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by Al Krebs and Karen Lehman

Welcome to the global economy - it's on your dinner plate. In a Mexican mountain village, the corn may be home-grown and home-ground, the chicken in the soup fed on scraps in the yard, and the wild greens gathered from the fields nearby - but the cheese in the quesadilla could come from a US commodity programme. In the US, an entire meal could be brought to you by the Philip Morris tobacco company under the misleading brand names of Sungold Dairies, Tombstone Pizza, Lender's Bagel Bakery and Kraft Macaroni and Cheese.

If we could accompany our pork and beans on their journey from farm to table, the images of a countryside populated by family farmers calling their animals by name and shipping their produce directly to our supermarket would evaporate. How is it possible, we might ask, that 10 cents of every dollar spent on food in the US winds up in Philip Morris' coffers? That food travels an average of 2000 miles before it lands on our plates? That there are so few farmers left in the United States that the government is considering removing "farming" as a category on the census? That 5000 pigs can spend their entire lives under one roof in what amounts to a pig factory and never see the light of day before they are led to slaughter? That US and European food is so cheap, it is replacing the native diets of peoples in Africa, Asia and Latin America, destroying native agriculture systems and accelerating urban migration?

The answers lie in the policies that governments in the world have promoted both domestically and through international trade agreements. Intentionally or inadvertently, they have strengthened the stranglehold corporate agribusiness has on our food system.

Food In a Global Economy

To have a secure supply of food, both in its quality and safety, has been a primary goal of humankind since the dawn of our species. Food, next to life itself, is our greatest common denominator. Its availability, quality, and price are matters of life and death, and the cultures it nourishes, its moral and religious significance, make it history's "staff of life" as well.

The global economy poses threats to food security in several important ways. First, people who eat food are separated from the farms that produce it by great distances that are economic and political as well as physical. Second, the rules of the global economy place the world's food supply under the control of multinational corporations that have no allegiance to countries or their citizens. In the process, the system of family farm agriculture and the rural communities that depend on it are destroyed. Finally, the global economy threatens the biological wealth of the planet.

Imagine a system in which a single company sells seed to the farmer, operates the local grain elevator, owns the railroad, owns the port facility, buys the grain from the farmer, and sells the grain to itself to be processed into food. That's the system we have now in grain production in the US and, increasingly, around the world. By eliminating tariffs and making many forms of public support to farmers "illegal", the General Agreement on Tariffs and Trade (GATT) will further increase the control exerted by corporations over all the different stages of the food production process. Under such conditions the farmer is completely at the mercy of the corporation which, in effect, sets the price at which he buys the imports and sells his produce.

Corporate agribusiness manufactures and markets over 95% of the food in the United States. As other countries in the world emulate the US model, agribusiness is gaining ground throughout the globe. Multinational corporations have relatively easy access to credit, tax advantages, and the ability to rapidly expand their production. There are three "single overriding corporate objectives" upon which corporate agribusiness is based and upon which it thrives. They are:

  • Substituting capital for efficiency and technology for labour
  • Standardising our food supply
  • Creating synthetic food

In pursuing each of these objectives, corporate agribusiness has sought first to diminish the role of family farmers in the production of our food. Second, it has sought to relegate the farm community to a small and select group of economically and politically impotent raw material producers serving a nationwide food manufacturing system. Such a system can thus be controlled from afar by a select number of giant corporations and economically powerful individuals.

Between January 1 and January 31, 1995, while most Americans were still figuring out how to break their New Year's resolutions, Philip Morris merged Kraft and General Foods into Kraft Foods; Ralston Purina sold Continental Baking Company to Interstate Bakeries Corporation, the nation's largest bread maker; Perdue Farms Inc., the nation's fourth largest poultry producer, acquired Showell Farms Inc., the nation's tenth largest poultry producer; and Grand Metropolitan proposed to acquire Pet Inc. The brand names are all that's left of the small companies which became huge conglomerates through mergers and acquisitions.

