Posted January 31, 2014 by Patrick Tsai
Food insecurity is a lucrative endeavor for U.S. agribusiness corporations. As a matter of course, hunger has taken a backseat to maintaining a dominant trade position when it comes to U.S. trade negotiations and domestic policy. As long as the U.S. holds its position as the world's largest agricultural exporter, and import-dependent countries continue to be bound by rules that exploit their vulnerability to volatile commodity markets, U.S. agribusiness will profit indefinitely at the expense of the most vulnerable.
In order to address global hunger effectively, the U.S. government will have to acknowledge the effect its current agricultural policy has on global food security and extend the same lenience to allow developing countries the reestablishment of sovereignty in their own food systems without threat of dispute settlement or retaliatory trade sanctions. As it stands, wealth, subsidy classification, export credits and food aid contribute to a system of subjugation and persisting power disparities.
Inequalities in power between nations exist before negotiations begin. Initial positions of wealth determine the degree to which countries can leverage the allowed subsidies outlined within international agricultural agreements to promote food security and rural development. Developed countries’ subsidies comprise the “lion’s share” of global spending supporting agriculture (though they are, in theory, bound by greater reduction commitments under trade agreements). This raises the question, “Given the inequality in initial positions, must [the situation] inevitably result in inequality in outcomes?” (Matthews 2008, 82). Developing countries’ stagnant progress toward food security and rural development, compared to developed countries relative effectiveness, attests to the importance of economic wealth.
Power disparities are further exacerbated through exploitation of the WTO’s Agreement on Agriculture (AoA). The AoA, a byproduct of the General Agreement on Tariffs and Trade (GATT) Uruguay Round (UR) negotiations, was agreed upon in 1994. The AoA guides agricultural trade for WTO member countries, and the text acts as the basis for the WTO’s agricultural subsidies categorization system. The categories signify the extent of trade distortion and what is allowable. For the most part, agricultural subsidies fall under one of three classifications:
** In addition to these three subsidy classifications, developing countries may use the classification of "special and differential treatment" (found in Article 6.2) and all member countries may use “De minnimis” rules for spending on product specific support, developed countries 5 percent and developing countries 10 percent of value of production.
It is believed that countries subject to AMS reductions and limits, such as the U.S., exploit the system through “box shifting,” the practice of re-categorizing trade-distorting amber box subsidies into the blue or green box without making any substantive reform to subsidy programs (ICTSD 2007 2). Box shifting best characterizes the changes in U.S. agricultural policy stemming from the 1996 Farm Bill in order to conform to the newly implemented AoA. Domestic food security programs, seen as minimally trade distorting by the WTO, have historically comprised a large portion of U.S. agricultural subsidies and after the 2007-08 financial crisis these allocations grew even more. The degree to which the U.S. leverages and continues to grow green box subsidies is apparent in the following slides from WTO economist Diwakar Dixit (Figure 1) and ICTSD (Figure 2).
Figure 1 – US Green Box and AMS spending from 1995 to 2010
Figure 2 – US subsidy spending from 1995 to 2010
Subsidies are critical for helping producers adequately address risk and in helping achieve higher levels of food security. In 2010, the U.S. allocated $120.5 billion to green box subsidies, $94.9 billion of which went to domestic food aid (WTO 2012 G/AG/N/USA/89). Though the U.S. takes full advantage of green box subsidies to provide food security to its own people, the World Bank reports 5 percent of the U.S. population is undernourished (~15.6 million people1). At the recent Bali ministerial, the U.S. actively denied developing countries, such as India which experiences 18 percent undernourishment (~219.8 million people undernourished2), from taking measures to subsidize further development of food security programs. India allocates about one-ninth the amount of money to food security programs5 while managing a population approximately 4 times the size3 and suffering 14 times the amount of hunger4 as the U.S. The G-33, a “coalition” of developing countries facing similar trade and economic issues (including India), proposed three amendments to the AoA at the Bali WTO ministerial. The G-33 proposal allows more leeway in terms of how money can be used for food reserves and how AMS is calculated (see also, ICTSD 2013). Adoption of the G-33 proposal could result in greater food security for countries able to leverage the revised language by establishing stockholdings that reduce price volatility in domestic markets and provide a source of emergency food relief.
