THE WORLD FOOD CRISIS, AGRARIAN DISTRESS AND THE QUESTION OF SUSTAINABLE AGRICULTURE IN THE AGE OF CHANGING CLIMATES
As I am writing this paper (8 November, 2009), within the span of a week five farmers have committed suicide in western Orissa. India had a cruel drought and devastating flood this year. One need not say that one of the most severe food problems and agrarian crisis is the dominating socio-economic phenomenon in India and third world with the onset of economic reforms under globalization since the early 1990s. According to official statistics, more than 1.8 lakh farmers have committed suicide in India, both under the NDA and UPA regimes. For the past two years we are witness to widespread food riots all over the third world. In India we are seeing unprecedented rise in the price of food grains and vegetables. With dal vanishing from the poor and lower middle-class households, we now face a qualitative change in our most fundamental economic relationship - the delivery of food. This situation has arisen from an extended process rooted in the sharp growth in inequality that has accompanied the extension of capitalist social relations in the period of economic reform. The condition of the majority of the population has been steadily weakening over the last decades, becoming ever more undernourished. At the same time, the governmental tools available to respond to a food crisis have been under continuous attack, and are no longer able to fulfill their role. According to the UNICEF report “The State of the World Children 2009” India has the highest rate of child malnutrition in the world. On an average, children in rural areas are twice as likely to be underweight compared to children in urban areas. The rate of child malnutrition is higher than that of Sub-Saharan Africa. This is the base line from which we can begin to asses the consequences of the failed monsoon.
The crisis has been building up for some time. Grain output has been stagnating for over a decade. For the five years from 2002-07, the average annual growth rate in agriculture has been a meager 2.2 percent, hardly more than India’s 1.5 percent annual population growth. Per capita availability of food grains in terms of kilograms per year was 162.5 in 2006, below the level of 1972 figure of 171.1. However, the availability of food grains does not give the real picture of the food question; access to food is the main criteria. The decline in per capita availability marks a yet more severe decline for the disadvantaged sections - the inevitable result of the neoliberal dogma of rationing scarce goods by ability to pay, that is by firmly entrenching market relations. The vast extent of the numbers living in extreme poverty is a known fact to everyone, but it simply does not appear in business press. Every politician and policy maker talks of poverty reduction. But if we follow international criteria, more than 50 percent of Indians are extremely poor. Arguably, the most significant achievement since independence was the extension of food security to this immense sector of the population through the public distribution system, assuring the minimum level of supply. The PDS achieved, at least to a considerable extent, the rationing of scarce but necessary goods without making the means of payment the decisive consideration. But only the shadow now remains.
Food prices have been steadily rising in the five years since 2004. In these years, between 2004 and 2008, when India had some good monsoons and record production of food grains was claimed, the price of rice went up by over 46 percent, that of wheat by over 62%, atta (wheat flour) 55%, salt 42%, and so on. By March 2008 the average increase in the price of such items was already well over 40 percent. Then these prices rose again till a little before the 2009 polls and have risen dramatically in the past six months. Inflation based on year-on-year variation in consumer price indices has increased since June 2008. Various measures of consumer price inflation remained high in the range of 8.6-11.5% during May/June 2009, and 8.0-97% in March 2009, as compared with 7.3-8.8% in June 2008. For the most disadvantaged who have fallen out of the wreckage of the PDS system, and we are talking of crores, the last years of price rise for foods have meant a steady gradual increase in hunger and malnutrition.
And now comes the bad monsoon of 2009. We are officially told that half the country is suffering from drought. The question at issue is not unpredictable weather in one month or another, it is the consequences of what the ecologists have told us is certain—that facing us today are the results of global climate change and irresponsible market driven practices in the absence of planning. Not only this year, but even in the years ahead, there will be crises arising from water shortage. A study published in Nature in August this year recounts that a satellite survey shows that ground water reserves in northern India have dropped sharply between 2002 and 2008. This depletion, primarily due to irrigation, is accelerating over time. And even in the absence of consensus on a casual linkage between global warming and bad monsoons, there is consensus on the increased prevalence of extreme weather variation, i.e., that the previously rare event (such as a failed monsoon) will be more frequent. Once again, the future has arrived.
Food Crisis Today - In 2006-08, food shortages became a global reality, with the prices of commodities spiralling beyond the reach of vast numbers of people. International agencies were caught flat-footed, with the world food program warning that its rapidly diminishing food stocks might not be able to deal with the emergency. Owing to surging prices of rice, wheat and vegetable oils, the food import bills of least developed countries (LDCs) climbed up by 37 percent from 2007 to 2008 - from 17.9 million US dollars to 24.6 million dollars, after having risen by 30 percent in 2006. By the end of 2008, the United Nations reported “the annual food import basket in LDCs lost more than three times that of 2000, not because of the increased volume of food imports, but as the result of rising food prices (United Nations, World Economic Situation and Prospects 2009). These tumultuous developments added 75 million people to the ranks of the hungry and drove an estimated 125 million people in developing countries into extreme poverty. (FAO briefing paper 'Hungry on Rise', United Nations, September 17, 2009.)
Alarmed by massive demand, countries like China and Argentina resorted to imposing taxes or quotas on their rice and wheat exports to avert local shortages. Rice exports were simply banned in Cambodia, Egypt, India, Indonesia and Vietnam. South-South solidarity, fragile in the best of times crumbled, becoming part of the collateral damage of the crisis.
For some countries, the food crisis was the proverbial straw that broke the camel's back. Some thirty countries experienced violent popular actions against rising prices in 2007 and 2008, among them Bangladesh, Burkina Faso, Cameroon, Egypt, Guinea, Indonesia, Mauritania, Mexico, Morocco, Mozambique, Senegal, Somalia, Uzbekistan and Yemen. Across the continents, people came out in thousands against uncontrolled rise in the staple goods which their countries had to import owing to insufficient production. Scores of people died in these demonstrations of popular anger.
