Agriculture https://www.iatp.org/agriculture2 en Resolving the Food Crisis: Assessing Global Policy Reforms Since 2007 https://www.iatp.org/documents/resolving-the-food-crisis-assessing-global-policy-reforms-since-2007 <div data-history-node-id="41680" class="node node--type-document node--view-mode-rss no-field-teaser-image title-not-empty ds-1col clearfix"> <div class="field field--name-field-author-text field--type-text-long field--label-above"> <div class="field--label">Author (free form)</div> <div class="field--item"><p>Timothy A. Wise</p> </div> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><h3>Executive summary</h3> <p>The recent spikes in global food-prices in 2007-08 served as a wake-up call to the global community on the inadequacies of our global food system. Commodity prices doubled, the estimated number of hungry people topped one billion and food riots spread through the developing world. A second price spike in 2010-11, which is expected to drive the global food import bill for 2011 to an astonishing $1.3 trillion, only deepened the sense that the policies and principles guiding agricultural development and food security were deeply flawed. </p> <p>There is now widespread agreement that international agricultural prices will remain significantly higher than precrisis levels for at least the next decade, with many warning that demand will outstrip supply by 2050 unless concerted action is taken to address the underlying problems with our food system.</p> <p>The crisis certainly awakened the global community. Since 2007, governments and international agencies have made food security a priority issue, and with a decidedly different tone. They stress the importance of agricultural development and food production in developing countries, the key role of small-scale farmers and women, the challenge of limited resources in a climate-constrained world, the important role of the state in “country-led” agricultural development programs, the critical role of public investment. For many, these priorities represent a sea change from policies that sought to free markets from government policies seen as hampering efficient resource allocation. Now that those policies and markets have failed to deliver food security, the debates over how countries and international institutions should manage our food system are more open than they have been in decades.</p> <p>The purpose of this report is to look beyond the proclamations and communiqués to assess what has really changed since the crisis erupted. While not exhaustive, the report looks at: Overseas Development Assistance, both in terms of how much and what is funded; Multilateral Development Banks’ policies and programs; selected U.N. agencies and initiatives, notably the Committee on Food Security (CFS); the G-20 group of economically powerful governments; and the U.N. Special Rapporteur on the right to food, who has injected a resonant “right to food” approach to the issue.</p> <p> </p> <ul><li>low levels of investment in developing-country agriculture in general and small-scale agriculture in particular; </li> <li>reduced support for publicly funded research and development and increased reliance on private research;</li> <li>a reliance on international trade to meet domestic food needs in poor countries that can ill-afford the import dependence and declining local production; </li> <li> <div>a bias toward cash crops for export over food production for domestic markets; </div> </li> <li> <div>increasing land use for non-food agricultural crops such as biofuels for industrial uses;</div> </li> <li> <div>support for high-input agricultural methods over more environmentally sustainable low-input systems; </div> </li> <li> <div>inadequate attention to the linkages between climate change and food security; and </div> </li> <li> <div>deregulation of commodity markets and increasing financial speculation in agricultural commodities,  including staple food crops as well as land.</div> </li> </ul><h4>Findings</h4> <div>Our review suggests that on the positive side, the food crisis was an important catalyst for change. As high prices persisted and public protest mounted, many governments were confronted with “moments of truth,” the cumulative result of which was to question some of the assumptions that had driven food and agriculture policy over the past few decades. This prompted renwed attention to agricultural development, reversing the long-standing neglect of agriculture as a vital economic sector. It also brought some important new funding, though at levels still far short of what is needed. </div> <div> </div> <div>The stated priorities for much of that funding suggest distinct improvement over the policies of the past few decades. The needs and political voices of small-scale farmers and women; environmental issues, including climate change; and, the weaknesses of international markets now receive more attention. The additional funding for these important areas is also driven by greater openness to country-led programs with strong state involvement, a marked change from past priorities. </div> <div> </div> <div>Our review suggests areas of great concern, though. We see neither the necessary urgency nor the willingness to change policies that contributed to the recent crisis. New international funding