Posted February 8, 2013 by Ben Lilliston
In 2010, journalist Frederick Kaufman wrote in Harper’s Magazine about how Wall Street speculators wreaked havoc with wheat markets and, in turn, helped drive the 2008-09 food price crisis. Now, he’s out with a new book titled Bet the Farm: How Food Stopped Being Food that goes into depth on how the increasing financialization of food effects farmers, consumers and global hunger. Research for the book brought Kaufman to farms, food science research labs, agribusiness giants, the United Nations and the Chicago Mercantile exchange. Bet the Farm is an accessible, sharp critique of how our food system has become increasingly captured by the big banks and giant food and agribusiness companies. Kaufman graciously accepted our invitation to answer five questions about the new book.
You write about the remarkable growth of the pizza industry, not only here but around the world. How has that impacted the agricultural economy?
Global pizza constitutes layers upon layers of global commodities: At the bottom lies commodity wheat, in the middle, commodity milk and cheese, and more times than not the concoction is crowned with pepperoni, a combination of commodity beef and pork. And let's not forget the tomatoes, which are the closest we come to a commodity crop in the vegetable kingdom. So, while Domino's and Papa John's and Little Caesar's and Pizza Hut advertise millions of combinations and possibilities for pizza, the underlining structure of the retail pizza business is monocultural, herbicide- and insecticide- and water-intensive agricultural methods on vast tracts of commercial land. Perhaps there is an argument to be made that when it comes to farming, bigger is better. The problem is that the commodities themselves are increasingly being priced based on the activities of international financial institutions, not the farmers, millers and bakers. Global pizza has become less of a food, and more of an investment for those with the deepest pockets, and Wall Street has led the charge.
Why are efforts to set a strict definition for “sustainability” so important for the food industry and others?
We all believe we know what it means. But in research for Bet the Farm I found that "sustainability" has become one of the most important marketing terms and tactics of this new century: Sustainability sells. And when I went to the University of Arkansas to interview the men and women at the Walmart-funded sustainability research center, I discovered that no one really knows how to calculate sustainability. In the case of a can of tomatoes, we actually do not possess the math to weigh the environmental impact of the can against the water against the diesel against the tomatoes in the can. But that doesn't mean a sustainability label wouldn't sell that can of tomatoes!
From a bank’s perspective, why is food always a good investment—even, and perhaps particularly, in bad times? How does the banks’ growing involvement in commodity markets affect farmers and consumers?
Since 2008, there has been a mad rush to find investment "value." Stocks and bonds and real estate and even dollars and euros have become suspect. But the smart money knows that going forward, arable land and fresh water and basic food commodities will retain value, and even grow in value. Of course, it is great when you invest in a product and watch the line on the graph go up. Except for the fact that each uptick in the global price of food is also an uptick in the number of people who cannot afford the food, the growing number of the world's food insecure. And, as the price of commodities becomes ever more volatile on the international exchanges, farmers are increasingly being left behind. The largest investors are the ones who can hire the PhD's from MIT to manage their hedging operations. Meanwhile, small farmers simply have to pay more for all their inputs, from seeds and insecticides to their diesel fuel.
What concerns do you have with the U.N. World Food Program’s Purchase for Progress program?
Purchase for Progress (P4P) is a classic case where the richest and most developed countries on earth believe that the path for the success for the poorest and least developed nations should simply be a game of Simon Says. In other words, do what we did, because we got it right. The idea of P4P that I object to most is the blanketing of commodity markets over the nascent food markets in nations such as Tanzania and Rwanda and Uganda and Guatemala. These markets will benefit the largest plantation owners, the biggest growers and the largest millers and warehouses, not to mention the bankers who will put these markets together. Most farmers will be left behind. Commodity markets are great things, but they must grow organically from an agricultural context, and not a forced march to the future.
What steps might we take to return food to being food?
First step: Get Wall Street out of the global food supply. And that's simple: Bring back the so-called "position limits," which limit the number of futures and options contracts non-agricultural institutions can hold. That would make food less of an investment, and allow food to be what it is: In short, the most precious thing on earth. We can also ease plant patent laws, so that food can become less of a legal construct. In the United States, we can bring back the national strategic grain reserve, which we had under the Clinton Administration. These buffer stocks help blunt the peaks and valleys of food price and help farmers manage risks going forward. Finally, we need to encourage countries to stop using food as a political football, a tool of foreign policy. Every nation needs to develop its own systems of food security and support their farmers: big, medium, and small.
