Posted January 19, 2017 by Shiney Varghese
Ahead World Bank’s release of the 2017 “Enabling the Business of Agriculture” (EBA) project report this month, 156 organizations (including IATP) and academics from around the world, denounced the Bank’s scheme to undermine farmers’ rights to seeds and destroy their food sovereignty and the environment. In letters to World Bank President Jim Yong Kim and EBA’s five Western donors, the group has demanded the immediate end of the project, as a key step to stop the corporatization of global agricultural development.
The Obama administration played a lead role in launching the highly controversial New Alliance for Food Security and Nutrition at the 2012 G8 Camp David Summit. From the White House fact sheet, G-8 Action on Food Security and Nutrition’, it appears that the New Alliance was instrumental in urging the World Bank to develop options for generating a “Doing Business in Agriculture Index.” The index involved a ranking of the ease of doing business in a country, to help investors with agricultural investment decisions. This G8/New Alliance initiative appears to have given rise to Enabling the Business of Agriculture project, formerly called Benchmarking the Business of Agriculture. EBA focuses on identifying and monitoring regulations” which the Bank considers to “negatively affect agriculture and agribusiness markets”.
When taken together with other initiatives that seek to lower the barriers to investment, EBA becomes a problematic initiative. This is especially so in the context of small-holder food production systems, since such approaches often exclude a long-term view about the future of smallholder farming communities, and the interests of those engaged in such food systems. For example, the EBA awards the best scores to countries that ease private companies’ – but not farmers’ – access to public gene banks.
In Down On the Seed, the World Bank Enables Corporate Takeover of Seeds, the Oakland Institute’s Alice Martin-Prevel argues that while the World Bank claims to promote “smart and balanced policies,” its EBA index blatantly ignores farmer-managed seed systems. Instead, it reinforces the stranglehold of agrochemical companies and western nations by pushing for intellectual property rights in seeds, g seeds, germplasm, and plant varieties, so that private breeders profit from the use of their seeds by farmers.
Farmer-managed seed systems currently provide 80 to 90 percent of the seed supply in developing countries through on-farm seed saving and farmer-to-farmer seed exchange. On the other hand, only six multinationals currently control over two-thirds of the industrial seed sales, and pending agroindustry mergers stand to further consolidate this oligopoly. Further protections and bias toward those companies will undermine the vital farmer managed seed systems.
The consolidation of corporate power in agriculture is opposed by family farmers in the United States as well. National Farmers Union president Roger Johnson testified in Congress in September 2016 that the proposed mergers would enable just three corporations to control 80 percent of the U.S. seed supply (and 70 percent of the global pesticide market). In addition to pro-corporate initiatives such as New Alliance for Food Security and Nutrition, as IATP’s Karen Hansen-Kuhn has argued, that ‘the expansion of corporate control is also happening in three international treaties that establish the global rights of various stakeholders to seeds, germplasm, and plant varieties.” While each of these treaties strikes a certain balance among those interests, she adds that recently, as with the agribusiness mergers, the balance has been tilting away from the interests of smaller-scale farmers and diversified agriculture. This is most evident in the push to compel countries to adhere to the most corporate-friendly of the three: the International Union for the Protection of New Varieties of Plants (UPOV). Although earlier versions of the treaty included some flexibility for family farmers to save and share seeds, the 1991 version eliminated those rights.
In its 2016 EBA report, the World Bank upheld Tanzania as a model country for enacting intellectual property laws in agriculture, and becoming the one of the first least-developed nations bound by the 1991 UPOV Convention. UPOV-1991 is a pro-industry treaty that dramatically restricts farmers’ rights to save, exchange, and sell seeds. As Michael Farrelly (of the Tanzania Organic Agriculture Movement) pointed out in an email exchange, the current Tanzanian legislation criminalizes farmers who share, exchange or sell seed. Under the amended seed act (Special Bill Supplement of 12 May 2014), farmers now risk fines and imprisonment for practicing ancestral seed saving and trading! Tanzanian civil society groups (and pan-African civil society networks such as the Alliance for Food Sovereignty in Africa) have called on their governments to recognize the use and exchange of farm-saved seed by any person.
Against such a backdrop, the signatories to these letters have come together to demand the end of the corporate-led EBA project as key step to uphold farmers’ rights to seeds, their food sovereignty and to enable their full participation in food and agricultural policy making.
Posted January 11, 2017 by Ben Lilliston
This week, Congress begins the first round of confirmation hearings for President-elect Trump’s Cabinet. After a bombastic Presidential campaign that was often short on policy specifics, the Cabinet selections provide an initial glimpse into how first-time public officeholder Trump will actually govern. While the role of rural America in electing Trump has been well documented, the first impression from the proposed Cabinet is troubling and is raising red flags for how the Trump Administration will respond to key rural issues. It is notable that a position very important to rural America, the Secretary of Agriculture, remains vacant and appears at the bottom of the list of priority positions.
In too many rural communities, natural resources and profits are extracted for the gain of outside—often multinational—investors at the expense of the people that live there. The Rural Compact, an effort we contributed to in 2008 as part of the National Rural Assembly, outlines a set of values and priorities for rural America and continues to be relevant today in assessing Trump’s appointees. The Compact states:
Rural America is more than the land…When rural communities succeed, the nation does better, and cities and suburbs have more resources on which to build. Conversely, when rural communities falter, it drains the nation’s prosperity and limits what we can accomplish together.
As Trump’s appointees make their way through the confirmation process, we’ll be looking at how the proposed Cabinet addresses four key challenges particularly relevant to rural communities:
Trump’s proposed appointees are just beginning the confirmation process, but first impressions are troubling. It is essential on a multitude of important challenges the country faces, rural and urban communities alike, that government officials represent the public good and not just narrow corporate interests. The increasing influence of corporations and financial firms in government and elections is a growing threat to our democracy, and not exclusive to any political party. Yet, Trump’s proposed cabinet takes this corporate influence to another level. The scope of corporate connections, combined with the enormous financial holdings of many of the appointees, poses the potential for conflicts of interest that must be settled before they take office. Many of the appointees will direct departments with jurisdiction over their former business or investments. Examples include:
Trump has particularly aligned himself with Goldman Sachs, the financial giant he assailed during the Presidential campaign. Now Trump has filled his staff with four former Goldman employees and the company’s lawyer. Aside from its role in the financial collapse of 2007-2008, Goldman has a very checkered record as a corporate actor. Goldman Sachs commodity index funds contributed to excess speculation in 2007-2008 that disrupted agricultural markets.