The U.S. argues that the G-33 proposal centers on trade-distorting supply-management structures. The argument is predicated on free market ideology, the tenets of which the U.S. circumvents through misidentified subsidies and its own trade-distorting green box subsidies. The U.S. decoupled subsidy payments under the 1996 Federal Agriculture Improvement Reform Act (FAIR) to follow Green box criteria, however ICTSD points out that the OECD (OECD 2001), World Bank (de Gorter 2003, 5) and USDA ERS (USDA 2002, 12) have found decoupled payments trade distorting. (ICTSD 2007 25,26) For many, the laissez-faire economic paradigm is seen to perpetuate hunger by reducing sovereignty in the agricultural sector of developing countries through reductions in government support, removal of protectionist policies and opening markets to increased imports of cheap and below production cost commodities (ActionAid, 7, IATP/UNCTAD, Food First).
Timothy Wise of Tufts University aptly describes the U.S. position on the G-33 proposal as hypocritical and an “attack on the right to food.” Some may argue that the U.S. position on the G-33 proposal comes as no surprise due to the fact the U.S. has not accepted the right to food under the human rights framework (IFPRI 2007 1, the Nation, Righting Food) and was the only dissenting country, out of 181, to vote against a 2008 U.N. “resolution on the right to food, by which the assembly would ‘consider it intolerable’ […] that the number of undernourished people had grown to about 923 million worldwide, at the same time that the planet could produce enough food to feed 12 billion people, or twice the world’s present population. (See Annex III)” (GA/SHC/3941). Indeed the U.S. continues to adhere to a course guided by infamous precedent.
Figure 3 – Projections for reaching WFS and MGD hunger goals
It is true that U.S. food aid has saved lives, however the net effect is arguably detrimental. U.S. food aid and hunger relief programs have been associated with undermining local food systems resulting in vulnerability and dependence on world markets (Clapp 2004, Hansen-Kuhn 2012, OECD 2000). The failing trajectory for both international goals to halve hunger (Figure 3), the World Food Summit (WFS) and Millennium Development Goals (MDG), warrants sincere consideration of food aid critique. Two notable areas of controversy in U.S. policy, said to address hunger, are the export credit guarantee program (GSM-102) outlined in the current Farm Bill (PL 110-246 section 3101) and Public Law 480 (PL 480), the 1954 Agricultural Trade and Development Assistance Act otherwise known as Food for Peace. The latter institutionalizes the dumping of U.S. overproduction on vulnerable countries feigned as food aid (Weis 2007, 67).
While appearing charitable, the use of export credits takes advantage of poor nations’ vulnerability to high prices and the need to feed their large populations on small budgets. Officially supported export credits are characterized by below market interest rates, longer repayment schedules, reduced/no fees and government guaranteed repayment of loans (OECD 2000, 8,Clapp 2004, 1441). These attributes result in lower purchasing prices for importers, effectively subsidizing exporter goods. (OECD 2000, 8) The current Farm Bill outlays 5.5 billion dollars a year for the program, though not always used in its entirety (FY 2013 $3 Billion). The OECD determined that due to the immense size of outlays and the excessive use, US export credits have a much greater trade distorting effect on world markets than any other country. The OECD also found that historically the US extends a very small proportion of overall export credits to countries most in need, least developed countries (LDC) and net food importing developing countries (NFIDC) (Clapp 2004, 1442). In addition to trade distortion, the burden of export credit debt acts to retard progress in developing countries by diverting funds for social programs to debt repayment (Eurodad, 2011).
PL 480 Title I is controversial for many of the same reasons as export credits. The title outlines policy on food aid sold under concessional terms, “grace periods of five years, repayment periods of up to 30 years, and below market interest rates” (Clapp 2004, 1442). Furthering the controversy, Title I has the explicit purpose to “improve commercial markets abroad,” (Clapp 2004, 1442) and therefore is not necessarily a tool dedicated to relief, but rather a title used to promote the U.S.’s own trade interests. Titles II and III of PL 480 pertain to U.S. in-kind food aid. Most U.S. food aid is purchased from U.S. producers (at least 75 percent by law) and shipped as in-kind donations to countries in need (Hansen-Kuhn 2012, 1). In-kind food aid sales are seen to “distort international trade by displacing commercial trade,” and are inefficient compared to other forms of assistance (Clapp 2004, 1442). Alternatively, food aid programs focused on local and regional procurement offer monetary donations that stimulate local economies by providing means for local purchases from farmers in the afflicted country or region. There are also less costs due to reduced distances of travel (Hansen-Kuhn 2012, 1; Murphy 2005, 12). The current U.S. food aid titles have addressed hunger to some extent, however it can be argued that their usage has, to a greater extent, amplified power asymmetries by undermining sovereignty and local food systems, making these nations more reliant on imports and subservient through debt.
