Free Trade in Rhetoric, Not in Practice

Martin Khor

Western countries commonly proclaim the great benefits of free trade and the evils of protectionism.

In reality, many developed countries practise double standards, insisting on free trade in areas where they are strong, whilst using protectionist measures in sectors where they are weak.

In the worst case, within the same sector they have designed rules that impose liberalisation on developing countries but allow themselves to maintain high protectionism.

An outstanding example is in agriculture, in which the rich counties are not competitive.

If “free trade” were to be practised, a large part of global agricultural trade would be dominated by the more efficient developing countries.

But until today, agricultural trade is dominated instead by the major developed countries.

For many decades they got an exemption for agriculture from trade liberalisation rules.

This exemption ended when the World Trade Organisation (WTO) was crea­ted in 1995 and the rich countries were expected to open their agriculture to global competition.

But in reality, WTO’s agriculture agreement allowed them to have both high tariffs and high subsidies.

The subsidies have enabled far­mers to sell their products at low prices, often below production cost, yet allowed them to get adequate revenues (which include the subsidies) that keep them in business.

Read the rest of this entry »

India’s Time to Lead at the WTO

Timothy A. Wise

As we approach the World Trade Organization (WTO) ministerial on December 15-18 in Nairobi, India is leading a group of developing countries insisting that the development goals promised in Doha in 2001 be achieved. On the other hand, the US, European Union (EU) and Japan have called for a “recalibration” of that agenda, one that leaves agriculture largely off the table.

India is right to lead the fight for reforms in developed countries’ agricultural policies. Cotton should be at the centre of those reforms. A recent study suggests that US subsidies under the 2014 Farm Bill will continue to suppress global cotton prices. Recognising this threat, Africa’s so-called Cotton 4 (or C-4) – Benin, Burkina Faso, Mali, and Chad – tabled a proposal in October calling on the US and other WTO members to make good on the longstanding commitment to address the cotton issue.

India should take the lead on cotton in Nairobi. The C-4 countries need a strong ally now that Brazil has abdicated that role, and India’s cotton farmers stand to lose a devastating US $800 million per year due to US price suppression.

Read the rest of this entry »

Local Food and the CASTE Paradigm

Anita Dancs and Helen Scharber, Guest Bloggers

Anita Dancs is an associate professor of economics at Western New England University.

Helen Scharber is an assistant professor of economics at Hampshire College.

Food produced on small farms close to where it is consumed—or “local food” for short—accounts for only about 2% of all the food produced in the United States today, but demand for it is growing rapidly. According to the U.S. Department of Agriculture, sales of food going directly from farmers’ fields to consumer’s kitchens have more than tripled in the past twenty years. During the same period, the number of farmers’ markets in the United States has quintupled, and it’s increasingly easy to talk about “CSAs”—community-supported agriculture operations where consumers pay up front for a share in the season’s output—without explaining the acronym.

But as local food has grown, so have the number of critics who claim that locavores have a dilemma. The dilemma, prominently argued by Pierre Desrochers and Hiroko Shimizu in their 2012 book The Locavore’s Dilemma: In Praise of the 10,000-mile Diet, is that local food conflicts with the goal of feeding more people better food in an ecologically sustainable way. In other words, well-meaning locavores are inadvertently promoting a future characterized by less food security and greater environmental destruction. The critics are typically academics, and while not all of them are economists, they rely on economic arguments to support their claims that the globalized food chain has improved our lives.

Why are critics pessimistic about the trend toward local food? Their arguments hinge on what we call the CASTE paradigm—the idea that Comparative Advantage and economies of Scale justify global Trade and lead to greater Efficiency.

Read the rest of this entry »

Maine Farmers and Climate Change, Part II

System Change

Stephanie Welcomer, Mark Haggerty, and John Jemison, Guest Bloggers

This is part II of a two-part series, excerpted from an article originally published in the March/April issue of Dollars & Sense. The full article is available here.

