Showing posts with label trade. Show all posts
Showing posts with label trade. Show all posts

Sunday, March 11, 2018

Food self-sufficiency – does it make sense?



Global food production increased with over 50% between 1986 and 2009. Meanwhile the trade in food for direct human consumption has increased from 15% of total production in 1986 to 23% in 2009, thus about one fourth of food production is traded. Half of the net exports 2010 were originating from just five countries.[i] After the food price hike in 2007-2008 and in a world that many feel is less secure, there is a renewed interest in food self-sufficiency.

Food self-sufficiency is, however, widely critiqued by economists as a misguided approach to food security that places political priorities ahead of economic efficiency. In the paper Food self-sufficiency: Making sense of it, and when it makes sense, in the journal Food Policy, Jennifer Clapp makes the case that policy choice on this issue is more than a choice between the extremes of relying solely on homegrown food and a fully open trade policy for foodstuffs. All countries rely on imports for at least some of their food consumption, including large food exporters that produce far more food than they consume. Even, North Korea, the country with policies that most approach autarky, still imports food and accepts international food assistance. Clapp recommends that we should instead realize that there is a continuum between the extremes and that there is not one correct policy response for all countries at all times. 
Before even discussing food self-sufficiency or not, one have to agree on what it means. There are several definitions and measurements. Some define self-sufficiency such that a country should produce a quantity (or calories) that equals or exceeds the consumption, but food is both imported and exported. Sweden is such a country. In the public debate we are told that half of the food consumed in Sweden is imported, which might be correct if measured in monetary value. Meanwhile, Sweden produces more or less the calories it needs, but it exports a big share of its grain harvest while it imports, soy, wine, vegetables and fruits (just to mention a few important streams). The value of food imports is considerably higher than the value of food exports, so from an economic perspective, Sweden is not at all food self-sufficient.

Self-sufficiency should not be mixed up with food security. Food self-sufficiency does not guarantee food security within a country. Food security as a concept does not distinguish whether that food is imported from abroad or grown domestically A rich country such as Japan is deemed food secure even if they import a lot and there are many food exporting countries that have large food insecure populations. Then there is the concept of food sovereignty that promotes the right of countries and communities to shape their own food policies. The food sovereignty movement calls for a greater reliance on domestically produced foods and is mostly critical to free trade, without ruling out trade as such.

Clapp identifies four arguments often voiced against food self-sufficiency from a food security perspective.

- The first argument is that drought or natural disasters can lead to severe shortfalls in production, leading to periodic episodes of hunger for countries that do not engage in food trade.
- The second argument is the economists’ belief that market intervention designed to insulate domestic markets from competition results in inefficiencies and in lower production and higher food prices, thereby harming long-term food security.
- Thirdly, if farmers are denied the possibility to export, they are deprived of income which could enhance their food security.
- Fourth, not all countries have the natural resource base that would allow them to supply all of their own food needs domestically, sustainably, for instance due to a shortage of water. The former Director General of the WTO, Pascal Lamy, for example, considers food trade to be an ‘‘environmental obligation”[ii]

Clapp, however, identifies that there are many valid reasons for a country to increase food self- sufficiency and decrease its dependency to international trade. In particular, she states that the following groups of countries might benefit from increasing its own production for domestic consumption:

- Poor countries with high levels of food insecurity, as they can minimize risk and costs associated with food price hikes.
- Countries with volatile export earnings, as sudden drops in major export commodities might result in inability to purchase foods.
- Countries that have a sufficient natural resource base to be self-sufficient. Clapp notes that there are some 60 countries in the world which might not be able to produce all the food they need, but most countries can.
- Countries where the main dietary staples are controlled by a handfull of global suppliers. She gives the example of rice which is a very important staple in many countries and only a few major exporters. Problems in one of the major exporters can lead to serious disruptions in supply and rapid price increases.
- Countries with a large population. When very populous nations buy big quantities in global markets the prices and supply will be strongly affected to the detriment both of those nations and all other countries importing the same commodity.
- Finally, Clapp mentions countries at risk of trade disruption because of war or other tensions. Most countries consider the ability to ensure food supplies in times of crisis to be a national security issue. It can be difficult to rapidly increase production when such crisis occur so countries may want to invest in their domestic agricultural capacity.

Clapp concludes that: 

”A more nuanced approach based on the real-world application of food self-sufficiency policies does not view the concept as an either/or proposition, but rather sees it in relative terms. Such an approach could potentially create room for a more productive policy dialogue on this issue at the international level."
In addition to the paper of Ms Clapp, I would add some pertinent drawbacks of international trade in foods.

