On the "Feed the World" Rationale:
A Challenge to Food Security in Recipient Countries

by
John Acquay
Visiting Scholar from Friends of the Earth-Ghana
December 1998

Table of Contents

Introduction
Do Food Importation and Food Aid Shipment Guarantee Food Security and Environmental Sanity?
Structural Adjustment Programmes and WTO Rules: Catalysts to Promote "Feed the World" Rationale
Impact of Food Imports on Vulnerable Groups
Impact of Grain Exports to the Philippines and Mexico
Socio-Economic and Environmental Impacts Associated with the Trading-Off of Domestic Food Production in Preference for Export Crops and Cheap Food Imports – the Case of Ghana
Dietary Impact of Imported Food as a Measure of the Globalization of Food Trade
Conclusion

Introduction

Agriculture has always been the basis and take-off point for socio-economic and technological advancement. This can be traced as far back as the neolithic revolution in 8000 B.C through to the industrial revolution of the 18^th and 19^th centuries and even up to the Chinese revolution of the 20^th century. Food surpluses have been plowed into all kinds of accumulation for development in any civilization. The motive which led to the "discovery" of the Americas was mainly to achieve food security in Europe by establishing new food supply routes. Although the explorers unexpectedly found precious minerals like gold and silver which they found more important and contributed to Europe’s money supply, the new food preservation methods, spices and crops like corn, tomatoes, and beans which were taken back to Europe contributed significantly to the agriculture revolution which preceded the European industrial revolution.

In any country, the long-term goal to achieve sustainable development must be tied to a strong agricultural base. The rationale for others to "feed the world" fails to recognize this historical fact, at a time when developing countries are striving to emerge from poverty and debt. Without food security there is no way they can achieve a strong technological and industrial base. Investing in food crops means satisfying the primary needs of individuals: that is, food, shelter, clothing, as well as the pre-conditions for development. It may be acceded that the right of nations with the ability to produce their own food is a fundamental human right.

The rationale pursued by grain exporters to ship surplus food to other food deficit countries will not guarantee food security but rather aggravate the global socio-economic and environmental problems both in producing and recipient countries.

Developing countries, which due to very unfavourable conditions cannot produce enough food, are threatened with currency devaluation, higher tariffs associated with exports to get the needed foreign exchange and higher interest rates which are all back drops of trade rules and Bretton Woods agreements. They inevitably have to commit themselves to the payment of higher import bills with all or a greater percentage of the foreign exchange accrued from exports to achieve food self-sufficiency. Although trade plays an important role for such countries, the existing rules help predict that it should not be the starting point but a complementary support to the attainment of food security.

Do Food Importation and Food Aid Shipment Guarantee Food Security and Environmental Sanity?

A basic tool for developing an agricultural economy is some sort of protectionism from imports in order for domestic food production to yield its benefits. These laws often placed an embargo on food importation up to fifty years or more. The Corn Laws of England established in 1660 were not repealed until 1846. Belgium’s food imports began only around 1870, Germany around 1890 and Japan in 1925.¹

The industrialized countries were well justified to apply this sort of protectionism to ensure self-reliance and self-sufficiency. The Common Agriculture Policy (CAP) of contemporary Europe made sure its internal market was well consolidated in order to achieve its gains. With CAP as a strong base, Europe was propelled to establish a common economic and political culture, which bonds the European Union today.

In contrast developing countries’ dependence on food imports keeps increasing. Developing countries’ cereal imports increased from 31.4 million tons in 1961 to over 141 million tons by 1996 as compared to a population increase from 2.1 billion in 1961 to 4.4 billion by 1996.² Out of nearly one billion people who suffer from hunger in the Third World, seven million children die every year of malnutrition.³

Dependence is the greatest harm that food aid has done to recipient countries. The Eisenhower administration promulgated the PL 480 Food for Peace bill adopted by Congress in 1954. This was an introduction of food aid disguised as assistance to developing countries; in reality it was to dump huge food surpluses, mainly wheat, which could neither be sold on the domestic market nor to international markets. This proved disastrous for locally produced crops in recipient countries as prices of these crops fell and discouraged peasants from increasing production. With current levels of dependence any inconsistencies in supply will destabilize the societies and economies of recipient countries.