The international press and academics proclaimed the end of the era of cheap food, and they traced the cause to a variety of reasons: the failure of the poor countries to develop their agricultural sectors, strain on the international food supply created by dietary changes in China and India’s expanding middle-classes who are eating more meat, speculation in commodity futures, the conversion of farmland into urban real estate, climate change and the diversion of corn and sugarcane from food production to the production of agrofuels to replace oil.
The United Nations World Economic Situation and Prospects spoke about the crisis being the product of a perfect storm or an explosive conjunction of different developments; and speculative movements that brought about the global financial crisis that broke out in the summer of 2007 were implicated in the food crisis. According to the United Nations, the impact on food prices of speculation by financial investors in commodities and commodities futures markets has been considerable, it could be argued, said the report.
“That increased global liquidity and financial innovations has also led to increased speculation in commodity markets and, in addition, the United States dollar appreciated as part of the process of de-leveraging of financial institutions in major economics.
However, radical economists claim that speculation in agro-commodity futures was the key factor in the extraordinary rise in the prices of food commodities in 2007 and 2008. With the real estate bubble bursting in 2007 and trading in mortgage-based securities and other derivatives collapsing, hedge funds and other speculative agents, they asserted, moved into speculation in commodity futures, causing a sharp increase in inside trading and contracts unaccompanied by little or no increase in production of agricultural commodities. It was this move into commodity futures for quick profits followed by a move out after the commodities bubble burst that triggered the rise in the FAO food price index by 71 percent during only fifteen months between the end of 2006 and March 2008 and its falling back after July 2008 to the level 2006 (Peter Wahl “Food Speculation: The Main Factor of the Price Bubble in 2008”, Berlin: WEED, 2009).
KEY TRENDS OF AGRICULTURE AND FOODS CRISIS TODAY
The causes for the extraordinary rise in food prices in 2008, doubling over 2007 prices, brought together long-term trends at work for decades, with a number of more recent realities. The most important long-term trends leading to the current situation are:
1. Increased diversion of corn grain and soybeans to produce meat as the world’s per capita meat consumption doubled in about forty years. As much as 95 percent of calories are lost in the conversion of grain and soybeans to meat.
2. Decreased food production associated with poor countries adopting the neoliberal paradigm of letting the free market govern food production and distribution.
3. Widespread “depeasantisation” partially caused by neoliberal reforms and IMF mandated “Structural adjustment” as conditions forced peasant farmers to migrate from the land into urban slums, where one-sixth of humanity now lives.
4. Increasing concentration of corporate ownership and control over all aspects of food production - from seeds, pesticides and fertilizers, to the grain elevators, processing facilities and grocery stores.
One of more recent causes for the crisis is the diversion of large amounts of corn, soy, and palm oil into producing agrofuels, the term adopted by critics worldwide for industrial-scale biofuels based on agricultural crops as feedstocks. Agrofuel production looked very appealing as the United States and the European Union sought to break the influence of oil producing countries to promote “Greener” fuels. In 2008, some 30 percent of the entire corn crop in the US was used to produce ethanol to blend with gasoline to fuel cars.
Estimates of how much ethanol production contributed to the rise in food prices varied from less than 5 percent, according to the US department of agriculture, to upwards 80 percent as estimated by the World Bank.
The year 2008 also brought major crop failures, from Bangladesh to the grain exporting regions of Australia, where wheat and rice crops were devastated by drought. Scientists agree that such widespread disruption in food production will only increase with the increasing destabilization of the earth’s climate. In addition, speculation at the local level (usually called hoarding) and unprecedented financial speculation in world commodity markets - an increasingly popular way to gamble as global stock markets plummeted - forced prices to much higher levels after several years in which consumption exceeded supply, crop failures in a few countries, and new large-scale diversions of food into fuel production – combined with the longer term trends - a perfect storm was created in which many people suffered greatly and continue to suffer.
The food prices in summer 2008 were considerably higher than just a few years ago. Food supplies, although ample to feed everyone if distributed equally, are still in relatively short supply. Today, approximately a billion people, close to one-sixth of humanity, suffer from continual and severe hunger. There are many more, possibly another two billion people, who live in perpetual food insecurity, missing some meals, and often not knowing where their next meal will come from. This means that close to half of entire mankind are either perpetually hungry and malnourished, or suffering from varying degrees of food insecurity. The present world food crisis has been the culmination of the following trends:
1. Disruption of nutrient cycles with the spread of capitalist agriculture and the more recent move towards large-scale, factory style animal production facilities.
2. Ecological damage caused by chemical and fossil fuel-intensive agricultural practices.
3. Great extent of consolidation (both horizontal and vertical integration) in the input and processing sectors of the agrifood system.
4. Farmers increasingly working as labourers for agribusiness, often under contract to large integrated meat producing corporations.
5. Role of genetically modified (GM) seeds in consolidating corporate control over the input sector and from practices overall.
6. Difficulties presented to the third world by the various provisions of the World Trade Organization.
7. Mass migration of peasants from the countryside of the third world (depeasantization) and into urban slums where there are few jobs available.
8. Extent of hunger amidst plenty in the developed countries, with many anti-hunger organizations focusing on the most immediate emergencies, thus leaving the deeper issue of poverty unaddressed.
9. Neglecting the importance of land reforms and the benefits of reducing or eliminating reliance on commercial fertilizers and pesticides.
Farming - the process of growing food and fibre crops and raising food animals, is imbedded in a larger system, often referred to as agrifood system. This system includes all the upstream inputs into farming (seeds, fertilizers, pesticides, tractors, fuel, implements, etc.) as well as the downstream sectors (purchasing farmers' products, processing, transporting, wholesaling, and finally retailing at markets and restaurants). While everyone eats food, the share of the population that is directly involved in its production declined sharply in the developed countries during the 20th century. A century ago, a third of the US population, some 32 million people, lived on farms. At the beginning of the Great Depression, there were some 6.8 million farms in the entire US. By the early 1960s this number was reduced by half - today there are only 1.3 million farms that earn more than 1,000 US dollars per year. There are more prisoners (2.3 million) than farmers in the US today. At the same time, hundreds of millions of people are still engaged in farming in the countries of Africa, Asia and Latin America – it is estimated that there are about 1 billion farmers out of a total world population of over 6 billion people.
