Washing Down the Food Crisis with Corporate-Trade Kool-Aid (by Elizabeth Palmberg)
It's clear that one cause of the current food crisis is that poorer countries have been pressured into dismantling their food policies, leaving peasant farmers and eaters alike to bear all the risks of the extremely volatile world market. This has left corporations free to ship factory-farmed food to those countries, peasants free to migrate to urban slums, and corporately-dominated economic markets free to ignore those starving.
And we should blame ourselves, not the corporations. Expecting a corporation to give affordable loans to farmers, look out for the urban poor, and cut carbon emissions - unless those are the most profitable things it can do, which they aren't - is like expecting your kitchen stove to go out and join the Missionaries of Charity. (The difference is that, if your stove were a corporation, it would hire lobbyists to make sure that federal policies heavily favored stoves over toasters and George Foreman grills).
But many of the powers that be refuse to admit that our current trade model is a problem; so some are demanding that we respond to the crisis by drinking more corporate-trade Kool-Aid (by extending reach of the WTO, for example). In a move that clearly shows they are lost to common sense, such arguments often blame the food crisis on the only significant farm policy left on the planet: rich-country subsidies for food crops. For example, a story last week announced that U.N. head Ban Ki-moon had asked the world to respond to the crisis by "cut[ting] agricultural subsidies, particularly in developed countries."
Now, there are lots of reasons why U.S. farm subsidies, which push the export-driven factory-farming model, are broken and need to be radically reworked. (And, of course, subsidies for ethanol production, which converts food to fuel, really do drive up the price of food and are a huge problem).
But the crisis is that food prices have become way too high. Subsidies to food crops inherently lower food prices. You do the math.
I believe the underlying argument is that subsidies have dampened "market signals"--i.e., rising prices--that would otherwise have caused farmers to gradually increase production. But, as you may have noticed at the gas pump, some key farm inputs, like fuel and fossil-fuel-based fertilizer, have been anything but gradual in their price rise. On top of genuine supply and demand spikes, there's the still-more-volatile behavior of financial speculators.
And, on a more basic level, farmers often are unable to respond to price increases. In particular, small farmers in the global South don't have access to affordable loans, supplies, or marketing they would need to grow more.
Why? Because poor countries have dismantled most of their food policies as trade agreements decimated the government policy toolbox, and IMF pressure forced many governments to slash their farm investment. Now, there are belated calls for governments in the Global South to invest in farming once again. Amen to that.
Elizabeth Palmberg is an assistant editor of Sojourners.
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Comments
insightful article -
One of the challenges that we have in the US with farming is that farmers wanted less risk over the past decades and less risk also means lower profits. I learned this from a former neighbor who was a farmer and one time Dem. Representative for ND. Many farmers also baught into the idea that their land could be leveraged for investment. That one backfired.
I will have to look into the IMF's involvment because this one just does not add up for me. Why would an agency like that put these types of demand/restrictions on poorer countries.
Where the US errored is when congress demanded that ethenol be made from corn. Farmers overnight plowed fields that had other crops growning and planted corn. What research I have been able to do shows that it take about 1.2 gal of pertorlium to produce 1 gal of corn ethenol. what is wrong with this picture? Brazil is now free from importing oil as they are producing their own from their own wells - wow - what a concept. They are also producing ethenol - but they are doing it from sugar which I believe takes less water etc to produce and .5 gal of petrolium can produce 1 gal of ethenol.
Blessings -
.
Posted by: Moderatelad | July 10, 2008 10:43 AM
another example of goverment meddling in markets. they need to stay out. why do we not use surgar to make ethnol a big tarriff from our friends in washington that niether coke or pepsi can do away with
Posted by: roger | July 10, 2008 11:42 AM
Farm subsidies give developed nations an unfair advantage in the global market. Developing nations cannot compete in this global market because they cannot afford subsidies. The agriculture in developing nations remain under-developed and then the country is unable to feed its own people. Governments of developing countries depend on food aid rather then developing its own agricature. There is a strong need for the west to create the market to devolope agriculture in developing countries to replace food aid. I wish I knew more about what sustainable agriculture would look like in developing nations.
Posted by: Marilyn | July 10, 2008 1:17 PM
A lot of foreign aid is given in the form of grain, grown in developed countries. These imports push down prices of home-grown produce in the markets and farmers suffer and farms can be lost. Buying food in the country where aid is needed is not as beneficial to agriculture in the giving country, but supports the entire development of the country receiving aid.
