As a new monthly feature on this blog we’ll be syndicating the free column produced by Touch the Soil magazine, a publication dedicated to “raising agricultural awareness for households of the future”. This month we’re happy to share with you a piece by Benjamin Grissin on the global economics of agriculture. For more information please visit www.touchthesoil.com.
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Food Security Takes Precedence over Global Free Trade
Global food tremors over the last 12 months have given many governments the jitters. At the heart of the issue is that global free trade, under World Trade Organization protocols, limits what a nation can do to protect its farmers and national food production. The practice of limiting agricultural imports, in an effort to protect a nation’s farmers, is something the WTO wants to eliminate.
As dozens of governments nearly collapsed due to internal food shortages made worse by high prices, riots and demonstrations, other governments, particularly India and China took notice. Who is next?
The WTO mission – global free trade by reducing tariffs particularly in agriculture – backfired. Nation after nation saw it’s domestic stability threatened by food issues. Either they could not find a source to import from, prices were too high or the dramatic global price hikes infected their own countries unsustainable food inflation. In addition, food prices were rocked by hundreds of billions of dollars moving into commodity speculation that added volatility to prices and political stability.
This year has seen a new consciousness emerge – membership in the WTO and following its protocols does not ensure access to food.
While proponents of free trade argue high agricultural prices are good in that they will give agriculture an incentive to produce more, their argument is suspect. The free market waited too long to give farmers their due until food shortages and high prices threatened the stability of the world’s two largest nations – India and China.
It is not that farmers don’t deserve better prices for feeding us, the question is about how its done. And global free-trade got a failing grade from many nations for its performance during the recent global food crisis. Free trade left them high and dry as major wheat and rice exporting countries limited or stopped exports to protect their own food security – something the WTO should have addressed long ago. Both the USDA and FAO (Food and Agriculture Organization) have consistently issued reports on the ongoing collapse of global grain reserves for the last 10 years.
The International Herald Tribune (July 31st) reported that growing worries in China about the adequacy of its food supply now appear to have overridden the country’s previous commitment to free trade. In a shocking move of solidarity, China joined India at the Doha round of global trade talks in Geneva demanding safeguard rules for agriculture including implementation of high tariffs as a way to protect farmers in poor countries and increase national food output.
The unyielding position of China and India in protecting domestic food security ended up collapsing seven years of ongoing WTO negotiations on further trade harmonization. We must remember the WTO is not a democratic institution and is not accessible by the average citizen. So poor people can only go to their governments for redress leading to protectionism. Perhaps if the global free market did not wait so long to give farmers their due, before the world fell into a global food crises, things may have been different.
The obvious goal of India and China is to insulate their countries from the uncertainty of foreign food imports, unaffordable prices and from Western-style commodity speculation that artificially raises food prices – causing additional starvation and political instability.
China has some 300 million small farmers and hundreds of millions of poor people. Having access to a reliable and affordable food supply has erupted as China’s number one national security issue.
There is yet another element that underlies the growing disappointment with the WTO – its glaring lack of oversight and warning as global grain stocks collapsed to levels insufficient to protect the world from shortages and price spikes.
The future success of the world’s farming sectors in producing enough food and the global free market in distributing that food may well determine the future of WTO negotiations, if not the WTO itself.
Farmers must stop being economically punished for producing a surplus that helps the world cope between farming seasons. If that means building national, regional and local food stocks, the time has come to get our checkbooks out. ■
Benjamin Gisin has visited hundreds of farms in his banking, farm consulting and publishing careers. He writes and lectures extensively on the global and domestic food situation, the promise of local food first and grass-roots economic issues.