For the last two decades corporations have aggressively promoted the idea that the genetic engineering of crops and seeds is the key to improving world agriculture. It is clear, however, that crops that have been genetically modified usually by introduction of genes from other species, have so far produced no reliable increase in yields over equivalent non-GM crops. Since the first commercial production of GM crops in the 1990s, opposition to this technology has united small-scale farmers, environmentalists and public health advocates from India to South Africa, as well as western Europe and the US. While over 300 million acres worldwide are currently planted in GM crops, according to industry sources, this represents only 2.6 percent of the cultivated land, and is highly concentrated in North and South America. While GM acreage in China and India is expanding, most of the world croplands are still GM free.
Nearly all of the commercially grown GM crops are of two general types: either they are engineered to withstand large doses of chemical herbicides (for example, Monsanto’s well-known "Roundup Ready" varieties), or they produce one or more pesticidal proteins, derived from BT bacteria. Recently released varieties combine both traits, a technology known as “gene stacking”. Twenty years of claims that genetic engineering will “feed the world” by making crops more resilient and healthier have time and again proved false. Instead, companies like Monsanto focus their research and development on traits that increase farmers' dependence on proprietary chemicals, while making farming more logistically convenient, hence easier to carry out over larger acreages in increasingly mechanized farms.
While comprehensive analyses of the health and environmental effects of GM crops remain relatively sparse, scientists continue to reveal new information demonstrating that the technology is inherently disruptive of cellular metabolism and gene expression. Independent research is largely stifled by proprietary control over GM traits by companies that have every interest in suppressing systematic studies of the technology’s consequences, and independent plant breeding research at the state land-grants universities in the US is being supplanted by in-house corporate research. Corporate influence is exacerbated by an increasingly cozy relationship between these institutions and agribusiness corporations. For example, the President of South Dakota State University, David Chicoine joined Monsanto’s Board of Directors, and is stated to receive significantly more income in 2009 than the 300,000 US dollar salary he received from his university. Seed corporations have thoroughly corrupted the land-grants university mission - directly through research grants and payments to consulting scientists, and indirectly by prohibiting most independent research on GM seeds.
Political Economy of the Present Food and Agrarian Crisis -
The Globalization of Agribusiness and Developing World Food Systems
The issue of the global concentration of agribusiness is crucial to the future of the food systems of developing (and poor, non-developing) countries. These countries have been a target of corporate investments from the outset of the industrial food system. This process has been uneven - at different times corporate investment has focused on one or another part of the food system. Today, this uneven and often uncoordinated foray of metropolitan corporate capital is still subjugating the agriculture and domestic food markets of many developing countries, particularly smaller, peripheral ones undergoing rapid urbanisation, to the needs of global agribusiness. For some of the larger developing countries, however, national capitalists are the principal force behind the emerging urban food system. In addition, the state has been playing a key role in the consolidation of the urban food system in certain emerging economies.
Foreign participation in the food industry was once typically concentrated in the more sophisticated food segments geared to the emerging urban middle-class and exports primarily to wealthy countries. Because of lack of patent protection, there was little foreign private capital investment in the genetic inputs industry. Thus, the nascent private seed industry, especially maize, was restricted to the non-GMO (genetically modified organism) hybrid markets; foreign direct investment was also largely absent until recently from the retail sector.
A profound shift occurred in the 1980s and 1990s in the pattern and extent of the transnational corporate penetration of the agrifood systems of developing countries. From mid-1970s, per capita food consumption of basic staples in the developed world was reaching saturation, and overall growth suffered from the effects of the end of the baby boom.
This led to a rapid process of concentration and development of oligopolies (where a few companies control a large portion of the market) as the key condition of continued growth.
This slowdown in growth in food purchases in the developed countries was partially offset by a number of new initiatives. The introduction of an increasingly number of unprocessed specific varieties (instead of selling undifferentiated commodities), led to truly unbelievable proliferation of processed food products, and a segmentation of markets. A new wave of investment promoted “non traditional exports” — particularly seafoods, fruits and vegetables, either off season or exotic - from developing countries to metropolitan markets. There was also renewed attention to the potential of the domestic markets of developing countries where higher demographic growth rates and rapid urbanisation were creating an ideal condition for food corporations to offset the slowdown in growth in markets of developed countries. In earlier periods, Latin American countries were the main focus of investments directed to domestic markets within the periphery. The attention was being redirected to Asia, where many developing countries were sustaining high growth rates.
During the 1980s, biotechnology, heavily dependent on patents, was 'revolutionizing' the genetic and agrochemical input sectors. Concerted lobbying by these and the pharmaceutical sectors led to the developing countries' acceptance of patents on food and as a pre-condition for joining the WTO. The seed, fertilizer, and chemical input sectors, particularly of those developing countries with an increasingly large-scale and export-oriented agriculture, as in the Southern Cone countries of South America, were subjected to new waves of market pressure from foreign-based transnational corporations.
But the input sectors were not the only areas for investment. There was a rapid growth of transnational involvement in the retail food sector of the South, which had been mainly owned and organized on a domestic basis. Some European corporations, particularly Carrefour, had entered developing country markets as early as the 1970s. However, it was only in the 1990s that a more generalized foreign corporate penetration of the retail sector got underway, first in highly urbanized Latin America and then in key Asian countries. European retail led the way here, but was then accompanied by the US Wal-Mart colossus. Urbanization in developing countries also brought with it a shift in lifestyles and food habits favoring the rise of convenience foods, which, in turn, stimulated the expansion and large-scale entrance of foreign corporations into the fast-food sector.
The changing global dynamics of demand and the acceptance of the "free market" liberal approach by developing countries led to an increasing presence of multinationals in all phases of agrifood systems. This now includes direct foreign investment in land and water resources, stimulated both by the moves to grow crops for agrofuel feedstocks and thereby concerns with food security in an increasingly uncertain environment for world commodity trade.