Nor is the concentration of agribusiness isolated from the rest of the economy. Wells Fargo Bank, the second largest bank in California, is among the top six shareholders of five major agriculture-related corporations: Tyson (#5), Archer Daniel Midland (#2), ConAgra (#2), Monsanto (#6), and Philip Morris (#2). The largest bank in California, Bank of America, is the nation's largest agricultural lender, including crops and real estate.

This accelerated concentration of the food industry has as much impact on the political process as it does on the dinner table. US agribusiness companies, such as Cargill, the world's largest grain trading company, had a disproportionate role shaping the rules in the GATT framework. President Nixon's first trade advisor was William Pearce, a vice president of Cargill. Another Cargill alumnus, Daniel Amstutz, drafted the US agriculture proposal for the GATT for President Reagan.

Exports, Imports, and the Family Farm

Those who promote the global economy say that the rules for trade should be based on comparative advantage. In its simplest form, the logic of comparative advantage dictates that countries should buy low and sell high regardless of a product's importance to the local culture and economy. Thus, if Mexico can buy corn more cheaply elsewhere than it can be raised domestically, it should abandon domestic corn production, buy corn elsewhere, and sell products like tomatoes to countries that can't produce them as economically. Such reasoning is at the root of international trade agreements like the GATT and the North American Free Trade Agreement (NAFTA).

At first, this looks good on the plate, because theoretically, food would be cheaper for all of the world's consumers. There are two primary problems with the pursuit of markets based on comparative advantage. First, it leads to dependence on foreign suppliers for food - and the international trading companies that serve them. Second, countries will implement policies that are destructive to their own citizens to maintain their comparative advantage in a given market.

In times of war and in times of famine, the lack of domestic production for local consumption in food importing countries has had disastrous consequences as food producing nations suddenly designate their production for their own populations, at the expense of those who have become accustomed to constant supplies. In 1973, for example, the US decided to restrict exports of soybeans because of a drought-related shortage in the US. This created problems for European farmers who were using US soybeans in their animal feed - and made meat more expensive at European dinner tables. Europe has learned its lesson and become more aggressive in local cereal production to ensure a constant supply.

Furthermore, international trade's dependence on multinational corporations poses a threat to food security. Two companies, Cargill and Continental, shared 50% of US grain exports in 1994. This is important to the rest of the world, given that in the same year, the US exported 36% of the wheat traded worldwide that year, 64% of the corn, barley, sorghum and oats, 40% of the soybeans, 17% of the rice, and 33% of the cotton. By controlling the flow of these volumes of agricultural products, these companies are capable of manipulating prices and supplies throughout the globe. When farmers have attempted to bypass these companies and market their grain directly to foreign countries, as the American Agriculture Movement did in the late 1970s, the companies can retaliate as Cargill did in 1984 by importing 1 million bushels of Argentinian wheat. This degree of control has serious long term implications. These huge companies now have the power to shift comparative advantage simply by their decisions on where to build warehouse, transport and processing facilities. Our food system is very close to being totally managed - without citizen involvement.

Governments, too, pursue strategies to improve their comparative advantage with effects that can be disastrous for the domestic population. For example, the US, in its efforts to maintain its dominance as the world's most important supplier of grains like wheat and corn, has driven down prices below the cost of production to increase exports - a policy which has devastated farmers in both the US and developing countries. Between 1987 and 1992, 38,500 farms per year were eliminated, and the country's newspapers were filled with stories of suicide, spouse abuse, bankruptcy, and armers applying for food stamps - a federal program to help the poor buy food.

Other countries, unable to compete with this low priced grain, tried in some cases to protect their farmers by imposing tariffs or quotas on the cheap grain. This is the poor country's form of agricultural subsidy. By making imported grain more expensive with a tariff, or tax, the government makes domestically produced grain more competitive in local markets.

