a recent Harvard International Law Journal article, some analysts question whether the FSB is an appropriate forum in which to discuss non-G-20 country finance.  In September, the FSB published a monitoring report on the effect of G-20 financial reforms on emergency markets and developing countries.

Russia, as this year’s G-20 president, hosted the FSB press conference that customarily follows plenaries. According to the FSB press release, the plenary heard reports from the six regional consultative groups. While but the substance of the reports was not revealed.  However, press releases outlining discussions of past regional consultative group meetings, including two meetings of financial regulators from the Commonwealth of Independent States, are posted at FSB Watch.

FSB decisions are made by consensus and are not binding on members. However, FSB can decide to “name and shame” in reports written by the 28 member FSB secretariat, which is housed in the Bank for International Settlements in Basel, Switzerland. The FSB is legally independent both from the BIS and the G-20, so the secretariat has some degree of autonomy. FSB staff notes alert FSB members to potentially system destabilizing financial instruments, such as commodity index funds. FSB publishes peer reviews of financial reform in its member jurisdictions. The FSB staff does not refrain from saying that FSB members are not providing data and information for its reports, e.g., in its just-released report on the (at least) $71 trillion and largely unregulated "shadow banking" industry of hedge funds, payday loans and other non-bank, non-insurance company financial institutions. (Oddly, pension funds, globally amounting to trillions of dollars and sometimes invested in OTC derivatives, are not FSB classified as part of shadow banking.) Often what is not said speaks more loudly than what is said.

At the November 8 press conference, the FSB Secretary General outlined four topics of plenary work: enhancing banking resilience in the event of losses; preventing public bailouts of Too Big To Fail banks by agreeing on procedures for orderly bankruptcy if needed; preventing huge debt build-up in the shadow banking sector; and regulation of the $668 trillion global Over the Counter derivatives market.  The remainder of this blog is dedicated to the OTC derivatives reform that G-20 leaders committed to conclude by end-2012.

Three major reforms were demanded in September 2009:

  1. OTC trades would be reported to trade data repositories, so they could be reviewed by regulators and have pricing and other information be available to the public;
  2. The credit and payment arrangements (clearing) for “standardized” OTC contracts would be administered on centralized platforms to prevent trader defaults from affecting the whole financial system; and
  3. OTC contracts that are so “customized” to corporate client needs (e.g., contracts to disguise debt as an asset) as to not qualify for clearing would require OTC dealer brokers to set aside higher capital reserves to cover possible losses and be purchased with higher down payments (margin).

There was not a lot the FSB Secretary General could add to the FSB’s September report to the G-20 about OTC derivatives reform without violating diplomatic decorum. Reform advocates have struggled to persuade banks to give up individual profit maximization in return for financial system transparency and stability that will benefit all financial institutions and their users, as demonstrated in a recent BIS study.

This struggle is writ large in the OTC report on “Substantial Progress”: e.g., “By the start of 2014, three-quarters of FSB member jurisdictions intend to have legislation and regulation adopted to require transactions to be reported to trade repositories.” The most potent word in this sentence is “intend.” More than four years after the G-20 leaders committed to making the vast and dark OTC market transparent to regulators and the public by putting trade data in repositories for regulatory review, regulators are still fighting with banks in order to realize that commitment. “Intend,” for the moment at least, is the most “substantial progress” the FSB secretariat can indicate for a majority of its member governments.

Posted November 29, 2013 by Sophia Murphy   

TradeWorld Trade Organization (WTO)

Used under creative commons license from mk30.

A statue titled "Peace" sits outside the World Trade Organization (WTO) headquarters in Geneva.

In the category of “praise more fit for a eulogy,” U.S. Trade Representative Michael Froman is reported to have said of the last minute negotiations to prepare a package for upcoming WTO Ministerial in Bali: "It's unclear whether they will succeed or not. We certainly hope they will succeed. But [the WTO] has served a very important function and will continue to serve a very important function as a dispute settlement mechanism either way." (Inside US Trade, November 15, 2013).

