Dispatch from NC: Notes on the food crisis

It’s been a whirlwind few days on the campus of North Carolina State University, where I attended “The Politics of Food,” a conference organized by the Environmental Leadership Program. There’s lots to report on: Panels during the three-day event ranged in topic from the role of business in a sustainable food system to the role of government in the growth of factory farms (the panel I spoke on) to ag workers’ justice. And I owe you all a thorough write-up of the bus tour we took through the nation’s most CAFO-dense counties, an eye-opening experience if I’ve ever had one. Yes, I took lots of pictures.

But first, I’d like to report on my favorite part of the event: The panel on the food crisis. I know, I’m a wonk. But it was really impressive. The three speakers — Alexandra Spieldoch from the Institute for Agriculture and Trade Policy, Daniel de la Torre Ugarte from U. Tennessee’s Ag Policy Analysis Center, and Thomas Forster of International Partners for Sustainable Ag — pulled off a feat of Pollan-esque proportions by tying a neat bow around the issues of global ag policy, the food crisis, biofuels, and international financial institutions. It was one “a-ha” moment after another. Even the ag economist’s graphs gave me a rush. (Please don’t tell anyone that I said that, though — it’s embarrassing.)

Spieldoch led it off and summed up the panel’s main theme: The food crisis is not just a blip in history. It reflects a larger structural problem in ag that leads to a lot of volatility and insecurity for the world’s poor. And those forces can’t be distinguished from the impacts of climate change on our food system, so we’d better do something about both while we’re at it.

Her talk and Forster’s were both great, but for the sake of space, I want to focus on Daniel de la Torre Ugarte’s presentation. He’s perhaps best known for co-authoring what sustainable ag folks lovingly call “The Blueprint,” a far-reaching guide to a new ag policy. And — yep, embarrassed again — he kind of blew my mind.

Why ag matters

Ugarte started off by making the case for caring about ag when we think about poverty. Of the 5.5 billion people living in the developing world, 2.5 billion of them are involved in agriculture, 1.5 billion as small farmers. 80% of food-insecure people are rural. Investing in ag has proven to be the single most effective anti-poverty intervention, largely because it stimulates job growth in other sectors (providing inputs, sorting and processing, selling, cooking): When a country increases the share of its gross domestic product (GDP) that comes from agriculture, poverty rates fall twice as fast as they do when the same thing happens in any other sector.

Yet developing country governments haven’t been investing in agriculture at nearly the rates one might expect given this fact. They actually invest much less than developed countries do. In developing countries where ag accounts for at least 40% of the GDP, governments are reinvesting, on average, 4% of that amount in the ag sector. Highly urbanized countries like the United States, where ag accounts for less than 1% of GDP, reinvest an average of 12% of that back into agriculture. The disparity has a lot to do with the pressure that developing countries have received from institutions like the IMF and the World Bank, which have conditioned their loans on shifting ag funding into private hands. The result has been pretty bleak: Less credit and training available to small farmers in developing countries, more control of the food system by foreign corporations, and the substitution of imports for regional products.

To add insult to injury, governments have left the poor vulnerable to huge price fluctuations by changing the way they manage stocks of commodities — the corn, wheat, rice, and soybeans that flood the markets each year at harvest time. Historically, governments have bought some of the surplus grain produced at harvest, stored it in reserves, and released it slowly into the market when supply declines. It’s kind of like what the Federal Reserve does with money, and like that intervention, it’s aimed at keeping prices fairly stable. That tradition more or less ended in 1996, though, when free-marketeers encouraged world governments to release their reserves into private hands. Speculators now hold and trade almost 11 billion bushels of grain, about the same amount that is used in biofuels production. The result looks a lot like — hey! — the financial crisis. Tons of volatility, chronic insecurity, and a bunch of poor people left holding the bag.

That brings us to framing. News coverage of the food crisis has focused on the global poor as consumers whose lives are thrown out of whack by rising prices. The obvious solution, as they frame it, is to do anything necessary to make food prices low again. But in many cases, the poor are actually farmers or workers in the ag supply chain — or they used to be. If they were farmers still, they’d be making pretty good money right now. Ugarte was asking a profound question: Is the food crisis really about prices? Or is it, at its core, about policy and ownership?

