This week, the World Bank, the U.N. Food and Agriculture Organization and a number of governments are meeting in the Hague at the Global Conference on Agriculture, Food Security and Climate Change. The original goal was to develop a Roadmap for Agriculture that would feed into the global climate change negotiations at the United Nations.
One of the key obstacles to developing a joint approach on agriculture and climate change is financing: finding money to help farmers and communities adapt to the effects of climate change while reducing agriculture's contribution to climate change. Carbon markets have been one of dominant proposals for financing agriculture-related projects on climate change.
IATP's Shefali Sharma is in the Hague and delivered the below statement to conference participants on the risks carbon markets pose to food security and greenhouse gas reduction goals.
Between 2007 and the spring of 2008, the food price index shot up by 85 percent, then in a few months, agriculture commodity prices fell by 60 percent. The massive price spike and drop was devastating for developing countries, particularly net-food importers. The food price crisis drove another 150 million people into hunger. According to UNCTAD, the extent of price volatility during the food crisis cannot be attributed to supply and demand alone. There is now a wide consensus that speculation on commodity markets by financial traders had a significant role to play in creating the crisis.
In our discussions in the Hague on food security, climate change and “innovative finance," the discussion on speculation in carbon markets and their impact on agriculture commodities is glaringly missing.
Carbon and commodity markets are tied together through futures markets. And carbon trading is essentially derivatives trading. Unregulated derivatives trading, starting with mortgage-backed securities, was a major source of the current global financial crisis. This crisis is the reason most developed countries claim they have inadequate public funds for climate finance. Yet, carbon trading, to the scale at which it is being proposed, would create a large secondary market of carbon derivatives that has thus far been poorly regulated. When bundled with other commodities, such as maize, wheat or oil, carbon derivatives have a large potential to destabilize agriculture prices. A second way that carbon derivatives can destabilize markets is through over-the-counter trading: a preferred mechanism of financial speculators who can make unlimited bets in commodity markets through this window. In 2008, 44 percent of carbon traded on the European Emissions Trading Scheme was through over-the-counter trades. As a result the carbon price in the ETS has been highly volatile and low.
Land-based offsets included in carbon markets therefore have significant implications on land tenure, food sovereignty, biodiversity and the right to food. These linkages need to be carefully examined and have thus far been neglected as a topic of discussion in this conference.
Industrialized countries and their industries have a legal and historical responsibility under the UNFCCC to mitigate climate change. They should not pass this responsibility to countries who have had little to do with creating the problem, but who nonetheless will bear the largest impacts.
Reliable, predictable and public finance needs to fund adaptation needs in developing countries and there are several proposals including carbon, transport and financial transaction taxes that are on the table that should be considered.
IATP's Shefali Sharma is reporting from the Global Conference on Agriculture, Food Security and Climate Change at The Hague.
It is the fourth evening of this six-day long conference, which promises to deliver a “roadmap” of concrete actions on agriculture, food security and climate change through a participatory process. This evening, a draft copy of the roadmap is supposed to be made available at the conference center with the announcement that this was “not going to be a negotiated text” and that only a “chairman’s summary” would be produced as the outcome of the meeting.
For three days now, the meetings have continued nonstop from 10 a.m. to 8 p.m. with plenaries morphing into working groups, morphing into numerous side events and an investment fair in the evening. Participants have complained about not having any breaks or enough time to engage on the numerous topics. The conference has been dominated by panels and confusion has reigned with regards to the objectives of such a “roadmap” that will simply be delivered onto the participants in a top down manner. Certainly, the chairmen’s summaries of what happened in working groups the day before illustrates that the conference is not meant to necessarily capture the diversity of views (and there are many, with little consensus on anything!), but steadily drive towards a planned outline of a “roadmap.”
Such a shell of an outline was handed to participants today with the headings such as: “Shared Understanding of the Challenges,” “Shared understanding of the Solutions,” “Urgent Need for Action,” and “A Roadmap for Action.” This latter heading is further divided into “Policies and Strategies” for the catch phrase of the conference: “climate-smart agriculture,” “Tools and Technologies for Climate-Smart Agriculture” and “Financing for Transformational Change.” And yet the working groups have not necessarily been addressing these issues in any meaningful way, nor has there been adequate governmental and civil-society participation in the debates or time to merit a “shared understanding.”