Significant concentration of control of food and agriculture had already occurred in most advanced capitalist countries. In the US, concentration ratios for the top four or five firms have been calculated for the major upstream inputs (materials, resources, energy, fertilizers, etc.) and downstream outputs (farm products, processing, and sales markets). The main segments have ratios averaging well over the 40 percent level—considered the threshold for a market oligopoly—and often in the 70-80 percent range. More recently, researchers have identified very high levels of concentration in the retail sectors of Europe and the US. The major agricultural commodities that make up world trade are also subject to high levels of concentration—grains and oils, coffee, cocoa, and bananas. In addition, a substantial proportion of trade is now organized and coordinated by leading firms. This is particularly the case for the so-called non-traditional exports (seafoods, fruits, vegetables and flowers), very often under the direct control of large-scale retailers. As much as a third of overall trade can be accounted for by purchases between the subsidiaries of the same firm, where prices are determined by fiscal (including tax) considerations.
In smaller market segments, there are even higher levels of concentration involving oligopolies and even monopolies. And, although global food cartels have formed, often in oligopolistic markets, formal collusion is not necessary. Leading firms can adjust their respective behavior, creating an informal control over the market. The issue of market concentration, however, is not limited to individual markets. The major firms grow both horizontally (in like sectors) and vertically (integrating both downstream suppliers and upstream markets for a given industry)—leading to concentration and economic power that extends to broad sections of the agrifood system. It is this activity across market segments that transforms market concentration into a greater position of strategic economic power. Vertical and/or horizontal integration is now being complemented by strategic alliances with firms in complementary areas. This development is particularly noticeable in the agricultural inputs and primary processing/trade sectors.
Global corporate investment in the food industry was initially overwhelmingly within the leading industrialized blocs. While some firms established an international presence as early as the latter half of the 19th century, a more across-the-board incursion of foreign direct investment began in the 1980s. Leading agrifood transnationals are now increasingly geared to a global food commodity market.
The New Position of Emerging Countries in the Global Agrifood Economy
As mentioned earlier, two broad tendencies transformed North/South relations since the 1970s. In addition to being a source for traditional tropical exports, developing countries became increasingly important in the supply of the components of what has been called the "nutritional transition"—the shift to a high animal protein diet (including seafoods) and the increasing consumption of fresh fruits and vegetables. This has provided opportunities for the expansion of domestic food companies in a few countries. Brazil and Argentina, together with Thailand, became major suppliers of animal feed and meat. Particularly in the white meat sector (poultry and pigs), this gave rise to domestic agribusiness firms—Sadia and Perdigao in Brazil, and the Charoen Pokphand Group in Thailand. More recently, there has been a similar surge of domestic firms in the red meat sector, with the Brazilian firm JBS/Fnboi becoming the world's largest firm in that sector. The Charoen Pokphand Group similarly embarked on regional foreign direct investment.
Foreign investment and increasing coordination have also transformed devel¬oping countries into major suppliers of seafoods, with a key driver being the explosion of shrimp-based restaurant chains in developed countries. This has involved new transnationals, such as the animal (and fish) feed company Nutreco, the entry into this sector of leading firms from the agricultural inputs and genetics sectors, such as Monsanto, and the emergence of domestic play¬ers.
Fresh fruits and vegetables have been piloted mainly by firms for which this previously unorganized market segment has become a key to establishing consumer loyalty. Early forays into the domestic markets of developing countries often had the character of enclave-type activities, with few or no linkages to their economies. Alternatively, they were aimed at a specific niche. Now, under the aegis of retail, the transnational objective has become corporate takeover of the domestic food systems of developing countries as a whole. In addition, this penetration now includes the large developing countries, often with strong states, with already consolidated agrifood companies, and with very distinct traditions and food habits. It also occurs in a context in which developing countries have become competitive suppliers in a number of markets, providing opportunities for the transformation of their leading domestic players into global actors.
The neoliberal consensus, often referred to as the Washington Consensus, maintains that the "free market" can and will take care of everything that governments in the third world once did to support agriculture and food consumption by the poor, and that government spending for these programs can be drastically reduced. What a splendid fable was spun, based on no evidence whatsoever—a fantasy as make-believe as the fairy tales told to children. This left poor countries in an especially vulnerable condition when prices for basic foods—wheat, corn, soybeans, food oils, and rice—rose in the world market.
The Washington Consensus, an ideology developed by the advanced capitalist countries, especially the US, promotes the concepts of "free markets" and "free trade." The dogma holds that if restrictions on markets are eliminated, both within a country and between countries, market forces will work their magic and efficiently allocate resources. This is the rehashing of an argument that goes back some two hundred years. It is the ideology of the strong and its imposition on a world scale has had devastating effects on agriculture and basic food supplies for the poor.
Governments of the South have been mistaken to follow the prescriptions of the IMF and World Bank (WB) and the rules of the World Trade Organization (WTO). Of course, in many cases, they had few alternatives to accepting the conditions imposed by these institutions, including reducing tariffs for food imports, eliminating government support for farmers (e.g., subsidies to purchase expensive imported fertilizers), breeding and distributing new crop varieties adapted to local conditions, and purchasing and storing food in government warehouses. In addition, the economic advisors of many governments in the South had their training in the US or Britain at institutions that preached the near-miraculous efficient allocation of resources and self-regulation of markets, viewing all public regulation as ill-advised and inappropriate meddling. The remarkable documentary “Life and Debt” demonstrates the destruction of Jamaican agriculture under the IMF-enforced opening of markets. The film makes it clear that there was no possibility for Jamaican farmers to compete with imports of nearly every type of agricultural product—from onions to potatoes to carrots to milk to chicken.
The ideology of comparative advantage—that everything will work out for the best if each country produces products for which they have a "comparative advantage" and imports the products for which they do not—is absolute rubbish. There are definite winners and losers in such a system, with the winners' power to implement their desires trumping all other considerations. The notion of "level playing field" of "free trade," Joan Robinson has explained as follows: "When Ricardo set out the case against protection, he was supporting British economic interests. Free trade ruined Portuguese industry. Free trade for others is in the interest of the strongest competitor in world markets, and a sufficiently strong competitor has no need for protection at home."