Possibly the World Bank insists on dropping export subsidies as part of the strategy of paying back loans to them? Sounds like one of their conditions.
Posted by: Sandra | July 10, 2008 5:17 PM
Rising prices are a direct result of the inflation engendered by the mortgage debt crisis, which led to massive liquidity infusions by the Fed to try to keep the market from collapsing. However, giving those same financial entities even more cash to play with led them to try for "double or nothing" by using it to bid up commodities.
Given that the US dollar is the world's de facto reserve currency, the excess liquidity has amounted to printing a lot more money and putting it into circulation without appropriate productive increases in the economy.
You do the math: too many excess dollars chasing the same amount of goods, means higher prices for those goods.
As usual, the problem can't be laid at an either/or of public versus private, given that the government has a monopoly on creating the money that the private sector gets to play with, for good or for ill.
Posted by: Sojourner Truth | July 10, 2008 6:07 PM
As a farmer (and one who has received a bachelor's degree in sustainable agriculture) it is difficult to know where to begin commenting here. As the number of farmers in the US is quickly dwindling and our numbers are estimated at somewhere between one and two percent of the entire population, it is unlikely to hear many speak up. Add to this fact that many (though not all, obviously) of us are reserved and keep our opinions to ourselves, even fewer are likely to speak up on this issue. The problem is, we need to and we need to do it in a united fashion. We also need to speak up for those who struggle to do so for themselves.
The US farm subsidy model is horrendously broken. In reality it was never intended to be what it has become. It was originally intended to help farmers during and after the Great Depression. It was meant to be a temporary assistance - interesting that temporary has come to span nearly 80 years. As the Farm Bill stands (and has for many years now), it only really benefits those that need it least. Farmers making up to $1.5 million can still apply for and receive subsidies in this country. Those that could benefit from subsidies the most, never see a single penny. Those are the remaining family farms across America. The definition of family farm can be contentious as a multi-million dollar farm can be family run. I'm referring to farms that are several hundred acres or less and have operating budgets of under $250K (this does not mean they make that much).
As with oil prices currently, no one really knows why prices are the way they are. Anyone who attempts to pin the blame on one group or another, does not truly understand the complexity of the issues at hand. But, that is for a different day.
The author looses me in her logic.
"I believe the underlying argument is that subsidies have dampened "market signals"--i.e., rising prices--that would otherwise have caused farmers to gradually increase production."
This really only is effective in "developed" countries due to their mechanization and as she notes, ability to get financing. It is very seldom seen in "developing" countries. Which to me, would thus increase exports to poor countries, thus further depressing their own locally produced products (according to the model discussed in this article - which is much of how it happens). This seems to defeat what the author is advocating (i.e. helping farmers in "developing" countries get back on their feet). Additionally, the financing many farmers get in the US help them on the immediate term, however, many are brought lower by it in the long term. As such, I do not see annual financing most farmers getting as beneficial and only cause them to hedge larger and larger bets on the commodities markets thus leading into a vicious circle.
This vicious circle does not even begin to touch on the issues facing farmers in non-westernized countries. Nor does it address the issues faced by farmers dealing with oppression from their own governments or that of neighbors (Zimbabwe?, Palestinians?, Chinese?, the rest of the continent of Africa?). Consequently, the situation is more complex than the author has made it out to be. I have only scratched the surface of the issues too.
To Moderatelad -
Although I do not have the data in front of me, the IMF and World Bank are heavily involved in agriculture in most of the developing world. Their demands are unbearable by most (if not all) small farmers in those countries. The model that they work off of promotes, as the author points out, the export/import of grains from western nations being sold at drastically reduced prices (if not donated) thus crushing rural economies in developing nations. Oh, 1.2 gallons of oil per gallon of ethanol is quite conservative. Some estimates are as high as 5:1.
One last point and I may well be chastised on this, but the truth is often not popular. Food prices (specifically in the US & other western nations) is in reality not high enough. As it stands, current prices do not reflect the true price of production. The current price hikes are not going to those that need it most - farmers. It is all going to the middle men. Subsidies are one portion of the puzzle, but there are many more. On average in the US, the farmer only sees 18% of what you pay in the store. Where as if you shop at farmers markets, they average 95%. Most farmers do not make money like the rest of Americans. They just live from one loan to the next, year to year. Current prices do not reflect the social and environmental costs as well.