Froman seems to be saying it is okay if Bali is a failure—which, given the latest news from Geneva, is a good thing because the meeting has failure written all over it.

There are lots of reasons why the system is failing. The Doha Agenda, adopted in 2001 and still ostensibly the framework for negotiations, should not have been agreed in the first place. Multilateral trade rules are worth getting right, but the Uruguay Round agreements on which the rules now in place are based got far too much wrong.

The trade agenda launched in Doha in 2001 is dead but the corpse is not yet buried. Most developing countries say they want it all still—Doha resuscitated—while the majority of industrialized countries want to salvage the corpse for parts; they’ll take deeper deregulation of services, more restrictive intellectual property rights and the harmonization of regulations for transnational firms, but are happy to leave rotting their promise to finally eliminate export subsidies in agriculture, make real cuts to trade-distorting support, or support disciplines on agricultural exporters that are as stringent as the disciplines imposed on food importers.  

In an era of more responsible global leadership, the gathering of trade ministers December 3–6 at the WTO conference in Bali could have marked a watershed. It is clear now it will not. The question, then, is both whether and when governments can rise above their squabbling over the (many) hypocrisies and inconsistencies in the now almost 20-year old Uruguay agreements (most of which serve industrialized countries and transnational investors) and instead focus on how to rethink trade rules given the demands of the 21st century, including higher and more volatile agricultural commodity prices in the face of financial instability as well as less predictable and more extreme weather.

The challenges confronting governments in relation to international trade in agriculture include the need for:

  1. Recognition of the many forms that price instability takes in different developing country contexts, and the importance of countering that instability, so as to allow farmers to invest in their production and to protect people from food insecurity. International markets are valuable, but in no way can they satisfy the complexity of food security needs. The assumption that governments are even willing to deregulate their markets to the extent of the WTO rhetoric only highlights the hypocrisy of the many OECD countries. These countries protect their agriculture (and their consumers) in a variety of ways that are by definition trade distorting, while constantly limiting developing countries’ ability to do the same.
  2. Disciplines that bring exporter and importer responsibilities into line. Neither side should be able to change their commitments without notice or due warning. The G-20 has recognized the problem but failed to take action.
  3. Full and final elimination of all forms of export subsidies.

Like some of the other innovations in multilateral governance in recent years, any real breakthrough on trade is likely to require a new configuration of countries taking the lead. It is important but not enough to add the so-called emerging countries of Brazil, China and India to the United States and Europe and expect that bloc of countries to advance rules that respond to the needs of the 120 or so LDCs and poorer net–food importing countries. It is from agriculture that the most interesting challenge to the evolving status quo has come, specifically from the India-led G-33 proposal to exempt the purchase of food stocks for food security programmes from limits to spending (see IATP’s discussion of the proposal here). Fundamentally, the proposal is an assertion of the importance of domestic food security programs that extend beyond social safety nets to questions of rural livelihoods and capital formation. It is also an assertion of importing countries’ need for greater stability and reliability in the trade system.

In September 2013, a French economist, Franck Galtier, from a French agricultural research institute called CIRAD, published a short paper with additional proposals for the reform of the AoA rules (see here). Among other things, Galtier writes about the importance of stability for developing countries, especially those that experience significant price volatility linked to uncertain domestic supply and weak and unstable currencies. Franck proposes three reforms in the calculation of the Aggregate Measure of Support (known as the AMS or amber box, it is the part of the agreement that limits public spending on agriculture) as to correct existing biases against developing countries:

