Agriculture

Food Security: All Investment Is Not Created Equal

Susan Ozawa — Mon, 17 Aug 2009 11:34:58 -0400

The G8 countries committed $20 billion in aid to address global hunger and promote more productive farming in the world's poorest countries this July in L’Aquila, Italy. Major commitments came from the United States and Japan. The challenge remains to make sure the investments are structured properly and the environment that caused the hunger crisis is reformed to ensure food security for all.

Tokyo has already begun targeting its investment in ways that might exacerbate food security problems in developing countries. This demonstrates the need to maintain pressure on donor countries and the international financial institutions (IFIs) to adjust their assumptions and protocol so that the crisis is addressed in the short, medium and long-term.

Tokyo believes that expanding food production, through public-private partnership with its local trading houses and other companies, will help mitigate future risks. Among Japan’s five mammoth trading houses, Mitsui & Co, Itochu and Marubeni are expanding into food commodities such as soyabean, palm oil, wheat and corn. . . . Beyond their homeland, where demand for grains and oilseeds is relatively stable, industry observers say the Japanese trading houses seek to tap the voracious appetite for soyabean and grains in China and elsewhere in Asia, particularly in Vietnam, Thailand and the Philippines, or in Middle-East countries such as Saudi Arabia.

What is being pitched as a new agricultural revolution using these forms of investment will look very much like the colonial model of exploitation with the exception that the output will meet commodity demand in high growth countries versus demand in the colonizing nation. Regardless, the same distribution of benefits will apply without proper safeguards. These should include mechanisms to coordinate international production as well as mechanisms to ensure investment is directed at local producers, and to ensure prices are low enough so that developing countries will have food security and access to their own goods. By simply funding industrial agricultural conglomerates, the company, in typical neocolonial fashion, will utilize the resources of developing countries, extract the raw materials and export them to sell in foreign markets at a profit.

The current framework discussed by the G8 nations and embodied in the new IFI push for investment assumes increased investment in agricultural production will generate greater supply, which will naturally decrease prices and address the problem. Although increased production will tend reduce prices generally, this does not mean that this strategy will address the global food crisis for several reasons. This line of thinking presumes the large run-up in commodity prices resulted from a uniform increase in demand against a less responsive supply chain. Leaving aside the ways in which speculative players affect commodity prices, there is a structural supply problem because of the increasing cost of energy.

However, this issue of increasing costs affecting global food prices predominates because a technological mode of agriculture production and transportation predominates. This mode is extremely capital-intensive, industrial and large-scale. Thus what we are seeing is not a food security problem as much as an investment problem in certain kinds of agricultural production and distribution. It is also a global food supply chain coordination problem. On the demand side, there aren’t fast growing populations of hungry people in the least developed nations driving up the prices of food; there are changes in the diet preferences of high growth nations representing a dynamic middle-class who are driving demand for more energy and resource intensive food sources.

Although demand exceeds supply, the demand for staple crops is driven by demand for livestock feed and for biofuel crops in addition to basic staple consumption by households. Thus, the problems of food security for the poor are being caused by structural distribution problems that drive up prices on basic staples. This leaves local populations, even in arable, land-abundant nations, without access to their own agricultural products.

International price fluctuations wreaking havoc on production in developing countries has been particularly damaging over the past 30 years of neoliberal development policy. This has occurred after the privatization of their development and agricultural banks and the liberalization of their agricultural and commodity markets. The export and foreign exchange-oriented development strategy which promote economic growth before food security presumes the distribution of gains from increased economic growth will benefit the population equally. However, the impact of privatization and globalization on the rural poor, historically has not demonstrated that this happens naturally. Income inequality has grown across the developing world during this period of neoliberal polices. Further what we have witnessed is the trend in the rapid transformation of small-scale agricultural producers into struggling slum dwelling communities. See more here. A solution to the global food crisis must then also address these neoliberal policy failures to address the root causes of the problem.

The original document drafted by the agricultural ministers to the G8 and the subsequent joint statement with G8 ministers recognized the significance of investment in smallholder farmers and women farmers. However, it still maintained that open and efficient trade markets were part of the solution. This part of the statement might have sought to draw attention to the large distortionary impact of US agricultural subsidies on the developing world’s agricultural markets. If this was the case, it should have stated explicitly that wealthy nations, particularly land and resource abundant wealthy nations, should work to scale-back their subsidies to large-scale, industrial producers. The ministers should have then gone further by endorsing developing countries’ use of protections to develop their agricultural sectors through whatever means are necessary including revitalizing publicly subsidized agricultural banks.

