GLOBALIZATION, PROFITEERING, LACK OF GENUINE AGRARIAN REFORM BEHIND WORSENING FOOD CRISIS

Civil society groups call October 16 ‘World Foodless Day’

As the world celebrates World Food Day today, research group IBON join civil society groups worldwide in denouncing globalization polices and corporate profiteering, which have made food a commodity for trade and speculation that worsened global hunger.

Global food prices have risen by 75% since 2000, according to the World Bank, while prices of rice, corn, wheat, and soybean have hit all-time highs. Prices of meat, poultry, eggs and dairy products naturally follow the upward trends of grains prices. Amid the global financial crisis, increased speculation in food and fuel prices is seen as a possible consequence that will further push food prices up and worsen the poor’s access to food.

The world is facing its worst food crisis that has been aggravated by trade liberalization policies imposed by international finance institutions (IFIs) like the International Monetary Fund and trade bodies such as the World Trade Organization. These policies have allowed intensified profiteering by food transnational corporations (TNCs). In fact while more and more people go hungry everyday, TNCs such as Cargill and grain traders such as Archer Daniels Midland reported increased profits as of the first quarter of 2008.

TNCs in its desire for more profits have continued to lobby IFIs and Third World government to implement globalization policies in food and agriculture, including liberalization of trade and investment in agriculture, privatization of public organs in agricultural extension services such as irrigation, trading and the like, and deregulation of government roles in pricing, marketing and even land reforms. These globalization policies compound the deep crisis of agriculture and food production in underdeveloped countries due to decades-old landlessness of farmers, backwardness of their tools and production, monopoly of land, tools and inputs, TNC control in production and trade, and government neglect. Thus, ironically, hunger is at its worst in rural communities in the Third World where most food and agricultural production take place.

Globalization has not only resulted in the increasing bankruptcy and worsening poverty and hunger of farmers and consumers, but also in continuously eroding local production and self-sufficiency of Third World countries.

Civil society, peasant groups, and people’s organizations around the world consider World Food Day an opportune time to send a strong message that farmers and people of the Third World reject globalization, trade liberalization, and TNC profiteering of agriculture. It is also a time to recognize the successful efforts of broad alliances of farmers and people’s organizations for strengthened protests against globalization, struggle against genuine agrarian reform, and relentlessly demand for social accountability. (end)

World Foodless Day events are being held in more than fourteen countries across Asia and being supported by civil society groups around the globe. For more details on the events of World Foodless Day, visit http://www.panap.net/wfd



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PROPOSAL TO EXTEND CARP TO INCREASE LAND RECONCENTRATION

Proposals of Malacañang and congressmen to reform and extend the Comprehensive Agrarian Reform Program (CARP) create more opportunities for land owners and agribusiness firms to further consolidate their control over agricultural lands, according to research group IBON Foundation.

IBON noted that proposals for CARP extension include the “farmland as collateral” provision, a key component of so-called market-oriented land reform. The research group said that farmers availing of the provision to access credit may find their lands foreclosed, resulting in reconsolidation of already-redistributed agricultural lands in the hands of landlords and large agribusiness firms. IBON pointed out that the present flawed program has failed to stop bankrupt farmers from selling or transferring distributed lands, despite 10-year prohibitions on such transfers.

Malacañang will also be able to use the proposal to push for its initiatives to develop corporate farms and facilitate foreign and local agricultural investment through the Agrarian Reform Community (ARC) concept, further increasing the insecurity of land tenure in the countryside. According to IBON, the proposal to extend CARP is meant to fine-tune the bankrupt program to continue restructuring local agriculture in order to suit the needs of big land owners and agro-corporations.

Bills filed at the House of Representatives are even more dangerous for small and landless farmers since introducing reforms to the flawed CARP undermines the historical and moral claim of farmers to own the land they till for free. Requiring farmers to pay for the land perpetuates one of the biggest flaws of CARP—that the program is essentially a real estate transaction between landlords and farmers, with the government as the middle man.

The present agrarian situation, according to IBON, proves that CARP in its 20 years of implementation has failed and has been used to legitimize various forms of land grabbing. Instead of extending the flawed CARP, IBON calls for a genuine program that is not designed to perpetuate landlord-business and agro-corporate interests but upholds land distribution as key for social justice.

BREAKING MONOPOLIES, REVERSING LIBERALIZATION: A STEP TO END RICE CRISIS


The presence of a rice cartel is only part of the monopoly control of land and capital in Philippine rice production, trade, and marketing and aggravated by neoliberal policies adhered to by the Philippine government

By Jennifer H. Guste

IBON Features– As the government insists there is enough rice available for everyone, it is now looking at rationing rice to three kilos per family, and has secured the importation of around 2.2 million metric tons (MT) of rice from Vietnam, Thailand and the United States. This is the country’s biggest volume of importation since 1998.