Net food-deficit least-developed countries experienced sharp price rises in 1995 and 1996 as a result of cutbacks in food aid by the United States since 1993 and unprecedented climatic conditions, which negatively affected crop production. The U.S. had also depleted its reserves due to a zealous commitment to market forces. Cereal aid now amounts to just 4-6% of total world cereal trade as compared to 18% in mid-1960s.⁴

The "Feed the World" rationale would harness the dependence of food importing countries as permanent markets for the grain exporters. Whether through food aid or the so-called free market, the shippers are paid for their services. As food retailers they have been able to establish monopolies on food exports into recipient countries. For example, Cargill, a family-owned commodity trader, controls 60% of world cereal trade by virtue of its lead in economic globalization.⁵ Such giant industrial and financial corporations accept no social responsibility but are accountable only to their shareholders. They are winners in the game of competition, which also claims victims: arousing powerless feelings and frustrating the poor in underdeveloped and developing countries who cannot resist their influence and financial strength. The " Feed the World" rationale is influenced, financed and controlled by transnational corporations regardless of its impact on local food security in recipient countries.

The transportation of food is taking its toll on the environment as well. The increased traffic in the transportation of food up and down motorways and seaways promotes high-energy use, which the public pays for indirectly. Air pollution from increased traffic causes ill health which public authorities or private insurance companies must cover, with taxes or private premiums making up the difference over the years. Agro-chemical and machine-intensive production is causing pollution of local land and water bodies. In the U.S. agriculture is responsible for polluting over 60% of surface water bodies. In the midwestern and southeastern parts of the U.S. traces of nitrates and pesticides have been identified in drinking water.⁶

A special case is that of the Mississippi River and the Gulf of Mexico which have high concentrations of phosphates and nitrates from nitrogen and phosphorous fertilizer spread on cornfields in Iowa, Illinois, Indiana, Ohio and southern Minnesota. The Tensas watershed, which lies within the lower Mississippi River alluvial flood plain historically, was covered with native bottomland hardwood and forested wetlands. Presently less than 15% remain.⁷ Oxygen depletion in a 7000 square mile area of the Gulf of Mexico is so severe that it is termed the "dead zone", affecting fisheries in the Gulf of Mexico. Fishes can no longer live in this water and migration patterns are altered. Shrimpers and fishermen are experiencing hard times as catches are down.

More than 65% of U.S maize exports leave the Midwest by barge. To make transportation more efficient, a lock and dam system and dredging of a 9-foot channel was constructed by the U.S. Army Corps of Engineers in the early part of the century in the Upper Mississippi River. While this accounted for billions of dollars in economic gains, it is now an impediment to the river’s flow and the accumulation of sediment is a threat to aquatic life. There are plans to further expand the navigation system of the Upper Mississippi River to contain the heavy traffic and very large barges that will be needed to "Feed the World". This is based on projections by the U.S. Army Corps’ study that grain shipments will double in the next 25 years. The project is expected to cost $5 to $6 billion dollars and definitely funding is going to come from the taxpayers’ pockets.

Structural Adjustment Programmes and WTO Rules: Catalysts to Promote "Feed the World" Rationale

The institution of structural adjustment programmes by the World Bank and the International Monetary Fund (IMF) in signatory countries is to promote export-oriented economies so that debts can be repaid in hard currency earned through foreign exchange. The concentration of exports is on cash crops which displace food crops, contributing to import dependence.

Generally signatory countries commit themselves to the following measures:

• The elimination of custom barriers to do away with locally produced goods and services made unprofitable by international competition; as a result, peasants in developing countries who cannot produce crops more cheaply than the imported foods abandon their farms and move to shanty towns as urban refugees.