In all, Trump’s selections represent the wealthiest set of cabinet members ever. Of the first 17 people Trump has appointed, they are worth an astounding $9.5 billion in combined wealth, more than the combined wealth of 43 million of the entire country’s least wealthy households (about one-third of national households, according to Quartz magazine). Many of the appointees were major campaign contributors. The Washington Post reports that six of Trump’s appointees gave almost $12 million, along with their families, to Trump and his party.
With the appointees’ enormous wealth comes a complex set of financial interests and investments across multiple sectors, including extensive foreign investments. This doesn’t include the financial entanglements of Trump himself, who will enter office with unprecedented conflicts of interest compared to past Presidents.
Government officials that personally profit from their positions would violate criminal conflict of interest laws. It’s critical that each nominee submit thorough details on their financial holdings and how they will address potential conflicts with the Office of Government Ethics. As of today, many of the nominees have not submitted complete information on their financial holdings. The Republican leadership in the Senate is pushing for committee confirmation hearings for appointees before background checks and ethics clearances have been given. This is a troubling precedent and hopefully not a sign of future secrecy in government under the Trump Administration.
Another sign of excess corporate influence within the Trump Administration is his move to establish a series of influential councils that appear thus far to be mostly composed of his friends in business. Trump’s formation of a White House National Trade Council will shift trade policy closer to the Presidency, but no information has been given on how the council will be run, who all its members will be, and whether or how it will hear from citizens. He has also set up a Strategic and Policy Forum—made up entirely of corporate CEOs to advise him on policy. The head of Dow Chemical will chair his American Manufacturing Council. A major merger between seed giants Dow and DuPont remains pending under Justice Department review and has been highly criticized by many in agriculture, including some Trump supporters, for reducing farmers’ seed choices.
There is an underlying assumption in Trump’s selections that people who are very successful in business, or who have a lot of money, are the most qualified to lead the government. But it’s not government’s job to advocate only for the narrow interests of big corporations and financial firms. It must represent the interest of all Americans, all communities and the natural resources we all are connected to.
There has been a lot of post-election analysis about what rural America thinks and why they voted the way they did. We’ve written about how Democrats have not effectively responded to key rural challenges related to globalization, agriculture policy, rural poverty and development. And about the strong need to move away from the deepening rural-urban divide and toward a more inclusive nation and discourse built on listening and dialogue.
As the confirmation process continues, we’ll continue to examine in more depth Trump’s nominees to assess whether their experience and views reflect the perspective that “rural America is more than the land.”
Posted January 10, 2017 by Anna Claussen
The past few months have been as much about looking ahead as they have been about coping with life in post-election America, a space that feels post-apocalyptic for many. Americans and people across the globe have been processing their emotions, trying to understand a vote that came as a surprise to many, and in some cases pausing to reflect on rural realities seemingly ignored by the Democratic Party. Voting patterns in the election brought to the surface just how little understanding there is between rural and urban Americans. What can we learn from this? If we stop oversimplifying the Presidential vote—and the voters themselves—we may recognize that people are complex, emotional beings. Many are recognizing the need for Americans to increase our understanding of others and pondering just how to do that. Here are a few good starting points.
Today, politics have become more about identity than policy. This was evidenced in Trump’s campaign, which rarely detailed his stance on policies, but never failed to send a loud, clear, and indeed, successful message of inclusion to rural Americans who felt misunderstood and ignored. The sorting and categorization of communities by race, gender, education levels and shared ideologies is a practice further entrenched by this election, one in which many voters used their vote as one of protest.
If we want the world to be more inclusive, rather than exclusive, we must step back and look at our own identities. I strongly believe that being inclusive is a mindset first, a mindset of how to embody more complex versions of ourselves. The challenge is that it’s human nature (in our increasingly overwhelming society) to simplify the complexities. Once you lean one way more than another, you have a home base, a family, community, a safe zone, refuge and shoulders to stand on. Yet, this innate tendency to gravitate towards those who are like us only intensifies the poles, leaving a larger gap and great divide between the “us” and “them.” We become comfortable and unaware. We lose our complexities. Our systems lose important players in the middle. Our discussions become challenging because we don’t see how we are similar.
As we seek to build a more inclusive nation in the U.S., we must always be reminded that it starts with ourselves, and often what we think is coming at us is also coming from us. Rather than trying to create a stronger sense of who we are by simplifying our identity, how can we embrace broader versions of ourselves? It’s not just the most effective place to start; it’s the most important.
Do not listen for the purpose of building a strategy to change someone’s ideology. Do not listen to validate how your worldview is nobler than theirs. Listen to understand. We do not have to agree, but we must broaden our understanding to move forward as a truly civil society. Our values are based on our life situations and experiences. They cannot be separated from place and time, just as today’s marginalization of people of color comes from a long-standing history and continued oppression that plays out as structural racism, so too must we recognize the history of class in America and its enduring role in our social and geographic hierarchy.
We must engage in real, authentic dialogue—the type of conversation that is comprised of representative groups of community members in terms of the ideologies, political viewpoints and class divisions. We must refrain from narrowing our communities to a scale that comforts us, like to those who live in our gentrified and segregated neighborhood. As a Minnesotan, I ask myself, what happened to our community of Minnesotans or our shared identity as Americans? At what point did we perceive that we share no values common enough to consider our identity a shared identity? It is now that we must embrace the uneasiness of rebuilding our shared identity and value as an interdependent country of urban and rural citizens, one that is truly better together.