The poorer countries of the world have long insisted on a "level playing field" in which all countries within the WTO abide by the same rules. They are pursuing a better deal on agriculture than they got from the WTO regarding property rights and trade in manufactured goods. This pursuit has also been in reaction to the hypocrisy of the already developed countries that help their local farmers and agribusinesses—using both direct and indirect subsidies—while demanding that Southern governments stop supporting farmers.
A natural response from the poor countries has been to request that the developed countries stop subsidizing their agriculture and, thus, help level the playing field. Direct subsidies, often based on production quantity or acreage of specific crops, allow farmers in the US, Europe, and Japan to sell below their costs of production. But there are also many alternative ways to help production and exports of crops other than direct subsidies for production—for example, "green" payments to farmers for using more ecologically sound practices and subsidized crop or income insurance. Even crops that are not directly subsidized by government programs may thereby gain easier access into foreign markets. In the seemingly failed Doha Round of WTO negotiations, the developing countries have insisted on the right to maintain tariffs on imported foods if needed to protect local production. The US and European Union, however, want to eliminate tariffs, while retaining their own crop subsidy programs.
The consolidation, both vertically and horizontally, of the agrifood system outside of actual farming (inputs, purchasing, exporting, processing, and retailing) has continued in the US and Europe. For examples of how far horizontal consolidation has gone, in 2007 the four largest beef packers in the US controlled about 84 percent of the market and close to 50 percent of all supermarket food was sold by five corporations, with Wal-Mart by far the largest. In addition, sectors of the agrifood system in the wealthy countries have made significant inroads into the economies of Eastern Europe and the South. A report for the Grocery Manufacturers Association in the US put it clearly: “The case for global expansion is quite simple. As domestic markets are saturated, global expansion is one way to achieve sustainable, double-digit growth.” Assuming that your goal is to maximize profits, it is hard to argue with that logic. Seed companies and chemical companies such as Monsanto (which comprises both) have aggressively entered new markets and have developed strong footholds in a number of countries, especially Brazil. Transnational processing and export companies as well as supermarkets have also entered the poor countries.
Perhaps the fastest pace of consolidation is in the seed sector, where three companies, Monsanto, DuPont, and the Swiss conglomerate, Syngenta—all heavily invested in GM technologies—now control 47 percent of the global market in proprietary seeds, and almost 40 percent of the total commercial seed market. This is the latest manifestation of a pattern first documented in the late 1990s, when Monsanto and other GM companies began investing tens of billions of dollars in acquiring key national and international seed companies. These three companies, along with Bayer, Dow, and others, are also central players in the global agrochemicals market. The top six pesticide firms control three-quarters of this sector, and the top ten represent an overwhelming 89 percent share. While food and beverage manufacturing is still a more dispersed undertaking, ten companies, starting with Nestle, Kraft, Coca-Cola, and Pepsi, now control 26 percent of this sector, and the top hundred companies control three-quarters of all the world's packaged foods. In the retail sector, one hundred companies control about 35 percent of grocery sales, of which 40 percent is controlled by the top ten, including Wal-Mart, Kroger, the French company Carrefour, and the British Tesco. Corporate consolidations and alliances with other corporations have proceeded to the point where there are discernable chains linking almost all parts of the agrifood industry.
Corporations that pioneered factory-scale animal production in the US, displacing many independent hog, cattle, and poultry farmers, are now also producing abroad. They achieve low costs of production by: (a) having very large facilities; (b) controlling and providing all the feed and veterinary medicines; (c) mandating that the people raising the animals (the "farmers") be essentially laborers under contracts favorable to the corporation, following strict procedures and protocol; (d) passing on responsibility for manure and other waste; and (e) locating contracted factory farms near their own processing facilities. Smithfield, a Virginia-based Fortune 500 corporation, has used its power and connections to expand into Eastern Europe. In the space of a few years, about 90 percent of Romania's and 56 percent of Poland's hog farmers were put out of business because of competition from Smithfield—creating social as well as environmental havoc. In addition, frozen pork products are exported to West Africa—Liberia, Equatorial Guinea, and the Ivory Coast— where local producers are also put out of business. Smithfield receives export incentive funds from Poland and sells its pork at about half the price of local producers in the Ivory Coast.
Another aspect in the penetration of agricultural products from food-exporting countries of the North has been successful long-term efforts to change the diets of the people of the South. The transformation of third world people's diets toward non-traditional foods was encouraged by both governments—for example, the United States P.L. 480 program which shipped "charity" wheat to countries that had never grown the crop, partially to get them used to the new food—and by corporations desiring to sell more of their products abroad. A United Nations World Health Organization report has described the effects of the push of the transnational food corporations into the third world on the consumption habits and health of people.
The poor condition of farm workers is one of the many tragedies of our agrifood system — from exposure to pesticides, to lack of sanitary facilities, and clean water, to low pay, to air pollution, etc. Whether in the sugarcane fields of Brazil, the new commercial estates of Africa, the oil palm plantations of Malaysia, or the tomato fields of Florida, farm workers have very little organized power and are treated poorly. This includes the workers in the meat and poultry processing facilities that work under unsanitary and harsh conditions. These abysmal working conditions for farm labor, in addition to the difficult conditions for small farmers, have helped to fuel the mass migrations to city slums.
The migration out of the countryside and into the slums in the cities of the global South — where there are few jobs — is continuing. The rural to urban migrations in Latin America, Africa, and Asia are a result of harsh conditions in the countryside. People are pushed off the land at an accelerating pace as farmers and the general population become more integrated into world markets and find themselves at the mercy of market forces. When they move to the slums, people join the "informal economy" and struggle for existence. As a reporter from Lagos, Nigeria ended his story, "The really disturbing thing about Lagos' pickers and vendors is that their lives have essentially nothing to do with ours. They scavenge an existence beyond the margins of macroeconomics. They are, in the harsh terms of globalization, superfluous."