Read more about Bet the Farm: How Food Stopped Being Food.
When a four year old in our project was asked recently where carrots come from, he pretty well nailed it: “The ground, and farmers water them and pick them and give them to people and bunnies too, and stores.” We couldn’t have said it better ourselves.
So amidst all the gloom and doom about childhood obesity, there is reason for hope. One bright light on the path to healthier kids is Farm to Childcare (F2CC). By connecting kids with local farm fresh foods, F2CC initiatives support farmers who produce healthy choices like fruits and vegetables while helping our youngest eaters get off to a good start.
IATP launched our new Farm to Child Care pilot in Minnesota last summer. With our child care partner, New Horizon Academy, we designed a set of practical, on-the-ground strategies to try out new approaches in child care settings: menu innovations featuring local foods, age-appropriate curriculum, parent outreach and a rigorous evaluation program. Now we’re pleased to share some of what we did and what we’re learning. Here’s the scoop:
By the end of the pilot, we found that:
Through a survey of parents, we learned that:
So we have made some initial inroads in building bridges among very young children, child care providers and local foods. What is next?
First, IATP will have the opportunity to share this work on a national stage at the Partnership for a Healthier America Summit, part of Michelle Obama’s “Let’s Move” initiative, in Washington, D.C. in a few weeks. Then, our Farm to Child Care initiative will be rolled out in 2013 to all 60 New Horizon Academy child care centers in Minnesota. Lastly, IATP will use what we’ve learned to improve our F2CC model and then share all of our F2CC resources later in 2013 with early childhood advocates, child care providers, farmers and policymakers around the U.S.
We hope that these efforts will enable others to learn from our mistakes and our successes, and help stakeholders around the country get more of those carrots to our littlest eaters (and to bunnies, too).
Posted February 5, 2013 by Shefali Sharma
As the Rome-based Committee on World Food Security begins preparing principles for “responsible agriculture investment” (RAI), its advisory body, the High-level Panel of Experts (HLPE), gets ready to revise its report on “Smallholder agriculture investment.” It is hoped that the RAI principles, if crafted with input from small-scale food producers and those advocating for their rights, become internationally accepted principles to govern international investment. If so, the RAI principles could pave the way for multilateral and bilateral investment treaties that respect small food producers, prevent egregious practices of transnational corporations that have led to landgrabs and livelihood loss, and more positively encourage agroecological investment in small-scale producers.
The HLPE, an advisory body to the Rome-based Committee on World Food Security, has received at least 65 comments into the first draft of its report, Investing in smallholder agriculture for food and nutrition security. This report could be a significant contribution into the RAI process. Many civil society groups support the HLPE and its process, not only because it has civil society representation, but also because its ultimate objectives are to help the CFS have “more informed policy debates and improve the quality, effectiveness and coherence of food security and nutrition policies from local to international levels.” This report on small-scale food producers is its sixth report in three years with previous reports addressing critical issues affecting the global food system such as food price volatility, land tenure, social protection and climate change.
The HLPE project team now has a challenging task to integrate comments from a wide variety of stakeholders. IATP, Grassroots International and the International Development Exchange have submitted joint comments emphasizing that agroecology should be a central pillar of the type of policy frameworks and support governments enable for agricultural investment in general and for small-scale producers, in particular. Several others made similar comments. The final report’s recommendations will be presented at CFS 40 this October for endorsement by governments.
The HLPE initiative comes at a time when the CFS has embarked on a process of creating principles of responsible agricultural investment (RAI)—to be distinguished from the more controversial World Bank-led PRAI, which were widely rejected by civil society organizations as a way of legitimizing large-scale land acquisition through a top-down process. Governments agreed to the Terms of Reference for this new process last year at CFS 39. The Civil Society Mechanism (CSM), a mix of social movements, grassroots groups and policy-oriented NGOs, assessed the CFS outcome on the RAI and stressed the need for building a “truly inclusive set of principles.” They stressed that investment “by and for” small producers was the most important investment needed for food security.
