Posted December 4, 2014 by Dale Wiehoff
The Story of Drought has opened a new chapter in California this week, with a welcomed pouring rain storm: the most rain to fall in Los Angeles in two years. As California enters its fourth year of a drought, the immediate concern of the state’s water managers is that the rains will send the wrong signal to the population. But as crucial as water conservation is, the signal we need today is one that would begin to address the social, economic and political drivers that cause climate change.
Droughts are very slow weather disasters that can go unnoticed even as rain falls and ground water supplies are drying up. We keep saying that California and other western states are entering into the fourth year of a drought, but the real truth is, California and many areas of the west have been living for too long on borrowed water from aquifers and mountain snowpack that will not be renewed. The modern history of water in California going back to the destruction of the Paiute irrigation system and the Owen’s Valley water diversion are part of a pattern of mismanagement and abuse that is still reverberating today.
Like droughts, many of the underlying causes of climate change are not perceived as threats when first encountered. Three interconnected drivers that are major contributors to climate change are global trade, industrial agriculture and the petroleum production and consumption.
Some of the greatest losses to drought in in the west have been in agricultural where no water for irrigation and the lack rainfall has left many farmers and ranchers with barren fields, pastures and orchards. But long before the rain stopped falling in 2010, our agricultural economy was defined by low prices for farmers combined with price volatility and the absence of any system to manage supply production, all of which helped create the climate crisis we face today.
These conditions in agriculture have led to larger and larger farms deficient in crop or livestock diversity and dependent on the use of energy intensive petroleum-based synthetic fertilizers. Industrial meat production alone has become a significant source greenhouse gas emissions. And where does all the cheap grain and meat produced in this corporate controlled system go? Into a global trading system that reinforces through export dumping agricultural practices that cause climate change.
An example is the new $100 million powdered milk plant being built in drought prone western Kansas by the Chinese dairy company, Yili, and its partner, Dairy Farmers of America. It is projected that the plant will produce 80,000 metric tons of milk powder a year for export to China. This mega dairy project will add to the production of greenhouse gasses, deplete precious western water resources and as the final product is shipped thousands of miles away, the farmers in Kansas will be left with lagoons full of manure. It will be a colossal misuse of energy, natural resources, and water and likely to leave Kansas dairy a step closer to becoming contract workers like most chicken farmers.
What starts out as a sunny day can turn to months and years of a terrible drought. The underlying causes of too many sunny days is very complex, but we if don’t begin to address the underlying forces that contribute to the climate change, all our conservation efforts will be for naught.
Posted November 26, 2014 by Dr. Steve Suppan
During the fight to pass and implement the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act of 2010, a favorite Wall Street lobbyist tactic was to organize small and large non-financial business owners to talk with members of Congress about the “unintended consequences” for Main Street of regulating Wall Street. Wall Street didn’t want to be seen as directly lobbying for continuing the regulatory exemptions that lead to the big bank bankruptcies and multi-billion dollar bailouts of 2007–2009.
Instead the Chamber of Commerce, International Swaps and Derivatives Association and other lobby groups’ strategy used “Main Street” clients to promote the idea that global banks such as Goldman Sachs and J.P. Morgan should operate under many of the same rules as small businesses under Dodd-Frank. In sum, they argued, it is in the interest of Main Street business to not reform Wall Street “too much.”
For example, Dodd-Frank exempts municipal electricity and gas companies from having to put money down (margin collateral) to trade to manage their price risks in the commodity derivatives market. (Derivatives are financial contracts that manage the price risk of an underlying asset, such as wheat, oil or a mortgage interest rate.) Municipal companies must provide service to all, and the cost of posting margin collateral for each trade puts them in a competitive disadvantage with electricity and gas companies that can deny service to the poor. Through their lobbying associations, Wall Street banks argued that they are essential buyers and sellers of such derivatives contracts, and sought to benefit from this margin collateral and other Dodd-Frank exemptions for derivatives trading by commercial users of commodities.
Numerous allegations of the banks’ abuse of the Federal Reserve’s Bank Holding Company Act regulation to allow banks to own and trade commodities in which they also trade derivatives contracts has lead the Fed to consider changing the regulation. Now, Wall Street is trotting out Main Street business representatives once again, this time in an attempt to get the Fed to allow Wall Street to continue to own and trade physical commodities, which are not covered by the Dodd-Frank reforms, to commodity derivatives contracts. Officials from these municipal utility companies are visiting legislators, including Dodd-Frank opponent and incoming U.S. Senate Finance and Banking Chair Senator Richard Shelby, whose committee oversees the Fed. It is not improbable that Senator Shelby invited the visits, following Wall Street lobbying.
The municipal officials complain that Federal Reserve Bank rules under discussion on big bank ownership and trading of physical commodities will harm Main Street gas and electricity service provision. Notwithstanding J.P. Morgan manipulation of electricity supply and prices, the Main Street officials agree with the Wall Street lobbyists that gas, electricity and other physical commodity prices will only be affordable if big banks are allowed to compete with Big Electricity (and little electricity) for supply and price. The Main Street lobbying trips are designed to defend the Fed rule that allows banks with huge and unique competitive advantages, such as access to the lowest interest rate Fed loans, to “compete” with commercial users of those commodities.
