Food and Politics

Big Brothers and Global Food System:

The Second World War brought a transformation in innumerable things and people learned how to build very significant factories that produced prodigious quantities of product at economies of scale never before dreamed possible. As the darkness of war closed in, luxury goods were shunted aside for the production of munitions, but the theories that Henry Ford brought to the table in automobile production were reinforced during that period in spades. Trade expanded exponentially as allied nations supplied raw materials and finished goods across national borders to help those that were in solidarity with their cause. The world was shocked out of a global depression and bread lines were replaced by assembly lines.

The United States for the most part was not susceptible from attack by its enemies and thus was able to construct a production machine unmatched in the history of civilization. Within a reasonably short time after America entered the war, it became evident that between Germany’s over-reaching, America’s production capacity and Britain and Russia’s unbreakable resolve, it would be only a matter of time before preparation must begin for the life after war.

The post war planners were predominantly concerned with one primary consideration, that the destruction that was being wrought on both sides should never be repeated, thus the resurrection of Wilson’s dream, the League of Nations was resuscitated in the form of the United Nations.

World leaders met a place called Breton Woods and fashioned what they believed would be a new and better world. The United States agreed that they would become the "Sugar Daddy" for a series of novel international economic innovations. Thus, with Uncle Sam footing a good portion of the bill just as they had with the UN, the World Bank was born which was designed to originate and fund infrastructure projects for the betterment of people all over the globe. At the same time "the International Monetary Fund" a lender of last resort, that would come to the aid of economically failing nations was created and almost in concert the grandest scheme of all, the Marshall Plan was initiated to aid in the rebuilding of Europe.

To some, the act represented penance for America’s forsaking the League of Nations and indirectly creating the environment for World War II. Others felt that United States being the only major nation that came out of the massive conflict virtually unscathed, alone, was the solitary entity left that could make order out of chaos, give food to the starving and recreate the European Industry that it had helped to decimate. An act of charity? No; in this lifetime if wasn't, America had millions of servicemen returning from that conflict that were entitled to jobs. The factories were bursting with capacity. The world outside the U.S. was clamoring for the goods that only the massive manufacturing potential of the country could provide and yet, there was no money to purchase America’s goods.

In order to avoid the breadlines and soup kitchens that not finding employment for the twelve million returning servicemen and women would create, the powers that be rightly determined to artificially create a market for a product and jobs for our citizens by restoring Europe to its previous vitality with American food, machinery and money. The idea worked to perfection. The IMF lent nations money to get back on their feet, the World Bank built roads, dams and factories to employee a population with no homes to go to, know food to eat and no jobs to earn a living at. The Marshal Plan gave the nations food, machinery and hope.

US factories could now turn to the production of both luxuries and necessities, for the restocking a civilization that had not had either the money to buy nor the production to create goods since the 1920’s.

And US agriculture was ready to feed war torn, devastated Europe. However, Europe became almost self sufficient in food by 1950 and US lost a huge market for its agricultural surplus. In 1951, India made an emergency request to the United States for grain to stave off famine precipitated by monsoon failure. Since the end of World War II, India had embargoed exports of monazite sands, which contain thorium, a material necessary for the production nuclear weapon. The US government seized the threat of famine as an opportunity to have the embargo lifted. The result was India Emergency Food Act of 1951, the direct predecessor of Public Law 480 (PL 480). The PL 480 latter called “ Food for Peace) passed in 1954 to address a crisis that was much closer to home than the Indian famine: the great American grain surplus.

Since 1950, the huge amount of food shipped abroad often presented as a clear expression of the generosity of the American people. Undoubtedly, the humanitarian intentions of ordinary Americans supporting the food aid are genuine. But the actual motives behind the program are something else. During different periods of time, the US food aid served many purposes for diverse interest groups, but has its primary purpose been to feed the hungry. In fact, the humanitarian intent was not even written into the fe3dd aid law until 1966. From its inception in 1951, the food aid program has been an extension of US foreign policy, farm interests and corporate interests, which in most cases have been mutually supportive. Public records unequivocally show that U.S. policy makers have been viewed the food aid program as a means to:

  • Rid US markets of price-depressing domestic surpluses.
  • Open new markets for commercial sales of US farm products and thereby offset trade deficits.
  • Extend the reach of US agri-business corporations into food economies abroad.
  • Provide support for US military interventions in the third world.
  • Pressure foreign governments to accommodate US economic and military interests.

and

  • To stop socialism escalating throughout the newly liberated countries.

Big Brothers, Multinationals and Developing Countries

Free marketers claim that the liberalization of agricultural trade under the WTO Agreement on Agriculture seeks to reduce tariffs and other trade barriers by the year 2000, creating a `level playing-field' and opening up markets to `free and fair competition.

The reality is that the WTO is fostering greater inequality and increasing the monopolization and centralization of power in the hands of a few TNCs which dominant the agri-food industry. While the developing countries in the South are forced to abolish tariffs and other agricultural trade barriers by the year 2000, the major industrialized countries such as the US, the EU and Japan will maintain significantly higher tariff levels even after these reductions.

The US, EU and Japan maintain high tariff levels on a wide range of agric-foods. Here are some examples:

US

Sugar 244%
Peanuts 168%
Milk 83 %

EU

Beef 388%
Wheat 352%
Barley 361%

Japan

Wheat 388%
Wheat products 352%
Barley products 361%

So the 36 per cent tariff reductions required by the WTO will still leave producers in these countries with high tariffs.

In contrast, countries like India must reduce import tariffs, and a range of non-tariff import restrictions, which were not converted to equivalent tariffs during GATT negotiations, must be eliminated completely, leaving totally free access to agricultural imports by 2000.

Second, competition is far from `free and fair.' The WTO allows certain kinds of subsidies to continue, particularly export subsidies through export credits and direct income provision to farmers. These subsidies are common in the major industrialized countries, but developing countries tend to rely on less expensive measures such as tariffs. WTO obligations require the abolition of tariffs, but permit export subsidies like the US government's export credit scheme and direct income transfers under its Export Enhancement Program (EEP). For example, through the WTO the US recently secured the opening up of the poultry, pork and beef market in Taiwan, leading to protests by thousands of farmers in Taiwan, who also face the opening up of the rice and meat market under WTO tariff reductions. A similar victory for `free trade' under the WTO was achieved in South Korea. Yet US poultry, pork and beef exports to Taiwan and Korea receive more than US$1 billion in export subsidies under the EEP.

The continued use of export subsidies and other forms of domestic support for big agribusiness in the US and the EU allows massive dumping of under-priced agri-food products in developing countries. At the same time access to markets in the South is secured through the Structural Adjustment Programs (SAPs) imposed by the IMF and World Bank, which have forced small farmers and peasants away from food self-sufficiency and sustainable agriculture.

More than anything else this reveals the logic of agricultural restructuring under the WTO. The systematic destruction of local capacity for food self-sufficiency and sustainable agriculture through the consolidation of the power of agri-food TNCs. The conversion of land use to non-traditional agri-exports creates a paradoxical situation of increased dependency on TNCs for access to markets and distribution, and inputs - including seed - while importing heavily subsidized agricultural products that are the same as the traditional crops originally displaced.

For example, in the Philippines the government's promotion of cash crop exports to replace rice and corn involved the conversion of 2.5 million hectares of land used to grow rice and 2.5 million hectares of corn to livestock production. This was linked to the US Department of Agriculture's support for Cargill's plan to become a major exporter of corn to the Philippines, making the Philippines a "regular corn importer" by the year 2000.

(Cargill's former senior vice president drafted the US proposal on agriculture in the Uruguay Round of GATT, which set in motion these policies.) The export subsidies paid to a US corn farmer was 100 times the average income of a corn farmer in Mindanao. It is because of this heavy subsidization that the OECD predicted "US corn exports would undercut Philippines corn prices by 20 per cent by the year 2000."

Having converted to livestock production, this sector is now being `opened up.' Heavily subsidized US pork and poultry exporters have gained greater access to the Philippines, reducing the share of Filipino producers of pork from 82 per dent to 45 per cent of the market and poultry from 94 per cent to 49 per cent.

The recent WTO ruling in favor of the US against import controls on pork and poultry in the Philippines will open this market up even further.

Of course this renders the logic of agricultural restructuring proposed by governments meaningless. It is not a transition from traditional to industrialized agriculture and cash crops. Rather, it is a series of unpredictable, dramatic and often contradictory transformations forced from above, determined by the strategies of TNCs involved in destructive competition. Ultimately, only the logic of capitalist agribusiness profits will prevail, and instability and uncertainty for farmers and food-food workers will continue to rise.

Indigenous peasant farmers' organizations in Latin America are saying 'No' to the 'Free Trade Area of the Americas' - US President George W Bush's star trade project - based on their past experiences with free trade and bilateral plans with the US.

The Mexican organizations presented their experience after eight years of the North American Free Trade Agreement. Since 1997 the country has imported more than 50 million tones of basic grain. In 2001 Mexico imported more than six million tones of maize, a third of which was genetically modified. Mexico’s food dependence on foreign countries has grown to 95% for oil-rich seeds, 50% for rice, 40% for meat, 25% for maize and 20% for milk.

Even the businesses of the National Agricultural Council acknowledge the dire results ofthe Agreement in terms of grain, oil-seed and meat producers. In the past three years, the price of basic grains has fallen by 50% and that of inputs for agriculture has increased by 40-50%. The result is greater impoverishment in the rural areas for two-thirds of the 25 million people dependent on agriculture, and migration of 500,000 people per year.

One would think that in Mercosur [the Southern Common Market], due to its distance from the US, things would be better. That is not the case. The majority of farms in the fertile and well-irrigated Uruguayan pampas are not viable, and the same is true for 80% of products from the Mercosur countries. Despite having stocks of 50 million sheep and 10 million cattle, Uruguay now imports more than half of its food. Brazilian multinationals are reaping the benefits.

In Argentina, the old 'grain farmer of the world', there was a model that worked: agriculture and cattle farming were integrated, without the need for aggressive agrochemicals that damage the fertile soil of the humid pampa. In all areas there were small local businesses that added value to agricultural products. But since the 1980s, the multinationals have promoted soya cultivation, until they produced up to 10 million tones per year. An agrochemical package was introduced, with a high level of glyphosate, which contaminates soil, currents, water tables, cattle and people. The integrated model was broken, agribusinesses collapsed. It was the end of Argentina's food sovereignty. Some 114,000 farms were abandoned covering an area of 10 million hectares. This food-agro crisis is a very important factor of the economic crisis that erupted last December.

The Bolivian campesinos spoke of their experience with Plan Dignidad, negotiated between the US and Andean countries. Tired of cocaine consumption, the North Americans proposed replacing coca cultivation - a traditional crop - with others such as mango, coffee and yucca, in order to combat drugs trafficking. It failed completely: the alternative crops were not profitable. This resulted in governmental corruption in the use of subsidies and hunger for farmers.

Plan Colombia, which was imposed by [former US President] Clinton's government on this country, has led to the miniaturization of the country, the establishment of a North American base in Manta, the devastation of crops and of the vegetable mass of many regions, through the use of defoliating chemicals under the pretext of combating coca. Greater impoverishment in the Colombian countryside followed.

With such precedents, no one wants the FTAA: It is not the way to a dignified life for campesino families, or for food sovereignty, political independence, or the conservation of the environment.

It is necessary to promote another agricultural model based on the protection of the contributions of campesino and family farmers. From one side of the Andes to the other people are saying, 'We don't want the FTAA; another type of agriculture is possible.'

Multinationals and Food Security

Everyday 25,000 people die directly from starvation. Many thousands more die from diseases because their bodies are weakened by malnutrition. The multinationals and bankers wreck the economies of countries in Africa and Asia where those people starve. But there are firms that are also directly responsible for who lives and who dies, who eats and who wastes away.

As in every sphere, a handful of corporations dominate the world food market. What should be a basic human right has been turned into a source of fabulous profit for a few. The blizzard of brand names hides the truth about who controls food.

Few people know that one of the world's biggest food firms is a tobacco company (Philip Morris) that makes vast profits from spreading its killer drug across the globe.

Just two companies (Cargill and Archer Daniels Midland) control three quarters of the world's grain trade. Four huge multinational corporations (Philip Morris, Nestlé, Procter & Gamble, and Sara Lee) control 70 percent of the world's coffee market. Only three companies (Cargill, ADM and Philip Morris) account for over 80 percent of the world cocoa trade.

Five agribusinesses (Astra-Zeneca, DuPont, Monsanto, Novartis and Aventis) account for nearly two thirds of the global pesticide market, almost one quarter of the global seed market and virtually all of the genetically modified seed. These are the top ten firms that preside over a world where 850 million are malnourished and others are obese through eating unhealthy food.

CARGILL and ARCHER DANIELS MIDLAND (ADM) control the world's grain trade and much more. They show exactly how food multinationals operate. They, not our governments, decide the price of staple foods. It is these corporations that decide who will live and who will starve. There are fortunes to be made from starvation.

In 1996 drought and disease hit the US wheat crop hard. Cargill (and Continental Grain, which Cargill has since bought) bought wheat at $60 to $100 a tone from India and sold it at $230 to $240 a tone on the international market. The export created shortages within India and several million tones then had to be re-imported by the Indian government at the world market price. Both Cargill and ADM are linked to the US state. They get huge subsidies and can rely on the US military to protect their interests across the globe. At the recent World Food Summit in Rome the US delegation stood alone among 182 nations in opposing the statement that food was a right. Cargill has had its man in the White House in every generation. In the 1970s William Pearce left Cargill and became President Nixon's deputy special representative for trade negotiations. He helped draft key documents about farming, food and international trade. He then rejoined Cargill. In the 1980s Daniel Astute moved from being in charge of feed grains for Cargill to become under-secretary of agriculture for international affairs. Former Cargill chairman Ernest Mice was on Bill Clinton's export council. He was one of three top businessmen who accompanied Clinton on his tour of Africa.