Combine all of these things together and you have one very dysfunctional system. Prior to the past 6 months or so, the average American spent about 7% of their salary on food, the average African spent 60% (although statistics vary on both of these numbers). When it comes down to it our system has fallen and can't get up and is dragging the poorest of the poor with it.
Posted by: P.M.R. | July 10, 2008 7:49 PM
Governance of the dumb by the dumb doesn't seem to be currently working out very well when the challenges are intellectually daunting both to understand and develop strategies to deal with.
That means that very soon people are going to be ready for the siren song of anyone who seems to have credible answers as who to blame and what to do about it.
We not only live in interesting times, but very dangerous ones too.
Posted by: N.M. Rod | July 10, 2008 9:19 PM
No matter which way you look at this, all complexities aside; it boils down to greed, pure and simple greed. America has to stop being the seemingly concerned police to the world and help it's own people. There are hundreds of people, working class with two college degrees! Who are suffering, living off of just pasta and occasional meat... I am definitely not denying that there are societies all over the world who are suffering from hunger due to greed and ignorance but if the issues are not truly addressed and we're just there with our wallet open... how is this helping anyone? We have developed a distorted perspective of humanitarianism which smacks of Epicurianism and sympathetic self-righteousness. True aid comes from education & empathy....unfortunately we are not ready for this, yet...
Posted by: Nicole Macaluso | July 10, 2008 10:29 PM
Posted by: P.M.R. | July 10, 2008 7:49 PM
i will have to look into this a little more. Twice a year I purchase my coffee from a church that brings it in from South America as they purchase it from the growers and instead of the famers make about 5 cents a lbs. they can get the upwards of 1.50 a lbs.
Rumor has it that St. Paul is going to stop this as it is hurting some of the coffee sales in MN. Wow - one church that I know of in the metro area and the Dems in St Paul are working on a law - this has limo libs of EDINA written all over it.
Blessings -
.
Posted by: Moderatelad | July 10, 2008 10:45 PM
" Add to this fact that many (though not all, obviously) of us are reserved and keep our opinions to ourselves, even fewer are likely to speak up on this issue. "
Farmers represent possibly the most influential lobby in the United States. They just about own a dozen or so Senators.
Posted by: kevin s. | July 11, 2008 12:01 AM
"And we should blame ourselves, not the corporations." Should we really blame ourselves? In fact, I don't believe that the system is "broken" at all. It is delivering very high profits to the agribusiness majors, ADM, Cargill, and Monsanto, whose earnings have never been higher. From their point of view, the system is quite successful. The fact that millions of people must starve in order to support these profits is not their concern. The fact is that production does not need to be increased - there is plenty of food to feed everyone in the world. The agribusiness majors need hunger, even extreme hunger, in order to maintain profit growth. I applaud Elizabeth's analysis, which I very much agree with, but if you would like to delve more deeply into the system that thrives on human pain, take a look at the following post on the Nonviolent Jesus: http://nonviolentjesus.blogspot.com/2008/06/conceal-nothing.html
Posted by: Boyd Collins | July 11, 2008 12:39 AM
3 books to read that cover the WTO, IMF, etc that are supposed to be international, but are mostly U.S. influenced:
Confessions of an ecomomic hitman, written by a guy who work with these organizations.
The Bush Agenda by Antonia Juhasz. A poorly titled book which covers American dealings in other countries. Antonia is a former Congressional staffer. I say poorly titled because while the book carries a clearly anti Bush administration slant, it provides a good history of U.S.,IMF and WTO past business going back to the 50s.
The Shock Doctrine by Naomi Klein. Liberal author who has been exactly right too many times to be ignored. This book was a huge shock to me. This book was almost too painful to read, even though I had already read much of the info in other books. I couldn't put it down.
Posted by: pwheel | July 11, 2008 9:41 AM
Moderatelad -
I will have to respectfully disagree with you on your most recent comment. I don't think we can blame one group over another - for starters. Secondly, I personally resent your comment:
"Rumor has it that St. Paul is going to stop this as it is hurting some of the coffee sales in MN. Wow - one church that I know of in the metro area and the Dems in St Paul are working on a law - this has limo libs of EDINA written all over it.
Blessings -"
That comment does not in any way seem like a blessing to anyone. As a democrat (from St. Paul) I feel that is very insulting. I applaud your church (or any other faith group) working towards improving the lives of the impoverished and I know many, many democrats in the city that feel the same way. These same people, myself included, would fight a proposed law as absurd as that. In my previous experience, there are other political parties usually more interested in protecting big (and small) business interests.