IATP criticized this rule in an April comment letter on proposed rulemaking. As we noted then, gas and oil prices affect the agricultural cost of production for such inputs as chemical fertilizer and diesel fuel.
The timing of the lobbying trips couldn’t have been better. The U.S. Senate Permanent Subcommittee on Investigations (PSI) held a November 20-21 hearing related to the release of a scathing 400-page report, “Wall Street Bank Involvement With Physical Commodities.” The two-year investigation found that bank ownership of physical commodities, such as operating oil and gas pipelines, coal mines and power plants, allowed them to control the physical supply of commodities in which they traded derivatives contracts. According to the report, the deregulatory erosion of banking laws, which separate commercial activities from banking activities, exposed the banks and commercial entities to “significant financial loss, catastrophic event risks, unfair trading, market manipulation, credit distortions, unfair business competition, and conflicts of interest.”
As in prior PSI reports on Wall Street trading of natural gas and wheat derivatives contracts, Senate investigators found troubling trading practices and regulatory failures. The latest commodities trading report concludes with recommendations for the Fed to change its rule, in order to prevent the banks’ “complementary activities” from undermining their “safety and soundness,” e.g., through losses due to commodity related environmental accidents.
The PSI, under Republican Party leadership beginning in January, is very unlikely to do any more investigation that will discomfit Wall Street. Indeed, the leadership has already characterized Dodd-Frank as “Obamacare for banks,” and indicated that the Republican majority House and Senate could vote to repeal all of Dodd-Frank or cripple it by refusing to fund its implementation and enforcement, in the name of defending community banks and, of course, Main Street. The PSI report and hearing are a bittersweet swan song for retiring Senator Carl Levin (D-Michigan), one the few Senators willing to investigate Wall Street.
The Republican Congressional majority will not be alone in government in the effort to gut Dodd-Frank. A recent Republican appointee to the Commodity Futures Trading Commission (CFTC), Commissioner Christopher Giancarlo, released the text of a speech that indicated he intends to tear up CFTC regulations to implement Dodd-Frank. By posting the speech, intended for an industry group to which he had belonged, on the CFTC website, Giancarlo violated the spirit of President Barack Obama’s executive order prohibiting political appointees from appearing before industry groups with which they just had been associated. Giancarlo argues that unless CFTC rules are rewritten, derivatives contracts currently traded on U.S. markets by U.S. headquartered firms will migrate to foreign markets through the U.S. dealer broker’s foreign affiliates, resulting in the loss of “thousands” of jobs on Wall Street.
The carefully drafted and footnoted speech is the kind of document that the House and Senate majority party will cite as “evidence” of the need to repeal or “reform” Dodd-Frank. The House had cited several speeches by former Commissioner Scott O’Malia, who left the CFTC before the end of his term to become CEO of the International Swaps and Derivatives Association, in its report justifying a CFTC reauthorization bill (H.R. 4413) that authorized Commissioners to micro-manage even the length of enforcement subpoenas. The recent headlines of billion dollar fines for Wall Street violations of civil law reflect a cost that will diminish when political appointees vote on whether to investigate Wall Street firms that are financing the elections of both political parties.
Despite ample evidence to prosecute global bank executives for a broad range of financial crimes, the Department of Justice continues to avoid prosecution. DoJ apparently believes that the conviction of a handful of individuals will destabilize further a U.S. economy that suffered an at least $13 trillion loss as a result of the financial crisis of 2007–2009. Cities, both big and small, continue to suffer from Wall Street’s financial innovations that promised savings or profit that instead resulted in loss or greater debt. Main Street is doing itself no favors by continuing to enable Wall Street to operate with impunity.
Posted November 20, 2014 by Zhe Yu
This year’s World Food Prize and Borlaug Dialogue, held from October 17–19, 2014 in Des Moines, Iowa once again brought together the big gun stakeholders in industrial agriculture, and provided many insights to the current framing on the global food security challenge.
Given the parallel celebration of the Borlaug Centennial marking 100 years since the birth of Norman Borlaug, it should come as no surprise that Sanjaya Rajaram was named this year’s World Food Prize Laureate. As Borlaug’s protege in terms of sustaining his legacy of wheat breeding, this award for Rajaram appears to reinforce the importance of remembering what Borlaug was said to have achieved, while also ensuring that current research efforts at the International Maize and Wheat Improvement Center (CIMMYT) in Mexico, where Rajaram is based, continue to be perceived to play an important role in meeting global agricultural research needs. It is also noteworthy to acknowledge that Rajaram was born in India but has become a naturalized Mexican citizen given that Borlaug pioneered many Green Revolution ideas and technologies in Mexico in the mid 20th century before subsequently institutionalizing them in India’s post-independence agricultural sector. Indian agriculture continues to be geared towards a commitment to use “modern” and “improved” crop varieties and inputs even as many small farmers face a variety of severe social, environmental and economic challenges that fundamentally threaten production levels and livelihood security of a significant proportion of its population.