• Incentives to export so as to obtain the foreign exchange needed to service debt and balance the budget; this means restructuring the economy to modernize the export product sectors such as, cocoa, coffee, bananas, sugar and peanuts and to bring new investment for which the World Bank provides credit, adding to the debt burden.

• Deregulation of prices (especially for agricultural products), wages, interest rates and exchange rates, and liberalization of legislation (especially laws controlling foreign investments and profit transfers).

• Privatization to minimize or eliminate the role of government consistent with the theory of the " invisible hand"; this abdication of the responsibilities of the state transfers power to a few transnational corporations.

• Cuts in public spending in order to maximize the cash available for debt repayment, especially in the "unproductive" social services: namely education, health and housing.

The Uruguay Round Agreements of the World Trade Organisation (WTO) aim at liberalizing trade. As the basis for a global rule-based system, the WTO agreements are expected to promote the smooth and orderly development of international trade. Signatory governments are expected to ensure that their industries and business enterprises can trade with those in other countries on a fair and equitable basis; exports to foreign markets are not to be disrupted by the imposition of restrictions. The WTO was negotiated as a "rules-based" system to enforce cooperation among its members.

The agreements recognize that there is a need for positive efforts to ensure that developing countries, and especially the least developed among them, secure a better share of the growth in international trade.

However the WTO agreements have not lived to their expectations. Committing themselves to the Agreement on Agriculture, developing countries have encountered problems with food security under the following measures:

• Cuts in domestic support for production. Although the level of allowable support is higher in developing countries, the effective levels of domestic subsidy remain much higher in developed countries under WTO rules. Few developing countries can afford to subsidize their farming sector. Nor is this policy helping Third World producers to compete: Dumping of food, which is the determined if the export price is less because it is being sold less than its cost of production than for the like product in the exporting country, is still being experienced in developing countries. This and the use of export subsidies by developed countries is eventually driving farmers in developing countries out of production.

• The introduction of tariffs to replace quantitative restrictions and other non-tariff measures affecting imports. As a result of "tariffication", countries may henceforth protect their domestic agriculture only by means of tariffs which must over time be reduced. This so-called "market access" provision is proving to open southern markets to transnational shippers more effectively than its ostensible purpose of opening northern markets to southern producers.

• Under the export subsidy commitment, developing countries are exempted from two types of export subsidy. They are allowed to support the cost of marketing, including handling, upgrading, processing and international transport and freight, and also provision of internal transport and freight for export shipment on terms more favourable than that for domestic shipments. The benefits of these provisions however are rarely felt as tariffs in developed countries remain higher. In specific areas like upgrading and processing, the technology needed is mainly established in developed countries and protected by intellectual property rights, and with the escalating of tariffs on value-added products, most commodities are exported in their raw state so the value-added benefits are not reaped by domestic producers.

• Countries are considered to be in balance-of-payment (BoP) difficulties when their external earnings from trade and the flow of investment and loans are far from adequate for their external payments liabilities, and when monetary reserves for meeting immediate liabilities are declining. WTO rules are expected to safeguard against BoP by use of price based measures, and quantitative restrictions on imports can only be resorted to if only it is perceived that price based measures cannot arrest a further deterioration in the external payments position. Once countries have liberalized their import regulations, it is impossible to protect their internal markets against low-priced imports. This has always been the case in developing countries.

Any developing country that participates in the globalization and deregulation of its food system is likely to find its potential to create a sustainable local food system weakened by reliance upon foreign suppliers. An export orientation toward cash crops imposed on its farmers means a dislocation in food culture: what is produced is not consumed locally, and products are consumed that are produced elsewhere. This new economic regime undermines the policies of those developing countries that were previously committed to policies of national food self-reliance. (Watkins K.)⁸

Impact of Food Imports on Vulnerable Groups

The impact of food imports on vulnerable groups, specifically women and children in recipient countries, is a special case worth bringing into perspective. These groups suffer disproportionately the consequences of anti-social and anti-economic policies. According to some estimates, women already perform 75% of subsistence labour in Third World countries.⁹ Male migration into cash crop plantations as augmented by export-oriented policies worsens the situation of women. Their already heavy burden of domestic tasks, notably handling the health and educational needs of children as well as subsistently growing food to feed the family is increasing.