  1. The baseline against which spending is measured is set to the average price that prevailed from 1986 to 1988 (28 years ago). The number was part of the political negotiation between the European Union and the United States that effectively eliminated their need to actually cut domestic support, though it did set a ceiling that was intended to stop future increases. Commodity prices have soared since 1988, especially in developing countries. Inflation in developing countries as a group has averaged 5–10 percent in recent years, while it has been below 4 percent on average in industrialized countries. Inflation has rendered the baseline meaningless. Although updating the baseline might allow the OECD countries to negotiate yet more spending room for themselves, that seems preferable to keeping rules that discriminate against poorer countries.
  2. The WTO rules have been interpreted to assume that if a government buys any amount of national production at a price higher than market prices then the price for all production that year will be assumed to have received support. This means that even if purchases are only a tiny share of the total produced or, as is common, if the price intervention only lasts a few weeks or months rather than all year, the subsidy is nonetheless calculated as if the whole crop were bought at the procurement price. The effect is to use up the allowed budgetary support on imagined rather than actual spending. While any purchase at non-market prices will have some kind of effect on the whole market, clearly there are volumes low enough that the effect will be negligible—certainly far different than would be the effect of a price support at the higher rate for the entire crop.
  3. The WTO rules do not allow countries to add back as credit to the AMS the sale of public stocks at below market prices, although such sales are effectively a tax on farmers in exactly the way purchases above market prices provide a subsidy. A country might seek to use both purchases and sales of stocks to support a level of equilibrium in market prices that supports long-term development objectives. Such interventions might avoid the necessity of more disruptive interventions if the market is prone to failure. By only counting the subsidy effects, the rules exaggerate the level of support that public purchases provide to farmers.

The G-33 proposal does not go into such detail. It is instead the latest iteration in the group’s longstanding fight to regain governments’ right to policy space for domestic agriculture and food security priorities. India, the leading spokesperson for the proposal within the G-33, is fighting for the right to be able to buy food from its domestic producers at a reasonably good price and then to use that food for consumer safety nets. The U.S. essentially did this for decades, but then moved away from a direct role in price floors and stopped accumulating stocks. Now U.S. firms and some producer organizations complain that countries such as India will use these tools to limit food imports, depriving them of export markets. U.S. civil society groups have countered that the G-33 proposal is an important first step to reforming unfair rules.

Up until the last minute before Bali, governments have been negotiating the terms of a “due restraint” or Peace Clause. Instead of changing the rules to accommodate the food security spending as the G33 requested, the Peace Clause would instead allow countries to spend more than their AMS limits, under certain conditions, without the threat of trade disputes from other members. It sidesteps everything interesting about the G33 proposal, especially from the perspective of the majority of developing countries who do not have the resources to overspend on their AMS but need to intervene in their agricultural markets. The contention between the G33 and the opponents of the proposal (such as the US) has been whether the Peace Clause should be applicable for a limited time (no more than 4 years) or more open-ended until countries devise an optimal solution. Under this meager concession, many countries that urgently want access to measures to stabilize their food security situations will continue unsupported by the WTO rules. The G-33 proposal got to the heart of the dilemma for trade rules in unstable times; no trade can work without confidence in the trading system. The existing rules do not give countries the confidence they need to take advantage of all trade has to offer. It’s time for rules that do. Apparently that will have to wait until after Bali. But it cannot wait for long.

IATP’s Shefali Sharma will attend the Bali Ministerial and will be reporting on the evolution of this debate.

Posted November 27, 2013 by Ben Lilliston   

IATP joins the Food Chain Workers Alliance and other allies around the country in supporting International Food Workers Week.

As we prepare to gather with family members around the dinner table and give thanks, let’s remember the nation’s 20 million food workers. From the field, to the processing facility to the grocery store, these workers have some of the nation’s most difficult and sometimes dangerous jobs, while often living below the poverty line.

The momentum to ensure food workers are treated fairly is growing, particularly around the need to increase the minimum wage. A recent report by the Food Labor Research Center at the University of California, Berkeley and the Food Chain Workers Alliance shows how raising the minimum wage would particularly improve the lives of food workers, while only increasing food prices by an average of less than half a percent. The Fair Minimum Wage Act in Congress would raise the minimum wage from $7.25 to $10.10 per hour over the next three years. The proposal also includes an increase in the minimum wage for tipped workers to 70 percent of the minimum wage. Better wages for workers help strengthen the economy and the food system. Sign this petition to ask Congress to act!