In this vein, the plenary sessions that were held did not depart from what continues to be an overwhelmingly productivist paradigm, grounded in unceasing faith in what are framed as neutral approaches to scientific research, technological innovation and financial investment and financialization. It seems that recent criticisms implicit in the discussions of agroecology, food sovereignty, food justice and local foods have not been able to significantly disrupt this technocratic discourse. The dialogue seemed to be a self-congratulatory echo chamber, largely oblivious to questions of equity, large-scale environmental pollution, alternative forms of production as well as the historical baggage of how the development of industrial agriculture was linked to the highly politicized Cold War project of establishing capitalist economies around the world. While there was acknowledgment of problems such as chemical overuse and land degradation, many of the solutions that were proposed were couched in terms of increased productivity, efficiency and “sustainable intensification.”
Many, if not all of the plenary sessions invoked the 9 billion by 2050 statement to frame the food security problem merely as one of increasing production levels and reducing absolute hunger both through “better” crops, physical technologies and cropping methods and the forging of value-chain infrastructures that will allow small farmers increased access to markets. There was also a whole-hearted embrace of the use of big data and precision agriculture with stakeholders such as the Bill and Melinda Gates Foundation massively investing in this area. On the one hand, this could lead to better understanding of local conditions with the intention of empowering farmers to appropriately adjust production techniques and use inputs more efficiently. One the other hand, this could further reinforce the notion that the food security challenge is merely a problem of management, not to mention the question of who will ultimately have control of the data and profit from it especially in the developing country context.
What stood out was a significant proportion of international delegates coming from various African countries, most of whom were relatively open to embracing what seems to be a concerted push to implement a New Green Revolution. Many desired to sustain the flow of “expertise” from Global North institutions into their respective countries. The absence of discussion about local agroecological solutions was palpable. There was also a considerable presence of high school students who participated through the parallel Global Youth Institute initiative that desires to get young people interested in working in the agricultural sector. The recent emphasis of Science, Technology, Engineering and Mathematics fields (STEM) in education has an explicit agricultural focus, given the recent founding of the STEM Food & Ag Council with the Lieutenant Governor of Iowa, Kim Reynolds and the President of Dupont Pioneer, Paul E. Schickler as Chair and Vice Chair respectively.
Lastly, many speakers including the US Secretary of Agriculture, Tom Vilsack discussed the importance of better communicating the merits of biotechnology to the general population. This could be seen as an implicit acknowledgement of the resonance of concerns expressed by various civil society groups criticizing the development of genetically modified crops (GMOs). He also noted that there continues to be stark differences between the European Union and the United States on GMOs in the Transatlantic Trade and Investment Partnership (TTIP) free trade negotiations, desiring that EU policies would be more open to accepting such crops by conforming more closely to the US regulatory framework.
Overall, this technocratic and seemingly depoliticized discourse did not come as a surprise. Despite mounting evidence around the world of the negative socio-economic and ecological impacts of dominant, industrial modes of agriculture, the stakeholders at the “dialogue” double-downed on their continued faith in top-down technological and capital-centric solutions. Unless social, consumer and farmer movements continue to put pressure at different policy processes to alter the framing of the global food security challenge and forcefully put forth alternatives, the approaches and strategies that were discussed at the Borlaug Dialogue will go unchallenged. The stakes are as high as ever and continue to mount, and therefore the necessity of imagining and enacting radically different futures remains as relevant as ever.
Posted November 20, 2014 by Sophia Murphy
Just ahead of the G-20 Leaders’ Summit in Brisbane, Australia (November 15-16, 2014), India and the United States announced a breakthrough in their trade negotiations impasse over agriculture. That fight had brought trade negotiations to a crashing standstill in July after the few months of tentative optimism among negotiators that followed the eleventh-hour agreement in at the Bali Ministerial Conference in December 2013. Confidence in the multilateral rules-based trading system had reached an all-time low, and while the response was muted (an agreement between two WTO members is not the same as an agreement among all), the media coverage made it clear the news of the U.S.-India agreement was very welcome in trade circles.
Should the rest of the world share this excitement? The discussion underlying the fight between India and the United States has important implications for countries’ ability to set policy to promote food security and control their food systems—and the role the WTO and the multilateral system should play in that effort.
The India-US agreement means the 2013 Bali WTO Ministerial Conference will likely have an outcome after all: the Trade Facilitation Agreement1 is now widely expected to go ahead. India had been refusing to sign the agreement unless there was “substantive movement” on the Bali decision to revise the rules governing food security stocks within the WTO Agreement on Agriculture. In the agreement, the U.S. has agreed it will not challenge India’s spending on food stocks until the negotiations at the WTO on stocks are concluded, granting India what is called an indefinite peace clause for its programs.
How did we get here?
The first move in the negotiating dance came from the Group of 33 in the months before the Bali Ministerial. The G-33 is a group of developing countries that coordinate their work on agriculture at the WTO out of a shared understanding that developing countries should have greater flexibility under the rules to manage imports to protect rural livelihoods and national food security objectives. IATP provided a brief discussion of the G-33 proposal last year. There were three main points to the proposal:
In the last few weeks ahead of last year’s Bali Ministerial, there was no agreement on the G-33 proposal. India had become the strongest proponent of the proposal by then, and the United States its most vocal opponent. The heart of the G-33 proposal was already lost; instead of the points outlined above, the fight was down to the question of a peace clause—a guarantee that existing food distribution programmes would be exempt from challenge under the AMS rules until the rules on stocks were clarified (see here for more detail).