is welcome, but only $6.1 billion of the G-8’s pledged $22 billion, three-year commitment represents new money, and those pledges have been slow to materialize and are now threatened with cutbacks as developed countries adopt austerity measures. The overwhelming priority is to increase production. There are reasons to focus on this, specifically within low-income net-food importing countries. The setting of production targets at the global level, however, encourages an expansion in industrial agriculture and the consolidation of land holdings, including land grabs, and ignores environmental constraints and equity issues. </div> <div> </div> <div>Beyond funding, we find that the policies that contributed to the recent food-price crisis have gone largely unchanged, leaving global food security as fragile as ever. The world needs policies that discourage biofuels expansion, regulate financial speculation, limit irresponsible land investments, encourage the use of buffer stocks, move away from fossil fuel dependence and toward agro-ecological practices, and reform global agricultural trade rules to support rather than undermine food security objectives. </div> <div> </div> <div>Unfortunately, we find that the international institutions reviewed have shown too little resolve to address these issues. Although at the G-20 the world’s most economically powerful nations have asserted leadership on food security, their actions have been tepid if not counterproductive. This has had a chilling effect on reform efforts elsewhere in the international system, most notably at the United Nations. This raises important governance issues. The U.N.’s CFS is formally recognized by most institutions as the appropriate body to </div> <div>coordinate the global response to the food crisis, because of both its mandate and its inclusive, multi- takeholder structure. Yet in practice the G-20 has systematically constrained the reform agenda. Similarly, the WTO’s recent efforts to give the Doha Agenda more relevance by including food security issues in the form of restrictions on exporting countries’ use of export tariffs have failed, because many of the exporters (most of the G-20 members) refuse to surrender that policy space. Not surprisingly, importing countries’ wish for the same policy space with regard to their imports are now more determined than ever to insist on their rights.</div> <div> </div> <div>The recent food-price crisis exposed the fragility of the global food system. A paradigm shift is underway, caused by the deepening integration of agricultural, energy and financial markets in a resource-constrained world made more vulnerable by climate change. Powerful multinational firms dominate these markets. Many benefit from current policies and practices and their interests are a dominant influence in national and global policies—slowing, diverting, or halting needed action. This leaves international institutions promoting market-friendly reforms but resistant to imposing the concomitant regulations required to ensure well-functioning food and agricultural markets.</div> <div> </div> <div> <div>Three areas in particular demand decisive action:</div> <ul><li>Biofuels expansion – There is a clear international consensus that current policies to encourage biofuel expansion, particularly in the United States and Europe, are a major contributor to rising demand, tight supplies and rising prices. Yet international institutions, from the G-20 to the U.N. High-Level Task Force to the CFS, have diluted their demands for actions to address this problem.</li> <li>Price volatility – High spikes in prices remain a major problem for poor people worldwide, and for foodimporting developing countries in particular. The policy goal, for effective market functioning and for food security, should be relatively stable prices that are remunerative to farmers and affordable to consumers. We find few concrete actions toward this goal. There is strong evidence that financial speculation contributed to recent food-price volatility, though there remains considerable debate on the subject. As an FAO report on the topic noted, there is no demonstrated benefit to the public of allowing such speculation, and the potential costs are huge. Precautionary regulations are warranted but few have been taken. Similarly, the lack of publicly held food reserves contributes to the shortages that make speculation possible while leaving vulnerable countries at risk. Reserves should be explored more actively than simply as emergency regional humanitarian policy instruments. </li> <li>Land grabs – The scale and pace of land grabs is truly alarming, driven by financial speculation and land-banking by sovereign wealth funds in resource-constrained nations. The consensus is that such investments are not good for either food security or development. As laudable as recent efforts are to promote “responsible agricultural investment,” these initiatives risk being “too little too late” for a fast-moving phenomenon. Meanwhile, international institutions, such as the World Bank, must do more to protect smallscale producers’ access to land. </li> </ul><div> </div> <div>Fortunately, many developing countries are not waiting for international action or permission to more aggressively address the problems that can be dealt with