A well-coordinated strategy would use the WTO, not to police nations to reduce barriers to trade uniformly, but to coordinate international agricultural policy to ensure food security for all. Particularly, the WTO could be tasked to ensure short-term efforts to address food security via dumping excess commodities on low income country markets do not crowd out domestic production of agricultural crops in the medium- to long-term. Likewise, along the lines of the Kyoto Agreement, nations that are large consumers of staple-intensive livestock, should commit to lowering their consumption to less resource intensive foods. Treating wealthy nations that are agriculturally constrained differently from resource abundant nations that are poor when allocating IFI investment is also particularly important. The International Financial Corporation’s latest commitment to boost agricultural production by 30% would seem to be targeting production in developing and high-risk nations, however, the companies benefiting from the investments will be donor country corporations and budding domestic partners, not traditional farmers. Funding small local producers is the right thing to do socially and politically but also makes economic sense. Walden Bello states:

[S]mall farmers have confounded those who have preached their demise by showing that labour-intensive small farms can be far more productive than big farms. To cite just one well known study, a World Bank report on agriculture in Argentina, Brazil, Chile, Colombia and Ecuador showed that small farms were three to 14 times more productive per acre than the large farms.

Kanayo F. Nwanze, president of the International Fund for Agricultural Development (IFAD) explains the value of investing in smallholder farmers over larger-scale producers in the developing world even with reaching industrial levels of productivity:

Eighty percent of the farmers in Africa are smallholder farmers. The majority of them are women. They produce 80 percent of the food that is consumed by Africans. Obviously, if these are the people that produce the food that we eat we must invest in smallholder agriculture. . . . We have proof that investment in smallholder agriculture is two to four times more profitable than investment in any other sector or sub-sector. It's very simple mathematics.

The investment generated to address the food crisis must be tied to measures to ensure the domestic population gains from the increased production and use of their land, energy and resources. Thus, investment should be targeted toward local producers for local consumption in low and middle income countries. These countries should be allowed to maintain tariffs on their commodities if they choose to export to wealthy and middle-income countries. Likewise, price controls should be permitted for countries with hunger problems.

If the G-8 and IFIs were sincere about addressing the food crisis, they would be permitting more flexibility of developing countries' policy responses to address this crisis using all tools at their disposal. This would include channeling investment on favorable terms to local producers; working with the WTO on global food production and distribution coordination; encouraging populations in high-demand countries to eat further down the food chain; and reigning in speculation in commodity and futures markets. Now's the time to ensure the US doesn't follow in Japan's wake.

2044: Big Brother Inc.

Eric Lotke — Fri, 22 May 2009 11:13:26 -0400

I just finished a new novel, 2044.

2044 starts where George Orwell’s 1984 left off. The problem isn’t Big Brother and the leviathan government. The problem is Big Brother Inc., and the all-powerful marketplace.

Orwell was right for his time, of course. Europe lay in smoking ruins, and the statist Stalin peered over the wall with his Big Brother mustache. Orwell sounded the alarm.

But history didn’t unfold that way. The government didn’t take over. It got taken over. Nowadays the commercial sector is in control. Everything is produced en masse and for profit, from clothes to music to political campaigns. Amazon.com knows what I read. Microsoft makes me write with Windows™. ToysRUs tells my kids what they want.

Check out the fights over the new federal budget. Look what the insurance and pharmaceutical industries are doing to health care reform, and how the good old Military Industrial Complex grows the defense budget. Watch giant agribusiness conglomerates dress up like family farmers and milk the government for subsidies. 2044 follows the pattern to the endpoint.

The heroes of 2044 are two overworked professionals who spend long days at the office and short nights in tiny apartments. Malcolm Moore is an engineer who designs security devices for the titanic Tentek Corporation. Jessica Frey is a lawyer who defends such corporations in court. Both are single and both are lonely — though Jessica has a six-year-old son, her sperm-banked answer to isolation.

The story begins when Malcolm discovers a cheap, easy way to take the salt out of seawater. Fresh water is scarce enough right now. By the year 2044, people will die and countries will go to war for water. A microorganism that takes the salt out of seawater could benefit literally billions of people.