The United States went to Bali declaring it would not concede this point, and that if the Bali Ministerial was a failure as a result, it was not that big of a deal; the WTO’s importance as a dispute settlement body would continue to give the organization relevance. Such defeatist talk proved unnecessary. Late night and past-the-deadline talks did eventually produce an outcome for Bali (IATP was on the spot). India claimed that outcome included an indefinite peace clause. The U.S, it turns out, did not see the agreement that way. Then in July, when it came time to sign the other part of the Bali Declaration—an agreement on Trade Facilitation—India refused, saying that it would not move forward on this aspect of the Bali outcome without tangible progress on food security stocks. Months later, they have reached agreement on an indefinite peace clause.
Astute readers may now have noticed the import of the deal: it is in effect a clarification of what G-33 countries were fighting for in the last weeks before the Bali Ministerial (fully one year ago), and what India claimed, in accepting the Bali Declaration, that it had already won. When India sought a stronger reference to this provision, however, the United States would not oblige. Now it has. As breakthroughs go, this one feels decidedly modest.
Why it matters
The point of diplomatic breakthroughs is not always their substance, of course. If the objective is to keep the WTO breathing, the deal has done its work. India has claimed a big victory, while the United States, for its part, insists it was India that compromised in giving up its insistence that substantive progress on the new language for public food stocks was needed before it would sign an agreement on trade facilitation. India’s Prime Minister was said to be preoccupied over the summer months with elections in two large states that he did not want to jeopardize for his party by appearing to challenge the very popular National Food Security Act, which was passed by the previous government, and which is at the heart of the fight over public food stocks. As in the United States, talking up the national interest in the face of international pressure plays well to the crowd in India.
Nonetheless, there is substance to the fight. First, there are technical issues that have not been sufficiently explored. For example, Pakistan has complained loudly that its own exports will be threatened by the food stocks if India should sell its surplus stocks on international markets at prices below the cost of acquisition. Many say, though none for attribution, that the United States government actively encouraged this line of argument among a handful of developing country negotiators, knowing that this was a strong message in a trade context but not one that would have credibility if it came from one of the world’s agricultural exporting powerhouses (not to mention a government that continues to subsidise a significant share of the crops it grows for export). In truth, it is not immediately obvious that Pakistan’s fears are well founded. India’s exports have historically been of inferior quality grain, for the most part. Moreover, the size of the procurement implied by the new food security act suggests that India will hardly have enough production to meet its own targets. There are many questions about the value of the food security act in terms of its ability to meet India’s significant food insecurity challenges, but the likelihood of significant dumping on export markets seems improbable.
On the other hand, the question of whether India’s purchasing policies will encourage surplus production appears not to have been raised in the negotiations. This is extraordinary if you consider the history and intent of the WTO Agreement on Agriculture, which emerged out of a heated struggle to end U.S. and E.U. policies that paid farmers a minimum price for their production without effective volume controls. If there is a policy that is known to work to raise agricultural output—and, potentially, to generate surpluses that will either depress prices or will have to be stored at public expense, or both—it’s a price floor for production.
But these questions are not really at the heart of the matter. Though worlds apart, the United States and India are both relatively rich countries. They are both heavily invested in globalization, they both have powerful domestic constituencies that include a tendency towards xenophobia and they both maintain contradictory policies on trade and agriculture (though the U.S. inconsistencies have a much greater effect on international commodity markets). Both have the economic means and the political might to better align trade and food security policies than they actually do; neither seems especially intent on that objective. Nor is either country paying all that much attention to the needs of the 180 or so countries that do not belong the G-20 and that face significant trade and food security challenges of their own.
Food security is often characterized as resting on four pillars: supply, access, nutrition and stability. Trade is usually considered a supply issue—it is one of the three components of food supply, with production and stocks. But trade is also a factor in food access, affecting food prices, livelihoods, economic growth and income distribution patterns. Trade also has nutrition effects, potentially diversifying diets but also leading in some instances to higher intakes of sweet and fatty processed foods, which exacerbates health challenges. Finally, and linked to price effects, trade is a component of food stability, both positively where it can help make up production shortfalls (production is more variable at the local and regional level than it is globally) and negatively, when price volatility in international markets is transmitted to domestic markets, as happened in a number of countries in the wake of the 2007-2008 food price crisis, and in the subsequent price spikes.
To be relevant, trade rules have to manage this complexity. Currently, those of us looking at international negotiations on food and agriculture face two unappealing options: the WTO with an outdated negotiating agenda (from Doha) and held prisoner to an inability to reach a decision on almost anything on the one hand; and, on the other, a series of bilateral and plurilateral agreements, such as the Trans-Pacific Partnership and the Trans-Atlantic Trade Partnership that in effect distil mostly the trade issues proposed first in Singapore in 1996 (investment, services, public procurement, intellectual property rights)—issues rejected by most developing countries as not part of their trade agenda. It’s hard to see any way around the multilateral system that will not exclude the smallest and least powerful countries. And it’s hard to see the most powerful countries making the effort to ensure the multilateral system works for all. The India-United States agreement will not hurt that effort, but the true test will come in whether the WTO membership is ready to hear and respond to the concerns of low-income, net food deficit countries: the countries that depend on trade yet have no protections in the rules as they are now written and implemented.
