This article contains very little that is new but it does serve to remind us of why commodity prices are so low, while retail prices remain high. It should also give food for thought to those who still believe that corporate free trade is a boon to all. Caspar Davis ***** FORWARDED MESSAGE ***** Delivered-To: [EMAIL PROTECTED] Date: Tue, 1 Dec 98 10:55:58 -0000 From: Global Times <[EMAIL PROTECTED]> Mime-Version: 1.0 Precedence: bulk Reply-To: [EMAIL PROTECTED] Sender: [EMAIL PROTECTED] Subject: >pNa< Globalization Threat to Food Security To: "People's News Agency" <[EMAIL PROTECTED]> X-MIME-Autoconverted: from quoted-printable to 8bit by igc7.igc.org id BAA12561 x-sender: [EMAIL PROTECTED] A People's News Agency (PNA) Dispatch . . AGRICULTURAL GLOBALIZATION: A THREAT TO FOOD SECURITY? Corporate agribusiness controls much of world food production and supply. Though portrayed as a modern marvel of efficiency, it is actually increasing food supply insecurity and undermining food purchasing capacity By David Griffin I n the sixteenth century, during and after the likes of Henry the XIII, something new was brewing in England. The monarchy had consolidated power to an unusual degree, and the agricultural countryside had become accessible through a well developed system of roads and waterways. The country's lords had lost much of their power to levy taxes and manage their estates as independent entities, but they none-the-less owned the majority of England's agricultural land. Meanwhile London was emerging as the hub of a national market. The English lords were in a unique position. The aristocracy in other European countries had extra-economic powers to extract wealth from the peasantry, which no king could take away from them. Outside England peasants generally owned the land they worked. Taxation was the only way to get anything from them. Without the power to tax, landowning English lords needed a new formula to increase their wealth and power, one not dependent on military force or loyalty. That power was economic production, and the formula would eventually evolve into modern day capitalism. An imperative thus emerged in the English countryside to produce a lot and to produce it efficiently. While agriculture on the Continent remained in the dark ages, English farming bounded ahead. New technologies were developed allowing lords to extract more production from their land holdings. Thus, the technologies of manuring, crop rotation, close planting, and weed control were advanced. The lords also increased their share of goods by decreasing the number of people working. If a landowner could have thirty tenant farm families do the work of ninety, well, that's sixty less families he had to share the crop with. So in England, technologies were also refined to increase the efficiency of labor. Horse-drawn plows and cultivators replaced people with hand tools, and a number of systemic changes were introduced to increase efficiencies of scale. Gradually the countryside was depopulated. Displaced tenants moved to the cities, where their cheap hire eventually made possible the industrial revolution. The Wealth Extraction Imperative So capitalism - the extraction of the surpluses of labor by owners, and the trade of that surplus in an open market - began with agriculture. Extracting greater wealth from the production of food has remained a challenge to the owners of capital to this day. Over the years the capitalistic quest for increased production and increased efficiency has moved agriculture through various technological "revolutions". First mechanization in the 1800s and early 1900s. Then chemical fertilization, pest, and weed control after WWII. And now genetic proprietorship. The difference between 20th Century capitalist extraction and the surplus extraction of the English lords lies in scale and the nature of the capital owned. Today about 90 percent of the value added in food production is not added on the farm. Thus, land has declined in value relative to the input, processing and trading industries. For example, chemical and seed companies make inputs for agricultural production. Through various "advancements", companies have increased the amount of chemicals and seeds it is desirous for farmers to buy. Hybrid seeds, for example, are a Twentieth Century invention. They can't be replanted by farmers so farmers have to buy the seed of hybrid crops, like corn, every year. The Delta and Pine Land Company and the U.S. Department of Agriculture have even come up with a terminator gene for non-hybrid crops. This gene will make the seed farmers save from these crops unable to germinate. Farmers in a few years will be unable to save and replant even non-hybrid crop varieties that companies choose to patent and insert with the terminator gene. One more way for the owners of capital to extract value from agriculture. Globalization is Extraction A non-technological form of extraction has also evolved. It's called globalization. Under the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO), which emerged from the GATT, it has become increasingly difficult for nations to protect their farmers and food-consuming populace from globalization. For example, under the conditions of the 1994 Uruguay Round of the GATT, it is expected that U.S. corn prices will undercut Philippine corn prices by 20 percent in the year 2000. This could reduce incomes of half a million peasant farmers by 15 percent, resulting in increased menial labor for woman and children, lowered educational opportunities for children, and increased malnutrition. This is bad for small farmers but good for corporate grain traders. These companies are backed by U.S. government farm and export subsidies and will make terrific amounts of money through market expansion with favorable conditions of trade. It's also good for suppliers of agricultural inputs to highly industrialized U.S. corn farmers. However, it doesn't necessarily work out so well for U.S. corn farmers, who at the time of this writing are receiving $1.70 for a bushel of corn, well below