Since October, a draft outline of these principles has been prepared and a calendar of regional consultations has been proposed for 2013. It is critical that the CFS secretariat does all it can to ensure that those impacted most by these policies—i.e., small-scale food producers (which includes women, pastoralists, fisherfolk)—have a strong presence and input into this process. It is therefore important that organizations working with small-scale producers ensure their presence and representation at these consultations. The CSM working group on agricultural investment is closely involved in this process and will be engaged with the Open-ended Working Group (OEWG) of the CFS to ensure that the viewpoints of small-scale producers are articulated in these principles. The private sector and other stakeholders will also be vying for their own interests in this process. A final draft is scheduled for CFS endorsement at its 41st session, October 2014.
A successful outcome of this process would result in just principles that can be endorsed by civil society and a new basis of international investment law that helps, among other things, implement the Voluntary Guidelines on the Responsible Governance of Tenure.
Posted January 31, 2013 by Andrew Ranallo
“Any defenders of the status quo are not on my team.”
As he spoke, pictures flashed on the screen behind him: first, 60,000 plastic bags—the amount used in the U.S. every five seconds. Then, a shot of what 106,000 cans looks like (or the product of 30 seconds of can consumption in America). The photos were part of Photographer Chris Jordan’s Intolerable Beauty: Portraits of American Mass Consumption collection and dramatically illustrated our country’s urgent need for innovation—even as waste is only one small part of the picture.
Here, Anastas highlighted two properties that remain front and center in product lifecycle design: Persistence and toxicity. Think pesticides. Potentially toxic, and persistent enough to build up in our land and water, damage the environment and impact public health on a large scale. Green chemistry means designing products, from concept to production to the end of their use, to potential reuse, that are nontoxic, and will degrade safely when their time has come to shuffle off this mortal coil. Quite a brilliant idea, and not all that radical, especially as businesses in Minnesota and around the country begin to see that any successful business model will require such consideration as resources deplete and consumption continues to rise.
The day-long gathering brought together scores of Minnesota businesspeople, academics and visionaries like Dr. Anastas, and included panels on training future green chemists, managing supply chains, product lifecycle consideration and investing in green chemistry.
Take a look at pictures from the day, or watch Dr. Paul Anastas’ keynote below.
Posted January 29, 2013 by Kathleen Schuler, MPH
People across the country are concerned about toxic chemicals like bisphenol A (BPA), flame retardants, phthalates and formaldehyde in products they use every day, including those designed for babies and children. Most people agree that hormone disrupters, carcinogens and developmental toxins don’t belong in our consumer products. While action at the federal level is needed to better regulate toxic chemicals, states are taking the lead on protecting their citizens. At least 26 states will consider policies in 2013 to address concerns over toxic chemicals in consumer products, according to an analysis by Safer States, a national coalition of state-based environmental health organizations. The bills will cover a broad range of topics from bans on toxic flame retardants and bisphenol A (BPA) in consumer products to requirements that states identify chemicals of concern for health, manufacturers disclose their use of chemicals in products and the phase out of chemicals of concern.
Chemicals in our food system contribute to much of the human exposure to toxic chemicals, as persistent, toxic chemicals build up in the food chain and the human body. In addition, we are exposed to hormone-disrupting chemicals like BPA, PFCs and phthalates in food packaging.
“With more studies showing increased exposure to toxic or untested chemicals in our homes, citizens are demanding action at the state level,” said Sarah Doll, national director of Safer States. “Stronger state laws not only benefit public health, but the marketplace, too, by restoring consumer's confidence that products in stores are safe. We urge state legislators across the country to continue leading on these critical public health protections.”
“States realize that we can’t sit idly by and wait on Congress to protect our children from toxic chemicals,” said National Caucus of Environmental Legislators Board Chairman and Maryland Delegate James Hubbard. “The threats to public health from inaction are too great to ignore.”
State action on toxic chemicals is nothing new. Since 2003, 19 states have adopted 93 chemical safety policies. According to SAFER, “The majority of legislation passed with healthy bipartisan support—99% of Democratic legislators and 75% of Republican legislators voted in favor of bills, and both Republican and Democratic governors signed them into law.”