1.The trade facilitation agreement is about the regulations that govern the movement of goods across borders, including imports, exports and goods in transit. The agreement is supposed to cut the time that goods wait to clear customs. It includes measures for cooperation between customs authorities, as well as provisions for technical assistance and capacity building. A critical review of the agreement by GDAE at Tufts Univeristy is available here.
2. The Aggregate Measure of Support (AMS) is a calculation of how much money governments spend on agricultural production, exempting only the spending that is specified under other articles of the agreement. (See more detail in IATP’s Agreement on Agriculture Glossary).
Posted November 17, 2014 by Jim Kleinschmit
The last few years have not been good for the factory farm industry. High prices for corn and other crops (in part driven by the growth of ethanol) made feed costs incredibly high, while at the same time, environmental and animal welfare advocates have been winning ballot and marketplace battles to shift more meat production out of intensive confinement and industrial systems. Hog and cattle producers have been hit by disease, drought and weather related disasters, resulting in losses in both sectors.
But the winds are changing, and not in a good way, if you live downwind from a factory farm manure lagoon. With the collapse of commodity prices and the expected bumper harvest this year, corn and other grains are expected to be plentiful and sell well below the cost of production. Prices for pork and beef are at or near record highs, while the “blend wall” for ethanol is limiting the ability to shift much more corn into that alternative market. Transportation jams in the rail and barge systems have made local cash prices for grains plummet. This development has devalued the direct export (and even in some cases domestic coastal) markets, but increased interest in local value-added opportunities.
Meat is the most obvious of those opportunities. As IATP details in a new report, the big meat companies acknowledge this reality in their increasing focus on export markets, and could further accelerate that trend with a successfully completed Trans Pacific Partnership trade deal. Add in successful corporate-sponsored efforts to take away local control and regulation—crystalized in the ALEC-sponsored “right to farm” legislation pushed in many states—and you’ve got the perfect scenario for an explosion in factory farms.
Considering the well-documented and extensive problems associated with factory farms (human health impacts, animal welfare problems, food safety, negative water and soil impacts, greenhouse gas emissions, etc.) this is definitely not something that rural America needs more of. Rather than allow this bounty of grain to be soaked up and devalued through cheap and dirty meat production, we should instead use this rare opportunity of surplus to prepare for the future. A publicly held food reserve is an obvious, appropriate response to what we know is coming with a changing climate—more volatile weather and precipitation, higher temperatures, higher rates of disease and pests—all of which are expected to reduce agricultural production. A well-managed reserve would soften the impact of any future drought or reduced harvest, while also helping to stabilize prices for farmers and consumers alike.
Instead of growing dirty meat production, we need to be focused on what the market wants. Consumers are increasingly demanding and willing to pay for meat that is produced in ways that are better for the animal, us and the environment. Organic is the most recognized and highest value sector, but free-range chicken, grass-fed beef, and sustainable pork production, are other growing, higher-value markets responding to an increasingly educated and choosy consumer base.
In the face of climate change and the indisputable negative impacts of factory farms, the choice should be clear: Do we use the opportunity the record crop production offers to build a public grain reserve and focus on more valuable and sustainable meat production or do we take the route “big meat” wants and waste that grain on a cheap meat and dirty system that devalues our communities, environment, workers and the animals? The answer we give to the market and our policymakers on this critical question will impact all of us, not least our rural communities.
Posted November 13, 2014 by Karen Hansen-Kuhn
Communities across the United States and Europe are working to transform local economic systems so that they are more sustainable and equitable. Many states and communities are utilizing public procurement programs to support those efforts, especially bidding preferences for healthy, locally grown foods, energy or transportation programs that create local jobs and fair markets. Especially in the aftermath of the Great Recession, Buy American programs have helped ensure that taxpayer-funded programs create local jobs and serve social goals. Farm to School programs that incentivize purchases from local farmers have grown in all 50 U.S. states and many European countries. Innovative efforts are also underway to expand this approach to other institutions such as hospitals, universities and early childcare programs like Head Start.
In a move that could undermine those important initiatives, the European Union has made the opening of U.S. procurement programs to bids by European firms one of its priority goals for the Transatlantic Trade and Investment Partnership (TTIP). IATP published a new report today, Local Economies on the Table, which takes a look at what those proposals could mean.
The EU has been insistent on the inclusion of procurement commitments at all levels of government, for all goods, and in all sectors. At a speech in San Francisco, French trade minister Nicole Bricq declared, “Let’s dream a little with respect to public procurement. Why not replace ‘Buy American’ which penalizes our companies with ‘Buy Transatlantic’ which reflects the depth of our mutual commitment?”
It’s easy to see why this appeals to EU officials. It is an enormous market. It’s a lot harder to understand why local governments in the U.S. would want to give up their authority to shape procurement contracts to serve local economies and job creation. And because the negotiations have taken place in secret, it’s a mystery who decides whether these local governments would be bound by the rules in the trade deal.