Sadly, agricultural trade has become an art of identifying loopholes and re-categorizing subsidies that curtail risk to profits at home while perpetuating hunger abroad. Trade dominance amounts to how well a country can leverage subsidies exempt from World Trade Organization (WTO) limits and reduction commitments, and maintain programs that create and expand markets in vulnerable regions. Developing countries suffer under the brunt of these actions in the form of food insecurity. The issue of hunger has found a blind spot in the purview of developed country trade negotiations, which are focused more on maintaining powerful trade positions than ceding any control that might bring about food security and food sovereignty to developing countries.
Advocating rules that obstruct a country's ability to feed its hungry is an act of subjugation. By leveraging trade agreements and perverting the intentions of trade rules, the U.S. is negotiating the terms of global oppression where it could be genuinely helping others.
3 World Bank numbers 1.221 billion (India pop.) / 311.6 million (US pop.) ~ 4
4 219.8 million / 15.6 million ~ 14
5 India’s GAIN 2009/10 stockholding numbers compared to US WTO domestic food aid notification for year 2010 G/AG/N/USA/89
Posted January 29, 2014 by Tara Ritter
The second Rural Climate Network newsletter was released last week, featuring updates on how rural America is responding to the climate challenge. Since the first newsletter, the network has welcomed five new member organizations that represent the diversity of climate work across the country and display how climate change impacts sectors ranging from fisheries to forestry to meat production. The member spotlight this month is Organic Valley, and a featured interview with Sustainability Program Manager Jonathan Reinbold outlines the organization’s views on climate change. Policy that incentivizes this kind of on-the-ground work is critical in supporting the growing rural movement to adapt to and mitigate climate change.
This edition of the newsletter also features a brief interview with Renata Brillinger of the California Climate and Agriculture Network (CalCAN) to better understand how California farmers and ranchers are handling the drought that is currently underway in California. According to Brillinger, “mandated cutbacks in water distributions, along with depletions in available surface water and groundwater, are forcing farmers to dig deeper into their pockets while making tough decisions about crop planting and livestock management.” Some farmers have resorted to pumping groundwater to compensate for the lack of water elsewhere, but that is not a sustainable strategy in the long term should the drought persist and other ideas are needed.
Certain agricultural practices work to increase soil resiliency and keep the raindrop where it falls more effectively than others. For instance, crop rotation and crop diversification encourage increased water-holding capacity in soils and reduce the amount of runoff that occurs from monocropped soils. Particular crops are also less water-intensive than others, and farmers would benefit from increasing the amount of hardy crops grown on their land.
However, Brillinger is right on point when she says, “while there are actions individual growers can take to cope with drought and other climate change impacts, this is not just a farmer’s problem.” In order to encourage an agricultural system that remains resilient in the face of extreme weather events, farmers need technical and financial assistance to build soil health and water efficiency. With today’s stalled farm policy, it is more important than ever to advocate for policies that will incentivize sustainable, robust farm operations.
Sign up for future editions of the Rural Climate Network newsletter and learn more about what member organizations are doing regarding climate change in their communities at www.ruralclimatenetwork.org. If you are involved with an organization that would be a good fit for the network or would like to add your voice to this growing movement in another way, please email email@example.com.
Congress is quietly considering legislation that would speed the passage of two mega trade agreements, and seeks to specifically eliminate government programs that favor “localization.” The bill would give the Obama Administration what is known as “fast track” authority—meaning Congress would surrender its constitutional authority to shape trade agreements negotiated by the president and instead can only vote up or down on the deal.
Why should those working for a fair, sustainable food system care? Perhaps no area of policy has undermined local food systems around the world more than the slew of trade agreements passed over the last several decades. These trade rules cover everything from tariffs, food safety and intellectual property to enshrining corporate rights. They place restrictions on what is allowed in national policies, like the Farm Bill, as well as the state and local level. These deals have heavily tilted the playing field from farmers and consumers toward global agribusiness and food giants like Cargill, Monsanto and Wal-Mart.
Because these trade deals, like NAFTA and CAFTA, have been so blatantly negotiated on behalf of multinational corporations and have contributed to growing income inequality, they’ve been extremely unpopular. This is why the Obama Administration has decided to negotiate these two new trade agreements in secret. That’s right, the Trans-Pacific Partnership (including more than a dozen countries) and the Transatlantic Trade and Investment Partnership (with our biggest trading partner, the EU) is being negotiated entirely behind closed doors. The negotiating text has not been made public, and, amazingly, even many members of Congress are in the dark about what’s happening.