at a national or regional level. Many of the Comprehensive Africa Agriculture Development Program (CAADP) projects in Africa, for example, emphasize the kinds of changes that are needed. CAADP has four pillars: land and water management, market access, food supply and hunger, and agricultural research. Bangladesh and other countries used food reserves to reduce the impact of the food-price spikes in far more ambitious efforts than the G-20 is proposing to support in West Africa. </div> <div> </div> <div>Developing-country governments will be central to bringing about such changes. They need the policy space to pursue their own solutions and they need the support of the international community to demand deeper reform in developed-country policies. The evidence discussed in this report suggests the paradigm shift has started but is incomplete. Many developing-country governments have chosen to step away from the prevailing orthodoxy of the last several decades and are again exploring a larger role for the public sector in governing agriculture and food. Donors, too, have shown some willingness to re-order priorities and to give greater space to agriculture, and to changing priorities within agricultural spending to acknowledge the need for more inclusive and sustainable outcomes. But they still resist more fundamental reform and continue to promote private investment and liberalized markets, relying on humanitarian aid and social safety nets to try to help those who are displaced by the policies.</div> <div> </div> <div>Perhaps not surprisingly, developed-country governments have yet to make the needed changes to their domestic policies. Comfortable with re-ordering development priorities, governments of rich countries have proved unwilling to look at their domestic agricultural economies to see what changes are needed there. If the most powerful countries are not willing to make the changes at home that would help international markets perform better, they should at a minimum stop undermining international efforts, at the U.N. and within </div> <div>and among developing countries, to address the fundamental causes of the food crisis.</div> </div> </div> <div class="field field--name-upload field--type-file field--label-above"> <div class="field--label">Upload</div> <div class="field__items"> <div class="field--item"><span class="file file--mime-application-pdf file--application-pdf icon-before"><span class="file-icon"><span class="icon glyphicon glyphicon-file text-primary" aria-hidden="true"></span></span><span class="file-link"><a href="https://www.iatp.org/sites/default/files/2012_01_17_ResolvingFoodCrisis_SM_TW.pdf" type="application/pdf; length=885806" title="Open file in new window" target="_blank" data-toggle="tooltip" data-placement="bottom">2012_01_17_ResolvingFoodCrisis_SM_TW.pdf</a></span><span class="file-size">865.04 KB</span></span></div> </div> </div> </div> Wed, 18 Jan 2012 15:48:00 +0000 Andrew Ranallo 41680 at https://www.iatp.org Climate change, CAFTA and forced migration https://www.iatp.org/blog/201905/climate-change-cafta-and-forced-migration <span>Climate change, CAFTA and forced migration</span> <span><span lang="" about="/user/2863" typeof="schema:Person" property="schema:name" datatype="">Chris Palmquist</span></span> <span>Thu, 05/16/2019 - 14:32</span> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span>On the last day of April, 16-year-old <span>Juan de León Gutiérrez</span> <span><span><a href="https://thehill.com/latino/441645-16-year-old-unaccompanied-migrant-dies-in-us-custody">died in U.S. government custody</a></span></span> in Texas. It was just 10 days since he had crossed the border after migrating from his home in Guatemala.</div> Thu, 16 May 2019 19:32:45 +0000 Chris Palmquist 43964 at https://www.iatp.org Regulating agricultural futures markets to benefit producers, processors and consumers https://www.iatp.org/blog/201905/regulating-agricultural-futures-markets-benefit-producers-processors-and-consumers <span>Regulating agricultural futures markets to benefit producers, processors and consumers</span> <span><span lang="" about="/user/2863" typeof="schema:Person" property="schema:name" datatype="">Chris Palmquist</span></span> <span>Thu, 05/09/2019 - 12:25</span> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span><span><span>How difficult can it be to trade contracts based on the cash value of wheat, crude oil, unroasted coffee beans and other raw materials? Sure, there are future risks, physical and financial, but they can be usually managed with the help of trading exchanges, standardized data and lightning-fast computer technology. Political news, such as President Trump’s threat to increase U.S.