The Food Chainworkers Alliance’s Joann Lo outlines a number of other policy options to improve the lives of food workers at IATP’s Beyond the Farm Bill website.

IATP joins the Food Chain Workers Alliance and other allies around the country in supporting International Food Workers Week. During the week, a variety of actions are taking place around the country, from those focusing on raising the minimum wage to Black Friday Actions at Wal-Mart. Learn more about events happening in your part of the country.  

Posted November 27, 2013 by Shefali Sharma   

TradeWTOFood securityWorld Trade Organization (WTO)

United States Trade Representative Michael Froman greets stakeholders, including IATP, in July. Photo credit: Office of the USTR.

People in the U.S. may still remember how the streets were shut down in Seattle exactly 14 years ago (1999) as trade diplomats from all around the world gathered for the World Trade Organization’s (WTO) 3rd Ministerial meeting. Back then, there were protests on the streets by citizens who asserted that trade policy could not be made without public debate and behind closed doors because of its implications for everyday concerns such as food, environment, health and other issues that shape our lives. At that meeting, there was a revolt by developing countries as well, who felt that a backroom deal was being made by a few powerful countries that would then be imposed on them as an international agreement. Though the U.S. and other rich countries failed to launch a new trade round in Seattle, they succeeded two years later, in Doha, in the wake of September 11.

Fast forward 12 years and we have a WTO stalemate once more in time for the 9th WTO Ministerial in Bali next week. The conflict proves yet again that trade policy cannot be made in a vacuum, particularly when it comes to critical human concerns such as governments’ obligation to protect their citizens’ right to food.

The controversy pits the government of India against the United States, but in reality, the controversial G-33 proposal (named after the group of developing countries who have tabled it) is about allowing all developing countries the policy space to spend public resources on food stocks to ensure price stability and food security. U.S. opposition to that proposal has focused in part on the argument that this would limit export opportunities for companies wanting to sell in the Indian market. U.S. agribusinesses and commodity groups also complained in an October letter to the US. Trade Representative (USTR) that the proposed creation of food reserves would unfairly advantage producers in those countries.

Thus far, the U.S. government has dug its heels in and even indicated that a failure in Bali is likely unless the G-33 drops its proposal and accepts instead a time-limited deal (called a “Peace Clause”) that would allow governments to support food stocks as an exception to the rules. The implication of such an agreement would be that governments must take steps to end these programs before the time on the deal is up. In response to this unfair stance, some 40 U.S. food, faith-based, nutrition, health, development and economic justice organizations have written to USTR calling on the government to accept the G-33 proposal to change the rules to allow food stocks. The letter highlights “that the current agriculture rules in the WTO (including domestic support) are rigged to support big agribusiness. We do all countries a disservice when we promote only commercial export interests, ignoring the real political (and moral) imperative that governments are responsible for their citizens’ welfare, including their right to adequate and affordable food and fair prices to agriculture producers.”

The letter continues, “The G-33 food security proposal is an important first step in the reframing of global trade rules to promote more equitable and stable markets, especially for countries that face huge food security challenges. The U.S. proposal for a “Peace Clause” to suspend potential challenges to those efforts at the WTO is an unfair and inadequate response to a sensible proposal to explore new options to improve stability in national and global markets.”

The ball is very much in the USTR’s court to do the right thing in Bali next week.

Read the group sign-on letter to the USTR on the G-33 food security proposal. 

Posted November 26, 2013 by Dr. M. Jahi Chappell   

Food AssistanceFoodFood security

Participants play a "Food System Plinko" game at the Minnesota State Fair. Photo credit: K.V. Cadieux

Eric Holt-Giménez, director of the amazing food policy think tank FoodFirst, recently wrote in the Huffington Post that if healthy, organic food is unaffordable, this is a problem of wages and rights, not inherently a problem with healthy, organic foods. Meanwhile, Doug Rauch, the former president of the grocery chain Trader Joe’s is set to open a market “to repurpose the perfectly edible produce slightly past its sell-by date that ends up in the trash . . .  [the market] will prepare and repackage the food at deeply discounted prices.” One could take Rauch’s apparently noble kludge to reinforce the old saw that people only care about price when it comes to food.