Urban populations have increased with the out-migration of the youth from the countryside to these urban settings, where they lack the skills to make jobs accessible to them. To survive and also be in the position to cater for their families, they fall victim to all kinds of urban destitution: prostitution, drug peddling, robbery and so on.

Impact of Grain Exports to the Philippines and Mexico

Liberalization under SAPs and the WTO has given the U.S. the opportunity to feed the Philippines with corn. Currently around 1.2 million households, an equivalent of about 6 million people, depend on the production of maize for their livelihoods. The Organization of Economic Co-operation and Development’s (O.E.C.D) price projections predict that maize imports from the U.S. will be 20% cheaper than the current 1998 price level by the end of the decade and the price gap may further widen to 39% as tariffs scale down. This is expected to push incomes of Filipino maize-producing households down 15% by 2000 and 40% by 2004.¹⁰ Mindanao and Cagayan Valley are the main maize-producing areas where half of the population lives below the poverty line. With cheap maize imports, farmers’ income is expected to decline; they will be forced to reduce spending on education and increase their reliance on child labour.¹¹

The situation of Mexico under liberalization is similar to that of the Philippines. After signing on to the North American Free Trade Agreement (NAFTA) and the WTO, problems with food security are being encountered. Peasant agriculture is declining as a result of cuts in subsidies and tariffs and the elimination of price support and rural credits for farmers. Despite a GDP growth of 7%, the rural economy of Mexico’s rural sector has dropped by 7%. Under NAFTA, Mexico was made to believe that U.S markets would be open to Mexican exports. However, the opposite is happening now. Cheaper U.S. corn imports prompted a 30% reduction in prices but did not benefit consumers due to a 200% devaluation of the peso while the domestic production was also discouraged with higher interest rates. Although Mexico was recently a major corn producing country, it is now importing about 40% of its corn requirements. (Victor Suarez)¹²

Socio-Economic and Environmental Impacts Associated with the Trading-Off of Domestic Food Production in Preference for Export Crops and Cheap Food Imports – the Case of Ghana

Liberalization had already started in Ghana under structural adjustment programmes of the World Bank and the IMF before the Uruguay Round of agreements. The system of import licenses has been replaced by tariffs. Several other non-tariff barriers have also been removed. With the removal of such import regulations it became hardly possible to protect internal markets against low-priced imports through Balance of Payment (BoP) exemptions.

Cocoa is the major cash crop. Average land productivity for cocoa increased from 0.22 metric tonnes per hectare in 1985 to 0.28 metric tonnes per hectare in 1996.¹³ Out of the 9,330,000 hectares of agriculture land in Ghana, half is devoted to cocoa production. It was estimated that in Ghana about 586,000 hectares of virgin forest was cleared between 1990 and 1995 to plant cocoa. In the Volta region of Ghana, cocoa cash cropping rapidly expanded into the most fertile lands with the highest productivity, forcing food production and subsistence agriculture on to marginal land with steep slopes and soil of low fertility as a result of erosion. Cocoa production as a monoculture drains the soil of its organic nutrients. Estimates show that soil fertility declines after 5 years.

The use of pesticides is a major component in cocoa production. The resulting effect is residue on food and on the farmers who do not wear protective gear whiles spraying these chemicals. Traces of pesticides are found in underground water and surface water sources, which are the main sources of drinking water in villages.

Food production in Ghana started declining from the 1980s, when 46% of government spending in agriculture was allocated to cocoa farmers, representing 18% of the farming population. Technological support for sustenance farming has been limited in comparison. Domestic food production has been displaced by the usual cheap imports prompting the rural-urban drift. More shantytowns have developed in the major cities over the past few years.