Where we disagree, we must be clear what we disagree about. We must stomp out the bigotry, racism, sexism and all forms of injustice that Trump attempts to legitimize and condone – calling it out in all instances that it is present, overt and subversive. At the same time, we must recognize that Trump’s use of this discrimination in his candidacy does not reveal an inherent malice in the majority of Americans, and perpetuating this assumption only hinders our collective advancement of human rights. More appropriately, we need to set generalizations aside so that we can create space for the needed conversation about the hidden injuries of structural racism and class privilege. This is not the moment to get swept up in our own political identities. Rather, it is a critical time to be clear about the proposals put forth by the new administration and to offer concrete alternatives or changes that are representative of all of our needs. We must use caution when turning those battles into an opposition of two opposing forces, of seeing those points of misalignment as a duality – it’s a dangerous oversimplification.
It is a mistake to think that our social media enclave is broadening our perspective and worldview. Get to know someone different than you every chance you can and stop contributing to the echo chamber. In a time when we are outraged, we must practice ever more diligence to be mindful of how we speak and relate to one another, and what we post on social media. Restricting our tone to anger runs the risk of further narrowing our already narrow identities.
Reading a book or participating in a social forum discussion doesn’t come close to what we can learn from firsthand experience. I know many urban-based, liberal counterparts who understand this intellectually, yet rarely drive out of their metro area to understand and experience the rural culture in their state or region. Their lack of exploration can often, rightly or wrongly, be perceived as deriving from fear of or lack of interest in rural communities. Worse, it fans the flames of disregard by perpetuating media and second-hand messaging offering caricatures of rural Americans as backwards, outdated and uninteresting.
Despite much recent talk of fake news, there is little talk of what I would call the failing media. Major news outlets in the U.S. and abroad rarely offer rural place-based perspectives that truly document the life, celebrate the culture and voice the concerns of rural people; despite assertions of rural communities around the world that they have long been unheard, unsupported and afraid of democracy failing them. Yet, their plights have remained largely ignored by mainstream media. Which brings us back to the importance of first-hand experience and authentic engagement. When humans are in crisis, they respond emotionally, not rationally. People need to know that you care, before they can care what you know. It is a mistake to focus more attention on intellectual and ideological battles rather than validating how people actually feel.
We have to be brave and curious. We have to stop ignoring people’s inner pains and seek to understand them by reaching out with empathy to create space for an authentic exchange of all our fears and concerns for the years ahead. At the end of the day, this is an opportunity to learn and grow and consider another world view. This is the time to become even more vocal of what is unjust and what is inexcusable, and to also abandon the shaming of Trump voters in order to rebuild a community base that is broader, more inclusive and a place for all of us, urban and rural, to stand-up for one another.
Posted January 9, 2017 by Tara Ritter
As evidenced in the 2016 election, the long-standing urban-rural voting gap is widening. At least part of this gap comes from the fact that rural communities often have different cultural, economic, and community concerns than urban communities. Climate change specifically will impact rural and urban communities differently, yet many climate solutions and policies focus on urban and suburban perspectives. To address this, the Institute for Agriculture and Trade Policy and the Jefferson Center organized a State Convening of rural Minnesotans, state agency representatives, and nonprofit organizations last September in St. Paul. Participants strategized together to improve the effectiveness of state agency program offerings and make them relevant to rural needs and priorities.
The State Convening was the culmination of three Rural Climate Dialogues that took place from 2014-2016 in Morris, Grand Rapids, and Winona, MN. The Rural Climate Dialogues were created to provide a space for rural residents to think critically and plan strategically to address local challenges related to extreme weather and climate change. All three dialogues identified the need to strengthen connections between local efforts and state agencies and programs.
At the State Convening, rural participants identified and presented their shared climate action priorities, which included energy, infrastructure, and land use concerns. State agency staff also presented on a number of key climate issues for rural Minnesota, including available programs and technical support. Topics included clean energy and energy efficiency, climate-friendly agriculture, resilient transportation infrastructure, and health impacts of climate change on rural citizens who work mostly outdoors.
Rural citizens and state agency staff then strategized together on key priority next step actions within existing programs in the areas of land use (e.g. soil health, water quality, ecotourism), infrastructure (e.g. stormwater, transportation planning), and energy (e.g. clean energy, energy efficiency). The State Convening also identified areas where change is needed, including building a state program navigator for local government officials, encouraging more rural-focused research on climate resilience, sharing best practices between rural communities, and creating an ongoing space for state agency staff to engage constructively with rural citizens.
The meeting provided a useful space for state agencies and rural residents to learn from one another. John Geleneau, a participant from Stevens County, said, “even if you thought you knew a lot about climate change, the information that we were all given, the experts that were provided, really gave you a chance to gain so much more knowledge and be able to have a dialogue with other people with all the information that you learned.”
In addition, state agency staff were able to learn from one another. Marcie Weinandt from the Minnesota Department of Agriculture said, “I found it very useful knowing what other agencies are doing—there are few good forums for that.”
To read more, you can access the full report of proceedings, findings, and next steps, now available online.
Posted December 21, 2016 by Dr. Steve Suppan
On December 5, the Commodity Futures Trade Commission (CFTC) announced it had voted to propose for the fourth time the position limit rule required by the 2010 Dodd Frank Wall Street Reform and Consumer Financial Protection Act. A Wall Street lawsuit in 2012 and the time required for CFTC staff to review an avalanche of industry comments delayed finalization of the rule. The CFTC published a fact sheet outlining the main features of the re-proposed 910-page rule and naming the 25 contracts subject to position limits.
Position limits on commodity derivatives contracts were proposed to prevent market manipulation and excessive speculation in agricultural, energy, base metals and precious metal contracts. During 2007-2009, excessive speculation by Commodity Index Traders, such as Goldman Sachs and Morgan Stanley, resulted in high and extremely volatile commodity prices. The commodity exchange self-regulation of positions, under the deregulatory Commodity Futures Modernization Act of 2000 (a 262-page bill attached to a must pass budget resolution), failed to prevent both excessive speculation and market manipulation, e.g. by Kraft Foods’ and Mondelez’s decade-long price fixing of the Chicago Board of Trade wheat contract.