Minnesota is one of the leading states in protecting children from toxic chemicals, due to the leadership of Minnesota legislators and the work of Healthy Legacy. Healthy Legacy, led by IATP and Clean Water Action, is a coalition of 36 groups across the state representing more than a million Minnesotans. In 2009, Minnesota was the first state to pass a ban on BPA in baby bottles and sippy cups. Now eleven states and the FDA have taken action on BPA. Minnesota also passed the Toxic Free Kids Act, which required the Minnesota Department of Health to generate a list of chemicals of high concern and a list of priority chemicals in children’s products. There are nine chemicals on the priority chemicals list, including three phthalates, two flame retardants, lead, cadmium, BPA and formaldehyde.
For the 2013 legislative session, Healthy Legacy will advocate for three bills to protect children’s health.
Posted January 28, 2013 by Dr. Steve Suppan
On January 19, Deutsche Bank (DB) issued “Questions and Answers on investments in agricultural commodities”. The DB stated that after an internal examination, it was resuming investments in agricultural derivatives contracts that it had suspended since March 2011. Nongovernmental organizations had successfully pressured the DB and a few other European banks to “stop gambling on hunger” due to the banks’ concern about risk to their reputations. The World Development Movement had organized an October 2011 letter signed by 450 economists to the Group of 20 (G-20) demanding an end to bank speculation on agricultural contracts, so the DB was an early adopter of the investment moratorium.
The derivatives contracts include both the regulated futures and options contracts that farmers and food manufacturers use to protect against price decreases and increases respectively, and the unregulated over-the-counter (OTC) contracts. The DB’s internal investigation, bolstered by non-cited studies of unnamed agricultural economists, found “there is little empirical evidence to support the notion that the growth of agricultural based financial products has caused price increases or volatility.”
Nor, of course, had financial speculation on agricultural commodities contributed to increased food insecurity and hunger, particularly in developing countries. Indeed, the statement concluded, financial speculation should not be limited by regulatory instruments, such as position limits on the share of the commodity derivatives contracts that any one entity and its foreign affiliates could control. To deny the effects of financial speculation on agricultural prices, Deutsche Bank had to ignore studies, such as those of Dr. Stephan Schulmeister’s trenchant analysis that showed how 1,092 algorithmic models for trading commodities have driven commodity price volatility. Schulmeister’s studies have been very influential in building European—and particularly German—government support for a Financial Transaction Tax to reduce the volume and volatility of such trading. On January 22, 11 European Union member states committed to levying an FTT.
It would be truly extraordinary for any bank—even one that had received $711 billion of U.S. Federal Reserve Bank emergency loans, as Deutsche Bank had as of November 2011—to admit to systematically dangerous investments that required a U.S. bailout to prevent the DB’s insolvency. (At a DB co-financed conference in November in Berlin, former IMF economist Randall Wray reminded participants of the scale of the bailout, in the context of a presentation on “What Banks Should Do” (slide 15). Professor Michael Greenberger, an advisor to Americans for Financial Reform, presented on “The Imperative of the Extra-territorial Reach of Dodd-Frank.”) But even by the standards of Too Big to Fail Bank self-exoneration and impunity from effective prosecution, the DB press release was a masterpiece of mea exculpa. (To be fair, in May 2012, Deutsche Bank and its U.S. affiliate Mortgage IT did admit to wrong-doing for reckless lending practices and paid a $202 million fine in a civil fraud case brought by the U.S. federal attorney for the Southern District of New York. Generally speaking, U.S. federal agencies allow corporate miscreants to pay usually risible fines without admitting guilt, thus protecting the corporations from further civil suits.)
Cynics will say that the result of the internal examination was preordained in the 2011 report of the Institute of International Finance (IIF), then headed by the Deutsche Bank CEO Josef Ackermann, to the G-20 finance ministers. The IIF report concluded that speculative investments by IIF member banks played no role whatsoever in the commodity price bubble and collapse of 2008–09 that triggered the ongoing G-20 investigation into commodity price volatility. The report further alleged that there was no economic evidence to demonstrate that anything but supply and demand fundamentals determined agricultural or other commodity derivatives prices.