The conference appears to be dominated by agribusiness interests and those promoting opportunities for carbon-related offsets and market-based approaches to solve the climate crisis in agriculture sector in the Global South. The words “mitigation” and “adaptation” have been used interchangeably, particularly by representatives from industrialized countries such as the U.S. and New Zealand, raising concerns that this so-called “roadmap” of the chair of the conference will simply ignore the legal obligations of industrialized countries who are party to the UNFCCC to reduce their own carbon footprint and greenhouse gases domestically and to set the stage for carbon offsets in agriculture.
In response to the proceedings of the conference, Bolivia and Nicaragua on behalf of the ALBA group of countries (Bolivia, Cuba, Ecuador, Nicaragua and Venezuela) made 13 recommendations to the conference organizers regarding the chairman’s summary as the outcome document of the conference.
They noted that “a process that genuinely seeks to draw together the linkages between agriculture, food security and climate change should involve government delegates from both the agriculture and climate change sectors in order to support fair and effective solutions to the agriculture and climate crises.“
They called on the chair to “honor the commitments” under the UNFCCC on mitigation, adaptation and financing. They said, “Developed countries should not shift the burden of reducing their emission to developing countries through the carbon market and offsetting […]” Instead, they called for a “holistic framework” that also includes water management, biodiversity, agricultural prices, commodities markets, livelihoods, employment, salaries, womens’ and indigenous rights and poverty reduction.”
The ALBA group also supported the findings of the International Assessment on Agriculture Science Technology and Development (IAASTD) and referenced the World People's Conference on Climate Change and the Rights of Mother Earth held in Cochabamba on April 2010. They stressed that ecological agriculture “is the route to food security and adaptation to climate change” and as such adaptation should be the main priority of the conference. They noted that a market-based approach will lead to carbon speculation “and inevitably a carbon bubble. On the contrary, we need to get non-sector speculators out of food futures markets. Speculation in food security that leads to mass malnutrition is immoral and should be illegal,“ they said.
They concluded by emphasizing the Adaptation Fund of the Kyoto protocol as the appropriate channel for financing and stressed that further funding could also be obtained through Special Drawing Rights at the International Monetary Fund.
Tomorrow begins the ministerial roundtable to deliberate on the chair’s summary.
This month's Radio Sustain podcast is all about food security and farmworker justice: Why does exploitation of farmworkers and modern-day slavery still exist in the United States, and why do some (both domestically and internationally) go hungry while others have more than enough?
First, IATP Food and Society Fellow Sean Sellers discusses the shocking modern-day farmworker exploitation that takes place throughout the country. In a new campaign, he and IATP Food and Society Fellow Shalini Kantayya have created a video with the Coalition of Immokalee Workers to ask for One Penny More for farmworkers.
Domestically, hunger remains—unsurprisingly—concentrated in low-income urban areas. Mark Winne, author of Closing the Food Gap, is a veteran food security and anti-hunger advocate. He's founded multiple food security organizations, including the Community Food Security Coaltion (CFSC). Winne talks about his ideas on where the food gap comes from and shares his insights on what steps must be taken to close it.
Finally, IATP's Sophia Murphy discusses the state of international food security, and why food reserves hold promise as a tool for stabilizing volatility in agriculture markets that devastates farmers and poor consumers around the globe.
In 2003, at an Integrated Pest Management (IPM) conference in Indianapolis, I presented a paper entitled "GMO’s and IPM: are they compatible?" One focus of the discussion centered on the question of whether GMO’s will increase or decrease pesticide use over time? I, and others—especially Chuck Benbrook—predicted that over time pesticide use will actually increase as pest resistance develops. I also covered this issue recently in a previous Think Forward blog.
