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A People's News Agency (PNA) Dispatch
AGRICULTURAL GLOBALIZATION: A THREAT TO FOOD SECURITY?
Corporate agribusiness controls much of world food production and supply.
Though portrayed as a modern marvel of efficiency, it is actually
increasing food supply insecurity and undermining food purchasing capacity
By David Griffin
In the sixteenth century, during and after the likes of Henry the
XIII, something new was brewing in England. The monarchy had
consolidated power to an unusual degree, and the agricultural
countryside had become accessible through a well developed system of
roads and waterways. The country1s lords had lost much of their power
to levy taxes and manage their estates as independent entities, but
they none-the-less owned the majority of England1s agricultural land.
Meanwhile London was emerging as the hub of a national market.
The English lords were in a unique position. The aristocracy in
other European countries had extra-economic powers to extract wealth
from the peasantry, which no king could take away from them. Outside
England peasants generally owned the land they worked. Taxation was
the only way to get anything from them. Without the power to tax,
landowning English lords needed a new formula to increase their
wealth and power, one not dependent on military force or loyalty.
That power was economic production, and the formula would eventually
evolve into modern day capitalism.
An imperative thus emerged in the English countryside to produce a lot and
to produce it efficiently. While agriculture on the Continent remained in
the dark ages, English farming bounded ahead. New technologies were
developed allowing lords to extract more production from their land
holdings. Thus, the technologies of manuring, crop rotation, close
planting, and weed control were advanced.
The lords also increased their share of goods by decreasing the number of
people working. If a landowner could have thirty tenant farm families do
the work of ninety, well, that1s sixty less families he had to share the
crop with. So in England, technologies were also refined to increase the
efficiency of labor. Horse-drawn plows and cultivators replaced people
with hand tools, and a number of systemic changes were introduced to
increase efficiencies of scale. Gradually the countryside was depopulated.
Displaced tenants moved to the cities, where their cheap hire eventually
made possible the industrial revolution.
The Wealth Extraction Imperative
So capitalism - the extraction of the surpluses of labor by owners,
and the trade of that surplus in an open market - began with
agriculture. Extracting greater wealth from the production of food
has remained a challenge to the owners of capital to this day. Over
the years the capitalistic quest for increased production and
increased efficiency has moved agriculture through various
technological 3revolutions^2. First mechanization in the 1800s and
early 1900s. Then chemical fertilization, pest, and weed control
after WWII. And now genetic proprietorship.
The difference between 20th Century capitalist extraction and the
surplus extraction of the English lords lies in scale and the nature of
the capital owned. Today about 90 percent of the value added in food
production is not added on the farm. Thus, land has declined in value
relative to the input, processing and trading industries. For example,
chemical and seed companies make inputs for agricultural production.
Through various 3advancements^2, companies have increased the amount of
chemicals and seeds it is desirous for farmers to buy.
Hybrid seeds, for example, are a Twentieth Century invention. They
can1t be replanted by farmers so farmers have to buy the seed of
hybrid crops, like corn, every year. The Delta and Pine Land Company
and the U.S. Department of Agriculture have even come up with a
terminator gene for non-hybrid crops. This gene will make the seed
farmers save from these crops unable to germinate. Farmers in a few
years will be unable to save and replant even non-hybrid crop
varieties that companies choose to patent and insert with the
terminator gene. One more way for the owners of capital to extract
value from agriculture.
Globalization is Extraction
A non-technological form of extraction has also evolved. It1s called
globalization. Under the General Agreement on Tariffs and Trade (GATT) and
the World Trade Organization (WTO), which emerged from the GATT, it has
become increasingly difficult for nations to protect their farmers and
food-consuming populace from globalization.
For example, under the conditions of the 1994 Uruguay Round of the GATT,
it is expected that U.S. corn prices will undercut Philippine corn prices
by 20 percent in the year 2000. This could reduce incomes of half a
million peasant farmers by 15 percent, resulting in increased menial labor
for woman and children, lowered educational opportunities for children,
and increased malnutrition.
This is bad for small farmers but good for corporate grain traders.
These companies are backed by U.S. government farm and export
subsidies and will make terrific amounts of money through market
expansion with favorable conditions of trade. It1s also good for
suppliers of agricultural inputs to highly industrialized U.S. corn
farmers. However, it doesn1t necessarily work out so well for U.S.
corn farmers, who at the time of this writing are receiving $1.70 for
a bushel of corn, well below the average cost of production.
The original U.S. proposal to the Uruguay Round of the GATT was
submitted by the former senior vice president to Cargill. Cargill is
the largest grain trader in the world and has pushed multinational
agribusiness since the Green Revolution.