The December 5 announcement ended the CFTC’s efforts to finalize the rule during the Obama administration. On December 14, Senators Maria Cantwell, Sherrod Brown and Diane Feinstein wrote to CFTC Chairman Timothy Massad to criticize the failure to finalize the rule, despite Massad’s stated intent in May to do so this year.
The Republican member of the Commission, Christopher Giancarlo, a fierce critic of position limits, is likely to become the Chairman of the CFTC in the Trump administration. Given President-elect Trump’s promise to repeal large parts of the Dodd-Frank Act, the CFTC may not be required to do further work on the re-proposed rule after receiving comments by the March 2017 deadline. As succinctly put in The New York Times, “Are we going back to the precrisis nonregulation of derivatives?”
If so, said Dennis Kelleher, CEO of Better Markets, “then it’s time to start the countdown clock to the next financial crash which will make the last one look mild by comparison.” Are we doomed to suffer another, more severe and widespread financial crash under proposed Dodd Frank replacement legislation, such as H.R. 6392, which weakens the standards for designating systematically important financial institutions subject to stricter oversight?
Position limits are just one tool applied to regulate the smallest value asset class under CFTC jurisdiction. The Wall Street opposition to position limits is part and parcel of its opposition to transparent, standardized and near real time reporting of trades in larger value contracts, such as interest rate derivatives. Such reporting and aggregating of trade data positions by U.S. parent firms and their myriad foreign affiliates helps regulators determine whether defaults or liquidity crises among trading counterparties pose threats to the U.S. financial system that could result in another crash.
IATP first advocated for a position limit rule, as a signatory to a Commodity Markets Oversight Coalition letter in June 2009, for a bill that would become part of the Dodd Frank Act. We have continued to do so ever since, most recently submitting comments to the CFTC in July on the third version of the rule. Seven years later, is an effective position limit rule dead? Has the IATP’s work and the greater work of many other organizations to advance the rule been in vain?
It could be argued that finalizing a CFTC position limit rule would be fruitless unless the European Union regulators likewise finalize their rule, opposed by many of the same global banks and trading venues that opposed the CFTC rule. On December 1, the Brussels-based NGO Finance Watch announced they would recommend that the European Parliament reject the European Commission-adopted position limit regulations that European Union member state regulators would adapt and enforce by January 1, 2018.
Finance Watch charged that the regulations ignored important and clear guidelines in the Parliament’s Market in Financial Instruments Directive (MiFID) for setting position limits. If the Parliament rejects the Commission-adopted regulations, under the EU financial regulatory process, they will be sent back to the European Securities and Markets Authority for redrafting. Redrafting, and adoption by the Commission and then the Parliament, would likely mean that there would be no European position limit rules before the summer of 2017 at the earliest.
In the meantime, in order for European and other foreign firms to trade on U.S. commodity markets, the CFTC staff writes “regulatory relief” letters that extend the date by which those firms must comply with CFTC rules. For example, on November 21, the CFTC announced that it was extending—until December 1, 2017—“regulatory relief” for commodity derivatives contracts traded over-the-counter (OTC or swaps), i.e. not traded on regulated exchanges. Is repeated year-long “regulatory relief” from compliance with Dodd Frank and MiFID rules a permanent victory for Wall Street and the City of London banks and exchanges?
IATP has tried to take the long view on market regulatory reform. Rulemaking, compliance procedures and training, and developing computer software for trading, data record keeping, aggregation, verification and reporting under new rules must be achieved comprehensively to restore integrity to financial markets. It took eight years after the Commodity Futures Modernization Act of 2000 for Wall Street firms and their foreign affiliates to blow up asset price evaluations and trigger the global Great Recession. It will take many more years to implement and enforce reform of the derivatives markets, if the proposals to repeal and replace Dodd Frank are enacted under the Trump administration.
One wind at the back of Dodd Frank derivatives rule supporters is international regulatory organization initiatives about the unrelenting wave of rule violations and crime by global banks. In a comment on an International Organization of Securities Commissions consultation paper on cross border derivatives trading, IATP cited a 2015 letter from Financial Stability Board Chairman, Mark Carney to the G20 Finance Ministers and Central Bank Governors: “The scale of misconduct in some financial institutions has risen to a level that has the potential to create systemic risks. Fundamentally, it threatens to undermine trust in financial institutions and markets, thereby limiting some of the hard-won benefits of the initial reforms.”
Deutsche Bank, for example, a major recipient of 2007-2010 Federal Reserve Bank bailout money, harbors a “culture of criminality,” according to one Deutsche Bank whistleblower. Deutsche Bank continues to negotiate with the Justice Department to reduce the amount of money it owes for U.S. government purchases of its “toxic” (unsellable at any price) derivatives contracts. It’s not hard to imagine that the bank would call out to Donald Trump, who owes Deutsche Bank at least $300 million, for some “regulatory relief.’ As Deutsche Bank continues to violate CFTC rules, including position limits, it likely will need more “regulatory relief.”
It would be unfair to the CFTC to end this blog with reference to the morass of the incoming Trump administration’s conflict of interests with the Trump organization’s main banker and the perils for the financial system of returning to pre-crisis non-regulation.
The December 5 announcement also stated, “In a separate vote, CFTC approved final aggregation regulations, which are a key component of the CFTC’s existing position limits regime.” The rule establishes the framework for exchanges to aggregate their trading data for reporting to and monitoring by CFTC staff to prevent market manipulation of prices and excessive speculation. The aggregation rule describes who must aggregate and report positions to the CFTC and who is exempt from doing so. However, the aggregation rule applies only to nine agricultural contracts. If the content of the final position aggregation rule is the same as the 2015 proposed rule, it is unlikely to be nullified under the terms of the Congressional Review Act.