Aside from putting these secret trade deals on a fast track, the bill introduced by Senators Max Baucus and Orrin Hatch and Representative Dave Camp includes a new negotiating priority objective to eliminate what it calls “localization barriers.” Local content requirements have been a stated target of the U.S. Trade Representative in other countries like India. But of course, any agreement to undermine local content rules in another country would also apply to U.S. programs that give preference to locally sourced food or energy.
Here are 5 issues on the negotiating table in these trade agreements that local food activists should be worried about:
There is too much at stake for Congress to pass fast track and open the door for the speedy passage of mega trade deals that threaten to undermine much of the important work being done to build more sustainable, healthy and fair food systems. The good news is that we can prevent this from happening. There is growing opposition to Fast Track in Congress. More than 150 House members have expressed their opposition to the bill. Now is the time for the local and sustainable food community needs to tell their member of Congress to oppose fast track. IATP is a member of the Citizens Trade Campaign, go to their action center and let your member of Congress know your concerns.
Posted January 28, 2014 by Shefali Sharma
Over 13 years ago, IATP documented the transformation of U.S. hog production in The Price We Pay for Corporate Hogs. In a period of 30 years (1950–1980), the number of U.S. hog farms declined by nearly 80 percent, while the average farm size increased six-fold. Whereas in 1950, 2.1 million independent farmers raised pigs outdoors or indoors with bedded straw or hay (raising 31 pigs a year); at the end of the 90s, a total of 105 farms accounted for 40 percent of U.S. production (50,000 pigs each). By 1999, 50 percent or more of the farmers were under some sort of contractual arrangement and four companies (including Smithfield) controlled 20 percent of the production. In the last decade, this process has only intensified. By 2007, four companies controlled 66 percent of the production, all at great cost to U.S. farmers, consumers, the environment and public health.
What do the United States and China have in common when it comes to pigs today? The answer is not just Smithfield, now part of the world’s largest pork producing corporation owned by Shuanghui—China’s largest pork processor. The process that neared its end in the 80s in the United States began in China during that same period. Literally, millions of small-scale farmers raising a small number of pigs, chickens and cows have disappeared in the last 30 years. Those who continue to survive and further scale-up have become “specialized farmers”—part of a brutal cost-cutting supply chain dictated by intense competition between meat companies who increasingly double up as feed companies and vice versa. In the midst of these changes, China is grappling with environmental pollution, public health risks, and recurrent and rampant food safety concerns—again, very similar to the concerns that have arisen in the United States.
In February, IATP will launch four reports on China’s feed, pork, dairy and poultry supply chains. It is an endeavor to understand and share how China’s transformation toward a U.S. model is both a common story of industrial meat production anywhere (be it the United States or Germany) and also specific to China. It is also an attempt to show how China’s story, like the U.S.’s, is a global one, with global links and global impacts. Understanding how Chinese companies are “going out” to develop their supply chains, and how major U.S. and other international livestock and dairy companies are “going in” to China, better prepares us to address the global nature of this industrial complex and its impacts both domestically and globally. It can help us to get beyond big headlines in the paper about China’s growing meat consumption and dig deeper into how and why it is taking place and imagine a different pathway toward fairness, nutrition, public health, and environmental protection in food production—lessons that are readily available from the U.S. experience.
The global trend points to ever greater consolidation of fewer and more powerful corporations controlling ever scarcer water and land resources to feed millions of animals in confined spaces to produce more cheap meat. How citizens and governments deal with the externalities of this sector and its endemic global ramifications merit careful thought. China—as the largest producer of pork, the second largest producer of poultry, the largest feed importer in the world and the fourth largest dairy producer—is a critical piece of this global puzzle.
Financiers such as Morgan Stanley, Rabobank, Goldman Sachs have a great stake in China’s increased and unquestioned meat consumption growth. Meanwhile, Chinese consumers are increasingly concerned about growing food safety problems in their meat and food supply. Food safety concerns have the potential to be game changers in China’s consumption trends. Currently, these threats are used to further industrialize the meat and dairy sectors, but if lessons are learned from the U.S. experience, this needn’t be a fait accompli.
IATP’s forthcoming reports help understand these production and consumption trends and map some of these critical issues in order to gain more insight into China’s role in the Global Industrial Meat Complex and the global industry’s role in China.
Posted January 24, 2014 by Karen Hansen-Kuhn
On a slightly chilly morning last Saturday in Berlin, more than 30,000 people marched through the city to raise their voices against industrial agriculture and for good food and good farming. This was the fourth year for the Wir Haben Agrarindustrie Satt (We’re Fed Up with Agribusiness) march, and the biggest so far. The day started off with a breakfast led by family farmers from around Germany and the region. They led the march with a caravan of tractors, followed by slow food, animal rights, environmental, trade, development and other activists in a joyous celebration of food justice and local democracy.