This, of course, is nonsense.

One needn’t look so far as the ludicrously luxurious meals available, or even the 1000 percent mark-up we’re ready to pay for a $0.20 cup of coffee to realize this. Surveys show that Americans have a large number of values that they bring with them to their food choices—price being one, but only one. Thus, when we go out and buy food that costs more, say, than the USDA’s “Low-Cost Food Plan” (which allocates between $2.15 and $4 a meal), we are not making economically irrational choices. Rather, we’re attempting to balance price among many other factors. When the argument turns purely to price, what follows is most often an attempt to distract from the more appropriate conversation—a conversation about what kind of food people should have a *right* to access. I would argue that we should correspondingly strive for systems that enable people to make the choices to buy sustainable food affordably, that reflects the real prices—it isn’t a matter of keeping prices down, but constructing a system where the rights and economic access to better choices is present.

This is not to say that no one wants low prices; of course we all like to pay low prices. But at the same time, I’d say we also want fairness (a factor industry surveys tend to, er, “forget” to ask about!). Indeed, I would argue that most people want to think they're paying a fair price based on what something costs, environment-wise and labor-wise.

It is of course true and vitally important to note that many of my fellow Americans depend on low prices for food access. But let’s not get confused—it is one thing to need low prices in order to get access to food. Food is necessary to survive, to say nothing of thriving and overcoming the numerous hurdles placed on low-income Americans. It is quite another thing to say that because many of our fellow citizens depend on low prices—and on essential programs like SNAP (food stamps)—that they, or we, don’t or shouldn’t care about more than price. The choice for people with low incomes should NOT be between survival, sustainability or accepting the exploitation of your fellow human beings. The cuts to these programs, and the fact that profit margins and revenues have been going up, but wages haven’t, points to the huge problems we have with inequality in the U.S. We cannot and must not forget that this is the root problem. Trying to obscure this by insisting that no one should be paying for what our food system actually costs, or that Americans with scarce economic resources should have no choice but to buy food that is bad for the health of the people who make it, and bad for the health of the environment it is made in, is ridiculous. The price isn’t the right focus: wages, inequality and a lack of democratic control are.

But what about the rest of us, those who might have more economic means but still want low prices (expensive coffees and non-Low Cost Meal Plans aside)? Well, it is true that we are inconsistent and fickle enough as humans that we can compartmentalize—we can perhaps conveniently “forget” that some Everyday Low Prices incorporate Every Day Poverty Wages Under Horrible Conditions for workers somewhere. On the other hand, companies from Apple to Walmart and many more intentionally leave the exact working conditions all their products are made under undisclosed. And of course it isn't required, say, to have pictures of the conditions inside the places where products are made—be it meatpacking or garment-making. The supposed "consent" of people to low prices in exchange for all the human and environmental destruction is manufactured and constrained by under-accountable corporations and inadequate oversight. We can’t “consent” to what we don’t know, and saying “well, any consumer’s gotta realize this was made under horrible conditions” is far cry from actually providing the information to consumers, front and center, to say nothing of what our preferences might be for a different food system altogether.

This is why continuing to push for global transparency and accountability is critical toward more democratic, decentralized control of the food system and the economy. There may be a few people who can look at a factory farm and think “I’m still in the mood for industrial pork!” A few people will look at a picture of a workers living in abject poverty in Bangladesh and still buy that pair of capri pants. But this number of people shopping “purely on price” is a much smaller slice of the consumer pie than large corporations currently recognize. And the companies know this as they hide their true practices behind rhetoric of family-owned businesses, strict animal welfare standards, and proud, hard-working, red-blooded Americans. Otherwise, as I used to say to my students, if people truly only cared about prices, you could call your CAFO-ed hamburgers "Grade A Torture-Made Meat," and people would still buy it. But everyone, McDonald’s to WinCo, Safeway to YUM! Brands, does their best to make us think their Fine Meats and Cheeses are produced in nothing but the most idyllic of pastoral settings.