Europe has let almost 100 million hectares of farm land revert to forest or lying idle, while European farmers buy soy from South America and European food industries buy palm oil from Malaysia and Indonesia. Europe could produce those, or equivalent crops, within its own territory, but it is simply cheaper to import it.[iii] Thus, trade has diminished the European production and created a trade dependency. Only a quarter of the trade is with crops which could not be grown in the importing country.[iv] (read more here). The higher proportion of food that is globally traded, the bigger dependencies will be created when regions that could produce their own food cease to do that. More and more people will be structurally dependent on global trade; trade becomes its own justification.

The possibility to move food from areas of surplus to areas of shortage (food aid) should be a backup measure which will not be supplied by the market but by governments. The food security argument for global trade is therefore not valid.

The increasing distance between consumption and production makes it easier for market actors to externalize costs and more difficult to citizens and the political system to influence the way things are produced.[v]

Competition drives farmers in to more and more specialization and larger scale in order to cut costs. This leads to that farms go into mono-cropping and, ultimately, economies of scale will turn whole landscapes to one or a few lines of production/commodities. Which is perfectly in line with the theory of comparative advantage but a disaster fur nature and sustainability of the production system.

The carrot for trade is profit, but the much bigger driver is the stick of competition. On the level of the individual basic actor in the food system, the farmer, the main influence of trade is competition. It is competition that drives mechanization and structural transformation of the farm sector, it is competition which makes it necessary for farmers to externalize costs to the environment, to workers or to livestock. It seems to me that reducing competition would be an important objective for a food trade policy.

Trade without competition, anyone?



[i] D’Odorico, P., J. A. Carr, F. Laio, L. Ridolfi, and S. Vandoni (2014), Feeding humanity through global food trade, Earth’s Future, 2, 458–469
[ii] Pascal Lamy Speaks on the Challenge of Feeding 9 Billion People. Speech at The Economist Conference ‘‘Feeding the World”, Geneva, February 8. [iii] Rundgren, G 2014, Global Eating Disorder. [iv] Thomas Kastner, Karl-Heinz Erb nd Helmut Haberl 2014 Rapid growth in agricultural trade: effects on global area efficiency and the role of management, Environ. Res. Lett. 9 (2014) [v] Clapp, J. Distant Agricultural Landscapes, Sustain Sci (2015) 10:305-316

Thursday, August 10, 2017

A people's food policy for England



There is a vibrant food movement in the UK and Brexit means that there will be a national food and agriculture policy in the future. Will the UK stick to it market-liberal free trade politics or will it take the opportunity to re-shape its food system? A People’s Food Policy want it to be fundamentally transformed.

In Sweden, it is very difficult to discuss food or agriculture outside of the prevailing market paradigm. The story goes like this:
The consumers determine which food is produced, how it is produced and where it is produced through their purchasing behaviors. Therefore there is no need (well, very little need) for government interventions or other kinds of regulations in the food sector. If people want farmers to take care of their animals, the environment and their workers, they will favor producers doing so by buying their products. By and large it is a question of information and linking the proper information to the particular product.

The more advanced proponents add that this should be complemented with Payment for Ecosystem Services and the Polluter Pay Principle, whereby all external costs and benefits will be priced. I will not expand on all the arguments against this notion in this article, but you can read about it here, Can we shop our way to a better world? And here, Food: from commodity to commons.

Stepping away from market imperatives frees our minds and thinking about food and farm production. Agriculture and food systems, the resources needed for producing food and the landscapes where this takes place are a kind of commons or a public good. The more food is viewed as a public good, the less appropri­ate it is that the productive factors needed to produce foods, seeds, land, water etc., are private property and provided by the market.

The Universal Declaration of Human Rights of 1948 already defines food as a human right: “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control” (Article 25).

Rethinking food as a right, farming as a management system of the planet and the food system as a commons is what I would call a real shift in paradigm (a most overused word!). It doesn’t rule out markets as one of several mechanisms for food distribu­tion, but does it reject market hegemony over our food supplies, and rejects the view that market forces are the best way of allocating food producing resources.
*
Political actions to reform the food system can take many forms and happen on many levels. Citing America’s Declaration of Independence and the Maine Constitution, the one thousand or so citizens of Sedg­wick voted in 2001 in favor of a local ordinance stating that “Sedgwick citizens possess the right to produce, process, sell, purchase, and consume local foods of their choosing.” In similar ways many municipalities and counties in Europe have declared themselves to be GMO-free zones. All the Austrian Bundesländer (states) have declared their intention to remain GMO-free and more than hundred municipalities have signed resolutions to the same effect. Of course, these are primarily provocations, rather than a practical policy. But the system certainly needs provoking.