The broad-spectrum herbicide glyphosate (Roundup, until recently manufactured exclusively by Monsanto), when used with corn or soybeans containing a transgenic gene resistant to the effects of the herbicide has provided excellent control of both grass and broadleaved weeds. This permitted more use of no-till and narrow row farming, and increased the acreage that can be managed per farm unit. Thus, it has indirectly contributed to yield and to profits. In short, it has been a major contributor to large-scale industrial agriculture that has decimated the countryside. As Andrew Wargo III, president of the Arkansas Association of Conservation Districts, states in a New York Times article, ”It (Roundup) is the single largest threat to production agriculture that we have ever seen.”
Chuck Benbrook estimates that it takes about 12–15 years to develop resistance to a pharmaceutical in a general population, which fits the time frame that is occurring for Roundup-resistant weeds (Roundup-Ready soybean was first introduced in 1996). Dr. Mike Owen, the Extension Weed Scientist at Iowa State University, calls this “Darwinian evolution fast forwarded.” Owen, in a “Stewardship Tips” fact sheet from ISU Extension, recommended timely weed control, knowing the weed issues in the field, using a pre-followed post herbicide system to control weeds and using full labeled rates of glyphosate. These recommendations were in general ignored. Many publications have been available over the years giving the facts behind the occurrence of resistance. Yet now Roundup resistance is a big problem and growing bigger.
Why? Basically it was overused and poorly managed.
Benbrook wrote “glyphosate herbicide and genetically engineered corn, soybeans and cotton (are) the most stunning and profitable market success story in the history of the pesticide and seed industry.” Dr. Owen points out that while it is logical to blame GMO crops, the real blame lies with the cropping and weed control system that has come out of the Roundup-Ready marketing and promotion efforts, coupled with the convenience and simplicity of the Roundup-based systems. He also faults the aggressive marketing by industry that downplayed the risks involved. And after going off patent, glyphosate prices dropped, encouraging farmers to increase herbicide rates to kill the more resistant weeds. Of course, this only encouraged the weeds to fight back with increased resistance. It has becoming a losing arms race, or what Willard Cochrane called—years ago—the "Technology Treadmill." Chemical companies are delighted with the new business opportunities; now they can revive old chemistry.
The most persistant problems have been seen in only a few weed species. Among these are pigweed (Palmer amaranth), horseweed and giant ragweed. Even though only about 7 to 10 million acres are currently impacted, resistant weeds will spread rapidly as forces such as birds, dirty combines and wind and soil erosion spread resistant weed seeds from field to field.
While Monsanto spent precious years in denial, it now recognizes the problem and realizes that if the effectiveness of glyphosate is diminished, farmers will be reluctant to pay the premium for Roundup-Ready seeds. Recently, Monsanto became aggressive, actually subsidizing the use of alternate herbicides that control the Roundup-resistant weeds in cotton, where the problem first surfaced and is the most severe. In 2010, they began paying farmers to use these alternatives as well as developing crops that have resistance to other herbicides.
The herbicide subsidy program by Monsanto has been extended in 2011 to corn and soybeans. This is admittedly an effort to extend the use of glyphosate, but also likely has a financial return because Monsanto is forming partnerships with chemical companies such as Sumitomo Chemical and Valent that produce the alternatives. Valor, a herbicide made by Monsanto, has also been approved but it is a very toxic herbicide. Warrant is another subsidized herbicide (made by Monsanto) which is particularly effective for pigweed control in soybean.
Of course, these subsidy programs fall back into the old pattern; the overuse of glyphosate has lead to the use of more herbicides and these are more toxic. And while Monsanto and other companies are racing to develop crops resistant to alternate herbicides, no silver bullet has emerged. While farmers might think a new magic herbicide-GMO combination is in the works, it is not likely.
Still with the high and rising demand for soybeans worldwide (The October 28, 2010 Chicago Board of Trade Price was $12.25) growers will be looking for all the ways possible to maintain their current soybean production systems. Industry will benefit but farmers will be paying higher input costs.
As long as the free market reigns supreme and corporations control agriculture’s destiny, there will be no way to halt the development of even more pest resistance and more dominance by the chemical/seed industry. Will the loss of the ability to control weeds cripple agriculture’s economy? Some think so. And they may be right. Remember, Bt insect control through GMOs has greatly expanded recently. The clock is ticking.