IATP’s short comment on the 2015 supplement to the draft aggregation rule was critical of industry-proposed exemptions from aggregation. We wrote, “As the [technological] means to aggregate derivatives data in near real time become more feasible, the [industry] will to not aggregate seems to become stronger.” IATP noted that extensive exemptions from aggregation granted by the CFTC would run counter to the effort of the 36-member government Financial Stability Board to agree on an aggregation mechanism for over the counter (off exchange) trading data in all asset classes, not just commodities. Once operational, such a mechanism would enable FSB member regulators to access foreign trade data to determine whether cross border derivatives trading posed risks to their financial systems.
It appears that the CFTC position aggregation rule is at best one step forward and two back for global derivatives trade data aggregation and surveillance. IATP will be commenting this month on the CFTC’s proposed cross border trading rule. A blog in early 2017 will consider the interface of that rule with the position aggregation rule.
Posted December 19, 2016 by Dr. Steve Suppan
There is little doubt that many supporters of the Donald Trump candidacy for President expect President-elect Trump to carry out his promise to deport millions of undocumented immigrants and to keep out more immigrants by building a wall along the U.S.-Mexico border. (The Center for Migration Studies estimated 11 million undocumented immigrants in the United States with about six million from Mexico.)
However, according to a 2014 report commissioned by the American Farm Bureau Federation, about half of all hired farm workers are undocumented immigrants. U.S. industrial-scale animal agriculture and horticulture depend on “the abundant supply of undocumented workers available and their willingness to accept transitory, seasonal, or physically arduous work that pays introductory wages that are unattractive to the U.S.-born.” According to a U.S. Department of Agriculture survey of farm labor, non-supervisory wages for all farm workers reported in 2012 averaged $10.80 an hour. How will the Trump administration both protect the agribusiness migrant labor dependent business model and fulfill the campaign promise to protect American jobs by deporting the undocumented?
Candidate Trump has said his administration would renegotiate the North American Free Trade Agreement (NAFTA) to get a better deal for the United States. Senator Sherrod Brown (D-OH) has called on the President-elect to make NAFTA renegotiation “an immediate priority once in office.” If there is bi-partisan support for renegotiation, how might it affect migrant farm workers?
As IATP’s Karen Lehman testified to Congress in 1993, the terms of the NAFTA agriculture chapter would drive a very conservatively estimated 600,000 to 700,000 Mexican farmers (and their families) off their land to the United States to look for work. According to a Mexican legislator, as of January 2015, about 550,000 Mexican farmers a year migrate to the United States. Stemming futures flows of Mexican farmers into the undocumented U.S. agricultural workforce will require renegotiating NAFTA to prevent agricultural export dumping, i.e. exporting at prices below the cost of production, with which the unsubsidized Mexican farmers cannot compete.
Measures to end dumping will not be popular with agribusiness donors to Congressional elections and so are unlikely to be included in a renegotiated NAFTA. The flow of undocumented labor into U.S. agribusiness very likely will keep coming, both from Mexico and via Mexico, from the Central American Free Trade Agreement countries.
As if to anticipate that flow, the Farm Bureau currently advocates an “uncapped Agricultural Worker Visa Program (AWP) [that] will ensure agriculture’s future legal workforce.” For migrant farm workers currently residing in the United States, the Farm Bureau proposes—subject to requiring a worker’s commitment to agricultural labor “for several years”—an immigration policy according to which “the workers could obtain permanent legal status and the right to work in whatever industries they choose, including agriculture.”
“Permanent legal status,” much less citizenship with voting rights, is likely a non-starter with the incoming Congressional majority and their electoral support base. Thus, the Farm Bureau proposal looks at updating the 1942-1964 temporary Mexican Farm Labor Program. The Farm Bureau and the U.S. Chamber of Commerce supported the creation of that long-term force of temporary agricultural labor, which sabotaged the ability of farmworkers to organize for better wages, working conditions and temporary housing. That kind of labor “reform” might well appeal to a Republican majority and to a Trump White House because it would enable agribusiness as usual.
There are many other causes of migration besides trade policy that drive farmers out of business and into emigration. According to the United Nations’ International Migrant Report 2015, global migration is estimated at 244 million, with 47 million immigrants residing in the United Statesand 76 million in Europe.
One important emigration driver is climate change that is helping to degrade soil quality and fertility. Major investments to adapt to climate change by improving soil are absent and a recent report estimates that there will be about 50 million climate change refugees over the next decade.
President-elect Trump told The New York Times that he is “keeping an open mind” about climate change but he nominated a climate change denier to be in charge of the Environmental Protection Agency. If the Trump administration climate policy does not come with U.S. funding for farmers in developing countries to adapt to climate change, the Farm Bureau advocated pool of permanent temporary migrant farmworkers could become much larger much faster.
Posted December 16, 2016 by Dr. Steve Suppan
Congress has gone on recess without holding a vote to approve the Trans-Pacific Partnership (TPP) Agreement during the last days of the Obama administration. But on the day after the U.S. elections, Inside U.S. Trade reported that Senate Majority Leader Mitch McConnell reminded journalists that President Donald Trump will still be able to present new trade agreements for an expedited, no amendments vote under the 2015 Trade Promotion Authority Act. Free trade proponents are already fretting that Trump’s notion of a better trade deal would mean “protectionism.” But what does that term really mean?
Conventionally, “protectionism” describes government actions and policies, such as taxes on imports, i.e. tariffs, and import quotas to restrain international trade and to protect local economic development. “Free” trade is said to be the absence of such actions and policies, to maximize international trade and, in theory, produce benefits for all consumers and most workers.
However, as economist Dean Baker has written, “the TPP goes far in the opposite direction [from free trade], increasing protectionism in the form of stronger and longer patent and copyright protection.” He estimates that intellectual property protectionism increases prices of prescription drugs, software and other protected products by an equivalent to a several thousand fold increase in tariffs.
Furthermore, the investment chapter of the TPP and other “free” trade agreements increases protection for foreign investors by providing for private arbitration panels of corporate lawyers to sue governments for policies or actions believed to have diminished the value of their investments. The TPP does not allow governments to sue investors for cross-border damage resulting from their investments.