At the start of the TTIP talks, local foods and Farm to School activists raised questions about whether farm-to-institution programs could be at risk in TTIP. Advocates for fair and sustainable food systems urged the negotiators to commit to keep these important programs off the table in the trade talks, raising the issue in a January 2014 letter from sustainable foods groups, a February 2014 letter from the Maine Citizen Trade Policy Commission, as well as at various presentations at official stakeholder events held at negotiating sessions. Of course, these and many organizations on both sides of the Atlantic have also raised broader concerns about the lack of transparency in the trade talks, the dangers of investment rules that allow foreign investors to sue governments over public interest laws, and proposals to “harmonize” regulations in ways that could undermine progress towards more sustainable food systems.
The negotiations are still happening behind closed doors. However, some meeting reports and negotiating proposals have been leaked, providing new insights into how TTIP might affect local foods and rural communities. While a new leak on procurement indicates that the EU may refrain from requesting commitments on school lunch programs, there is little question that procurement preferences to strengthen local economies continue to be a target of EU negotiators.
The demand to open up public procurement programs to foreign investors is not unique to TTIP; it has been a significant issue in the talks for a Trans Pacific Partnership (TPP) as well. But the EU is being asked to give up so much in TTIP in terms its food safety, energy and other standards, even its reliance on the Precautionary Principle. In exchange, the EU is seeking unfettered access for its companies to what seem to be elusive state and local procurement markets. It’s a bad deal for both sides. These proposals in TTIP could very well undermine local decision-making and innovative efforts to rebuild local economies in ways that are sustainable, healthy and fair.
We need a different approach, starting with transparency. Both the U.S. and EU governments should publish negotiating text indicating which sectors and federal, state and local agencies are contemplating procurement commitments and who would make those commitments. In the meantime, we in the U.S. should call on Congress to reject Fast Track Authority, which would give the administration the power to negotiate trade deals in secret and present the resulting agreement to Congress for an up or down vote, no amendments allowed. This is an outdated and inadequate process to negotiate agreements with such far reaching consequences.
Read IATP’s new report, Local Economies on the Table, for more.
Posted November 6, 2014 by Ben Lilliston
It wasn’t the subject of a barrage of campaign ads this past month, nor has it been widely reported in the media or even debated much in the halls of Congress but new rules are being written right now as part of an arcane, secret process that will expand global agribusiness’ choke-hold over our food system, and you are not invited. A new report, Big Meat Swallows the Trans-Pacific Partnership, released today from IATP takes an in-depth look at what’s at stake for global agribusiness—and particularly the big meat corporations—in potentially the largest regional free trade agreement ever negotiated, the Trans-Pacific Partnership (TPP).
This weekend, President Obama will meet with leaders of 11 other Pacific Rim countries at the Asian Pacific Economic Cooperation summit about TPP. The negotiations and the proposed treaty text itself are secret, behind-closed-doors affairs—and the corporations that will benefit like it that way.
For global agribusiness, most with operations and connections in multiple TPP countries, the goal is simple: lower tariffs and weaken regulations that support farmers, consumers and rural communities in order to increase exports and imports. For the big meat companies, the stakes are high. Meat consumption in the U.S. has flattened, and in some cases like beef and pork, has slightly declined. While domestic consumption has been stagnant, meat exports from the U.S. have soared since 1990, and the percentage of U.S. meat production for export is rapidly rising.
The handful of big meat and poultry companies driving factory-style production in the U.S. do not consider themselves U.S. companies. They are global corporations, some with foreign parent companies, operating in multiple TPP countries. An alarmingly few companies control the U.S. protein market (as the industry refers to it). They are all global players operating in multiple sectors and multiple countries, including: JBS USA (beef, pork and poultry), Cargill (beef, feed), Tyson Foods (poultry, beef), Shuanghui/Smithfield (pork).
If the meat companies get their way in TPP, rising exports from the U.S. could shift into overdrive. This means there will be more CAFOs in U.S. rural communities, more land needed for animal feed (yes, more corn and soybeans), more antibiotics used to raise these animals, and more water and air pollution from their giant manure lagoons. The agreement would also both expand and lock in a system of contract farming, where pork and poultry farmers take the risk, and the companies take the profits.
The agreement targets what negotiators call “barriers to trade;” this means tariffs, food safety standards that protect consumers, and other regulations and policies that might give preference to local economies, businesses or communities over multinationals.
Of the TPP countries, the meat industry is particularly targeting Japan, who not only is one of their biggest markets, but also retains a variety of tariffs and safeguards on chicken, pork and beef to protect their own farmers and food system from a flood of imports. The meat companies also want to get rid of Canada’s various supply management programs for their dairy, poultry and egg industries, which protect Canada’s producers. They want to set one system of low food safety protections for all TPP countries that is “least-trade-restrictive,” limiting countries’ and states’ ability to set their own tougher standards. They also want to further establish corporate legal rights, an obscure trade provision called investor-state dispute resolution, which grants corporations broad rights to challenge policies that affect expected future profits including food safety rules.