"Farmers represent possibly the most influential lobby in the United States. They just about own a dozen or so Senators. Kevin S."
I would respectfully disagree with you. First off, their influence in a state or national legislature is no greater than anyone else's. Nor do farmers "own" Senators more than anyone else. The lobby primarily comes from large agri-businesses not individuals. Those are not farmers, they are businesses. They are entities that care about the bottom line and how big it gets; they don't care about the land, the farming community, or their neighbors and families. Corporations with millions of dollars spent on lobbying politicians have the bottom line in mind and that only. They are one of many, raking farmers over the coals.
Most people today feel you have to be either crazy or stupid to be a farmer today. I would contend it is neither. It's not something most farmers do because of the possible huge payoffs. It is a way of life, it is a passion. Granted not all farmers fit into this paradigm, but most I know do.
The crisis we are in is horrible, but I think it has the possibility of worsening. We are living history. Time will only tell what the choices we make today will do to affect or disaffect tomorrow. I only hope and pray that our choices will be governed by love and compassion for those less fortunate than ourselves rather than greed and lust for that which is not ours.
Posted by: P.M.R. | July 11, 2008 11:59 AM
Those familiar with agribusiness know that increased production is not the issue. Prices are not high because we are running out of food. There is enough food to feed everyone on the planet with an adequate diet. Prices are high in the first instance because of speculation due to a shift in investment funds from stocks and bonds to commodities. But the reason that we don't feed everyone though we could if we wanted to is to ensure high profit margins for the agribusiness giants. The high subsidies for these corporations are part of a much larger strategy that seeks to make poor countries dependent on food imports. Reducing these subsidies would reduce food prices by causing the developing countries to depend less on imports and more on their own supplies. This in turn would make them less subject to the price fluctuations of commodity speculation and better able to supply their own food. This issue requires that we see the overall strategies of agribusiness rather than narrowly focusing on one aspect of the crisis.
Posted by: Boyd Collins | July 12, 2008 10:23 PM
Posted by: P.M.R. | July 11, 2008 11:59 AM
First to P.M.R. - no insult to St Paul - just that it is where the Capital is and I find it interesting as to what some make an issue out of.
Re-reading the article - does anyone else get the idea that countries should be allowed to produce what they want to and buy and sell to their own citizens without outside interfearence from any other country or UN / world organization.
That is what I am getting from the article along with others ideas and issues.
Blessings -
.
Posted by: moderatelad | July 13, 2008 1:24 AM
Well, Mod, I see that you and Kevin persist in taking pot-shots at Liberals. By the same token, many Liberals point the finger of blame at Conservatives. Meanwhile, the rich and powerful insiders are laughing all the way to the bank with the obscene profits left over after financing their "non-profit" advocacy groups that promote the kind of obfuscation that leads to the polarization of opinion. Divide and conquer is a tried and true tactic for achieving one's aims in the pursuit of self-interest—economically, politically, militarily and, sadly, spiritually.
Posted by: Hermes | July 14, 2008 10:35 AM
Moderatelad -
Thanks for the clarification. :)
Boyd makes an excellent point. There is currently enough food being produced and there is still enough arable land to produce more, especially if it is shifted away from crops grown for biofuels. Relating to what he says, it is more about distribution problems than production problems. For example, this year alone Asian rice production is up 4%. This should cause us to question things a little more deeply than why are prices high. In my opinion, that is just scratching the surface. The real problem in the future (and unfortunately all to near at that) is the dwindling amounts of fresh water available. Here is an excellent article that was recently posted. It gives those unfamiliar with the situation a great introduction to the water crisis. Yes, it exists here in the US too. Just begin scratching the surface and you will begin to see the "water war" that currently is boiling beneath the surface in our great west. It will only continue to worsen unless we can change at the fundamental levels of how we think and treat one another.
Posted by: P.M.R. | July 14, 2008 10:54 AM
Hermes - Thank you for your comments regarding division.
It is interesting how, regardless of who we are, we all can fall into a habit of being self seeking. Meanwhile, while we sit idly in our glee of pride, others struggle to survive. They are homeless, jobless, pennyless, starving and often even worse. So many in our world would be happy to swallow corporate Kool-Aid, as at least it would mask the flavor of drinking non-potable water.