Systems theorists, who study how organizations and systems change, offer some insight into farmers’ minimal recognition of climate change, and their lack of advocacy for climate-mitigation policy. Management scholar Connie Gersick describes systems—such as the farming sector—as being in equilibrium until fundamental factors change.

One key factor can be “environmental changes that threaten the system’s ability to obtain resources.” As the system’s actors are faced with persistent, systemic problems, they experience mounting discomfort. Once key actors recognize that the system has become dysfunctional, they begin to search for new information about the sources of the problems and possible new steps. Newcomers enter the system and are enlisted or inspired to search for solutions. The entrenched understandings, relationships, and power dynamics of the system, finally, can be dismantled. Revolutionary change can happen and a new system can be created.

Read the rest of this entry »

Maine Farmers and Climate Change, Part I

How Do Farmers See It?

Stephanie Welcomer, Mark Haggerty, and John Jemison, Guest Bloggers

This is part I of a two-part series, excerpted from an article originally published in the March/April issue of Dollars & Sense. The full article is available here.

Maine’s farmers are facing unprecedented challenges stemming from climate change, centered on the two key ingredients in agriculture—water and soil. Too much water can wash soil away, while too little limits crop production and dries the soil out. According to the University of Maine report Maine’s Climate Future, the “high-intensity rainfall events” that are expected to accompany climate change are “less effective at replenishing soil water supplies and more likely to erode soil.” Meanwhile, higher average temperatures mean that, for a given level of precipitation, less water will actually be available to crops, due to higher rates of moisture loss from the ground and from the plants themselves.

As part of the 2011 “Assessing Maine’s Agriculture Future” study, we interviewed around 200 Maine farmers about changes in the climate and their expectations for the future of farming. We asked representatives and opinion leaders from a wide sampling of the state’s farming sectors about their reasons for farming, their concerns, and their hopes for the future, as well as changes in weather patterns and their related adaptations.

Read the rest of this entry »

To Feed the World in 2050 We Have to Change Course

Timothy A. Wise and Kristin Sundell

Regular Triple Crisis contributor Timothy A. Wise (Global Development and Environment Institute (GDAE), Tufts University) and Kristin Sundell (ActionAid USA) are the co-authors of the ActionAid report “Rising to the Challenge: Changing Course to Feed the World in 2050.”

The 2008 global food price spikes were a wake-up call to global policymakers, shaking them from the lethargic slumber of the overfed. The rhetorical responses were swift, but policies and practices have changed little. That is in part because they relied on the tried-and-failed solution of increasing commodity food production.

Agribusiness led the charge, with dire warnings about unsustainable population growth and looming resource constraints. How can we produce enough food to feed this growing population?

“Between now and 2050, we need to double the food supply,” said Dr. Robert Fraley, Executive Vice President and Chief Technology Officer of Monsanto, during an interview withNational Public Radio’s Takeaway host John Hockenberry.“That’s probably the greatest challenge facing mankind.”

Indeed, that is the theme of this year’s World Food Prize event, taking place October 15-17 in Des Moines, Iowa. This event promises more of the same solutions.

The panic is not warranted, the claims about the need to double food production are unfounded. According to ActionAid’s report, “Rising to the Challenge: Changing Course to Feed the World in 2050,” the solutions lie not in the rush to increase industrial food production but in supporting sustainable and productive farming practices among small-scale farmers – particularly women – in developing countries while halting the diversion of food to biofuels and reducing the obscene levels of waste and spoilage that keep one-third of the world’s food from nourishing anyone.

Read the rest of this entry »

Land Degradation, Less Favored Lands and the Rural Poor: A Growing Global Problem

Edward B. Barbier

This summer, I completed with a graduate student of mine a major report for the Economics of Land Degradation Initiative, which is entitled Land Degradation, Less Favored Lands and the Rural Poor: A Spatial and Economic Analysis.  This study had three objectives:

  • To determine the spatial distribution of global rural populations on less favoured agricultural land and in less favoured agricultural areas from 2000 to 2010;
  • To determine the spatial distribution of global rural populations on degrading and improving agricultural land from 2000 to 2010;
  • To analyse how these spatial distributions affect poverty in developing countries.