</div> Thu, 09 May 2019 17:25:34 +0000 Chris Palmquist 43961 at https://www.iatp.org USDA's proposed relocation of ERS, NIFA an insult to world-class researchers https://www.iatp.org/documents/usdas-proposed-relocation-ers-nifa-insult-world-class-researchers <div data-history-node-id="43959" class="node node--type-document node--view-mode-rss field-primary-category-agriculture has-field-primary-category has-field-teaser-image title-not-empty ds-1col clearfix"> <h3 > The relocation is a way for the agency to reach its desired staff and budget cuts</h3> <div class="field field--name-field-author field--type-entity-reference field--label-above"> <div class="field--label">Author</div> <div class="field__items"> <div class="field--item"><a href="/about/staff/iatp" hreflang="en">IATP</a></div> </div> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span>MINNEAPOLIS—Today, the United States Department of Agriculture <a href="http://icm-tracking.meltwater.com/link.php?DynEngagement=true&amp;H=FcQ5do3Mtm%2F2JnP%2FxXFcY%2BL9mOkU%2Fad4G7kfqxVfSdkEEq1vNf2gy4dinEeYkkjD8kBj9LZQt8UqIh6geUBK2ajimwx0C0XF4%2BNMrDvWYXAe5eZ8MNRz1w%3D%3D&amp;G=0&amp;R=https%3A%2F%2Fwww.usda.gov%2Fmedia%2Fpress-releases%2F2019%2F05%2F03%2Fperdue-announces-top-sites-ers-and-nifa-relocations&amp;I=20190503202438.00000188c629%40mail6-41-usnbn1&amp;X=MHwxMDQ2NzU4OjVjY2NhMzg1NjEzNGNhMjlmOTNkMWZiMDsxfDEwNDY3NTk6dHJ1ZTs%3D&amp;S=q3msTsMRN4ZFLuSZcGpmfhRVOEalt6qGguGJVLGKcg0">announced its finalists</a> for the new homes of the Economic Research Service and the National Institute of Food and Agriculture, despite heavy political and popular criticisms. In response, <a href="http://icm-tracking.meltwater.com/link.php?DynEngagement=true&amp;H=FcQ5do3Mtm%2F2JnP%2FxXFcY%2BL9mOkU%2Fad4G7kfqxVfSdkEEq1vNf2gy4dinEeYkkjD8kBj9LZQt8UqIh6geUBK2ajimwx0C0XF4%2BNMrDvWYXAe5eZ8MNRz1w%3D%3D&amp;G=0&amp;R=https%3A%2F%2Fwww.iatp.org%2Fabout%2Fstaff%2Fdr-steve-suppan&amp;I=20190503202438.00000188c629%40mail6-41-usnbn1&amp;X=MHwxMDQ2NzU4OjVjY2NhMzg1NjEzNGNhMjlmOTNkMWZiMDsxfDEwNDY3NTk6dHJ1ZTs%3D&amp;S=k_P0B6cGl47PS3yii64-Vn-Q2s95-q64nBr1e-a53Kg">Dr. Steve Suppan</a>, Senior Policy Analyst at the <a href="http://icm-tracking.meltwater.com/link.php?DynEngagement=true&amp;H=FcQ5do3Mtm%2F2JnP%2FxXFcY%2BL9mOkU%2Fad4G7kfqxVfSdkEEq1vNf2gy4dinEeYkkjD8kBj9LZQt8UqIh6geUBK2ajimwx0C0XF4%2BNMrDvWYXAe5eZ8MNRz1w%3D%3D&amp;G=0&amp;R=https%3A%2F%2Fwww.iatp.org%2F&amp;I=20190503202438.00000188c629%40mail6-41-usnbn1&amp;X=MHwxMDQ2NzU4OjVjY2NhMzg1NjEzNGNhMjlmOTNkMWZiMDsxfDEwNDY3NTk6dHJ1ZTs%3D&amp;S=3LGY5h3DH5gu_TDFo9yOP2XHXkWgy_bDG4pwTrQH6fQ">Institute for Agriculture and Trade Policy</a>, issued the following statement:<br /><br /><em><span>"The Trump administration's reorganization and relocation of ERS and NIFA is a back-door tactic to achieve its desired, massive cuts to staff and budget that it failed to produce through the Congressional budget process. Congress had already appropriated funds for NIFA's office relocation within the National Capitol Area that USDA Secretary Sonny Perdue now proposes to use to relocate to Indiana, Kansas and Missouri or North Carolina. </span></em><br /><br /><em><span>If Secretary Perdue wishes to eviscerate ERS and NIFA research that is opposed by the White House, let him make that case to Congress, rather than hide behind an unjustified, criticized plan to force world-class researchers to make the decision to uproot their families or leave their careers."</span></em></span></span></span></p></div> <div class="field field--name-upload field--type-file field--label-above"> <div class="field--label">Upload</div> <div class="field__items"> <div class="field--item"><span class="file file--mime-application-pdf file--application-pdf icon-before"><span class="file-icon"><span class="icon glyphicon glyphicon-file text-primary" aria-hidden="true"></span></span><span class="file-link"><a href="https://www.iatp.org/sites/default/files/2019-05/USDA%27s%20Relocation%20for%20ERS%2C%20NIFA%20an%20Insult%20to%20Researchers.pdf" type="application/pdf; length=249088" title="Open file in new window" target="_blank" data-toggle="tooltip" data-placement="bottom">USDA&#039;s Relocation for ERS, NIFA an Insult to Researchers.pdf</a></span><span class="file-size">243.25 KB</span></span></div> </div> </div> <div class="field field--name-field-primary-category field--type-entity-reference field--label-above"> <div class="field--label">Primary category</div> <div class="field--item"><a href="/agriculture2" hreflang="en">Agriculture</a></div> </div> </div> Fri, 03 May 2019 20:26:50 +0000 Chris Palmquist 43959 at https://www.iatp.org The costs of agricultural export dumping for farmers and rural communities https://www.iatp.org/documents/costs-agricultural-export-dumping-farmers-and-rural-communities <div data-history-node-id="43960" class="node node--type-document node--view-mode-rss field-primary-category-agriculture has-field-primary-category has-field-teaser-image title-not-empty ds-1col clearfix"> <div class="field field--name-field-author field--type-entity-reference field--label-above"> <div class="field--label">Author</div> <div class="field__items"> <div class="field--item"><a href="/about/staff/karen-hansen-kuhn" hreflang="en">Karen Hansen-Kuhn</a></div> <div class="field--item"><a href="/about/staff/sophia-murphy" hreflang="en">Sophia Murphy</a></div> </div> </div> <div class="field field--name-field-media field--type-entity-reference field--label-hidden field--items"> <div class="field--item"><article class="media media-image view-mode-feature"> <div class="field field--name-field-image field--type-image field--label-hidden field--item"> <img src="/sites/default/files/styles/feat/public/2019-05/ADM_Minneapolis_Flickr_Joe_Passe.jpg?itok=sBEmme6V" width="950" height="590" alt="ADM grain elevator in Minneapolis" typeof="foaf:Image" class="img-responsive" /> </div> <div class="field field--name-field-credit-flickr field--type-string field--label-hidden field--item">Used under creative commons license from <a href="https://www.flickr.com/photos/Joe Passe">Joe Passe</a></div> </article> </div> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><a href="https://www.iatp.org/sites/default/files/2019-05/2019_05_01_Dumping_KHK_SM.pdf">Download a PDF of the fact sheet.