A September 2011 letter from the Berlin based NGO World Economy, Ecology & Development (WEED) and several other NGOs rebutted the IIF report. They appended to the letter an annotated bibliography of studies documenting the effect of financial speculation in commodities trading. The list comprises now well over a hundred studies, many of them peer-reviewed academic studies. Many of the studies concern OTC energy derivatives contracts, particularly oil and gas. These studies are relevant to agricultural prices insofar as energy contracts are the dominant contracts in commodity index funds and index trading strategies, traded both OTC and on regulated commodity exchanges. In most index funds, agricultural contracts are the tail wagged by the energy contract dog.
Clearly, agricultural supply and demand factors are structurally important—but by no means the only—determinants of agricultural raw materials prices. The DB internal investigation must have failed to look at agricultural prices and its agricultural contracts included in the commodity index products it buys and sells as part of a purportedly effective portfolio diversification strategy for its clients. Portfolio diversification is not driven by short-term, or even long-term, agricultural supply and demand fundamentals but by the trading formulas and overwhelming weight of money of portfolio investors, such as pension funds and endowments. A recent essay by Myriam Vander Stichele shows how commodity exchange–traded funds, such as those of Deutsche Bank, pose risks for consumers, retail investors, institutional investors, commodity markets and financial markets.
That weight of money and the volatility induced by the rolling of indexed contracts drives commercial hedgers out of markets when the costs of trading in non-fundamental factor volatility become too high even for large agricultural derivatives investors. (To be fair, one of DB’s advisors, Dr. Andreas Beck, advised in January against including commodities in exchange-traded funds.) The studies Deutsche Bank reviewed could only have been of data from the regulated futures and options market and not studies evaluating data from the still unregulated and dominant OTC commodity derivatives market.
Corollary to the Deutsche Bank et al self-exoneration is the denial that cross-border government regulation of the OTC market is necessary. This denial was manifest in the voluminous foreign government and multinational bank comments on the draft Commodity Futures Trading Commission (CFTC) guidance on the cross-border application of CFTC rules on OTC trading to the foreign affiliates of U.S. banks. Deutsche Bank was among those banks that argued that foreign regulators, and not U.S. regulators, should decide whether or not their regulatory regimes provided “comparable comprehensive oversight” of the markets, as required by the Dodd-Frank Wall Street Reform and Consumer Protection Act.
In an August 27, 2012 letter to the CFTC, Deutsche Bank argues that the CFTC should not have access to foreign OTC data depositories to verify that the foreign affiliates of U.S. OTC dealers are complying with Dodd-Frank. Furthermore, Deutsche Bank and others argued, the CFTC should adopt a narrow definition of “U.S. person” to exclude foreign affiliates of U.S. OTC dealers from liability for Dodd-Frank violations. No data access, no data surveillance, no enforcement, no violations. In other words, Deutsch Bank et al argued for no consequential change from Bush administration non-regulation of markets.
On December 4, regulators from more than a dozen national jurisdictions, including the European Union and the United States, issued a joint press statement about their intent to cooperate to regulate OTC markets “consistent with their [national] mandates.” Likewise, trade data access or lack thereof, due to data privacy laws protecting banks, would be consistent with national mandates. The diplomatically crafted statement left open the possibility that some of the signatories would be less than cooperative in turning over the data necessary for effective cross-border regulation of the global OTC market.
The foreign government and bank comments resulted in the approval of weakened cross-border guidance by the CFTC on December 21 and the granting of a six month extension to the banks and their foreign affiliates to register as OTC dealers with the CFTC and show other steps toward complying with Dodd-Frank. Registration is the first step toward regulation that will require the U.S. headquarters of the foreign affiliates to aggregate trading data for surveillance and possible enforcement actions.
By restricting the data field of its internal examination to that of regulated commodity markets, Deutsche Bank steers our attention away from the vast and unregulated OTC market. Its lobbying effort, and that of the Too Big To Fail banks, seeks to keep regulation by principle (otherwise known as “light touch regulation”), rather than regulation applied to the mandatory, comprehensive submission of trading data. A recent International Monetary Fund staff discussion note estimates that the collateral posted to trade $600 trillion in OTC trades annually was just $600 billion, or a dollar posted for every $1,000 in gross notional value (face value of each trade). Such a lightly collateralized market needs both more collateral posted and more stringent regulation, not less.