The march was the culmination of a series of events during Green Week. We started with a public forum on agriculture and the Transatlantic Trade and Investment Partnership (“TTIP: No We Can’t!”) organized by Martin Haüsling, a Green Party Member of the European Parliament. The German government held its annual Global Forum for Food and Agriculture, which included informative sessions organized by NGOs, academics and corporations on the future of the food system. All great events, but hard to beat the Snippledisco (Disco Soup), where hundreds of people chopped vegetables deemed not quite good enough for the supermarket to pounding music, at once protesting food waste, preparing soup for the demo the next day and just having a great time.
Our colleagues at ARC2020, a broad coalition pushing for reforms in EU agricultural policies, were among the leaders of the week’s events. ARC (and IATP board member) Hannes Lorenzen guided me through the march explaining the groups organized against GMOs (a hot topic, since the European Commission is considering approval of a new variety of GMO corn), factory farming, and TTIP. We stopped for a while to join Benny Haerlin, also from ARC2020 (and the Future of Farming Foundation) to raise our voices for local seeds, leading hundreds of marchers chanting “Freiheit fur die Vielfalt!” (Freedom for Diversity!).
And at the end of the march, I had the honor of following Slow Foods movement leader Carlo Petrini in a short speech to the crowd. We in the U.S. haven’t yet made the enormous strides of the EU in fixing our broken food system, but we haven’t been sitting still either. I told them of the state level campaigns all across the U.S. to label GMOs and get toxics out of our food and environments, and the Farm to School and other local foods initiatives that bring farmers and consumers together in ways that are fair, healthy and sustainable. And of the waves of activism all across the country to oppose fast track, TTIP and other trade deals that put those fragile gains at risk.
It was an inspiring event, all about rebuilding the food system from the ground up and changing the rules that result in corporate concentration, unfair prices for farmers, and unhealthy diets. A tough act to follow, but wouldn’t it be great to try?
Posted January 10, 2014 by Karen Hansen-Kuhn
The U.S. trade debate shifted into high gear yesterday with the introduction of Congressional bills to fast track trade deals. If approved, this would give the administration the authority to negotiate trade deals behind closed doors and then submit the resulting agreements to Congress for an up or down vote, with very limited debate and no possibility of amendments. Unions, environmental organizations and many other civil society groups immediately denounced the bill as undemocratic and out of date. Some 151 Democrats issued a letter last week expressing opposition to the bill, so its passage is far from assured.
Even beyond the undemocratic nature of the fast-track mechanism, the bill includes negotiating objectives that should raise alarms for advocates of food sovereignty and international development. It would direct the office of the U.S. Trade Representative (USTR) to eliminate “localization barriers to trade.” Rather than celebrating the emergence of strong local economies, that provision would direct USTR to "eliminate and prevent measures that require United States producers and service providers to locate facilities, intellectual property, or other assets in a country as a market access or investment condition, including indigenous innovation measures." That kind of measure, if enacted in a trade agreement, could easily boomerang back to the U.S. to undermine local content requirements for job creation or even perhaps local foods programs.
The legislation also calls on USTR to make food safety and other Sanitary and Phytosanitary (SPS) measures “fully enforceable” in trade deals. That could mean that corporate complaints over restrictions on GMOs or dubious food additives become subject to the loathsome Investor-State Dispute Resolution mechanism, which gives corporations the right to sue governments over public laws or regulations that undermine their expected profits. Using that mechanism, Phillip Morris has brought suits against the governments of Uruguay and Australia over new rules on cigarette labels. Could GMO or country-of-origin labels be next?
These issues are all subject to heated debate in negotiations for the Trans Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP). Those talks, like the debate on fast track itself, need to emerge from the shadows. As AFL-CIO President Richard Trumka says, “Rather than focusing on empowering multinational corporations, we should be working to support domestic manufacturing jobs, fix our crumbling infrastructure, and rebuild a strong middle class. This fast track bill will do the opposite.”
Posted January 9, 2014 by Shefali Sharma
One of Berlin’s big newspapers, the Berlin Zeitung, flashed images of little piglets today and of mass produced turkeys. This is part of a bigger build up towards a major demonstration on January 18 in which over 20,000 citizens are expected in Berlin to protest against industrial farming in the country—mass meat production being the vivid centerpiece for why it is so bad for people and the environment.