The pattern here is hard to miss. The industry views TPP as an opportunity to expand their global reach by attacking policies that protect farmers, consumers and democratic local control of the food system. In fact, the industry’s relentless assault on these policies in the U.S. is how we’ve become such a low-cost meat producer. Several decades of agribusiness lobbying culminated in the 1996 Farm Bill wiping out the last vestiges of U.S. farm programs that used to put a floor on grain prices making CAFO feed costs less economical. The industry has fought to weaken and under-fund U.S. regulatory agencies like Grains Inspection, Packers and Stockyards Administration designed to ensure competitive markets and fair contracts for farmers and ranchers. They’ve driven efforts to weaken U.S. food safety regulations by shifting from government inspection to private inspection. Through a steady attack on unions – and the use of a largely immigrant workforce, they have weakened workers’ rights. Their relentless legal and lobbying assault on Country of Origin Labeling (COOL), a simple label to tell consumers where their meat animal was born, raised and slaughtered, continues as does its ALEC-inspired Right to Farm laws at the state-level, designed to limit local regulations of CAFOs.
Remarkably, TPP continues to be negotiated in secret as if it were a private commercial agreement, with no effective means for the public to intervene in negotiations. The Obama Administration and many in Congress are pushing for fast track, which would allow the Administration to complete the secret negotiations and then present the final deal to Congress for an up or down vote, no changes, no amendments. There is talk that Congress will try to slip fast track through during the post-election lame duck session, but if not, it will very likely come up for a vote in 2015. This undemocratic, secretive approach to trade policy is exactly what the global meat industry is banking on.
To make sure that our trade agenda reflects democratic values and the interests of farmers, rural communities and consumers, we need to stop the secrecy. The people living in TPP countries have a right to know what is being negotiated in their name. To create policies that are accountable to people, not just big corporations, Fast Track must be rejected.
From the beginning the TPP has been designed to further the power of private corporate interests. It doesn’t have to be that way. Last year, the U.S.-based National Farmers Union and the Japanese-based cooperative farmer group JA Zenchu put out a joint statement to TPP negotiators. They wrote: “Agricultural terms in any trade agreement must be aimed toward improving quality of life for farmers, protecting consumer interests, and ensuring food and energy security for all.” Unfortunately, these terms differ greatly from agribusiness’ interests.
Read the full report Big Meat Swallows the Trans-Pacific Partnership.
Posted October 21, 2014 by Steven Shrybman
With some help from my friends (lawyers Anders Bruun and Ben Piper) I argued a case before the Federal Court of Appeal yesterday. The Court ruled from the bench; the result was mixed but more of a defeat than a victory.
Among other things, the case was about money. An awful lot of it -- over $17 billion. That is actually a realistic estimate of the value of the Canadian Wheat Board that has been destroyed by the Harper's government's decision to get rid of the Board's marketing monopoly for wheat and barley and to fire all of the directors elected by the farmers to sit on the Board.
With the benefit of the market power the monopoly afforded, a smart farmer-controlled Board had built an international brand for Canadian wheat that allowed it to claim a very nice premium in the market -- somewhere between $600-800 million a year. It also allowed the Board the leverage to negotiate favorable supply chain arrangements with the rail companies and international grain conglomerates so that grain could be moved efficiently to markets.
While the Wheat Board still exists, it has been run by Harper appointees since Dec. 2011 and has no marketing power. Last summer, the failure of supply chain logistics to move a bumper wheat crop to market cost farmers an estimated $4 billion.
The court was dealing with motions to strike a proposed class action brought on behalf of grain producers seeking compensation for the value of the Wheat Board the Government had taken and will now either sell or wind down.
At the center of the case was this question -- can the Government simply take the assets, which include the enormously valuable goodwill the Board built, from the farmers who paid for and built those assets, and do so without paying the farmers for them? The Court said yes. Why? Because according to the Court the farmers weren't "shareholders" and had no proprietary interest in those assets.
The reasoning is this: Unless grain farmers can prevent others from taking advantage of an institution they built, or can sell that interest to others, they cannot claim a property interest in the institution and assets they built and paid for. As the court found, the law simply won't protect co-operative forms of ownership or the generous impulse of those who invest and create to benefit the community.
There is much that is egregiously unjust about Harper's decision to destroy the Board, including his failure to hold a vote among grain producers before the fundamentally changing the Board's mandate as the Wheat Board Act required. Two years ago, the Federal Court of Appeal found that parliamentary sovereignty trumped that statutory requirement. Now the court has found that farmers have no right to be compensated for the assets the Government has taken from them.
There is much to the history of the Canadian Wheat Board, and the agrarian socialist movement from which it sprung, that should be better known and celebrated. From those same roots sprouted the CCF, and many of the fundamental social reforms that define this country. Many of these are still with us today, but the Canadian Wheat Board will soon not be among them.
I began by saying the result in court yesterday was mixed. That is because one aspect of the proposed class action has survived -- a claim for damages based on the mismanagement of funds by the Government-appointed Board. While it will do nothing to revive the Board, the case should impose some small measure of accountability on the Government and its appointees. That prospect provides some, albeit small, comfort.
Posted October 20, 2014 by Ben Lilliston
A U.S. law requiring the simple labeling of meat and poultry products for the country of origin (COOL) was determined to violate trade rules by a dispute panel at the World Trade Organization (WTO) today.
The ruling demonstrates again how trade rules have been rigged to benefit multinational corporations and run counter to the interests of consumers who want more information about the food they purchase and farmer and ranchers who target local markets.
Knowing where your food comes from is an important right for consumers all over the world. This ruling is also a loss for farmers and ranchers who are selling to domestic, local markets and who want to build stronger connections with consumers. Trade rules should never get in the way of greater transparency in the marketplace. The USDA should not give in to the WTO on COOL in the short term, and should appeal the ruling. In the long term, we need to reform or throw out trade rules that undermine consumers and farmers.