The favored model of international traders like Cargill involves buying
commodities like wheat and corn where they are cheapest and adding value
to them by converting them to a more valuable product. For example,
Cargill is also in the pork and beef industries. By manufacturing meat
products abroad with cheap imported grain, Cargill undercuts prices of
domestically produced meat. Cargill, in fact, has equity in livestock
operations all over the world.
This global sourcing of 3ingredients^2 undermines local farmers.
Nations have traditionally protected domestic farmers with import
tariffs, quotas and the like. GATT is now used to challenge the
authority of national supply management boards to interfere with
international trade.
At the same time heavy, non-agricultural industrialization in food import
nations has resulted in agricultural resources like water and land being
appropriated for industry and industrial infrastructure. Consequently,
many countries, including Korea, Indonesia, China, Saudi Arabia, to name
just a few, have sacrificed a tremendous percentage of their agricultural
land and irrigation water to non-agricultural uses.
Corporations may not control farms directly but they are coming to control
seed and chemicals (Dow, Monsanto, Novartus, Agro-evo, Dupont), grain
trade and livestock production (Cargill, Archer Daniels Midland [ADM],
Continental, Conagra) and retailing (Phillip Morris [yes, the largest food
retailer in the USA], Nestle, Unilever). Through trade liberalization
agreements that they helped author, these companies increasingly control
who grows what and where and, ultimately, what people eat.
Even agriculturally rich nations like Mexico and Chile are subjected to
food insecurity by the domination of agriculture by transnational
corporations (TNCs). Chile is the largest supplier of off-season fruits
and vegetables to Europe and North America, and most of this production
and trade is controlled by five TNCs.
This is typical of agriculture in Southern Hemisphere countries. They
produce high value, labor intensive fruits and vegetables for export with
underpaid laborers, and increasingly import staple grains like corn and
wheat from the capitalized and subsidized farms of the Northern
Hemisphere. It is for this reason that family farmers in Chiapas Mexico
have raised such a hue and cry over NAFTA.
Dependence Means Insecurity
This reliance on global trade puts people1s food security in
jeopardy. On the one hand global corporations will continue to assume
a greater percentage of value added up the whole ladder of the food
production process. On the other, any decline in the relative worth
of a nation1s currency, or the relative worth of a nation1s exports,
will jeopardize its ability to purchase food on the global market.
Through the penetration of capital, the people of the world have become
more dependent on an economically and environmentally precarious system of
agriculture. Agriculture-for-corporate-profit requires the continual
introduction of new purchased inputs in crop farming, livestock rearing,
and food processing, and the continual paring down of labor and
independent owners in the process.
In the long run, the globalization of agriculture and the concomitant
penetration of capital into agriculture undermines its existence
economically as well. Because of the constant pressure to reduce cost,
agricultural labor is either replaced by capital or manipulated into
accepting smaller wages or prices, as in the case of independent farmers.
Globalization has sped this trend in industry at large by allowing
corporations to relocate operations involving labor to poorer countries
whose workers can be paid less.
Economic Quicksand
As it stands, workers globally are seeing their earning power erode
to the point where capitalism1s massive and efficient productivity
undermines its ability to market its wares. This becomes apparent in
the food industry early in a economic downturn because foods must be
sold broadly, to the billions, for it to be profitable.
Amongst the former Asian Tigers, in Russia, and in Latin America, people
are less able to afford the high value-added meats, processed foods and
even the staple grains that have made investors in agricultural
globalization rich. Their food supply is thus diminished. Also, we are
seeing dramatic declines in the prices of grains and other agricultural
commodities on the world market.
While capitalism has been the engine for great leaps and strides in
agricultural productivity, it can expand like cancer if all constraints
are removed. The global trade agreements of the last 50 years, including
the GATT and NAFTA and the organizational offshoots of those agreements,
were negotiated by capitalists in the interests of capitalists. If we are
to ensure the food security of future generations, we must recognize the
right and need of local governments to protect their farmers and the food
security of their citizenries. If this turns back the tide of
globalization and the associated penetration of capital in agriculture,
then so be it.
This article draws substantially on four articles in the academic
socialist magazine, Monthly Review, number 3 volume 50. These are: 3The
Agrarian Origins of Capitalism^2 by Ellen M. Wood, 3Agriculture and
Monopoly Capital^2 by William D. Heffernan, 3The Maturing of Capitalist
Agriculture: Farmer as Proletarian^2 by R.C. Lewontin, and 3Global Food
Politics^2 by Phillip McMichael. With the exception of Wood, who co-edits
Monthly Review, the writers are university professors with expertise in
the areas of international political economics, rural sociology, and
biology.
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