IATP's Sophia Murphy was in Rome last week for the Food and Agriculture's Committee on Food Security meeting. A version of this report also appeared on the Triple Crisis blog.
The 36th meeting of the FAO’s Committee on Food Security (CFS) concluded in archetypal U.N. fashion: one and a half hours of apparently aimless milling about followed by a call to order, a 10-minute exchange during which it becomes clear that the milling about was actually about last—very last—minute negotiations, and, finally, adoption of the report by acclamation. So ended the first meeting of a revamped piece of the U.N. system—a small but fascinating piece.
Why fascinating? Because last year governments agreed to a major overhaul of the way the committee works, and to give the committee a preeminent role in the coordination of U.N. food security policy. The FAO, World Food Program (WFP) and the International Fund Agriculture and Development (IFAD) jointly run the CFS. There are several new mechanisms alongside, including one defining a Civil Society Mechanism to ensure adequate and accountable participation from the nongovernmental sector writ large, and a recently constituted High-level Panel of Experts (yes, another acronym: HLPE) that will be commissioned by the CFS to write reports and more generally to provide the benefit of independent advice and thinking.
The mood was upbeat at the end. Government officials seemed tired but satisfied. And the CSOs did, too. Not excited or exhilarated, but not angry or bored, either. A few governments seemed determined to damn with faint praise (sadly for this Canadian, Canada comes to mind). But others engaged. The United States, for instance, while hardly visionary, was constructive. The budget discussion was a painful rehearsal of so many of the U.N.’s budgetary discussions, along strictly North-South lines. On the other hand, on substance, the divisions were not so predictable.
There are procedural issues to work out for next year. The governments spent hours (and hours) negotiating the outcomes from a roundtable, which seemed a bit tangled. Why not just adopt the report, and spend the negotiating time on outcomes the governments themselves will have to implement? As it is, the HLPE will have its work cut out to make sense of the many proposals and to pick among them because it has nowhere near enough resources to do them all.
On the other hand, there has never been anything like the CFS before—no intergovernmental body was even attempting to concert governments’ responses to food security. Let alone an intergovernmental forum so open to CSO contributions. Particularly in an age when governments have accepted that food security is not a simplistic equation of total availability of grains worldwide divided by the total global population, the need for a CFS in the U.N. system is clear. It is a hopeful sign that so many governments came prepared to engage.
The biggest fight during the meeting was probably around land grabs and how to tackle them. Two processes have somehow emerged, in parallel, serving different audiences. One is under FAO auspices and is known as the Voluntary Guidelines on the tenure of land and other natural resources. The other as RAI, or the “Principles for Responsible Agricultural Investment that Respects Rights, Livelihoods and Resources,”— an interagency process (FAO, IFAD, World Bank and UNCTAD). It has angered many NGOs and CSOs because they have emerged without consultation and instead of starting with the universal human right to food, they build on various corporate social responsibility initiatives.The VG emerged from the 2006 International Conference on Agrarian Reform and Rural Development and have a better pedigree in terms of consultation and broader ownership by NGOs. Take a look at what the Special rapporteur on the right to food had to say: he should know.
For now, whatever happens next must happen soon. The international community has already sat by for too many years as national governments and investors have muddled and meddled in the highly (and rightly) sensitive issues of land ownership and land use. It was encouraging to see a fight in Rome, but it will be far more encouraging if the governments can actually act, and fast.
I'm in Rome to talk about volatility (my powerpoint here). More precisely, the volatility in agricultural commodity markets and what can be done to a) mitigate it and b) better cope with its consequences. The topic was part of one of three issues the first meeting of the revamped FAO Committee on World Food Security (CFS) has on its agenda. It will be one of the first topics to be addressed by the High Level Panel of Experts created as part of the revamped CFS structure. It's also an issue close to the French government's heart, as it made clear in the short speech given yesterday by France's Minister for Agriculture. France's President Sarkozy has committed to making agriculture a central part of the agenda for the G20 meeting that France will host next May.