The Milan Urban Food Policy Pact commit the signatories to “develop sustainable food systems that  are inclusive, resilient, safe and diverse, that provide healthy and  affordable  food  to  all  people  in  a  human  rights - based  framework, that minimise  waste  and conserve  biodiversity  while adapting to  and  mitigating impacts  of  climate change.” The 144 cities having signed on to it includes New York, Beijing, Milan, London and Buenos Aires (no Swedish city has signed, so much for progressive Sweden).

One of recent political projects regarding food is A People’s Food Policy, in England. In the policy 80 organisations have agreed that
“Our vision is of a food system where everybody, regardless of income, status or background, has secure access to enough good food at all times, without compromising on the wellbeing of people, the health of the environment and the ability of future generations to provide for themselves.“

There is a vibrant food movement in the UK and Brexit means that there will be a national food and agriculture policy in the future. Will the UK stick to it market-liberal free trade politics or will it take the opportunity to transform its food system? The policy builds on the concepts of Right to Food and Food Sovereignty and elaborate a hundred different proposals, which, if implemented would largely re-shape the English[i] food system.

The policy strives to relocalize production and consumption of food produced according to agro-ecological methods. It want to support the kind of produce which currently is mostly imported, e.g. horticulture, as well as environmentally friendly farming methods. Meanwhile it proposes a ban on GMOs, several pesticides and antibiotics and environmental taxes on artificial fertilizers.
Two thirds of the population is malnourished or overweight and more than eight million people are short in food (scandalous in one of the world’s richer countries!). Better access to food and regulations and taxes for junk food, sugar, salt and fat are proposed.

Only one percent of the population owns half of the agriculture land in England. Land and housing ownership contribute to growing inequality and limits the opportunities for new entrants into food production. The policy falls short of radical redistribution of land (a “Land reform”) but it calls for strengthened community access to land and a number of other measures to make access to land easier. 


In an interesting twist the policy rejects both agricultural support based on production (which was the case earlier in the EU) and based on land management. The former drives intensification overproduction the latter favours big land owners over small ones. Instead it suggest that support could be distributed according to the amount of work involved or the jobs created, whatever you prefer to call it.

Finally, the People’s Food Policy calls for a very different view on trade and markets. It calls on protective tariffs and quotas to protect producers as well as renegotiation of the WTO agreement on agriculture. Trade agreements should not undermine social or environmental standards, in the UK or overseas. The existing Groceries Code Adjucator (a kind of ombudsman for supermarket suppliers) should be given much extended powers including ensuring that a “fair proportion of retail price goes to producers”.  

The measures described above of the above are radical, but wouldn’t amount to a “transformation” of the food system, taken one by one. But taken together they might actually tip the scale towards a new system. A system which we don’t know how it will look like in any detail, but where the guiding principles are food as a right and public goods.



[i] There are other processes going on in Scotland and Wales which is why the policy is for England and not the UK.

Tuesday, January 10, 2017

Reducing consumption and local exchange better than "sustainable consumption"

While it is clear that global trade play a major role as a driver of destruction of biodiversity there is no way "consumers" in the US or other developed economies can be expected to take responsibility for the effect on biodiversity of their consumption. It is a tall order even for the companies trading or the retailers selling the products. Citizens should rather take responsibility by a general reduction in consumption, by favoring local goods exchange and relationships and by opposing policies that further drive international trade.

New research published in Nature links trade to biodiversity hotspots. The production of goods for export often involves logging, mining, fishing, farming or other activities that can damage natural habitats. To figure out where the drive for these goods is coming from, researchers traced the production of goods in one country to consumers in another.  The video gives some insights in this.




I believe the research is very helpful in illuminating the increasing interdependence in the globalized economy.

The researchers write in the paper Identifying species threat hotspots from global supply chains:"Locating biodiversity threat hotspots driven by consumption of goods and services can help to connect conservationists, consumers, companies and governments in order to better target conservation actions." And the recommend: "to initiate direct collaborations between producers and consumers to mitigate biodiversity impacts at those places"


I beg to differ from that conclusion. Their own research show how incredibly complex all these linkages are. The map showing the effect US consumption has on biodiversity in all parts of the world (darker areas indicate areas of threat hotspots driven by US consumption) makes it clear that there is no way "consumers" in the US can be expected to take responsibility or act upon all this. It is a tall order even for the companies trading or the retailers selling the products.

The example in the film from Spain makes this clear. Apparently the habitat of the Iberian Lynx (Lynx pardinus) is threatened by dams. Those dams are built for agriculture irrigation and once of the crops grown is olive, which is processed into oil exported to the United States. So, are consumer expected not to buy Spanish olive oil. But what about the effect of Italian olive oil?, or Avocado oil from Mexico? And what about Swedish paper pulp from mono-culture forest production which harms biodiversity and reindeer herding etc. etc. etc. In addition to biodiversity threats there are effects on green house gases, the nitrogen cycle, child labour, the rights of indigenous people. The global impacts are simply overwhelming. In addition, the research also shows that two-thirds of the impact on the hotspots are driven by domestic factors. Of course, for a few symbolic cases one can have consumer driven actions or boycotts, but in most cases it is irrelevant as a strategy.