Notwithstanding unanimous transnational agribusiness support for the TPP, the view from rural America—62 percent of whom voted for Trump—is quite different. With farm incomes plummeting for the third year in a row, and the level of farm debt to income the highest since the farm mortgage crisis in 1985, Trump’s tying the message of rural economic pain to the TPP was not a hard sell. But what kind and extent of protection did the Obama administration provide for farmers and ranchers, and indirectly for their input suppliers and landlords, to enable agribusiness exports?
The 2014 Farm Bill payments to compensate for falling crop and livestock prices were locked in for 2016 and so did not figure in the election debates. The Congressional Budget Office estimates that for fiscal year 2017, U.S. taxpayers will pay farmers and ranchers about $10.2 billion for commodity support programs, plus about $5.5 billion for conservation programs.
However, despite these payments, farmer and ranchers are caught in a cost-price squeeze, since USDA estimates that the costs of production will continue to be greater than the prices offered by agribusiness for their raw materials. For example, wheat farmers will pay about $6.50 to grow a bushel and receive $5.21 a bushel at their local grain elevators. The American Farm Bureau Federation commissioned a study that claims the TPP would increase wheat prices by $0.02 a bushel by 2025.
A more fiscally conservative policy is available to increase prices paid to farmers and decrease taxpayer support payments—supply management— to adjust supply to demand. But agribusiness has long opposed any form of supply management, most recently in the TPP negotiations.
TPP proponents didn’t explain how more agribusiness exports would make farmers profitable in the market place and reduce their dependence on government payments for survival. According to a Farm Bureau lobbyist, Trump’s supporters believe the best way to protect farmers is to eliminate regulation: “Without a doubt the rural Americans that supported Trump supported him mostly on his comments about the EPA . . . When you ask farmers their biggest concern, it’s always regulation.”
The Republican Party promised in its Platform to empower states, not the EPA, to protect rural families, water and soil from toxics. But if President Trump signs a bill to cripple the EPA, and farm debt continues to rise relative to income, will regulation remain the Farm Bureau’s biggest concern? Gutting the EPA will not increase farm profitability, but it will help protect “least trade restrictive” policy, imports and exports.
Posted December 6, 2016 by Shefali Sharma
Last week in Berlin, Arbeitsgemeinschaft bäuerliche Landwirtschaft e.V. (ABL), Meine Landwirtschaft (a broad platform of over 50 organizations demanding an alternative agricultural system), PowerShift and Institute for Agriculture and Trade Policy (IATP) Europe launched the German version of our report Selling Off the Farm to highlight why trade agreements such as the Comprehensive Economic and Trade Agreement (CETA, between Canada and the EU) and the Transatlantic Trade and Investment Partnership (TTIP, between the U.S. and EU) will be disastrous for European agriculture. Given that German farmers are struggling in one of Europe’s biggest farm crises, a rise in imports from North American “factory” farms, lax food safety rules and greater corporate control will make an agriculture deal in CETA and TTIP very costly and perhaps the last straw for European family farms.
Like the European Parliamentarians in Brussels, ministers of the German Parliament (Bundestag) were surprised to learn how integrated the North American meat market is and even more shocked to learn that only two companies control 90 percent of the beef sector in Canada and only four in the U.S.
If CETA is implemented, 50,000 tonnes of beef (largely fresh, but nearly 1/3 frozen) will be allowed into the EU market on top of the 11,500 tonnes of high quality “Hilton beef” exports shared between the U.S. and Canada (granted after the WTO hormone dispute). CETA will allow Canadian Hilton beef to enter duty-free into the EU market. In addition, EU will allow 80,000 additional tonnes of Canadian pork duty free as part of CETA.
While the EU dismisses these significant volumes as only 0.04 percent and 0.06 percent respectively of total European beef and pork produced—European farmers calculate a very different conclusion:
For several years, Canadian pork has sold for up to 60 percent less than European pork. In 2014, despite the price crash in the European pork sector, the Canadian price was still 25 percent lower. In part this is because Canadian pork producers are paid 15-35 percent less than their European counterparts. Should CETA allow for an opening of those markets, under current conditions Canadian producers would be able to offer their products in the EU at a much cheaper price than comparable EU producers.1
Pork Farmer and ABL Chair Martin Schulz, who was present at meetings at the Bundestag and at our public debate with MPs, emphasized that even small quantities of pork imports dramatically depress prices in the EU since the EU market has a surplus. The imports allowed through CETA would be devastating to thousands of independent pork farmers who cannot compete with the vertically integrated contract farming system of North American pork production.
The extreme concentration and contract system has created a dramatic shift out of pork farming in Canada and competition with this North American giant is likely to speed up the transformation of European family farms into contract labor as well:
The Canadian meat industry lauds CETA, indicating that it would create many more jobs in the country’s meat sector. It also looks forward to the technical negotiations to remove any other trade barriers in the form of food safety (such as chemical rinses to wash meat carcasses) –indicating quite clearly that the industry plans to use the built-in regulatory cooperation agenda in CETA to continue lowering EU standards once the agreement is enacted.
Germany was the second stop for our Selling Off the Farm tour as Sujata Dey from Council of Canadians and IATP’s Sharon Treat continue this week through Hungary, France, Slovenia and Poland. Along the way, they are highlighting the fundamentally different structures of the North American and European agriculture market and why these agreements would hurt European agricultural producers.
1. “CETA’s threat to agricultural markets and food quality.” In Making Sense of CETA, 2nd Edition, pgs. 51-58.: https://power-shift.de/making-sense-of-ceta-en/
Posted December 1, 2016 by Shefali Sharma
Our tour across Europe on Selling Off the Farm Corporate Meat’s Takeover Through TTIP and its links to the EU-Canada Comprehensive Economic and Trade Agreement (CETA) launched on November 29 at the European Parliament. IATP’s Senior Advisor, Sharon Treat, Waldemar Fortuna from the Polish organization, IGO and I met with several members of the European Parliament (MEPs), including coordinators of different political parties that will decide CETAs fate in early February.