Mexico is a case in point. Until Carlos Salinas de Gortari became President in 1988, Mexico attempted to protect its corn production system from artificially cheap US corn. Corn is the Mexican food staple and is produced by 2,500,000 small farmers, mostly of Mayan and other indigenous descent. Half of the land under cultivation in Mexico is dedicated to corn, and is as important culturally as it is economically. The Congressional Budget Office Report on Agriculture in the North American Free Trade Agreement stated that Mexico's corn program had been a "de facto rural employment and anti-poverty program." But to ensure the passage of NAFTA, Mexico promulgated a series of reforms in the agriculture sector, including the breakup of the cooperative farms (ejidas) and signed away its right to protect corn in NAFTA. As a result, economists predicted that as few as 700,000 and as many as ten million farmers could be displaced during the decade after NAFTA took effect. This is a pattern repeating itself all over the world, creating problems of overpopulation in the Thrid World's megacities where rural people migrate to seek nonexistent jobs.

The world's governments could change global trade policy to favour domestic food security over comparative advantage marketing. But that would require controlling corporate behaviour to a degree most governments have lacked the courage to do. Countries, with a few notable exceptions, don't generally engage in trade. Corporations do. The countries' role in the process is to set the rules by which corporations conduct their business. Unfortunately, they have structured the rules to benefit multinationals at the expense of domestic food systems.

The Death of the Family Farm

Already, agriculture statistics read like tombstones for family farmers and tabloid headlines for agribusiness corporations:

  • In the past 50 years, the number of farms has declined by two-thirds in the US, while the area in farmland has remained about the same.
  • In 1994, three packers controlled the slaughter of over 80% of the beef in the US.
  • In 1994, 73% of all US farms accounted for 9% of the annual total cash farm commodity and food sales, while 2% of the farms accounted for 50% of the total sales.
  • The average farm operator household in 1990 earned 14% of its income from the farm and the rest from off-farm employment. In that same year, 22% of US farm operator households had incomes below the official poverty threshold, twice the rate of all US families.

Implicit in these statistics are the stories of corporate concentration, the foreclosure of family farms that have been in families for four generations, and the reduction of real choice and quality on US dinner tables.

The numbers also chronicle the deaths of rural communities, where family farm dollars paid to equipment dealers, grocery stores and gas stations circulated through the local economy four times. With the family farms went many rural community businesses, and the main streets across the upper Midwest in the United States are full of empty storefronts and empty schools.

Some startling figures developed by Dr Stewart Smith, a senior economist for the Congressional Joint Economic Committee, vividly illustrate how agriculture has shifted from a system based on farmers to one based on agribusiness. In a study released in October 1992, he examined the economic activity of agribusiness' three basic economic sectors - farming, inputs and marketing.

Viewing the economic activity with agribusiness sector by sector, he found that farming suffered a shocking descent from 41% in 1910 to 9% in 1990, while the input sector rose from 15% to 24% and the marketing sector climbed from 44% to 67% in the past 80 year period.

Equally shocking was the fact that while the value of the marketing sector in real dollars increased from $35 billion to $216 billion and the input sector went from $13 billion to $58 billion, farming shrank from $24 billion to $23 billion.

US agriculture has been transformed from a one-time integral sector of the nation's economy to a dependent labour arrangement in which family farmers are merely providers of raw materials for a giant food manufacturing industry where technology is being substituted for labour, and capital for efficiency. As countries around the world seek to replicate the US agriculture system, similar dynamics are being integrated into their farm sectors.

During the postwar boom of the 1950s and 1960s, there was ample employment in urban areas for the many American farmers who left the land. This is not the case today, and the haemorraging from the countryside continues, not only in the US but in Canada, France, Mexico, Japan, and Somalia. Many urban problems are the results of bad agriculture policy and the global economy, if anything, is exacerbating them.

Unless there is a reversal in the decline of family farms and rural communities, our increasingly urban societies will be entirely dependent on multinational corporations that will someday own the farm land and hire "farm managers" to work it.

Threats to Biological Diversity

The global economy has another impact on the food that will be produced in the future. For the first time, multinational corporations are within reach of controlling the planet's genetic wealth through a global legal framework established under the World Trade Organisation. Companies can patent living organisms and the genetic information that determines their nature and development.