It's great to see that the topic is preoccupying governments. It should be. Of course agriculture prices fluctuate and of course that fluctuation plays a number of very useful purposes in keeping markets on track. Volatility, however, especially unpredictable and extreme volatility, hurts producers, consumers and ultimately undermines investor confidence, starving the sector of much needed capital.
The problem should be tackled both at the source, by limiting the occasion for extreme volatility to occur, and where it hits home, in poor households especially, by providing safety nets and risk management tools. It has to be tackled comprehensively, too. Volatility has several distinct components that need to be considered jointly. There are the futures markets and speculative investors, a problem much discussed by IATP, on this blog and elsewhere. There is the question of grain reserves, the issue I came to Rome to talk about and also a hot topic for IATP writing. Then there is trade - do we have the right rules? What can governments do better?
Climate change is affecting the heart of any food system: the weather. We don't yet know all that it will mean for the future, but for the millions of people coping today with record-setting disasters, from Central America through South Asia with too many stops in between, it is clear that there is a new and particular urgency to addressing volatility quickly and effectively, with as few ideological fights about governments and markets and their respective roles as possible.
This year should see renewed attention from governments on understanding the causes and taking action to at least mitigate volatility. The background paper for the discussion written for the CFS was disappointing: it gave a useful and concise discussion of how climate change was increasing vulnerability to food insecurity but then turned into a very unpersuasive discussion about responses, mostly highlighting the failures of past reserves policies, and not very convincingly. Here's hoping the next iteration serves governments better. Perhaps by CFS 37 (i.e. in one year's time), we could hope to see some binding government decisions on the issues. Fingers crossed.
I'm writing from Rome, a beautiful city despite the cars. I'm attending the FAO's Committee on World Food Security, a once relatively sleepy piece of the sprawling UN system that last year was given a significant boost by a thorough revamp. Listening to the governments negotiate, agonizing over words (to launch or to discuss? To endorse or to notice? To act by the next session of the committee or at a future session of the committee?) I am mostly pulled back into memories of the days when a UN meeting was a regular part of my life.
But I am also struck by some differences.
There is the technology - someone now has the job of typing amendments into a computer, projected onto huge screens, so that everyone can see the text as it changes. There is the technique - maybe it was just a good day, but the working group report backs were exemplary. Short and on message. Not something I would have expected the system to be good at. But most revolutionary, really, is the presence of civil society organizations - the CSOs. CSOs are a part of the revamped committee, you see. So in the parsing of the sentences that goes into creating a government agreement, you see Via Campesina and FIAN and Oxfam asking for (and getting) the floor, just as the governments do. No governments first rule, no pre-agreed rules about which topics can be addressed. The CSOs spent days in advance discussing the agenda and drafting agreed language themselves.
Now let's see if all this change adds up to a Committee that can fulfill it's promise. This year will be too early to tell, but so far not bad. I'll know more when I get into the building this morning and find out what was decided after I left at 11pm last night.
The idea that engineered nanomaterials (involving the manipulation of materials at the molecular level) would be allowed in certified organic food production seems ludicrous on its face. Allowing nanotechnology would seemingly destroy the credibility of the organic label with consumers. Yet, the National Organic Standards Board Materials Committee issued a proposal for public comment recently requesting that the USDA's National Organic Program hold a symposium on whether nanotechnology in organic production is "possible, practical and legal."
In a comment to the National Organic Standards Board sent earlier this week, IATP's Steve Suppan takes issue with the assumption that federal regulators can effectively regulate engineered nanomaterials in food production—meaning, any kind of food production, organic or not. The nanotech industry has been reluctant to submit product data on the environmental, safety and health effects of nanomaterials in food production. Currently, there are no requirements that the industry submit such data before nanoproducts enter the market. And in fact, according to an explosive report from AOL News earlier this year, they already have already entered the marketplace without regulatory oversight.
Steve writes, "Food processing and agribusiness firms engaged in nanotechnology research, sometimes in cooperation with USDA's Agricultural Research Service, have not submitted to regulatory authorities the food and agri-nanotechnology data required to carry out risk assessment to develop standards. [...] USDA's National Organic Program, rather than joining FDA in assuming that food and agri-nanotechnology can be regulated under current authority, should adopt a presumptive prohibiltion on ENMs (engineered nanomaterials) in products that meet the organic standard."