Reduction of support measures and subsidies to domestic food production as a current orientation of the WTO Agreement on Agriculture has undermined women’s food production, their major income generating activity. Unlike their male counterparts who totally control cocoa production, many Ghanaian women cannot own land by customary law restrictions. This prevents them from going into cocoa and other export crop production which require producers to have a guarantee to possess land for a longer period as most of these crops are perennial or multiple year plants. Ghana with currently no farmers’ subsidies means that domestic food production will drop and this is compounded by the increased cheap food imports. Less food production means less income for women and therefore less spending on education and health care.

Dietary Impact of Imported Food as a Measure of the Globalization of Food Trade

The selling of the Northern American diet through trade liberalization around the world has changed the eating habits of entire populations who were unfamiliar with wheat flour, powdered milk or tinned meat. For example, in West Africa the traditional staples are rice, tubers, root crops and maize. However the American long grain rice is now widely consumed because it is cheaper. What is locally produced is of a high nutritional value because it is unpolished. The North’s taste for highly processed diet with saturated fats and very little anti-oxidants is being promoted globally. Governments and public health have done nothing to stop this trend. There is huge growth in processed food, fast food and family-styled restaurants and western-style supermarkets in developing countries.

The export of Northern diets can be likened to tobacco sales which is encouraged in the South but at the same time being constrained in the North due to public health measures, health education campaigns and fiscal measures. But who comments on the doubtful health, not to say ethics, of subsidizing exports of wheat grains and meat consumption to food cultures where wheat is foreign and meat a rare luxury? It should be expected that over the next few decades, we should witness a spread of western diseases of affluence, such as coronary heart disease and some of the food-related cancers.

Conclusion

With all its complexities, the globalization process, either under the WTO or World Bank and IMF structural adjustment programmes, driven by Northern corporate exporters and marketed everywhere in the name of Northern culture and capital, offers formidable changes to food security systems, environmental and social structures in the developing world. Governments argue they can do little but bow to market pressures and facilitate its mechanisms. The developed world actually needs to shift away from cheap export-led food policies for developing countries to encourage more local production for local use everywhere. This requires more people on local land, not forcing people out of production all over the world. The over-all goal should be to promote a strong domestic agriculture base, the stepping stone to sustainable development with regards to socio-economic, environmental and cultural parameters.

1 Jacques Gelinas, "FREEDOM FROM DEBT" (Zed Books Ltd., U.K., 1998) p. 125.

2 Food and Agriculture Organisation (FAO) statistical estimates, World Cereal Trade (1996).

3 United Nations International Children's Emergency Fund (UNICEF) report on State of the World's Children (1994).

4 "One More Try" COURRIER DE LA PLANETE (SOLAGRAL, Jan. to Feb. 1998) p. 14.

5 International Forum on Globalization News Bulletin (IFG NEWS, No. 3, 1998) p. 11.

6 National Water Quality Inventory, U.S.A. (1992).

7 Mark Adcock, Tensas River Co-ordinator, report on state of Tensas River Watershed, National Water Quality Assessment Program, U.S.A. (1992).

8 Watkins K. Creating Dependence: the Impact of Northern Food Systems on the South. Southeast Asian NGO Conference of Food Security and Fair Trade, Quezon City, Philippines, 13-16 Feb., 1996.

9 See "Closing the Gender Gap in Development," in The State of the World, (1993) A Worldwatch Institute Report, Toward a Sustainable Society.

10 "Poor prospects for maize" COURRIER DE LA PLANETE (SOLAGRAL, Jan. to Feb. 1998) p. 10.

11 Ibid., p. 10.

12 Victor Suarez, ANEC, paper on "Food Security in Mexico," Washington D.C. meeting on "WTO Agreement on Agriculture" (30 Sept. to 4 Oct., 1998), conference report, p. 5.

13 "The relationship between international trade rules, national policy and national resource use in sub-Saharan Africa" (FIELD U.K., 1997), p. 10.