A Wall Street Journal article described the situation in India: "Across India, poor migrants keep streaming into cities like Lucknow, many of which are woefully mismanaged and ill-equipped to handle the influx. India has at least 41 cities with more than one million people, up from 23 two decades ago. A half dozen others will soon join the megacity list. Urban experts say the risk is now rising that some of these cities could face the same fate as Mumbai and Calcutta, which became synonymous with poverty and decay in the 1970s and 1980s."
Corporate control through a food regime based in market liberalization is a proximate cause of the globalization of a system in which food price increases are encouraged and rapidly transmitted around the world. But its roots lie in the industrial agricultural model, and its heavy fossil-fuel dependence. As a recent Chatham House report claims, producing one tonne of maize in the US requires 160 litres of oil, compared with just 4.8 litres in Mexico where farmers rely on more traditional methods. In 2005, expenditure on energy accounted for as much as 16% of total US agricultural production costs, one-third for fuel, including electricity, and two-thirds indirectly for the production of fertilizer and chemicals." The latter is, of course, responsible for the crisis of "peak soil," as inorganic fertilizers and monocropping (originating in the colonial plantation system) have intensified the "metabolic rift," interrupting the natural carbon and nutrient cycles and degrading soils. This means that while there is still arable land available globally, soils in use exhibit forms of exhaustion and erosion that suggest the world faces steadily declining yields under the present regime of dependency on petroleum-based fertilizers and pesticides.
The twin crises of peak oil and peak soil legitimize a global agrofuels project, to supplement (mainly) Northern fuel needs with cheaper (mainly Southern) forms of ethanol and biodiesel, but without substantially affecting the total greenhouse gas emissions. Ironically, industrial agriculture's dependence on fossil fuels has contributed to the search for alternative, renewable sources of energy, such as biofuels. But biofuels compound the problem, not only by barely offsetting emissions, but also by putting pressure on cropland. A corporate bloc that a decade ago claimed to "feed the world" with new agricultural biotechnologies now follows an agro-industrial path dependence in substituting fuel crops for food crops. Popular perceptions of the underlying cause of food inflation lay considerable blame on the biofuels revolution, with one author noting that the unsustainable agriculture and agrofuels policies of the US and the European Union have led to "huge food trade deficits of both countries," being "at the heart of the current explosion of agricultural commodity prices." Here, the argument is that food stocks in the global North were run down by ballooning food trade deficits, in addition to highly subsidized agrofuel policies, especially for US corn-ethanol, identified by international institutions as the chief culprit in the explosion of world food prices:
US corn-ethanol explains one-third of the rise in the world corn price according to the FAO, and 70% according to the IMF. The World Bank estimates that the 'US' policy is responsible for 65% of the surge in agricultural prices, and for the former USDA Chief economist, it explains 60% of the price rise. The World Bank states that: "Prices for those crops used as bio-fuels have risen more rapidly than other food prices in the past two years, with grain prices going up by 144%, oilseeds by 157% and other food prices only up by 11%." The US, as a result of its corn-ethanol production, is clearly responsible for the explosion of agricultural prices. The second largest world corn exporter, Brazil, produces ethanol from sugarcane and hence has not influenced world market prices for corn. In addition to the US corn ethanol program, the US biodiesel [soybeans] also contributes to soaring prices.
The market fetishism evident in industrial agriculture's transformation of almost all agricultural products into undifferentiated commodities (certainly with substantial subsidies for energy crops as well as other types of subsidies) compounds the legacy of agricultural liberalization. This legacy has produced a regime that has steadily dismantled protections for domestic agriculture in global South, while allowing the global North to continue to subsidize its corporate farm sectors. Additional subsidies for agrofuels have reverberated throughout the global food market in the form of price inflation. At the same time, liberalization and structural adjustment policies have deepened the crisis and created shortage of some commodities from the global South, now including agrofuel exports encouraged by the European Emissions Trading Scheme. Whether in the form of calories or energy crops, the global South continues to fuel corn-style consumption patterns. At the same time, many countries such as Mexico and Jamaica have greatly lessened their production of basic foods for consumption.
One significant corrective to this neocolonial pattern is the intervention by the food sovereignty movement, which emerged in the 1990s to challenge the privatization of food security, arguing that "hunger is not a problem of means, but of rights." In other words, states as well as communities, especially of producers, should have the right to develop their policy instruments, including protections, so that inhabitants can be provisioned adequately and nutritionally with the food they need, and in culturally and ecologically appropriate ways. This means an end or drastic curtailment of food systems—and the power of corporations controlling them—oriented to production for those (anywhere) with the purchasing power to command the food they want. We stand on the brink of an era in which the industrial food system faces increasing problems and decreased support, and in which the food sovereignty vision has an opportunity to be progressively realized. The food crisis of 2007-08 serves as a reminder of the long-standing patterns of inequality in the global food regime, and of its social and ecological unsustainability.
Climate Crisis and the Question of Sustainable Agriculture
The Intergovernmental Panel on Climate Change (IPCC) 2007 Nobel Peace Prize wining report documented an unprecedented convergence of findings from hundreds of studies of the earth’s changing climate, including tens of thousands of distinct data sets in numerous independent fields of inquiry. Not only did the report demonstrate that the evidence for the role of human activity in altering the earth’s climate is “unequivocal”, but it also confirmed that the ecological and human consequences of those alternations are already being felt in literally thousands of different ways. Perhaps most disturbing are the near and medium-term consequences for global agriculture. People living in the tropics and sub-tropics, where most of the world’s remaining subsistence farmers are located, are already experiencing a world of increasingly uncertain rainfall, persistent droughts, coastal flooding, loss of wetlands and fisheries, and increasingly scarce fresh water supplies. The IPCC predicts that severally increased flooding will most immediately affect residents of the major river deltas of Asia and Africa. Furthermore, one-sixth of the world's population, including a large number in South East Asia, that depends on water from glacial run-off, may see a brief increase in the size and volume of their freshwater lakes as glaciers melt, but eventually the loss of the glaciers will become a life-threatening reality for those people as well.