I have been in Germany for the last few weeks and am struck by how hot this topic is becoming—capturing media attention and putting the Green Party into elected positions in different states where animal factory farms have become a major problem. A slow movement is building, garnering ever increasing consumer support towards direct farmer-to-consumer marketing of organic, small-scale, locally produced, humane agriculture products.
The campaign that is organizing events and the demonstration during Germany’s “Green Week” is called "Meine Landwirtschaft" or “My Agriculture,” building a message to put back agriculture into the hands of better stewards who can respect soil, water and integrate human and animal health into good food for the people and the planet. This year’s theme for the campaign demonstration is "Wir Haben Agrarindustrie Satt!" or "We’re fed up with industrial agriculture!" The poster child: a big pig face.
Speaking of pigs, just after the New Year I visited a sow-raising industrial pig farm near Muenster (about a 4-hour train ride Southwest of Berlin)—the farmer had started out with 400 sows and is now in the business of feeding and impregnating over 1,200 of them. He has them delivered by a company when they have just come of age and hands them off to another contract farmer just as they are about to give birth. The delivery of piglets is more risky.
Many of the people actively working on problems with industrial meat production were surprised that I managed to get access to such a farm—and it’s true, without connections of a friend of a friend, I would not have been able to see such an operation. It is also nearly impossible to visit such operations in the U.S. I got lucky, I guess.
The visit shocked my senses; The extreme smell of ammonia and methane saturated my pores and clothes and the extremely cruel conditions these poor animals are in made me anxious to get out within minutes of entering. We were made to wear boots and these astronaut-like suits/coveralls that would keep our clothes from smelling and would hopefully prevent infection (both human to pig and pig to human).
The producer spoke at length about his operations—his mechanized feeding process, the breeds, the way that each sow is inseminated. The details he failed to mention are just as important, like the excessive use of hormones in the industry so that sows are fertile and give birth to piglets at the same time. This is efficient for producers so that no gestation crate is empty at any given time during the year. The faster the turnover, the more uniform the sows and piglets, the greater the number of piglets born, the more profitable the business.
These crates are so narrow that these poor animals can only stand and face their feeding troughs, unable even to turn around. German rules mandate that after 35 days of being pregnant, these sows must be able to have more space for some hours during the day until they give birth. I saw these more “spacious” stalls where about 5–6 sows sit, indoors with cement floors and gaps that allow for urine and manure to pass through (which generate all the smell and pollution).
Incidentally, the headlines in today’s paper are also about hormone use in sows and how the danger to human health. BUND, Friends of the Earth Germany, released a high-profile report yesterday on the excessive use of hormones with sows in the German pork industry. This is likely no different than sow rearing in the U.S.
I spoke at length last evening with Reinhild Benning, BUND’s agriculture expert, and she told me that Germany’s data on hormone use in the animal industry is ten years old. The evidence they have gathered based on this old data indicates that these hormones contaminate groundwater and end up in drinking water sources. Excessive hormones, such as steroids that are used in industrial pork production, can be carcinogenic, leading to higher rates of prostate and breast cancer, infertility and even early puberty in youth. She told me that she did 12 radio interviews yesterday on the subject. Their press conference was also well-attended followed by interviews by several newspapers. Several other colleagues across Berlin were interviewed on their take of the issue.
This is perhaps the most exciting aspect of these developments: German media and its readers are interested in knowing about these issues and are beginning to demand change. I would love to see such an interest in the U.S. For instance, wouldn’t it be great to imagine 20,000 Americans demonstrating against this industrial production model after news broke out in October that antibiotic-resistant salmonella was found in several Foster Farm poultry products, sickening over 16,000 people.
The Henrich Boell Foundation in Berlin is launching its second annual “Meat Atlas: Facts and Figures about the animals we eat” with another press conference. IATP is one of the 26 contributors to this atlas. Stay tuned for more blogs on these issues and on IATP’s own upcoming publications on industrial meat production in China. Sign up to receive IATP's latest work in this area, including the forthcoming reports, at www.iatp.org/industrial-meat.
Posted January 8, 2014 by Dr. M. Jahi Chappell
The illusion of choice takes away from our ability to get to a just, sustainable food system, meaning we’ll have to “Vote with our Vote.” We can’t afford to just “Vote with our Fork.”