</a> </p> <p>Agricultural commodity dumping is the practice of exporting commodities at prices below the cost of production. Dumping cheats farmers both domestically and abroad and undermines crucial environmental goals in a time of climate crisis. The Institute for Agriculture and Trade Policy (IATP) has documented the extent of dumping of several key commodity crops for more than twenty years. IATP founder Mark Ritchie, with Gigi DiGiacomo, developed a calculation using a definition of dumping from the General Agreement on Tariffs and Trade (GATT, a precursor to the World Trade Organization) and data from the U.S. Department of Agriculture (USDA) and the Organization for Economic Cooperation and Development (OECD). They tracked production costs, prices at the farm and at the point of export, subsidies and estimated transportation costs for wheat, rice, corn, soy and cotton. Recently, we updated those calculations to better understand how global agricultural markets are functioning.</p> <p>We found, with some exceptions, a consistent pattern of dumping from 1990 to 2017. As prices fell after price spikes in 2007-2008 and 2011, U.S. dumping on export markets resumed. As of 2017, the rates of dumping stood at 38 percent for wheat, 12 percent for cotton, nine percent for corn, four percent for soybeans and three percent for rice.<sup>1</sup> Despite the pause in dumping during those periods of high prices, the structural factors that allow dumping have persisted.</p> <p>Dumping matters for at least three reasons. First, it hurts U.S. producers who sell their product into markets that are controlled by a handful of agricultural commodity trading corporations. When farmers cannot get back their production costs from the market, they are forced to rely on other strategies to survive, whether it is off-farm employment, government subsidies or undervaluing their labor. The economic consequences of low prices are felt by farmers and their families, their hired workers and by their rural communities, communities that are deprived of spending that would otherwise support vibrant economic life.</p> <p>Secondly, it undermines the economic viability of farmers abroad, whether growing crops for domestic markets or selling to traders for export. Even producers in countries that do not import U.S.-grown commodities suffer because U.S. exports are large enough to affect world prices—which then impact all countries that trade some share of their agricultural production.</p> <p><img alt="Graph 1: Dumping rates for major U.S. commodities, 1990-2017" data-align="center" data-entity-type="file" data-entity-uuid="f9c7d1db-6b31-4e8c-877a-f2fd414325d1" src="/sites/default/files/inline-images/Dumping%20rates%20for%20major%20U.S.%20commoditiesComponents.jpg" width="100%" /></p> <p> </p> <h2>Why does dumping happen?</h2> <p>There are three main driving factors behind dumping. One is the level of market power enjoyed by the agribusiness companies that provide inputs to farmers, buy commodities and then process those goods into food, animal feed and industrial products. Four firms dominate U.S. domestic agricultural commodity supply chains and the international grain trade: Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus.<sup>2</sup> They are estimated to control 75-90 percent of global grain trade. In many markets, just one or two firms are present.<sup>3</sup></p> <p>Grain traders are heavily involved in commodity processing. They are vertically integrated in the market. This means that the costs at different stages of the commodity value chain remain internal to the firm’s operation, including the price of corn purchased on the commodity exchange, the price of the processed products made from that corn at the crushing plant and the cost of the grain provided to a feed lot operator for meat production.</p> <p>In effect, agribusinesses that buy and process agricultural commodities have the market power to push prices below the level that would provide a reasonable profit to producers and then to appropriate value from other stages of the supply chain. The persistent gap between production costs and the price farmers receive is evidence the market is not self-correcting.</p> <p>Government subsidies are the second factor. They make it possible for farm operations to continue by muffling price signals, which would otherwise push more farmers out of agriculture or would, in some other way, reduce supply. The continued production spurs more dumping. There is no question that without subsidies, many more U.S. farms would fail. The real question is whether fewer farms would reduce dumping, which is a factor of the volume of supply, not the number of farms in operation.<sup>4</sup> The long-term trend is toward consolidation and fewer, larger farms, a fact confirmed in the newly released 2017 U.S. Census of Agriculture.