The data points strongly towards a worldwide decrease in crop productivity if global temperatures rise more than 50F (2.70C) – well within the range of current predictions - although crop yields from rain-fed agriculture could be reduced by half as soon as 2020. In Africa alone, between 75 million and 250 million people will be exposed to increased water stress. Prolonged and severe mega droughts are projected to occur in places as diverse as West Africa, North China and California, while a ten-year drought is occurring in Australia with drastic effects on its agriculture. In addition, the rise in temperature may already be adversely affecting some crops - with higher temperatures increasing night time respiration by rice (and perhaps other crops), resulting in the loss of metabolic energy produced by photosynthesis during the previous day. The IPCC report affirms that those populations with “high exposure, high sensitivity and/or low adaptive capacity” will bear the greatest burdens; those who contribute the least to the problem of global warming will continue of face the severest consequences.
And finally, as the sea level rises in response to melting ice sheets in Iceland and Antartica, coastal croplands and homes, villages of literally millions of peoples will be inundated. And even before this happens, coastal aquifers needed for drinking water and irrigation will be contaminated by saltwater intrusion.
Numerous studies in the past several years have demonstrated that high yields of crops can be grown by using ecologically sound methods, including but not limited to, organic farming. Instead of relying on methods of industrial agriculture that use large quantities of energy derived from fossil fuels - for example, to produce fertilizers and pesticides and for traction - agroecological approaches rely more on building healthy soils and greater diversity in crops and animals while relying on few inputs from off the farm.
Most climate change models predict that damages will disproportionally affect the regions populated by small farmers, particularly rain-fed agriculturalists in the third world. However, existing models at best provide a broad-brush approximation of expected effects and hide the enormous variability in internal adoption strategies. Many rural communities and traditional farming households, despite weather fluctuations, seem able to cope with climate extremes. In fact, many farmers cope up with and even prepare for climate change, minimizing crop failure through increased use of drought tolerant local varieties, water harvesting, extensive planting, mixed cropping, agroforestry, wild plant gathering and series of other traditional farming system techniques.
In traditional agroecosystems, the prevalence of complex and diversified cropping system is of key importance to the stability of peasant farming systems, allowing crops to reach acceptable productivity levels in the midst of environmentally stressful conditions. In general, traditional agroecosystems are less vulnerable to catastrophic loss because they grow a wide variety of crops to reach acceptable productivity levels in the midst of environmentally stressful conditions in various spatial and temporal arrangements. Researchers have found that polycultures of sorghum/peanut and millet/peanut exhibited greater yield stability and less productivity declines during a drought than in the case of monocultures.
One way of expressing such experimental results is in terms of “over-yielding - occurring” when two or more crops grown together yield more than when grown alone.
One hectare of a mixture of sorghum and peanuts yield more than half hectare of only sorghum plus a half hectare of only peanuts. All the intercrops over-yielded consistently at fine level of moisture availability, ranging from 297 to 584 mm of water applied over the cropping season. Quite interestingly, the rate of over-yielding actually increased with water stress, such that the relative differences in productivity between monocultures and polycultures become more accentuated as stress increased. Many farmers grow crops in agroforestry designs, and tree shade covers protect crop plants against extremes in microclimate and soil moisture fluctuation. Farmers influence microclimate by retaining and planting trees, which reduce temperature, wind velocity, evaporation, and direct exposure to sunlight and intercept hail and rain. In coffee agrosystems in Chiapas (Mexico), temperature, humidity and solar radiation fluctuations were found to increase significantly as shade cover decreased, indicating that shade cover was directly related to the mitigation of variability in microclimate and soil moisture for the coffee crop.
Despite the evidence of resiliency and productivity advantage of small-scale and traditional farming systems, many scientists, development specialists, and organizations argue that the performance of subsistence agriculture is unsatisfactory, and that agrochemical and transgenic intensification of production is essential for the transition from subsistence to commercial production. Although such intensification approaches have met with much failure, research indicates that the traditional crop and animal combination can often be adapted to increase productivity. This is the case when ecological principles are used in the redesign of small farms, enhancing the habitat so that it promotes healthy plant growth, stresses pests, and encourages beneficial organisms while using labour and local resources more efficiently.
Several reviews have amply documented that small farmers can produce much of the urban communities in the midst of climate change and burgeoning energy costs. (See N. Uphoff and M.A. Altieri - Alternatives to Conventional Modern Agriculture for Meeting World Food Needs in the Next Century – Ithaca: Cornell International Institute for Food, Agriculture and Development, 1999.)
The evidence is conclusive: new agroecological approaches and technologies spearheaded by farmers and some local governments around the world are already making sufficient contribution to food security at the household, national and regional level. A variety of agroecological and participatory approaches in many countries show very positive outcomes even under adverse environmental conditions. Potentials include: raising cereal yields from 50 to 200 percent, increasing stability of production through diversification, improving diets and income, and contributing to national food security and conservation of the natural resource base and biodiversity. This evidence has been reinforced by a recent report of the United Nations Conference on Trade and Development, stating that organic agriculture could boost African food security. Based on an analysis of 114 cases in Africa, the report revealed that a conversion of farms to organic or near-organic production methods increased agricultural productivity by 116 percent. Moreover, a shift towards organic production system has enduring impact, as it builds up levels of natural, human, social, financial and physical capital in farming communities. Traditional and local knowledge systems enhance agricultural and soil quality and biodiversity as well as nutrients, pest and water management and the capacity to respond to environmental stresses such as climate.
Whether the potential and spread of agroecological innovations is realized or not depends on several factors, such as major changes in policies, institutions and research and development approaches. Proposed agroecological strategies need to target the poor deliberately, and not only aim at increasing production and conserving natural resources. But they must also create employment and provide access to local inputs and local markets. Any serious attempt at developing sustainable agricultural technologies must bring to bear local knowledge and skills on the research process. The agroecological process requires participation and enhancement of the farmers’ ecological literacy about their farms and resources laying the foundation for empowerment and continuous innovations by rural communities.