It'll be a long haul, but requiring that companies be up front about their practices and the true costs these practices have on humans and the environment will help make the many alternatives all the more feasible (for example, the estimated externalized—unpaid-for—costs of just our pesticide application in current the food system ranges into the many billions of dollars). People are also hungry for affordable alternatives, and have been embracing them. The changes we're going to see will come from continuing to develop and fight for these alternatives, and from continuing to expose the true costs we're placing on everyone for the artificially cheap prices of food. This isn’t about consumer choice, it’s about consumer sovereignty, citizen sovereignty and food sovereignty.

Photo: From a Food System Plinko game at the Minnesota State Fair. "People are encouraged to vote with (agricultural) tokens for which part they value the most. The tokens (beans) falling through the obstacles on the Plinko board show the web of interconnected processes that are involved in the food system." More information.

Posted November 22, 2013 by Karen Hansen-Kuhn   

AgricultureFree trade agreementsNAFTA: North American Free Trade Agreement

Cover of the TLCAN issue of La Jornada in which this story originally appeared. TLCAN (Tratado de Libre Comercio de América del Norte) is the Spanish translation of NAFTA.

A Spanish version of this commentary originally appeared in La Jornada.

One of the clearest stories from the NAFTA experience has been the devastation wreaked on the Mexican countryside by dramatic increases in imports of cheap U.S. corn. But while Mexican farmers, especially small-scale farmers, undoubtedly lost from the deal, that doesn’t mean that U.S. farmers have won. Prices for agricultural goods have been on a roller coaster of extreme price volatility caused by unfair agriculture policies, recklessly unregulated speculation on commodity markets, and increasing droughts and other climate chaos. Each time prices took their terrifying ride back down, more small- and medium-scale farmers were forced into bankruptcy while concentration of land ownership, and agricultural production, grew.

It’s hard to separate the impacts of NAFTA from another big change in U.S. farm policy: the 1996 Farm Bill, which set in place a shift from supply management and regulated markets to an accelerated policy of “get big or get out.” Farmers were encouraged to increase production with the promise of expanded export markets—including to Mexico. But almost immediately, the failure of this policy was evident as commodity prices dropped like a stone, and Congress turned to “emergency” payments, later codified as direct payment farm subsidies, to clean up the mess and keep rural economies afloat.

Then, as new demand for biofuels increased the demand for corn, and investors turned from failing mortgage markets to speculate on grains, energy and other commodities, prices soared. It wasn’t only the prices of farm goods that rose, however, but also prices of land, fuel, fertilizers and other petrochemical based agrochemicals. Net farm incomes were much more erratic.

In many ways, the family farmers who had been the backbone of rural economies really did either get big or get out, leaving a sector marked by inequality and corporate concentration. Over the last 20 years, there has been a marked shift in the size of U.S. farms, with the number of very small farms and very large farms increasing dramatically. The increase in the number of small farms is due to several factors, including urban people returning to the land (almost all are reliant on off-farm jobs to support themselves) and the growth in specialty crops for local farmers markets. The number of farms in the middle, those that are small but commercially viable on their own, dropped by 40 percent, from half of total farms in 1982 to less than a third in 2007.[i]

During this process of farm consolidation, corporations involved in agriculture and food production also consolidated. Mary Hendrickson at the University of Missouri calculates the share of production in different sectors held by just four firms. The share of the top four firms (Cargill, Tyson, JGF and National Beef) in total beef production, for example, increased from 69 percent in 1990 to 82 percent in 2012. The story is the same in poultry, pork, flour milling and other sectors, as fewer firms control bigger and bigger shares of total production, making it even harder for farmers to get fair prices or earn a living from their production.

Those corporations take advantage of the rules in NAFTA to operate across borders. U.S. companies grow cattle in Canada and pork in Mexico that they then bring back to the U.S. for slaughter and sale. Along the way, independent U.S. hog and poultry producers have virtually disappeared. Efforts to at least label those meats under Country Of Origin Labeling (COOL) laws have been vigorously opposed by the Mexican and Canadian governments. Meanwhile those factory farms contribute to grow environmental devastation in all three countries.