the average cost of production. The original U.S. proposal to the Uruguay Round of the GATT was submitted by the former senior vice president to Cargill. Cargill is the largest grain trader in the world and has pushed multinational agribusiness since the Green Revolution. The favored model of international traders like Cargill involves buying commodities like wheat and corn where they are cheapest and adding value to them by converting them to a more valuable product. For example, Cargill is also in the pork and beef industries. By manufacturing meat products abroad with cheap imported grain, Cargill undercuts prices of domestically produced meat. Cargill, in fact, has equity in livestock operations all over the world. This global sourcing of "ingredients" undermines local farmers. Nations have traditionally protected domestic farmers with import tariffs, quotas and the like. GATT is now used to challenge the authority of national supply management boards to interfere with international trade. At the same time heavy, non-agricultural industrialization in food import nations has resulted in agricultural resources like water and land being appropriated for industry and industrial infrastructure. Consequently, many countries, including Korea, Indonesia, China, Saudi Arabia, to name just a few, have sacrificed a tremendous percentage of their agricultural land and irrigation water to non-agricultural uses. Corporations may not control farms directly but they are coming to control seed and chemicals (Dow, Monsanto, Novartus, Agro-evo, Dupont), grain trade and livestock production (Cargill, Archer Daniels Midland [ADM], Continental, Conagra) and retailing (Phillip Morris [yes, the largest food retailer in the USA], Nestle, Unilever). Through trade liberalization agreements that they helped author, these companies increasingly control who grows what and where and, ultimately, what people eat. Even agriculturally rich nations like Mexico and Chile are subjected to food insecurity by the domination of agriculture by transnational corporations (TNCs). Chile is the largest supplier of off-season fruits and vegetables to Europe and North America, and most of this production and trade is controlled by five TNCs. This is typical of agriculture in Southern Hemisphere countries. They produce high value, labor intensive fruits and vegetables for export with underpaid laborers, and increasingly import staple grains like corn and wheat from the capitalized and subsidized farms of the Northern Hemisphere. It is for this reason that family farmers in Chiapas Mexico have raised such a hue and cry over NAFTA. Dependence Means Insecurity This reliance on global trade puts people's food security in jeopardy. On the one hand global corporations will continue to assume a greater percentage of value added up the whole ladder of the food production process. On the other, any decline in the relative worth of a nation's currency, or the relative worth of a nation's exports, will jeopardize its ability to purchase food on the global market. Through the penetration of capital, the people of the world have become more dependent on an economically and environmentally precarious system of agriculture. Agriculture-for-corporate-profit requires the continual introduction of new purchased inputs in crop farming, livestock rearing, and food processing, and the continual paring down of labor and independent owners in the process. In the long run, the globalization of agriculture and the concomitant penetration of capital into agriculture undermines its existence economically as well. Because of the constant pressure to reduce cost, agricultural labor is either replaced by capital or manipulated into accepting smaller wages or prices, as in the case of independent farmers. Globalization has sped this trend in industry at large by allowing corporations to relocate operations involving labor to poorer countries whose workers can be paid less. Economic Quicksand As it stands, workers globally are seeing their earning power erode to the point where capitalism's massive and efficient productivity undermines its ability to market its wares. This becomes apparent in the food industry early in a economic downturn because foods must be sold broadly, to the billions, for it to be profitable. Amongst the former Asian Tigers, in Russia, and in Latin America, people are less able to afford the high value-added meats, processed foods and even the staple grains that have made investors in agricultural globalization rich. Their food supply is thus diminished. Also, we are seeing dramatic declines in the prices of grains and other agricultural commodities on the world market. While capitalism has been the engine for great leaps and strides in agricultural productivity, it can expand like cancer if all constraints are removed. The global trade agreements of the last 50 years, including the GATT and NAFTA and the organizational offshoots of those agreements, were negotiated by capitalists in the interests of capitalists. If we are to ensure the food security of future generations, we must recognize the right and need of local governments to protect their farmers and the food security of their citizenries. If this turns back the tide of globalization and the associated penetration of capital in agriculture, then so be it. This article draws substantially on four articles in the academic socialist magazine, Monthly Review, number 3 volume 50. These are: "The Agrarian Origins of Capitalism" by Ellen M. Wood, "Agriculture and Monopoly Capital" by William D. Heffernan, "The Maturing of Capitalist Agriculture: Farmer as Proletarian" by R.C. Lewontin, and "Global Food Politics" by Phillip McMichael. With the exception of Wood, who co-edits Monthly Review, the writers are university professors with expertise in the areas of international political economics, rural sociology, and biology. =================================================================== (c) 1998 People's News Agency (unless otherwise noted). 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