</p> <p>The third factor links the market power of agribusiness and the government programs. Until 1985, when Farm Bill policies started to change, the U.S. government’s non-recourse loans acted as a buyer of last resort in the market. Farmers knew that if market prices were less than that foreseen when they borrowed money from the government for their crop, the government would accept that crop in lieu of repayment. This effectively created a price floor that the grain traders had to match or beat. With the elimination of the non-recourse loan and the eventual transition to revenue and price insurance, farmers lost a bargaining instrument against the market power of grain traders.</p> <p>Graph 2 illustrates the relative production costs, subsidies and transportation costs for wheat. The pattern is similar for other crops. Both subsidies and dumping are linked to market prices, but they do not track precisely. Subsidies are not large enough, nor do they correlate closely enough, to fully explain dumping. The issue is not only the amount of the subsidies, but the incentives they create to produce massive quantities of certain crops, coupled with the effects of monopoly power.<sup>5</sup></p> <p><img alt="Graph 2: Total costs of wheat, 2004-2017" data-align="center" data-entity-type="file" data-entity-uuid="bb431ac3-3186-4701-9198-c2715093f204" src="/sites/default/files/inline-images/Total%20costs%20of%20wheat%20copy%203Components.jpg" width="75%" /></p> <p> </p> <p>Farmers will forgo profit and maintain production in the face of losses for a long time. This is a long-observed fact of agriculture that is different than other sectors. Different explanations are offered for this behavior, including culture and community and family ties, as well as economic realities such as the lag that results from holding illiquid assets (land and machinery) and growing a commodity that cannot be produced “just in time.” Periods of high prices, if left unchecked, tend to stimulate an overreaction by farmers, resulting in more production than is demanded, thus leading again to lower prices.</p> <p>As a result, over the last two decades, production has moved in two opposing directions: Toward larger farms and toward micro-farms that respond to emerging urban demand for locally grown produce. While the growth in more sustainable local production is a welcome development, small farms remain highly dependent on off-farm income and vulnerable to financial failure. Volatile prices contribute to that polarization, as smaller farmers are compelled to either sell their land to bigger farms or to buy up their neighbors’ land in the hope that expansion will improve returns. The absorption of medium-sized, family-owned farms by larger operators undermines the flow of capital in local economies that historically made agriculture a mainstay of rural economies.<sup>6</sup></p> <p>Current Farm Bill programs react to price drops, but they are not designed to resolve them. They compensate farmers when there is a significant drop in commodity prices but do nothing to change the market structures that make farmers price takers in their markets, whether buying from the concentrated farm input supply sector or selling to commodity buyers. The result has been selling trade agreements and projected expanded exports as the way to grow markets and compensate for low prices. That response, though, has not solved farmers’ lack of bargaining power in relation to commodity traders and processors, most of whom buy from farmers around the globe.</p> <p>The benefits of export-oriented agriculture tend to accrue to the largest actors, particularly the grain traders most directly involved in international markets. While farmers’ planting decisions are locked in seasonally (or even longer), grain traders can react very quickly to changes in markets. These companies have vastly superior access to information, an advantage that is likely to increase in the era of Big Data.<sup>7</sup> Although they have significant capital investments in commodity transport infrastructure, they can offset their risks with futures trading, and their global presence and market power gives them access to buyers and sellers around the planet. Grain traders can profit when prices rise or when they fall, as long as they successfully predict the direction of change. If the U.S. soy harvest fails, traders can source from Brazil or Argentina; if demand in China dips, they find customers in Malaysia. As importantly, grain traders are in the business of adding value to primary commodities, whether they are fattening animals with soy or turning corn into ethanol.</p> <p>The risks inherent in agricultural production, such as unpredictable weather, fall on farmers. The risks of unstable markets, too, are a problem. Limiting production is not really an option if prices are expected to fall, as no individual farm is in a position to affect the market. This means farmers, quite rationally, tend to maximize production in the hopes that higher volume will compensate for lower prices.