You can read IATP's full comment to the NOSB here.
By nearly all accounts, agriculture prices worldwide have entered a new era of volatility. Earlier this year, wheat prices shot up an additional $3 a bushel over two months due in large part to concerns around a wheat export ban in Russia. This week, corn prices have risen dramatically due to a USDA report issued Friday, finding a less-than-predicted corn crop this year.
This era of extreme volatility dating back to the 2007-08 global food crisis has contributed to the nearly one billion people worldwide suffering from hunger. This week in Rome, the U.N.'s Food and Agriculture Organization (FAO) is hosting a five-day conference on efforts to address global food security. The meeting comes on the heels of an emergency meeting at the FAO last month focused on increased volatility in grain markets.
Of course, agriculture production has always experienced ups and downs due to a variety of factors—from the weather to pests, economics or war. Traditionally, one of the simplest tools to smooth out agriculture markets is to establish reserves: putting food aside in times of plenty to release in times of scarcity. This week, IATP published a series of short primers on: why we need food reserves, food reserves in practice, what's next on food reserves, and the WTO and food reserves. IATP's Sophia Murphy is attending the FAO meeting in Rome to speak on a panel focusing on volatility, where she'll be making the case for food reserves.
Some kind of food reserve is just common sense, right? Who could be against food reserves and efforts to stabilize agriculture prices? Who profits from volatility in agriculture markets?
Yesterday's press release from Cargill announcing that profits jumped 68 percent this quarter provides a clue. As Cargill CEO Greg Page stated, "Our results were led by the food ingredients and the commodity trading and processing segments, both of which experienced resurgence in volatility across agricultural commodity markets. The change put Cargill's global breadth, trading and risk management skills more acutely into play as we worked with customers to help them manage their price risk and raw material needs."
As agriculture commodity prices remain volatile, agribusiness companies like Cargill and ADM (up $388 million last quarter) with a global reach and diversified holdings throughout the food chain are uniquely positioned to benefit, and so far, they have.
The Obama administration continues to push for new investments to end global hunger. As part of that effort, Bloomberg news reports that the U.S. will urge other nations attending the upcoming G-20 Finance Ministers meeting and the World Bank/IMF meeting this week to contribute to the Global Agriculture and Food Security Program (GAFSP). GASFP was set up last year to channel funding requests for agricultural development. So far, the U.S., Canada, South Korea and Spain (along with the Gates Foundation) have contributed $880 million.
On the plus side, the fund is driven by host-country requests through partner agencies. Rather than setting up a cumbersome new set of rules and procedures, developing country governments can work with multilateral agencies like the International Fund for Agricultural Development, World Food Program and others, using their existing procedures. Some of those agencies, especially IFAD, have a long history of working with small-scale farmers and including women farmers. GAFSP’s steering committee includes donor and recipient governments, as well as representatives from Southern and Northern civil society organizations.
On the other hand, there is reason to be skeptical of a food security fund housed at the World Bank. Over the last 20 or so years, the bank’s structural adjustment programs required trade liberalization, privatization and cuts in public credit, technical assistance and other support to agriculture. In 2007, the World Bank’s own Internal Evaluation Group recognized that its under-investment in African agriculture, and its over-reliance on the private sector, had been a dismal failure. Since then, the bank has committed to mend its ways, but whether new programs housed at the bank can really contribute to food sovereignty—each country’s right to democratically determine its own path to achieve food security and the right to food—remains to be seen.
Obama is right that substantial new investment in agriculture is needed. But, as always, the devil is in the details. Over the last few years the FAO’s Committee on Food Security (CFS)—which meets next week in Rome (IATP's Sophia Murphy is attending and will report back)—has undergone a thorough reform process. It now includes active involvement by family farmers, urban poor, women, indigenous peoples and development organizations from the Nouth and Sorth. Can GASFP coordinate with the CFS to learn from experiences and priorities around the world? Will it support agro-ecological methods built on local knowledge and priorities or will it advance GMOs and other technological fixes? More money for sustainable agricultural development is necessary, but definitely not sufficient to end hunger.