In the last two years, there has been an unprecedented awakening by ordinary citizens across Europe about the damage that free trade agreements do to policy making in the public interest. People have begun to understand that treaties, such as CETA and the Transatlantic Trade and Investment Partnership (TTIP), give transnational corporations even more power to expand and consolidate than they already possess. Many citizens have begun to challenge key elements of these agreements—such as the provisions that allow these corporations to sue governments for enacting public policies that might dampen their profits.
We set out to highlight key concerns that our research revealed about how agreements such as TTIP (and CETA) undermine their jobs as Parliamentarians, particularly when it comes to issues Europeans really care about like cloning, GMOs, and how meat is produced and processed. It became evident quite quickly that while many agreed or hesitatingly admitted that perhaps TTIP went too far in that realm, they were more than relieved to be able to say that CETA was no problem at all.
While politics in many of their countries involves serious crises in the agriculture sector—crashing dairy prices, rising input costs, a struggling beef production sector, the phasing out of small family farms—many of them believed that the competition with Canada would be beneficial to European farmers. Some Eastern European MEPs felt that joining the EU had transformed their economies in a positive direction, so certainly further opening up to free trade deals with industrialized countries will also be beneficial.
Never mind that CETA contains many of the same provisions that TTIP would, or that the Canadian meat market is not really “Canadian,” but rather North American. One of the clear outcomes of the North American Free Trade Agreement (NAFTA) has been the integration of the North American meat and feed industries. As a result, the meat industry can shuttle animals between the U.S., Mexico and Canada to cut costs of production and still market products as made in Canada or the U.S. That is until the U.S. implemented Country of Origin Labeling (COOL) for meat that required processors to state where the animal was born, raised and slaughtered. Ironically, Canada and Mexico, on behalf of the North American Meat Industry, put an end to this much desired consumer demand. They brought a challenge to the World Trade Organization, complaining that the U.S. law goes against free trade, and they won. The congressional lackeys of the meat industry in the U.S. were only too happy to repeal the law.
The European Parliamentarians have failed to understand this dynamic, that a free trade deal with Canada on agriculture, particularly meat, is also a deal with the United States—because these companies are neither American or Canadian. They are both. And what this means is that CETA, like TTIP, will hasten a very different agriculture system than what most European farmers and consumers want.
JBS and Cargill together control 90 percent of beef processing in Canada. And perhaps by 2019, JBS will be headquartered in Ireland. It is the world’s largest meat processor and also one that has aggressively bought out major brands in the U.S. and worldwide. Though currently headquartered in Brazil, having received substantial support from Brazil’s national development bank BNDS to become a “national champion,” the company had plans to move to Ireland this year, but BNDS shot this down recently. However, JBS’s shareholder agreement with BNDS ends in 2019 after which the company would be free to relocate to Europe.
The disconnect between these Parliamentarians and the voters they represent couldn’t be more stark—and I was reminded of Donald Trump’s election as President. How badly the Democrats had miscalculated the disenfranchisement of Americans from their democracy, how angry they are at corporate control of that country—that they are willing to elect someone, even a corporate tycoon, who says that he will end corporate control, create jobs and end free trade deals that hurt American citizens. I am afraid for the European Parliament and for the European Project, because as long as they continue to ignore the protests and petitions and rightful critiques of these free trade deals, they are likely to repeat the same mistake that has, in part, led to Brexit and Trump.
Posted November 30, 2016 by Ben Lilliston
In country star Jason Aldean’s song Fly over States, he overhears first class passengers on a flight from New York to LA, looking down on the countryside and wondering, “who’d want to live down there, in the middle of nowhere.” Aldean then flips the dismissive line into a proud anthem about the middle of the country. Like the song, Donald Trump flipped the predictions of the professional political class and rode a wave of support from many people who felt over-looked in those fly over states all the way to the Presidency.
The power of the so-called fly over states in the election is impossible to ignore. The electoral maps tell the story. A swath of red, often mostly rural, states in the middle and south of the country, bookended by blue states on the coasts. Even within the few Midwest blue states like Minnesota and Illinois, you can see the stark divide between how urban and rural counties saw the candidates. A look back at the 2012 electoral map tells us this divide is not new, but perhaps wasn’t taken seriously by many Democrats because President Obama won. As the Daily Yonder reports, the long-standing urban-rural voting gap is widening. At least part of this voting gap can be attributed to the Democratic Party’s loss of credibility on a number of core issues that affect the lives of rural communities in those so-called fly over states.
The state of rural politics lies squarely within the condition of the rural economy. Rural communities have higher poverty rates, more persistent long-term poverty rates, and higher child poverty than urban communities. There’s been a steady decline in rural and small town main street businesses, accompanied by a decline in rural business lending. Nearly two out of three rural counties lost businesses, on net, from 2010 through 2014 – even as the rest of the country recovered from the recession. Rural infrastructure is seeing disinvestment and rural bridges and roads are increasingly being closed as public money shrinks. Rural grocery stores are disappearing and there is a significant digital divide that hampers rural businesses without broadband access.
These economic challenges, particularly the loss of rural-based manufacturing, provided the backdrop for Trump’s narrow (yet effective) attacks on free trade deals. In smaller towns, the loss of a manufacturing plant or anchor business hits harder than urban centers with more job opportunities. Though both parties have long supported free trade agreements that took American jobs offshore and kept wages stagnant, it was Bill Clinton who signed the North American Free Trade Agreement (NAFTA); and it was Barack Obama who, having failed to address the problems with NAFTA (as he’d promised to), actually expanded the NAFTA model to create the proposed 12-nation Trans-Pacific Partnership.
There is another storm returning to the rural horizon; an emerging farm crisis. Prices for many commodities are below the cost of production, farm debt to income is the highest in three decades, farmland values are decreasing, and dairy farmers are dropping by the hundreds. These neon warning signs of trouble in the farm economy were virtually absent from the Presidential campaign. The Democratic party platform afforded 80 words to agriculture, which, as John Nichols of the Nation pointed out, fell well short of the attention given by previous Democratic platforms.