So, as a result of Deutsche Bank’s self-exoneration, it will profitably resume those investments and join the chorus of bankers urging regulators to simply trust that these actions won’t result in another food-price crisis, another financial meltdown or yet another bank bailout. Trust, but don’t verify (as data won’t be forthcoming anyway).
Posted January 18, 2013 by Shiney Varghese
Writing in National Geographic in December 2012 about “small-scale irrigation techniques with simple buckets, affordable pumps, drip lines, and other equipment” that “are enabling farm families to weather dry seasons, raise yields, diversify their crops, and lift themselves out of poverty” water expert Sandra Postel of the Global Water Policy Project cautioned against reckless land and water-related investments in Africa. “[U]nless African governments and foreign interests lend support to these farmer-driven initiatives, rather than undermine them through land and water deals that benefit large-scale, commercial schemes, the best opportunity in decades for societal advancement in the region will be squandered.”
That same month, the online publication Market Oracle reported that “[t]he new ‘water barons’—the Wall Street banks and elitist multibillionaires—are buying up water all over the world at unprecedented pace.” The report reveals two phenomena that have been gathering speed, and that could potentially lead to profit accumulation at the cost of communities and commons —the expansion of market instruments beyond the water supply and sanitation to other areas of water governance, and the increasingly prominent role of financial institutions.
In several instances this has meant that the government itself has set up public corporations that run like a business, contracting out water supply and sanitation operations to those with expertise, or entering into public–private–partnerships, often with water multinationals. This happened recently in Nagpur and New Delhi, India. In most rural areas, ensuring a clean drinking water supply and sanitation continues to be a challenge. For-profit companies such as Sarvajal have begun setting up pre-paid water kiosks (or water ATMs) that would dispense units of water upon the insertion of a pre-paid card. It is no surprise that these are popular among people who otherwise have no access to clean drinking water.
With climate change, however, the water crisis is no longer perceived as confined to developing countries or even primarily a concern related to water supply and sanitation. Fresh water commons are becoming degraded and depleted in both developed and developing countries. In the United States, diversion of water for expanded commodity crop production, biofuels and gas hydro-fracking is compounding the crisis in rural areas. In areas ranging from the Ogallala aquifer to the Great Lakes in North America, water has been referred to as liquid gold. Billionaires such as T. Boone Pickens have been buying up land overlying the Ogallala aquifer, acquiring water rights; companies such as Dow Chemicals, with a long history of water pollution, are investing in the business of water purification, making pollution itself a cash-cow.
But chemical companies are not alone: GE and its competitor Siemens have extensive portfolios that include an array of water technologies to serve the needs of industrial customers, municipal water suppliers or governments. (In the last year and a half two Minnesota based companies have become large players in this business—Ecolab, by acquiring Nalco and Pentair by merging with Tyco's Flow Control unit—both now belonging to S&P’s 500.)
The financial industry has also zeroed in on water. In the summer of 2011, Citigroup issued a report on water investments. The much quoted statement by Willem Buiter (chief economist at Citigroup) gives an inkling of Citigroup’s conclusion: “Water as an asset class will, in my view, become eventually the single most important physical-commodity based asset class, dwarfing oil, copper, agricultural commodities and precious metals.” Once again, several others had already seen water as an important investment opportunity, including GE’s Energy Financial Services, Goldman Sachs and several asset management firms that are involved investing in farmland in Asia, Africa, South America and Eastern Europe.
Given these recent trends, initiatives that track the water use of companies or map information regarding water related risks could be double edged. Some examples include the ‘water disclosure project’ and the ‘water-mapping project’. Both are initiated by non-profits/ think-tanks, the former by UK-based Carbon Disclosure Project and the latter by the US-based World Resources Institute. While distinct, they are linked by their shared constituency: global investors concerned about water-related risks. These initiatives could help companies identify and reduce their water footprint, or could lead to company investments that follow water and grab it.
The Carbon Disclosure Project’s water disclosure project seeks to help businesses and institutional investors understand the risks and opportunities associated with water scarcity and other water-related issues. According to its most recent report, issued on behalf of 470 investors with assets of $50 trillion USD, over half the respondents to their survey have experienced water-related challenges in the preceding five years, translating into disruptions in operations, increases in expenses and other detrimental impacts.
Aqueduct Alliance and its water mapping project, which aims to provide companies with an unprecedented level of detail on global water risks, seems at one level a direct response to the findings of the global water disclosure reports by CDP. General Electric, Goldman Sachs and the Washington-based think tank World Resources Institute are the founding members of the Aqueduct Alliance. All of them identify water-related risks as detrimental to profitability, continued economic growth and environmental sustainability. The water maps, with their unprecedented level of detail and resolution, seek to combine advanced hydrological data with geographically specific indicators that capture social, economic, and governance factors. But this initiative has given rise to concerns that such information gives companies and investors unprecedented details of water-related information in some of the world's largest river basins.
Many of these investors, described as the “new water barons” in Jo-Shing Yang’s article "Profiting from Your Thirst as Global Elite Rush to Control Water Worldwide," are the same ones who have profited from speculating on agricultural contracts and contributing to the food crisis of the past few years. The food crisis and recent droughts have confirmed that controlling the source of food—the land and the water that flows under or by it—are equally or even more important.
A closer look at the land-related investments in Africa, for example, show that land grabbing is not simply an investment, but also an attempt to capture the water underneath. At the recent annual Global AgInvesting Conference (with well over 370 participants), the asset management groups and global farm businesses showcased their plans, including purchases of vast tracts of lands in varying locations around the globe. With tools such as water maps, such investors are further advantaged. The global rush for land grabbing, as well as the resistance to it, shows that all stake-holders—pension funds, Wall Street or nation-states on the one hand or the people who currently use these lands and waters, and their advocates on the other—are well aware of the life-and-death nature of land (and water) grabbing, especially in the case of developing countries.
National and international regulatory mechanisms must be put in place to ensure that basic resources such as land, water and the means for accessing fresh water do not become merely the means for profit accumulation for the wealthy, but are governed in a way that ensures the basic livelihood of those most dependent on it. The last session of the Committee on World Food Security (a United Nations mechanism set up to address the food crisis) was a good starting point, and has set in motion a series of consultations on principles for agricultural investments. Civil Society Organizations are tracking the various ways in which regulations may develop in national contexts: simply facilitate land grabbing, mitigate negative impacts and maximize opportunities or block (or roll-back) land grabbing altogether. Ultimately, any policy approaches must prioritize local communities’ access to food and water: Any water-related investments needs to be about allaying their livelihood risks and enhancing their ability to realize their rights, whether it is in developing countries or developed countries.
Posted January 17, 2013 by Jim Kleinschmit
Last week, IATP, in partnership with Sustainable Northwest and the National Rural Assembly, hosted the kick-off meeting in Minneapolis for a new initiative: the Rural Climate Network, designed to support rural action and education around climate change. This inaugural meeting brought together rural organizations and leaders from around the country to discuss what resources, tools and information are most needed to help rural citizens understand and respond to the mounting climate crises. The meeting made clear the need for a specifically rural effort that builds connections and capacity among existing organizations, supports and promotes on-the-ground climate projects and supports rural leaders who can speak to both rural communities and policy makers about the need and value of effective climate policy and action on the community, state, national and international levels.
The meeting took place at the McKnight Foundation and included representatives from the following organizations: California Climate and Agriculture Network; Center for Rural Affairs; Center for Rural Strategies; CROPP Cooperative and Organic Valley; CURE; Farm Aid; Forest Guild; Land Stewardship Project; Lutheran Coalition for Public Policy; MACED; Main Street Project; National Congress of American Indians; National Family Farm Coalition; NCAT; Pesticide Action Network; RAFI-USA; Sustainable Northwest; The Watershed Research and Training Center; Threlkeld Farm Organic Dairy / Organic Valley; and the Western Organization of Resource Councils.
Posted January 15, 2013 by Jim Harkness
The Institute for Agriculture and Trade Policy will be ending the IATP Food and Community Fellows program at the conclusion of the current two-year class of fellows’ term in April 2013.
Launched in 2001, the program has made major contributions to efforts for a fair, green, healthy and affordable food system. With 86 outstanding alumni, the program has supported the development of many leading public officials, farmers, community advocates, writers, filmmakers, academics, public health experts and other professionals contributing to a better food system. The IATP Food and Community Fellows website provides a biography for each fellow, as well as several blog posts that highlight some of the outstanding work over the years.