Equitable market opportunities must also be developed, emphasizing local commercialization and distribution schemes, fair prices, and other mechanisms that link farmers more directly and with greater solidarity to the rest of the population. The ultimate challenge is to increase investment and research in agroecology and scale-up projects that have already proven successful to thousands of farmers. This will generate a meaningful impact on the income, food security, and environmental well-being of all populations, especially small farmers who have been adversely impacted by conventional modern agricultural policy, technology, and the penetration of multinational agribusiness deep into the third world. (For details see P.M. Rosset, R. Patel and M. Courville - Promised Land - Oakland: Food First Books, 2006; P. Richards - Indigenous Agricultural Revolution – Boulder: Westview Press 1985; and E. Holt-Gimenez - Campesino a Campesino – Oakland: Food First Books, 2006).
Transcending Capitalist Agriculture and the Grip of Imperial Agribusiness – Towards Sustainable Agriculture
Global imperialist forces are challenging the ability of third world countries to feed themselves. A number of countries have organized their economies around a competitive export oriented agricultural sector, based mainly on monocultures. It may be argued that agricultural exports of crops such as soybeans from Brazil make significant contribution to the national economies by bringing in hard currency that can be used to purchase other goods from abroad. However, this type of industrial agriculture also brings a variety of economic, environmental and social problems, including negative impacts on public health, ecosystem integrity, food quality, and in many cases, disruption of traditional rural livelihoods, while accelerating indebtedness among farmers.
The growing push towards industrial agriculture and globalization - with an emphasis on export crops, lately transgenic crops, and with rapid expansion of biofuel crops (sugarcane, maize, soybean, oil palm, eucalyptus, etc.) is increasingly reshaping the world’s agriculture and food supply, with potentially severe economic, social, and ecological impacts and risks. Such reshaping is occurring in the midst of a changing climate expected to have large and far reaching effects on crop productivity predominantly in tropical zones of the developing world. Hazards include increased flooding in low-lying areas, greater frequency and severity of droughts in semi-arid areas, and excessive heat conditions, all of which can limit agricultural productivity.
Globally the Green Revolution, while enhancing crop production, proved to be unsustainable as it damaged the environment, caused dramatic loss of biodiversity and associated traditional knowledge, favored wealthier farmers, and left many poor farmers deeper in debt. The countries of the third world have had disastrous consequences due to the dependence on fertilizers and high yielding seeds by increasing their dependency on foreign inputs and patent-protected plant varieties which poor farmers cannot afford (for example, fertilizer costs went up approximately 270% in the year 2007-08 and the growing phenomenon of dependency on foreign aid).
For centuries, the agricultures of developing countries were built upon the local resources of land, water, etc., as well as local varieties and indigenous knowledge. This has nurtured biologically and genetically diverse small-holder farms with a robustness and built-in resilience that has helped them to adjust to rapidly changing climates, pests and diseases. The persistence of millions of agricultural hectares under ancient, traditional management in the form of raised fields, terraces, polycultures with a number of crops growing in the same field, agroforestry systems, etc., indicate successful indigenous agricultural strategy and constitutes a tribute to the creativity of traditional farmers. These microcosms of traditional agriculture offer promising models for other areas because they promote biodiversity, thrive without agrochemicals, and sustain year-round yields. In the new models of agriculture, humanity will need to include forms of farming that are more ecological, biodiverse, local, sustainable and socially just. They will be rooted in the ecological rationale of traditional small-scale agriculture, representing long-established examples of successful community-based local agriculture. Such systems have fed much of the world for centuries and continue to feed people in many parts of the world. Thousands of small traditional farms still exist in most rural areas of the third world. The productivity and sustainability of such agroecosystems can be optimized with sustainable agroecological approaches and thus they can form the basis of food sovereignty, defined as the right of each nation or region to maintain and develop their capacity to produce basic food crops with the corresponding productive and cultural diversity. The emerging concept of food sovereignty emphasizes farmers’ access to land, seeds, and water, while focusing on local autonomy, local markets, local production, consumption cycles, energy and technological sovereignty, and farmer-to-farmer network.
The large influence of transnational corporations in promoting sales of agrochemicals cannot be ignored as a barrier to sustainable farming. Most MNCs have taken advantage of existing policies that promote the enhanced participation of the private sector in technology development and delivery, putting themselves in a powerful position to scale-up promotion and marketing of pesticides. Given such a scenario, it is clear that the future of agriculture will be determined by power relations, and there is no reason why farmers and the public in general, if sufficiently empowered, could not influence the direction of agriculture towards the goals of sustainability.
The nature of modern agricultural structure and contemporary policies have strongly influenced the context of agricultural technology and production, which in turn has led to numerous environmental problems. Given the realities of capitalism, resource conserving practices are discouraged and in many cases such practices are not profitable for farmers. As the large-scale landscape homogenization with transgenic crops proceeds, environmental impacts will probably be substantial and it is expected that such massive deployment will exacerbate the ecological problems already associated with monoculture agriculture. Unquestioned expansion of this technology into developing countries is also undesirable. There is strength in the agricultural diversity of many of these countries, and it should not be inhibited or reduced by extensive monoculture, especially when consequences of doing so result in serious social and environmental problems.
The expectation that a set of policy changes could bring a renaissance of diversified or small-scale farms may be unrealistic, because it negates the existence of economies of scale in agriculture and ignores the political power of agribusiness corporations and current trends set forth by globalization. A more radical transformation of agriculture is needed, one guided by the notion that ecological change in agriculture cannot be promoted without comparable changes in the social, political, cultural, and economic arenas that also constrain agriculture. Change towards a more socially just, economically viable, and environmentally sound agriculture will be the result of social movements in the rural sector in alliance with urban working classes.
The development of sustainable agriculture will require significant structural changes, in addition to technological innovation, farmer-to-farmer networks, and farmer-to-consumer solidarity. The required change is impossible without social movements that create political will among decision-makers to dismantle and transform the institutions and regulations that presently hold back sustainable agricultural development.