The WTO ruled that COOL favored U.S. producers over those from other countries, arguing that the costs of the recordkeeping and segregation required was too high to justify the informational benefit to consumers. The WTO ruled "the detrimental impact caused by the amended COOL measure's labelling and recordkeeping rules could not be explained by the need to convey to consumers information regarding the countries where livestock were born, raised, and slaughtered." The WTO encouraged the U.S. to begin negotiations with Canada and Mexico (the countries bringing the challenge) to explore other options for food consumer labeling.
The Obama Administration should appeal this unjust WTO ruling, and no legislative changes should be made to COOL until all legal avenues have been completed at the WTO. The Administration has 60 days to appeal. An appellate body would issue a final WTO ruling, which would likely take an additional six months. Without an appeal, Canada and Mexico could start levying sanctions against U.S. goods until the law is changed. The U.S. should explore all avenues at their disposal to actively defend consumers’ right to know.
Despite nearly 90 percent of consumers supporting COOL, it has long been targeted by big meat companies like Cargill, Tyson Foods, Smithfield Foods and JBS USA since the 2002 and 2008 Farm Bills required such labeling. While COOLs for other foods like fruits and vegetables are firmly in place, the multinational meat companies aggressively fought the rule. The big meat companies often move cattle and pigs across borders during different stages of the finishing process. Some meat plants are processing animals from multiple countries. Meeting the COOL standard often resulted in a confusing label indicating that the meat came from multiple countries.
The meat and poultry industry in Canada and Mexico challenged the U.S. COOL law at the WTO in 2008, alleging that the law discriminated against producers in those countries. The WTO ruled in favor of Canada and Mexico in 2011, concluding that the law created economic incentives for the meat companies to only use animals born, raised and slaughtered in the same country – in order to avoid a mixed-origin label. In 2013, the USDA attempted to address the WTO ruling by consulting with the US Trade Representative and listening to more than 35,000 consumer comments which called for a stronger COOL label. The USDA strengthened the COOL label to include separate, clear information on where the animal was born, raised and slaughtered – which eliminated mixed-origin labels. The WTO ruling concluded that the USDA’s new COOL requirements still discriminated against Mexican and Canadian meat producers.
The ruling also further complicates the Obama administration’s beleaguered effort to obtain Fast Track trade authority for two major agreements, the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), both of which would expose the United States to more such trade challenges against U.S. consumer, environmental and other policies.
It’s hard to make an argument for expanding the rights of corporations in future trade agreements when the trade rules we already have are striking down common-sense laws like COOL.
Posted October 10, 2014 by Karen Hansen-Kuhn Robert Pederson, ARC 2020
Thousands of farmers, environmentalists and fair trade activists will gather on October 11 in over 300 events across Europe to protest the Transatlantic Trade and Investment Partnership (TTIP) and promote positive alternatives to the current rhetoric of free trade agreements.
Europeans have the right, enshrined in the Treaty of Lisbon, to demand action by the European Commission if they gather at least a million signatures. This spring citizens launched a European Citizens Initiative (ECI) calling on the Commission to repeal the negotiating mandate for TTIP and to abandon the talks for the EU-Canada Comprehensive Economic and Trade Agreement (CETA). Following the European Commission’s rejection of the ECI on TTIP earlier this month, activists launched a self- organized European Citizens initiative. In less than 3 days over 350.000 European citizens have signed up in their support of the initiative.
Yesterday, the European Council published the negotiating mandate for TTIP. This is an important first step towards transparency that goes further than any action taken so far by the U.S. government, although it’s worth noting that the document had been leaked more than a year ago. The Council’s decision illustrates just how important public pressure is in ensuring a democratic and transparent process, but much more must be done to increase the transparency and accountability of negotiations.
Hundreds of citizens groups in the EU and U.S. are united in their call to publish the negotiating texts and to oppose Investor-State Dispute Settlement (which gives corporations the right to sue governments over public interest laws) and plans for regulatory coherence that could lower health, environmental and food safety standards. Much has been said, about public opposition to chlorine chickens and hormone beef, but what is really at stake is moving towards even more intensive, industrial modes of production that ultimately lead to unhealthy and unsustainable diets and greater corporate control over our food systems. TTIP seeks to harmonize standards (i.e., reduce to their lowest common denominator) in a number of areas such as food safety and labeling, and could undermine much of the progress made to raise the bar on these issues, as well as efforts to rebuild food systems so they work for consumers and farmers, in Europe and the United States.
The debate on TTIP is often framed around a U.S. versus EU agenda, but in fact citizens are getting involved and coordinating strategies across the Atlantic. While European citizens are mobilizing and questioning what benefits TTIP and CETA will bring for society, U.S. groups are gearing up for a week of action on trade in November. Those actions will focus on plans to rush through Fast Track authority during the Lame Duck session between the congressional elections and the entry of the new Congress. Fast track would give the U.S. administration authority to negotiate trade deals in secret and present the final agreement to Congress for an up or down vote—no amendments allowed). On both sides of the Atlantic, people are raising their voices on transparency, democracy and local decision-making.
Here’s what you can do: