Professional Documents
Culture Documents
The Great Robbery
The Great Robbery
How corporations control food, grab land and destroy the climate.
How corporations control food, grab land and destroy the climate.
GRAIN c/ Girona 25, principal 08010 Barcelona www.grain.org Art & Layout www.mareavacia.com ISBN
GRAIN is a small international non-profit organisation that works to support small farmers and social movements in their struggles for community-controlled and biodiversity-based food systems. Our support takes the form of independent research and analysis, constant networking at local, regional and international levels, and active cooperation and alliance-building. We believe that the current industrial food system, dominated by corporate interests, is leading us further down the path of more hunger, environmental destruction, climate change and eviction of rural and indigenous communities. The alternative exists and is being fought for. Food sovereignty implies a fundamental overhaul of the global food system, putting peasant farming, ecological agriculture and local markets centre stage. The great food robbery is a collection of materials produced by GRAIN during the past few years. It zooms in on how agribusiness is driving todays global food crisis, how the industrial food system is largely responsible for the climate crisis, and how a whole new phenomenon of landgrabbing is being fuelled by a financial industry wanting to make money off the backs of the poor. It also explains how the struggle for food sovereignty is challenging these trends and actors.
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Contents
PREFACE INTRODUCTiON Time to recall the land grabbers Twenty years of fighting for seeds and food sovereignty AGRiBUSiNESS Global agribusiness: two decades of plunder The great milk robbery Food safety for whom? Big Meat is growing in the South Unravelling the miracle of Malawis green revolution Laws for killing off independent agriculture FOOD AND THE CLiMATE CRiSiS Food and climate change: the forgotten link The international food system and the climate crisis Earth matters. Tackling the climate crisis from the ground up LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE The new farm owners Turning African farmland over to big business Pension funds: key players in the global farmland grab A land grabbers instruction manual Saudi investors poised to take control of rice production in Senegal and Mali? Its time to outlaw land grabbing 7 9 12 23 31 50 68 79 91
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PREFACE
PREFACE
This book looks at the forces behind these developments. Much of it is about corporations and the strategies and tactics they use for organising and controlling the production and distribution of food. We focus on corporations because they are the leading actors driving the expansion of the industrial food system and we are concerned about how their actions impact on people and the planet. As this book should make clear, when these corporations expand, they destroy other food systems: those based on local markets, local cultures, biodiversity and, most of all, people. The corporate food system puts the profits of the few before the needs of people. This is why it leads to massive food safety incidents, environmental destruction, labour exploitation and the decimation of rural communities. All of these impacts are well-documented in this book. Our goal is to work with others to take the food system back from corporations and put it in the hands of people. We hope this book will help readers to better understand the ways in which corporations seek to increase their control over the food system so that this control can be more effectively challenged. We hope it will inspire people to take action and we hope that it will provide readers with some information and analysis that they can use directly in their local work. All of the chapters in this book were published as separate articles by GRAIN, most of them in the last two years. They can all be found on our website: www.grain.org. The main purpose of this book is to bring these articles under one hard publication, which can be used as a reference, be distributed where access to the internet is limited, and be shared from hand to hand. Copies are available in English, Spanish and French. GRAIN would like to thank the many partners from all over the world who over the years have contributed to the the thinking, the research, and the writing of the different chapters in this book. Without their input, these materials never would have seen the light. Jim Elick and Amadine Semat proofread the final texts in English and in French, respectively. Odile Girard-Blakoe, Lucy Moffatt, Maria Teresa Montecinos and Jean Luc Thierry provided translations. Dexter Perrera and Ral Fernndez did a tremendous job with the design and desktop publishing. And Camila Oda Montecinos helped us in securing access to the images that we used in this book. Many thanks to all of them! Finally we would like to acknowledge and thank the organisations and agencies that have supported our work financially over the past years: Action Solidarit Tiers-Monde (Luxembourg); Brot fr Alle (Switzerland); Brot fr die Welt (Germany); Christensen Fund (US); Development and Peace (Canada); Dutch government (Netherlands); EED (Germany); European Union; Inter Pares (Canada); Isvara Foundation (UK); Misereor (Germany); New Field Foundation (US); Oxfam Novib (Netherlands); SwedBio (Sweden); Swissaid (Switzerland). Please get in touch with us if you want to share your feedback on this book or if you have ideas for its further distribution. GRAIN, December 2011 www.grain.org
he global food system is in a profound crisis. More than a billion people on the planet suffer from hunger, and their numbers are rising faster than global population. Yet more than enough food is being produced to feed everybody in the world. At the same time we are heading deeper into a global climate crisis, for which the industrial food system is to a large extent to blame. And we are witnessing a brutal new wave of landgrabbing in which corporations are taking control over huge areas of land and water systems in poor countries, displacing rural communities in the process.
INTRODUCTION
Peasants in Argentina protest the assassination of Cristian Ferreyra, November 2011. Photo: MOCASE Via Campesina.
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hree weeks ago, on the 16th of November, Cristian Ferreyra was shot dead by two masked men in front of his house and his family. Cristian lived in San Antonio, a village north of Santiago del Estero in Argentina. He was part of an indigenous community and a member of one of our partners, the indigenous peasant organisation MOCASE Via Campesina. His crime? To refuse to leave his homeland in order to make way for a massive soybean plantation, one of so many that have been encroaching on rural communities throughout Argentina in the last decade. So the plantation owners had him assassinated. Cristian was only 25 years old. Six weeks ago, on the 26th of October, one farmer died and 21 others were injured, ten of them critically, in the village of Fanaye in northern Senegal. They, too, were trying to stop the takeover of their lands. Government officials had handed over 20,000 hectares surrounding their area to an Italian businessman who wanted to grow sweet potatoes and sunflowers to produce biofuels for European cars. The project would displace whole villages, destroy grazing areas for cattle and desecrate the local cemeteries and mosques. Fanaye is not an isolated case. Over the past few years, nearly half a million hectares in Senegal have been
signed away to foreign agribusiness companies. Gambela is a region in Ethiopia that borders South Sudan. It is home to one of the most extreme cases of landgrabbing in the world. Over half of the arable land in the region has been signed away to Indian, Saudi and other investors who are now busy moving the tractors in and the people out. Ethiopia is in the midst of a severe food crisis and is heavily dependent on food aid to feed its people. Yet, the government has already signed away about 10% of the countrys entire agricultural area to foreign investors to produce commodities for the international market. Earlier this year, we were involved in the production of a video on the situation of the indigenous Anuak peoples in Gambela, who now face losing their farms, their villages and their ancestral territories. We wanted to help raise their voices to the international level, but in the video we had to distort their voices and hide their faces to protect them from backlash by the Ethiopian government. One could continue with many more examples of how people who just want to grow food and make a living from the land are being expelled, criminalised, and sometimes killed, to make room for the production of commodities and someone elses wealth. Today,
Farmers cool and feed the world. Via Campesina, the international
peasant movement, has called today, the 5th of December, the International food sovereignty day to cool down the earth. Right now, Via Campesina members and allies are out in the streets of Durban, South Africa, protesting the negotiations over false solutions to climate change, and insisting that small farmers can not only cool the world but can feed it too. They are right. The basic idea of food sovereignty is that the aspirations and needs of those who produce, distribute and consume food, rather than the demands of transnational corporations, should be at the heart of our food systems. It prioritises local food production, based on agroecology and family farming, and local markets. It keeps seeds and biodiversity
lands to all affected rural communities. Stopping land grabbing is not just about what is legal. It is about what is just. Here in Sweden, people can start by taking on companies, like Black Earth Farming, that have bought or leased farmland overseas. They are not allowed to do this here in Sweden and should not be permitted to do so abroad. Campaigns can be launched to pressure Swedfund, which is using taxpayers money to finance the land grabber Addax in Sierra Leone. The Swedish pension fund AP2 is also going into global farmland acquisitions as a new strategy, supposedly to protect the retirement savings of working Swedes. Swedish development aid projects ought to be scrutinised, as there are already indications that some are promoting land grabbing activities in Mozambique and elsewhere. Such actions and campaigns are already brewing in other parts of Europe and in the US. These should be strengthened and supported, in order to stop land grabbing at the source. Rural communities have fed the world for millennia. Today, the massive expansion of large scale industrial farming is destroying our capacity to move on. At GRAIN, together with peasant organisations and others social movements, we will continue exposing what is going wrong, while fighting for an equitable, just and sustainable food system. This award gives this struggle a tremendous boost. We see it not only as an acknowledgement of our work but also as a powerful recognition of the contributions of countless people and organisations engaged in the fight for genuine community-based food sovereignty. Together, we will continue this struggle. We have no other option if we are to survive on this planet with some dignity. Thank you very much for this award, and for your attention.
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hen we set up GRAIN back in 1990, we were keen to influence the international fora that were drawing up agreements around seeds and biodiversity. We often found ourselves at the FAO in Rome, where governments were negotiating an agreement on the rules of the game for conserving and exchanging seeds and benefiting from seed diversity. Those were also the days when the Convention on Biological Diversity (CBD) was taking shape, which was eventually signed into existence in 1992 at the Rio Earth Summit. Just before that, we were deeply involved in the campaign against the patenting of life forms, and organised a major conference at the European parliament to denounce the plans of the European Commission to create a piece of legislation that would permit this. At the same time, we participated in a three-year multistakeholder dialogue, organised by the Keystone Foundation, which got us to sit at the table with other NGOs, government officials and people from the seed and biotechnology industries and from agricultural research institutes, trying to find some consensus on how to save and use the worlds agricultural biodiversity. What was driving us then? We were concerned about the increasing concentration in the global seed industry, which
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Food sovereignty
Food sovereignty is the right of peoples, countries, and state unions to define their agricultural and food policy without the dumping of agricultural commodities into foreign countries. Food sovereignty organises food production and consumption according to the needs of local communities, giving priority to production for local consumption. Food sovereignty includes the right to protect and regulate national agricultural and livestock production and to shield the domestic market from the dumping of agricultural surpluses and low-price imports from other countries. Landless people, peasants, and small farmers must get access to land, water, and seed, as well as productive resources and adequate public services. Food sovereignty and sustainability are a higher priority than trade policies. (Via Campesina, The International Peasants Voice: www.viacampesina.org)
ter world. The WTO never fully recovered from the blow, and the industrialised countries, in response, started signing bilateral or regional trade agreements instead, to secure their interests. To the social movements and NGOs involved in fighting the neoliberal corporate agenda came the realisation that we could actually win by having a clear, radical and coherent line of analysis and action.
Another world is possible. Often hidden from view, and unexposed at international
fora, were the organisations and movements that were quietly resisting and building at the local level. The importance of these experiences became forcefully clear to GRAIN when we got ourselves involved in the Growing Diversity project. During a three-year period (20002003), this project worked with hundreds of organisations around the world to discuss, analyse and document the experiences of groups working at the local level to build local food and agricultural systems based on biodiversity. A massive amount of evidence came out of this project that an agriculture different from the one being promoted by the industrial powers and corporations was not only possible, but also more productive, more sustainable, and better for the farmers and communities involved. It became clear to us that the work at local level of organisations and communities resisting the neoliberal onslaught while developing strong alternatives was the backbone of any struggle to bring this other world into being. There was another development in the first decade of the present century that started strongly influencing agendas around agriculture and food systems. This was the emergence of the call for food sovereignty and the growing presence and maturity of small-farmer organisations such as Via Campesina. Via Campesina was created in 1993, and erupted on the international stage at the global civil society forum held parallel to the 1996 world food summit in Rome, where it launched food sovereignty as the alternative framework for a global world food system. Food sovereignty articulates the prioritisation of food policies oriented towards the needs of local communities and local markets, and based on local knowledge and agroecological production systems (see Box: Food Sovereignty on page 4). For the first time, the global movement for a different food system had a concept and an action agenda that connected all the dots, brought together local and international
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struggles, and formed a basis for building alliances between different social movements and NGOs. In the decade that followed, many more groups and movements started to use food sovereignty as their framework for action, and this framework was articulated and further elaborated in numerous international and regional fora. The movement received a tremendous boost at the global food sovereignty forum held in Nyeleni, Mali, in 2007, at which organisations representing small farmers, fisherfolk, pastoralists, indigenous peoples, women and youth joined with NGOs and groups from the environmental movement to further articulate a common action agenda for the future. In the late 1990s, GRAIN embarked on an ambitious and radical decentralisation process that would bring us much closer to regional and local realities and struggles, and transform us into a truly international collective (see Box: A brief history of GRAIN). This process transformed GRAINs agenda as well. The increased exposure to local struggles and social movements made us realise that we could not limit our work to the issue-oriented agenda of agricultural biodiversity, and we gradually broadened our focus to deal with the wider food system. As a result, we were able to produce new analysis and fresh thinking on issues such as agrofuels, hybrid rice, bird flu, swine fever, the food crisis, climate change and land grabbing, and connect them with the struggles for food sovereignty. At the same time, we strengthened and deepened our relationship with and support role to groups in Africa, Asia and Latin America. Think globally, act locally became GRAINs very way of working.
Lessons learnt and challenges ahead. As explained in detail in another article in this Seedling,
the past 20 years have witnessed a tremendous increase in the dominance and control that huge transnational corporations exercise over the global food system. In essence, the entire neoliberal globalisation process has been an exercise in handing over that control to them, and it has created tremendous inequity, human suffering and environmental damage in the process. As a result, we are now faced with well over one billion people going hungry every day, massive environmental destruction, and a climate crisis that we wont be able to stop unless profound changes are implemented.
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to building more linkages. There is a clear need to build alliances that respect peoples different situations and world views. The most significant and effective struggles are happening in movements that are grounded in local contexts but connected to global perspectives. This is difficult, non-glamorous movement building work that, incrementally, is creating spaces where power can be challenged. We rarely hear about these struggles, but they are where hope for the future lies. Brewster Kneen, another long-standing author and activist and for many years part of GRAINs Board of Directors agrees. He adds:
Disillusion in government
Mariam Mayet Mariam Mayet grew up during the apartheid struggle in South Africa. After being involved in different NGOs in the 1990s, she set up the African Centre for Biosafety, with which she has since sustained a tireless effort to fight GMOs in Africa and to promote instead the use of local seeds. Over the last decades there has been a profound change across the world in the food system, over who owns it and controls it. During this time there has been a radical shift in power from ever weaker nation-states to corporations. In South Africa, we were not plugged into global movements but we experienced huge disillusionment with our government because it did not change the agenda but started implementing neoliberal economic policies and privatising. Over the years one has learnt to understand much more profoundly the nature of the struggle, the nature of ownership and big capital. Once you understood what is at stake, you know where you stand and can take a very clear position. The problems have become more complex and there is a lot of apathy because people feel overwhelmed by the scale and level of corporate intrusion, the insidiousness of it. These corporate powers are extremely well-funded and are implementing their agenda with military precision. Issues like genomics, IPRs, patenting, are all galloping into the future, without us being able to take stock and consider the impacts. There are examples of grassroots resistance that have been inspiring shining examples of where we should be going. But in South Africa the anti-apartheid struggle was largely urban-based, and we do not have many examples of rural struggle. But we know that we will be successful only if we build up our internal capacity and work in networks. We realise that engaging with the multilateral system has been counter-productive and has pulled us away from the real struggles. We are aware that we should not have engaged in that as much as we did. It is local struggles that are important, that we need to keep building up, little by little, and doing the right thing every day. We have been deeply disillusioned, and we feel a great urgency to change things. There is also much anxiety. We keep asking ourselves: what more can I do? If we are to move forward, relationships between NGOs, movements and communities must be allowed to unfold, we must provide ongoing support to the communities, and we must train farmer leaders. As in the trade unions, communities need to take ownership of the issues. We often want quick-fix solutions, without allowing communities enough time to process and to take ownership of the issues, and not taking enough time to make sure that we support the real struggles. We have to learn from this. In Africa humanity is profound, and the joy and celebration of humanity is deep-seated. As a movement in Africa we care about the heritage of Africa. To me it has been an honour to be part of that movement. I have learnt a lot from others, and to me it has been a journey to fulfil my destiny. My hope is that something will get through to people, that I can set an example for my son and the next generation.
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A big challenge we have lies in how we deal with the state. The state is a relatively recent construction, and we do not have to accept it as a given. It can be very debilitating when peoples movements define themselves in reference to the state. These movements need to be constructed on their own terms. We need to question the authority of the state. What we do should be based on what we feel we have a moral responsibility to do, not what the state tells us we can or cannot do. This is a strange land but we have to venture out from our traditional territory. Many others that we have talked to have reached similar conclusions. Today we live in a world where a lot of traditional pillars and forces with which we we thought we could build a better world have been eroded or corrupted. The way to deal with this is to construct our own terms of reference, to learn from our history, and to build alliances and dialogues across different issues and realities.
Following or setting the international agenda? In the past 20 years, the most interesting, promising and mobilising concepts and advances have emerged when social movements have decided to look at things from their own perspectives rather than within frameworks set by the powerful. We can recite a long list of negotiations that we enthusiastically got involved in because we felt that we could achieve some positive results, but in which we got trapped in endless debates, where we saw our proposals being stripped of their essential meaning and corrupted into empty promises. At the FAO we argued for Farmers Rights to challenge the privatisation of seeds and genes, and to promote the notion that rural communities are the starting point for seed saving and crop improvement. We ended up with a Treaty that allows the patenting of genes, is mostly focused on managing gene banks, and as lip service might financially support a few projects that involve on-farm management of plant genetic resources. At the Biodiversity Convention we challenged biopiracy, and urged the recognition of local communities in the management of biodiversity. We got benefit-sharing regimes that do nothing about the monopoly control that corporations obtain on the
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ties. This does not mean uncritically following their agendas, as we are also part of the debates and learning processes of the movement. But it does imply, from our own autonomy, constructing relationships in which a constant dialogue on priorities and strategies informs our own thinking and actions. Movement building, alternatives and alliances What has become very clear over the past decades is how help, however well intentioned, can become a dependency trap, rather than a push in the right direction. Gathuru Mburu, of the Kenyan Institute for Culture and Ecology, and also the African Biodiversity Network, puts it this way: Now I understand better that solutions will not come from outside Africa. We need to change our mindset because we are much too dependent on help and ideas from outside. The solutions we are looking for are under our noses, very close, but we keep on looking to the outside. This dependency blocks our minds to the solutions and capacity we have at our doorstep. If anything, we need support for African solutions. Over the years our knowledge has been devalued, our agriculture classified as unproductive, and our people as uneducated. Our focus should now be on working with communities so that they can chart their own destiny, make their own decisions, with or without support. We
could have done better often we didnt empower communities to do their own advocacy work, rather we tried to do it on their behalf. We ignored their capacity to handle their own local situation. If we had understood the importance of local knowledge and local struggles earlier, we could have forestalled many things that have happened in the meantime. Or, in the words of Diamantino Nhampossa of the Mozambique small farmers union UNAC: We need to redefine help: we need solidarity, not someone telling us what to do. We need relationships, not domination. (see Box #4) A factor that, ironically, has sometimes undermined the movement building and the formulation of a clear, holistic and integral alternative to the industrial food system has been the imagined desire to come up with measurable results within the time-frame of project periods. On many occasions this project mentality has done more harm than good. As a result, we now have many interesting initiatives, ranging from local seed banks and organic gardens to community biogas production schemes and local credit facilities. But as many of them are disconnected from a wider struggle and vision of the role of rural communities in society, they hardly challenge the expansion
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of the industrial food system. So here is another goal for us to meet: we have to become more effective in building a social force that challenges the industrial food system across the board, while at the same time guaranteeing livelihoods so that local communities can survive. It is here that Antonio Onorati sees the strength of rural social movements and small farmer organisations: Compared to social movements in urban areas, like trade unions among industrial workers, the rural movements actually have a pretty clear idea about the alternative society that they want to build. They have no choice; they have to resist to survive, and in that process they start organising or reviving alternative structures, local markets, seed exchange systems, chemical-free agriculture, direct links with consumers, and so on. Unavoidably, these lead them to clash with the production models that Monsanto, the World Bank and WTO are pushing for. In that sense, the food sovereignty agenda is one that not only denounces, but also provides solutions. For us at GRAIN, if we have learned one thing in the past 20 years, it is about the central importance of supporting and participating in processes that are clearly aimed at creating an autonomous framework from which alternatives can be built and action
taken. The struggle for food sovereignty is one of these. This does not mean that there should not be any relationship with, or involvement in, governmental processes. But such relations have to be built from our own strength, and oriented towards creating political space for putting our own agenda on the table rather than running after the agendas of those in power.
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AGRIBUSINESS
Global agribusiness:
two decades of plunder
We offer a brief overview of the expansion of agribusiness in the global food sys- 23 tem in the past two decades, with some thoughts on what we can expect from these companies in the years ahead.
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ack in the early 1990s, many of Seedlings pages were devoted to discussions about international treaties and public research agendas. Corporations were part of the discussion, but mainly as a looming threat, one group of actors pushing forward the industrial model of agriculture that was destroying agricultural biodiversity. Fast-forward twenty years, and the landscape has changed. Corporate power in the food system has grown by leaps and bounds. Today corporations set the global rules, with governments and public research centres following their lead. The fall-out of this transformation for the planets biodiversity, and the people who look after it, has been devastating. Corporations have used their power to expand monoculture crop production, undermine farmers seed systems and cut into local markets. They are making
WHOSE SEEDS FEED THE WORLD? FARM-SAVED SEED: 67.5%; CERTiFiED SEED: 32.5%1
1. Percentages for cereal crops in 14 developing and developed UPOV member countries surveyed by the International Seed Federation in 2005.
Source: Philip H. Howard, Visualizing Consolidation in the Global Seed Industry, 19962008, in Sustainability, 2009 www.mdpi.com/2071-1050/1/4/1266/pdf
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nership programmes where CGIAR centres actually sell their breeding material to the highest bidder. The national research institutions and universities have gone down the same path, with many now behaving more like private companies than institutions with a public mandate. Public seed systems are thus disappearing as a major source of seeds for farmers, and into this hole, often with the collaboration of public research institutions, the private sector is insinuating itself. The second wave of Green-Revolution-style programmes that Bill Gates and other donors are currently pursuing puts the private sector in charge of the seed supply,
rather than public seed programmes, as was the case in the past. Typically, these initiatives seek to build up local private seed companies that can establish marketing channels and build up networks of seed growers. While most of these small seed companies will inevitably be bought up or squeezed out by larger transnationals, in the meantime they not only get markets up and running, but also provide critical domestic support to push for changes to seed regulations, intellectual property laws, and biosafety legislation that undermine farmers seed systems and pave the way for the big corporations to step in and take over the market.
Syngenta (Switzerland) DuPont (USA) 22% 35% 13% Groupe Limagr aine (Fr ance) 8% Land OLakes (USA) 7% 5% KWS AG (Germany) 4% Bayer Crop Science (Germany) 3% 2% Sakata (Japan) 2% DLF Trifolium (Denmark) Takii (Japan)
Monsanto (USA)
Source: 3D
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The implicit (and rarely stated) intent of these programmes is to supply seeds to a new class of medium-scale and largescale farmers in Africa and elsewhere who can pay for the seeds. There is no interest in supporting seed systems that are controlled by and that serve peasant farmers producing for their families and communities. The expansion of the corporate seed sector is indeed inseparable from the corporate expansion in farming and markets discussed below. The most dramatic case is the boom in sales of Monsantos GM soya beans that has accompanied the massive expansion of soya plantations for export in Argentina and Brazil since 1996. Similar models of production are now being applied and pursued elsewhere, across the Americas, Africa and Asia, displacing local seed systems with corporate seed systems in the process. In fact, in many cases the introduction of corporate seeds precedes the imposition of corporate farming. For instance, Chinese programmes to promote the use of Chinese hybrid rice varieties in Africa are part of a long-term effort to establish large-scale rice farming on the continent for export back to China. The situation today with seeds is like a form of apartheid. On one side, theres the so-called formal sector: the private companies, the national and international research institutes and the governmental agencies pursuing the development of varieties for an industrial model of agriculture completely at odds with the needs of small farmers and local food systems. This side has lots of money and is supported by all kinds of laws (intellectual property rights (IPRs), seed regulations, investment protections, and so on), and it also has all the access it needs to the biodiversity developed by farmers and now stored in gene banks. On the other side, there are farmers seed systems, which still provide food for much of the planet, but which receive almost no support from governments, who instead are increasingly repressing and even criminalising them.
Farming. Much has been said about the rise of corporate control over
seeds. But there has been an equally dramatic rise in corporate control over farming during the past two decades that has received less attention, and that now threatens to get much worse. As with the Green Revolution, some of this control has come about through seeds, since GM crops and hybrids enforce a chemically intensive model of farming. Of greater significance, however, has been the intensification of vertical integration. In the 1960s and 70s, many of the farms and plantations set up under colonial occupation were nationalised, and the general trend among global food corporations was to move away from direct production. For the most part, capital chose instead to enter farming through the input side by controlling the sale of seeds, fertilisers and machinery. In recent years, however, that trend has turned around. Corporations are exercising more and more direct control over farming, particularly through contract farming. In the livestock sector, for example, more than 50% of the worlds pork and 66% of the worlds poultry and egg production now takes place on industrial farms, which are generally either owned by large meat corporations or under contract to them.1 In Brazil, 75% of poultry production is under contract, while in Vietnam 90% of dairy production is under contract.2 Contract produc1. E. Blackmore and J. Keeley, Understanding the Social Impacts of Large-Scale Animal Protein Production, Oxfam Novib/IIED, Preliminary Scoping Report, as input to the Conference on the Social Impacts of the Large-Scale Meat and Dairy Production and Consumption, 2009. 2. UNCTAD, World Investment Report: Transnational Corpora-
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300,000
tions, Agricultural Production and Development, 2009: http:// unctad.org/en/docs/wir2009_en.pdf 3. Klaus Deininger, Large scale land acquisition What is happening and what can we do? World Bank, Presentation to Land Day event, Rome, 24 January 2010: http://farmlandgrab.org/10920 4. Maryna Moiseeva, The largest landlords of Ukraine, Delo, 5 October 2009: http://www.smart-holding.ua/en/press-center/articles/index.php?ELEMENT_ID=882
Asparagus exports
From 1990 to 2007, global exports of asparagus increased by 271%. Peruvian asparagus production accounted for more than half (58%) of the increase in global exports during this period. Over those years, asparagus production in Peru increased from 58,000 tonnes to 284,000 tonnes. Around 90% of Peruvian exports of asparagus go to the US and Europe. In Peru, asparagus was formerly produced by small-scale farmers, but today they account for less than 10% of the countrys production, which is now dominated by large-scale exporting companies. Just two companies control a quarter of Perus asparagus exports.
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The overall effect of these developments is a massive expansion of monocultures. Soya alone accounts for over a quarter of the total increase in global agricultural area between 1990 and 2007 (see illustration, Occupying fertile land). What is perhaps most striking about these figures is that the bulk of the expansion in monoculture production has not been about producing more food for people. The expanded agricultural area growing soya, timber, maize and sugar cane has mainly been for industrial uses, especially biofuels and animal feed.
Markets. In the 1980s and through to the 1990s, there was a wholesale
dismantling of the state or parastatal companies and agencies that, at least in theory, balanced the interests of farmers and the urban population. International commodity boards, which had similar intentions, were also broken apart during these years. Meanwhile, through the creation of the WTO and subsequently through bilateral trade and investment agreements, a comprehensive package of neoliberal rules was imposed on countries around the world, setting the stage for a huge upsurge of foreign investment in agribusiness and the globalisation of food systems. The net result of these processes has been the con-
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All
Source: FAOSTAT
infrastructure, finance and policies, is high (see Asparagus exports, below) the aggressive entry of northern supermarkets (WalMart, Carrefour), food service companies (McDonalds, KFC), and food processing companies (Nestl, Unilever) into domestic food systems the replacement of local markets and systems of food production with global supply chains of food and feed organised by food and agribusiness TNCs. Governments have, by and large, eagerly embraced these trends falling over each other to provide incentives to foreign investors, signing up for and implementing Western-based IPR laws and food safety regulations that favour corporations and criminalise small farmers and local food systems, and pumping scarce public funds into the creation of infrastructure to facilitate corporate expansion. Some southern governments, such as those of China, Brazil, Thailand and South Africa, have been able to support the development of their own agribusiness TNCs, but these are few and far between and almost exclusively confined to agricultural production. Moreover, these TNCs are replicas of Northern TNCs, organised according to the same logic, and often tightly integrated with larger northern TNCs, whether as suppliers to food corporations such as McDonalds and Nestl or as clients of agribusiness corporations such as Monsanto and Hybro Genetics. Moreover, the whole machinery of corporate agribusiness, whether its JBS in Brazil or Shineway in China, has become inseparable from the global financial sector. The past two decades of globalisation have, more than anything else, been about the concentration of wealth and power in the hands of Wall Street and other financial centres. Todays captains of finance can move trillions of dollars around the world every day, looking for the quickest and highest returns. More and more of this money is now flowing into corporate agribusiness and commodity speculation. Access to this huge pool of capital is propelling the expansion of agribusiness, giving companies the financial resources to take over smaller firms or to set up new operations, while also harnessing them ever tighter to the
logic of fast and high returns, which are made off the backs of workers, consumers and the environment. Meanwhile, the amount of speculative capital in agricultural commodities has skyrocketed in recent years, and this, combined with rising corporate control at all levels of the food chain, means that prices have little to do with supply and demand, and that food distribution has become disconnected from need. Todays corporate global food system is organised according to one principle only: profit for the owners of the corporations.
Tot
al c
rop
ga
lan d
so
r op
Peasant farming 50% Urban gardening 8% 13% Industrial food chain 30%
29
Hunting/ gathering
Source: ETC Group, Who will feed us?, November 2009. www.etcgroup.org
.
Via Campesina activists demostrating for food sovereignty in Rome. Photo: The Development Fund, Norway.
going further
FAO, State of Food and Agriculture: Livestock in the Balance, 2009: http://www.fao.org/publications/sofa/en/ 3D, Exploring the Global Food Supply Chain. Markets, Companies, Systems, May 2010: http:// www.3dthree.org/en/index.php GRAIN, Seized: The 2008 land grab for food and financial security, Briefing, October 2008: http:// www.grain.org/landgrab/ ETC Group, Who Owns Nature? Corporate Power and the Final Frontier in the Commodification of Life, Communiqu, December 2008: http://www.etcgroup.org/en/node/707 Philip McMichael, The World Food Crisis in Historical Perspective, Monthly Review, JulyAugust 2009: http://monthlyreview.org/090713mcmichael.php GRAIN, Making a killing from hunger, Against the grain, April 2008: http://www.grain.org/ articles/?id=39
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Table 1. Percentages of national milk markets not handled by the formal milk sector in certain countries. Country Percentage of national milk market not handled by the formal sector
All developing countries Argentina Bangladesh Brazil Colombia India Kenya Mexico Pakistan Paraguay Rwanda Sri Lanka Uganda Uruguay Zambia * Figure is for cheese only Source: GRAIN 80 15 97 40 83 85 86 41 96 70 96 53 70 60* 78
another reason. They, along with farmers, small-scale 32 for dairy processors and consumers, have been protesting against
repeated moves by the Colombian government to destroy their leche popular. The problem began in 2006, when the government of President Uribe issued Decree 616 prohibiting the consumption, sale and transport of unpasteurised milk, effectively making leche popular illegal. The decree triggered huge protests across the country, forcing the government to postpone adoption of the regulation. Popular opposition did not die down and, two years later, with over 15,000 people marching in the streets of Bogot, the government was yet again forced to push things back another two years. But Decree 616 was not the only threat to leche popular. Colombia had begun negotiations for several bilateral free
trade agreements (FTA) with dairy exporters. While Colombia is self-sufficient in milk, the FTAs would remove key protections from the sector, leaving it vulnerable to imports of cheap powdered milk, particularly from the EU, where dairy production is heavily subsidised. In the words of Aurelio Surez, Executive Director of the National Association for the Preservation of the Agricultural Economy (Salvacin Agropecuaria), an FTA with the EU would be a huge disaster for Colombias dairy sector. By 2010, when legislation to prohibit leche popular was once again up for implementation, opposition had merged with anger at the proposed FTAs. Massive mobilisations ensued, leaving the government with little choice but to postpone the legislation to March 2011, when, greeted by a fresh wave of demonstrations, the government had to concede defeat. In May 2011, Decree 1880 was passed, which recognises leche popular as both legal and essential. It was an impressive series of victories for the people of Colombias dairy sector, one that should inspire the many similar struggles that small-scale dairy farmers and vendors are waging in other parts of the world.1 Of course, the battle is not over; an FTA with the US has been passed, and the negotiations for an FTA with the EU have just been concluded. But the dairy sector is now at the heart of the popular resistance to
1. The situation in Colombia is extensively documented in Aurelio Surez Montoya, Colombia, una pieza ms en la conquista de un nuevo mundo lcteo, November 2010: http://www.recalca.org. co/Colombia-una-pieza-mas-en-la.html
Table 2. Differences between milk production in the global North and the global South North
Total milk production (2009) Percentage of the milk market handled by the informal sector Number of cows per farm 362 million tonnes <10% US = >100 Australia = >100 France = >30 Japan = >30 80%
South
ing a strong global trend. Dairy, like other food and agriculture sectors, has Rural jobs per million litres of milk/year 5 200 been going through severe consolidation Milk consumption per person (2007) 248 litres 68 litres over recent decades. Today, a few multiUganda = <20 Cost of milk production (US$/100kg) Canada = >60 nationals, like Nestle and Danone, sell Pakistan = <30 New Zealand = >30 their dairy products in every corner of the Argentina = <30 Italy = >60 planet. Consolidation is happening on the farm too. Dairy herds are getting bigger, and new technologies are squeezing Source: IFCN; Aurelio Surez Montoya, Colombia, una pieza ms en la conquista de un more and more milk out of each cow. nuevo mundo lcteo, November 2010: http://www.recalca.org.co/Colombia-una-piezaAnd new money, mainly from the finan- mas-en-la.html cial sector, is now streaming into agriculture, looking for a share of the profits in this move to bigger dairy farms. But this is far from the whole story. In most of the world, dairy is still very much in the hands of poor people. The milk corporations are growing, but in many places milk markets are still the domain of what government and industry like to call the informal sector farmers who sell their milk directly, or local vendors who go deep into the countryside to purchase milk from small farmers and bring it directly to consumers. The available data suggests that more than 80% of milk marketed in developing countries, and 47% of the global total, is peoples milk. In India, the worlds largest producer of milk, the peoples milk sector still accounts for 85% of the national milk market. Although much is said of the significance of Indians dairy cooperatives in building up the countrys milk production, the real story behind the countrys white revolution, which saw a tripling of milk production between 1980 and 2006, lies with Cheese at a market in Ayacucho, Peru (Photo: Tomandbecky). the peoples milk sector. It was Indias small-scale farmers and local markets that led the massive expansion in the countrys dairy production over those years, and, as a result, the bene- able to those without. Fresh peoples milk tends to be much fits of this boom in production have been widely spread out. cheaper than the processed packaged milk sold by companies. Today, 70 million rural households in India well over half of In Colombia it costs less than half the price of the pasteurized, the countrys total rural families keep dairy animals, and over packaged milk sold in supermarkets.4 It is the same in Pakihalf of the milk they produce, which is mainly buffalo milk, stan, where the gawalas (street vendors) sell to urban consumgoes to feed people in the communities they live in, while a ers fresh milk that they collect from rural farms for about half quarter of it is processed into cheese, yoghurts and other dairy the price of packaged, processed milk.5 For small farmers, peoples milk offers one of the few products by the local unorganised sector.3 The contributions of peoples milk to the lives of the poor sources of regular, consistent income. Because milk is perisharound the world are many. It is a key source of nutrition a able, it is also a major source of revenue for small-scale vendors subsistence food for those with dairy animals and afford- and processors who can source it daily from farmers and bring it to the consumers who purchase fresh milk, cheese, yoghurt and other dairy products on a near daily basis. Common cus2. Movimiento Obrero Independiente y Revolucionario (MOIR),
Triunfo de la cadena lctea popular y la seguridad alimentaria, 7 June 2011: http://www.nasaacin.org/component/content/article/1ultimas-noticias/2180-triunfo-de-la-cadena-lactea-popular-y-laseguridad-alimentaria 3. Animesh Banerjee, Lessons Learned Studies: India, FAO: http://www.aphca.org/reference/dairy/dairy.html 4. Personal communication with Aurelio Surez, 6 July 2011. 5. Tanvir Ali, A case study of milk production and marketing by small- and medium-scale contract farmers of Haleeb Foods Ltd, Pakistan: http://www.regoverningmarkets.org/en/filemanager/ active?fid=30
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toms of heating or fermenting the milk ensure that it is safe for consumption. In Pakistan, for instance, many leave their milk to simmer for hours on special stoves called karrhni, which burn dung on a low heat. In northern Nigeria, milk is often consumed as a fermented drink called nono. The informal sector is treated with disdain by the elites. Produce is called unhygienic or of poor quality, and the system is labelled inefficient. Some decry it for not contributing taxes. But the truth is that peoples milk thrives in many countries. Small farmers, pastoralists and landless peasants are showing that they can produce enough milk to satisfy peoples needs, and small vendors and processors have little trouble getting the milk and other dairy products safely to markets. The unorganised sector can do things just fine without the big players when they are not undercut by dumped surplus milk from elsewhere or persecuted by unfair regulations. Even in markets where dairy was industrialised long ago, peoples milk is making a comeback. From the US to New Zea-
has been accelerating in recent years alongside the globalisation of the industry. The twenty largest 1 Nestl Switzerland 25.9 dairy companies now control over half the global 2 Danone France 14.79 (organised) dairy market and process about a quarter of global milk production.6 Just one com3 Lactalis* France 12.68 pany, Nestl, controls an estimated 5% of that 4 FrieslandCampina Netherlands 11.17 global market, with sales of US$25.9 billion in 5 Fonterra New Zealand 10.2 2009. 6 Dean Foods USA 9.74 Nestl is not a milk producer. It owns few cows, 7 Arla Foods Denmark/Sweden 8.64 and buys milk directly from farmers or suppliers and processes it into all kinds of products. Most 8 Dairy Farmers of America** USA 8.1 of the other top 20 companies are also processors, 9 Kraft Foods USA 6.79 even though, as with Nestl, some have started to 10 Unilever Netherlands/UK 6.38 operate their own farms.7 The exceptions are the 11 Meiji Dairies Japan 5.13 dairy cooperatives, of which there are five in the top 8 12 Saputo Canada 4.97 20 (six if Mexicos Grupo Lala is included). These five cooperatives are owned by around 13 Parmalat* Italy 4.93 70,000 farmer members in the US, Europe and New 14 Morinaga Milk Industry Japan 4.81 Zealand.9 While each produces its own own dairy 15 Bongrain France 4.57 products, much of the milk their farmers produce 16 Mengniu China 3.77 goes to supply the multinational processors. In 17 Yili China 3.54 this, the interests of the big cooperatives and the processors are often closely aligned. Indeed, the 18 Land OLakes USA 3.21 big cooperatives are multinationals in their own 19 Bel France 3.1 right, most having established or taken over dairy 20 Tine Norway 3.02 companies overseas, and their policies can clash with the interests of the farmers that supply them, *On July 7, 2011, Lactalis boosted its ownership of Parmalat to over 50%, particular the smaller-scale dairy farmers. making Lactalis the worlds second-largest dairy company. All of the big dairy players have, in recent years, **After the sale of National Dairy to the Grupo Lala (Mexico) in 2009, Dairy been pushing aggressively to expand beyond the Farmers of Americas ranking would certainly drop, while Grupo Lala would saturated dairy markets of the North and conquer enter the top 20, with sales of around US$ 5 billion. the growing markets in the South. They have been Source: Rabobank on a spending spree, buying up major national players or investing in their own production units. Nestl says that about 36% of its total sales now come from emerging markets. By 2020, it expects that portion Table 5. Some dairy corporations based to rise to 45%; it plans to double its turnover in Africa every in the South with an overseas presence three years. Company Home country Overseas expansions The expansion into the South is being driven not only by Al Marai/PepsiCo. Saudi Arabia/US Egypt, Jordan, Gulf the large dairy companies. A number of corporations from Cooperation Council other sectors of the food industry, such as PepsiCo and GenAusnutria China Netherlands eral Mills, have recently made significant moves into dairy. Financial players such as Kohlberg Kravis Roberts & Co and Bom Gosto Brazil Uruguay
Bright Dairy 6. Figures are from Kevin Bellamy of Zenith International, cited in Shaun Weston, How global dairy markets are developing and competing, FoodBev.com, 23 Aug 2011. 7. Nestl established a demonstration farm with 120 cows in Pakistan in 2009. 8. The 5 cooperatives are FrieslandCampina, Fonterra, Arla, Dairy Farmers of America, and Land OLakes. 9. In addition to its 3,200 direct producer members, Land OLakes is owned by 1,000 member-cooperatives that comprise more than 300,000 dairy farmers in the US. Grupo Lala Marfrig Olam RJ Corp (Jaipura Group) China Mexico Brazil Singapore India New Zealand Guatemala, US Uruguay Netherlands, New Zealand, Poland, Uruguay Kenya, Uganda
Table 3. Top 20 global dairy corporations Name Country Dairy sales in US$ billions, 2009
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Table 4. Some financial players investing in the dairy industry Financial company Investments
Actis (UK) Black River/Cargill (US) Carlyle Group (US) Citadel Capital (Egypt) Hopu Fund (China), with Temasek (Singapore) and Goldman Sachs (US) as limited partners Kohlberg Kravis Roberts & Co (US) Invested US$65 million in Nilgiri Dairy Farm (India) in 2006. Established $300 million fund to invest in dairy farms in India and China. Purchase of minority stake in Tirumala Milk Products in 2010 (India) Owner of Dina Farms, the largest dairy farm in Egypt. Teamed up with COFCO, Chinas largest agribusiness company, to acquire China Mengniu Dairy in 2009, one of Chinas largest dairy companies. Investment in 2009 in Ma Anshan Modern Farming Co. one of the largest operators of mega dairy farms in China. With KKRs investment, Modern Dairy plans to construct another 20 to 30 mega-farms in China Private equity fund that took over Parmalats Brazilian subsidiary. In April 2011, it made a bid to acquire Crafar Farms, one of New Zealands largest dairy farms. The bid is awaiting approval of New Zealands Overseas Investment Office. Owner of dairy farms and processing plant in Argentina through its $295 million holding in Adecoagro.
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Citadel Capital (see Table 4), are also getting directly involved, as are new dairy companies based in the South, some of whom have begun expanding into markets in the North (see Table 5). In addition, there is a host of corporations not involved in dairy processing or production that have direct interests in the expansion of the transnational dairy industry, in sales of animal genetics and veterinary drugs or in packaging and equipment.
Taking from the poor. Corporate hopes for emerging markets rest in large part
upon projections for a growing middle class in the South that will consume more dairy, and will purchase that dairy from the rapidly expanding supermarket chains. Supermarkets like Walmart and Carrefour are closed to peoples milk, as are restaurant chains like McDonalds and Starbucks. It is simply impossible for the peoples milk system to comply with the private standards and procurement policies set by these companies. In Chile, for instance, supermarkets insist that their cheese suppliers allow them to delay payment for up to 45
months, which few small-scale cheese makers can afford.10 So, as more dairy is consumed through these outlets, less is consumed through the peoples milk markets, and more is supplied by the dairy corporations able to meet the standards and procurement polices set by the retailers. Not that Big Dairy is uninterested in the poor. Margins may be slim, but the overall market can be quite significant, and transnational dairy companies are putting great effort into developing products and marketing strategies that target low-income consumers. Since these people currently tend to consume peoples milk, fresh from the farm, part of the companies strategy is to damn that milk as unsafe. In Kenya, for instance, in 2003, the big dairy processors launched a Safe Milk campaign, accusing the peoples milk sector of selling adulterated milk.11 A coalition of farmers, vendors, researchers and concerned citizens came together to fight back successfully. With the support of a Kenyan University, they carried out their own study, which demonstrated that the accusations were completely false. The most plausible explanation of the goings-on in the industry is the big players are scheming to shut out the small traders and small-holder producers so that they can have the market to themselves, said Dr Wilson Nguyo, a senior researcher at Egerton Universitys Tegemeo Institute of Agricultural Policy and Development.12 There is much more reason to be concerned about adulteration in the industrial chain than in the peoples milk sector, as the recent melamine scandal in China so amply demonstrates. In that case, milk was being adulterated at the collection centres serving several of Chinas largest dairy companies. The global dairy corporations were also implicated. New Zealand-based Fonterra owned 43% of Sanlu, the Chinese dairy company at
10. Personal communication with Max Thomet, Director of CETSUR, 20 July 2011. 11. The campaign was led by the Kenyan Dairy Board and the Kenyan Dairy Processors Association, which is composed of corporate members such as Nestl and Tetra Pak. The US dairy cooperative Land OLakes was also involved. 12. Juma Kwayera, Clean vs Dirty Milk or Big Business vs Small Farmers, The East African, 22 December 2003.
the centre of the scandal, and it appears that the contaminated milk from China got into its global supplies as well as those of Nestl and other multinationals. The big dairy corporations responded by trying to distance themselves from the scandal. When tests carried out at Dhaka University in Bangladesh found Nestls Nido Fortified Instant milk product, made with powdered milk supplied by Fonterra, to be contaminated with melamine, the two companies publicly questioned the findings and the competence of the university lab. But, at around the same time, similar results came back concerning Nestl products in Taiwan and Saudi Arabia. Saudi Arabian authorities called the levels of melamine they uncovered highly harmful.13 A Freedom of Information Act request by Associated Press revealed that the US Food and Drug Administration had found melamine in tests it conducted on infant formula and nutritional supplement products sold in the US by Nestl and other corporations.14 What was Nestls response? Low levels of melamine are not dangerous and can be found in most food products, it said. Minute traces exist in the natural food cycle, said the company, while urging governments to adopt minimum-residue levels instead of zero tolerance.15
Small farmers not welcome. The cruellest hoax about the expansion of Big Dairy into
the South is the claim that it will bring more opportunities for dairy farmers. Nestl and Danone may have a few programmes in poor countries to create supply chains with small farmers, and there are numerous NGO pilot projects trying to help small farmers meet the quality criteria set by these corporations.
13. Saudi Arabia finds traces of melamine in Nestl milk powder, Zawya Dow Jones, 3 December 2008. http://www.marketwatch. com/story/saudi-arabia-finds-traces-of-melamine-in-nestle-milkpowder 14. Jordan Lite, Melamine traces found in samples of U.S. infant formula, Scientific American, 26 November 2008. 15. Jenny Wiggins, Nestl in melamine dispute with Taiwan, Financial Times, 2 October 2008.
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Argentina - 3% Belarus - 5%
USA - 8% Australia - 9%
EU - 24%
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But this represents just a small drop in the bucket. While Big Dairy needs to develop some local supply chains as it expands into the South, the reality is that little of these local chains will ever be formed by the overwhelming majority of the Souths dairy farmers, who hold on average just a few dairy animals.16 Unlike the small vendors who head deep into the countryside on motorcycles and bicycles, the big processors are unwilling to venture out to hundreds of small farms to collect milk. In the rare places where they are developing local supply chains in the South, they demand that farmers bring their milk to centralised collection centres, called milk sheds or hubs, in which the costs of refrigeration are often borne by the farmers.17 Typically, the companies will purchase milk in the programme area only from farmers who have signed exclusive contracts, and, at the end of the day, the company holds complete control when it comes to setting the price and determining whether the milk supplied by the farmer meets the companys standards, which it often does not. In the 1990s in Brazil, for instance, when the dairy market shifted dramatically towards supermarkets and ultra-high temperature treated, vacuum-packed milk, 60,000 small scale dairy farmers were delisted by the 12 largest processors.18
16. For an example of how seriously Big Dairy takes its pilot projects to build local dairy supplies in the South, see the case study of Nestls contract farming project in Ha Tay Province, Vietnam. Nguyen Anh Phong, Viet Nam: The emergence of a rapidly growing industry, in Smallholder dairy development: Lessons learned in Asia, FAO, Bangkok, January 2009. 17. Manuel Poitras, The concentration of capital and the introduction of biotechnology in La Laguna dairy farming, Sociedades Rurales, Produccion y Medio Ambiente, 1 (1), 2000. 18. Thomas Reardon and Julio A. Berdegu, The Rapid Rise of Supermarkets in Latin America: Challenges and Opportunities for Development, Development Policy Review, 20 (4), 2002.
Global activism has had considerable success in forcing Nestl and other transnationals to tone down their aggressive, deceitful promotion of infant formula as a replacement for breastmilk. But what these companies are doing today to vilify peoples milk one of the most important sources of nutrition and livelihoods available to poor people in poor countries is equally sinister and deadly. Photo credit: Rachael Romero and Lincoln Cushing
address this inherent power imbalance between them and the dairy processors by establishing co-operatives to strengthen their bargaining power. The globalisation of the dairy industry has, however, fundamentally distorted the founding visions of some co-operative movements, and made it much more difficult to counterbalance the power of the large dairy companies.
A milk bar in Kenya, serving fresh, locally produced milk. (Photo: ILRI/Elsworth).
Nestl refuses even to purchase milk from Kenyas traditional dairy farmers, despite the centuries of experience they have in producing high-quality milk. The company says that the milk produced and processed in Kenya does not meet its standards, so it relies instead on imported powdered milk, mainly from New Zealand. Recently the company launched a pilot project to start developing local milk collection, but participating farmers have to adopt the exotic animal breeds and high-cost, high-production and, ultimately, high-risk model that the company wants.19 Farmers in Kenya can turn to the peoples milk sector to avoid such corporate tactics. In other countries, where the dairy market is fully controlled by the big processors, farmers are in a much more vulnerable position. Milk is a highly perishable product, leaving farmers with few options but to sell immediately whatever they produce in excess of their families needs, at whatever price is offered. In many countries of the North and several countries of the South, farmers acted to
19. Nestl to add factories in Africa, cut imports, Reuters, 15 April 2011.
In a closed national market, co-operatives, especially if armed with supply controls, can exercise some influence over price, and even ensure that other considerations are taken on board, such as protections for small farms and the environment. But the moment that national markets are opened up to imports, there is little hope for ensuring fair prices.
The power of powder. The basic problem is that international prices for dairy are
far below the costs of production for nearly all countries. The price is artificial, based on heavily subsidised surplus production in Europe and the US, and a low-cost model of export production in New Zealand and Australia, which farmers in many other countries cannot compete with. Although the international trade in dairy is quite small as a proportion of the overall global dairy market, its impacts are huge. Access to imports of cheap powdered milk and other milk products (see photo) allows processors and retailers to exert downward pressure on local milk prices, often forcing farmers to accept prices below the costs of production.
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Say Cheez! Milk protein concentrates (MPCs) are created by putting milk through an ultra-filtration process that removes the liquid and small molecules, including certain nutritional minerals. Not only does it sell cheaply on the international market, it can also fall outside dairy tariffs. Thats why the big dairy companies are using more and more of it. In the US, where imports of MPCs have skyrocketed in recent years, companies like Kraft and Nestl use MPC to make cheap processed cheese products, like cheese slices (above) that they export to Mexico and other countries. In Canada, the dairy companies import a product called butteroil-sugar blend as a substitute for butterfat in making ice cream. Since the blend is 51% sugar, it is viewed as a confectionary product and not subjected to Canadian import tariffs on dairy.
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In Vietnam, for example, where the dairy market is dominated by a few large processors, and powdered milk imports make up 80% of the national market, the processors set their local procurement prices according to international powderedmilk prices. Those prices are at or below the costs of production for the average Vietnamese farmer.20 The national representative for Dutch-based Friesland Campina, one of the biggest dairy processors in Vietnam, said that Vietnamese farmers should stop complaining, as they are getting a price that would make Dutch farmers jealous.21 He didnt mention that the price his company pays to Dutch farmers is even further below the costs of production, and that the only reason Dutch farms can survive such prices is through heavy subsidies, to which Vietnamese farmers have no access. There is little hope that the dynamics of the global dairy market are going to change. The looming reform of EU dairy policies are likely to increase exports, while doing nothing to address artificially low prices. And several other countries, such as Uruguay, Chile, India and Kenya, are emerging as new zones for low-cost export production to supplement the cheap exports coming out of the US, New Zealand and Australia. At present, the only thing holding back the growth of global trade are national tariffs on dairy and other protective measures, which remain significant and widespread. The average tariff protection level for dairy products is 80%, compared with an overall average for agricultural commodities of 62%. Such tariffs have been crucial to the growth of peoples milk in Southern countries like India, Colombia and Kenya. Where
20. Nguyen Anh Phong, Viet Nam: The emergence of a rapidly growing industry, in Smallholder dairy development: Lessons learned in Asia, FAO, Bangkok, January 2009. 21. High dairy prices explained, LookAtVietnam, 19 October 2009.
there are no significant tariff and trade protections, such as in Sri Lanka or Cameroon, local dairy production has suffered. The potential for countries of the South to maintain or implement tariffs or other trade protections on dairy are under threat from the multitude of bilateral and regional trade agreements being implemented and negotiated around the world. In negotiations for such trade deals, the EU, Australia, New Zealand, the US, Argentina and other exporters insist that importing countries open their markets to their dairy products and comply with other demands that protect exporters interests. Not that the EU or the US will subject their own domestic dairy industries to the same foreign competition.22 Many governments in the South, however, have proved all too willing to sacrifice local dairy production in trade negotiations for other perceived benefits. Colombian Agriculture Minister Andrs Fernndez admits that the FTA that his government has initiated with the EU will adversely affect more than 400,000 farming families across Colombia. But he says that it should be viewed as a sacrifice,
22. Talks are currently under way for a deal to expand the TransPacific Partnership trade agreement between New Zealand, Brunei, Chile and Singapore to include the US, Australia, Peru and Vietnam. The US dairy industry says that New Zealand engages in anticompetitive practices in dairy farming that could potentially cost US producers billions of dollars if dairy is included in the deal. The New Zealand government and Fonterra flatly deny the accusations. But given the US sugar industrys success in keeping sugar out of the trade deal with Australia, it is quite possible that the US dairy industry will similarly get its way. For more information see: Dustin Ensinger,TPP Could Cost U.S. Dairy Farmers Billions, Economy in Crisis, 23 March 2010; NZ rejects US senators claims on dairy trade, Associated Press, 22 March 2010: http://www.bilaterals.org/ spip.php?article17028
Efforts to develop local supply chains for domestic dairy processors in Cameroon have failed because of competition from cheap imports of powdered milk from the EU. A national company, Sotramilk, began operations in the north-west of Cameroon in 1995, with hopes of producing yoghurt from local milk. Competition from other companies relying on imported powdered milk, however, forced the company to increase its use of imported powdered milk as well, and to reduce the local procurement price to the point where it was no longer possible for farmers to sell their milk to the company. In 2008, the company closed down. According to Tilder Kumichii of the Association Citoyenne de Dfense des Intrts Collectifs, The EU export subsidies are only part of the problem of cheap imports, but they send a clear message to all domestic investors to keep out of the dairy economy and let the world market profit from the huge opportunities offered by the Cameroon dairy market.* * Brot fr die Welt, Milk Dumping in Cameroon, October 2010.
Antigo Stravecchio Parmesan cheese. Under the EUs system of geographic indicators (GI), cheese sold as Parmigiano-Reggiano can be produced only in Parma, Reggio Emilia, Modena, Bologna or Matua. In 2008, however, the EU ruled that the same applied to all cheese produced under the name Parmesan, a generic term widely used for cheeses produced around the world. The EU issued a similar ruling for Feta, claiming that it could be produced only within Greece, despite the name Feta having become generic or customary in many non-EU countries where cheeses sold as Feta are also produced. This repatriation of generic terms has become a major part of the EUs international trade negotiations. In the agreement negotiated with South Korea, for instance, the EU insisted on repatriation of a long list of cheese names, including Provolone, Parmesan, Romano, Roquefort, Feta, Asiago, Gorgonzola, Grana and Fontina. US cheese producers have rightly signalled that such a deal threatens their exports of these products to Korea, the USs second-largest cheese export market, and, in June 2011, they got Ron Kirk, the US Trade Representative, to get a written guarantee from Kim Jung-hoon, Koreas trade minister, that Korea will not stop importing certain cheeses from the US because of European GIs under the EUKorea FTA. Kim declared in writing that Korea considers names such as Brie, Camembert, Cheddar, Mozzarella, Gorgonzola, and Parmesan as generic and not the exclusive property of European cheese makers.* How will the EU react? It is too early to tell. But with other products, the EUs repatriation efforts have extended even to local translations and variations of generic terms. For instance, the EU is insisting in its free trade negotiations with the Ukraine that Ukrainian winemakers stop labelling the sparkling white wines made in the Ukraine as shampanskoye, even though this local variant on the name champagne has been in common use for decades (Photo: AP). * The letters are here: http://www.ustr.gov/countries-regions/japan-korea-apec/korea/ exchange-letters-between-ambassador-kirk-and-trade-minister Sources: Thitapha Wattanapruttipaisan, Trademarks and Geographical Indications: Policy Issues and Options in Trade Negotiations and Implementation, Asian Development Review, vol. 26, no. 1, pp. 166-205; Petri protests threat to state cheese industry, Fond du Lac Reporter, 8 October 2010; Shaun Walker, The bubble bursts for Ukraines Champagne, Independent, 28 February 2011. Photo courtesy PDPhoto.org
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uncompetitive practices to keep prices down. Today the price of retailed milk in Chile is six times what farmers receive at the farm gate.27
Make way for mega-farms. It goes without saying that the liberalisation of Chiles dairy
market has led to the disappearance of many small dairy farms in the country. What is perhaps more surprising is what has taken their place. The low prices and trade flows that are so toxic to small farmers have been a tonic for the foreign companies and local business elites that have started to build up corporate farming in the country. Along the five kilometres of road from my mothers dairy farm to the nearest town there used to be eight families with small dairy farms, says Max Thomet, a director of the Chilean organisation CETSUR.28 Now one big farm has taken over these lands and it is controlled by a Chilean business magnate who made his fortune in life insurance.
27. Personal communication with Max Thomet, a director of CET SUR, July 2011. 28. Centro de Educacin y Tecnologa para el Desarrollo del Sur.
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Fazenda Leite Verde in Bahia, the largest pastoral-based dairy farm in Brazil. The farm, which now covers 5,500 ha and holds 3,500 cows, was established in 2008 by former Fonterra executive Simon Wallace, with more than US$10 million in funding from one of New Zealands richest internet entrepreneurs, Sam Morgan. In 2010, the New Zealandowned company opened a milk processing plant, which sells milk under the brand name Leitssimo. The company is in the process of a farm expansion that will triple the size of its farming operations.* Wallace sees no conflict between what his company is doing and his home countrys dairy export ambitions. The value of Fonterra is not that milk is produced in New Zealand; it is that milk is produced in a lot of places and then traded around the world. New Zealand dairy farmers have a massive investment in a global business, not just a few dairy farms in New Zealand. We have done this since the start; its just that sometimes in the semantics and discussion that goes on we get a little bit protective or focused on the land holding. * Vincent Heeringa, Sam Morgans South American adventure, Idealog, 7 July 2011: http://idealog.co.nz/blog/2011/07/our-milk-powder-problem; Andy Kenworthy, The Milky Way, Idealog, 1 August 2011: http://idealog.co.nz/magazine/34/milky-way Photo: Georges van Hoegaerden
When fast-food chains like McDonalds move into new markets in the South, so do their global suppliers. McDonalds main global suppliers of dairy products, Schreiber Foods and Erie Foods, entered India in the late 1990s to develop a regional supply base for the restaurant. At the behest of McDonalds, the companies partnered with the wealthy Goenka family to establish a large dairy-processing company in Maharashtra, now called Schreiber-Dynamix. The company began by setting up contract farming and collection centres to collect milk from local farmers, but then began building its own large-scale farm to supply its needs. In November 2010, the company inaugurated a future ready 6,000-cow dairy farm on 300 acres in Pune District, with backing from the State Bank of India. Dynamix also supplies Danone, Nestl, Yum! and KFC (Photo: USC).
Over the past few years, the countrys richest families, with holdings in retail, media and telecommunications, have been rapidly taking over dairy farms in Chiles most important dairy zones. So too have foreign investors, especially from New Zealand. In 2005, former Fonterra chairman Henry van der Heyden and 14 other large dairy-farming families from New Zealand established a fund, called Manuka, to purchase dairy farms in the Osorno region of Chile. The fund began by buying 13 farms of 150500 ha, and then took over Chiles largest dairy operation, Hacienda Rupanco. Today, the funds farming operations cover more than 22,000 ha, producing 82 million litres of milk per year, most of which is sold to Fonterras subsidiary Soprole. Now Manukas owners are seeking to expand by bringing in additional investors. These massive new farms, owned by absentees, represent the future for the supply of milk to the transnationals that now dominate the Chilean dairy market. Already the Ancali farm (see photo) and the Manuka farms account for nearly 10% of Chiles national dairy production.29 With their high volumes, these farms can turn a profit even when prices for milk are
29. National dairy production recorded by the industry in 2009 was 1,772 million litres. Source: Ministry of Agriculture 2010.
low, especially given that the big processors pay higher prices for farms that supply in higher volumes.30 Chile may one day become an export power in dairy, as the government said it would, but small farmers will no longer have any place in the industry. What is happening in Chile is not an isolated case. It is part of a global trend. Around the world, in the North and in the South, corporations and big financial players are moving to set up mega-farms and capture the global milk supply. If this shift to mega-farms continues in the South, it will be brutal for small farmers. In the EU and the US, and also in Southern countries like Chile and Argentina, where there is little left of the peoples milk system, the industrialisation and concentration of milk production wiped out huge numbers of small farmers. The US lost 88% of its dairy farms between 1970 and 2006, while the original nine countries of the EU lost 70% between 1975 and 1995. The pace of destruction has not slowed. In Argentina, Australia, Brazil, Europe, Japan, New Zealand, South Africa and the US, the number of farms decreased by between 2% and 10% per year in 20002005. Contrast this with most developing countries, where the transna30. Fedeleche, Informa 4 (37), Julio 2010: www.fedeleche.cl
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tional dairy processors and mega dairy farms are still hardly present. During the same years, the number of farms in these countries increased by between 0.5% and 10% per year.31 The shift to large-scale farms would also be an environmental and health catastrophe. Such farms guzzle enormous quantities of water, often at the expense of other farms and communities that depend on the same sources.32 They also require a lot of land not for their cows to live on, but to produce their feed.33 And they produce massive amounts of waste. On average, a cow produces about 20 times the waste of a human: so an industrial farm with 2,000 cows produces as much waste as a small city. Most of the excrement goes untreated and ends up in big lagoons next to the farm. These attract flies and create an odour that makes it unbearable to live nearby. Much of the waste in the lagoons will eventually be sprayed on fields, but, all too often, some of it will run off into water courses, contaminating local supplies. The manure lagoons are also major sources of greenhouse gas emissions. One study found that an industrial farm using manure lagoons loses 40 times the methane a potent greenhouse gas emitted by an organic farm where cows are pastured.34 The impact of industrial farming on animal health is also well-documented. As animals in these farms are pushed to produce more, through the use of high-protein feeds, frequent
31. International Farm Comparison Network, Dairy Report, 2010. 32. See the example from Mexico in Lus Hernndez Navarro, La Laguna: la nueva guerra por el agua, La Jornada, 12 November 2004: http://www.jornada.unam.mx/2004/11/12/048n1soc. php?origen=soc-jus.php&fly=1. 33. Data on land use is available in Charles Benbrook et al., A Dairy Farms Footprint: Evaluating the Impacts of Conventional and Organic Farming Systems, November 2010: http://www. organic-center.org. 34. See ibid.
milking and production-enhancing hormones and drugs, they become stressed and susceptible to disease and injury. To compensate, the animals are fed high levels of antibiotics and other veterinary drugs. One result is the emergence on these farms of antibiotic-resistant superbugs that can infect humans, such as MRSA.35 But these practices also directly affect the quality of milk. A recent study from the US shows a substantial difference in the nutritional quality of milk from cows raised in factory farms and cows raised on pasture in organic systems.36 Moreover, the hormones and antibiotics used in industrial farms can end up in the milk supply, or produce nasty side effects.37
35. Tom Levitt, Routine antibiotic use linked to new MRSA strain found in UK dairy cows, The Ecologist, 3 June 2011. The article points to a new study in the medical journal The Lancet that provides evidence of MRSA in dairy farms in the UK. 36. Charles Benbrook et al., A Dairy Farms Footprint: Evaluating the Impacts of Conventional and Organic Farming Systems, November 2010: http://www.organic-center.org 37. Regulations typically require dairy processors to test for elevated levels of certain antibiotics and hormones in their milk supply. These regulations, however, may not cover many of the antibiotics, hormones and other drugs that are commonly used in industrial dairy farms and potentially dangerous to human health. High levels of drug residues found in dairy cows at the point of slaughter prompted the US Food and Drug Administration to propose tests on cows on dairy farms for about two dozen antibiotics beyond the six that are typically tested for. The testing would also look for a painkiller and anti-inflammatory drug popular on dairy farms, called flunixin, which often shows up in slaughterhouse testing. But due to fierce resistance from the dairy industry, these measures have not been implemented. See William Neuman, F.D.A and Dairy Industry Spar Over Testing of Milk, 25 January 2011: http://www.nytimes.com/2011/01/26/business/26milk.html
Recombinant bovine growth hormone (rBGH), for example, a production-enhancing drug that is widely used on industrial farms in the US, South Africa and Mexico, but banned in Australia, Canada, Europe, Japan and New Zealand, is linked to increased levels of carcinogenic and antimicrobial substances in milk that make it a risk to human health.38 Peoples milk is an engine of poverty alleviation and health. It provides livelihoods and safe, affordable, nutritious foods. The revenues earned are distributed evenly and consistently throughout the sector. Everyone wins with peoples milk, except for big business, and this is why there is such pressure to destroy it. What does Big Dairy have to offer? Instead of fresh, highquality milk produced and supplied in the most sustainable ways, we are offered powdered and processed milk produced on highly polluting megafarms and sold in all kinds of packaging at double the cost! Still, every government seems hell-bent on following the New Zealand model and joining the club of exporters. What is so great about New Zealands experience? The continuing boom in dairy production is causing severe pollution to the countrys waterways. The constant push to expand export markets means that other sectors of the economy, sensitive to liberalisation, have been sacrificed in trade and investment policy. And the majority of the benefits have been captured by the 11,000 or so dairy farm owners that control Fonterra. Nearly a third of these farmers are absentee investors, and a growing number are corporations, some of them foreign.39 New Zealanders, faced with rising prices for milk at home, may well ask if theres another model that could serve them better. New Zealand is in fact so different from any other major dairy-producing country that it is silly even to make comparisons. In other countries, millions not thousands of farmers are engaged in dairy production. There, milk is not a commodity, but an essential food source, which can make the difference between misery and dignity for those engaged in its production and distribution. The opportunity for most countries is not in exports, but in clearing the way for local people to serve local markets, as they have done time and again wherever those opportunities arise. The way forward, then, requires putting the brakes on the dumping of cheap imported powdered milk and dairy prod38. EU Scientific Committee on Veterinary Measures relating to Public Health, Report on Public Health Aspects of the Use of Bovine Somatotrophin, March 1999: http://ec.europa.eu/food/fs/ sc/scv/out19_en.html 39. Personal communication with Bill Rosenberg, 16 August 2011, and James Ritchie, Secretary of the New Zealand Dairy Workers Union, 6 September 2011; and, Who owns farming in NZ?, Greenpeace: http://www.greenpeace.org/new-zealand/en/campaigns/climate-change/smart-farming/agriculture-and-climatechange/nz-farming/
ucts. High, comprehensive tariffs, such as those already in place in Europe, are a necessity. There is no reason why such tariffs have to lead to higher prices for consumers. What they protect against is periodic dumping, and the big processors use of cheap, processed dairy products or non-dairy fats as a substitute for real milk. Big processing companies may suffer from such measures, but consumers and farmers will not. Such trade measures, however, are not enough. Peoples milk is also under threat from food safety standards and regulations designed for the industrial processors. A peoples milk system needs an appropriate system of food safety, based around trust and local knowledge. There are plenty of examples of such models of food safety around the world, each particular to its local culture. Supermarkets, however, are typically unwilling to adjust to such local cultures, and they impose their own standards. Taking action against supermarkets, whether by putting pressure on them or by supporting local markets, is thus essential to the success of peoples milk. So too is the question of investment. Money from multiple sources, both local and foreign, is currently flowing into the construction of mega-farms. Money is also flowing from donors and NGOs into programmes to bring small farmers into the supply chains of the big processors. Those dollars, rupees and shillings are deadly. There is no future for smallscale sustainable farming and local markets in this scenario, as countless examples from around the world demonstrate. It leads to the concentration of farms and processing. Industrial farming generates disease and pollution, and wipes out biodiversity. Local breeds of dairy animals that supply the peoples milk system, whether cattle, goats, buffaloes or camels, have the resilience and low-input efficiency that small farmers and pastoralists need to withstand the precarious conditions cre-
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1. http://www.nestle.com/Common/NestleDocuments/Documents/R_and_D/News/Popularly%20Positioned%20Products.pdf 2. B. Kris Schulthies and Robert B. Schwart, The US-Mexico Free Trade Agreement: Issues and implications for the US and Texas dairy industry, TAMRC, August 1991. 3. Pro-poor Livestock Policy Institute, Developing Countries and the Global Dairy Sector, Part I: Global Overview, 2005. 4. http://adage.com/article/global-news/brazil-s-northeast-land-laziness-china/228070/
by climate change. It is their livestock systems that require 46 ated support, not the investors, who get all kinds of generous tax breaks, donor funds, and other incentives from governments. Workers in the dairy industry are also suffering from the same trends. Greater concentration in the industry means fewer jobs. More powdered milk, which is produced by mechanised processes that require little labour, means less work with fresh milk, which is labour-intensive. And, as can be seen in the campaigns of the International Union of Food Workers (IUF) against Nestl, the transnational dairy companies that are busy taking over national dairy industries in the South are some of the worst offenders against workers rights. The IUF points out that, for all the talk about the benefits from foreign investment, corporations like Nestl plough the profits they reap from dairy markets into the pockets of their shareholders.
Nestl in 2008 spent CHF [Swiss francs] 8.7 billion buying back its own shares on the stock market in order to reduce the number of shares in circulation and boost the earnings per share ratio, says the IUF. Thats over half of what the company claims to have spent on wages and salaries, and nearly double the capital expenditure for the year! Together with the enormous dividend hike, this is money that was not invested in research, new capacity, training, improved wages and pensions or other benefits for what Nestl calls our people. What it actually represents is the growing diversion of enormous amounts of cash to shareholders, against a background of persistent violations of trade union rights.40 The way to stop Big Dairy and strengthen peoples milk will
40. IUF press release, 10 June 2009.
The Nestl Indonesia Workers Union Panjang, a member of the IUF, waged a successful two-year campaign for the right to negotiate wages, despite the companys intense pressure on union members and their families. The IUF has been campaigning against Nestls policy of wiping out permanent jobs and replacing them with outsourced and subcontracted work, and its refusal to accept the IUF as a valid interlocutor representing workers before the company globally. The IUFs New Zealand local, on the other hand, has developed a co-operative relationship with Fonterra, formalised in a framework agreement regulating labour relations in the company signed in 2002 between Fonterra, the IUF and the New Zealand Dairy Workers Union (NZDWU). So what happens when Fonterra and Nestl come together, as they have in Latin America under their Dairy Partners of America joint venture? According to NZDWU Secretary General James Ritchie, Fonterra acts like any other transnational corporation when it comes to its overseas operations, and his union has been unable to get the cooperative to move ahead with the implementation of its framework overseas. For more information see the website of the IUF (www.iuf.org) or the website it created, NestleWatch (www.iuf.org/cms/). (Photo: IUF)
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41. Unfortunately, many of the the big co-operatives that operate internationally, such as Fonterra and Grupo Lala, are increasingly controlled by large landowners and corporate farms. 42. International Farm Comparison Network, Dairy Report 2010.
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In Egypt, the countrys largest dairy farm is owned by Dina Farms, a dairy company set up by one of the regions top private equity firms, Citadel Capital. The farm is located in the desert off the main highway between Cairo and Alexandria. It has 7,000 dairy cows, but Citadel wants to have 12,000 by 2012. Other big-time dairy investors are also flocking to the desert. Danone is in the process of constructing a mega-farm there, its second large-scale farm operation, after building one in the desert in Saudi Arabia. Participation in the organisation of large farms is a new direction for us, says Danone Director Jean Christophe Lauge. Its also new for PepsiCo, which started making major moves into dairy only in the last few years. PepsiCos subsidiary, International Dairy and Juice Ltd (IDJ), bought up the Egyptian company Beyti in 2010, taking over its large-scale dairy farm. PepsiCo jointly owns IDJ with Saudi dairy giant Almarai, which operates six mega-farms in the Saudi desert, holding 100,000 cows, or two-thirds of the dairy cattle in the country, as well as a dairy farm in Jordan, which is now part of IDJ.6 Building water-intensive dairy farms in the middle of the Egyptian desert sounds crazy. Even more so when the farms are planning to draw their future water needs from the Nile, which is already a source of tension between the various countries and communities that depend on it for food production. I dont worry about a shortage of Nile water, says Dr Mohamed Waeed, a manager with Dina Farms. I know the Ethiopians want to use more Nile water. But it wont work for them. Ive been there, its such a mountainous country, theres no space for extensive agriculture No, the future of agriculture in Northern Africa is in the Egyptian desert. Who knows, we might become big exporters of agricultural and dairy produce to the region.7 In Uruguay, foreign investment in dairy processing and dairy farms is exploding. The leading investors include Bom Gosto of Brazil, global fast-food-chain supplier Schreiber Foods of the US, Cresud of Argentina, Inlacsa of Mexico, and the Grupo Maldonado of Venezuela, which is a partner of Fonterra and Nestl. Bom Gosto and Schreiber alone now handle a quarter of Uruguays milk production. The rise of foreign investments has turned Uruguay into a major centre for dairy exports. Today, two-thirds of Uruguayan dairy products are exported, primarily to Brazil, Venezuela and Mexico. But if production is rising, the number of farms and the area devoted to dairy farming is declining rapidly, leading to more concentration. Farms larger than 500 hectares now represent 5% of all dairy and account for 28% of the national milk supply. Many of these bigger farms are in the hands of foreign investors, such as New Zealand Farming Systems Uruguay, which was set up by New Zealand investors until it was taken over by the Olam Group of Singapore in 2011. The companys 31 dairy farms produce around 70 million litres of milk per year, but it plans to acquire more farms and increase this to 300 million litres within the next few years around 20% of Uruguays total milk production!8
6. Global Investment House, Almarai Company, March 2009: http://www.gulfbase.com/site/interface/SpecialReport/Almarai%20 March%202009.pdf 7. Jeroen Kuiper, Egypts biggest dairy farm, Disputed Waters, 17 March 2011: http://www.disputedwaters.com/blog/17/03/2011/egyptsbiggest-dairy-farm 8. For a detailed account of the foreign takeover of the Uruguayan dairy sector, see: Agazzi: un mala leche, El Muerto Blog, 21 June 2009: http://elmuertoquehabla.blogspot.com/2009/06/agazzi-un-mala-leche.html
going further
Punjab Lok Sujag, The political economy of milk in Punjab: A peoples perspective, August 2003: www.grain. org/e/4428 Aurelio Surez Montoya, Colombia, una pieza ms en la conquista de un nuevo mundo lcteo, November 2010: http://www.recalca.org.co/Colombia-una-pieza-mas-en-la.html
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a source of health, not harm. But food can maim, cripple, and kill. The leading cause of food poisoning in the United Kingdom today is Campylobacter, a tiny bacterium, rife throughout the countrys chicken supply, that causes in humans diarrhoea, fever, abdominal pain and cramping, and in some cases chronic, even lifethreatening, conditions. People get it from touching raw poultry or eating undercooked birds. Some 85% of the chicken population in the UK may be infected. In the United States, the top culprits these days are Norovirus, mostly transmitted from dirty hands, and Salmonella, contracted from eating food with faeces on it. Norovirus will give you acute vomiting and diarrhoea, while Salmonella causes vomiting, fever and cramps. Among the more notorious food safety incidents in recent years was the melamine scandal in China in 2008. Six babies died and 300,000 others got horribly sick with kidney problems when the industrial chemical melamine got into the commercial milk distribution circuit. There was also a dioxin
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SOME 85% OF THE CHiCKEN pOpULATiON iN THE UK MAY BE iNFECTED. IN THE UNiTED STATES, THE
TOp CULpRiTS THESE DAYS ARE NOROVIRUS, MOSTLY TRANSMiTTED FROM DiRTY HANDS, AND SALMOnELLA, CONTRACTED FROM EATiNG FOOD WiTH FAECES ON iT.
This is food safety? and industry action on food safety gives lit52 tle Government indication that they recognise any fundamental problem
with industrial food production. Rarely do their regulations or standards hinder corporate practices in any significant way. On the contrary, they tend to reinforce the power of large industry
4. The data do not reflect the increasing privatisation of food safety. To give just one example of a private legal cost generated by the failings of the US food system: in April 2010, Cargill settled a lawsuit with Stephanie Smith, a 22-year-old dancer who was paralysed for life after eating an Escherichia coli-tainted hamburger made from Cargill beef. The amount of the settlement will never be known, but it is said to provide for Ms Smiths lifelong health costs related to coping with her affliction (and she is committed to walking again.) In the US context, this may climb to millions of dollars.
while undermining, or even criminalising, small-scale production and local food cultures. Colombia, for instance, is in the process of implementing legislation to prevent the sale of raw milk in urban areas. Well over two million farmers and vendors depend for their livelihoods on these sales of raw milk, and around 20 million Colombians, most of them poor, depend on raw milk as an affordable and essential source of nutrition, easily made safe by boiling it at home. Hard pressed to justify its moves on public health grounds, the government says that the legislation is part of its commitment to the WTO, and that it will help to modernise the dairy sector, making it better able to compete with imports when a looming free trade agreement with the EU kicks in.5 These days, in Colombia and elsewhere, food safety policy has little to do with public health or consumers. It has become a battleground among contesting interests, the site of power struggles for control over food and agriculture, with decisions being increasingly taken far from producers and consumers, in the obscure world of trade negotiations and multilateral agencies, where politics and commerce, not science and public health, are what drives things. Consider the case of bovine spongiform encephalopathy (BSE), the fatal brain-wasting condition popularly known as mad cow disease. People get the human strain of it by eating the meat of cows that have been fed diseased animals as a cheap source of protein a practice common in industrial feedlots since the 1970s. The US and Canada lost Japan, Korea
5. Aurelio Suarez Montoya, Colombia, una pieza mas en la conquista de un nuevo nundo lacteo, RECALCA, November 2010, http://www.recalca.org.co/Colombia-una-pieza-mas-en-la.html
and several other major export markets for beef when BSE was found in their herds in 2003, and have had a tough time regaining those markets because risks remain from their industries feeding practices.6 Indeed, in March 2011, a new case of BSE was identified in a Canadian cow.7 But through constant pressure, particularly at the trade negotiating table, both countries have secured some concessions to allow certain parts of the cow, or the meat of younger animals, to cross borders freely. Both countries also went to the Organisation for Animal Health (OIE) in Paris, which has a similar role to Codex Alimentarius Commission in Rome but for the animal kingdom, to get their beef declared generally safe for consumption. Where does that leave Japan? Unmoved. It says that its standards are higher than those of the OIE or the US, and have to be given priority. And then theres the case of ractopamine, a growth promoter added to pig feed. China and the European Union, which together produce 70% of the worlds pork, say that it is not safe for humans and have banned its use in meat production. The same is true for more than 150 other countries. In the United States, however, home to Eli Lilly, the pharmaceutical giant that produces ractopamine by way of its subsidiary Elanco, the drug is fed every day to pigs, cows, and turkeys and Washington fights tooth and nail to defend the interests of US corporations and prevent countries from rejecting US pork for containing residues of the stuff. The US and Eli Lilly are working hard to try to convince Codex to declare it safe for human consumption.
6. US regulation now forbids feeding cow protein to cows, but allows the feeding of poultry litter, which can contain restricted feed ingredients including meat and bone meal from dead cattle. See Downright Scary: Cows fed chicken feces, recycled cow remains, Consumers Union, 29 October 2009, http://www.consumersunion.org/pub/core_food_safety/015272.html 7. Lee Eun-joo, New mad cow disease case in Canada noted, JoongAng Daily, 7 March 2011, http://joongangdaily.joins.com/ article/view.asp?aid=2933089
Beijing, for its part, has so far refused to budge. But that doesnt mean that Chinese consumers are getting ractopamine-free pork. The same government fighting off ractopamine-laced US pork, is aggressively pushing, in the name of food safety, a consolidation and modernisation of the countrys pig production based on the US factory farm model. Chinas two largest, vertically-integrated pork producers, Yurun and Shineway, both of whom have been heavily funded by the US bank Goldman Sachs, were implicated in recent food safety incidents involving ractopamine and clenbuterol (another banned drug added to pig feed for the same purposes). In March 2011, Chinese consumers were shocked when a CCTV television report uncovered how ractopamine and clenbuterol are widely used in all the factory farms supplying Shineway in Henan Province. The report found that Shineway was actually offering farmers higher prices for pigs fed ractopamine.
As the two examples above help to show, trade agreements have become the core mechanism to expand and enforce food safety standards around the world. Since the 1980s and the Uruguay Round of GATT negotiations, which gave rise to the World Trade Organisation (WTO), agricultural markets have been profoundly liberalised, with tariffs and quotas coming down, particularly in developing countries.8 This has led to a boom in global food trade, with few countries free to impose tariffs or take similar measures to regulate the flow of imports and exports any more. As a result, governments and corporations have turned to other measures to manipulate market access and control. In agriculture, food safety is the major method.
8. The rich countries still use subsidies to protect and promote their own agricultural businesses.
Food safety and global trade: Europe and the US impose their standards.
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GOVERNMENTS AND
CORpORATiONS HAVE TURNED TO OTHER MEASURES TO MANipULATE MARKET ACCESS AND CONTROL. IN AGRiCULTURE, FOOD SAFETY iS THE MAJOR METHOD.
producers, Gabonese peanut exporters, Bolivian brazil nut harvesters and Filipino coconut farmers. The World Bank calculates that the exaggerated aflatoxin tolerance level imposed by the EU costs African countries US$670 million a year in export losses.13 For many observers, it is hard to square those losses against the benefit of preventing the potential death of 0.7 people in a population of 500 million per year.14 In fact, there are cases where the overzealous aflatoxin restrictions have only led to bidding wars to drive peanut prices down for the benefit of European importers, of course.15 The United States is slightly different in its demands. To begin with, the US is generally seen to have lower standards than Europe with regard to pesticide and chemical residues. In fact, Brussels seems constantly to be engaged in some spat with Washington DC. For instance, US poultry destined for export is routinely dunked in chlorine just before it is shipped. This is to kill the bacteria that have accumulated in the birds carcasses through the quintessentially American factory farming production process.16 The Europeans do not allow the import of chickens bathed in chlorine, so no US poultry enters the EU market. The US also carries out fewer physical checks on its
rius is 15 ppb. Many countries practise the standard of 15 (Canada, Australia, Peru), 20 (Thailand, US, China) or 30 (India, Brazil). Data from the Almond Board of California, November 2009, http:// californiaalmonds.fr/Handlers/Documents/Intnl-Aflatoxin-Limits. pdf 13. Timothy Josling, Donna Roberts and David Orden, Food regulation and trade: toward a safe and open global system, Institute for International Economics, Washington DC, 2004, p. 113. 14. T. Otsuki et al., Saving two in a billion: quantifying the trade effect of European food safety standards on African exports, Food Policy, Vol. 26, No. 5, October 2001, pp. 495514. 15. See Veena Jha (ed.), Environmental regulation and food safety: Studies of protection and protectionism, International Development Research Centre, Ottawa, 2006, p. 16. 16. It is also to get rid of slime and odour.
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9. Veena Jha, chapter on South Asia in Environmental regulation and food safety: Studies of protection and protectionism, International Development Research Centre, Ottawa, 2006, http://www.idrc.ca/en/ev-93090-201-1-DO_TOPIC.html 10. Gumisai Mutume, New barriers hinder African trade, Africa Renewal, January 2006, http://www.un.org/ecosocdev/geninfo/ afrec/vol19no4/194trade.html 11. This process has been dubbed the Senegalisation of EU fishing vessels, because of where it began. See ActionAid, SelFish Europe, June 2008, http://www.actionaid.org/main. aspx?PageID=1114, and Jean Sbastien Mora, LEurope pche en eaux troubles, Politis, 27 May 2010, http://www.bilaterals.org/ spip.php?article17454. 12. For peanuts, the level adopted by the EU in the 1990s was 4 parts per billion (ppb). The level recommended by Codex Alimenta-
own food imports. It examines only 2% of all incoming fish shipments, for instance, even though some 80% of fish consumed in the US is imported. This laxity exemplifies a US food safety system which has long relied on self-regulation by the industry, particularly through Hazard Analysis and Critical Control Points (HACCP) checks, rather than public oversight and accountability.17 At the trade negotiating table, the US government is well known and feared for pushing lax standards on genetically modified foods. Indeed, a diplomatic cable uncovered by Wikileaks shows that the George W. Bush administration pressured the French government to ease its stance against GMOs. In a 2007 cable, the US ambassador to France went so far as to suggest that we calibrate a target retaliation list that causes some pain across the EU since this [acceptance of GMOs] is a collective responsibility, but that also focuses in part on the worst culprits . He added: The list should be measured rather than vicious and must be sustainable over the long term, since we should not expect an early victory.18 Such diplomacy is for the clear and direct benefit of Monsanto, DuPont and other agricultural biotechnology corporations that do not like foreign countries banning GM seeds or foods, much less requiring labels that inform consumers of the presence of GM ingredients. US firms, especially the members of the Biotechnology Industry Organisation, religiously use FTA talks by Washington officials as a platform to secure market access for GMOs through aggressive regulatory reforms.19
17. HACCP is a method of controlling risks in a food production process by identifying the key points to monitor, and keeping an eye on them. It was developed by the Pillsbury Corporation to create foods suitable for NASA space flights, so one can imagine the ramifications! It is basically just a system of private checklists. 18. Subject: France and the WTO ag biotech case, Wiki-leaks cable Reference ID 07PARIS4723, dated 14 December 2007, http://213.251.145.96/cable/2007/12/07PARIS4723.html 19. For details, see bilaterals.org and GRAIN, FTAs and biodiversity, in Fighting FTAs, 2008, http://www.bilaterals.org/spip. php?article15225, and GRAIN, Food safety: rigging the game, Seedling, July 2008, http://www.grain.org/seedling/?id=555
Besides GMOs, US trade policy is also seen as destabilising other countries sovereignty over food safety and health matters, insofar as Washington regularly demands relaxation of rules against the import of US farm products that others deem risky, such as beef (BSE, hormones), veal (hormones), chicken (chlorine) and pork (swine flu). The US and the EU have much in common, though. Both are attached to the process of inspecting and accrediting specific farms, fisheries or manufacturers as matching or surpassing US or EU standards for exporting food to them. While this might seem extraordinarily protective of EU or US consumers, it also invites corporate takeover and concentration. For example, when the EU lifted a six-year import ban on Chinese poultry in 2008, in reality it gave the nod to only a handful of meat factories in Shandong Province certified to export to the EU, one of which had been taken over just two weeks before by Tyson, the worlds second-largest meat company.20 Both the US and the EU also create bilateral committees with their trade partners to continue the conversation on harmonisation, in order to develop further not only mutually agreed food safety practices but also standards, including new international standards. The EU is using these mechanisms to pursue its agenda of introducing animal welfare into the pool of world food trade norms. Free Trade Agreements (FTAs) are used to fight food safety battles not only by the US and the EU, of course. Countries like India or Australia or Brazil are not just on the receiving end of US or EU pressures. They have their own sanitary standards, agendas and needs. India, for instance, through a gradually maturing FTA strategy, is fighting an uphill battle to increase foreign inward investment and yet still control agricultural markets. During US President Obamas visit to India in November 2010, Indian Agriculture Minister Sharad Pawar made it clear that the United States can produce all the scientific studies it wants, and they will be respectfully reviewed, but India will not import US dairy products that offend
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20. GRAIN, Big Meat is growing in the South, Seedling, October 2010, http://www.grain.org/seedling/?type=82
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ble for meat, poultry and egg products, which accounts for 20% of the US food supply. The Food and Drug Administration, within the US Department of Health, takes care of the rest. The Food Safety Modernisation Act addresses only the work of the
farm activists who, because of the way the bill was framed, saw themselves falling under these controls when they are not the problem. So instead of instigating real food safety reform in a country where one out of four people gets sick and 5,000 people die from eating contaminated food each year, the law might do next to nothing. In the absence of stricter public action around food safety, corporations have moved to fill the void sometimes to tragicomic effect. A case in point: in the mid-2000s, a company called Beef Products Inc. had an ingenious idea: it would buy slaughterhouse scraps which are extremely likely to be infected by bacterial pathogens from large-scale beef processors at cut-rate prices. It would pure those parts into a paste, which it would then mix with ammonia to kill bacterial pathogens. It would sell the product back the the beef industry as a cheap filler for ground beef, with the added feature that the ammonia in the paste would sterilise the ground beef it was mixed with. The beef industry had found a solution to the problem of bacterial pathogens in ground beef! The product, known in the industry as pink slime for its distinctive look, could be found in 70% of hamburgers consumed in the United States by the end of the decade. The USDAs Food Safety Inspection Service, which oversees meat safety, applauded it recognised pink slime as safe without requiring testing, on the grounds that it had been sterilised by ammonia. But in 2009, a New York Times expos found that pink slime in fact tended to be ridden with pathogens and was actively adding to the pathogen load of the ground beef it was mixed with. Beef Products Inc. responded by merely upping the ammonia dose for its mix. To this day, the product remains widely used in the vast US ground beef market, including at fast-food chains nationwide.6 If the official US response to highly visible manifestations of food poisoning, like Salmonella-tainted meat and peanut butter, has been underwhelming and industry-friendly, then the response to low-level exposure to pathogens that cause cumulative damage has been virtually non-existent. The first kind causes spectacular, impossible-to-ignore symptoms like vomiting and diarrhoea; the second entails subtle, easy-to-ignore ones that can cause significant long-term damage. Corporate-led food safety regimes like the one in the United States have to at least gesture at the first kind; the second kind, not so much. It turns out that the USDAs Food Safety Inspection Service (FSIS), which oversees the safety of the US meat supply, routinely endorses meat that it knows to be tainted with residues of veterinary drugs, pesticides, and heavy metals, the USDA Inspector General revealed in a 2010 report.7 The damning report was met with silence by the US media probably because small amounts of substances like heavy metals dont cause dramatic immediate symptoms, but rather hard-to-trace, slowto-develop conditions like cancer. As the report puts it, the effects of residue are generally chronic as opposed to acute, which means that they will occur over time, as an individual consumes small traces of the residue. In its report, the USDA Inspector Generals office expressed confidence that the FSIS would redouble efforts to keep heavy metals and antibiotic traces out of the meat supply going forward. Yet it had expressed the same thing, after exposing the same problem, in its report two years earlier.8 Another example is the US Food and Drug Administrations refusal to act on mounting evidence that BisphenolA, an industrial compound found in many food containers, is an endocrine disrupter. If the food safety regime for spectacular pathogens could be described as porous, that for the second, more subtle, kind barely exists at all. Written with contributions from Tom Philpott, senior writer on food and agriculture for Grist magazine.
FDA. The top sources of food poisoning in the United States are, however, poultry, beef and leafy vegetables (in that order, 2007). See: Can Congress make a food-safety omelette without breaking the wrong eggs? , Grist, 25 October 2010. 6. Safety of Beef Processing Method Is Questioned, New York Times, 30 December 2009, http://www.nytimes. com/2009/12/31/us/31meat.html?_r=1&partner=rss&emc=rss&pagewanted=all; See also, Lessons on the food system from the ammonia-hamburger fiasco, Grist, 5 January 2010, http://www.grist.org/article/2010-01-05-cheap-food-ammonia-burgers 7. FSIS National Residue Program for Cattle, Office of the Inspector General, US Department of Agriculture, http://www. usda.gov/oig/webdocs/24601-08-KC.pdf
8. USDA Inspector General: meat supply routinely tainted with harmful residues, Grist, 15 April 2010: http://www.grist
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allowed for livestock are controlled, the use of antibiotics for animals still exceeds their use for humans. In Germany, for example, three times as many antibiotics are given to animals as to humans.10 Such widespread use of antibiotics in factory farms speeds up the development of antibiotic resistance among bacteria. Unlike other strains of MRSA, ST398 can already withstand tetracyclines, a group of antibiotics that is given heavily and regularly to pigs on factory farms. The medical profession is getting increasingly worried about what this will mean for the future of human health care, as antibiotics may become useless. The WHO now calls it the greatest threat to human health.11 The good news, however, is that ST398 still hasnt shown much virulence in humans, nor is it easily transmitted between people. Not yet, at least. In 2010, a 14-year-old girl in France, recovering in hospital from pneumonia, was infected with a superbug. She soon began having serious respiratory problems, her lungs started bleeding, and within six days she died. The superbug that killed her was a clone of MRSA ST398 that is known to circulate in humans. The most alarming issue for the French doctors studying the case was that this was the first incident on record in which this strain of MRSA had acquired the capacity to produce a lethal toxin in humans, something that certain other strains of superbugs are able to do. They reasoned that if the clone of MRSA ST398 could do it, then surely pig MRSA has the same capacity.12 It is not much of a stretch to imagine a situation where pig MRSA passes from a pig to a farm worker carrying another MRSA strain with virulence to humans, mixes with that strain, and acquires its capacity for virulence. The new virulent strain of ST398 could then easily pass back into the pigs, where it would rapidly amplify and spread. ST398 is transmitted to humans not only through contact with live pigs: the bacteria is also present in meat sold in supermarkets and can be carried over large distances by the insects that pass in and out of farms.13 The EU is slowly starting to take action to defend against such a possibility. It has implemented several measures to restrict the use of antibiotics in livestock production and, at national and at EU level, some surveillance of farms is being carried out. In 2009, a panel of the European Food Safety Authority recommended that the EU move towards systematic surveillance and monitoring of MRSA in intensively reared animals. South Korea, for its part, banned the use of seven antibiotics in animal feed in 2008, and implemented a national programme to reduce the use of antibiotics on livestock farms. But such restrictions on the use of antibiotics for livestock hardly exist in the US, although proposed legislation restricting the non-therapeutic use of certain antibiotics in feed is currently before Congress. As for surveillance, the US National Antimicrobial Resistance Monitoring System doesnt even test for MRSA.14 Outside the industrialised countries, where the meat industry is expanding most rapidly, there is an almost complete absence of controls on the use of antibiotics in agriculture and of surveillance for pathogens such as MRSA. Enhancing surveillance and cutting back on the use of antibiotics on factory farms are important measures. But they arent enough to deal effectively with the threat posed by MRSA and the myriad other pathogens that thrive on factory farms. A staggering 61% of all human pathogens, and 75% of new human pathogens, are transmitted by animals, with many of the most dangerous such as bird flu, BSE, swine flu and the Nypah virus having emerged from intensive livestock farms.15 It is the way that animals are farmed that is fundamentally at issue.16
10. Kristen Kerksiek, Farming out Antibiotics: The fast track to the post-antibiotic era, Infection Research, Germany, 22 March 2010, http://www.infection-research.de/perspectives/ detail/pressrelease/ farming_out_antibiotics_the_fast_track_to_ the_post_antibiotic_era/ 11. AAP, Greatest threat to human health, Sydney Morning Herald, 16 February 2011, http://www.smh.com.au/lifestyle/wellbeing/greatest-threat-to-human-health-20110216-1awai.html 12. Frdric Laurent, Les souches de staphylococcus aureus ST398 sont-elles virulents, Bull. Acad. Vt. France, Vol. 163, No. 3, May 2010. 13. See Aqeel Ahmad et al., Insects in confined swine operations carry a large antibiotic resistant and potentially virulent enterococcal community, BMC Microbiology, 2011, http://www.biomedcentral.com/1471-2180/11/23/abstract 14. Maryn McKenna, Alarm over pig MRSA but not in the US, Wired, 30 October 2010, http://www.wired.com/wiredscience/2010/10/alarm-over-pig-mrsa-%E2%80%94-but-not-in-the-us/ 15. John McDermott and Delia Grace, Agriculture-Associated diseases: Adapting Agriculture to improve Human Health, ILRI, February 2011. 16. GRAIN, Germ warfare: Livestock disease, public health and the military-industrial complex, Seedling, January 2008
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domestic religious sensitivities.21 The Japanese government, in its zeal to sign FTAs, especially with Australia and the US, also has a difficult tightrope to walk on the issue of GMOs, as it needs to respect its own electorates preference for GM-free foods. Southern African states such as Namibia have raised serious questions about how to be proactive in pushing their own development strategies and needs in trade negotiations with the EU, where Sanitary and Phytosanitary Standards (SPS) requirements which are very costly to comply with can undermine local benefits. The difference is that these countries are not out to change others food safety standards. The US and the EU most clearly are.
New standards open new markets. Food safety, strictly speaking, is a matter of preventing illness. But the boundaries of what we bundle under this concept can be stretched to include broader issues of food quality. Halal, GM-free, cruelty-free and organic foods are all examples of growing markets that are generally handled, for practical purposes, by the current food safety regime (standards, audits, certification, traceability and dispute mechanisms). Similarly, at the policy level these considerations are regulated by food safety authorities, and in trade talks they form part of sanitary and phytosanitary chapters or agreements.22 Many of these broader food quality concerns are not necessarily about product standards, but processes. Therefore they tend to get defined and controlled through schemes rather than standards per se. And if care is not taken, they can be quite arbitrarily defined to suit the needs of transnationals like Cargill or Carrefour, rather than the needs of local communities or of public health generally. While demands for GM labelling and organic foods are relatively more integrated into food safety or food marketing regimes, a shake-out is needed soon with regard to halal foods and animal welfare issues.23
21. This includes milk of cattle fed with feeds produced from internal organs, blood meal and tissues of ruminant origin or products that may contain animal rennet. See Gargi Parsai, No import of US dairy products for now, The Hindu, 15 November 2010, http:// www.bilaterals.org/spip.php?article18483 22. They also fall under the remit of Technical Barriers to Trade (TBT) disciplines, the close cousin of SPS. TBT rules govern labelling, and many food safety and broader food quality issues require proper labelling. 23. The same is true for nanomaterials.
The halal food market, currently valued at around US$600 billion, or 16% of the global food retail market, is expanding fast, and will continue to grow in the coming years.24 But what constitutes halal food is a highly contested issue. There is no global standard, and within any given country there may be different or even competing standards.25 At the international level, the Organisation of the Islamic Conference is the forum that needs to come to terms with this. In 2008, Malaysia and Turkey agreed to develop jointly some harmonised or common standards, for adoption by the OIC at large, but this is unlikely to pass uncontested. Animal welfare is another issue altogether. It seems to be a predominantly European regulatory concern, but this alone means that it is fast becoming a responsibility for the rest of the world. By 2013, the EU will implement new standards on animal slaughter, including stunning, and these new norms will have to be followed by anyone planning to export meat to the EU. As already noted, the EU increasingly includes animal welfare in its bilateral trade agreements, making explicit demands on partners to work with the EU to draw up international standards in this area. So far, Chile, Korea, Colombia, Peru, and Central America have accepted the EUs demands, particularly working with the Europeans to draw up global legal standards.26 Internationally, the OIE is expected to adopt, very soon, some recommended set of principles for animal welfare in international trade.27 But who defines these principles, and who enforces them as international norms? There are no international legal standards for animal welfare. At OIE, the debate is divided along NorthSouth lines. The major complaint from
24. Exact figures of the market size vary, but come to US$550630 billion per year. The main reasons why this market is booming are population growth and conversion rates. But practicalities facing the food service industry also weigh in. For instance, the catering firms that supply the airline industry at the worlds major hubs (e.g. Heathrow and Frankfurt) are increasingly opting to use only halal meat. 25. Whether GMOs like cloning and other new technologies are halal or haram has long been an issue of debate, and the answer often depends on the country or the authority giving it. 26. Outside the SPS arena, Canada filed a WTO dispute in August 2010 against the EUs seal trade ban. While this conflict is not over food safety, it does challenge how far the EU can go in pushing its animal welfare standards on other countries. This issue will also have to be dealt with in the current EUCanada FTA negotiations. 27. This involves not just food but testing and cosmetics.
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Food safety, now on offer at Walmart. It would be wrong to take diplomatic or legislative wrangling as evidence that governments are getting serious about food safety. While they spare no expense in ensuring that regulations do not harm export markets for their food companies, when it comes to managing the risks generated by the industrial food system, deregulation and hands-off attitudes are very much the order of the day. Governments may define and administer the legal framework of food safety and similar standards, but the action and the agenda are very much left in the hands of the private sector. One could even say that food safety is hardly a matter of public policy at all any more, as so much revolves around private standards, voluntary controls and obscure industry bodies, all under the thumb of the largest food corporations. Consider beef. The US government insists that US beef is the safest in the world, but buyers know better. If you look at food recalls over the past two years, theres been a significant increase, says Frank Yianna, vice-president for food safety at Walmart, one of the countrys largest beef retailers. The US governments response to this alarming rise in meat recalls: no new measures. Walmarts response: a set of its own new standards to which its US beef suppliers will have to conform by June 2012. Walmart says that its standards will provide its customers with an additional layer of protection beyond the tests for Escherichia coli and other pathogens that the meat industry already conducts. This is really a response to long-term trends in beef recalls, says Yianna.29 US beef regulations, and even the regulations that the Japanese government imposes on US beef imports, arent good enough for Japans food service sector. Although Tokyo lifted, in 2006, its ban on US cattle aged 20 months or younger, Zensho, Japans largest food service company, wants US beef suppliers to provide it with special safeguards, particularly concerning BSE. In December 2010, Zensho announced that it had struck a deal with JBS, a Brazilian company that is one of the largest beef producers in
28. Their main concerns are lack of harmonisation, lack of transparency, lack of scientific basis and no consultation. For OIEs overview of the discussion process, see Implications of private standards in international trade of animals and animal products, updated 23 June 2010, http://www.oie.int/eng/normes/en_Implications%20of%20private%20standards.htm For an account of developing country concerns, see the final report of the OIE questionnaire on private standards, http://www.oie.int/ eng/normes/A_AHG_PS_NOV09_2.pdf 29. Bruce Blythe, Walmart will require stricter safety tests for beef suppliers, Drovers CattleNetwork, 29 April 2010, http://www.cattlenetwork.com/cattle-news/latest/wal-mart-will-require-strictersafety-tests-for-beef-suppliers-114326579.html
Small farmers at the losing end. More and more of the food that people buy is delivered to
them through the supply chains of transnational supermarkets and food service corporations. These companies now wield enormous power in deciding where food is produced and where it is sold, and they increasingly want to dictate exactly how it is produced and handled. Food standards have become a central way for them to organise global markets. Supermarket standards for fresh fruit and vegetables reveal much about who wins and loses within the corporate regulatory apparatus. Fresh fruit and vegetables are extremely important to retailers because they bring shoppers into their stores on a more regular basis, keeping overall sales up. Supermarkets have tried to capture this market by offering low costs and quality assurances. Their main strategy in this regard has been to source from preferred suppliers that can provide large volumes from low-cost production areas, assure traceability of the produce all the way back to the farm, and ensure that it was grown according to the standards stipulated by the supermarkets. Today, big food retailers such as Tesco, Walmart, Carrefour or Lotte are focusing on expanding their operations in the South, where markets are growing. India, China, Brazil and Indonesia are among the prime targets. In these and other developing countries, however, produce markets are still dominated by informal supply chains, from peasants and small co-operatives to local wholesalers and street vendors. So the
30. Zensho statement of 30 November 2010, http://www.zensho. co.jp/en/ZENSHO_SFC_20101130.pdf 31. South African poultry makers racist, politician says, BBC, 29 December 2010, http://www.bbc.co.uk/news/worldafrica-12090741
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supermarkets in Indonesia are imported, mostly from regional supermarket supply hubs in Thailand and China.33 Third, the suppliers that serve supermarkets, and the standards that they are obliged to follow, leave no room for traditional farming. The only window of opportunity for a small-scale grower who wants to sell to supermarkets is tightly controlled contract production, where the company dictates everything, from the seeds to the pesticides used. Such contract farming schemes erode biodiversity and local food systems and cultures. But even this option is usually not possible, as compliance is generally too costly and impractical for small-scale growers. So more and more of the actual farming is being carried out and managed by the preferred suppliers themselves, with heavy involvement from the supermarkets. Of course, many domestic supermarkets and supply chains from ShopRite of South Africa to DMA of Brazil are implementing this model as well. And while some will surely grow and become regional giants, they are easy prey for buyout by Northern cousins. US-based Fresh Del Monte Produce is one such preferred supplier of fresh fruit and vegetables to global supermarket chains. According to the companys CEO, Mohammad AbuGhazaleh, Retailers today are more inclined to work with someone who can assure them that his product has come from his own farm, has been packed under his own packing plant, with shipping under his control and delivering it to his customer, also under his control. His company produces 39% of its bananas, 84% of its pineapples, and 81% of its melons on its own plantations, mainly in Central America, and runs a vertically integrated poultry business in Jordan that supplies retailers and transnational corporations (TNCs) in the Middle East. In 2009, 13% of the its total sales were to Walmart. Peru is described as a success in penetrating supermarket supply channels. It was prodded into the business under Washingtons so-called war on drugs 20 years ago. Since then, exports of asparagus to the EU and North America have taken off. But this has dramatically transformed local agriculture. Asparagus used to be produced by small-scale farmers, but today they account for less than 10% of the countrys production, which is now dominated by large-scale export-oriented firms. Just two companies Del Monte and Green Giant, both of the US today control a quarter of Perus asparagus exports.34 In 2000, Ghana tried a similar programme, but with a focus on the production of pineapples for European supermarkets. In the first four years, exports of pineapples to Europe surged, from around 20,000 tonnes to around 50,000 tonnes, and much of it was supplied by small Ghanian farmers and mid-sized traders.35 But in 2005, Ghanas market crumbled. Without warning, European retailers, lobbied by Del Monte, unilaterally decided to begin purchasing only the
33. Thomas Reardon, Spencer Hensen and Julio Berdegu, Proactive fast-tracking diffusion of supermarkets in developing countries: implications for market institutions and trade, Journal of Economic Geography, Vol. 7, No. 4, 2007. 34. GRAIN, Global agribusiness: two decades of plunder, Seedling, July 2010, http://www.grain.org/seedling/?type=81 35. Niels Fold, Transnational Sourcing Practices in Ghanas Perennial Crop Sectors, Journal of Agrarian Change, Vol. 8, No. 1, January 2008, pp. 94122.
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Privatised Food Safety inIn the Global South. China, where supermarkets are expanding at a furious
pace, these trends are biting hard. The major supermarket chains, both foreign and domestic, are working hand-in-glove with suppliers and local governments to develop farms to supply fruit and vegetables. As part of a drive to improve food safety and integrate its 700 million small-scale farmers into high value food chains with scientific methods of farming, the Chinese government has been pursuing the establishment of fruit- and vegetable-growing bases in partnership with the private sector. In each of these designated production zones, local authorities negotiate deals with private companies whereby the company comes in, leases an area of land from the farmers currently occupying it, or acquires their land use rights, and then sets up large-scale production, hiring the displaced farmers as labourers or in contract production arrangements. Hong Kong Yue Teng Investment is one of these companies. Over the last few years it has emerged as a major vegetable producer in Chinas Guizhou Province, where it has two largescale production bases that supply vegetables to Walmarts stores in southern China. Walmarts preferred fruit supplier is the Xingyeyuan Company, which has several thousand hectares of orchards north of Dalian City. For eggs, Walmart deals with Dalian Hongjia, a massive factory farm complex with 470,000 laying hens and an annual production capacity of 7,400 tons of fresh eggs. Walmart has 56 such direct purchase bases with companies in 18 provinces and cities in China, covering a total of at least 33,000 ha of farmland. It calls its network the Direct Farm Program and claims that, by 2011, these arrangements will bring benefits to one million farmers. Of course, Walmart does not actually deal directly with farmers, but with companies that hire and manage farmers for their large-scale operations. Walmarts moves in agriculture are part of its overall strategy to source more directly and reduce costs in its supply chain. The companies supplying Walmart have to ensure that production happens strictly in accordance with Walmarts demands, and the company runs training programmes to show the companies and the farmers working for them exactly how they want farming done. As a multinational corporation with a strong
40. Clare Narrod, Devesh Roy, Belem Avendano and Julius Okello, Impact of International Food Safety Standards on Smallholders: Evidence from Three Cases, in McCullough, Pingali and Stamoulis (eds), The Transformation of Agri-Food Systems: globalization, supply chains and smallholder farmers, London, Earthscan, 2008.
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Peoples resistance to corporate food safety. In recent years we have seen some amazing social struggles
and really solid initiatives emerge to counteract this corporate hijack of food safety policy-making. Some of them have been triggered by the restructuring of international food trade, such as the resistance to US beef waged by citizens movements in Taiwan, Australia, Japan or South Korea. Others have been reactions to domestic nightmares, such as the social activism in China following the melamine milk tragedy. Occasionally, all countries get rocked by short-lived food poisoning outbreaks. But we are increasingly seeing much more structural and political questioning of the industrial food system, of capitalist development and of who decides what, because peoples health and livelihoods are being directly affected. The struggles around mad-cow beef and GMOs are good examples. Many times, social movements have organised to keep them out of their countries not so much because of the health or food safety implications per se, but because of the broader social and economic directions that these symbols of industrial agriculture, corporate power or Western imperialism represent. The Korean peoples resistance to US beef has grown into an expression of profound distrust toward Koreas system of representational democracy, including the states relationship with the US, not an irrational fear of prions.47 In Australia, the campaign has been more about keeping Australian food within Australian hands, a concern that many peoples across the world share with regard to governance and control of their own countrys food supplies. As to anti-GMO struggles, they are as diverse as the anti-US beef campaigns, but they have also been about profound issues of democracy, the survival of local cultures and food systems against the onslaught of Western solutions, about keeping seeds and knowledge alive in communities hands and challenging whole models of development. On a deeper level, people are organising to overcome the health, environmental and social costs of the expanding industrial food system. Movements and campaigns for organic food or to go local, in other words to buy food produced nearby and boycott products shipped from far away, have been spreading in many countries. The alarming rise in obesity, type 2 diabetes, cancers and other diseases that are directly linked to unhealthy eating is mobilising many people to change their lifestyles and work with others to promote more wholesome
46. Greenpeace, Pesticides: not your problem?, 9 April 2009, http://www.greenpeace.org/eastasia/news/China-pesticides 47. See Jo Dongwon, Real-time networked media activism in the 2008 Chotbul protest, Interface, Vol. 2, No. 2, November 2010, pp. 92102.
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52. Western journalists and academics such as Christian Jacquiau, Marion Nestle, Felicity Lawrence and Michael Pollan have been doing a great job in helping the public to understand how supermarkets and food safety systems really work, and how citizens can retake control of such matters. 53. Historic breakthrough in Floridas tomato fields, joint press release from Coalition of Immokalee Workers and the Florida Tomato Growers Exchange, 16 November 2010, http://www.ciwonline.org/FTGE_CIW_joint_release.html See also: The human cost of industrial tomatoes, Grist, 6 March 2009, http://www. grist.org/article/Immokalee-Diary-part-I/
going further
GRAIN, Food safety: rigging the game, Seedling, July 2008, http://www.grain.org/seedling/?id=555 Christine Ahn and GRAIN, Food safety on the butchers block, Foreign Policy In Focus, Washington DC, 18 April 2008, http://www.grain.org/o/?id=83 The SPS-food safety section of the activist website bilaterals.org has a range of highly focused articles tracking how countries use bilateral trade and investment agreements to move food safety standards and policies in favour of their corporations. http://www.bilaterals.org/spip.php?mot185 Sunita Narain, Control your food. Its your business, Centre for Science and Environment, New Delhi, 1 October 2010, http://www.cseindia.org/content/control-your-food-it-your-business Susan Freidberg, Supermarkets and imperial knowledge, Cultural Geographies, 2007, http://www. dartmouth.edu/~geog/facstaff/CVs/Freidberg/ImpKnowledge.pdf
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Photo: Development Fund Norway
hat is fuelling the galloping market for meat in the countries of the South? The short answer is an abundance of cheap, factoryfarmed meat, behind which stands an abundance of cheap feed. Todays explosion in meat consumption in the South is really just round two of what happened years ago in the North, when companies began setting up factory farms and feedlots to convert mountains of subsidised cereals and oilseeds into animal protein for fast-food kitchens and supermarket aisles. The excess meat, from frozen chicken legs to cow entrails, was and continues to be dumped on poorer countries. Big Meat a collective name for the large corporations running meat production and trade gets all kinds of subsidies in the US and Europe. Some argue that the actual price of a pound of hamburger meat in the United States should be around US$30 instead of the US$12 it sells for at mass retail centres.1 If subsidies on feed alone were removed, the operating costs for US meat companies would be about 10% higher, and you would likely start seeing fruit and
1. This is claimed by Moby and Miyun Park in their book Gristle, New York, The New Press, 2009.
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THE GREAT FOOD ROBBERY. Table 1: Use of feed concentrate by region, 1980 and 2005 (million tonnes) 1980 2005
Developed countries Former centrally planned economies Other developed countries Developing countries East and South-east Asia China Rest of East and South-east Asia Latin America and the Caribbean Brazil Rest of Latin America and the Caribbean South Asia India Rest of South Asia Near East and North Africa Sub-Saharan Africa WORLD Source: FAO 668.7 296.5 372.2 239.6 113.7 86.0 27.7 64.3 33.4 30.9 20.9 15.5 5.4 25.8 15.0 908.4 647.4 171.9 475.4 602.7 321.0 241.4 79.6 114.1 54.9 59.3 49.7 37.1 12.6 70.1 47.6 1,250.1
been actively relocating much of their production to China, while Danish pork producers have been relocating production to eastern Europe. But its not just a story of big companies from the North. Increasingly, the fresh capital being put on the table to build factory farms and feedlots, produce and transport the feed and set up the meat-packing plants is flowing from and through companies from the South. As the United Nations Conference on Trade and Development (UNCTAD) points out, 40% of all global cross-border investment in agricultural production in 2008 was SouthSouth.6 In the process, a number of meat companies based in the South have grown into full-fledged transnationals, with their own aggressive overseas expansion strategies. Graph 2 gives the global ranking of the top meat companies, and shows how transnational corporations from the South have joined the big boys meat club. But a graph cannot convey the speed at which they are buying each other up, nor the complexity of their relations.
Engines of expansion. A company needs capital to grow. And, as of late, the global
finance industry, which sits on most of the worlds money, has been eager to funnel its investment into meat production in the South. Since the financial crisis of 2008, private investors, from hedge funds to pension funds, have developed a big appetite for equity stakes in meat and dairy companies in the South, and even for direct investment in farms. For example, Goldman Sachs and Deutsche Bank have invested hundreds of millions of dollars buying into Chinas top pork producers over the past few years, as the market is in full growth. Barclays Bank is among several institutional investors that have acquired major stakes in Zambeef, Zambias largest agribusiness company. Further north, Citadel Capital, an Egyptian private equity fund buying up land for food production across Africa, has taken over a domestic farm of 11,000 cows (see Box 1). But there is also a great deal of government manoeuvring to boost the bank accounts of meat companies in the South. Some governments, most notably Brazils, are determined to develop their own multinational meat giants that can take on the TNCs from the North in supplying international markets and fast-food chains. Brazils National Economic and Social Development Bank (BNDES) has dished out US$4.4 billion in financing to the four biggest Brazilian meat companies since 2008.7 The bank now owns 20% of JBS and 14% of Marfrig, the countrys two largest meat multinationals. Other governments are more motivated by long-term food security issues. The governments of Libya and South Korea, for instance, are working with national companies to acquire farmland overseas to produce food for export back home or to the international market. When it comes to meat, this means both promoting offshore crop production to grow feed for domestic livestock and investing in livestock production overLe Monde Diplomatique, July 2008, http://www.monde-diplomatique.fr/2008/07/COLOMA/16084 6. UNCTAD, World Investment Report 2009, Geneva, September 2009. 7. Stuart Grudgings, Cattle a tough target in Amazon protection fight, Reuters, 1 June 2009.
poorer countries. People around the world are not just eating more meat, they are eating more industrial factory-farmed meat, and the implications of this are huge. Big Meat, developed by corporations in the North, is now a global phenomenon. And, as we shall see, in its rampage across new frontiers its armies are now often marching with flags of countries from the South. The old NorthSouth lens needs some readjustment.
A new crop of meat giants. One of the reasons why industrial meat production is booming in the South is that the large meat conglomerates, like corporations in other sectors, have been using the architecture of neoliberal globalisation to shift their operations to poorer countries where they can produce more cheaply. US-based Smithfield, the largest pork producer in the world, has set up farms in Mexico and Eastern Europe. Another giant US meat company, Tyson, began producing poultry in China in the 1990s on a relatively small scale until 2010, when it brought two new poultry farms into production that will produce a total of 150 million birds per year. At around the same time, Tyson established a joint venture in India, bought into cattle feedlot operations in Argentina and took over three major poultry producers in Brazil. Several European poultry companies have also outsourced their operations to Brazil. The French company Doux, which led the transformation of the French poultry industry into a heavily industrialised export producer, began shifting its operations to Brazil in 1998 through the acquisition of a Brazilian poultry company with generous incentives from the Brazilian government. By 2002, Doux, the worlds fifth largest poultry company, was producing half of its total output in Brazil.5 Japanese meat companies, for their part, have
5. Tristan Coloma, Quand les volailles donnent la chair de poule,
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250
Others Argentina
200
Brazil USA
150
seas. China, for example, is securing land for the production of feed crops in Brazil and Argentina while negotiating livestock projects in the Bahamas and Tanzania. And its state-owned commodity trading giant COFCO is rapidly becoming one of the largest meat and dairy producers within China, while also getting a foot in the door overseas by taking a 5% stake in the US pork producer Smithfield in 2007. Paradoxically, Singapore is looking to China for its future pork supplies. In 2010, a subsidiary of Temasek, Singapores sovereign wealth fund, announced a massive investment in a joint venture project with Chinas largest pork producer that will eventually churn out one million pigs per year at farms in Jilin province, mainly for export to Singapore. Many countries in the Middle East, with their populations booming and having limited access to arable land and water, are extra nervous about the vulnerability of their meat supplies. Meat imports have skyrocketed, as have imports of feed. Diplomatic assurances of future supplies from Brazil, New Zealand, the US and other major meat and feed exporters do not seem to be having the desired effect, since several governments in the region are continuing to support, if not actively promote, their private companies efforts to invest in meat and feed production overseas. Saudi Arabias fourth-largest poultry company, HADCO, which is owned by the Kingdoms largest dairy company, Almarai, has started producing cereals and fodder on 10,000 hectares of land in Sudan, and says it will eventually raise production to 100,000 ha. State-owned Hassad Food is building new livestock farms in its home market of Qatar, while it acquires overseas lands for feed production and livestock projects in Australia, Brazil, Turkey and Uruguay. Iran, too, has joined the rush. In November 2009, the Brazilian government rejected a formal request from Iran to purchase farmland in the country. A few months later, it was reported that Iranian investors were launching a US$40-million cattle and feed mill operation in southern Russia, and contemplating the construction of a 1.2-million-bird poultry facility there.8 But these various governmental initiatives are just creating space for the big guys to move in. The global food system is run and managed by corporations, and corporate strategies define the investment flows. As Kentucky Fried Chicken expands in China, so does DaChan, one of Asias largest poultry companies and a KFC supplier. As African supermarket leader Shoprite sets up shops in Nigeria, Zambeef, its main supplier for southern Africa, constructs meat-packing plants nearby. As Wal-Mart expands into Mexico, so does Pilgrims Pride, the largest US poultry company, now owned by Brazils JBS. Likewise, when JBS buys feedlots and builds packaging plants in Uruguay, the US or Australia, it does so to be better able to supply beef to its global clients like McDonalds and Carrefour in markets that are closed to Brazilian exports because of restrictions on foot-and-mouth disease (see Box: McMarfrig, p. 8).
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10 0
Flags of convenience. The role of governments in this game is mainly to help their
1960
(26.9)
50
1970
(43.5)
1980
1990
2000
2005
(206.4)
companies and elites to navigate these markets, whether by signing bilateral trade and investment agreements or launching diplomatic missions to overturn import restrictions. The ThailandAustralia Free Trade Agreement, for instance, was
8. See http://farmlandgrab.org/cat/iran.
THE GREAT FOOD ROBBERY. Graph 2: The top ten global meat corporations production, 2009
(million tonnes)
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mainly a horse trade (so to speak): Australian dairy companies took over the Thai dairy market, and Charoen Pokphand (CP), the Thai agribusiness giant, got the Australian poultry market.9 Or consider the recent trade negotiations between Brazil and China on poultry. In May 2009, when Brazils President Lula was in Beijing, he succeeded in getting the Chinese government to lift the trade sanctions it had imposed on Brazilian poultry imports because of outbreaks of Newcastle disease. This does not mean that Brazil is now free to export poultry to China, but that the five meat plants in Brazil authorised to export to China can resume exports. The first shipment to arrive in China after the embargo was lifted consisted of 300 tonnes of chicken sent by the French company Doux from its Brazilian subsidiary Frangosul. Similarly, in 2008, the EU lifted a six-year import ban on Chinese chicken by allowing in exports from Shandong province. An official with Shandongs provincial department of foreign trade remarked, It is good news for Chinese producers and especially farmers. But this was hardly a victory for Chinese farmers. The European decision came just two weeks after Tyson took over one of Shandongs largest poultry exporters one of six companies that the European Commission has authorised for exports of chicken meat from China.10 If corporate chickens have identity issues, so do cattle. Ever
9. Behind every FTA lie the TNCs: examples from Thailand, interview with Witoon Lianchamroon of BIOTHAI, conducted by Aziz Choudry of bilaterals.org, for Fighting FTAs, November 2007: http://www.bilaterals.org/ 10. The three companies are Shandong Zhucheng Foreign Trade, Qingdao Nine-Alliance and Anqiu Foreign Trade.
ith fie ld ( US ) Vio n( Ne the rla nd Da s) nis hC row n Na tio nal Be ef ( US Sh ine ) wa y( Ch ina Do ) ux (Fr an ce)
Source: Gira, Rabobank, GRAIN
Bra s il
Sm
Fo od s
since mad cow disease was confirmed in US herds in 2003, many countries closed their borders to US beef. Both Washington and the American meat industry lobby made enormous efforts in the years since to sweet-talk, if not arm-twist, foreign governments to open their borders again.11 They even rewrote the rules at the World Organisation for Animal Health (OIE), the global standard-setting body, to declare US beef safe.12 Nevertheless, citizen concern about not only the health implications but also the socio-economic and political impacts of US beef imports primarily local farmers being pushed out of business has had many campaigns going in Korea, Australia and Taiwan. So strong have these social movements been that US beef is commonly called mad cow beef. The terms, at least in AsiaPacific, are interchangeable. However, what people often do not realise is that Brazils JBS has progressively bought up the largest position in the US beef-packing industry. Cattle may come from independent US farms, but the feedlots, abattoirs and processing plants are mostly run and controlled by Brazilian executives.
Counting the costs. What all these investment flows amount to is more industrial meat: more factory farms, faster assembly lines and more fast food. The cost to people and the planet is devastating.
11. Arm-twisting is when the US government tells Taiwan or Korea that unless they open their markets to US beef the US will not give them a free trade agreement. 12. See GRAIN, Food safety, rigging the game, Seedling, July 2008, http://www.grain.org/seedling/?id=555
McMarfrig
McDonalds was an early mover in setting up meat supplies from Brazil. Back in 1982 it sent its main US beef supplier, OSI Group, to open an operation in Brazil to produce for its restaurants in the Middle East. This company, Braslo Produtos de Carnes Ltda, became the exclusive supplier of beef and chicken products to McDonalds restaurants in Saudi Arabia, the United Arab Emirates, Oman, Bahrain, Lebanon and Pakistan. In 2008, Braslo was acquired from OSI by Marfrig, one of Brazils largest meat companies, along with OSIs European poultry operations. The European buyout included the massive Moy Park operation in northern Ireland, which sells about 200 million chickens per year. Marfrig thus became the largest global meat supplier to McDonalds outside the US, while OSI acquired a seat on Marfrigs board of directors and around 10% of the companys shares. Shortly after, Marfrig moved even deeper into McDonalds orbit by taking over Cargills Brazilian poultry company, Seara, in 2009 and Keystone Foods in the US in 2010. Keystone is one of the main suppliers of meat to McDonalds US and global restaurants. It has 54 meat plants in the US, New Zealand, Australia, EU, Asia and the Middle East. Its Malaysian subsidiary, MacFood, ships seven million pounds of halal meat to the Middle East every year. Keystone says that it supplies more than 28,000 fast-food restaurants around the world, bringing in net sales of US$6.4 billion in 2009. With these acquisitions, plus the 35 previous acquisitions it made between 2006 and 2008, Marfrig has become Brazils second-largest meat company and the worlds largest supplier of meat to McDonalds, which claims to serve 1.6 billion people a day. All of this has, of course, only happened with the blessing of McDonalds. In fact, Marfrigs expansion strategy is primarily based on satisfying the needs of McDonalds and other major global clients, who want to source meat as cheaply as possible from a few suppliers. To this end, Marfrig has to be able to produce meat outside Brazil. For beef, for example, 61% of the global market is closed to Brazilian exports, because of restrictions against foot-and-mouth disease. Now, thanks to its recent acquisitions, Marfrig can turn to its operations in Australia, Uruguay or the US to send beef to the restaurants that its fast-food clients operate in the markets that are closed to Brazilian beef. The company can also use its global spread to put pressure on workers. Workers at a Marfrig meat plant in Argentina, for instance, are locked in a labour dispute over what they feel are inhuman working conditions at the plant.1 To go global, Marfrig also had to globalise its ownership. The company sold off shares and offered ownership as a way to fund its expansion. It also borrowed heavily from foreign banks. From a private, family -owned company in 2006, Marfrig has become a publicly traded corporation with only 43% of the firm still in the hands of its Brazilian founders, 13% owned by BNDES and the rest held by OSI and other foreign investors.
1. Pr-conflito em um frigorfico da Marfrig, RELUITA, 19 May 2010: http://www.rel-uita.org/sectores/frigorificos/preconflicto_en_un_ frigorifico_de_marfrig-por.htm
Farmers are the first casualties. In the countries importing cheap meat, local farmers lose markets. In the countries where these companies set up operations, local farmers lose their livelihoods and simply get wiped out. The rise of Chinas industrial poultry companies since the mid-1990s has forced 70 million small farmers to abandon poultry production.13 In a country like Romania, the opening of its markets to imports and the entry of corporations into pork production, by both foreign and domestic firms, has resulted in the dramatic loss of 90% of its pig farmers between 2003 and 2007 480,000 farmers dwindled to 50,000 in just four years.14 Those farmers who remain in business have to accept the dictates of contract production arrangements or a precarious existence at the margins, where corporate concentration and private standards make it increasingly difficult for them to access markets and continue their traditional farming practic-
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13. FAO, The state of food and agriculture, 2009, http://www.fao. org/publications/sofa/en/ 14. Doreen Carvajal and Stephen Castle, A US hog giant transforms Eastern Europe, New York Times, 5 May 2009.
BiG MEAT, DEVELOpED BY CORpORATiONS iN THE NORTH, iS NOW A GLOBAL pHENOMENON. AND, AS WE SHALL SEE, iN
iTS RAMpAGE ACROSS NEW FRONTiERS iTS ARMiES ARE NOW OFTEN MARCHiNG WiTH FLAGS OF COUNTRiES FROM THE SOUTH. THE OLD NORTHSOUTH LENS NEEDS SOME READJUSTMENT.
try plants had serious repetitive strain injury, and that this was directly related to depression. Nearly 40% of women in Brazils poultry industry suffer from depression.20 Workers say that the companies have created epidemics of severe health problems for them.21 Indeed, from a public health standpoint, industrial meat is a disaster. The crowding of large numbers of animals in factory farms, an obscene treatment of animals in its own right, causes the overuse of antibiotics and facilitates the emergence and spread of dangerous pathogens. It makes food that is toxic for people, and its scale means that when something goes wrong huge numbers of people are affected, as the recent salmonella outbreak in the US egg supply shows (see A high-risk food system, in Seeds, p. 26). Factory farms also make life miserable for local communities, releasing odours and hazardous gases that cause respiratory problems and pollute local water supplies. In China, where factory farms are expanding faster than anywhere else, the countrys first national pollution census, released in 2010, shocked many people when it reported that agriculture was a bigger source of water pollution than industry, with the authors putting the blame squarely on factory farms.22 It is for these reasons that companies generally locate their barns in poor communities with little political power.23
20. See RELUITA: http://www.rel-uita.org/agenda/encontro_ setor_avicola-2008/con_sergio_bolsan.htm 21. Carta de Atibaia, Declaracin Final del Encuentro Internacional de los Trabajadores en la Industria Avcola, 18 June 2008: http://www.rel-uita.org/agenda/encontro_setor_avicola-2008/ carta_de_atibaiahtm 22. Jin Zhu, Animal waste a threat to clean water supply, China Daily, 15 July 2010; Mindi Schneider, China: agriculture a bigger polluter than industry, Pig Penning, 20 July 2010: http://pigpenning.wordpress.com/ 23. For more information, see the excellent interview with David Kirby on Democracy Now!, The looming threat of industrial pig, dairy and poultry farms on humans and the environment, 24 August 2010: http://www.democracynow.org/2010/8/24/ david_kirby_on_the_looming_threat or Fabrice Nicolino, Bidoche : Lindustrie de la viande menace le monde, Editions LLL, September 2009. For an important documentary on the community of La Gloria, Mexico, and its experiences with nearby hog farms, see Tlvision Suisse Romande, H1N1: Why did it strike the Mexicans first?, September 2009: http://www.grain.org/articles/?id=58
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The scale of the environmental devastation is huge. Factory farming is driving the loss of animal biodiversity (industrial pig production, for instance, relies on only five breeds),24 spewing out greenhouse gases (the meat industry is responsible for 18% of total greenhouse gas emissions)25 and mowing down forests (both directly, by clearing forest for cattle, and indirectly, through the clearing of forest for the production of crops for animal feeds).26 Overall, the global boom in industrial meat is responsible for a massive expansion of industrial production of commodity crops such as soya, which push local communities off their lands and convert small-scale sustainable farms into corporate plantations, transforming and destroying rural landscapes in the process.
Upsetting the meat cart. Fortunately, struggles that challenge the expansion of
industrial meat production in and from the South are underway. Groups in Thailand have joined together to take on CP and have started reaching out to groups in other countries where CP has operations, just as groups in Brazil that monitor and challenge the investments by the BNDES in Brazilian multinationals are starting to make connections with people in African countries where the companies are active. At the local level, communities in Mexico affected by factory pig farms are linking their struggles to national networks for social and environmental justice. And, from within the leading Southern meat
24. For a larger analysis of the issue, see Susanne Gura, Livestock breeding in the hands of corporations, Seedling, January 2008, http://www.grain.org/seedling/?id=528 25. GRAIN, The international food system and the climate crisis, Seedling, October 2009, http://www.grain.org/seedling/?id=642 26. During Brazils beef export boom, 19902002, the total cattle herd grew from 26 million to 57 million, and 80% of this growth was in the Amazon. See Sven Wunder, Benoit Mertens, Pablo Pacheco and David Kaimowitz, Hamburger connection fuels Amazon destruction, CIFOR, 2004, http://www.cifor.cgiar.org/ publications/pdf_files/media/Amazon.pdf
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lished in the UAE in 1975 by its holding company, the Allana Group. The Allana group, owner of Allanasons, is one of Indias largest exporters of agricultural products and the worlds largest producer of halal buffalo meat. Two members of the wealthy Allana family sit on the IFFCo board. IFFCos poultry farms in the UAE produce around 2.5 million birds per year. In 2009, the company began to step up its international meat operations. It launched a 50:50 joint venture with Oman Flour Mills to build one of the largest poultry farms in the Gulf, with a capacity of 15,000 tonnes of chicken and two million hatching eggs per year. The farm is to be set up on 6,000 ha of land in Oman, along the border with the UAE. Also in 2009, IFFCo purchased a 20% stake in the Australian Agricultural Company (AACo), making it the main shareholder of the largest cattle breeding company in Australia, with approximately 610,000 cattle and ownership of over seven million ha of land. IFFCo has since transferred its shares in AACo to a 50:50 Malaysian joint venture with the worlds largest oil palm plantation company, the Federal Land Development Authority (Felda) of Malaysia. A year later, Felda and IFFCo announced the creation of another 50:50 joint venture, Felda Global Ventures Livestock Sdn Bhd, which will rear livestock on 850,000 ha of Felda palm oil estates in Malaysia. JBS (Brazil) The origins of JBS date back to the early 1950s when Jos Batista started buying cattle in central Brazil and selling them to meat packers. He established a small slaughterhouse in 1957, gradually expanding over the next four decades into one of Brazils largest beef companies, with a kill capacity of 5,000 cattle per day by 2000. It was at that point that JBS embarked on a massive expansion strategy. Over the next five years, it brought several Brazilian meat plants into its fold and picked up five plants in Argentina that were struggling in the countrys economic crisis. By 2006, it had boosted its daily slaughter capacity to 22,600 cattle, making it the largest beef processing company in South America. But things were just getting going for JBS. In March 2007, after changing its name from Friboi to JBS, the company went public on the So Paulo Stock Exchange, raising US$800 million for its expansion plans. Soon after, it began a multi-billion-dollar spending spree that would see it take over some of the largest beef companies in the US, Europe, and Australia, as well as one of its main Brazilian competitors, Bertin. It also picked up a major lamb company in Australia and Pilgrims Pride of the US (which, until recently, was that countrys largest poultry company and a major producer in Mexico). JBS is now the largest meat company in the world, with annual revenues of around US$29 billion (ten times its 2006 revenues) and a slaughter capacity of 47,000 cattle per day. It is the largest beef company in Brazil, the largest beef packer in Australia (21% market share), the largest beef packer in the US (32% market share), the largest lamb processor in Australia, one of the largest poultry companies in the US and Mexico, and the third-largest pork producer in the US. Its acquisition of the Italian meat packer Inlaca in 2007 increased its presence in the growing markets of Russia, Eastern Europe and North Africa, while its Australian acquisitions gave it greater access to the Middle East, Europe, Japan and other Asian markets. In 2009, JBS announced that it would be opening its first Russian operation a US$119-million hamburger plant that will supply McDonalds Russian restaurants. JBSs most recent acquisition was in July 2010, when it acquired a feed mill and feedlot operation in the US with the capacity to confine more than 130,000 head of cattle at any one time. All told, JBS now controls more than 10% of the worlds meat processing capacity.1 We have already passed Tyson and were just starting, says JBS CEO Joesley Batista, the 37-year-old son of the founder, who is now in charge of one out of ten of the worlds industrial beef cattle. JBS is now pushing to develop more US-style feedlots in Brazil. In July 2008, the company opened JBS Bank, which will offer US$4 billion in loans to finance the construction of feedlots by 4,000 farmers who are main suppliers to JBS. JBS plans to extend its banking operations to Europe and Australia, and expects about 60% of its cattle suppliers to be using feedlots in two years, up from about 40% today. JBS is controlled by the Mendona Batista family through its holding companies, J&F Participaes and the ZMF Fund. But BNDES, which has bankrolled much of JBS acquisitions over the years, now holds around 20% of the company. New Hope Group (China) New Hope is a Chinese conglomerate based in Sichuan province. It has over 60,000 employees and close to 400 subsidiaries involved in everything from agribusiness and chemicals to real estate. The company was founded in 1982 as a poultry breeding enterprise by Liu Yonghao and his three brothers, one of the first private companies allowed to operate under new rules adopted by the communist government. The company grew rapidly, and by 2009 Liu Yonghao was Chinas 17th1. Lucia Kassai, Pilgrims may absorb JBSs US unit in reverse merger, CEO Batista says, Bloomberg, 17 August 2010, http://www.bloomberg.com/news/2010-08-16/jbs-says-reverse-merger-of-jbs-usa-pilgrim-s-pride-units-is-possible.html
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richest individual. He also climbed the political ladder, taking on key positions within some of Chinas most influential national committees and associations. New Hope is Chinas largest producer of animal feed and one of the countrys top producers of poultry and pork. In 2002, it entered into the dairy industry and today has a herd of at least 100,000 dairy cows. It began expanding overseas in 1996 and now has operations in Vietnam, Bangladesh, the Philippines, Indonesia and Cambodia, where it has a jointventure feed operation with Japans Sojitz. The World Banks International Finance Corporation invested US$45 million in New Hope in 2005. In May 2010, the New Hope Group bought 115,000 tonnes of genetically modified maize from the US for its feed mills the largest purchase of GM maize to enter China in over a decade.2 Zambeef (Zambia) The Zambeef Products PLC Group is the largest agribusiness corporation in Zambia, controlling 65% of the market for beef, 25% for poultry, 15% for eggs and 20% for dairy. It also grows crops on 6,500 ha of land it owns in Zambia, and is developing a palm oil plantation on another 20,000 ha. Zambeefs growth has occurred largely through an exclusive supply agreement it has with Shoprite, one of the largest retail chains in Africa. It is in the process of building a US$5-million beef abattoir and poultry operation on 200 ha of land it has acquired outside Lagos, Nigeria, which will supply Shoprite stores in West Africa. Zambeef trades on the Zambian Stock Exchange. One of its largest institutional investors is Barclays Bank. In April 2010, it was reported that the World Banks IFC would be providing US$7 million in debt equity to Zambeef and would be purchasing another US$3 million in equity, making IFC one of Zambeefs major shareholders. The IFC investments will be used to fund Zambeefs expansion programmes in Zambia and Nigeria.
2. Mindi Schneider is compiling profiles of New Hope and other Chinese meat companies on her website Pig Penning: http://pigpenning.wordpress.com/
multinationals, workers are building bridges across borders through their unions, as the Marfrig and JBS workers in Brazil are doing with their counterparts in Uruguay, Argentina and Europe. It is crucial to support, learn from and build upon this alliance-building. Greater attention also needs to be paid to the flurry of deal-making going on between governments of the South. And more needs to be done to forge connections and cooperation between groups standing up to meat multinationals from the South and people affected by their overseas expansion strategies. The stakes are high. Big Meat is too much of a big disaster to let its growth in the South go unchecked.
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ENOUGH iS ENOUGH. I AM NOT GOiNG TO GO ON MY KNEES TO BEG FOR FOOD. LET US GROW THE FOOD OURSELVES.
Bingu wa Mutharika, President of Malawi, 4 June 20081
1. M. Nyekanyeka and A. Daudi, Malawi: Renewed Maize Surplus, Government of Malawi report, October 2008.
But Malawis success story does not go much further than that, and it is also important to keep in mind that the increase in maize production is dramatic compared with the 20024 crisis, but not so dramatic when compared with averages over decades. It is not a new model, neither is it a model for resolving the countrys or the continents complex problems of hunger and poverty, as some would have us believe. Rather, the governments programme has benefited from a few exceptionally good years of weather, but it is beset in the long term by limitations that, if not addressed, will doom any good intentions to failure. The three most important limitations are: the pressing issue of access to land, the reliance on costly imported inputs, and their impact on the soil.
Malawis 30-year green revolution, and counting. When Malawi gained independence in
alawi has recently been hailed as the miracle of Africa and a role model for other countries. After four years of chronic food shortages, Malawi turned itself around and started producing enough maize to fulfil its national requirements in 2006 and even to export maize in 2007. The reason for the turnaround? According to the Alliance for a Green Revolution in Africa (AGRA), the biotech corporate giant Monsanto, and US economist Jeffrey Sachs, the Malawi miracle came about because the government followed the green revolution model, subsidising the distribution of chemical fertilisers and hybrid maize seeds. The Malawi story has become a very powerful marketing tool for their promotion of a new green revolution in Africa. Others praise the government for defying its foreign donors, and giving direct support to small farmers. The government pumped millions of dollars into its programme to provide farmers with vouchers for subsidised maize seeds and fertilisers, and farmers responded by increasing production significantly. No one can dispute the dramatic impact the programme has had on boosting domestic food production. It is a testament to what can be achieved when a government invests in its farmers.
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the mid-1960s, the government of President Hastings Kamuzu Banda inherited an agriculture structure split between commercial estates, which dominated the production of tobacco, tea, sugar and other cash crops, and smallholder farms producing mainly for subsistence. The government did little to alter the colonial patterns of power. Its policies continued to favour exporters and its land reforms only furthered the expansion of estates on to communal land, turning the rightful occupants into tenants and generating a new class of landless people. Peasants were also pushed off their land by the state to make way for wildlife parks and other protected areas, which have mainly served to support tourism. Between 1967 and 1994 more than one million hectares of customary lands held by local communities were transferred to the state and to commercial estate owners. Even though Malawis economy grew during the 30 years of Bandas regime, and the country was mostly self-sufficient in maize, these macro-economic figures mask the self-enrichment of the political elite and the escalating poverty of Malawis rural population.2 Dur2. More than 60% of Malawis people are classified as chronically poor; life expectancy has been falling from 48 years in 1990 to below 40, because of the HIV/Aids pandemic and increasing levels of poverty
AGRiBUSiNESS UNRAVELLiNG THE MiRACLE OF MALAWiS GREEN REVOLUTiON Table 1: Malawis rollercoaster Green Revolution interventions since the early 1970s Programme Number of affected and number of Disasters and cost beneficiaries
State control over agricultural inputs, subsidised 2060% of cost Structural adjustment (SAP), subsidies reduced. SubsidiesFood Aid Shift to smallholder tobacco production USAID funds transition from maize to tobacco Food Aid to millionsDrought Recovery Inputs Project (DRIP) Subsidies discontinued Supplementary Inputs Project 57 million people affected1.3 million given seeds and fertilisers 3 million people affected and receive food aid Up to 800,000 per year receive subsidies 400,000 affected Starter Pack all smallholders receive seed and fertiliser for 0.1 ha Donor pressure scale down to Targeted Input Programme that targets specific farmers (1020% of fertiliser subsidised). Extended Targeted Input Programme Agriculture Input Subsidy Programme (75% subsidy of fertilisers and maize seed) Agriculture Input Subsidy Programme Agriculture Input Subsidy Programme Agriculture Input Subsidy Programme Agriculture Input Subsidy Programme Floods 2.8 million receive subsidies per season US$2025 millionSurplus production, 2.5 MT maize per season 12 million receive subsidies per year2002: thousands die of hunger US$7.513 millionGood production in 20002001, but erratic rain and floods in 2002 US$12 million MK5.6 billionNo donor support 1.42.8 million people affected Drought Economic stratification accelerates, maize production down. Southern African drought + 1 million refugees from Mozambique Drought Benefit better off farmers, marginalise poor Up to 3% of national budget
Date
19701980s 198190 198790 199091
20035 20056
1.72 million receive subsidies5 million people hungry 1.3 million receive vouchers
1.7 million receive vouchers 2.2 million receive vouchers1.5 million food insecure because of high prices 1.7 million receive vouchers1.5 million classified as vulnerable 140,000 receive food aid
MK7.5 billionUS$91 million MK12 billionUS$200 millionSurplus production MK17.8 billion 39% reduced budget for AISP
Source: Jane Harrigan, Food insecurity, poverty and the Malawian Starter Pack: Fresh start or false start?, in Food Policy, Vol. 33, No. 3, June 2008, 23749. Abstract available at http://tinyurl.com/yaemcmg; supplemented with data from Malawi: Renewed Maize Surplus, Malawi Government report, October 2008 and EM-DAT: The OFDA/CRED International Disaster Database, Universit Catholique de Louvain, Brussels, Belgium.
ing the 1980s the World Bank and IMF started imposing structural adjustment programmes on Africa; in Malawi this meant phasing out subsidies for fertilisers and maize seeds, and removing price controls, creating a very volatile maize market. Less food was produced, it became more expensive, and a food crisis was in the making. In 1987, the government was forced to start importing maize in a big way.3 At the same time, the
and inequality. 3. Jane Harrigan, Food insecurity, poverty and the Malawian Starter Pack: Fresh start or false start?, in Food Policy, Vol. 33, No.
local currency was continually devalued, making fertilisers unaffordable for most farmers. But Malawis government, without ever putting in place a coherent, longterm food security strategy, could never completely abandon state intervention because it frequently had to react to recurring natural disasters and droughts. Between 1987 and 1995, subsidised fertiliser and hybrid seed programmes were again put in place. The devastating droughts of 1991 and 1993 reduced maize
3, June 2008, 23749. Abstract available at http://tinyurl.com/yaemcmg
production by half, and, to add to the pressure, a million refugees arrived from Mozambique. By 1994 donor pressure to liberalise the markets intensified again and subsidies were scaled down, the credit market collapsed, food expenditure doubled and structural vulnerability intensified. Selling their labour for miserable wages to estate owners became one of the key strategies for the poor to make ends meet, but being a labourer on someone elses land (ganyu) meant that they did not have time to work their own land adequately, so yields fell. The 1990s and early 2000s were characterised by a number of ad hoc, reactive
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Enoch Chione, a smallholder in Ekwendeni, northern Malawi, with his sorghum. He also intercrops maize with pigeon pea and other plants in order to improve soil fertility (see Box 5). Photo: GRAIN.
crop which, when grown with fertilisers, needs a great deal of water to perform, this boosted yields. So the gamble paid off, the fertiliser subsidy programme responded to the good weather, and Malawi achieved surplus national maize production four years in a row. Table 1 summarises Malawis different subsidy programmes in the past decades, and the contexts in which they took place. It clearly shows that subsidies are nothing new for Malawis farmers: they have been depending on them for decades and have been at the mercy of fluctuating donor policies and pressures for as long. Natural disasters introduce a huge element of risk (Malawi experienced 40 weather-related disasters between 1970 and 2006), but it is the affordability of maize that presents the biggest risk to poor Malawians, as sudden severe price hikes during the hungry season put food out of reach of the poor .4
4. R. Menon, Famine in Malawi: Causes and Consequences, UNDP Human Development Report, 2007. http://hdr.undp.org/ en/reports/global/hdr2007-2008/papers/
seeds and fertilisers to small farmers who have so little land is ever going to work. These farmers, who account for the vast majority of the farmers in Malawi, can hardly produce enough for their own families food needs, let alone enough to pay off their input costs. There is a real risk therefore that any green-revolutionstyle programme is going to benefit only the bigger, commercial farmers over the long term. AGRA and the other funders now promoting Malawis success story have a not-so-secret agenda to promote the concentration of land into bigger farms in Africa. The Bill and Melinda Gates Foundation makes this quite clear: Over time, this [strategy] will require some degree of land mobility and a lower percentage of total employment involved in direct agricultural production.5 An increasing number of these bigger farms in Malawi are ending up in foreign hands. It is not a secret that foreign nationals have acquired land in
5. Bill and Melinda Gates Foundation, Agricultural Development Strategy, 20082011, 11 July 2008, p. 2.
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Beyond the land question, there are also serious concerns about how sustainable this revolution is. Financially, how long can Malawi afford the subsi6. Nyasa Times, 7 September 2009: http://www.nyasatimes.com/national/ malawi-%E2%80%98sitting-on-timebomb%E2%80%99-campaignerswant-land-policy-to-promote-citizensinterest.html/comment-page-3 7. http://farmlandgrab.org/5111 8. http://farmlandgrab.org/2814 9. R. Moody, Lonrho secures rice land deal; farmers will be removed, Nostromo Research, 2009: http://londonminingnetwork.org/2009/02/angola 10. http://farmlandgrab.org/5578
1,200 1,000 800 urea: Europe price urea: Malawi price maize: Malawi post-harvest price
US$
2006/7
2007/8
2008/9
Source: A. Dorwarda nd C. Poulton, The GlobalF ertiliser Crisis June 2008. andA frica,F utureA gricultures www.future-agricultures.org 2009 from FEWSNET,June 2009.
CAPS Msukwa, showing the compost heap of a farmer near Ekwendeni. Photo: GRAIN.
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The cost of the programme doubled to nearly 9% of the overall national budget in 2008 because of the jump in fertiliser prices.13 Signs that Malawis
13. http://siteresources. worldbank.org/INTARD/ Resources/335807-1236361651968/DorwardFertiliserSubsidyPPPWBMar_2009. pdf; Nicolas Minot, IFPRI, Smart fertliser subsidies in Sub-Saharan Africa, 24 July 2009: http://www.slideshare.net/ifpri/ minot-presentation-july-24-2009
fertiliser programme might not last are already showing. In the 2009 budget the government announced that only food crops, not cash crops, will be subsidised, and that there will be a 39% reduction in the subsidy, with a budget of MK 17.8 billion (US$127 million).14
The cost of the fertiliser programme is not only financial. There is a high environmental cost as well. Healthy soil is vital to farming. Declining soil fertility in Africa is increasingly recognised as one of the biggest reasons for low production and hunger. In Malawi, maize productivity in 1997 was only 84% of what it had been in 1988. Local maize grown on fertile soil produces twice the yield that hybrids can on poor soil. Therefore the constraint for farmers was not necessarily related to seed, but rather to soil fer-
A woman near Nkhotakota, Central Malawi, carries home her harvest of maize to feed her family. Photo: GRAIN.
been widely practised in Malawi, and in the 1980s it was still found on more than 90% of Malawis small farms. Farmers practise intercropping because it mitigates the risks of disease, market fluctuation and weather disaster. It is also a strategy that farmers use to diversify crops for dietary purposes, to reduce labour, to improve yields and to stabilise crop production.17 There is a clear realisation in Malawi that farmers have to move beyond fertiliser dependency and that integrated soil
from the recent World Agroforestry Congress, http://www.worldagroforestry.org/ af/node/390 about the Acacia (Mgunga) tree, which could dramatically increase crop yields in Africa 17. S.R.Waddington et al., Research lessons for cereallegume intercropping, proceedings of a workshop on a research methodology for cereallegume intercropping for Eastern and Southern Africa, CIMMYT, 1990.
fertility management would be a much more viable option in terms of cost and yield.18 Malawis government acknowledges that fertilisers are not sustainable, and encourages farmers to make compost. But for this to work, the government needs to apply much more political will, on the same scale as for the Agriculture Subsidy Input Programme (AISP). It would be feasible, for this approach would be much cheaper to implement. Andrew Daudi, Malawis permanent secretary for agriculture and food security, concludes his report on the AISP not with a call for more fertilisers but
18. Johannes Sauer and Hardwick Tchale, Alternative Soil Fertility Management Options in Malawi An Economic Analysis, International Association of Agricultural Economists, Annual Meeting, 1218 August 2006, Queensland, Australia. This was also a recurring theme in interviews with farmers and other stakeholders in Malawi in May 2009.
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by saying: As the rural areas are full of materials that can be turned into manure (compost), farmers are encouraged to make compost and plant agro-forestry trees which retains fertility of the soil over a long period of time, hence reducing the need for high-cost inorganic fertilisers.19
the focus for investment in agriculture in Africa in the wrong direction. While it is great to see a government investing in local food production, this government has elected to pursue the tried and unsustainable policies of the past. This round of subsidies will also fail small farmers and the country if nothing is done to redistribute land to ensure that farmers have enough land to produce surpluses, and if it does not move away from its narrow focus on chemical fertilisers and hybrid maize seeds, for both financial and ecological reasons. At this point, importing fertilisers is cheaper than importing maize, but this is not where the debate lies, as dependency on any import can transform Malawi into a begging country in an instant. Malawi and many other countries in Africa need
a revolutionary approach to agriculture. Investment and subsidies are needed. But they should not be of the type that is now being promoted. What is needed is a massive programme across Africa and in the rest of the world to improve soils, to increase organic matter and soil fertility, to support biodiversity, and to invest in the capacity of small farmers everywhere to produce food sustainably while making a decent living. That requires looking beyond the technical quick fixes. It requires developing radical policies that give small farmers access to land, protects them from market imbalances and commodity fluctuations, and helps them to produce sustainably now and in the future.
Directly after harvest, a small-scale farmer has his maize weighed by private traders, who will store the maize to sell at a higher price later in the season
SUCCESS STORY iS BEiNG OVERSOLD, AND THiS NOT ONLY DOES MALAWi A DiSSERViCE BUT ALSO SHiFTS THE FOCUS FOR iNVESTMENT iN AGRiCULTURE iN AFRiCA iN THE WRONG DiRECTiON.
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exico's socalled Biosafety Law is part of a wider set of laws that the Mexican state, along with many other developing countries worldwide, is in the process of approving today. It is part of an offensive that implies the introduction of new laws, or changes and reforms to existing laws. The changes involved are by no means small: they are changes that affect the lives of all the peoples of the world in many different ways. Among those most affected are rural, peasant and indigenous communities. Indeed this offensive impacts on the rural population of the entire world. The offensive is fairly efficiently coordinated, mainly by large multinational companies and major corporations abetted by the governments of the world, but also with active, strong and aggressive support from many international bodies, including some we are all familiar with: The World Bank, the InterAmerican Development Bank, the Food and Agriculture Organization and much of the apparatus of the United Nations, as well as the World Trade Organization. In order to understand them fully, these laws must be seen as a whole, because they shore one another up. The Biosafety law will not act in isolation, but in conjunction with many others such as laws on seed certification, genetic
IT WOULD COME AS NO
SURpRiSE iF THE REGULATiONS UNDER ANY OF THESE SEED LAWS ENDED Up TELLiNG US THAT WE WERE ALL OBLiGED TO DENOUNCE SOMEBODY iF WE KNEW OR HEARD THAT THEY DiD NOT BUY THEiR SEED FROM THE COMpANiES.
The law also establishes the concept that goodquality seed must be uniform in other words the same and invariable and also stable: it must not change over time. The qualification of goodquality seed, even for certification, does not factor in performance in the field at all. To put it another way, as long as it turns out identical, exactly the same, it is irrelevant whether it functions better or worse. We know that only seeds produced by the major seed companies are all identical. But the fact that they are uniform does not necessarily mean that they are better. The law also says that seeds must be stable, and in order to keep a varietal name, they must not change. In a country like Mexico, this means that the obligation is somehow imposed on native seeds not to continue evolving. But the seeds of Mexican peasants and indigenous peoples have survived precisely because they have evolved over time. The law demands that seeds must be frozen (so to speak) and if this does not happen, legal problems can arise when they circulate from one farm to another. Some might say: this is may be what the law says but native seed, our own seed, has always circulated we haven't asked anybody's permission, and we're going to let it circulate the same as ever. That is a fundamental strategy that must continue to be used: the seeds must circulate with or without permission. Yet the attacks will continue and one of the attacks already under way is the Strategic Project for the Productive Chain of Maize and Bean Producers [Proyecto Estratgico para la Cadena Productiva de los Productores de Maz y Frijol], all of whose aid projects will stipulate the use of certified seed. Those in any doubt about which certified seed we are discussing may find it interesting to visit the web page of the Mexican National Seed Inspection and Certification Service to see what its strategic aims are as stated by the organisation itself through its strategic plan. The National Seed Inspection and Certification Service defines as its primary strategic aim coordinating the dissemination and strengthening of the national capacity in technological seed assets which is unintelligible, but sounds nice. It says that an indicator of its achievement of this target will be that by 2025, 60% of all seed used in Mexico will be certified seed. Note that we are talking about all the seed used
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THE FOOD MARKET iS ALSO A CApTiVE MARKET pAR EXCELLENCE. WE CAN STOp BUYiNG CARS, BUT NOT FOOD.
in Mexico, not just maize. To clear up any remaining doubt, the second strategic aim is managing and administering the national system for the protection of breeders' rights over plant varieties meaning that 60% of all seed in Mexico by 2025 must be seed that the organisation terms protected, that is, covered by intellectual property rights. By 2020, if the multinationals have their way, intellectual property will be in the form of patents. To sum up, the strategic aim of the National Seed Inspection and Certification Service is that by 2025, 60% of all seed must be certified, and all this certified seed must be protected by patent. This is the focus, and this is the bias with which the seed law will be applied. It will not be applied in a neutral fashion, but explicitly and strategically to defend the interests of the major multinationals which, in Mexico's case, are represented by AMSAC. Laws also have a way of being applied that consists of first applying the carrot, the parts that are less controversial and that present potential benefits, as a way to draw in as many people as possible, with a view, among others, to dividing organisations and communities. The good side of that which is being imposed is always played up. Then, once organisations or communities have become divided, or once people have become severely indebted, that's when the stick comes into play. AMSAC's web page defines pirate seed as seed that is not purchased. It adds: You will agree that we cannot allow pirate seed to damage our lands, our heritage and our prestige as agricultural workers. Together we can and must deal with this risk, by always ensuring that we buy only original seeds, distributed by reputable commercial bodies. This will help us buy and use only quality seeds. That's the soft part the first part of the script used to apply these laws. It goes on to say: It is important that when you buy original seeds, of recognised quality, you always ask the seed dealer or distributor to provide an invoice for your purchase. Why is this where the stick begins? Because implicitly those who use seed peasants and agricultural workers are being told that if they don't have an invoice, they'll feel the weight of the law. It continues: We recommend notifying your seed dealer and distributor if you know or hear about this kind of illegal trade in pirate seeds. In other words, they are asking us to become informers! It would come as no surprise if the regulations under any of these seed laws ended up telling us that we were all obliged to denounce somebody if we knew or heard that they did not buy their seed from the companies. And this is no exaggeration because current intellectual property laws oblige people to act as informers. Later come the sanctions. As expressed in the law, the punishment for infraction currently stands at 500,000 Mexican pesos (about US$50,000), and the confiscation of the seed and the harvest itself. That's in Article 39. Article 41 states that this does not rule out the possibility of penal sanctions in other words, it is possible that noncompliance with this law may also lead to a jail sentence.2 If we combine this with other laws for example those on the certification of meat and milk, organic certification and biosafety and intellectual property laws the aim is to destroy independent agriculture, to destroy above all independent food production and thereby arrive at a position where contract agriculture is the only option. And anyone who has lived in the countryside knows that contract agriculture is slavery in all but name. It is therefore no surprise that one of the key aims of the master plan for maize publicised in Mexico is to make contract agriculture more widespread. It is not easy for states to implement these laws because they require the monitoring of many people: people who've been resisting, battling and producing food for centuries. Consequently, these laws no matter how terrible they are are still nothing more than ink on paper and will remain just that as long as we continue to produce food independently. But as we loosen our hold on the production of food and leave production to be controlled by the multinationals, these laws will become very real. It will be a tough struggle but, on the other hand, we must remember that the attack is only this ferocious and implacable because the capacity of the peasant and indigenous peoples of the world to produce food is extremely significant. If the amount of food they currently produce were trivial, there would be no need for these laws the rural and indigenous communities would be left to die away of their own accord. The intensity of the attack arises from the importance of what the indigenous and peasant communities still hold in their hands. This is why, today more than ever, it is important to keep our own seed and maintain all the collective systems that allow this seed to remain alive and continue to evolve.
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2. The regulations, as Camila Montecinos accurately predicted, include a whole chapter on inspection, vigilance and sanctions, including the destruction or decommissioning of instruments, seeds or products related directly to the commission of the infraction, see Section XI, articles 105120 of the relevant regulations.
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In February 2007, the Nyeleni World Forum for Food Sovereignty was held in Slingu, a village two hours away from Bamako, Mali. This choice was made to allow the debate on food and agriculture to take place in a rural and agricultural context. Meeting facilities and accomodation to host over 600 participants, were build from scratch by people from the village and local artisans decorated the buildings. The Forum was a big success and estabished Food Sovereignty firmly on the agenda of many social movements. The facility is still used by the Malian farmers organisation CNOP and others for conferences and training seminars. Photos: Development Fund Norway, Jean-Marc Desfilhes, and Forum participants.
Climate change endangers food security in Himalayan communities such as Dunche, in Nepals Rasuwa District. In this photo Tamang women pound and sift wheat. (Photo credit: Minority Rights Group/Jared Ferrie).
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the contribution of agricultural emissions the emissions produced on the farm at somewhere between 11 and 15% of all global emissions1. What often goes unsaid, however, is that most of these emissions are generated by industrial farming practices that rely on chemical (nitrogen) fertilsers, heavy machinery run on petrol, and highly concentrated industrial livestock operations that pump out methane waste. The figures for agricultures contribution also often do not account for its role in land use changes and deforestation,
1. The IPCC says 10-12%, the OECD says 14% and the WRI says 14.9%. See: IPCC, Climate Change 2007: Mitigation of Climate Change. Chapter 8: Agriculture (http://tinyurl.com/ms4mzb). Wilfrid Legg and Hsin Huang. OECD Trade and Agriculture Directorate, Climate change and agriculture (http://tinyurl. com/5u2hf8k). WRI, World GHG Emissions Flow Chart (http://tinyurl.com/2fmebe).
Food and climate: piecing the puzzle together. ost studies put
FOOD AND THE CLiMATE CRiSiS FOOD AND CLiMATE CHANGE: THE FORGOTTEN LiNK
figures on transportation available for other countries, such as Kenya and Zimbabwe, indicate that the percentage is even higher in non-industrialised countries, where food production and delivery accounts for 60-80% of the total energy human plus animal plus fuel used.6 With transportation accounting
15-18% OF GLOBAL GHG EMiSSiONS ARE pRODUCED BY LAND-USE CHANGE AND DEFORESTATiON.
for 25% of global GHG emissions, we can use the EU data to conservatively estimate that the transport of food accounts for at least 6% of global GHG emissions. When it comes to processing and packaging, again the available data is mainly from the EU, where studies show that the processing and packaging of food accounts for 10-11% of GHG emissions7, while refrigeration of food accounts for 3-4%8 of total emissions and food retail another 2%9. Playing it conservative with the EU figures and extrapolating from the scarce figures that exist for other countries, we can estimate that at least 5-6% of emissions are due to food transport, 8-10% due to food processing and packaging, around 1-2% due to refrigeration, and 1-2% due to retail. This gives us a total contribution of 15-20% of global emissions from these activities. Not all of what the food system produces is consumed. In the trip from farms to traders, food processors, stores and supermarkets, up to half the production of the industrial food system is discarded or lost. This is enough to feed the worlds hungry six times over10. A lot of this waste rots away on garbage heaps and landfills, producing substantial amounts of greenhouse gases. Various studies indicate that something like 3.5 4.5% of global GHG emissions come from waste, and that over 90% of them come from materials originating in agriculture
6. FAO. Stephen Karekezi and Michael Lazarus, Future energy requirements for Africas agriculture. Chapters 2, 3, and 4. (http:// www.fao.org/docrep/V9766E/v9766e00.htm#Contents). 7. For EU, see: Viktoria BOLLA, Velina PENDOLOVSKA, Driving forces behind EU-27 greenhouse gas emissions over the decade 1999-2008. Statistics in focus 10/2011. (http://tinyurl. com/6bhesog). 8. Tara Garnett and Tim Jackson, Food Climate Research Network, Centre for Environmental Strategy, University of SurreyFrost Bitten: an exploration of refrigeration dependence in the UK food chain and its implications for climate policy (www.fcrn.org.uk/frcnPubs/ publications/PDFs/Frostbitten%20paper.pdf). 9. S.A. Tassou, Y. Ge, A. Hadawey, D. Marriott. Energy consumption and conservation in food retailing. Applied Thermal Engineering 31 (2011) 147-156 and Kumar Venkat. CleanMetrics Corp. The Climate Change Impact of US Food Waste. CleanMetrics Technical Brief. (www.cleanmetrics.com/pages/ ClimateChangeImpactofUSFoodWaste.pdf) and Ioannis Bakas, Copenhagen Resource Institute (CRI). Food and Greenhouse Gas (GHG) Emissions. (www.scp-knowledge.eu/sites/default/files/ KU_Food_GHG_emissions.pdf). 10. Tristram Stuart, Waste: Uncovering the Global Food Scandal, Penguin, 2009, (http://tinyurl.com/m3dxc9).
Steep hillside farming and deforested mountains in the Philippines. (Photo credit: Trees for the Future)
and their processing11. This means that the decomposition of organic waste originating in food and agriculture is responsible for 3-4% of global GHG emissions.
Turning the food system upside down. Clearly, we will not get out of the climate crisis if the global
food system is not urgently and dramatically transformed. The place to start is with the soil. Food begins and ends with soil. It grows out of the soil and eventually goes back in it to enable more food to be produced. This is the very cycle of life. But in recent years humans have ignored this vital cycle. We have been taking from the soil without giving back.The industrialisation of agriculture, starting in Europe and North America, replicating later through the Green Revolution in other parts of the world, was based on the assumption that soil fertility could be maintained and increased through the use of chemical fertilisers. Little attention was paid to the importance of organic matter in the soil. A wide range of scientific reports indicate that cultivated soils have lost from 30 to 75% of their organic matter during the 20th century, while soils under pastures and prairies have typically lost up to 50%. There is no doubt that these losses have provoked a serious deterioration of soil fertility and productivity, as well as contributing to worsening droughts and floods. Taking as a basis some of the most conservative figures provided by scientific literature, the global accumulated loss of soil organic matter over the last century may be estimated to be between 150 to 200 billion tonnes12. Not all this organic matter
11. Jean Bogner, et. al. Mitigation of global greenhouse gas emissions from waste: conclusions and strategies from the IPCC. Fourth Assessment Report. Working Group III (Mitigation) (http://wmr. sagepub.com/content/26/1/11.short?rss=1&ssource=mfc). 12. Figures used for calculations were:
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Add the above gures together, factor up the evidence, and there is a compelling case that the current global food system, propelled by an increasingly powerful transnational food industry, is responsible for around half of all human produced greenhouse gas emissions: anywhere from a low of 44% to a high of 57%. The graph below illustrates the conclusion:
Food and climate change Agricultural production: 11-15% Land use change & deforestation: 1518%
Waste: 2-4%
The industrial food system is responsible for 44 to 57% of all global GHG emissions
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ended up in the air as CO2, as significant amounts have been washed away by erosion and have been deposited in rivers and oceans. However, it can be estimated that at least 200 to 300 billion tonnes of CO2 have been released to the atmosphere due to the global destruction of soil organic matter. In other words, 25 to 40% of the current excess CO2 in the atmosphere comes from the destruction of soils and their organic matter. There is some good news hidden in these devastating figures. The CO2 that we have sent into the atmosphere by depleting the worlds soils can be put back into the soil. All that is required is a change of agricultural practices from those that deplete soil organic matter to those that build it up. We know this can be done. Farmers around the world have been engaging in these very practices for generations. GRAIN research has shown that if the right policies and incentives were in place worldwide, soil organic matter content could be restored to pre-industrial agriculture levels within a period of 50 years, which is roughly the same time that frame industrial
a) an average loss of 4.5- 6 kg of SOM/m2 of arable land and 2-3 kg of SOM/m2 of agricultural land under prairies and not cultivated. b) an average soil depth of 30 cm, with an average soil density of 1 gr/cm3. c) 5,000 million ha of agricultural land worldwide; 1,800 million ha of arable land, as stated by FAO. d) a ratio of 1.46 kg of CO2 for each kg of destroyed SOM.
agriculture took to reduce it.13 The continuing use of these practices would allow the offset of about 24-30% of current global annual GHG emissions14. The new scenario would require a radical change from the current industrial agriculture model. The changed model would focus on techniques such as diversified cropping systems, better integration between crop and animal production, increased incorporation of trees and wild vegetation, and so on. Such an increase in diversity would, in turn, increase the production potential, and the incorporation of organic matter would progressively improve soil fertility, creating virtuous cycles of higher productivity and higher availability of organic matter. The capacity of soil to hold water would increase, which would mean that excessive rainfall would lead to fewer, less intense floods and droughts. Soil erosion would become less of a problem. Soil acidity and alkalinity would fall progressively, reducing or eliminating the toxicity that has become a major problem in tropical and arid soils. Additionally, increased soil
13. See: Earth matters: tackling the climate crisis from the ground up. In: Seedling October 2009. (http://www.grain.org/e/735). 14. The conclusion is based on the assumption that organic matter incorporation would reach an annual global average rate of 3.5 to 5 tonnes per hectare of agricultural land. For more detailed calculations, see: GRAIN, Earth matters: tackling the climate crisis from the ground up. In: Seedling October 2009, table 2.
FOOD AND THE CLiMATE CRiSiS FOOD AND CLiMATE CHANGE: THE FORGOTTEN LiNK
biological activity would protect plants against pests and diseases. Each of these effects implies higher productivity and hence more organic matter available to soils, thus making possible, as the years go by, higher targets for soil organic matter incorporation. More food would be produced in the process. To be able to do it, we would need to build on the skills and experience of the worlds small farmers rather than undermining them and forcing them off their lands, as is now the case. A global shift towards an agriculture that builds up organic matter in the soil would also put us on a path to removing some of the other major sources of GHGs from the food system. There are three other mutually reinforcing shifts that need to take place in the food system to address its overall contribution to climate change. The first is a shift to local markets
25 TO 40% OF THE CURRENT EXCESS CO2 iN THE ATMOSpHERE COMES FROM THE DESTRUCTiON OF SOiLS.
and shorter circuits of food distribution, which will cut back on transportation and the need for packaging, processing and refrigeration. The second is a reintegration of crop and animal production, to cut back on transportation, the use of chemical fertilisers and the production of methane and nitrous oxide emissions generated by intensive meat and dairy operations. And the third is the stopping of land clearing and deforestation, which will require genuine agrarian reform and a reversal of the expansion of monoculture plantations for the production of agrofuels and animal feed. If the world gets serious about putting these four shifts into action, it is quite possible that we can cut global GHG emissions in half within a few decades and, in the process, go a long way towards resolving the other crises affecting the planet, such as poverty and hunger. There are no technical hurdles standing in the way the knowledge and skills are in the hands of the worlds farmers and we can build on that. The only hurdles are political, and this is where we need to focus our efforts.
Shorter circuits of food distribution could cut back on transportation and the need for packaging, processing and refigeration.
Street market in Kumasi.Woman carrying yams and chickens at market in Kumasi, Ghana. Photo: Peter Kosina.
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FOOD AND THE CLiMATE CRiSiS THE iNTERNATiONAL FOOD SYSTEM AND THE CLiMATE CRiSiS
also one of the main engines behind it. The model of industrial agriculture that supplies the global food system essentially functions by converting oil into food, producing tremendous amounts of greenhouse gases (GHGs) in the process. The use of huge amounts of chemical fertilisers, the expansion of the industrial meat industry, and the ploughing under of the worlds savannahs and forests to grow agricultural commodities are together responsible for at least 30% of the global GHG emissions that cause climate change.1 But that is only a part of the current food systems contribution to the climate crisis. Turning food into global industrial commodities results in a tremendous waste of fossil-fuel energy in transporting it around the world, processing it, storing it and freezing it, and getting it to peoples homes. All these processes are contributing to the climate bill. When added together, it is not an exaggeration to say that the current global food system could be responsible for nearly half the worlds GHG emissions. The rationale and urgency for an overhaul of the worlds food system has never been more stark. From a practical point of view, there is nothing preventing transition to a saner system, and people everywhere are showing willingness to change whether they be consumers searching out local foods or peasants barricading highways to defend their lands. What stands in the way is the structure of power and it is this, more than anything, that requires transformation.
his year more than one billion people will go hungry, while another half a billion will suffer from obesity. Three-quarters of those without enough to eat will be farmers and farm workers (those who produce food), while the handful of agribusiness corporations that control the food chain (those who decide where the food goes) will amass billions of dollars in profits. Now the latest scientific studies are predicting that, in a business-asusual scenario, rising temperatures, extreme climate conditions and the severe water and soil problems related to them will push many more millions into the ranks of the hungry. As population growth raises demand for food, climate change will sap our capacities to produce it. Certain countries already struggling with severe hunger problems could see their food production cut by half before the end of this century. Yet where elites gather to talk about climate change, very little is being said about such consequences for food production and supply, and even less is being done to address them. There is another dimension to this interaction between climate change and the global food system that reinforces the urgent need for action. Not only is todays dysfunctional food system utterly ill-equipped for climate change, it is
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1. Robert J. Zomer et al., Trees on Farm: Analysis of Global Extent and Geographical Patterns of Agroforestry, ICRAF Working Paper No. 89, World Agroforestry Centre, Nairobi, 2009, http://www.worldagroforestry.org/af/newsroom/for_journalists/agroforestry_assessment_report 2. See for example, Chris Lang, The expansion of industrial tree plantations in Cambodia and Laos, Focus Asien, 26 December 2006, http://chrislang.org/2006/12/26/the-expansion-of-industrial-tree-plantations-in-cambodia-and-laos/ 3. See, for example, World Rainforest Movement, Zambia: Causes of Deforestation linked to government policies, Bulletin No. 50, 2001, http://www.wrm.org.uy/bulletin/50/Zambia.html 4. Almuth Ernsting, Agrofuels in Asia: Fuelling poverty, conflict, deforestation; GRAIN, Corporate power: Agrofuels and the expansion of agribusiness, Seedling, July 2007, http://www.grain.org/seedling/?type=68 5. Ecuador: Breve anlisis de los resultados de las principales variables del censo nacional agropecuario 2000, http://www.sica.gov.ec/censo/ contenido/estud_an.htm, III Censo agropecuario del Ecuador, 2000, http://www.sica.gov.ec/censo/docs/nacionales/tabla1.htm Serafn Ilvay, Foro brasileo por la reforma agraria: Repartir la tierra y multiplicar el pan, 13 June 2000, http://movimientos.org/cloc/mst-br/show_text. php3?key=10. Censo Agropecuario y Forestal de Chile, http://www.censoagropecuario.cl 6. Edelmira Prez Correa and Maniel Prez Martnez, El sector rural en Colombia y su crisis actual, http://redalyc.uaemex.mx/redalyc/ pdf/117/11704803.pdf
FOOD AND THE CLiMATE CRiSiS THE iNTERNATiONAL FOOD SYSTEM AND THE CLiMATE CRiSiS
GHG emissions. The report warns that a rise in temperature of 24C, which may be reached by the end of the century, would produce a dramatic rise in sea levels and a sharply increased frequency of climatic catastrophes. Now, just two years later, it appears that the IPCC was too optimistic. Todays scientific consensus is that a 2C increase over the next few decades is already a virtual certainty, and that the business-asusual scenario could heat up the planet by as much as 8C by 2100, pushing us over the tipping point and deep into what is described as dangerous and irreversible climate change.2 Already, the impact of much milder climate change is hitting hard. According to the Geneva-based Global Humanitarian Forum, climate change is seriously affecting 325 million people a year with 315,000 dying from hunger, sickness and weather disasters induced by climate change.3 It predicts that the annual death toll from climate change will rise to half a million by 2030, with 10% of the worlds population (700800 million people) seriously affected. Food is and will remain at the centre of this unfolding climate crisis. Everyone agrees that agricultural production has to continue to rise significantly over coming decades to feed the growing population. Climate change, however, is likely to put agricultural production into reverse. In the most comprehensive survey of studies modelling the impact of global warming on agriculture to date, William Cline estimates that by 2080, in a business-as-usual scenario, climate change will reduce the potential output of global agriculture by more than 3.2% as compared with today. Developing countries will suffer the most, with a potential 9.1% decline in agricultural output. Africa will suffer a 16.6% decline. These are horrific numbers, but, as Cline says, the actual impacts are likely to be much worse than even these figures suggest.4
2. Chris Lang, The gaping chasm between climate science and climate negotiations, World Rainforest Movement Bulletin, No. 143, June 2009. 3. Global Humanitarian Forum, Human Impact Report, May 2009, (http://tinyurl. com/lqvs6v). 4. William R. Cline, Global Warming and Agriculture: Impact Estimates by Country, Center for Global Development and the
Table 1: Estimates for impact of global warming on world agricultural output potential by the 2080s (%) without carbon with carbon fertilisation fertilisation
Global output-weighted population-weighted median by country Industrial countries Developing countries median Africa Asia Middle East/North Africa Latin America 15.9 18.2 23.6 6.3 21.0 25.8 27.5 19.3 21.2 24.3 3.2 6.0 12.1 7.7 9.1 14.7 16.6 7.2 9.4 12.9
Source: edited table taken from William R. Cline, Global Warming and Agriculture, p. 96
A major weakness in the forecasts of the IPCC and others when it comes to agriculture is that their predictions accept a theory of carbon fertilisation, which argues that higher levels CO2 in the atmosphere will enhance photosynthesis in many key crops, and boost their yields. Recent studies show that this is a mirage. Not only does any initial acceleration in growth slow down significantly after a few days or weeks, but the increase in CO2 reduces nitrogen and protein in the leaves by more than 12%. This means that, with climate change, there will be less protein for humans in major cereals such as wheat and rice. There will also be less nitrogen in the leaves for bugs, which means that bugs will eat more leaf, leading to important reductions in yield.5 When Cline removed carbon fertilisation from his calculations, the results were much more gruesome (see Table 1). Global yields would decline by 15.9% by the 2080s, with yields declining 24.3% in Latin America, 19.3% in Asia (38% in India) and 27.5% in Africa (more than 50% in Senegal and Sudan).6
Peterson Institute for International Economics, 2007, (http://tinyurl.com/nc4hsr). 5. John T. Trumble and Casey D. Butler, Climate change will exacerbate Californias insect pest problems, California Agriculture, Vol. 63, No. 2, (http://tinyurl. com/m3qf85). 6. William R. Cline, Global Warming and Agriculture: Impact Estimates by Country, Center for Global Development and the
But even this dreadful forecast may be an underestimate. Clines study, like the IPCC report and other major reports dealing with agriculture and climate change, did not factor in the looming water crisis associated with climate change. Currently 2.4 billion people live in highly water-stressed environments, and recent predictions indicate that this number will rise to 4 billion by the second half of this century. Sources of water for agriculture have run out or are dangerously low in many parts of the world, and global warming is predicted to compound the problem, as higher temperatures generate drier conditions and increase the amount of water needed for agriculture.7 It is going to get much harder to sustain current levels of food production even as demand grows with increasing populations.8 Also outside Clines forecast are the effects of the increase in extreme
Peterson Institute for International Economics, 2007, (http://tinyurl.com/nc4hsr). 7. According to Cline, evapotranspiration (the combined loss of moisture from soil through evaporation and plants through stomatal transpiration) increases with temperature. 8. According to the report of the IAASTD, irrigation water supply reliability is expected to decline in all regions, with a global decrease from 70% to 58% from 2000 to 2050. International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD), Global Report, 2008, (http://tinyurl.com/6r82ry).
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CENTRE OF THiS UNFOLDiNG CLiMATE CRiSiS. EVERYONE AGREES THAT AGRiCULTURAL pRODUCTiON HAS TO CONTiNUE TO RiSE SiGNiFiCANTLY OVER COMiNG DECADES TO FEED THE GROWiNG pOpULATiON.
since the colonial era.13 We are moving into an era of severe disruption of food production. There has never been a more pressing need for a system that can ensure that food is distributed to everyone, according to need. Yet never has the worlds food supply been more tightly controlled by a small group, whose decisions are based solely on how much money they can extract for their shareholders.
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9. Susmita Dasgupta, Benoit Laplante, Siobhan Murray, David Wheeler, SeaLevel Rise and Storm Surges: A Comparative Analysis of Impacts in Developing Countries, The World Bank, Development Research Group, Environment and Energy Team, April 2009. 10. FAO, The wildland fire problem, Rome, 27 July 2009, (http://tinyurl.com/ n4qfcv). 11. American Geophysical Union and Harvard University, Damage, pollution from wildfires could surge as western US warms, 28 July 2009, (http://tinyurl.com/ l53keg). 12. See GRAINs resources web page on the food crisis, (http://www.grain.org/
FOOD AND THE CLiMATE CRiSiS THE iNTERNATiONAL FOOD SYSTEM AND THE CLiMATE CRiSiS
Five key steps towards a food system that can address climate change and the food crisis.
1. Move towards sustainable, integrated production methods The artificial separations and simplifications that industrial agriculture has brought upon us have to be undone, and the different elements of sustainable farming systems must be brought together again. Crops and livestock have to be reintegrated on the farm. Agricultural biodiversity has to become the cornerstone of food production again, and local seed saving and exchange systems need to be reactivated. Chemical fertilisers and pesticides must be replaced by natural ways of keeping soil healthy, and pests and diseases in check. The restructuring of the food system along these lines will help to create the conditions for near-zero emissions on farms. 2. Rebuild the soil and retain the water We have to take the soil seriously again. We need a massive global effort to build organic matter back into the soils, and bring back fertility. Decades of soil maltreatment with chemicals in many places, and mining of soils in others, have left soils exhausted. Healthy soils, rich in organic matter, can retain huge amounts of water, which will be needed to create resilience in the farming system and to deal with the climate and water crises that are already encroaching on us. Increasing organic matter in soils around the world will help to capture substantial amounts of the current excess CO2 in the atmosphere (see Earth matters, p. 9). 3. De-industrialise agriculture, save energy, and keep the people on the land Small-scale family farming should become the cornerstone of food production again. By allowing the build-up of megaindustrial farm operations that produce commodities for the international market rather than food for people, we have created empty countrysides, overpopulated cities, and destroyed many livelihoods and cultures in the process. De-industrialising agriculture would also help to eliminate the tremendous waste of energy that the industrial farming system now produces. 4. Grow close by and cut the international trade One principle of food sovereignty is to prioritise local markets over international trade. As we have seen, international trade in food, and its associated food processing industries and supermarket chains, are the food systems chief contributors to the climate crisis. All of these can largely be cut out of the food chain if food production is reoriented towards local markets. Achieving this is probably the toughest fight of all, as so much corporate power is concentrated on keeping the trade system growing and expanding, and so many governments are happy to go along with this. But if we are serious about dealing with the climate crisis, this has to change. 5. Cut the meat economy and change to a healthier diet Perhaps the most profound and destructive transformation that the industrial food system has brought upon us is in the livestock sector. What used to be an integral and sustainable part of rural livelihoods has become a mega-industrial meat factory system spread around the world, but controlled by a few. The international meat economy, which has grown fivefold in recent decades, is contributing to the climate crisis enormously. It has also helped to create the obesity problem in rich countries, and destroyed through subsidies and dumping local meat production in poor countries. This has to stop, and consumption patterns, especially in rich countries, have to move away from meat. The world needs to return to a decentralised system of meat production and distribution, organised according to peoples needs. Markets that supply meat from smaller farms to local markets at fair prices need to be restored and reinvigorated, and international dumping has to stop.
IN MOST
translates directly into the emission of GHGs. The US food system alone is calculated to account for a formidable 20% of the countrys fossil fuel consumption. This figure includes the energy used on the farm to grow the food and the post-agricultural components of transporting, packaging, processing, and storing food. The US Environmental Protection Agency reported that US farmers emitted as much carbon dioxide in 2005 as 141 million cars in the same year! This hopelessly inefficient food system uses ten non-renewable fossil-fuel calories
to produce one single food calorie.16 The difference in energy use between industrial and traditional agricultural systems could not be starker. There is much talk of how efficient and productive industrial agriculture is compared with traditional farming in the global South, but, if one takes into consideration energy efficiency, nothing could be
16. Data in this paragraph is from Food & Water Watch, Fuels and Emissions from Industrial Agriculture, Washington, November 2007, (http://tinyurl.com/ mdgypy).
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further from the truth. The FAO calculates that, on average, farmers in industrialised countries spend five times as much commercial energy to produce one kilo of cereal as do farmers in Africa. Looking at specific crops, the differences are even more spectacular: to produce one kilo of maize, a farmer
in the US uses 33 times as much commercial energy as his or her traditional neighbour in Mexico. And to produce one kilo of rice, a farmer in the US uses 80 times the commercial energy used by a traditional farmer in the Philippines!17
17. FAO, The energy and agriculture
This commercial energy that the FAO speaks of is, of course, mostly the fossilfuel oil and gas needed for the production of fertilisers and agrochemicals, and that used by farm machinery, all
nexus, Rome 2000, Tables 2.2 and 2.3, (http://tinyurl.com/2ubntj).
FOOD AND THE CLiMATE CRiSiS THE iNTERNATiONAL FOOD SYSTEM AND THE CLiMATE CRiSiS
of which emit substantial amounts of GHGs.18 But then, agriculture itself is responsible for only about a quarter of the energy used to get food to our tables. The real waste of energy and the pollution happen in the broader international food system: the processing, packaging, freezing, cooking, and moving of food. Crops for animal feed may be grown in Thailand, processed in Rotterdam, then fed to cattle somewhere else that are eaten in a McDonalds in Kentucky. Transporting food consumes huge amounts of energy. Looking at the USA again, it is calculated that 20% of all the commodity transport within the country involves moving food, resulting in 120 million tonnes of CO2 emissions. The US import and export of food accounts for another 120 million tonnes of CO2. Add to that moving supplies and inputs (fertilisers, pesticides, etc.) to industrial farms, transporting plastic and paper to the packaging industries, and moving consumers to increasingly faraway supermarkets, and we get a picture of the tremendous amount of GHGs produced by the industrial food systems transport requirements alone. Other big GHG producers are the food processing, freezing, and packaging industries, which account for 23% of the energy consumed in the US food system.19 It all adds up to an incredible waste of energy. And on the subject of waste, the industrial food system discards up to half of all the food that it produces in its journey from farms to traders, to food processors, to stores and supermarkets! This is enough to feed the worlds hungry six times over.20 Nobody has begun to calculate how much GHG is produced by the rotting of all this thrown-away food. Much of this tremendous global waste and destruction could be avoided if the food system were decentralised and agriculture oriented more towards local and regional markets. Small farm18. GRAIN, Stop the agrofuel craze!, Seedling, July 2007, (http://www.grain/ seedling/?id=477). 19. Data in this paragraph is from Food & Water Watch, Fuels and Emissions from Industrial Agriculture, Washington , November 2007, (http://tinyurl.com/ mdgypy). 20. Tristram Stuart, Waste: Uncovering the Global Food Scandal, Penguin, 2009, (http://tinyurl.com/m3dxc9).
Which way out? At a most basic level, the climate crisis means that business as usual has to stop, now. The profit motive, as an organising principle for our societies, is bankrupt, and we have to build alternative systems of production and consumption organised according to the needs of the people and life on the planet. When it comes to the food system, such a transformation cannot happen when power is vested in corporations, as it currently is. Nor can we trust our governments since the mismatch between what the scientists say must be done to stop catastrophic climate change and the actions that politicians take becomes ever more preposterous. The force for change rests with us, in our communities, organising to take back control of our food systems and territories. In the struggle for another food system our main obstacles are political, not technical. We can put seeds back in the hands of farmers, eliminate chemi-
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Earth matters
ome things have not changed much since da Vincis time, 500 years ago. For many, soil is a mix of dirt and dust. But in reality soils are one of Earths most amazing living ecosystems. Millions of plants, bacteria, fungi, insects and other living organisms most of them invisible to the naked human eye are in a constantly evolving process of creating, composing and decomposing organic living matter. They are also the unavoidable starting point for anyone who wants to grow food.
ViA CAMpESiNA HAS ARGUED THAT AGRiCULTURE BASED ON SMALL-SCALE FARMiNG, USiNG AGRO-ECOLOGiCAL
pRODUCTiON METHODS AND ORiENTED TOWARDS LOCAL MARKETS, CAN COOL THE pLANET AND FEED THE pOpULATiON.
Soils also contain enormous amounts of carbon, mostly in the form of organic matter. On a global scale soils hold more than twice as much carbon as is contained in terrestrial vegetation. The rise of industrial agriculture in the past cen-
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allow these processes to take place, life on earth as we know it simply wouldnt exist. A key component of what makes soils function is known as soil organic matter (SOM). It is a mixture of substances that originate from the decomposition of plant and animal materials. It includes substances excreted by fungi, bacteria, insects and other organisms. As manure and dead organisms decompose, they gradually liberate nutrients that can be taken up by plants and used in their growth and development. As all these substances get mixed into the soil, they form new molecules that give the soil new characteristics. Molecules of SOM can absorb up to 100 times as much water as those of dust, and they can retain and later release to plants a similar proportion of nutrients.1 Organic matter also provides binding molecules that keep soil particles together, thus protecting the soil against erosion and rendering it more porous and less compact. These characteristics are what allows soils to absorb rain
1. C.C. Mitchell and J.W. Everest, Soil testing and plant analysis, Southern Regional Fact Sheet, Department of Agronomy & Soils, Auburn University, (http://tinyurl.com/lbg6st).
and slowly release it to lakes, rivers and plants. They also allow plant roots to grow. As plants grow, more stubble reaches or stays in the soil and more organic matter is formed, thus creating a continuous cycle that accumulates organic matter in the soil. This process has taken place for millions of years, and the accumulation of organic matter in soils was a key factor in low-
1. See Carbon Dioxide Information Analysis Center, http://cdiac.ornl.gov/pns/graphics/c_cycle.htm 2. Calculations based on concentration changes over time. 3. Information from FAOSTAT, http://faostat.fao.org/site/377/default.aspx#ancor 4. Ibid. Source: GRAIN calculations
and organic matter has been the bridge between the two. But organic matter is also the food of bacteria, fungi, small insects and other organisms that live in the soil. They are the ones that turn manure and dead tissue into nutrients and the amazing substances described above, but they are also the ones that decompose organic substances in the soil. So organic matter must be replenished constantly; if it is not, it will slowly disappear from the soil. When micro-organisms and other living beings in the soil decompose organic matter, they produce energy for themselves and release minerals and CO2 in the process. For each kilogram of organic matter that decomposes, 1.5 kilograms of CO2 are released into the atmosphere. Rural peoples around the world have a deep understanding of soils. They learned through experience that soil has to be cared for, nurtured, fed and rested. Many common practices of traditional agriculture reflect this knowledge. The application of manure, crop residues and compost feed the soil and renovate organic matter. Leaving some land unplanted (fallow) in a system of rotation, especially when spontaneous wild vegetation is encouraged (covered fallow), allows the soil to rest, so that the decomposition processes can take place properly. Limits on tilling, terraces, mulching and other conservation practices protect the soil against erosion, so that organic matter is not washed or blown away. Forest cover is often kept intact, altered as little as possible or mimicked, so that trees can protect the soil against erosion and provide additional organic matter. At those times in history when these practices have been forgotten or laid aside, a high price has been paid. This seems to have been one of the main causes of the disappearance of the Maya kingdom in Central America. It may have also been behind a number of crises in the Chinese empire, and it is certainly a central cause of the dust bowl in the United States and Canada.
The industrialisation of agriculture and the loss of soil organic matter. The industrialisation of agriculture, which started in Europe
and North America and was later replicated in the Green Revolution that took place in other parts of the world, was based on the assumption that soil fertility can be maintained and increased through the use of chemical fertilisers. Little attention was paid to the importance of organic matter in the soil. Decades of industrialisation in agriculture and the imposition of industrial technical standards on small farming have weakened the processes that ensure that soils obtain new supplies of organic matter and that protect the organic matter already stored in the soil from being washed or blown away. The effects of not renovating organic matter and applying fertilisers initially went unnoticed because of the large stocks of organic matter within the soils. But over time, as these stocks have been depleted, the effects have become more visible with devastating consequences in some parts of the world. From a global point of view, the pre-industrial equilibrium between air and soils was that for every tonne of carbon in the air, approximately 2 tonnes existed in soils. The current ratio is down to approximately 1.7 tonnes in soils for each tonne in the atmosphere.2 Soil organic matter is measured in percentages. One% means that in every kilogram of soil, 10 grams are organic matter. Depending on soil depth, this is equivalent to 2080 tonnes
2. Y.G. Puzachenko et al., Assessment of the Reserves of Organic Matter in the Worlds Soils: Methodology and Results, Eurasian Soil Science, Vol. 39, No. 12, 2006, pp. 128496, (http://tinyurl. com/npd648).
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kg/ha
60 50 40 30 20 10 0
1960
1970
1980
1990
2000
2006
Graph 2: For each kg of nitrogen applied, 226 kg of maize were obtained in 1961, but only 76 kg in 2006. The figures were, respectively, 217 and 66 kg for rice, 131 and 36 kg for soya, and 126 and 45 kg for wheat.5
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1960
1970
1980
1990
2000
2006
1. See website of the International Fertilizer Industry Association (IFA), (http://www.fertilizer.org/ifa/Home-Page/STATISTICS). 2. Data obtained by GRAIN based on statistics provided by IFA (see note 1), and FAO, (http://faostat.fao.org/default.aspx). 3. P. Forster et al., Changes in Atmospheric Constituents and Radiative Forcing, in S. Solomon et al. (eds), Climate Change 2007: The Physical Science Basis, Contribution of Working Group I to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change, London and New York, Cambridge University Press, 2007, p. 212. 4. Data from IFA website (see note 1). 5. Data obtained by GRAIN based on statistics provided by IFA (see note 1) and FAO (see note 2).
The climate calculation. Let us suppose, as a conservative estimate, that soils around
the world have lost, on average, 12 percentage points of organic matter in the top 30 cm since the beginning of industrial agriculture. This would amount to some 150,000205,000 million tonnes of lost organic matter. If we were to manage to put this organic matter back into the soil, we would take 220,000330,000 million tonnes of CO2 from the air. This
THE iNDUSTRiALiSATiON OF FARMiNG THAT HAS DESTROYED SOM HAS BEEN GOiNG ON FOR MORE THAN A CENTURY iN iNDUSTRiALiSED COUNTRiES. THE GLOBAL pROCESS, HOWEVER, REALLY STARTED WiTH THE GREEN REVOLUTiON iN THE 1960S.
represents a remarkable 30% of the current excess CO2 in the atmosphere. Table 1 summarises the data. In other words, actively recovering SOM would effectively cool the planet, and the cooling potential is significantly higher than that presented in these figures, as many soils could store and benefit from a larger amount of organic matter than the 12 percentage point recuperation rate used in this example.
Can it be done? Bringing organic matter back into the soil The industrialisation of farming that has destroyed SOM
has been going on for more than a century in industrialised countries. The global process, however, really started with the Green Revolution in the 1960s. So the question is: how long would it take to counteract the effects of, say, 50 years of soil deterioration? Recovering one percentage point of SOM means that around 30 tonnes of organic matter per hectare would have to enter the soil and remain there. But, on average, around two thirds of organic matter added to agricultural soils will be decomposed by soil organisms (and the resulting minerals will feed the crops), so in order to add permanently 30 tonnes of SOM, a total of 90 tonnes of organic matter per hectare would be needed. This cannot be done quickly. A gradual process is required. What is the realistic amount of organic matter that farmers throughout the world could incorporate into the soil? The answer will vary widely from place to place, from cropping system to cropping system, and from one ecosystem to another. A production system that relies exclusively on annual, nondiversified crops can provide 0.510 tonnes of organic matter per hectare per year. If the cropping system is diversified, and pastures and green manures are incorporated, that amount can easily be doubled or tripled. If animals are added, the amount of organic matter will not necessarily increase, but it will make the cultivation of pastures and green manures economically feasible and profitable. Moreover, if trees and wild plants are also managed as part of the cropping system, not only will crop
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Table 2: Impact of the progressive incorporation of oil organic matter (SOM) into worlds agricultural soils
Number of years Tonnes of organic matter incorporated (per hectare per year) Total organic matter incorporated in worlds agricultural land by the end of the period (cumulative, in million tonnes) Average increase of organic matter in the soil at the end of the period (in percentage points) Total CO2 captured per year (in million tonnes) Total CO2 captured across the period (cumulative, in million tonnes) Source: GRAIN calculations 110 1.5 75,000 1120 3 225,000 2130 4 425,000 3140 4.5 650,000 4150 5 900,000
0.15
0.50
0.94
1.4
2.0
3,750 37,500
7,500 112,500
10,000 212,500
11,250 325,000
12,500 450,000
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production increase but additional organic matter will also be produced. As organic matter increases in the soil, soil fertility will improve and more organic matter will become available. When they start converting to organic farming, many farmers incorporate fewer than 10 tonnes per hectare per year, but they may end up after a few years producing and adding up to 30 tonnes of organic matter per hectare. So, if proactive agricultural policies and programmes were drawn up to promote the widespread incorporation of organic matter into the soil, initial goals might have to be rather modest, but progressively more ambitious goals could be set. Table 2 gives an example of how organic matter could be incorporated into the soil. The example is completely feasible. Today agriculture around the world produces each year at least two tonnes of usable organic matter per hectare. Annual crops alone produce more than one tonne per hectare10, and recycling urban organic waste and waste water could add approximately 0.2 tonnes per hectare.11 If the recuperation of SOM became a central goal of agricultural policies, it would be perfectly possible and reasonable to set as an initial goal the incorporation on average throughout the world of 1.5 tonnes per hectare per year. The new scenario would require a change in approach, with the use of techniques such as diversified cropping systems, better integration between crop and animal production, increased incorporation of trees and wild vegetation, and so on. Such
10. Calculations by GRAIN based on world production of annual crops. Figures obtained using data provided by J.B. Holm-Nielsen (http://tinyurl.com/l4nqra) and the Oak Ridge National Laboratory of the US Department of Energy (http://tinyurl.com/t4x96) at least double the amount of annual crop residues. The same figures can be arrived at using data provided by the University of Michigan at (http://tinyurl.com/38mrkw). 11. Calculations based on figures provided by K.A. Baumert, T. Herzog and J. Pershing, Navigating the Numbers: Greenhouse Gas Data and International Climate Policy, World Resources Institute, http://tinyurl.com/m5e7kb).
an increase in diversity would, in turn, increase the production potential, and the incorporation of organic matter would progressively improve soil fertility, creating virtuous cycles of higher productivity and higher availability of organic matter. The capacity of soil to hold water would increase, which would mean that excessive rainfall would lead to fewer, less intense floods and droughts. Soil erosion would become less of a problem. Soil acidity and alkalinity would fall progressively, reducing or eliminating the toxicity that has become a major problem in tropical and arid soils. Additionally, increased soil biological activity would protect plants against pests and diseases. Each of these effects implies higher productivity and hence more organic matter available to soils, thus making possible, as the years go by, higher targets for SOM incorporation. More food would be produced in the process. But even the very modest initial goal would have far-reaching effects. As Table 2 shows, the process would start with the annual incorporation of 1.5 tonnes of organic matter in the first 10 year period, which means that 3,750 million tonnes of CO2 would be captured each year. This is about 9% of the current total annual human-made emissions.12 Two other forms of reduction in greenhouse gases (GHGs) would simultaneously take place. First, nutrients equivalent to more than all of current world fertiliser production would be captured in the worlds agricultural soils.13 The elimination of the current production and use of chemical fertilisers would have the potential to reduce yet further GHG emissions by reducing both emissions of nitrous oxide (equivalent to approximately 8% of all GHG emissions and, after deforestation, by far the most important contribution made by agriculture to the greenhouse effect) and the worldwide production and trans12. Calculations based on figures provided by the Greenhouse Gas Bulletin No. 4, (http://tinyurl.com/m4apxz). 13. Calculations based on the following contents of nutrients in organic matter and efficiency of recovery: nitrogen: 1.21.8%, 70% efficiency; phosphorus: 0.51.5%, 90% efficiency; potassium: 1.02.5%, 90% efficiency.
Mineral
Sodium Potassium Magnesium Calcium Iron Copper Zinc
Vegetables
49% 16% 24% 46% 27% 76% 59%
Fruit
29% 19% 16% 16% 24% 20% 27%
A new study published in 2006 shows that mineral levels in animal products have suffered a similar decline. Comparing levels measured in 2002 with those present in 1940, the iron content of milk was found to have declined by 62%, while calcium and magnesium in Parmesan cheese had each fallen by 70%, and copper in dairy produce had plummeted by a remarkable 90%. From: Marin Hum, Soil mineral depletion, in Optimum nutrition, Vol. 19, No. 3, Autumn 2006.
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1. From: Tim J. LaSalle and Paul Hepperly, Regenerative Organic Farming: A Solution to Global Warming, Rodale Institute, 2008, (http:// www.rodaleinstitute.org/files/Rodale_Research_Paper-07_30_08.pdf).
118 It can be done, but it needs the right policies. The climate crisis requires a political response, with many
portation of fertilisers, which is currently responsible for more than 1% of world GHG emissions.14 Second, if organic waste was returned to agricultural soils, methane and CO2 emissions from landfills and waste water (equivalent to 3.6% of total current emissions)15 could be significantly reduced. In sum, even such a modest start would have the potential to reduce global GHG emissions by approximately 20% per year. And we are talking only about the first ten years. Table 2 shows that, if we were to increase progressively the reincorporation of organic matter into our agricultural soils, within 50 years we would increase the share of organic matter in the soil by two percentage points. This is about the same amount of time that was taken to reduce it. In the process we would have captured 450 billion tonnes of CO2, more than two thirds of the current excess CO2 in the atmosphere!
broad social and economic changes. Even though the recuperation of SOM is a feasible and beneficial way to cool the earth, climate change will continue to accelerate unless we have fundamental changes in our patterns of production and consumption. The process of returning organic matter to the
14. See Navigating the Numbers: Greenhouse Gas Data and International Climate Policy, World Resources Institute, (http://tinyurl. com/m5e7kb). 15. Ibid. See also (http://tinyurl.com/lfrcx4).
119
Corporate investors lead the rush for control over overseas farmland.
A background article on land grabbing by GRAIN, published as a chapter in the Monthly Review Press book Agriculture and food in crisis. Im convinced that farmland is going to be one of the best investments of our time. Eventually, of course, food prices will get high enough that the market probably will be ooded with supply through development of new land or technology or both, and the bull market will end. But thats a long ways away yet. George Soros, June 2009. 121
FROM THE UNiTED NATiONS HEADQUARTERS iN NEW YORK TO THE CORRiDORS OF EUROpEAN CApiTALS,
EVERYONE iS TALKiNG ABOUT MAKiNG THESE DEALS WiNWiN.
and grabbing has been going on for centuries. One has only to think of Columbus discovering America and the brutal expulsion of indigenous communities that this unleashed, or white colonialists taking over territories occupied by the Maori in New Zealand and by the Zulu in South Africa. It is a violent process very much alive today, from China to Peru. Hardly a day goes by without reports in the press about struggles over land, as mining companies such as Barrick Gold invade the highlands of South America or food corporations such as Dole or San Miguel swindle farmers out of their land entitlements in the Philippines. In many countries, private investors are buying up huge areas to be run as natural parks or conservation areas. And wherever you look, the new biofuels industry, promoted as an answer to climate change, seems to rely on throwing people off their land. Something more peculiar is going on now, though. The two big global crises that erupted in 2008 the world food crisis and the broader financial crisis that the food crisis has been part of1
1. See GRAIN, Making a killing from hunger, Against the grain, Barcelona, April 2008, (http://www.grain.org/ articles/?id=39).
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LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE THE NEW FARM OWNERS
In this context, and with all the talk about food security and distorted media statements like South Korea leases half of Madagascars land,2 it often goes unrecognised that the lead actors in todays global land grab for overseas food production are not countries or governments but corporations. So much attention has been focused on the involvement of states, like Saudi Arabia, China or South Korea. But the reality is that while governments are facilitating the deals, private companies are the ones getting control of the land. And their interests are simply not the same as those of governments. Take one example. In August 2009, the government of Mauritius, through the Ministry of Foreign Affairs, got a long-term lease for 20,000 ha of good farmland in Mozambique to produce rice for the Mauritian market. This is outsourced food production, no question. But it is not the government of Mauritius, on behalf of the Mauritian people, that is going to farm that land and ship the rice back home. Instead, the Mauritian Minister of Agro Industry immediately sub-leased the land to two corporations, one from Singapore (which is anxious to develop the market for its proprietary hybrid rice seeds in Africa) and one from Swaziland (which specialises in cattle production, but is also involved in biofuels in southern Africa).3 This is typical. And it means that we should not be blinded by the involvement of states. Because at the end of the day, what the corporations want will be decisive. And they have a war chest of legal, financial and political tools to assist them. Moreover, theres a tendency to assume that private-sector involvement in the global land grab amounts to traditional agribusiness or plantation companies, like Unilever or Dole, simply expanding the contract farming model of yesterday. In fact, the highpower finance industry, with little to no experience in farming, has emerged as a crucial corporate player. So much so that the very phrase investing in agriculture, todays mantra of development
2. It was not South Korea, but Daewoo Logistics. 3. See GRAIN, Mauritius leads land grabs for rice in Mozambique, Oryza hibrida, 1 September 2009. (http://www.grain.org/ hybridrice/?lid=221). Available in English, French and Portuguese.
bureaucrats, should not be understood as automatically meaning public funds. It is more and more becoming the business of big business.
The role of nance capital. GRAIN has tried to look more closely
at who the private sector investors currently taking over farmlands around the world for offshore food production really are. From what we have gathered, the role of finance capital investment funds and companies is truly significant. In October 2009, we released a table outlining over 120 investment structures, most of them newly created, which are busy acquiring farmland overseas in the aftermath of the financial crisis.4 Their engagement, whether materialised or targeted, rises into the tens of billions of dollars. That table was not exhaustive, but it did provide a sample of the kinds of firms or instruments involved, and the levels of investment they are aiming for. (See table 1 on page 126). Private investors are not turning to agriculture to solve world hunger or eliminate rural poverty. They want profit, pure and simple. And the world has changed in ways that now make it possible to make big money from farmland. From the investors perspective, global food needs are guaranteed to grow, keeping food prices up and providing a solid basis for returns on investment for those who control the necessary resource base. And that resource base, particularly land and water, is under stress as never before. In the aftermath of the financial crisis, so-called alternative investments, such as infrastructure or farmland, are all the rage. Farmland itself is touted as providing a hedge against inflation. And because its value doesnt go up and down in sync with other assets like gold or currencies, it allows investors to successfully diversify their portfolios. But its not just about land, its about production. Investors are convinced that they can go into Africa, Asia, Latin Amer4. The table covers three types of entities: specialised funds, most of them farmland funds; asset and investment managers; and participating investors. We are aware that this is a broad mixture, but it was important for us to keep the table simple: (http:// www.grain.org/m/?id=266).
ica and the former Soviet bloc to consolidate holdings, inject a mix of technology, capital and management skills, lay down the infrastructures and transform belowpotential farms into large-scale agribusiness operations. The same way you have shoemakers and computer manufacturers, we produce agricultural commodities, says Laurence Beltro Gomes of SLC Agrcola, the largest farm company in Brazil. In many cases, the goal is to generate revenue streams both from the harvests and from the land itself, whose value they expect to go up. In the words of Susan Payne, CEO of Emergent Asset Management, an investment fund in the UK targeting farmland in Mozambique and other Africa countries: The first thing were going to do is to make money off of the land itself . . . We could be moronic and not grow anything and we think wed make money over the next decade. What these investors are driving forward here is a totally corporate version of the Green Revolution, and their ambitions are big. My boss wants to create the first Exxon Mobil of the farming sector, said Joseph Carvin of Altima Partners One World Agriculture Fund to a gathering of global farmland investors in New York in June 2009. No wonder, then, that governments, the World Bank and the UN want to be associated with this. But it is not their show.
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FiNANCE iNDUSTRY, WiTH LiTTLE TO NO EXpERiENCE iN FARMiNG, HAS EMERGED AS A CRUCiAL CORpORATE pLAYER.
farmland investments. They want to tear down burdensome land laws that prevent foreign ownership, remove hostcountry restrictions on food exports and get around any regulations on genetically modified organisms. For this, we can be sure that they will be working with their home governments and various development banks to push their agendas around the globe through free trade agreements, bilateral investment treaties and donor conditionalities. Indeed, the global land grab is happening within the larger context of governments, both in the North and the South, anxiously supporting the expansion of their own transnational food and agribusiness corporations as the primary answer to the food crisis. The deals and programmes being promoted today all point to a restructuring and expansion of the industrial food system, based on capital-intensive large-scale monocultures for export markets. While that may sound old hat, several things are new and different. For one, the infrastructure needs for this model will be dealt with. (The Green Revolution never did that.) New forms of financing, as our table makes plain, are also at the base of it. Thirdly, the growing prominence of corporations and tycoons from the South is also becoming more important. US and European transnationals like Cargill, Tyson, Danone and Nestl, which once ruled the roost, are now being flanked by emerging conglomerates such as COFCO, Olam, Savola, Almarai and JBS.5
5. COFCO is based in China, Olam is based
Exporting food insecurity. Given the heavy role of the private sector in todays land grabs, it is clear that these firms are not interested in the kind of agriculture that will bring us food sovereignty. And with hunger rising faster than population growth, it will not likely do much for food security, either. One farmers leader from Synrgie Paysanne in Benin sees these land grabs as fundamentally exporting food insecurity. For they are about answering some peoples needs for maize or money by taking food production resources away from others. He is right, of course. In most cases, these investors are themselves not very experienced in running farms. And they are bound, as the Coordinator of MASIPAG in the Philippines sees it, to come in, deplete the soils of biological life and nutrients through intensive farming, pull out after a number of years and leave the local communities with a desert. The talk about channelling this sudden surge of dollars and dirhams into an agenda for resolving the global food crisis could be seen as quirky if it were not downright dangerous. From the United Nations headquarters in New York to the corridors of European capitals, everyone is talking about making these deals winwin. All we need to do, the thinking goes, is agree on a few parameters to moralise and discipline these land grab deals so that they actually serve local communities without scaring investors off. The World Bank even wants to create a global certification scheme and audit bureau for what could become sustainable land grabbing, along the lines of whats been tried with oil palm, forestry and other extractive industries.
in Singapore, Savola is based in Saudi Arabia, Almarai is based in Saudi Arabia, and JBS is based in Brazil. 6. World Investment Report 2009, UNCTAD, Geneva, September 2009, p. xxvii. Most foreign direct investment takes place through mergers and acquisitions.
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LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE THE NEW FARM OWNERS
ades of their Green Revolution projects and structural adjustment programmes, we have more hungry people on the planet than ever. Rather than question the model, the World Bank and others have decided that the only way to keep the global food system from coming apart at the seams is to fly forward, follow the money and install large scale agribusiness operations everywhere, particularly where they have not yet taken root. This is what todays land grab is all about: to expand and entrench the Western model of large scale commodity value chains. In other words: more corporate-controlled food production for export. The global land grab is thus only going to make the food crisis worsewith or without principles and guidelines. It pushes an agriculture based on large scale monocultures, chemicals, fossil fuels, and slave-like labour. This is not an agriculture that will feed the planet; its an agriculture that feeds speculative profits for a few and more poverty for the rest. As climate change takes us into an era of severe disruption of food production, there has never been a more pressing need for a system that can ensure that food is distributed to everyone, according to need. Yet never has the worlds food supply been more tightly controlled by a small group, whose decisions are based solely on how much money they can extract for their shareholders. Of course we need investment. But investment in food sovereignty, in a million local markets and in the three billion farmers and farm workers who currently produce most of the food that our societies rely on not in a few mega-farms controlled by a few mega-landlords.
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THE GREAT FOOD ROBBERY. Table 1. Investment vehicles purchasing farmland in Africa, Asia, Latin America and Eastern Europe.* Investment vehicle
Altima One World Agriculture Fund
Legal base
Cayman Islands/US
Participating investors
- Altima Partners (UK) - IFC (World Bank)
Details
The Altima One World Agricultural Fund is a US$625 million fund created by Altima Partners, a US$3 billion hedge fund, to invest in agricultural land and farming operations in emerging market countries. Altima invests in agribusinesses in Latin America and the Russia/Ukraine/Kazakhstan (RUK) region. Three-quarters of its portfolio goes into farm companies (producing agricultural crops) and 25% goes into publicly-listed ag companies. In February 2009, the World Banks private investment arm, the International Finance Corporation, announced that it was partnering with the Altima fund through a $75 million equity infusion. Altima owns 40% of the Argentine company El Tejar, which owns and leases well over 200,000 ha of farmland in Argentina, Brazil, Uruguay, Paraguay and Bolivia. El Tejar plans to start production in Colombia in 2010. In 2009, the Capital Group invested $150 million in El Tejar to acquire 13 percent of the companys shares. In March 2010, El Tejar announced it was considering an IPO in New York. APG (All Pensions Group) was established in March 2008 and is one of the largest managers of pension assets in the world, handling about 217 billion Euros from the pensions of 2.7 million Dutch. APG recently established a Farmland Fund to invest in structures that lease out farmland as well as structures where farmland is operated. It also has a Forestry Fund, established in 2007, that invests in both forests and farms. According to their agricultural fund manager Frank Asselbergs: When we talk about investing in farms you shouldnt think about some quaint Dutch smallholding you can drive a tractor around in an hour. These are enormous tracts of land, mainly in Latin America. And theyre not run by a farmer we hire in, but by professional companies. We recently bought a farm as big as the entire Veluwe region of the Netherlands. Thats tens of thousands of ha. Were active in Uruguay, Paraguay, Brazil and Argentina. Theyre the agricultural heartland of the future. We also have farms in Australia, and were now looking at other regions. Europe included.
APG Investment
Netherlands
BKK Partners
Australia
- Indochina Gateway Capital Ltd (Cambodia) - Louis Dreyfus (France) - AIG (US)
BKK is planning a $600 million investment to acquire 100,000 ha in Cambodia for the production of rice, bananas and sugar. The company is in negotiations with the Government of Cambodia and has already begun looking at possible sites. Louis Dreyfus is one of the worlds top grain traders. It established Calyx Agro in 2007 as a fund for farmland acquisitions in southern Latin America. Louis Dreyfus Commodities already owns 60,000 ha of farmland in Brazil, to which it has committed US$120 million. AIG invested US$65 million into the fund in 2008. The fund focuses on identifying, acquiring, developing, converting and selling farmland in Brazil, Argentina, Uruguay and Paraguay. Louis Dreyfus is also investing in land in Africa and the Ukraine. Citadel Capital makes private equity investments in the Middle East and North Africa and has more than US$ 8.3 billion in investments under its control. In 2008, Citadel set up a fund called Sabina, which holds Citadel Capitals agricultural investment near Kosti, White Nile State, Sudan, where it has obtained a 99-year freehold on a 255,000-feddan (107,000 ha) plot of fertile land, including 37 kilometres of Nile River frontage. Part of the land has been designated specifically for the cultivation of sugarcane and the rest will be used for various other crops. Some 32,000 feddans (13,440 ha) of the land are already cultivated. The plot is in close proximity to a river port owned by Keer Marine, a Citadel Capital investment. Citadel says it is also considering investments in Uganda, Kenya and Ethiopia. Citadel owns Egypts largest milk producer, Dina Farms, with a herd of 11,000 cows. It intends to double this herd within 3- 5 years. Dina Farms is a subsidiary of the Gozour Holding Company set up by Citadel with other regional investors.
Calyx Agro
Argentina
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Citadel Capital
Egypt
- Leading investors and family offices from Egypt, the Gulf Cooperation Council and North Africa
LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE THE NEW FARM OWNERS
Investment vehicle
Emergent Asset Managagement International Farmland Holdings / Adeco Agropecuaria Jarch Capital
Legal base
UK
Participating investors
- Toronto Dominion Bank (Canada)
Details
Emergent operates an Africa Agricultural Land Fund, with offices in Pretoria and London. As of June 2009, Emergent controlled over 150,000 ha in Angola, Botswana, Mozambique, South Africa, Swaziland and Zambia. International Farmland Holidings, also known as Adeco, is a farm investment company created by Alejandro Quentin and Soros Fund Management. It has invested more than US$600 million in Argentina, Brazil and Uruguay to acquire 263,000 ha of farmland. In 2009, Jarch took a 70% interest in the Sudanese company Leac for Agriculture and Investment and leased approximately 400,000 hectares of land in southern Sudan claimed by General Paulino Matip of the Sudan Peoples Liberation Army. Soon after, Jarch announced that it aimed to lease another 400,000 hectares of land by the end of 2009 in Africa. NCH Capital manages over $3 billion from university endowments, corporate and state pension funds, foundations, and family investment offices. It has a $1.2 billion agribusiness fund focused on acquiring farms in eastern Europe. In Ukraine, NCH controls and operates a portfolio of over 350,000 hectares. In Russia, NCH has more than 80,000 hectares. Pharos Miro Agricultural Fund is a US$350 million fund, which will focus initially on rice farming in Africa and cereal cultivation in eastern Europe and former Soviet countries. It is in the process of acquiring a 98-year lease on 50,000 ha of farmland in Tanzania for rice production. TIAA-CREF is the largest US manager of retirement funds. As of December 2008, it is said to have invested US$340 million in US farmland. TIAA-CREF has also created a holding company in Brazil, called Mansilla, which invested US$150 million in COSANs farmland fund, Radar Propriedades Agricolas, in 2008. Radar is buying up agricultural land for conversion to sugarcane production and for speculation. The fund is 81.1% owned by TIAA, but entirely controlled by COSAN, the largest sugar producer in Brazil and one of the largest in the world. Radar spent the first US$200 million it raised within 4 months and is has now raised another US$200 million. It has 2,000 farms in its portfolio. In November 2009, the Abu Dhabi-based investment house Tiris signed a contract with the Government of Morocco to lease up to 700,000 ha of farmland near the south-western town of Guelmim. It plans to invest $44 million in the project, and to export the produce to the Middle East and Europe.
US/Argentina - George Soros (US) - Pampa Capital Management (UK) - Halderman (US) Virgin Islands - Phillippe Heilberg and other wealthy US individuals
UAE
- Pharos Financial Group (Russia) - Miro Holding International (UK) - COSAN (Brazil)
Teachers Insurance and Annuity Association, College Retirement Equities Fund (TIAACREF)
US
UAE
Feronia Inc
Canada
TriNorth is a Canadian investment company managed by Lawrence Asset Management Inc.. Its subsidiary Feronia Inc. was established to invest in agricultural production and processing facilities in South Africa, Uganda, Zimbabwe and the DR Congo. It is working with Brazilian experts to develop plantations of soybean, sunflower, oil palm and other crops on land it acquires in Africa. In September 2009 it acquired a 100,000 ha plantation in the DR Congo through the purchase of Plantations et Huileries du Congo S.C.A.R.L. TriNorth also owns the Wild Horse Group, which is engaged in purchasing and consolidating farmland in Canada and intends to be one of Canadas largest owners and operators of irrigated farmland in Saskatchewan.
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*This table is an extraction from a more complete table compiled by GRAIN in October 2009. It also includes several new entries.
LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE TURNiNG AFRiCAN FARMLAND OVER TO BiG BUSiNESS
power politics and adapting to new pressures, such as urbanisation, migration, deforestation or the fragmentation of lands. They are based on varied and overlapping rights and responsibilities, and profoundly integrated with local farming, fishing and pastoral practices. In official circles, these systems of land management have been marginalised and condemned for years, but today they are under unprecedented attack.2 Africa has become the new frontier for global food (and agrofuel) production. Billions of dollars are being mobilised to create the infrastructure that will connect more of Africas farmland to global markets, and billions more are being mobilised by investors to take over that farmland to produce for those markets. To get a sense of the extent of what is transpiring, one need only look at the massive oil palm plantation planned for Liberia by the worlds largest palm oil companies, or the joint JapaneseBrazilian project to transform vast areas of Mozambique into Brazilian-style soya plantations.3 There is no place for Africas millions of small farmers in this new vision. And, like the colonial powers that came before, the new wave of invaders needs a legal and administrative structure to justify and facilitate the takeover of these lands. For more than a decade now, the World Bank, USAID and a slew of other international agencies and foreign donors have been laying the foundations for this conquest. Although there are subtle differences in their approaches, the land programmes of these various agencies converge around the same goal of creating commercial land markets based on private property titles in the areas of Africa targeted by foreign investors. Teams of consultants are constantly being parachuted across the continent to
2. See Declaration of FO platforms members of ROPPA, issued after the workshop on land security for family farms at Ouagadougou, 13 April 2008: (http://www.roppa. info/IMG/pdf/ Declaration_of_FO_platforms_members_of_ROPPA.pdf). 3. JICA development model to encourage increased agricultural production in Africa, Japan International Cooperation Agency, 17 March 2010: http://farmlandgrab.org/11756; Liberia: GOL, Golden Veroleum in US$1.6bn negotiation, Liberian Observer, 12 January 2010: (http:// farmlandgrab.org/10208).
hen the European powers invaded Africa they brought with them their systems of private property. Laws were established based on these systems in order to justify, entrench and facilitate the takeover of lands from local communities. But such laws were hardly ever applied or respected beyond the boundaries of the European farms and plantations. With independence, although the Western laws often stayed on the books, the African states assumed ultimate and often sole ownership of all lands in their territories. But in practice they did not have the power to manage these lands. So the vast majority of land in the African countryside, through the colonial period and up until today, has been governed according to local communities customary land practices.1 These customary practices are often complex and rarely static. They have evolved over time, shifting with local
1. According to Philippe Lavigne Delville, an anthropologist with GRET (France), 8095% of the rural lands remain managed according to local principles and procedures. See Philippe Lavigne Delville, Customary to modern transition, presentation to the World Bank Regional Workshops on Land Issues, 2002: (http:// www.landcoalition.org/pdf/wbtdelv.pdf).
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Table 1. Countries that have signed Compacts with MCC that include a land reform project Country Date of Compact with MCC
Madagascar Nicaragua Benin, Ghana, Mali Burkina Faso 2004 2005 2006 2008
The new face of structural adjustment. Near the end of his first term in office (20015), US President George W. Bush came forward with a proposal for a new structure to administer his governments overseas aid. He wanted something separate from USAID, something more like a private corporation than a government programme. It would have its own CEO and a Board of Directors which, while it would report to Congress and include the Secretary of State, the Secretary of the Treasury, the US Trade Representative, and the USAID Administrator, would also contain four private-sector representatives. The MCC, as it came to be known, was created by the US Congress in January 2004. The MCCs approach is hardhitting and akin to a structural adjustment programme. It has a large budget (which Congress has increased under the Obama administration, by 26% in 2010). This money is disbursed in the form of grants, not loans, to specific countries that the MCC deems eligible for funding. So there is a big carrot dangling to lure countries in. But even to become a candidate for funding, a country must first pass an MCC scorecard test, which looks at such criteria as Encouraging Economic Freedom and is based on indicators taken from neo-liberal institutions like the World Bank, the Heritage Foundation and the International Monetary Fund (IMF). If a country achieves a high enough score, it may then be promoted by the MCC to threshold status, where it will gain access to small funds for use in implementing the policy reforms that the MCC says are necessary for full eligibility. Having passed through these hoops, a country can then move into the process of developing and signing a Compact with the MCC, which will specify four or five projects for MCC funding. The way this usually works is that a team of US consultants flies in to guide the government in crafting the Compact proposal, pointing it towards those areas that are most salient to opening the country up to foreign investors. Once the Compact is approved, the money starts to flow, although the tap can quickly be turned off if the government changes direction in a manner that does not suit Washington. MCC funding to Nicaragua was cut off when the Sandinistas were elected to power, but was maintained in Honduras after the illegal coup dtat of 2009.4
4. Alexander Main and Jake Johnston, The Millennium Challenge Corporation and Economic Sanctions: A Comparison of Honduras With Other Countries, Center for Economic and Policy Research, Issue Brief, August 2009: (http://www.cepr.net/documents/publications/mcc-sanctions-2009-08.pdf).
With the signing of the Compact, the recipient government must set up an institution to administer the funds, often called a Millennium Challenge Account (MCA), which operates autonomously, with its own Board of Directors, yet under the oversight of a designated ministry. The Compact lasts typically for five years, with regular evaluations and strict targets that have to be met, each year or so, before new tranches of funding are released. Vincent Basserie, a land specialist with Le Hub Rural in Senegal, who has seen the MCC in action, likens it to a bulldozer pursuing a strict ideological agenda, without regard for previous experiences. As most of MCCs Compacts have so far been signed with African countries, it is not surprising that they focus on agriculture, where there is currently a great deal of interest from foreign investors. Nearly half of MCCs overall budget of US$6.8 billion supports what it calls market-based solutions to food security. Its Compacts finance projects such as the certification of outgrowers for fruit exports, or the construction of transport infrastructure to facilitate access to international markets, as in the case of the Port of Cotonou, Benin. In the African Compacts, there is almost always a land component that is central: while these land projects may vary from country to country, MCCs overriding objective with all of them is to privatise the land, and, in this way, to make it a marketable commodity from which investors can make profits.
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Local markets have no place in the MCC scheme. Photo: Development Fund Norway.
LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE TURNiNG AFRiCAN FARMLAND OVER TO BiG BUSiNESS
First steps in Madagascar. In 2004, Madagascar became the first country to sign a
Compact with the MCC. The government of President Marc Ravalomanana, given its zeal to open up the country to foreign investors, was an easy fit for the MCC. Initially, the MCC and Madagascars government agreed that the Compact should focus on increasing investment in agriculture, and that it should include a project to expand land titling. But a national land reform process oriented towards decentralised land management and the allocation of land certificates (not titles) had already begun before the MCC arrived, and those involved were able to get MCAMadagascar to support this process, even as the other components of the Compact maintained their focus on developing agribusiness and facilitating foreign investment. The contradiction exploded into public view in December 2008, however, when it became apparent that the same government that was using MCC funds to allocate certificates to thousands of rural Malagasy under the National Land Programme was also selling off these lands to foreign investors. The people of Madagascar were shocked to learn, via the international media, that their government had allocated a 1.3 million hectare land concession to the Korean company Daewoo Logistics, and that it was negotiating another agreement with the Indian company Varun, covering several hundred thousand hectares, both for large-scale farming projects. The Daewoo deal included lands where certificates had already been allocated through the MCC-funded programme, while Varun was proposing that the land programme be extended to the area it was targeting, so that certificates could be awarded to farmers on condition that they make their lands available to Varun!5 In fact, the government had signed away, or was in the
5. Andr Teyssier, Landry Ramarojohn and Rivo Andrianirina Ratsialonana, Des terres pour lagro-industrie internationale ? Un dilemme pour la politique foncire malgache EchoGo, No. 11, February 2010: (http://farmlandgrab.org/11420).
process of signing away, nearly 3 million hectares of agricultural land to foreign investors through a system of long-term leases (up to 99 years) that it established in 2008 as part of a new investment law supported by its donors.6 The government of President Ravalomanana and the MCA Madagascar programme came to a dramatic end in March 2009 by way of a coup dtat, which had certainly been facilitated by popular anger over the Daewoo deal. The MCC immediately cancelled the Compact and its funding for the National Land Programme. It was the first and last time that the MCC would let a national process steer its land project.
MCCs efdom in Mali. The programme in Mali offers a more clear-cut example of
MCCs land activities and what it seeks to accomplish. Millennium Challenge AccountMali (MCAMali) has taken over its own area of land in Malis Office du Niger the most important irrigated land scheme in the country, and perhaps in the whole of West Africa. On the 20,000 or so hectares that it has secured, MCAMali has set up what is essentially an extraterritorial zone, where it is putting in place its own system of land management. The Office du Niger Authority of the Malian government is the sole agency responsible for allocating lands and regulating irrigation water in the Office du Niger. Farmers gain access to land by paying fees to the Authority for irrigated water. But within the MCAMali zone, the lands, which are currently not irrigated, are to be irrigated and divided into parcels, to which people will be sold individual land titles. During a first phase, beginning in 2010, 6,000 ha of land will be irrigated and divided into 5-ha plots. Titles to these 5-ha parcels will be allocated, first, to the people currently living in the area who wish to stay and, second, to small farmers who wish to move
6. GTZ, Foreign Direct Investment (FDI) in Land in Madagascar, December 2009.
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to the area. These people will have to buy the titles from the MCA, although families currently living in the area who are being displaced by the project will be given two of the five hectares. The second phase will bring another 5,000 ha under irrigation in 2011 and these lands will be divided into 10-ha parcels. Finally, phase three, which is planned for 2012, will bring 5,000 more hectares under irrigation, which will be divided into seventy 30-ha plots and thirty large-scale plots of more than 30 ha each.7 While the MCA plans to divide and sell off the plots as individual titles, ownership will remain entrusted to a special authority created by the MCA until the title owners have entirely paid off their loans, which are to be amortised over 20 years.8 The local farmers organisation, Sexagon, has many members in the area that MCAMali has taken over.9 One of its leaders, Faliry Boly, says that the local people were not consulted and are in fact opposed to the project. These people are pastoralists who have no desire to start farming, says Boly. They
7. Millennium Challenge CorporationMali, Alatona Agricultural Systems Development Project: Final Report, Prepared by CDM, July 2007. 8. Ibid. 9. The Syndicat des exploitants agricoles de lOffice du Niger (SEXAGON) was created in 1996. Today it represents more than 12,000 peasants in the zone.
wont pay a cent to the MCA for the land that the MCA is taking from them and theyll most likely be forced to leave. MCC is clearly setting out to remake agriculture in the zone. A US firm is being parachuted in to teach modern farming to the Malians participating in the project, and it will be working with the Alliance for a Green Revolution for Africa (AGRA) to provide farmers with a starter pack of seeds and other inputs for the first year (see Box 1). The small farmers involved in the first phase, if they stay, are likely to run into debt, and most will probably end up selling their land to the bigger farmers and companies that move in under the second and third phases of the project. And the door is open for foreign investors to come in: the final report of the project plan carefully omits any requirement for the third wave of investors those with parcels of 30 ha and more to be citizens of Mali.10 Indeed, the Office du Niger is already being heavily targeted by foreign investors: Libya has taken over 100,000 ha; Chinese investors 6,000 ha; Saudi investors are considering 50,000 100,000 ha; there is an initiative by the regional body the West African Economic and Monetary Union (WAEMU)11 following
10. Millennium Challenge CorporationMali, Alatona Agricultural Systems Development Project: Final Report, Prepared by CDM, July 2007. 11. In French, the Union conomique et montaire ouest-africaine (UEMOA).
LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE TURNiNG AFRiCAN FARMLAND OVER TO BiG BUSiNESS
a similar approach to the MCA project on 11,000 ha; another regional formation, the Economic Community of West African States (ECOWAS),12 is talking about a publicprivate-sector project that would cover another 100,000 ha. Meanwhile local farmers are struggling to access more than 1 ha per family, and competition for access to water is intensifying, since all irrigation in the Office du Niger is dependent on the same source of water.13 In this context, Sexagon is advocating another vision, which would provide sufficient access to land and water for family farms, and ensure the countrys food sovereignty. They want a system based on long-term leases that would provide each family farm with around 3 ha. This system would prevent the development of a land market something that Sexagon opposes.14 Conflict with MCAMali is thus bound to intensify for the small farmers in the Office du Niger. MCC wants its zone to serve as a launching pad for a transformation of the entire region, and Sexagon is determined to stop it. The MCC project is destined to fail, says Boly. We will eventually get our lands back.
Faliry Boly, head of Sexagon, in an onion field in the Office du Niger. Photo: L. Lewalle / SOS Faim
A golden opportunity for US agribusiness in Ghana. The MCCs land project in Ghana is much the same as that
in Mali. Its Compact with Ghana is heavily oriented towards building up the countrys horticulture exports, with a particular focus on bringing more foreign investment into pineapple production. But the corporations that dominate the global pineapple trade have made it clear that they wont invest in the country without significant incentives: changes in the ways land is managed is at the top of their list. The MCC Compact is designed to make this happen. As in Mali, the land component revolves around an initial pilot project in a zone accorded special status by the central government. The pilot area is located not far from the capital, Accra, in the pineapple-producing rural district of Awutu Efutu Senya. As planned in a detailed Roadmap, signed by the government in September 2007, the project began by using satellite technology to map and delimit the zone.15 A consultant was hired to carry out sensitivity and information exercises to assure the cooperation of the local people. Then, when MCC and the Millennium Development Authority (MiDA),
12. In French, the Communaut Economique Des Etats de lAfrique de lOuest (CEDEAO). 13. AGTER, Appropriation et concentration de droits fonciers grande chelle-Le cas du Mali, janvier 2010: http://farmlandgrab.org/10462; Chantal Lavigne, Mali : La rue vers les terres, reportage vido, Une heure sur terre, Radio Canada, 12 March 2010: (http://farmlandgrab.org/11739; Via Campesina, Libyan land grab of Malis rice-producing land, 10 September 2009: http://farmlandgrab.org/7483). 14. For further details see, SOS Faim, Mali Office du Niger: Can the farmers movement push back agribusiness?, Farming Dynamics, No. 20, April 2009. 15. Implementing Entity Agreement by and between the Millennium Development Authority and the Ministry of Lands, Forestry and Mines, 18 September 2007.
which is Ghanas implementing agency for the Compact, judged the political climate to be ripe, the Minister of Lands declared the district a compulsory Title Registration Area, a first in rural Ghana.16 From there MiDA has moved into the implementation phase. The district is being surveyed in detail, lands and rights are being identified and mapped, conflicting claims are being managed by an alternative dispute resolution system established and managed by another team of consultants, and titles are being registered and handed out. By September 2009, a first round of 100 land titles had been allocated. Meanwhile, MiDA has even set up a special office to provide information and assess the value of land for prospective investors. The local people did not request this project. They were not seeking land titles. They have, however, been extremely worried about the expansion of pineapple plantations in the area, and what this is doing to local food production and their access to land.17 Such local trepidation concerns the foreign investors and elites keen to take over land for pineapple production; they do not want the local people and their customary land practices to stand in the way of profits. The MCCs project in Awutu Efutu Senya is integrated into a larger MCC programme bent on expanding export pineapple production in the area. MCC funds are being used to upgrade roads linking the district to the airport and the harbour, to build a local packhouse and other post-harvest facilities, to improve the port, to put in place investment incentives and extension programmes, to supply irrigation and even to increase access to potable water, which is essential for growers to achieve EurepGAP certification.18 Five years ago the MCC
16. By way of the Minister, supported by MiDA,Legislative Instrument 1914 was adopted by Parliament to declare the Awutu Senya District as a pilot registration area in accordance with the provision of the land title registration law, PNDC 152. Section 5 of PNDC Law 153 mandates the Minister to, by a Legislative Instrument, declare an area as a Registration District so that land titling can take place in the delimited area. 17. See for instance, GNA, Workshop on poverty reduction ends, GhanaWeb, 21 December 2003: (http://www.ghanaweb.com/ GhanaHomePage//regional/artikel.php?ID=48673). 18. EurepGAP is an internationally recognised set of farm standards that are supposed to guarantee good agricultural practices (GAP). In 2007 its name was changed to GLOBALGAP. Under Ghanas
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Turning the law against the people in Mozambique. The first thing were going to do is to make money off of
the land itself We could be moronic and not grow anything and we think wed make money over the next decade - Susan Payne, CEO of Emergent Asset Management, an investment fund in the UK targeting farmland in Mozambique and other African countries.19 In Mozambique, where the MCC has another major land project, foreign investment in land is booming, and fuelling a massive rise in land grabbing. The World Bank estimates that applications for concessions made over the past 18 months cover 13 million hectares, with over 1 million hectares having been approved.20 Land use and benefit rights (DUATs),21 which were created under Mozambiques 1997 land law and which are supposed to be tightly regulated by the state, are being handed out left, right and centre, with little transparency and supervision. DUATs are rights of occupation allotted by the state to communities in perpetuity, or to investors (both foreign and corporate) as long-term concessions (50 years, with an option to renew for another 50 years), as long as these investors provide and carry out an approved economic development plan. According to the law, the investors are also required to consult the local people to confirm that the land is available, and to set up partnerships with the local community. People struggled hard to ensure that such protection for communities was incorporated in the 1997 law. Increasingly, however, concessions are being allocated to local elites and foreign investors without local peoples consent. The MCC is not averse to DUATs, even though these are not land titles in the orthodox sense. The World Bank, which has a longer experience trying to reform Mozambiques land laws, seems also to have decided that this is the best that can be had for now, given the huge resistance to its push for commercial land markets. According to the MCCs Jolyne Sanjak: What were working with the government on is ensuring that those lease-holds are secure, that the process for expiring the lease and transferring the lease is efficient In Mozambique, we had very interesting discussions with lawyers who work with commercial clients looking for land on which to build their businesses. And they found that their clients startup costs can be 6090 % higher because of all the runaround
Compact proposal, the primary objective of improving water sanitation is for treating horticultural produce. Peoples access to clean water is listed as an indirect benefit. 19. See Susan Paynes presentation at the AgriPods Conference in London, February, 2010: (http://farmlandgrab.org/11247). 20. Presentation by the World Banks Klaus Deininger, Land grabbing - International community responses, 16 July 2009: (http:// farmlandgrab.org/6293). 21. An abbreviation of the Portuguese Direito de Uso e Aproveitamento de Terra.
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22. The Housing Crisis that No One is Talking About: Secure Land Tenure and Poverty Reduction, transcript from Millennium Challenge Corporation public outreach meeting, 13 November 2008: (http://www.mcc.gov/mcc/bm.doc/transcript-111308-habitatlandtenure.pdf). 23. Chemonics, Mozambique General Services Contract, Land Tenure Services: Final Report, Prepared for MCC, October 2006: (http://69.147.245.78/en/index.php?option=com_ docman&task=doc_download&gid=40&Itemid=10). 24. From MCCs preparatory document on land for its Compact with Mozambique: A capacity to respond quickly to this increase in demand [for land] and for intended investments not to be blighted by uncertainties or conflicts regarding land tenure issues is important. Chemonics, Mozambique General Services Contract, Land Tenure Services: Final Report, Prepared for MCC, October 2006: (http://69.147.245.78/en/index.php?option=com_ docman&task=doc_download&gid=40&Itemid=10). 25. According to the MCC Monitoring and Evaluation Plan for Mozambique, one of the main indicators for the Land Tenure Services Project are the hectares of rural land formalized through the provision of DUATs, for private sector use. (http://www.mcc.gov/ mcc/bm.doc/ mozambique-mande-plan-14april09_approved-2. pdf).
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Benins farms, one click from Wall Street. The MCC hired two US companies, Chemonics and International Land Systems, to develop the Mozambican governments proposal for the land component of its Compact. In Mali, another US firm, CDM, wrote up the draft proposal for the section of the Compact dealing with land. The hands of US companies, all well experienced in preparing the terrain for US corporations through USAID programmes, appear every-
where in the design and implementation of the MCC land programmes. In Benin, one US company, Stewart International, is even overseeing the development of a whole new national land policy framework under the MCC programme. The MCCs Compact with Benin makes the dispersal of funds, including a major grant for the development of the Port of Cotonou, conditional on the endorsement of a White Paper that is supposed to be the basis for the development of a new Land Code. The Compact spells out clearly what this new policy framework must look like: it will enable a progressive transition between customary and administrative land management
tions from foreign investors and the logistical means for accomplishing them. In Ghana, for instance, the US title insurance company First American and another US company, International Land Systems, are spearheading a pilot initiative with the Clinton Global Initiative and US-based microcredit bank Opportunity International to map out lands in poor areas of Accra by satellite.29 Opportunity International will then take residents through a process for acquiring a paralegal form of title which can be used as collateral for its loans. Its a rapid way of bypassing government to create a property market, operating under the sanction of an international bank connected to multinational investors.30 The promoters are now seeking to bring their project to rural Ghana. Meanwhile, those investors and companies leading the current scramble for global farmland are already working with satellite technology to identify lands for acquisition. El Tejar, an Argentine company partly owned by US and European private equity funds, explains: In evaluating a potential land purchase or rental, we use satellite imaging and historical weather data to perform an initial screening of the land for quality and productivity. We seek to develop an accurate map of the property, determining its topography and the percentage of the land that can be used for agricultural production, estimating flood and other risks such as disease or drought, as well as soil quality and productivity.31
Shutting the door on the MCC. The MCC is constantly expanding, with more countries
signing Compacts every year. A long list of countries, in Africa and elsewhere, are in line to become eligible for MCC funds. This can only be bad news for family farms. The MCC programmes are not about supporting small farmers. Rather they are turning small farmers into sellers of their lands, paving the way for investors to come in and, at bargain prices, take over prime farmland for large-scale industrial farming or even for speculation.32 Plus, the MCC programmes are just one part of a larger effort to facilitate corporate land grabbing that brings together a growing list of international and national agencies.
29. Peter Rabley, International Land Systems, Inc., Ghana Project Leverages GIS-Based Title Registration and Microfinance to Alleviate Poverty, ArcNews, Fall 2008: (http://en.landsystems.com/ downloads/Ghana_GIS_Land_Titling.pdf). 30. It is important to note that there is already a growing market for collateralised loan obligations based on bundles of microcredit loans in poor countries. Two companies selling these investment vehicles are Blue Orchard (www.blueorchard.com) and Symbiotics (www.symbiotics.ch/). Opportunity International is working actively with both of these companies (see http://www.opportunity. net/About/Distinctives/investment_capital/). 31. (http://www.eltejar.com/en/secciones/agricultural-land_44. php&sub=0). 32. A study by Synergie Paysanne of recent land grabbing in the Commune of Djidja, Departement of Zou, Benin, found an alarming increase in land acquisitions by outsiders in 2008 and 2009. Of the 30 land grabs that they documented, only in one case did an investor subsequently pursue any development of the land. Synergie Paysanne, Rapport final - Mission denqute sur le foncier Djidja : accaparement des terres, December 2009.
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LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE TURNiNG AFRiCAN FARMLAND OVER TO BiG BUSiNESS
going further
The new farm owners corporate investors lead the rush for control over overseas farmland, GRAIN, Against the grain, October 2009, http://www.grain.org/articles/?id=55 Seized: The 2008 landgrab for food and financial security, GRAIN Briefing, October 2008, http://www.grain.org/briefings/?id=212 Farmland Grab: Food crisis and the global land grab.This blog contains mainly news reports about the global rush to buy up or lease farmlands abroad as a strategy to secure basic food supplies or simply for profit. Its purpose is to serve as a resource for those monitoring or researching the issue, particularly social activists, non-government organisations and journalists. Although currently maintained by GRAIN, anyone can post materials or develop the blog further: http://farmlandgrab.org Synergie Paysanne, Lecture critique du Livre Blanc du MCABnin: Etude sur la Politique et lAdministration Foncires Projet Accs au Foncier, 26 November 2009. For a copy, contact: [email protected] Dclaration des plates formes dOP membres du ROPPA, suite latelier rgional sur la scurisation foncire des exploitations familiales Ouagadougou, 13 April 2008: http://www.roppa.info/IMG/pdf/ Declaration_roppa_atelier_french.pdf Declaration of farmer organisation platforms members of ROPPA, after the workshop on land security for family farms at Ouagadougou, 13 April 2008: http://www.roppa.info/IMG/pdf/ Declaration_ of_FO_platforms_members_of_ROPPA.pdf Le Hub Rural website contains a wealth of selected documents and news articles about land issues in Africa, particularly West Africa: http://www.hubrural.org/spip.php?rubrique15 Millennium Challenge Corporation website: http://www.mcc.gov/
The stage is thus being set for a massive transfer of lands currently being used by the poor, who produce food in a sustainable way for local people, to a wealthy elite and to foreign investors, who, if they are not simply sitting on the land for speculative purposes, will mine the soils to produce agricultural commodities for export. So much is at stake, and yet most African governments are falling over themselves to woo investors and sell off their peoples land. Hardly any African government leader has dared to speak out against the current global lang grab. Few have turned down the poisoned pills from the MCC or other donors. This is not preventing people on the ground from taking action. Most of the land deals that have been signed in Africa over the last couple of years still exist only on paper. Where the deals have been exposed or where investors have tried physically to move on to the lands, they have met fierce local resistance from Ethiopia to Madagascar, from Mali to Kenya. And, as more and more deals become known to local people, that resistance spreads, and becomes increasingly consolidated. It is high time that critical pressure around the role of multilateral agencies, including the UN and its human rights
machinery, as well as the more directly implicated groups like the World Bank and its International Finance Corporation, also be brought to bear on national development aid programmes and the role they are playing in todays massive land grab. The MCC is one powerful example of the kind of damage that can be done; it shows why we need to work together to stop it.
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Pension funds:
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LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE PENSiON FUNDS: KEY pLAYERS iN THE GLOBAL FARMLAND GRAB
funds continue to flow to overseas farmland like iron to a magnet. Why? Because of the financial returns. And some of the biggest players looking to profit from farmland are pension funds, with billions of dollars invested. Pension funds currently juggle US$23 trillion in assets, of which some US$100 billion are believed to be invested in commodities.2 Of this money in commodities, some US$515 billion are reportedly going into farmland acquisitions. By 2015, these commodity and farmland investments are expected to double. Pension funds are supposed to be working for workers, helping to keep their retirement savings safe until a later date. For this reason alone, there should be a level of public or other accountability involved when it comes to investment strategies and decisions. In other words, pension funds may be one of the few classes of land grabbers that people can pull the plug on, by sheer virtue of its being their money. This makes pension funds a particularly important target for action by social movements, labour groups and citizens organisations.
Preparing to burn crop residues in harvested rice fields in SE Punjab, India, prior to the wheat season. Photo: Neil Palmer (CIAT).
arge scale agricultural land acquisitions are generating conflicts and controversies around the world. A growing body of reports show that these projects are bad for local communities and that they promote the wrong kind of agriculture for a world in the grip of serious food and environmental crises.1 Yet
1. See the materials from the international conference on Global Land Grabbing held on 68 April 2011 at the Institute for Development Studies, University of Sussex, UK, http://www.future-agricultures. org/index.php?option=com_content&vi ew=category&layout=blog&id=1547&It emid=978. See also John Vidals reports for the Guardian (http://www.guardian. co.uk/world/2011/mar/21/ethiopia-centreglobal-farmland-rush); Alexis Marants film Planet for Sale (http://farmlandgrab. org/post/view/18542); the studies on land deals in Africa being released by the Oakland Institute (http://media.oaklandinstitute.org/land-deals-africa); the Dakar Appeal against land grabbing, drawn up by participants at the World Social Forum in February 2011 and presented to the G20 agriculture ministers in June 2011 (http://viacampesina.org/en/index. php?option=com_content&view=category &layout=blog&id=23&Itemid=36); and the collective statement against responsible
The size & weight ofToday, pensions. peoples pensions are often
managed by private companies on behalf of unions, governments, individuals or employers. These companies are responsible for safeguarding and growing peoples pension savings, so that these can be paid out to workers in monthly cheques after they retire. Anyone lucky enough both to have a job and to be able to squirrel away some income for retirement probably has a pension being administered by one firm or another. Globally, this is big money. The biggest pension funds in the world are those held by governments, such as Japan, Norway, the Netherlands, Korea and the US (see Table 1). Pensions both the institutionally managed and individually held retirement accounts were hit hard by the
agricultural land investments launched by La Via Campesina, FIAN, LRAN, WFF and GRAIN in April 2011 (http://www.grain. org/nfg/?id=767). 2. Sovereign wealth funds, by comparison, hold about US$4 trillion in assets.
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LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE PENSiON FUNDS: KEY pLAYERS iN THE GLOBAL FARMLAND GRAB
Nearly one-third (30%) of them are pension funds. Today, commodities like farmland make up, on average, 13% of pension funds portfolios.8 Yet by 2015, strategy decisions being taken now are expected to boost this to 35%, the new optimal.9 While figures of one, three or five% may sound terribly small, these are huge funds, where one% may amount to several billion dollars. Table 2 tries to go a bit deeper and examine some sample farmland portfolios of pension fund managers. But, as so often, the data are opaque and hard to come by.
Graph 1: Making money from agriculture trading on commodity exchanges (L) and food prices (R) both surging
OF THE FEW CLASSES OF LAND GRABBERS THAT pEOpLE CAN pULL THE pLUG ON, BY SHEER ViRTUE OF THE FACT THAT iT iS THEiR MONEY.
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8. Some of the biggest funds allocate as much as 7% of their portfolios to commodities. 9. Knoepfel, op. cit., p. 14. 10. Sarah Anderson, Food shouldnt be a poker chip, IPS, Washington DC, 15 November 2010, http://www.ips-dc.org/ articles/food_shouldnt_be_a_poker_chip. For more information, see Stop gambling on hunger, http://stopgamblingonhunger. com/?page_id=838
THE GREAT FOOD ROBBERY. Table 2: Pension funds investing in global farmland for food production Pension fund
Alecta Pension Fund
Country
Sweden
Type
Private SEK 500 billion [US$72.3 billion]
AP2 Second Swedish National Pension Fund AP3 Third Swedish National Pension Fund
Sweden Sweden
Public Public
SEK 220 billion [US$34.6 billion] SEK 206.5 billion [US$28.8 billion]
Netherlands
Public
Private Public
EUR 8.5 billion [US$ 11.5 billion] Public? (under supervision of Min of Fin of N. RhineWestphalia) Public US$ 231.4 billion
USA
USA UK
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USA
Public
US$ 20 billion
New Zealand
Public
USA
Public
LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE PENSiON FUNDS: KEY pLAYERS iN THE GLOBAL FARMLAND GRAB
Planned joint venture with TIAA-CREF. First forays into farmland investing were in 2010.
SEK 267 million [US$ 38 million] invested in companies that invest Current, since 2008 in farmland, primarily in Russia and to a lesser extent in Ukraine. Two examples are Alpcot-Agro and Black Earth Farming, which buy farmland in Eastern Europe and then oversee land managament operations. AP3 is also invested in FK Volga Farming Ltd, an offshore company holding & operating 60,000 ha for grain production in Penza, Russia. (0.1%) EUR 1 billion (0.5%), primarily in Latin America, Australia, New Zealand and Eastern Europe. Basically, the world is our farm, says APGs Jos Lemmens. It just depends on the project and whether the risk/return profile is right. Began investing in global farmland during a push for innovation in 2007. The one billion is a planned increase (from several hundred million in 2010). Targeted returns: 8-12% in most cases, but up to 20% for some crops or riskier countries. Farmland seen as a better form of exposure to commodities like corn or wheat than futures contracts because less volatile. Looking to invest in farmland for the first time, to help meet a real assets target of 7.5% that is currently unmet. Current. Estimate only.
Less than $1.1 billion (7.5% target) They reportedly have A$ 500 million [US$ 490 million] (0.04%) invested in Australian farmland
US$ 100 million (0.9%) invested in farmland in Australia, Brazil and Current. USA. They buy land and rent it out; they dont manage operations themselves.
Current. About US$ 50 million (0.2%): - US$ 1.2 million directly invested in Black Earth Farming; - US$ 47.5 million invested in agribusiness firms with huge international farmland holdings in Africa, SE Asia and S America: Olam (US$ 6.1m), Indofood (US$ 1m), Wilmar (US$ 24.5m), Sime Darby (US$ 3.2m), Golden Agriresources (US$ 8m), IOI Corp (US$ 4.7m) not revealed Farmland added recently. Aimed annual returns on US holdings: 8-12%. Not more than 1 billion (US$ 1.6 billion). Insight Management is Sept 2011 an asset manager that works primarily for pension funds (86% of its client base). They have just created a new fund of global farmland holdings for their institutional clients. The size of the fund is less than 0.7% of their portfolio. US$ 100 million (0.5%) In September 2011, IPERS decided to hire UBS Agrinvest to manage a new $100 million allotment for farmland. To be invested in North America only. This farmland fund is separate from an equally new timberland fund. The 3% allocation has been made at the Funds strategy level. First purchases of domestic farmland have started, to be followed by overseas farmland holdings.
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PFZW Netherlands Pension Fund for Care and Well-Being, formerly PGGM
Denmark
Public
US$ 25 billion
not revealed
Sonoma County Employees Retirement System Associa- USA tion TIAA-CREF Teachers Insurance and Annuity Association - College Retirement Equities Fund Varma Mutual Pension USA
Finland
Private
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LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE PENSiON FUNDS: KEY pLAYERS iN THE GLOBAL FARMLAND GRAB Global farmland investment portion... ... and its status
May raise farmland allocation in 2011. In 2010, PFZW placed EUR 50-100 million in Black River Asset Management, the private equity arm of Cargill, to engage in global farmland investing, plus up to EUR 50 million in Black Rivers Asiafocused food fund, which also engages in farm production investing, mostly for Chinas growing consumer market. They also have up to EUR 50 million invested in Rabo FARM, the farmland fund of Rabobank, which is buying up farmland in Eastern Europe for lease to global operators to produce food for the global market. Since 2008, they also have EUR 50-100 million invested in NY-based NCH Capital, which buys or leases small farms in Russia and Ukraine for consolidation and operation to produce cheap agricultural commodities for the global market. (0.3%) By April 2012 US$ 370 million (1.5%). Within its farmland portfolio, PKA has committed $47.9million (DKK250million) to SilverStreet Capitals Silverland Fund, a specialised 10-year fund engaged in farmland investment in Africa, for expected returns of 15-20%. SIlverland is primarily involved in Malawi, Mozambique, South Africa, Tanzania, Uganda, and Zambia, for production of cereals, soybeans, fruits, vegetables, sugar, tea and coffee. EUR 2-5 billion Planned soon Expected to allocate 3% to UBS Agrivest Farmland Fund US$3.1 billion in 400 farms (they own 600,000 ha) in US, Australia, Current. They claim annual returns of up to 12%. Jose Minaya says TIAABrazil, Poland and Romania (0.7%) CREF could easily double its farmland investements. Varma own 1.7% of Black Earth Farming, a Swedish farming venture Current (2011) in southwestern Russia which currently controls 326,000 ha (79% of it fully owned) to produce cereals, sugar beet, sunflower, meat and dairy for the international market.
going further
The website farmlandgrab.org is regularly updated with articles and news about pension funds going into farmland. See http://farmlandgrab.org/search?query=pension+fund&sort_order=date for a direct view. It also provides a wealth of contacts and reports of peoples experiences in dealing with the global rush to get control over farmland in the context of the current food crisis. Watch a presentation by Jose Minaya of TIAA-CREF at the World Banks land conference in April 2011: http://vimeo.com/23314644
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146 What are the implications when one of Chinas most powerful agribusiness rms starts acquiring thousands of hectares of land in the Province of Rio Negro, Argentina, for the production of soybeans, wheat, and oilseed rape to ship back to China? What are the consequences for the local communities that live in the region who were never consulted about these investments and commercial agreements? Why is the government paving the way for these deals, with all sorts of privileges promised to the Chinese investors, and not considering the implications for the regions food sovereignty?
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the phenomenon in terms of its broader scope and stampede-like pace; its use of the land to grow staples rather than luxury crops; its being led by the private sector (though governments have a supporting role); and, most important, its having nothing to do with development. It is a matter of expanding and consolidating agribusiness control, nothing more. The Ro Negro provincial government has touted this project as a food production agreement and as an investment in irrigation for the provinces lower valley. It says this is a necessity given the national governments refusal to fund irrigation infrastructure.2 But in reality, the agreement is just a land giveaway for industrial soy production. The Chinese state-owned company gets a long list of unconditional benefits at no cost. Its important to realise that when the agreement was finally made public at the end of 2010, it had already been signed. The substance of the talks with the Chinese government was kept secret for over a year after the opening of the talks were announced. The cooperation agreement is composed of two sub-agreements: one for the agrifood investment project, and another covering the submission of an investment proposal to build a new terminal in the port area of San Antonio Oeste. There is also a schedule to the agreement whose purpose is to expedite the cooperation timeline. The instruction manual contains a set of clauses entrenching a business model that maximises the companys profits and leaves it free of liability. Some of the detailed aspects of the deal are: Investment guarantees: The Ro Negro government offers the best investment policy, including legislated guarantees. Establishment in Ro Negro: The provincial government undertakes to provide office space at no cost whatsoever, as well as housing in the domicile of the provincial government. It also offers transportation and office equipment. Free viability studies: The Ro Negro government undertakes to
2. Accatino confirma el plan, molesto con los crticos, 13-10-2010 http://www. rocaportal.com.ar/blog/accatino-confirmael-plan-molesto-con-los-criticos/
n instruction manual. Thats the way Argentine civil society organisations such as Foro Permanente por una Vida Digna, a community organisation based in the city of Viedma in Ro Negro province, are describing an agreement signed by the provincial governor during his recent trip to China.1 The agreement hands over thousands of hectares to Beidahuang, a Chinese state-owned corporation, for production of soybeans, wheat, and oilseed rape, among other crops. The land will be leased so that the firm can install irrigation systems. Initially, Beidahuang will invest $20 million to irrigate and grow crops on 3,000 ha. But the project aims to reach a total investment of $1.45 billion over twenty years and to cover 320,000 ha. Simply put, Beidahuang is trying to get its hands on a twenty-year food supply. The global land grab took off as a new phenomenon in 200708 when food-importing governments and profitseeking companies began to buy up or lease vast areas of farmland in Africa, Asia, and Latin America. This new land grab differs from historical examples of
1. Soja: China y Ro Negro hacen acuerdo ilegal, http://farmlandgrab.org/17299 15-10-2010.
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What is Beidahuang?
Beidahuang Group is a conglomerate of state-owned agribusinesses based in Harbin, province of Heilongjiang. It is one of Chinas largest rice millers and, through its subsidiary Jiusan Oil and Grain Group, one of the five largest soy processors. According to the companys website, it owns nearly 5.5 million hectares (12% of the total area of Heilongjiang province), 418,094 head of beef cattle, 267,266 dairy cows, 1,315,000 breeding sows, 2,062,000 goats, and 6,352,000 head of poultry. It also owns 54 airports and 30 agricultural aircraft, 198 grain processing centres, 59 seed processing facilities, and 24,151 tractors. Beidahuang is one of the few domestic soy processing companies in China that survived the countrys entry into the World Trade Organisation (WTO) in 2001, when the government relinquished price controls on soybeans and imports. China became the worlds largest soybean importer, and the countrys domestic soy processing industry was taken over by the corporations that control world trade in soybeans: Wilmar, Cargill, ADM, Bunge, and Louis Dreyfus. Foreign companies now hold a stake in 64 of the 97 largest Chinese soy processors and control 80% of the countrys total soy processing capacity. The powerful Beidahuang Group has itself considered an alliance with foreign companies. However, the companys CEO, Tian Renli, made it clear that such an alliance would be premised on maintaining a Chinese controlling stake in the company, and that no unfair additional terms imposed by foreign enterprises would be accepted. In 2009 he told the Economic Observer (China) that if foreign companies disagree with him on this, he would rather build a global sales and purchasing network by himself, and complete the companys internationalisation process independently. This appears to be the alternative for which the company has now opted. The agreement to produce soybeans in Argentina is not the only one of its kind. In 2008, Beidahuang reported that it had signed agreements with the Philippine government to develop 200,000 ha of rice, corn, and other crops in the province of Luzon. The current status of these agreements is unknown.
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defray all costs related to investment viability studies. These comprise the investment environment, available resources, investment policy, and economic benefits. Free land: To begin, the government will provide 3,000 ha at no charge for experimental highyield cropping. Also to be made available immediately are 20,000 ha of idle land equipped with irrigation channels in the region under the governance of Idevi [Instituto de Desarrollo del Valle Inferior del Rio Negro, a government agency responsible for development of the lower valley]. The great giveaway continues with the provision of information on 234,000 ha in various valleys of the province (Colonia Josefa, Negro Muerto, Guardia Mitre, Margen Norte, and La Japonesa on the Ro Colorado) for future exploitation. Tax exemptions: The Ro Negro government will make all the necessary arrangements so that it can apply rules exempting [the company] from all provincial income taxes and other taxes or charges, such as on gross revenues, stamps, patent fees, etc. At the same time,
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the government undertakes to apply to the national government for the companys investments to be exempted from reserve requirements. Technical support: The Ro Negro government assures Beidahuang the cooperation of all the technicians working for its water authority, and will make available all previous engineering studies and other preliminary work done on developing the port project. Use of the port: Until such time as the future port covered by the agreement is built, the Ro Negro government offers part of the San Antonio Este port zone free of charge, and will allot 5 ha for the companys use. Here the wording is unclear, and the obligation to build the new port itself appears to rest with the company. It is important to remember that Beidahuang is not even registered in the province, and until that situation changes, Strong Energy, an unknown firm, will act as its representative.3 Once again we see the same situation as in the majority of land grabs: governments cave in to the demands of other countries or companies to occupy our land without fair compensation. No community consultation, no impact assessment: the peoples interests are simply disregarded and trod upon. And of course, when the company departs after twenty years (the term of the concession, although the port is being given away for fifty years, automatically renewable for another fifty), the land to be inherited by future generations will be degraded and depopulated. Such is the provincial governments unequivocal commitment to our descendants. In the face of such a provocation, the people of Ro Negro are not sitting quietly. Students, environmental organisations, unions, church groups, and others are joining in what has now become a worldwide clamour: NO to land grabs! YES to land for peasants, native peoples, workers, and small farmers! YES to food sovereignty! Environmental experts in the province have denounced the project as a form of
3. Se vienen los Chinos (http://www.multimedios2deabril.com.ar/?direccion_del_ navegador.294.7209 , 31-1-2010).
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agricultural policy and proposes alternatives, also denounced the agreement, stating that unconditional set-asides of land for China to produce Roundup Ready soy represent an immeasurably greater risk than the impacts of largescale chemical agriculture itself. If this project goes ahead, an enclave would be formed in Patagonia on a scale similar to what China and several European countries are doing in Africa; namely, they are buying up and taking vast areas of land out of circulation to meet their own food and forage production demands.5 Students have reacted with equal vehemence. Asociacin Biolgica del Comahue, a member group of the Argentine Federation of Biology Students, along with more than 450 students from the 12 provinces in attendance at the Ninth National Biology and Environmental Science Students Fair in the city of Bariloche (812 October 2010), unconditionally rejected the agreement on the grounds that it furthers the invasion of Argentina by transgenic soybeans, as well as causing grave environmental and health
5. Se Colonias del Siglo XXI: alimentos, especulacin y arrebato territorial (http:// www.grr.org.ar/documentos/coloniasxxi. htm).
impacts for the local communities as a result of massive glyphosate spraying.6 Likewise, high school students in the cities of Viedma and Patagones stated, The high school students of our cities oppose the soy megaproject slated to be carried out in the middle and lower Ro Negro valleys. This project unscrupulously hands over 320,000 ha of our provincial and national heritage to foreign invaders, threatening to destroy its productive value.7 A group of residents consisting of members of community organisations, teachers, students and ex-students of Escuela Secundaria de Formacin Agraria, an agricultural high school, along with members of the Foro Permanente por una Vida Digna, the Consejo Asesor Indgena (CAI) Viedma, the Centro Universitario Regional Zona Atlntica (CURZA), and various political parties
6. Ro Negro: profesionales y estudiantes de Biologa rechazan la produccin de soja en la provincia (http://puertae.blogspot. com/2010/10/rio-negro-profesionales-yestudiantes.html). 7. Manifiesto de estudiantes secundarios del Viedma y Patagones, 20-11-2010, (http://rionegrocontaminada.blogspot. com/2010/11/ni-soja-ni-china-soberaniaterritorial.html).
met in the month of December 2010 and issued the following statement:8 We firmly reject the Framework Agreement recently signed by the current executive of the province of Ro Negro with Chinese companies and/or the Chinese government, which allows for the use of vast areas of the lower and middle Ro Negro valley by Chinese companies to grow transgenic soybeans. The agreement was not even made public in Spanish. The Mapuche people, too, publicly rejected the agreement and are contemplating legal action: The idea is to start by filing an amparo [constitutional relief] action in court to try to stop this, since in none of these cases were any of the rights of the original peoples taken into account, much less the right to free prior informed consent. This right is enshrined in ILO Convention 169, which Argentina has ratified (Law 24.071). So the idea is to begin by asserting this
8. Argentina: declaracin en contra del cultivo de soja transgnica y del modelo herbicida de glifosato, diciembre 2010, (http://www.biodiversidadla.org/ Principal/ Contenido/Documentos/ Argentina_declaracion_en_contra_del_cultivo_de_soja_ transgenica_y_del_modelo_ herbicida_de_glifosato).
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right since, though it has not yet been given full legal protection, we think that its already possible to start filing amparos.9 Another voice speaking up is that of the provincial Pastoral Care Ministry of the Catholic Church, which expressed disapproval of the leasing of public or private lands, whether to large organisers of contract agriculture (pools de siembra), be they Argentine or foreign, or to provinces of a country like China. The Ministry added that soy and other industrial crops will not be welcomed under the conditions created by this agreement, which clearly jeopardises the future of Ro Negro residents.10 Foro Permanente por una Vida Digna has launched a campaign under the banner NO SOYA, NO CHINA: land and food sovereignty for Argentina. The organisation states, We oppose the agricultural export megaproject being carried out by the national and provincial governments, which jeopardises 320,000 ha of land and nature in our province by handing it over to the Republic of China to do with it as it sees fit. This violates our sovereign laws, posits a future of farming without farmers, and contaminates us with pesticides. It is a project that does great harm to this gen9. http://www.originarios.org.ar/index. php?pageid=13¬iciaid=6782 10. Argentina: La iglesia rionegrina plante sus crticas al proyecto de sojizacin con China, 25-12-.2010,(http://farmlandgrab. org/post/view/17922).
eration and the ones to come. (To join this campaign, write to Foro Permanente por una Vida Digna at nisojanichina@ gmail.com). Governor Saiz has turned a deaf ear to all these objections: he signed the agreement and is proceeding to put it into action. But organised opponents of the agreement are saying clearly and publicly that the last word has yet to be spoken.
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Saudi Arabias strategy to outsource food production will be at the top of the agenda when several heads of state and high-level delegations from African countries arrive in Riyadh for an investor conference on December 4, 2010. In some of these countries, Saudi investors are already acquiring farmland and starting to put the Kingdoms policies into operation. One of their main targets 152 is West Africas rice lands. New information obtained by GRAIN shows that the Kingdoms most powerful businessmen are pursuing deals in Senegal, Mali and other countries that would give them control over several hundred thousand hectares of the regions most productive farmlands to produce rice for export to Saudi Arabia. The deals will severely undermine national food security and destroy the livelihoods of millions of farmers and pastoralists. All of this is transpiring behind closed doors with African governments and without the knowledge of the affected people or the general public.
Saudi investors poised to take control of rice production in Senegal and Mali?
LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE RiCE pRODUCTiON iN SENEGAL AND MALi
place farmers and pastoralists and sell off huge amounts of much needed farmland.
Map 1. Document (right) obtained from Malis Office du Niger Authority, indicating the location and size of Forass initial lease of 5,000 ha. Foras says it has already completed preliminary tests on this site and now intends to pursue its plans to expand production, first on 50,000 ha and eventually on 100,000 ha.
n August 2009, news broke about a massive Saudi project aiming to acquire farmland for rice production in Africa. The project, led by the Foras International Investment Company, boasted that within 7 years it would produce 7 million tonnes of rice on 700,000 hectares of irrigated lands, mainly in Senegal and Mali, with Mauritania, Uganda, Sudan and Niger also being considered. Hence the name of the project: 77. Talk of the project tapered off after that, leaving the impression that the promoters were not really that serious. Farmers in Senegal thought it surely must be a bluff, since they themselves are struggling to get access to enough lands for food production. But new information confirms that the project is indeed advancing, now under the name AgroGlobe, and that Foras and its financial backers remain committed to taking over large swaths of the most important rice producing areas of Senegal and Mali, with projects also moving forward in Sudan and Nigeria. Meanwhile, other investors from Saudi Arabia have been conspiring with local businessmen to develop equally ambitious land grabs for rice in West Africa. These projects illustrate how governments in Africa are conspiring in secret with powerful foreign investors to dis-
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...while other investors want to come in. This other project proposal, entitled Project for the industrial production of one million tonnes of paddy rice in the Senegal River Valley, spells out how a group of unidentified Saudi investors would register a company in Senegal to grow rice on 120,000 ha of irrigated lands in the Senegal River Valley, through an investment of slightly more than US$100 million over five years. The Senegal River Valley is the main irrigated rice producing area of Senegal. Around 120,000 ha in the area are suitable for irrigated rice production and about half of these are currently being farmed under irrigation. These lands, most of which are farmed by families with access to less than a hectare, produce 70% of the national rice harvest and provide livelihoods for an estimated 600,000 people. But the area is also of vital importance for pastoralists and the production of other grains, such as sorghum, both of which tend to compete directly with the expansion of irrigation. Under the project, the Saudi investors would essentially take control of all the rice production in the Senegal River Valley, for they would get the 50,000 or so ha of irrigated lands that are presently in production and another 14,207 ha of irrigated lands that require rehabilitation. They would also acquire a further 52,228 ha in the districts of Dagana, Podor, Matam and Bakel for the extension of irrigation. All of these lands will be regrouped into big lots of a minimum of 500-2,000 ha (to allow for economies of scale, the proposal says). And they will not be sown to African rice, the proposal specifies, but new Asian varieties, especially hybrids. While the investors want to acquire these lands outright, the proposal says they are prepared to consider contract production if necessary on those lands where farmers are already producing rice. But, the document goes on, the economic and financial success of the project can only be achieved if the lands required for production are made available and placed under the control of (mise la disposition de) the investors. How much will the lands cost? The proposal does not say. It does say, however, that a joint venture company, called
3. GRAIN obtained a leaked copy of the document, dated May 2009 and entitled, Projet de production industrielle dun million de tonnes de riz paddy dans la Valle du Fleuve Sngal. The title page indicates that the project was prepared by Africa Life Science Consulting, under the coordination of Amadou Kiffa Gueye, special advisor to Abdoulaye Balde, Sngals Minister of Mines, Industry, Agro-industry and SMEs and Executive Director of the National Association of the Organization of the Islamic Conference.
Map 2. Senegal River Valley
Socit Agro-Industrielle du Sngal, will be established to carry out the project. Saudi investors will control 90% of that company, and Senegalese investors will control the remaining 10% through their contribution of lands to the project. A whopping 70% of the rice will be exported to Saudi Arabia, where the company has a guaranteed market. Trucks will transport the rice to the port of Dakar, from where it will be shipped to the Kingdom. The other 30% will be sold to local, urban markets. These investors are not only interested in assuring a rice supply for Saudi Arabia. They want to make money, lots of it. The project proposal claims that they will be able to pay off their investment within five years, stipulating that they expect
THE pLANS FOR SENEGAL ARE MOViNG MORE SLOWLY. BiN AHMED SAYS FORAS HAS AN iNTERiM
an annual rate of return of 36.7%. They also expect the government of Senegal to provide a range of subsidies through President Wades GOANA programme.4 According to the project proposal, the company qualifies for around US$10 million in subsidies over its first five years of operation. The win-win case for this project is hard to make, but the proposal tries to do so. It claims that the project will somehow contribute to Senegals rice self-sufficiency and provide jobs for the peasants who will no longer be able to farm the lands. The productive work force will be exclusively local in order to improve living conditions and provide, therefore, economic and social development options, says the proposal. As for the numerous pastoralists in the area who will lose access to both land and water for their herds, the company says that they will
4. GOANA stands for Grande Offensive Agricole pour la Nourriture et lAbondance or Great Farm Initiative for Food and Abundance. It was launched in 2008 in response to the food crisis.
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LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE RiCE pRODUCTiON iN SENEGAL AND MALi
What is Foras?
The Foras International Investment Company is the investment arm of the Organization of the Islamic Conference (OIC), an intergovernmental organisation with 57 member states that calls itself the collective voice of the Muslim world. Foras was established through an initiative of the Islamic Chamber of Commerce and Industry in 2008 as a closed joint stock company headquartered in Jeddah, Saudi Arabia, with an initial capital of US$120 million. Its main shareholders are the Islamic Development Bank and several private investors from Saudi Arabia and other Gulf countries.
Two of Forass most important high net worth investors: Nasser Kharafi (left) of Kuwait, the world owner of the Americana Group and 48th largest fortune in the world and Sheik Saleh Kamel, founder of the Dalla Al Barakah Group and Chairman of the Islamic Chamber of Commerce and Industry.
Two of the largest shareholders in Foras are the Dallah Al Barakah Group and the Saudi Bin Laden Group. These Saudi conglomerates have recently been pursuing overseas farmland investment projects, with Al Barakah reported to be negotiating for lands in Bulgaria and the Bin Laden Group trying to pursue a massive 500,000 ha rice project in Indonesia. The National Investment Company of Kuwait is also a major shareholder, as are a few super-rich individuals, such as Nasser Kharafi of Kuwait, the worlds 48th richest person and owner of the Americana Group, and Sheikh Saleh Kamel, the founder of the Dallah Al Barakah Group and Chairman of the Islamic Chamber of Commerce and Industry. Foras develops investment projects in OIC member countries, ranging from banking and housing to infrastructure and agriculture. By far its largest agriculture project is the 77 rice project, which it now calls AgroGlobe. Its close affiliation with the OIC and the Islamic Development Bank helps it to open doors for its investment projects, as do its various social investments. In both Mali and Senegal, for instance, it recently committed millions of dollars towards the construction of housing projects for the poor. In the case of Senegal, the project is being handled by no less than President Abdoulaye Wades son Karim Wade, who many see as poised to take over the presidency after his father.
FARMERS iN SENEGAL
THOUGHT iT SURELY MUST BE A BLUFF, SiNCE THEY THEMSELVES ARE STRUGGLiNG TO GET ACCESS TO ENOUGH LANDS FOR FOOD pRODUCTiON.
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Tiedo Kane, member of the farmers organisation SEXAGON, looks out at fields of millet planted by local farmers in the Office du Niger, Mali, that the government has now handed over to foreign investors (Photo: GRAIN, October 2010)
Farmers and pastoralists at the Kolongo Forum in Malis Office du Niger call for all land deals with foreign investors to be suspended (Photo: CNOP)
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be able to buy feed from the feed mills that the project intends to build in the area. In this way, the company boasts, the animals will be fed more easily and at a lower cost. The proposal does not say who the Saudi or Senegalese investors are. On probing from GRAIN, the person coordinating the project, Amadou Kiffa Guye, special advisor to the Minister of Mines and Agro-industry, would only say that the Saudi Royal Family was involved as were some wealthy Senegalese businessmen. He also said that it was the government of Senegal that tasked him to develop the project proposal, but at the request of the Saudi investors. Guye further explained, however, that the Saudi investors have since pulled out of the project, citing financing problems, and that the government of Senegal is now looking for other investors to carry the project forward. What are we to make of this? One group of Saudi investors withdraws, while another pushes ahead, for the same objectives and under the same national plan of the Saudi Kingdom to outsource food production. The government of Senegal signs an agreement for a project in the Senegal River Valley with Foras while constructing another with a different group of Saudi investors on the same lands. And now the government, never having breathed a word of this to the public, much less to the farmers and pastoralists of the Senegal River Valley, is looking for other investors to come into the project, while Foras waits for its go-ahead. One thing is clear however: Senegals food security and the livelihoods of hundreds of thousands of people are being negotiated behind closed doors, for cash.
Putting the brakes on Foras and the rest. Over in Mali, people have also been kept in the dark about
what their government has been negotiating with Saudi investors. The same goes for Sudan and Nigeria, where Foras has taken over lands as well. In January 2010, the firm announced an investment of US$200 million in a 126,000 ha farming project in Sudans Sennar State, along the Blue Nile. In June 2010, Foras signed a memorandum of understanding with the government of Katsina State, Nigeria, for a US$100 million agri-
cultural project that will begin with a pilot farm on 1,000 ha allocated by the state government to the firm. Forass AgroGlobe project is outrageous in its ambitions and assumptions alone, targeting as it does the very heartlands of rice production in West Africa. But it must be taken seriously. It has the backing of some of the wealthiest people in the world and the highest levels of government, both on the side of the investors and in the host countries. If it goes forward, hundreds of thousands of farmers and pastoralists in Mali, Mauritania, Senegal, Nigeria, Sudan and potentially other countries where the project expands will lose access to land and water, while national food security will be put in jeopardy. Complete information about the status of Forass AgroGlobe projects must be made publicly available. The same holds for the parallel rice project that unnamed Saudi and Senegalese investors have mysteriously drawn up with the government in Dakar, and the numerous other farmland deals that have been or are being signed with foreign investors.5 People in the affected countries need to know exactly what their governments are negotiating on their behalf. Indeed, the secrecy surrounding these deals suggests that the governments and investors know full well that their projects will be fiercely resisted by the public. Earlier this month, for instance, at a public forum in Kolongotomo, Mali, not far from the Forass project, local and national farmers and civil society organisations came together to discuss the land grabs happening in the Office du Niger and other parts of the country. Their conclusion was clear: all foreign investment projects in the Office du Niger must be suspended. Governments should take note: the backlash against land grabbing is swinging into action, and it will only get stronger if there is no change of course.
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5. See for example reports on an investment by Saudi Arabias Al-Rajhi Group in farmland in Mauritania: http://farmlandgrab. org/14751. Local communities affected by the project issued a declaration against it in July 2010 : http://farmlandgrab.org/17418
What is RAI? Nervous about the potential political backlash from the current phase of land grabbing, a number of concerned governments and agencies, from Japan to the G-8, have stepped forward to suggest criteria that could make these deals acceptable. The most prominent among these is the World Bank-led Principles for Responsible Agricultural Investment that Respect Rights, Livelihoods and Resources (RAI). The RAI were jointly formulated by the World Bank, the International Fund for Agricultural Development (IFAD), the UN Conference on Trade and Development (UNCTAD) and the UN Food and Agriculture Organization (FAO).3 They consist of seven principles that investors may wish to voluntarily subscribe to when conducting largescale farmland acquisitions (see box). It is noteworthy that the RAI principles were never submitted for approval to the governing bodies of these four institutions. In April 2010, some 130 organisations and networks from across the world, including some of the most representative alliances of farmers, pastoralists and fisherfolk, denounced the RAI initiative. Their statement debunked RAI as a move to try to legitimise land grabbing and asserted that facilitating the long-term corporate (foreign and domestic) takeover of rural peoples farmlands is completely unacceptable no matter which
odays farmland grabs are moving fast. Contracts are getting signed, bulldozers are hitting the ground, land is being aggressively fenced off and local people are getting kicked off their territories with devastating consequences. While precise details are hard to come by, it is clear that at least 50 million hectares of good agricultural land enough to feed 50 million families in India have been transferred from farmers to corporations in the last few years alone, and each day more investors join the rush.1 Some of these deals are presented as a novel way to meet food security needs of countries
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1. In 2010, the World Bank reported that 47 million hectares were leased or sold off worldwide in 2009 alone, while the Global Land Project calculated that 63 million hectares changed hands in just 27 countries of Africa. See New World Bank report sees growing global demand for farmland, World Bank, Washington DC, 7 September 2010, http://farmlandgrab.org/ post/view/15309, and Cecilie Friis & Anette Reenberg, Land grab in Africa: Emerging land system drivers in a teleconnected world, LP Report No. 1, The Global Land Project, Denmark, August 2010, http:// farmlandgrab.org/post/view/14816, respectively.
2. See High Quest Partners, Private financial sector investment in farmland and agricultural infrastructure, OECD, Paris, August 2010, http://farmlandgrab.org/ post/view/16060. 3. The four agencies have also created an internet-based knowledge platform to exchange information about RAI. See http://www.responsibleagroinvestment. org/
LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE ITS TiME TO OUTLAW LAND GRABBiNG
guidelines are followed.4 This statement was endorsed by many more groups and social movements from around the world following its release. Shortly after, the UNs Special Rapporteur on the Right to Food publicly criticised RAI for being woefully inadequate and said, It is regrettable that, instead of rising to the challenge of developing agriculture in a way that is more socially and environmentally sustainable, we act as if accelerating the destruction of the global peasantry could be accomplished responsibly.5 In September 2010, the World Bank released its much anticipated report about large-scale land acquisitions. After two years of research, the Bank could not find any convincing examples of wins for poor communities or countries, only a long list of losses. In fact, companies and governments involved in the land deals refused to share information about their transactions with the Bank, so it relied instead on a website (farmlandgrab.org) managed by the CSO GRAIN for its data. Even though the report noted the lack of consultation
4. Stop land grabbing now! Say NO to the principles on responsible agro-enterprise investment promoted by the World Bank, available online at http://www.landaction. org/spip/spip.php?article553 5. Responsibly destroying the worlds peasantry by Olivier de Schutter, Brussels, 4 June 2010, http://www.project-syndicate. org/commentary/deschutter1/English
THE IPC FURTHER RECOMMENDED THAT THE CFS STOp USiNG THE TERM RAI
BECAUSE iT iS HEAViLY ASSOCiATED WiTH LAND GRABBiNG, NOT iNVESTMENT. BUT THE FOUR AGENCiES BEHiND RAI SEEM KEEN TO pUSH ON.
behind the RAI initiative, the Bank still advocated RAI as the solution. Despite the RAI frameworks serious credibility problem, the CFS debated a motion on whether or not to endorse it in October 2010. Some governments, such as the US and Japan, were in favour. Others, including South Africa, Egypt on behalf of the Near East group and China, expressed strong opposition due to lack of an appropriate consultative process. A coalition of movements and organisations released a detailed critique of the RAI framework and principles prior to the CFS meeting.6 This catalysed rural social movements, particularly those affiliated with the International Planning Committee for Food Sovereignty (IPC), and other civil society groups to call on the CFS to reject RAI. In the end, the CFS
6. Why we oppose the principles for responsible agricultural investment, available at http://www.landaction.org/spip/ spip.php?article570
did not endorse RAI, agreeing only to pursue an inclusive process to consider it. By the end of 2010, it looked as though the high-level push for socially acceptable or win-win land grabbing was floundering. Social movements and other CSOs, meanwhile, continued to build popular opposition to RAI. At the World Social Forum in Dakar in February 2011, farmers movements, and human rights, social justice and environmental organisations gathered to share experiences and consolidate their struggles against land grabbing without the distraction of this code of conduct nonsense, and launched a public appeal to reject RAI and resist land grabbing that continues to gather support.7
7. See Dakar appeal against the land grab, which is open for endorsement by organisations until 1 June 2011: http:// www.petitiononline.com/dakar/petition. html.
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Cambodia, Ethiopia and Ghana, are using legal and brute force to suppress local contestation. In the run-up to the 2012 elections in Mali, the opposition Party for National Renewal has challenged President Tour to disclose all details of land leases amounting to several hundred thousands of irrigated hectares granted in the Office du Niger. In Sudan, the most land grabbed country in Africa, villagers are now rising up against the government in Khartoum for having seized their lands.
What is wrong with RAI? The push for RAI is not about facilitating investment in agriculture. It is about creating an illusion that by following a set of standards, large-scale land acquisitions can proceed without disastrous consequences to peoples, communities, ecosystems and the climate. This is false and misleading. RAI is an attempt to cover up power imbalances so that the land grabbers and state authorities who make the deals can get what they want. Farmers, pastoralists and fisherfolk, after all, are not asking for their lands to be sold off or leased away! Land grabbing forecloses vast stretches of lands and ecosystems for current and future use by peasants, indigenous peoples, fisherfolk and nomads, thus seriously jeopardising their rights to food and livelihood security. It captures whatever water resources exist on, below and around these lands, resulting in the de facto privatisation of water. The violation of international human rights law is an intrinsic part of land grabbing through forced evictions, the silencing (and worse) of critics, the introduction of non-sustainable models of land use and agriculture that destroy natural environments and deplete natural resources, the blatant denial of information, and the prevention of meaningful local participation in political decisions that affect peoples lives. No set of voluntary principles will remedy these facts and realities. Nor can they be misconstrued and presented as public policy or state regulation. Land grabs, which target 20% profit rates for investors, are all about financial speculation. This is why land grabbing is completely incompatible with ensuring food security: food production can only bring profits of 3-5%. Land
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IN THE MEANTiME,
COUNTRiES ARE SCRAMBLiNG TO CONTAiN GROWiNG OppOSiTiON TO THE GLOBAL LAND RUSH.
LAND GRABBiNG AND THE FUTURE OF AGRiCULTURE ITS TiME TO OUTLAW LAND GRABBiNG
grabbing simply enhances the commodification of agriculture, the sole purpose of which is the over-remuneration of speculative capital. There are some who believe that promoting transparency in land acquisition deals can somehow lead to winwin outcomes. However, even if done transparently, the transfer of large tracts of land, forests, coastal areas and water sources to investors is still going to deprive smallholder farmers, pastoralists, fisherfolk and other local communities from crucial, life sustaining resources for generations to come. In cultural development that it embodies a greenhouse gas pumping, fossil fuel guzzling, biodiversity depleting, water privatising, soil eroding, community impoverishing, genetically modified seed dependent production system belongs in the 20th century rubbish heap of destructive, unsustainable development. Just as our Arab sisters and brothers have been breaking the shackles of old regimes to recover their dignity and space for self-determination, we need to break the shackles of the corporate agriculture and food system. Rather than be codified and sancIt is obvious to us that a broad consensus has grown over the past several years around the real solutions to hunger, the food crisis and climate chaos, namely that: peasant agriculture, family farming, artisanal fishing and indigenous food procurement systems that are based on ecological methods and short marketing circuits are the ways toward sustainable, healthy and livelihood-enhancing food systems; production, distribution and consumption systems must radically change to fit the carrying capacity of the earth; new agricultural policies that respond to the needs, proposals and direct control of small-scale food producers have to replace the current top-down, corporate-led, neoliberal regimes; and genuine agrarian and aquatic reform programmes have to be carried through to return land and ecosystems to local communities.12 This is the path to food sovereignty and justice, quite the opposite of responsible land grabbing. And we will continue to push and fight for it with many allies the world over.
LAND GRABS, WHiCH TARGET 20% pROFiT RATES FOR iNVESTORS, ARE ALL ABOUT FiNANCiAL SpECULATiON.
many countries, there is an urgent need to strengthen systems that protect land tenure of peasants and small-scale food producers, and many social movements have been fighting for recognition of their rights to land for many years. The RAI principles will make any progress on agrarian reform or land rights meaningless. As for the big private players themselves, RAI can only amount to another feather in their CSR cap, a public relations act that they can point to when convenient. In the real world, they will continue to rely on bilateral trade and investment agreements, legal loopholes, compliant states, political risk insurance schemes and support from international institutions that promote RAI, to protect their interests and save them from any financial pain or responsibility. The problem is obvious. These agribusiness projects from the 100,000 hectare Malibya deal in the Office du Niger, Mali, to the 320,000 hectare Beidahuang Group deal in Rio Negro, Argentina do great harm and are profoundly illegitimate. Trying to compensate for this absence of legitimacy by getting investors to adhere to a few principles is deceitful. tioned, land grabbing must be immediately stopped and banned. This means that parliaments and national governments should urgently suspend all large-scale land transactions,11 rescind the deals already signed, return the misappropriated lands to communities and outlaw land grabbing. Governments must also stop oppressing and criminalising peoples for defending their lands and release detained activists. We reiterate the demands made repeatedly by social movements, CSOs and numerous academics to urgently implement actions agreed at the 2006 International Conference on Agrarian Reform and Rural Development the most authoritative and consensual multilateral framework for land and natural resources as well as the conclusions of the 2008 International Assessment of Agricultural Knowledge, Science and Technology for Development. We equally call on the CFS to adopt the FAO Guidelines on the Governance of Land and Natural Resources, which are strongly rooted in human rights law, so that they can be effectively used to protect and fulfill the rights to land and natural resources of all rural and urban constituencies at national and international levels.
11. By this we mean possessing or controlling a land area for commercial or industrial agriculture that is significantly larger than the average land holding in the region.
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12. This consensus is reflected in the work of the UN Special Rapporteur on the Right to Food, Olivier de Schutter. His March 2011 report on agroecology and the right to food captures a large body of todays public opinion on how to move forward. See http://www.srfood.org/index.php/en/ component/content/article/1-latestnews/ 1174-report-agroecology-and-the-right-tofood
Invest in food sovereignty! RAI is out of step with the times. The
whole approach to the so-called agri-
GRAIN is a small international non-profit organisation that works to support small farmers and social movements in their struggles for community-controlled and biodiversity-based food systems. Our support takes the form of independent research and analysis, constant networking at local, regional and international levels, and active cooperation and alliance-building. We believe that the current industrial food system, dominated by corporate interests, is leading us further down the path of more hunger, environmental destruction, climate change and eviction of rural and indigenous communities. The alternative exists and is being fought for. Food sovereignty implies a fundamental overhaul of the global food system, putting peasant farming, ecological agriculture and local markets centre stage. The great food robbery is a collection of materials produced by GRAIN during the past few years. It zooms in on how agribusiness is driving todays global food crisis, how the industrial food system is largely responsible for the climate crisis, and how a whole new phenomenon of landgrabbing is being fuelled by a financial industry wanting to make money off the backs of the poor. It also explains how the struggle for food sovereignty is challenging these trends and actors.
Front and back cover. An image of corporate farming: a huge lonely Brazil nut tree standing in an immense soybean field while a tractor sprays poison. Photo taken in Brazil, January 2006 and reproduced with kind permission from Greenpeace Brazil.