The table below summarizes our findings over 2000 to 2010 for the distribution of rural populations on less favoured agricultural land (LFAL), in less favoured agricultural areas (LFAA), degrading agricultural land and improving agricultural land.

A sizable proportion of the rural population in developing countries is concentrated on LFAL, which are subject to low productivity and degradation due to steep slopes, poor soil quality or limited rainfall.   In 2000, over 1.3 billion rural people in developing countries, representing almost 36 per cent of the rural population, were located on these lands, and their numbers increased to 1.5 billion in 2010 (35% of the rural population).

Summary of spatial distribution of global rural population, 2000 to 2010

Developing countries are all low and middle-income economies with 2012 per capita income of US$12,615 or less (World Bank 2014).

Read the rest of this entry »

September 15, 2014 | Posted in: Uncategorized | Comments Closed

Chicken Comes Home to Roost

Sunita Narain

What should I eat now? Is there nothing that is safe?” This is what I am asked every time the Centre for Science and Environment (CSE) does a study on toxins in food. It is a fact that our food is becoming unhealthy—not because of deliberate adulteration but because we are choosing to produce it in unsafe ways. India is at the beginning of industrial food production focused on efficiency and profits, and not on consumer safety, so it still has a choice to get it right. Why should the country not exercise its right to food that secures livelihoods and nutrition?

This time CSE has looked at antibiotics in chicken. Its laboratory bought 70 samples of chicken from different markets across the National Capital Region. It analysed each animal for six antibiotics: oxytetracycline, chlortetracycline and doxycycline (class tetracyclines);enrofloxacin and ciprofloxacin (class fluoroquinolones) and neomycin, an aminoglycoside. All these antibiotics are critical for humans. These are the same medicines we are prescribed when we are taken ill. These are life-saving drugs.

Today we know antibiotic resistance is almost a health pandemic. It is said that humans are headed towards a post-antibiotic era, where these miracle medicines will not work. No new class of antibiotics has been discovered for the past 20-odd years, so what we have is what we should keep for critical treatment. It is well known that resistance is growing because of our overexposure to antibiotics. A drug is no longer effective for treatment when microbes become resistant to it.

But we do not realise that our overexposure to antibiotics is also growing because of the food we eat.

Read the rest of this entry »

China’s Government Land Exposé

Sara Hsu

A farmer works the land in Southern Guangxi Province.  Source: Author.

China’s National Audit Office, under the direction of the cabinet, recently launched an audit to review funds from land sales obtained between 2008 and 2013. The audit is part of the government’s fight against corruption.  Local governments have often used land sales to increase revenue, at times under dubious circumstances, taking land from farmers at extremely low prices and selling the land to developers for a tidy profit.  The audit brings to light ongoing issues with local government revenue and rural land use rights.

Local governments receive a portion of value added and corporate taxes collected in their region, as well as all personal income and business taxes, but this has proven insufficient to generate a steady rate of GDP growth.  In order to combat this problem, officials have used rural residents’ land both as a source of revenue and as collateral in taking out loans via local government financing vehicles.  In this way, they have access to a major asset, unimproved land that promises to gain in value.

Read the rest of this entry »

China's Government Land Exposé

Sara Hsu

A farmer works the land in Southern Guangxi Province.  Source: Author.

China’s National Audit Office, under the direction of the cabinet, recently launched an audit to review funds from land sales obtained between 2008 and 2013. The audit is part of the government’s fight against corruption.  Local governments have often used land sales to increase revenue, at times under dubious circumstances, taking land from farmers at extremely low prices and selling the land to developers for a tidy profit.  The audit brings to light ongoing issues with local government revenue and rural land use rights.

Local governments receive a portion of value added and corporate taxes collected in their region, as well as all personal income and business taxes, but this has proven insufficient to generate a steady rate of GDP growth.  In order to combat this problem, officials have used rural residents’ land both as a source of revenue and as collateral in taking out loans via local government financing vehicles.  In this way, they have access to a major asset, unimproved land that promises to gain in value.

Read the rest of this entry »