International Food Wars: Growing Controversies

1. International Food Wars: Growing Controversies Grant T. Hammond Great Decision Program 3 February 2003

2. Overview • Food Security • Food Production • Trade in Agricultural Commodities • Subsidies • Bio-Technology and Food • Questions and Discussion

3. Food Security • UN Food & Agriculture Organization has set minimum caloric intake at 2,350 per day • World wide, there are 2,850 calories available per person per day • Fifty-four (54) countries fall below the FAO minimum standards • Problem is less one of production than equitable distribution within countries and among them

4. Food Security • Average available caloric intake per person per day at high end— • Austria, Belgium, Greece, Luxembourg, Portugal, USA all above 3,700 • USA high at 3,772 • Average available caloric intake per person per day at low end— • Afghanistan, Angola, Armenia, Central African Republic, Comoros, Congo, Kenya, Mongolia, Somalia, Tajikistan, Tanzania, Zambia all under 2,000 • Congo at 1,514

5. Food Production • US is world’s largest food exporter • US also largest food importer • One pound of grain translates directly into one pound of food consumed as grain • One pound of beef requires the equivalent of nearly ten pounds of grain • Caloric intake masks cultural preferences, availability issues, distribution costs, production inputs required to produce those calories

6. Food Production • How increase food production? • Trade and macroeconomic policies • Targeted food and nutrition interventions • Food price stabilization • Food aid and public works • Micro-finance for food security and nutrition • Food based Approaches for nutritional enhancement • Nutrition education and care

7. Trade in Agricultural Commodities • Each country acts to protect its agriculture and gives rural populations political favors • There are huge distortions in income and productivity in developed and developing world • Trade is used as both a carrot and stick • Tariffs, quotas, shipping & insurance provisions, negotiated reciprocities, labeling, definitions and prohibitions all used in food wars

8. Trade in Agricultural Commodities • Some examples— • Common Agricultural Policy (CAP) of EU used to subsidize farmers accounts for 2/3 of EU budget deficit • US gives foreign aid to countries it need not if it just reduced or eliminated tariffs and quotas on its agricultural exports • All politics is local and rural constituencies change least, have longest serving incumbents, hence cycle continues

9. Subsidies (Stabilization Policies) • Why have subsidies? What purpose? • Maintain low food costs for consumers • Maintain high food prices for producers • Provide price stability • Keep domestic prices close to world market prices • Allow enough seasonal fluctuations for private sector to operate in market

10. Subsidies • In some cases, they are carefully devised packages to dampen price fluctuations and provide reasonable profits and costs • In others, they are products of political deals with little rationale save serving special interests • Many farmers make more from being paid not to grow crops than from growing them • Depends on perspective (local vs. national) whether this makes sense or not

11. Bio-Tech and Food • Genetically modified (GM) organisms are the changing the farm into the “Pharm” • Phenomenon unknown 20 years ago • Started with “Green Revolution” in wheat production in India in 1960s • Has progressed rapidly to a variety of crops and GM capabilities • The Flavr Savr tomato in 1984 first big change

12. Bio-Tech and Food • Monsanto won permission for first GM soybean in 1994 • By 1996, GM crops grown commerically for soybeans, corn, squash, tomatoes, cotton, papaya • By 2000, 75,000,000 acres of GM crops • Insert two traits inmost: herbicide tolerance (for proprietary herbicides) and insect resistance • Virtually no organism that can’t be engineered

13. Bio-Tech and Food • An unfolding drama • Small farmers vs. corporate giants • Evils of corporate America • Economics of agricultural production • Creation of unknown life forms • Inevitability of progress • Carcinogenic impact of treated foods • Profits & politics vs. organic ethics

14. Bio-Tech and Food • The politics and economics of GM foods • Monsanto has become the world’s largest GM seed producer • Patenting foods • Novelty • Utility • Inventiveness • Plant breeder’s fights (PBRs) and the Union for Protection of New Varieties (UPOV) vs. Technology Use Agreements (TUAs)

15. Bio-Tech and Food • Trade secrets vs. patents and TUAs • The problem with TUAs • Farmers become contractor with Monsanto • They use but don’t own seeds and become sharecroppers • Much higher yields, deliver to Monsanto. • Farmer cannot keep seed for next year or sell to others • Monsanto has right to inspect future crops and test

16. Questions • What are the principles which should guide government food policies? • What policies should we adopt if we are to feed the world’s hungry? • Should the use of GM foods be curtailed or supported and why? • Who comes first--consumers, producers, the hungry, regulators, distributors?