There is widespread recognition among the U.S. public of the need to change food and farm policies to ensure healthier foods and more stable rural economies, but policymakers in Congress and the Obama administration continue to push hard on the same failed policies. More free trade agreements, including the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), largely cut and pasted from NAFTA, but with dangerous new ideas to limit any remaining restrictions on GMOs and questionable food additives, and to pave the way for even more untested emerging technologies. A “new” Farm Bill currently being negotiated shifts from commodity support to an insurance model, which still locks in place the same advantages for even bigger farms and corporations and the same willful ignorance of the devastating impacts of droughts and flooding caused by climate change.

The wild ride of prices under the NAFTA roller coaster has left us with a food system that is dominated by fewer and bigger corporations. In many communities across the country, people are opting out of the existing Big Food system to rebuild smaller, healthier options that are rooted in local economies and connections between farmers and consumers. Whether those experiences can build up from the local to national agriculture and change policy is a big question, and one made harder by the huge dominance of corporate interests. But rebuilding the system from the ground up, and considering how to make fairer links to farmers in Mexico and elsewhere, is really the only path forward.

[i] Robert A. Hoppe, James M. MacDonald and Penni Korb, Small Farms in the United States, Persistence Under Pressure, USDA Economic Research Service, Economic Information Bulletin Number 63, Feb. 2010, p. 27.

Posted November 15, 2013 by Ben Lilliston   

Industrialized MeatAgribusinessFarm BillLabelingLivestock

Used under creative commons license from USDAgov.

To truly see the power of agribusiness, and its growing disconnect from regular people and farmers, look no further than the current dust-up over Country of Origin Labeling (COOL). Polls say more than 90 percent of consumers want simple labeling indicating what country the meat they are buying comes from. Farm groups like the National Farmers Union and the U.S. Cattlemen’s Association support it because of the marketing advantage it gives to U.S. produced meat and livestock producers. Yet, agribusiness has repeatedly flexed its lobbying muscles to block COOL and now they are at it again as Congress negotiates a new Farm Bill. Why do companies like Cargill, JBS and Tyson care so much about COOL? Remarkably, these enormously profitable global corporations are frightened that if consumers better understood their business model—which pays no attention to what country animals come from—they might have to make some changes.

On October 29, big meat (Cargill, Smithfield, Tyson, JBS, among others) sent a letter (subscription required) to the House and Senate Agriculture Chairs demanding that the Farm Bill “reform” COOL. Soon thereafter, House Agriculture Chair Frank Lucus (R-OK) parroted big meat’s arguments in announcing he wants to repeal COOL to avoid retaliation from trade partners. Senate Agriculture Committee Chairwoman Debbie Stabenow has admitted that COOL is on the agenda for the Farm Bill conference committee. 

Agribusiness efforts to crush COOL behind the closed doors of the Farm Bill conference committee is but the latest in more than a decade-long effort to block consumers from getting even the most basic information about where their food comes from. COOL for fruits, vegetables, meat and fish was first passed as part of the 2002 Farm Bill. Agribusiness successfully delayed implementation until 2009, after the 2008 Farm Bill required USDA to issue and enforce the rules. Once implemented, the meat industry worked with governments in Canada and Mexico to file a World Trade Organization (WTO) challenge against the meat provisions of COOL, alleging discrimination against Canadian and Mexican meat producers.

The WTO case highlights why the meat industry, in particular, doesn’t like COOL. The big meat companies consider all of North America their playground (thank you NAFTA!)  – resulting in livestock crossing borders often several times in their lifetime. So, a cow may be born in Canada or a pig in Mexico, but the animal is finished and slaughtered in the U.S. The WTO ruled that while country of origin labeling is allowed, in the case of meat (where animals may be born in one country, raised in another, and slaughtered in another) it didn’t provide enough information to consumers.