We’ve been told that we in the U.S. have the best, safest food system in the world. Without getting bogged down in endless debate, let’s get some context: the U.S. has 6 percent of households with very low food security and almost 9 percent more who are not sure they’ll have enough money or resources for food (at the same time, our average food availability is equal to 3,800 calories per person per day, much more than the recommended 1900 to 2500 calories/person/day); we throw away and waste 30 to 50 percent of our food; our food system is rated as fourth in food safety; we’re first (among industrialized countries) in overweight and obesity and tied with Greece for second in terms of the number of people who can’t reliably afford adequate food. That’s right: despite having some of the world’s cheapest food, we have one of the highest levels among wealthy countries of people not being able to reliably afford it.
The Economist Magazine does rank the U.S. #1 in its Global Food Security Index, but given the above, all I’m saying is that being #1 leaves a lot to be desired. So let’s not get too comfortable, whatever our ranking.
So, how is one of the most politically and economically powerful countries on earth also the second worst among its peers in terms of food security? There are many ways to answer that question, but one way I’d answer it is to say that we’ve been focusing too much on “voting with our fork,” when what we should be doing is “voting with our vote.” That is to say, the U.S. food system has become incredibly concentrated, with most of the control in the hands of very few firms:
And on and on it goes. Things aren’t much better in the organic food industry. Why does it matter? Well, if we were voting with our forks, it means we’re doing so with three tines behind our back—it’d be like a U.S. Senate where the top three senators got a total of 70 votes, and 97 other senators would have share the other 30 between them. (And you thought things in the legislature were bad now!)
We’re in a system like the old saw by Henry Ford, “You can have any color car, as long as that color is black.” When I was in the bodywash business, the saying went “we want to sell consumers as much water [as part of the bodywash] as possible”—because water is cheap. Well, salt, fat, and sugar are cheap too, and even better than water, they’re hard to resist! All of these firms want to sell us more, more, more of everything, and the fact that some people can’t afford enough doesn’t matter as long as others can afford too much! “By concentrating fat, salt and sugar in products formulated for maximum ‘bliss,’ Big Food has spent almost a century distorting the American diet in favor of calorie-dense products,” Scott Mowbray summarized in his New York Times review of the book Salt Sugar Fat. What’s more, it’s more profitable for companies to sell us heavily processed foods rather than the whole and healthy ones we know we should eat. To make matters even worse yet, processed foods may have more calories than the whole foods they came from, meaning we might get less full while getting more calories from processed forms of the same foods.
It is just not as profitable or to the advantage of major food companies to sell us food that is healthier and less processed (indeed, processing is part of “adding value” in industry-speak). Most supermarket food is designed to trigger our pleasure centers to want even more, while it bypasses the triggers in our bodies making us feel “full.” The big food companies spend millions on advertising to make sure their food is “what we crave” (and like it or not, advertising works—why else would they pay for it?). They do this knowing that if we change our minds, our choices are the nearly identical products from their one or two major competitors. Echoing Henry Ford: we can have any kind of food we want in the U.S., for some of the lowest prices in the world, as long as we don’t mind choosing from only a couple companies, don’t mind it being unhealthy, and don’t mind the profits going to food processors and retailers, not farmers.
This is the way it goes when we vote only with our fork. 60,000—that’s the number of products supposedly found in the U.S.’s largest supermarkets. But when these 60,000 come from a handful of companies, how much choice do we really have? 57 kinds of processed, sugary breakfast cereals are still all processed, sugary breakfast cereals.
One of the things I’ll be doing here at IATP as the new director for agroecology and agriculture policy is continuing our long-standing work to build a new narrative of the food system. That is, the story we tell ourselves around our food system, what it does and what’s possible. This piece is the first of many that my colleagues and I will be writing around this theme over the next year. Tune in to IATP’s Think Forward blog and BeyondtheFarmBill.org in the coming weeks and months to see!
Posted December 31, 2013 by Dale Wiehoff
The New Year came in on the heels of an explosion in the small prairie town of Casselton, North Dakota, when two BNSF Railway trains collided, one carrying crude oil. The residents of Casselton were told to evacuate as the thick clouds of black smoke filled the sky. The only comfort in this latest of crude oil transportation disasters was that no people lost their lives. That wasn’t the case in Lac-Megantic, Quebec where 47 people lost their lives when a Montreal Maine & Atlantic Railway Ltd train carrying tar sand oil derailed and exploded. Small rural communities and First Nations lands have suffered the most from this steady flow of oil spills. When it isn’t train tankers careening off the tracks, it is crude oil pipeline leaks flowing out on to wheat fields and into rivers. When it isn’t crude oil, it is natural gas explosions such as the one in West, Texas last April, when a fertilizer plant blew up, killing 15 innocent people. Repeatedly, the oil and gas industry has shown criminal disregard for the lives and property of people and communities.
