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New geopolitics of world agriculture

The price of crops is rising with the rise in the cost of oil and is thus driving up food prices.


In the 1960s about 80 million people suffered from hunger worldwide. In this period global capitalism was peaking and transnational companies were expanding throughout the planet, dominating markets and exploiting cheap labour and the natural resources of peripheral countries.

This was the world into which the Green Revolution was born, with its promise to end hunger. Its mentor, Normal Borlaug, received the Nobel Peace Prize in 1970. The real objective was to introduce a new system of agricultural production based on the intensive use of industrial inputs. Productivity per hectare increased and world production quadrupled. Yet the number of people suffering from hunger grew, from 80 to 800 million.

Today 70 countries depend on imports to feed their people. This demonstrates that the new model of agriculture served to concentrate global agricultural production and trade in foodstuffs in about 30 transnational firms: Bunge, Cargill, ADM, Dreyfuss, Monsanto, Syngenta, Bayer, Basf, Nestle, among others.

According to recent estimates, the world's petroleum reserves, the primary source of energy in the contemporary age, will only last about another 30 years. 

In this context, a diabolic alliance has been formed between oil, automotive, and agro-industrial companies to produce agrofuels: the term biofuels is misleading- like ethanol in countries with an abundance of land, sunshine, water, and cheap labour.

In the last five years, millions of hectares that had been previously dedicated to food production and controlled by farmers were taken over by large corporations to plant monocultures of sugar cane, soy, corn, African palm, or sunflower to make ethanol or vegetable oils.

The dynamics of the Green Revolution is being repeated. In this case, because the price of ethanol is linked to the price of oil; the price of crops is rising with the latter and in turn driving up food prices.

However, agrofuels are not the solution to the problem of energy supply and global warming. Scientists warn that devoting all of the planet's arable land to agrofuel production would only replace 20 per cent of current oil consumption. But food production and costs were already in irrational territory when the financial capital crisis hit.


Many holders of massive sums of capital, whether in currency or fictitious capital (treasury bonds, mortgages, commercial paper), fearing losses, rushed to invest in futures markets and to buy natural goods — earth, energy, water — in peripheral countries. As a consequence of these movements of capital, prices of agricultural products around the world are no longer tied to production costs or even to the balance of supply and demand. Instead, today they swing rapidly in response to market speculation and transnational corporations' oligopolistic control of the international food markets. In other words, humanity is at the mercy of a handful of transnationals and giant speculators.

The result: according to the UN Food and Agricultural Organisation, the number of people suffering from hunger rose in the last two years from 800 to 925 million. And millions of farmers in Asia, Latin America, and Africa are losing their land, and emigrating. 

Given this new situation, Via Campesina, which comprises dozens of farmers organisations across the world, proposes a radical transformation in the production and trade of foodstuffs. We defend the principle of food sovereignty: that in every country, governments should implement policies that stimulate and guarantee the production of and access to the food necessary to their respective populations.

We hold that humanity should consider food a natural right of all human beings. This implies that agricultural products should not be treated as a market whose ultimate purpose is the generation of business profits, and that small farmers should be encouraged and strengthened because this is the only policy that can sustain the populations in rural areas. And with the goal of producing food that is both healthy and safe, we oppose the use of agro-toxins. Until now, governments have not listened to our demands. However, unless they make radical changes, social problems and contradictions will intensify and sooner or later they will explode. 

(The writer is a member of Via Campesina, Brazil.) IPS





Comments

Via Campesina and Farm Prices
By Wilson, Brad

"As a consequence of these movements of capital, prices of agricultural products around the world are no longer tied to production costs or even to the balance of supply and demand. " This should be qualified. Farm Commodities lack "price responsiveness" on both supply and demand sides, so farm commodity prices never automatically relate to supply and demand. (See "It's Price Responsiveness," Daryl E. Ray, APAC, University of Tennessee.) Agribusiness (output complex) influences have taken advantage of this, advocating neoliberal policies so they would usually get the commodities at below cost. (The agribusiness input complex also benefits, from oversupply, full production, lots of inputs needed.) This is seen in U.S. policy where (commodity title) price floors and supply management were reduced starting in 1953, on through 1996 when they were eliminated (dropped to zero). See, for example, the Committee for Economic Development's 1962 report, "An Adaptive Program for Agriculture." So the agribusiness (and larger corporate) complex has long been a problem. See Mark Ritchie, "Crisis by Design," and George Naylor, "Legacy of Crisis" for historical perspective (both online). Via Campesina supports price floors and supply management, as does US member, the National Family Farm Coalition, which leads on this issue. The article does not make clear the dilemma behind the price question, however. The long term crisis has been low prices (dumping), not high prices. U.S. farmers lost money in the marketplace 1981-2006 (excluding subsidies and usually with subsidies when that was checked by USDA,). Of course, exporting so much at a loss for decades did not solve the world hunger problem! It devastated farmers in LDC countries, dragging down their economies. Many couldn't even afford below cost prices. Biofuels have helped raise farm prices, helped reduce dumping, helped achieve Via Campesina's goals, even as it caused other problems. The kind of higher prices supported by Via Campesina and NFFC, however, make food more expensive. After a quarter century or half century of low farm prices, recovery takes time! People must be fed as LDC rural economies benefit from fair trade/living wage prices. They must be fed by LDC farmers, not at below cost, but at free trade/living wage prices. The speculation, with volatility, is a huge problem, as seen in the suddenly higher farm and food prices. U.S. farm policy coming out of the new deal had no subsidies but instead had effective price floors and supply management. On the top side (for the food crisis and to protect consumers and processors) we had price ceilings with commodity reserves to be released when the ceiling was reached. Today Via Campesina is calling for world (and world regional) approaches to these matters. During the 1980s the EU called for supply management, but the U.S. rejected it, choosing to lose money for decades instead (as a de facto subsidy to corporate grain buyers). Today the Africa Group calls for supply management. Today, with the financial crisis, the U.S. should choose to make a profit on exports (to not return to dumping). We need the wealth to pay our way out of this mess. In 1941 the Steagall Amendment for farm and other parity was an effective economic stimulus. Parity is a standard for fair trade/living wages. We need that kind of stimulus today, (not borrowing to give out checks, to be paid back later, with interest, in higher taxes).

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