Food Security and Trade: A Brief Educational Primer

    Food Security is defined by the World Food Summit as existing “when all people, at all times have physical and economic access to sufficient, safe and nutritious food to meet their dietary needs and food preferences for an active and healthy life” (www.fao.org).  Food sovereignty is herein defined as the right and ability of a country’s government and people to control their food supply, including how it is distributed, produced, traded etc.  Both food security and food sovereignty should be inherent rights of any given population of people.  Unfortunately, globalization and the components that make it such a dominant force are both provoking and directly affecting the ability of the world’s populations to be self sufficient in their ability to feed themselves.
    The organizations controlling the forces of globalization include the WTO or World Trade Organization, the International Monetary Fund, NAFTA or the North American Free Trade Agreement, and the World Bank among others.  These organizations largely conduct business in the interest of corporations not communities or the people within them.  This is summarized in the following:
        The global food supply is increasingly falling into the hands of a few large corporations.  More and more,             traditional farming methods are being replaced by large agribusinesses that rely on mechan-ized production,         harmful chemicals, and patented seeds, to the detriment of family farmer income, biodiversity,                            environ-mental sustainability and food security.  The proliferation of “free trade” agreements and policies             of privatization have had disastrous effects on farmers, food security, and the environment”                                 (www.globalexchange.org).