Over the past 12 years, the program has not only contributed to the career of fellows but has made major contributions to the growing food movement. Several fellows have been integral to efforts to address or promote farm to school, farmworker justice, childhood obesity, equitable food access, local food systems, better conservation practices, food sovereignty, and greater equity across race, class and gender in the production and distribution of food. We all benefit from the leadership and creativity that fellows developed over their two-year fellowship as many fellows are serving in positions of leadership or continuing to provide public education and outreach around these topics.
Funding has now ended for this program. IATP would like to express its enormous gratitude to past supporters of this program, including the W.K. Kellogg Foundation, the Woodcock Foundation and the Fair Food Foundation. IATP will continue to work on many of the topics addressed by fellows, and will continue to collaborate with many of the alumni of the program.
Posted January 9, 2013 by Ben Lilliston
Just when you thought Congress couldn’t screw up the Farm Bill any worse, they surprise us all. As part of a fiscal cliff, New Year’s Day bender, Congress and the White House extended a barebones version of the Farm Bill for yet another nine months—giving the bumbling legislative body more time to further decimate the nation’s main farm and food policy.
The Farm Bill extension, apparently written largely by powerful Republican Senator Mitch McConnell and VP Joe Biden, continues existing commodity programs (including controversial direct payments), keeps the food stamp program largely intact, and provides a temporary extension of the dairy program. But there’s a long list of what it doesn’t do, including funding extension for 37 programs. It also doesn’t include immediate emergency relief to livestock producers and fruit growers still dealing with the damaging effects of the ongoing drought. The Conservation Stewardship Program (CSP), a critical program supporting agroecology, can’t sign up new farmers to participate in 2013. Other programs that received no mandatory funding include a host of renewable energy programs, the Beginning Farmer and Rancher program, rural development programs and organic and specialty crop research programs. Additionally, an important pilot program for local and regional procurement of international food aid was not funded. (See excellent summaries of the deal by the National Farmers Union and the National Campaign for Sustainable Agriculture).
Aside from the program bloodletting, perhaps most jarring was the complete disdain Congressional leadership had for the Farm Bill itself and the Agriculture Committee Chairs in cutting this deal. Leadership in the Senate and House Agriculture Committees had reportedly agreed to an extension over the weekend, but that agreement was scrapped and agriculture committee representatives were cut out of the final fiscal cliff deal-making. This comes after the House leadership refused—since July—to bring the Farm Bill to a vote, with very little political cost to pay. As Senate Agriculture Committee chair Debbie Stabenow said on the Senate floor, “There is absolutely no way to explain this other than agriculture is just not a priority.”
What does this mean for the future of the Farm Bill? The next Congress will start from scratch, with the House expected to start working on a new Farm Bill in late February. The Farm Bills that came out of the Senate and the House Agriculture Committee last year will likely be a starting point. But we can also expect that the budgets will be even tighter when Congressional Budget Office issues a new Farm Bill baseline budget in March, so even more cuts will be needed. Two big disagreements remain: one over the shift of commodity programs toward a revenue insurance model (which due to climate change may ultimately result in higher government payouts), and the desire by Tea Party activists to cut the Supplemental Nutrition Assistance Program (SNAP). Politically, it is largely the same players at the Agriculture committees, Congressional leadership and at the White House, all trapped within the same budget-cutting straightjacket. It’s hard to see how real reform can emerge in 2013. But of course, things could get much worse.
In the bigger picture, the New Year’s madness reflects a major blow to the stature of the Farm Bill as an effective policy instrument. It wasn’t farmer or rural interests that drove the final deal, but the threat of higher milk prices for consumers. Even under optimal conditions, the Farm Bill has largely turned a blind eye to some of the biggest issues in the agriculture and food system: climate change, fair prices for all farmers, corporate concentration and marketplace competition, and the treatment of food workers.
In the future, the big policy changes needed in our farm and food system may need to come from beyond the Farm Bill. There are many policy approaches bubbling up at the community and state level, and even in other countries, that could serve as a basis for a new agenda grounded in resiliency (to environmental and economic instability), justice for farmers, workers and consumers, health throughout the food chain, and food sovereignty (community control and ownership of the food system). We can’t afford any more Congressional surprises.