This new paper by IATP finds that governments have been limited in their ability to help farmers take advantage of higher prices – due to free trade economics pushed by the World Bank, International Monetary Fund and World Trade Organization. Trade liberalization has encouraged the dismantling of agriculture programs in many developing countries, making it difficult to ramp up production and manage supplies to stabilize prices.
While agriculture prices are rising almost across the board, farmers in poor countries aren’t benefiting as much as they could. Instead, many of them suffer from the spike in food prices. Skyrocketing energy and input (fertilizer and seed) costs are increasing the cost of production. Gains from export earnings are being swallowed up by the exporting company and profits have not found their way back to farmers.