The WTO ruling sent the USDA back to the rule-writing drawing board, where they issued new rules in May, in consultation with the U.S. Trade Representative. Thankfully, instead of weakening the rules, the USDA listened to tens of thousands of comments from farmers, ranchers and consumers calling for stronger rules. The new and improved COOL requires muscle cuts of beef, pork, lamb and goat meat to list the country where the animal was born, raised and slaughtered—and eliminate confusing co-mingled mixed origin labels.

Agribusiness went into a tizzy. Groups representing U.S., Canadian and Mexican meat industries sought a preliminary injunction to block the revised USDA rules. Their case was denied in U.S. District court and is now under appeal. The governments of Canada and Mexico are threatening the U.S. government with additional legal action at the WTO, if COOL isn’t killed in the Farm Bill. And now, agribusiness lobbyists are doing what they do best: working behind closed doors in an attempt to undo COOL during the Farm Bill negotiations.

There is some reason to believe COOL is already affecting the industry. Tyson announced just last month that that it would stop buying Canadian cattle for shipment to U.S. beef plants (though it will continue to buy Canadian feeder cattle that it will finish at U.S. feedlots) because of COOL. Tracking where animals came from was just too costly, says Tyson.

COOL is just one manifestation of a larger battleground for greater food transparency as consumers struggle to have some say in a food system controlled by fewer and fewer corporations. Any step toward greater transparency is being fought tooth and nail by agribusiness; see the tens of millions of dollars companies spent to defeat labeling of genetically engineered foods in Washington State and California.

Of course, not all in the food industry are blocking more information for consumers. More and more voluntary labels are on the supermarket shelves, from “free range” to “raised without antibiotics” to “fair trade.” Food co-ops and Whole Foods are driving many of these changes, as the market grows for consumers who want to know not only where their food came from, but how it was produced. Many farmers targeting local markets are embracing greater transparency, and even larger-scale farmers are recognizing the price premiums offered by the rapidly rising non-GMO market.

The battle for greater transparency in the food system is happening at the state level, in Congress, and even at the international level, both at the WTO and within bilateral trade agreements like the U.S.-EU trade deal. The next litmus test for COOL is the Farm Bill conference committee. Will members of Congress stand up for consumers, farmers and ranchers or cave in to agribusiness? We’ll be watching.  

Posted November 15, 2013 by     Jim Harkness

AgroecologyClimateClimate Change

Used under creative commons license from Nove foto da Firenze.

Some of Typhoon Haiyan's wreckage Tacloban, Philippines.

In the past week, we have had a terrible reminder of what’s at stake in our work with the horrific typhoon hitting the Philippines. IATP Board Member and Director General of the Asian Farmers Association (AFA), Esther Penunia, has let us know that she’s alright, after several anxious days. Some of our earliest work with AFA was working together to build knowledge and capacity on climate change before the Copenhagen talks in 2009, and they continue to be close partners to promote agroecology as a resilient, low-carbon solution to feeding a climate-challenged world.

Esther lives in Manila and was there when super typhoon Haiyan struck last Friday. Esther and her immediate family got through fine, but her sister’s family lives in Tacloban, the hardest hit city. Esther had no news from them for several days. But Tuesday, she reported that her sister and family are safe—despite being in Tacloban at the height of the storm. As Esther told us, “You know how strong you are when being strong is the only choice left for you."

At least 10,000 others were not so lucky.

Haiyan was the strongest tropical storm to make landfall in history. It was almost certainly made stronger by the warming of shallow Southeast Asian seas due to man-made climate change, and its effects were exacerbated by the unusually high degree of sea level rise the region has already experienced in recent decades. The Philippines delegate to the international climate talks in Warsaw issued a strong plea for action, and has gone on a hunger strike to try to spur strong action.

This awful tragedy—more like a crime, really!—is a reminder to all of us that climate change is the environmental, social justice and food sovereignty issue of the next century, no matter who’s in the White House or Congress.

If you want to support the recovery in the Philippines, Esther recommends donating to the Philippine Red Cross.




       Sign up for our free newsletter!