</p> <h2>The new global challenges</h2> <p>Agricultural markets have changed over the last 20 years. More food is grown, more food is traded internationally, and more countries are involved in growing and trading commodities. There are more people in the world, in part because more people are living longer lives and more have higher incomes. Asia has overtaken Europe as the largest food-importing region. At the same time, population growth in some of the world’s poorest regions has kept demand high for the three primary sources of calories worldwide—rice, corn and wheat. Meeting the steadily growing demand for food has exacerbated the unsustainable use of freshwater and topsoil and encouraged deforestation, while urbanization and climate change are shifting the geography of agricultural production and making output less predictable.</p> <p>Agricultural commodity dumping diminished during periods of higher prices. Regions that depend heavily on commodity production and export profited from those prices. The benefits were also felt through higher government revenues and improved conditions on farms for producers and farm workers. But urban consumers suffered, and governments faced enormous political pressure to act quickly to bring food prices back down. In the aftermath of the price crisis, a range of policies—public investment in agriculture, private investment in land, price stabilization measures and social safety nets—received attention and funding.<sup>8</sup></p> <p>The food price crisis drew public focus to the vulnerabilities of globally interdependent food systems and the need for better risk management. Yet the resumption of low prices and dumping underscore the lack of progress in advancing comprehensive solutions that allow farmers to plan their production at fair and reasonably predictable prices. Most governments acknowledge that their food security rests on both local and international food systems. Therefore, it is essential that trade be governed by fair and transparent rules. A crucial first step is to protect food security from agricultural dumping.</p> <p>While many in the U.S. would agree on the need for a better Farm Bill that ensures consumers get healthier food produced more sustainably, there is not yet consensus around programs to pay farmers fair prices and to rein in market concentration (although proposed legislation for a moratorium on agricultural mergers is a start). In any case, those measures will only succeed if there is also renewed attention to programs that build resilience against climate catastrophes or include managing stocks against supply or distribution shocks rather than simply seeking to export as much as possible for as long as possible.</p> <p>The return to dumping occurs at a time when the U.S. is challenging other countries’ agricultural programs at the WTO. For example, the U.S. has challenged China’s support prices to corn farmers and India’s use of support prices for wheat and rice, leading other members to accuse the U.S. of hypocrisy.</p> <p>There is an urgent need for a new approach to global trade and agriculture policies. New rules should respect the obligation of governments to protect food security at home, embrace the complex relationship of food systems to economic development and recognize the importance of accountability in domestic politics in rich and poor countries alike.</p> <h2>Endnotes</h2> <ol><li>The government support cost and the cost of transportation and handling are added to the farmer production cost to calculate the full cost of production. The percent of export dumping is the difference between the full cost of production and the export price, divided by the full cost of production. Sources: Farmer production costs are from USDA Commodity Costs and Return. Government Support Costs are from OECD Producer Support Estimates Database. Transportation and export prices are based on information in USDA Agricultural Marketing Services Grain Transportation Report Datasets. For wheat, corn and soy, we used Table 2: Market Update: US Origins to Export Position Price Spreads. For rice we used Rice Yearbook, Table 17: Milled rice: Average price, f.o.b. mills, at selected US milling center. For cotton, we used the National Cotton Council of America’s A Index of global prices.</li> <li>Mary Hendrickson and William Heffernan, Concentration of Agricultural Markets, vol. 21, p 311-328, University of Missouri, 2007 and Sophia Murphy, D Burch and J Clapp, Cereal Secrets, Oxfam, 2012.</li> <li>Jennifer Clapp, Financialization, distance and global food politics, Journal of Peasant Studies 41, pp. 797-814, 2014.</li> <li>Daryl Ray, Daniel de la Torre Ugarte and K Tiller, Rethinking U.S. Agricultural Policy. Agricultural Policy Analysis Center. 2003.</li> <li>Hendrickson and Heffernan. Also see Claire Kelloway and Sarah Miller, Food and Power: Addressing Monopolization in America’s Food System, Open Markets Institute, March 2019.</li> <li>P McMichael, The Global Restructuring of Agri-Food Systems, Cornell University Press. 2004. Pat Mooney, Too Big to Feed, IPES-Food. 2017.</li> <li>Timothy Wise and Sophia Murphy, Resolving the Food Crisis. Global Development and Environment Institute and Institute for Agriculture and Trade Policy, 2012.</li> </ol><p><a href="https://www.iatp.org/sites/default/files/2019-05/2019_05_01_Dumping_KHK_SM.pdf">Download a PDF of the fact sheet.</a> </p> </div> <div class="field field--name-field-primary-category field--type-entity-reference field--label-above"> <div class="field--label">Primary category</div> <div class="field--item"><a href="/agriculture2" hreflang="en">Agriculture</a></div> </div> </div> Thu, 02 May 2019 21:31:15 +0000 Colleen Borgendale 43960 at https://www.iatp.org Food standards on the menu at U.S.