    The organizations and corporations involved in globalization are compromising the future food security of both individual countries and the world.  In this paper they will briefly be discussed in their individual aspects as they relate to food security and sovereignty.  This is done with the intent that an average person who is uninformed on the aspects or components of globalization and food security can come to have a basic understanding of both and the linkages between them through the brief discussion presented herein.
    NAFTA has had some highly negative effects on both Mexico and the U.S.  One example of this is that millions of Mexican farmers have been unable to compete with the corn imports from the U.S. and have therefore lost their livelihood.  This has left them without a method of subsistence and without a way to feed their families.  Because of this situation there have been mass migrations of Mexican farmers into the U.S. where they take low wage field jobs which in turn drive down the median income for these positions.      NAFTA was implemented in 1995 by the U.S., Canada and Mexico and led to the rapid deregulation of trade and investment along the borders of these countries.  NAFTA’s effects for all three countries has been largely negative; millions of jobs have been lost, U.S/Mexico border environmental conditions have worsened, farmer’s income is down while their rate of bankruptcy is up, and real wages are lower.  NAFTA has allowed for a huge increase in the profits of corporations at the cost of basic human welfare.  NAFTA allows for many corporate privileges that were unheard of before its implementation.  If a corporation feels that its current or future profits are at risk than they are allowed to sue a country’s government for cash compensation.  This is done in closed trade tribunals that involve arguments over regulatory costs.  The corporation concerned is often arguing that a particular or set of environmental or public health regulations are prohibitive to their profits.  One example of this is a case in which a multinational toxic waste company was paid 16 million by the Mexican government because the wish to build a toxic waste dump on ecologically protected land in Mexico was denied.  
    The even worse news is that the FTAA or Free Trade Area of the Americas agreement will extend NAFTA’s power even further to include all countries in the Western hemisphere except Cuba.  The FTAA is being written with the intent that it is compatible with the AOA or Agreement on Agriculture set forth by the WTO.  The AOA seeks to have agricultural commodity prices set by the Chicago Board of Trade rather than national policies or democratically elected officials.  This means that local, state and national policies would be undermined by transnational corporations seeking to benefit from the artificially low prices set by the Chicago Board of Trade.  
    Transnational corporations benefit from artificially low prices because they are able to flood markets with agricultural products that are priced below the cost of production thus outcompeting the local economy in agricultural products.  Smaller or medium sized agricultural producers including small farmers cannot compete with the artificially low prices and therefore end up in situations of hunger or poverty.  This process is referred to as “dumping”.  This is part and parcel of both NAFTA and the WTO and is described in the following:
        Dumping refers to the selling of products in another country below the cost of production.  Companies are             able to sell below the cost of production because the government sets prices at record low levels, and then         gives the farmers subsidies to make up for lost income.  In many countries, subsidies also work to assist not         just corporate but struggling farmers.  The WTO works to eliminate most subsidies on the grounds that they         are trade-distorting or protect-tionsist.  But rich countries have largely won exemptions for the types of                 subsidies they use, while prohibiting the types of subsidies used by developing countries”                                     (www.globalexchange.org).
    Dumping is detrimental to smaller or medium sized agricultural producers and farmers.  It is beneficial to corporations and agribusiness whom still receive the subsidies in what is called “government welfare” while many developing or poorer countries cannot afford to subsidize their farmers to the same extent.  Thus agribusiness wins by selling at artificially low prices and dumping commodities on markets that cannot compete.  Transnational trading companies ensure their win by buying at these artificially low prices yet selling at the market price which is higher.
    Another result of WTO and NAFTA has been to shift agricultural markets in developing countries away from national consumers and towards the exports market.  “This was accomplished by an array of measures under the guise of cutting deficits and stopping government interferences with “market forces”—measures such as elimination of subsidies, removal of tariff protection, reduction of credit—designed to make production of food or manufactures for the local market less profitable.  At the same time, a series of subsidies, special credits, and free services were created to promote production for export…” (World Hunger).  Not only has the forced shift to an export driven market in developing countries been bad for those economies it has also weakened the ability of the poor to feed themselves.  As an export driven market is put into place less food staples are being produced and more products such as fancy fruits are being produced leaving a developing country without enough to feed itself.  
    Many countries are left without any choice except to be part of the WTO.  In a fiercely competitive globalized marketplace, developing countries either join or are left out of the global economy.  The WTO is a system of governance that is certainly undemocratic and definitely non-transparent, it is an organization that favors profit above all, even above human rights.  The WTO consists of seventeen substantive agreements that are to be enforced by all members.    Any laws or policies of a given country found to impinge upon a corporations profit making ability are to either be eliminated or changed regardless of the environmental or human consequences, if not then a country faces trade sanctions which can be extremely harmful.
    To summarize the effects of “free trade” agricultural policies on both small farmers and food security we will review the following list which also has new information:
•    Small and medium sized farmers around the world lose their land to agribusiness as they are out-competed in the marketplace and are forced to sell or migrate.  An example of this is that 2% of farms in the U.S. constitute 50% of American agricultural sales (ww.globalexchange.org).
•    Agreements under the WTO give almost limitless rights to transnational corporations that are producing genetically modified organisms which under the WTO must be treated the same as conventional organisms thus leaving the consumer unaware.
•    “Dumping” is disguised as subsidies by agribusiness whom floods the market with artificially priced agricultural commodities out-competing small and medium sized farmers.
•     Increasing hunger even further are the tax and tariff restrictions imposed by structural adjustment programs.  Structural adjustment programs come out of loan agreements between a poor country and the IMF or World Bank and require the receiving country to drop taxes and tariffs on imported products which are both traditionally sources of income for a country’s government.  Often these structural adjustment programs or SAP’s require that a country grow certain amounts of certain export products therefore once again shifting agricultural production away from food staples for the hungry.  SAP’s require a number of other things including sometimes the privatization of public services.
•    The WTO imposes an agreement called TRIPs that establishes “global and uniform protection for trademarks, copyrights and patents.  The TRIPs agreement undermines global access to and distribution of seeds and, therefore, the food supply.  As corporations begin to patent seeds, local farmers must pay annual fees, and/or sign technology use agreements that limit their use of the seeds…Subsistence farmers cannot afford the cost of purchasing new seeds each year” (www.globalexchange.org).
•    Since the implementation of WTO and NAFTA food prices and hunger have risen.  Agribusiness has experienced tremendous profits however and poor farmers have become more dependent on their imports.
•    The WTO and NAFTA have both caused a decrease in democracy for all parties concerned.
•    Last but not least is the cost of environmental degradation not reflected in cheap food prices.  Due to the WTO and NAFTA now more than ever tax payers are stuck with the clean up bill leftover from the environmental degradation of industrial agriculture.

    Now that you have a basic understanding of the harm of “free trade” on the poor and hungry of the world you can be a better educated global citizen.  Although this brief overview does not provide any answers hopefully it provides the means to have valuable and informative discussions with others in your life so that they too may be educated and aware of these issues.  Now the next step is to do further research and become active in any way that you can.  Food security should be a right held by all human beings and should no longer have to be in question, together we can work to change this….




                Works Cited/Consulted:
“Food Security, Farming, and the FTAA and WTO”.  10 December 2003 (www.globalexchange.org).

Lappe, Frances Moore, Joseph Collins, and Peter Rosset with Luis Esparza.  World     Hunger: 12 Myths.  New York: Grove Press, 1998.


“Towards Food Sovereignty:  Constructing an Alternative to the World Trade     Organization’s Agreement on Agriculture”.  10 December 2003      (www.tradeobservatory.org).

Public Citizen Pocket Trade Lawyer, The Alphabet Soup of Globalization.  10 December     2003  (www.tradewatch.org).