Consumers, or rather citizens, can take responsibility by a general reduction in consumption, by favoring local goods exchange and by opposing policies that further drive international trade. Meanwhile, protection of biodiversity must primarily be dealt with by domestic processes and international treaties and conventions. Global policies to reduce inequality between nations and within nations will also counter the fact that a foreign powers can exert pressures on local nature resources.


Read more about this and other aspects of international trade in agriculture commodities Trade in food: It’s the competition, stupid  and Food: from commodity to commons.

Tuesday, June 28, 2016

Food: trading away our future? - path IV



In the period 1996 to 2011 I worked a lot with various efforts to link smallholder farmers to markets, mainly organic, in developed countries. The biggest engagement was in EPOPA. By 2008, 80,000 farmers in the programme sold organic products to exporters for approximately US$ 15 million per year. All farmers received higher prices due to the organic premium, which ranges from 10-25% over the conventional price. Taking into account the size of households, 600,000 people have benefited from the programme. You can read a whole book about this successful project here. Overall EPOPA was a success. 

Today, linking farmers to markets is an overarching policy for almost all development agencies as well as governments. It also fits very well with a development model that assumes that more markets and more capitalism is the best path to development. While I do think it works quite well under certain conditions, it has, unfortunately, been oversold.

A report from Hivos, Small Producer Agency in the Globalized Market, looks deeper into if and how smallholders can benefit from globalized markets. In short the answer is that a few of them will - and they will soon not be smallholders as the recipe for success is to grow, mechanize and buy up your neighbours farms. This should be no surprise, this is how the farm sector developed in other parts of the world. The report estimates that linking farmers into modern value chains (be they organic, fair trade or normal) may benefit only about 2-10 percent of the farms - and it will be those with the greatest assets. Of the farmers forced off their farms, some will become farm labourers at the farms of the more successful, or in huge agri-business plantations, others will only get a better life if there is some place for them to go – but in many places the prospects in the cities are not too promising and the future as an economic migrant is uncertain.

A recent report from the FAO, The State of Agriculturarl Commodity Markets, does a good job in untangling the contradictory views on the impacts of agricultural trade on food security. Trade affects each of the four dimensions of food security: food availability,  food access, food utilization and stability of food suply. The effect of of trade is complex and depends on a variety factors, which makes it difficult to generalize. Among others it is influenced by the way food markets work, by the ability and willingness of producers to respond to the changing incentives that trade can bring, and by the geography of food insecurity, each of which needs to be accounted for in the formulation of trade policy interventions.

The report clarifies that theory of comparative advantage builds on assumptions that
do not hold in today’s global economy. Capital and labour is highly mobile between countries through global value chains while the agriculture sector is highly inflexible, and mobility of agricultural labour and capital is low.  Competitive advantage prioritizes short-term conditions versus long-term structural transformation and efficiency gains are prioritized over other social goals. Meanwhile, self-sufficiency is not feasible for all countries and agriculture protection measures may have extraterritorial impacts that can harm food security of others.

Perhaps surprisingly to some, the majority of hungry people live in rural areas; many of them are farmers, others are landless laborers. According to the FAO, 50% of those suffering from hunger and mal­nutrition are small-scale peasants, 20% are landless, 10% are pastoralists or fishermen and 20% live in city slums. Clearly these groups are affected differently by the increasing globalization of food. Low food prices may initially look like a good proposition for the poor as it makes food more affordable. Falling prices, however, can lead to a worse situation for the rural poor, who make up the majority of those hun­gry. Most of them are dependent on farm incomes, either as small­holders or as landless individuals seeking employment by farmers. A surplus of food, with falling prices, creates a bigger prob­lem as it drives small farmers off the market so that they cannot buy the things they need for produc­tion or for their families. 

There are many side effects of the integration of farming in global markets, and those side effects may have far reaching implications. For instance, modern markets and global competition force farmers to adopt uniform high-yielding types of plant or animal. But when food produc­ers abandon diversity, valuable traditional varieties and breeds may die out, along with their specialized traits. For the poorest farmers, the diversity of life can be their best protection against starvation.

There is no silver bullet that in itself can guarantee food security. It seems clear to me that food security, poverty and equality are intrinsi­cally linked, and that the root cause of food insecurity is found in an unjust society and unequal access to resources. As such, the main path to food security involves correcting those injustices. 

This is the fourth post on the trade theme.