So, what can citizens do? We could and we must say that the nation’s infrastructure for oil and gas development is not up to the threat posed by the headlong drive to squeeze every last drop of petroleum out of the earth. We could and we must say that federal, state and local governments have failed to protect us, and have fallen far short of establishing and enforcing effective regulatory standards for the oil and gas industry. These measures are critical and it is up to us to hold our governments accountable.
But monitoring, regulating and preparing for disasters is not enough. All the spills, train derailments, explosions, and pollution, as horrific as they are, pale next to the disaster of climate chaos, caused in large part by the overuse of petroleum.
It is past time to stand up to this reckless and dangerous form of energy production. Citizens and communities must act to protect themselves. In Minnesota, the Public Utility Commission has agreed to hearings on the proposed expansion of the Alberta Clipper pipeline. It is time to join together and tell the PUC that we don’t need and we don’t want 800,000 barrels per day of tar sand oil traveling across northern Minnesota and approaching Lake Superior. In fact, we don’t want it to come out of the ground. Stopping the Alberta Clipper in 2014 is our New Year’s resolution.
Posted December 19, 2013 by Dr. Steve Suppan
Is it possible or necessary to regulate Automated Trading Systems (ATSs) on commodity futures markets that transact business electronically without direct human intervention at the speed of light (high-frequency Trading (HFT))? The Commodity Futures Trading Commission (CFTC) sought answers to that question in a September 2013 Concept Release with 132, often multi-part, questions. As CFTC Chairman Gary Gensler remarked in an appendix to the release, ATSs account for 91 percent of all trading, and farmers and ranchers are affected by ATS-generated price volatility. IATP responded to a few of the 132 questions in a comment filed last week with the CFTC.
The failings of ATSs, characterized popularly as “computer glitches,” came to the public’s attention on May 6, 2010, when U.S. stock markets lost 5–6 percent of their total value in a matter of minutes, before recovering later in the day, due to human intervention. The CFTC and the Securities Exchange Commission (SEC) issued an analysis of the “flash crash” in September 2010. The CFTC’s Technology Advisory Committee (TAC) held hearings over more than a two year period to exchange information about financial industry HFT practices and to recommend rules and definitions that were featured in the Concept Release.
Most TAC members represented HFT traders, HFT technology providers and exchanges that benefit from the huge fees generated by HFT orders placed, even if those orders do not result in completed trades. Indeed, according to one article, “order stuffing” is built into the design of some HFT algorithms (mathematical expressions of trading instructions and strategies), which “harvest” rebates from trading exchanges based on the sheer volume of HFT orders placed.
IATP recommended that the CFTC apply a fee to each cancelled order to make “order stuffing” and “rebate harvesting” economically unviable. One exchange reported to the TAC that it levied such a fee already, though it did not report how much nor with what results. Standardizing a cancellation fee across all trading venues by rulemaking would prevent trade migration to venues that did not levy the fee.
We noted that several of the Concept Release questions, concerning both normative and technological issues, implied that the CFTC would delegate to exchanges and market participants its authority to regulate ATSs and HFT. There were many more questions about the costs to industry of contemplated regulatory measures than about the benefits of those measures to market integrity and transparent price formation, as required by the Commodity Exchange Act and the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act.
Even in the face of relentless attacks on Dodd-Frank and the CFTC’s budget, allowing self-regulatory organizations, such as the International Swaps and Derivatives Organization, to dominate HFT regulation is a bad idea. As long as trading venues are for-profit entities, and not public utilities, they have no financial reason to reduce the speed and volume of trading, until and unless flash crashes pose a reputational risk that momentarily reduces trading fees and volume. Short-term savings might result for the CFTC through delegation of its authority, but at the long-term cost of having to patch together a techno-fix for each future flash crash. Furthermore, a weak CFTC HFT rule might be in conflict with the HFT articles in the European Union’s revision of its Market in Financial Instruments Direct (MiFID2), currently under debate.
According to a study referenced in the Concept Release, “at least 60 to 70 percent of commodity price changes” are not the result of trader response to new information about market supply/demand information, regulatory news, logistical news or commodity finance news. Rather they are the result of ATS algorithms responding to other algorithms. IATP concluded its comment to the CFTC by noting that grain and oilseed prices are expected to decline over the next four years, while the cost of production is expected to remain its current record high. Farmers caught in this price-cost squeeze might be tempted to try to hedge the price of their future production, unaware that their commodity derivatives contracts are likely dominated by HFT algorithms. We urged the CFTC to initiate an HFT rulemaking to regulate an unregulated market practice before mini-flash crashes become accepted as the new market normal.