But it also threatens business interests who are happy the way things are. Malcolm’s effort to persuade Tentek to sell his discovery gets him fired. His effort to strike out on his own gets him branded a terrorist. People who assist him are harassed, jailed and even killed.

It’s an exciting ride. The action scenes are fun and the politics of terrorism are haunting. There are even touches of humor and occasional references to 1984 — like the corporate merger that creates the new Big Brother Inc., with its happy slogan, “Big Brother is looking out for you.”

I like it, anyway. But then I wrote the thing.

It started some years ago with the idea of a private sector sequel to 1984. The idea didn’t go away, and eventually I stopped waiting. I decided to do it myself. My precise inspiration: “You’ve read a lot of crappy books. You can probably write one that’s no worse.” So I did. And it turned out pretty good.

Publishing it was a different story, though. A story about consolidation in the publishing industry (someone could write a novel about that!), the devotion to proven authors, and the aversion to unhappy endings (true to the original, I’m sorry to say).

So I took the self-publishing route around industry bottlenecks. Now you can buy 2044 direct from the publisher or at Amazon.com, of course. You can read Chapter One for free on my web page or, if you ask me nicely, I’ll send you a PDF (though I kept the purchase price almost as low as the printing costs). If you have any other ideas for outreach or distribution, I’m all ears.

Now it’s onward, back to my nonfiction life (and the outline of a new novel, uplifting with a happy ending). Meanwhile, enjoy the book.

Jim Harkness

Jim Harkness — Wed, 20 Feb 2008 14:20:33 -0500

James S. Harkness

Born June 19, 1962, in Milwaukee, Jim Harkness has had a lifelong interest in China, nature, and sustainable development.

Mr. Harkness began studying Chinese language and culture in high school. In 1976, he was chosen to participate in the first U.S. High School Students Friendship Delegation to the People's Republic of China. He continued studies of Chinese language in college at the University of Wisconsin at Madison, where he also studied wildlife ecology. During the 1980s, Mr. Harkness worked as a translator and researcher on various China projects for the International Crane Foundation, a small conservation organization concerned with conservation of cranes and their habitat. His work took him to nature reserves in Heilongjiang, Jiangxi, Hunan and Guizhou provinces, where he learned about China’s wildlife and about the human communities who live in and around protected areas. In 1990-91, he spent ten months in Tibet as part of a joint ICF-Tibet Plateau Institute of Biology research team carrying out the first comprehensive studies of the wintering and nesting population and status of the endangered black-necked crane (Grus nigricollis).

Mr. Harkness’ work with ICF convinced him of the need to better understand the social, economic and political causes of environmental degradation. From 1988 to 1992, he pursued a Master's degree in Development Sociology at Cornell University, with a focus on natural resource management. While there, he conducted field research in a nature reserve in Manchuria and wrote his thesis on the political and scientific debates surrounding the Three Gorges Dam.

From 1993 to 1995, Mr. Harkness worked with several different non-governmental organizations on issues ranging from transboundary environmental issues in Northeast Asia to Giant Panda conservation to the Three Gorges Dam. From 1995 to 1999, he worked as a program officer for the Ford Foundation in Beijing, where he was responsible for the Foundation's Environment and Development Program. This work focused on supporting innovative, people-centered approaches to rural development and natural resource management, mainly in the poor areas of China's Southwest; efforts to improve farmers' ability to organize and cooperate for mutual benefit; the establishment of new civil society organizations to promote social development and environmental protection; and research on causes, consequences and ways out of rural poverty in China.

From 1999 to July 2005, Mr. Harkness served as China Representative for the WWF, the conservation organization. He led a major expansion of WWF’s China progammme, and worked to expand the organization’s profile from a strict focus on conservation of biodiversity to also addressing the consequences of China’s economic growth on a broader sustainable development agenda. Throughout his tenure in China, Mr. Harkness sought to strengthen the Chinese non-governmental sector, and he was an early advocate of corporate social responsibility in that country. He also served as an advisor to the World Bank, United Nations agencies and international NGOs on sustainable development and civil society issues in China.

In July 2006, Mr. Harkness began a new position as President of the Institute for Agriculture and Trade Policy, (www.iapt.org) based in Minneapolis, Minnesota. IATP’s mission is to work at the intersection of policy and practice to ensure fair and sustainable food, farm and trade system for all people.

(for more information, see http://www.tradeobservatory.org/library.cfm?refid=80292)

Ted Robertson

Ted Robertson — Fri, 08 Feb 2008 15:59:12 -0500