A new way of thinking

“The problem,” said Ugarte, “is that the agricultural sector is currently shaped by power relationships that won’t change regardless of the price.” The goal is not necessarily to push food prices down, then, but to increase food security at every price point. (Here’s where he put up a graph of food security vs. price, and I swooned.) In other words, governments around the world need to start making the kinds of investments that will increase the share of the food dollar that returns to their own farmers. Some ideas: Investment in farmers’ access to markets, improving their marketing and distribution systems and product quality. Investment in funding for research and extension. Investment in programs that ensure access to food for the poorest. Investments that reduce the need for purchased inputs — fuel, fertilizers, pesticides — and reduce environmental costs. Payments to farmers for environmental stewardship. And the democratization of access to land, water, and seeds, so that foreign firms can’t control the resources needed to produce food.

“If we do nothing or focus only on high prices as the problem,” he said, “we run the risk of going back to where we were before.” Which, in case you hadn’t noticed, wasn’t a particularly functional system. “We have to see this crisis as an opportunity.” Those were the most hopeful words I’d heard all day.

Photos of rice fields, a Nepali man holding trail mix, and a woman at a Kathmandu market courtesy of my dad. Used with permission.

7 Responsesto “Dispatch from NC: Notes on the food crisis”

  1. Lee Cullens says:

    This all sounds very encouraging, but having just posted a new journal entry entitled “GMO Food For Thought” (an update to my “GMOs: Frankenstein in a business suit?” article)  I’m wondering if the GMO  food industry isn’t outpacing these efforts?  There is a serious gap between the minority that care, and industry’s efforts fortified by the indifferent majority (at least in the U.S.).
    I hope that more will see the seriousness of the food issue with your efforts.
    My best to you and yours,
    Lee C

  2. Jeremy says:

    Great post. Many thanks for writing this up; you made me wish I’d been there, which is high praise. The numbers of ag investment and GDP are great to have, as are the policy recommendations.

  3. Darren says:

    Wow, fantastic article.
    I was listening to a presentation recently where the speaker questioned the US’ ability to go and teach third-world people how to grow food for themselves. The average US farm LOSES $600/acre/year, if you take away all the government subsidies, excises, grants, concessions, etc propping them up.
    Food for thought.

  4. Elanor says:

    Darren, thanks for raising that point. Ugarte and the other speakers definitely stressed the importance of letting developing countries make their own decisions about how to support their ag sectors. It wasn’t that the U.S. should push these policies (except within its own borders– we need this stuff too!), but that advocates in the U.S. could support the fight to preserve developing countries’ right to enact these types of programs. Their policy space has been constrained by some of the rules coming out of the WTO and international lending institutions, which have encouraged a de-investment in ag by governments around the world. IATP has some good publications on this topic on its website, http://iatp.org .

  5. Daniela says:

    Thanks for the reporting. It’s always interesting to see the developments made in food policy discussions. My focus would be on the link between CAFOs and global warming. I’d be curious to see if there was any discussion on that topic, and/or the lack of oversight on animal welfare and food safety laws in the U.S.

  6. Tasmin says:

    I agree with you in a number in a number of respects, Elanor, but I do not believe that food security is the most important and feasible solution to the current global food crisis. Although I say this without having a viable solultion myself, I think placing ‘blame’ on developing countries’ lack of investment into their agricultural sectors is a result of a narrow understanding of the major causes of the crisis. Structural and policy-making problems are prime factors in the crisis, but what of global warming, biofuels and the rise in fuel prices? While developing countries hold a certain amount of power in the international realm, their power is secondary to the major international players. For this reason, how can developing countries afford to take a global food crisis into their own hands when they are the pawns of richer/more powerful nations like the EU and US? Take a look on the web for an unpublished and confidential World Bank report that has very different ideas about where the problems and solutions lie in respect of our food crisis. http://www.globalissues.org/article/758/global-food-crisis-2008

  7. Elanor says:

    Hi Tasmin, I don’t think the speakers were at all placing the blame on developing country governments. The blame was squarely at the feet of international financial institutions that had given loans to developing countries but made them conditional on the governments’ withdrawal from ag, opening up borders for unfettered food trade, etc. For that reason, the speakers emphasized the importance of advocacy with international institutions like the World Bank and the WTO and with the US government. The goal would not be to mandate certain policies, but to protect each country’s right and space to enact policies that would protect food security and sovereignty– if their citizens wanted them to.