Posted by: P.M.R. | July 14, 2008 11:20 AM
P.M.R. - Thanks for your insider's comments. Do you currently run a farm? If so, do you have a website, or a presence at the Farmers' Market? My husband and I are working up to buying only locally produced food (and it's a LONG journey!) and I would love to buy from you or from someone you recommend (we're also in St. Paul, or near enough as makes no difference). I think people are going to have to start relying on small local farmers more and more, once this whole ethanol + flood = food shortage thing really hits the fan.
Posted by: JEM | July 14, 2008 12:08 PM
Would there be enough food in some of these countries without developed countries sending aid in the form of food?
What we found in Africa is a need for education about farming. Not just how to farm but the attitude towards farming. In most of these countries the farmer is looked down on. There is very little concern for the farmer or the farm. There are ministries in place that are trying to change these attitudes.
Jeff
Posted by: Jeff | July 14, 2008 12:40 PM
JEM -
Without violating Beliefnet's Rules of Conduct, let me just encourage you (and anyone else interested) to visit your local farmers market. The St. Paul market has many, many wonderful farmers (and arguably one of the best markets in the nation). There are a number there that also run CSA's also.
A good place to start looking on the net is called LocalHarvest. For those concerned about getting away from the corporate Kool-Aid, take the time even to visit your local farmers market. You will find some amazing people who are eager to share their passion about food and eating locally. And don't be afraid to ask questions. Also, please, please don't judge a book by it's cover. Meaning, if your world view leans to the right, please don't avoid buying from a farmer simply because of their political views (and vice a versa). Don't walk past a farmer of a different nationality or skin color. Stop, ask them what something is. Ask for a simple way to cook something new. Expand what you eat. Just because you've never seen it before or mom told you as a kid that it was gross (just ask me about eggplant!!), don't over look it.
Laslty, please do NOT believe the hype that only hippies or yuppies shop at farmers markets and that they are way over priced. This is simply not true. My wife and I have proven this again and again to friends. But you have to be willing to live within parameters.
1) You have to be willing to take time to shop. You can't just zip in and back out and expect a good deal. Take time to shop around (this applies to stores too), ask questions of farmers. Do you have anything in over abundance today? How much if I buy a whole box or flat (then take it home and freeze it or dry it or can it!)?
2) Shop in season. Meaning, buy what is supposed to be growing in the season you are in. If you don't know, just ask. Farmers are more than happy to tell you what is growing now. For example: don't expect cheap peas in mid-August heat wave. You should have been asking for those back in April or May (maybe later or earlier depending on where you live). Don't expect good cheap apples in May or winter squash in June.
Without going into the reasons here Jeff, the answer is a resounding no - unfortunately. In college we did some research on agriculture in Africa and you hit the nail on the head - it isn't a lack of knowledge on how to farm. In reality, there are things we can learn from them, but that's a different discussion. It has been a decimation of their cultures, values, and knowledge system since the colonial era. Now with the influx of multinational agri-businesses the situation is worsening. Someone above also mentioned how the national governments are complicit as well, which is true. Although I am hard on agri-business, we are all complicit and have to accept responsibility for ourselves. This has unfortunately become an American tradition - one that I am trying to break free of in my own family. Even in situations of injustice, we seek to blame (I know I do all the time), instead of asking what could I have done to change this. Or asking how did my choices further this problem. If we are honest enough and get beyond scratching the surface, we can easily see the effects of our own choices and actions.
Posted by: P.M.R. | July 14, 2008 5:56 PM
Is it just me, or am I overly sensitive on this issue - I don't honestly know (it's myself after all). However, it seems as though some people are working extremely hard at being divisive and painting the world (or farmers) all under one brush stroke. Stereotypes have never worked and will never work. God has made us all individuals for a reason - at least so I believe.
Saying that all "Farmers want to have a risk free environment for growing and they can.", is saying something akin to "Everyone who makes a sandwich wants Wonder Bread and Skippy peanut butter." Of course there are some out there that do want that, but to paint broad strokes like that is absurd. The nature of farming is inherently risky. If you go into farming oblivious to that fact, you might as well have yourself checked out by a professional. If you cannot handle risk in your life, you should most certainly avoid farming (& the stock market).
If the comment was not meant to be a broad stroke covering the canvas of our nations farms, then someone needs to seriously think through how things are worded in their comments. On the other hand, I do not even know how to respond if that was the intended meaning.
Why is it so difficult to have intelligent discourse without painting one side or the other in broad brush strokes of generalities? Mea culpa. However, I do believe we can learn new behaviors and be spurred on and learn great things from those who see the world differently than we do.
Posted by: P.M.R. | July 15, 2008 11:01 AM
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