-EU talks https://www.iatp.org/blog/201904/food-standards-menu-us-eu-talks <span>Food standards on the menu at U.S.-EU talks</span> <span><span lang="" about="/user/2863" typeof="schema:Person" property="schema:name" datatype="">Chris Palmquist</span></span> <span>Mon, 04/15/2019 - 16:26</span> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span>With the <span><span><a href="https://www.reuters.com/article/us-usa-trade-eu/eu-countries-back-starting-trade-talks-with-united-states-idUSKCN1RR0OZ">endorsement on April 15</a></span></span> by a majority of the heads of government of its member states, the European Union has finally taken the formal step needed to move ahead with trade negotiations with the United States.</div> Mon, 15 Apr 2019 21:26:26 +0000 Chris Palmquist 43954 at https://www.iatp.org FAO to elect new Director General https://www.iatp.org/blog/201904/fao-elect-new-director-general <span>FAO to elect new Director General</span> <span><span lang="" about="/user/2863" typeof="schema:Person" property="schema:name" datatype="">Chris Palmquist</span></span> <span>Wed, 04/10/2019 - 14:29</span> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p>The United Nations <a href="http://www.fao.org/home/en/">Food and Agriculture Organization</a> is set to elect a new Director General in June. Decisions and actions of this organization have impacts on food and agricultural systems around the world. IATP believes this position is critical, as the Director General plays a key role in navigating the challenge of global hunger and climate change.</div> Wed, 10 Apr 2019 19:29:32 +0000 Chris Palmquist 43953 at https://www.iatp.org Family Farm Action rally challenges U.S. presidential candidates https://www.iatp.org/blog/201904/family-farm-action-rally-challenges-us-presidential-candidates <span>Family Farm Action rally challenges U.S. presidential candidates</span> <span><span lang="" about="/user/2863" typeof="schema:Person" property="schema:name" datatype="">Chris Palmquist</span></span> <span>Fri, 04/05/2019 - 10:55</span> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span>On March 30, Midwest farmers rallied in Storm Lake, Iowa, calling for legislators and the U.S. Department of Agriculture to implement a nine article <span><span><a href="http://www.farmaction.us/project/fbor/">Farmers Bill of Rights</a></span></span> which would aspire to, among others actions, enforce fair market practices and natural resource conservation rules.</div> Fri, 05 Apr 2019 15:55:34 +0000 Chris Palmquist 43949 at https://www.iatp.org Trading Away Our Environment https://www.iatp.org/documents/trading-away-our-environment <div data-history-node-id="43943" class="node node--type-document node--view-mode-rss no-field-teaser-image title-not-empty ds-1col clearfix"> <div class="field field--name-field-author field--type-entity-reference field--label-above"> <div class="field--label">Author</div> <div class="field__items"> <div class="field--item"><a href="/about/staff/mark-ritchie" hreflang="en">Mark Ritchie</a></div> </div> </div> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p>President Bush was repeatedly declaring his strong commitment to protecting the environment while his trade negotiators in Geneva at GATT were making agricultural proposals that could seriously weaken existing pesticide and environmental protection laws along with consumer safety legislation in the U.S. and world wide.</p> </div> <div class="field field--name-upload field--type-file field--label-above"> <div class="field--label">Upload</div> <div class="field__items"> <div class="field--item"><span class="file file--mime-application-pdf file--application-pdf icon-before"><span class="file-icon"><span class="icon glyphicon glyphicon-file text-primary" aria-hidden="true"></span></span><span class="file-link"><a href="https://www.iatp.org/sites/default/files/2019-03/Trading%20Away%20Our%20Environment.pdf" type="application/pdf; length=349367" title="Open file in new window" target="_blank" data-toggle="tooltip" data-placement="bottom">Trading Away Our Environment.pdf</a></span><span class="file-size">341.18 KB</span></span></div> </div> </div> </div> Thu, 28 Mar 2019 17:57:45 +0000 Patti Landres 43943 at https://www.iatp.org Latest agriculture emissions data show rise of factory farms https://www.iatp.org/blog/201904/latest-agriculture-emissions-data-show-rise-factory-farms <span>Latest agriculture emissions data show rise of factory farms</span> <span><span lang="" about="/user/2863" typeof="schema:Person" property="schema:name" datatype="">Chris Palmquist</span></span> <span>Tue, 03/26/2019 - 08:08</span> <div class="field field--name-body field--type-text-with-summary field--label-hidden field--item"><p><span><span><span>New data from the U.S. Environmental Protection Agency (EPA) shows a steady increase in agriculture-related greenhouse gas emissions, much of it linked to industrial systems of crop production and the rise of factory farm systems of animal production. The annually updated GHG data is designed to track U.S. emissions related to the Paris Climate Agreement and to inform national and state-level climate policy. </span></span></span></p></div> Tue, 26 Mar 2019 13:08:15 +0000 Chris Palmquist 43939 at https://www.iatp.org