Home > Evolution, Political Affairs > World Food & Water: If you eat today, don’t get used to it

World Food & Water: If you eat today, don’t get used to it

April 5, 2010
By Paul Richard Harris, Editor. Axis of Logic

World Food & Water: If you eat today, don’t get used to it

Even before World War II ended, thought was being given to how the world could, or should, be shaped in its aftermath. As early as 1942, economist John Maynard Keynes was proposing what he called the International Trade Organization (ITO) which would be supported by a central bank of central banks, called the International Clearing Union (ICU). This latter was, he proposed, to issue an international currency called the ‘bancor’.

Keynes ended up as Chair of the so-called Bretton Woods monetary conference in 1944, and his ideas for the ITO and ICU were widely discussed. For a series of complicated reasons, in great part due to preferences of United States corporations, what emerged instead were the World Bank and the International Monetary Fund (IMF). The difference is enormous.

As history has shown, the IMF in particular is rapacious and causes immense harm. The ITO’s final charter was designed specifically to provide for fair exchanges throughout the world, protecting against exactly the behaviour that has become the hallmark of the IMF. Ironically, the final ITO document became known as the Havana Charter – a city where the idea of sharing and equality still shines like a beacon.

By far the greatest tragedy wrought by the IMF has been its inexorable drive to destroy agriculture. Droughts and crop pestilences will come and go, but IMF efforts to ruin local agriculture appear to go on and on.

Let’s use rice in the Philippines as a clear example.

Less than 10% of world rice production is traded – it is primarily a crop consumed domestically. But the Philippines is an importer; in fact, it is the largest importer despite that they were formerly a net exporter.

So what happened to change that? Ferdinand Marcos? Nope. Whatever other foul deeds and bad government he sponsored, he did not neglect the agricultural sector. In order to ensure some measure of fealty among farmers, his régime provided farmers with subsidized fertilizer and seeds, launched several credit and micro-credit plans, and built rural infrastructure. When he was driven from office in 1986, government warehouses held 900,000 metric tons of rice.

Over the next few years – with a newly installed democracy – government investment in food production was gutted. The IMF, working in tandem with international creditors, pressured the new government of Corazón Aquino to make repayment of foreign debt a priority. She surrendered to this, even though she was warned against it by her top economists who told her any recovery program consistent with a debt repayment schedule determined by the Philippines’ creditors was futile.

Spending on agriculture fell by more than half, and interest payments as a percentage of total expenditures rose from 7% in 1980 to 28% in 1994. Agricultural capacity eroded quickly, irrigation projects were abandoned, rural infrastructure went unbuilt or unrepaired. In short, Filipino farmers were faced with the reality that the government had retreated as a support. They were on their own.

To compound the issue, the Philippines joined the World Trade Organization (WTO) in 1995 and things went from bad to worse. WTO membership required the elimination of quotas on all agricultural imports except rice, although the country did have to agree to admit the equivalent of 1-4% of domestic production without tariff. Following the collapse of agricultural support from the central government, it became necessary to import much more than the 1-4% in order to make up for shortfalls. That had the effect of depressing the price of rice and driving farmers from the land.

So the combination of IMF-imposed debt restructuring and WTO-imposed trade rules swiftly transformed a mostly self-sufficient agricultural economy into an import-dependent one. Given the nation that is the primary manager of both the IMF and the WTO, it isn’t hard to see where the problem lies. In fact, US Secretary of Agriculture John Block said in 1986, “The idea that developing countries should feed themselves is an anachronism from a bygone era. They could better ensure their food security by relying on US agricultural products, which are available in most cases at lower cost.”

Of course, Block failed to add that the lower US costs were the result of heavy subsidization of US farmers, which was supposed to be eliminated by the WTO but has, in fact, continued to increase. To be sure, the US is not alone in this – the European Union is even worse. Since the late 1990s, subsidies of US crops have accounted for about 25% of the value of production, 40% in Europe.

Now consider Mexico – the birthplace of domesticated corn.

A few years ago, Mexicans protested a sharp increase in corn prices
and many market experts blamed this on the development of corn into a biofuel. The US government was providing subsidies to farmers, so increasing levels of acreage were being devoted to corn for ethanol, rather than food. And that led to a sharp rise in corn prices, which affected Mexico particularly because it is such an essential in their diet.

But what is missing from this equation is how in the hell Mexico became a importer of US corn in the first place. They invented it, they perfected it, they were self-sufficient because of it. How did they become dependent on Iowa and Nebraska?

Once again, we have the IMF to thank.