For centuries, seeds moved freely across the continents on the wind, in birds' bellies, in traders' caravans, conquerors' pockets, and immigrants' knapsacks. They were available to all, the sole property of none, the common heritage of the planet earth.

The common misunderstanding about the world's food seeds is that they are naturally occurring. But behind every food crop seed there is a long line of farmers who literally created them through a process the Mende people of Sierra Leone call hungoo, literally meaning innovation or invention. Just as the yucca moth and the yucca cactus have evolved together, so have the world's people and its grains.

Early on, the forerunners of agribusiness disrupted this relationship when they transplanted bananas and sugarcane from Asia and coffee from Africa to Latin America and produced them in heavily policed plantations for export to European countries. The French outlawed the export of indigo seed from Antigua and the Dutch destroyed all of the nutmeg and clove trees in the Molucca Islands after they had established their own plantations. By separating the seed from its cultural root, the colonisers changed it forever from the living symbol of a community's hisotry into a commodity.

The United States is known as the breadbasket of the world - yet of the food and industrial crops so abundantly harvested each fall, only one, the sunflower, is native to this continent. All 15 US food crops worth $1 billion or more depend on genetic material from other countries: corn, potatoes, tomatoes and cotton from Latin America; rice and sugar cane from Indonesia; soybeans and oranges from China; wheat, barley, grapes and apples from West Central Asia.

In the early 1960s, the United States passed a law granting plant breeders the rights to patent seeds, thus preventing others from selling the same variety. Corporations made billions of dollars on seeds developed in US labs from germ plasm that farmers in other lands had carefully bred over generations. With the passage of the GATT, farmers all over the world will be forced to adhere to US-style law and pay royalties to companies that hold patents on the genetic material they or their ancestors helped to shape.

This new form of genetic piracy has an interesting name, "intellectual property rights", which are defined as rights to protection of innovation. Intellectual property rights would only be recognised when they generated profit, which occurs when a worker pulls a gene out of a seed in a Boston laboratory, but not when a Mende farmer saves some seeds and rejects others. Intellectual property rights are also only represented when the innovation is capable of industrial application. Pioneer Hi-Bred can be protected when it mass produces seed varieties, but the Indian farmer who collects and saves seeds for next year's planting cannot.

This means that innovation that took place in communities over centuries, or even innovation in plant varieties that takes place in the present in a communal fashion, is not eligible for protection. As more power is concentrated in the hands of the corporate gene manipulators, the genetic diversity that has been tended by farmers in millions of fields around the world is lost.

On October 2, 1993, 500,000 Indian farmers demonstrated against the GATT and vowed to protect their right to produce and protect their own seeds. They created a charter of farmers' rights, especially the right to conserve, reproduce, and modify seed and plant material. They speak for the rest of the farmers of the world who want to continue their partnership of hungoo with the vegetable kingdom. Resistance to the piracy of the earth's diversity could ensure that for future generations, seeds will continue to be the fruit of our common heritage and not the exclusive property of the gene splicers. [For a full discussion of Indian farmers' resistance to GATT and the US intellectual property rights initiative, see chapter by Vandana Shiva and Radha Holla-Bhar.]

Re-Rooting the Local Economy

Actions like those taken by the Indian farmers to challenge the hegemony of global corporations are one important response to the destruction of local economy and culture. In addition, people in countries all over the world are challenging the practises of export dumping, in which food is sold at prices less than production costs.

There are other approaches, however, that don't involve challenges to the global institutions themselves, but instead regenerate local food systems. These approaches will be different in every community, in every region, and in this diversity lies their strength. Peasants in a Mexican mountain village can continue to grow corn and urban dwellers in the United States can make connections directly with farmers who grow their own food without the aid of a multinational corporation. Replacing corporate products with local produce on the dinner plate is a small first step in relocalising the economy.

Reproduced with the permission of Edward Goldsmith, co-editor with Jerry Mander, of The Case Against the Global Economy and For a Turn Towards the Local - Sierra Club Books; fax 1-415-957-5793.

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