Many Midwest farmers still bear the scars of the farm crisis of the 1980s, when farm foreclosures and suicides were part of the countryside. In his seminal 1987 piece, Crisis by Design, IATP’s founder Mark Ritchie documented how government policy steadily eroded programs that focused on keeping farmers on the land through fair prices in the marketplace. Over a series of Farm Bills, agribusiness lobbying drove an intentional push toward fewer, big farms, characterized by the blunt call for farmers to “get big, or get out.” The final dismantling of the older farm programs culminated in the Freedom to Farm Bill of 1995 during President Clinton’s administration. Journalist Sienna Chrisman picked up where Crisis by Design left off, in a recent article explaining how a broken farm policy has set the stage for the emergence of Trump.
Addressing an anti-competitive marketplace for farmers and ranchers, fueled by increasing corporate concentration in the agriculture sector, was a priority for Presidential candidate Obama in 2008. Within his first year, a series of field hearings held around the country were organized by the Department of Justice and Department of Agriculture focusing on the anti-competitive elements of the meat, poultry and seeds markets. But the issue quickly faded and no action was taken.
Trump’s rhetoric on agriculture mirrored the directness of his talk on trade. He charged that there is a “war on farmers” preventing them from being profitable, and laid the blame for that war not on a mix of factors including volatile, anti-competitive markets, but solely on regulators. Regardless of this dubious claim, Trump’s strong words filled the largely silent void left by Clinton and many Democrats when it comes to agriculture.
Health care is another major issue for many farm families and rural citizens cobbling together part-time jobs, unable to rely on the health insurance of larger employers. Rural communities have fewer public resources for emergency medical services, less elder care, and less child care available than urban communities. More than 60 rural hospitals have closed since 2010, and more than 650 are vulnerable to closing. Rural adolescents commit suicide at roughly twice the rate as their urban peers. A recent study from the Center for Disease Control found that of all professions, the risk for suicide was highest among the rural-based jobs of farmers, foresters and fishermen. Rural drug and alcohol treatment centers have less access to highly-trained counselors.
When premium rates from so-called Obamacare jumped recently—it was particularly felt in rural communities. Again, candidate Trump’s strong message, though simplistic, resonated: you can blame the disastrous Obamacare for all your health care problems.
Finally, it’s worth noting that the inability to hold Wall Street accountable for the financial crisis is yet another issue where Democrats have lost credibility with working people. The Obama Administration’s failure to jail a single Wall Street executive in the wake of the financial crisis that caused massive foreclosures and job losses—combined with Hillary Clinton’s secret, lucrative speeches to Wall Street—allowed Trump to paint the Democrats as part of a rigged system that is unable to stand up to Wall Street.
Much of the post-election analysis has emphasized the inability of Clinton to galvanize the so-called Obama coalition – as if simply mobilizing those non-rural voters in the future will solve all problems. According to Politico’s Helena Bottemiller Evich, the Clinton campaign intentionally decided not to spend resources on rural voters, apparently only assigning a single staff person to rural outreach in their Brooklyn office late in the campaign. A similar disinvestment in rural policy and outreach took place at the Democratic National Committee and the House and Senate rural policy outreach committees, writes rural strategist Matt Barron.
The Democratic and Republican party infrastructures are not alone in overlooking many key rural issues. The private philanthropic community was recently called out by USDA Secretary Tom Vilsack for not funding in rural America. A recent USDA report found that rural communities, which account for 19 percent of the population, received only six to seven percent of foundation grants from 2005 to 2010.
There is an urgent need for new ideas and real solutions to the challenges facing rural America. Last year, Farm Aid held its 30th anniversary concert and brought together leading family farm activists of the 1980s. They talked about the dark economic times of that period and the personal trauma that many families went through, but also the very real danger of violence in the countryside at that time. Mark Ritchie talked about how essential it was “to build a movement based on peace…. If we’re not there to address peoples’ real hurt, if we’re not there to provide a real analysis of where this is coming from and if we’re not there to take real action, the right wing and the extremists will go in and scoop up people who are angry and frustrated—people who’ve done all the right things and served their country in all kinds of ways.”
Climate policy and politics provides some cautionary lessons on what can happen when rural communities are considered an after-thought. Rural economies are particularly natural resource based, whether forestry, agriculture or mining. They are already experiencing climate change—and will have to be part of the solution. Yet, the rural-urban political divide widens when most climate-related proposals start with raising fuel and energy costs for rural families (who already have higher transportation and energy costs), and in some cases, putting rural people out of work as in the case of coal. Rural resistance to climate action has often been viewed as a “messaging” problem by environmentalists—rather than a need to better understand these challenges, and actually involve rural citizens in designing a new approach to climate policy.
In his mea culpa column, Rolling Stone’s Matt Taibbi writes that he and the media misread the election by following polls and experts instead of “hearing things first hand.” Taibbi writes, “Just like the politicians, our job was to listen, but we talked instead.” The New York Times public editor Liz Spayd chastised the paper for being too focused on brief interviews that often created caricatures, rather than taking “readers deeper into the lives and values of the people who just elected the next president.”
Many of the core issues facing rural America are shared by people in all parts of the country: economic uncertainty, wage stagnation, overwhelming personal and college debt, poor health care, and yes, a changing climate. Both political parties have done a good job dividing the country or worse, spreading a wave of apathy, without effectively addressing these issues. It will take a lot of work by people, organizations and institutions to pull it back together.
In his 2015 song Something More Than Free, country singer Jason Isbell sings about another value deeply rooted in so-called fly over states – the honor, dignity and pain of hard work. Isbell sings, “Sunday morning I’m too tired to go to church. But I thank God for the work.” Finding a more just, peaceful and inclusive path forward along with those who feel ignored and that the system is rigged – is the work for all of us.
(Coming soon from IATP—Ideas on what’s next)