The homeland of corn had been converted into a corn-importing economy because of ‘free market’ policies promoted by the IMF, the World Bank, and Washington. The process began in the early 1980s when a debt crisis crippled Mexico, and they were forced to go cap-in-hand to beg for help. They got the help, at the price of surrendering their agricultural independence. As with the Philippines, the IMF arm-twisted to ensure Mexico would give the highest priority to debt repayment. Interest payments as a percentage of government expenditures rose from 19% in 1982 to 57% six years later. The government had no choice but to retreat from providing state credit to farmers, supporting marketing boards, and rural infrastructure.

And then the crap really hit the fan – Mexico, like Canada, got sucked into joining the US in the North American Free Trade Agreement (NAFTA). It has been an unmitigated disaster by most measures, although there have certainly been some minor winners. By far the biggest loser is agriculture in Mexico.

In both the Philippines and Mexico, farmers are being driven from the land. The Carnegie Endowment produced a report in 2003 that estimated the effect in Mexico alone had, at that time, already put at least 1.3 million farmers out of work. In case anyone wonders, that’s where the US is getting a lot of its ‘illegal’ immigrants.

This same scenario is unfolding in numerous developing nations around the world. We are seeing a massive die-off of peasants as international agro-giants scoop up more and more land and production, and inch closer to gaining total control over how, what, where, and when we all eat. This de-peasantization of agriculture is deliberate. There is little room remaining for hundreds of millions of rural workers, and this must be seen as much more than simply the erosion of food self-sufficiency or food security. Peasant production is not merely an economic activity – it is a way of life dating back millennia, it is a culture, it is the very essence of how a people survives.

The advance of de-peasantization (a word coined by Deborah Bryceson of Oxford) is well under way in Latin America and Asia. And the IMF has Africa clearly in its radar. As hard as it might be to remember, at the time African countries were decolonized in the 1960s, Africa was actually a net food exporter. Today, almost every African country is an importer and in total, more than 25% of Africa’s food originates elsewhere.

There is no doubt there are other stresses on Africa – drought, bad governance, poor technology, the spread of HIV/AIDS. But as with Mexico and the Philippines, an important part of Africa’s problem is the phasing out of government controls and support programs to satisfy the lunacy of the IMF. According to OXFAM, the number of sub-Saharan Africans living on less than a dollar a day is about 313 million, double what it was 20 years earlier – about 46% of the whole continent. The role of IMF structural adjustment programs in creating this poverty is impossible to deny.

In 1999, the small nation of Malawi began a program to provide each smallholder family a starter pack of fertilizer and seeds – free of charge. The result was a national surplus of corn. The World Bank and IMF forced Malawi to shrink, and eventually cease, this program. In 2002, some 1,500 people are believed to have starved to death as a direct result of the food crisis created by the curtailing of this success story. The IMF refused to acknowledge the problem, and continued to press Malawi for further structural adjustments.

But by 2005, a new Malawian president had had enough of the IMF and reintroduced the subsidy. What followed was two years of bumper crops, a million-ton surplus of corn, and the transformation of Malawi into a food exporter.

Malawi’s defiance of the IMF and World Bank might not have been possible until just a few years ago. But times are changing – these barbaric institutions are increasingly being superseded by aid from China, who is not insisting that recipient countries surrender their ability to feed themselves. The IMF and World Bank are becoming as marginalized as they have tried to make developing nations.

What is most important, though, is that peasant organizations around the world are becoming increasingly militant in resistance to the global reach of industrial agriculture. It is this resistance that brought to a crashing halt in 2008 the so-called Doha Round of WTO negotiations. Farmer’s groups are networking internationally, and they are pushing hard to get the WTO out of agriculture. They are opposing the agro-giants, the seed technology criminals like Monsanto, and working hard to develop programs that will allow for food sovereignty where possible, and reasonable food aid where needed.

Peasants have long been regarded as dinosaurs pre-dating the Industrial Revolution. But they are now leading a strong opposition to the capitalist industrial agriculture that threatens to make food slaves of us all. They need our backing, they need our support. For if they fail, vast numbers of us will ultimately starve.

Read his bio and more articles by Paul Richard Harris, Editor, Axis of Logic

© Copyright 2010 by AxisofLogic.com

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December 17, 2009: EU/IMF Revolt: Greece, Iceland, Latvia May Lead the Way by Ellen Brown
February 29, 2004: The Destabilization of Haiti: How the CIA and the IMF set the stage for the oblieration of Haiti by Michel Chossudovsky

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