From being a self-sufficient and rice exporting country in the 1980s, the country has become a net importer of rice since 1993. It is now the world’s top importer of rice, the country’s staple food crop.

Why this has become so can be traced to the backwardness of Philippine agricultural production and the exploitative relations of production, which are both exacerbated by globalization. Production tools are outdated, almost all farms are not mechanized, more than half are not yet irrigated, and most of all, seven out of 10 peasants are still landless. Despite three agrarian reform programs, land is still in the hands of few families who control not only land but also trade and marketing. Aggravating the condition are the globalization policies of trade liberalization, privatization and deregulation adopted by the government since the late 1980s.

Rice Production in Chronic Crisis

Philippine average rice yield per hectare is stagnant. Since the 1990s, the country’s rice yield has averaged at 3 metric tons per hectare even as it records yearly increases in production. According to the International Rice Research Institute (IRRI), the required yield for the Philippines to sustain food security is 5.4 metric tons per hectare.

Philippine rice lands is only four million hectares compared to its counterparts in Asia. For instance, Thailand devotes more than 10 million hectares for its rice production; Vietnam has more than seven million hectares planted to rice.

Rice production remains small-scale and productivity is low. This situation is even worsened by the increasing instances of conversion of rice farms to commercial uses and conversion of crops from rice to export winners, which has put the country in constant state of crisis in its rice supply.
Meanwhile, landlessness and the absence of government support through production and price subsidies leave millions of Filipino rice farmers at the mercy of big land owners and traders.

Even with the use of hybrid rice that promises a boost in rice production with minimal lands devoted to rice farming, rice supply in the country is still under threat of shortage and government will always find reason to resort to rice importation to fill in its buffer stocks. According to the National Food Authority (NFA), the country can only supply approximately 90% of its total rice consumption; the rest, according to the NFA, would have to be imported.

In reality, government has practically stopped subsidizing local agriculture for decades, and can be seen from the meager budget allocations received by the agricultural and fisheries sector. Worse, the funds intended for the sector are even reportedly siphoned off to corruption.

Even its much-hyped Agriculture and Fisheries Modernization Act (AFMA) did little in improving post-harvest facilities or even significantly increasing irrigated rice farms.

Reinforcing backwardness

Policies of globalization on rice, i.e. trade liberalization (allowing rice imports), privatization (clipping NFA powers), and deregulation (lifting of government production and price support), which the government started to implement in the 1980s, has reinforced the rice crisis.

The privatization of the NFA, for one, has been one of the conditions for the Philippine government to avail of loans from the World Bank and the Asian Development Bank (ADB). The NFA was once allowed to engage in grains procurement and distribution using government buffer stock and subsidized pricing system as main intervention instruments. But since the 1980s as a result of reforms adopted by the Philippine government to comply with the World Bank and ADB prescriptions, the role of the NFA in ensuring the country’s food security and price stabilization has been reduced to being a “facilitator” of the market forces– the big rice traders and retailers.

The NFA has increasingly relied on rice imports for local distribution. On the other hand, from an average of 7.95% of total palay production in 1977-1983, and 3.63% from 1984 to 2000, NFA rice procurement from 2001 to 2006 was barely 0.05% of total palay production. The NFA is originally mandated to procure at least 12% of total palay production.

Other than the World Bank and ADB conditionalities for minimized NFA intervention in grains procurement and trading, under the Agreement on Agriculture (AoA) of the World Trade Organization, the country has been compelled to import a minimum volume of rice from other countries whether or not it produces rice sufficiently. Rice importation has increased as a consequence, from 0 in 1994 to 257,260 MT in 1995 and consistently increasing to 1.7 million MT by 2006.

Yet, with the current rice crisis, private traders have still renewed calls for the full privatization of the NFA. Secretary Arthur Yap of the Department of Agriculture is even entertaining options to lower tariffs on rice importation to encourage greater private sector participation in rice importation and trade. Presently, licensed private traders are allowed to import a minimum of 300,000 MT of rice but this according to the NFA has been hardly utilized by the private traders due to the 50% tariff on rice.

Ironically, instead of re-considering government subsidy to farmers’ production, an increase in the subsidy given to the NFA is even being considered to allow the state agency to shoulder some of the import costs of private importers!

Yap said the scheme would call for the NFA to import rice “through a tax-expenditure-subsidy scheme and the volume that NFA brings can be sold to the private sector for it to distribute on the basis of an equalization fee that they will bid for.” Under this plan, the private sector will be allowed initially to bring in 163,000 tons of rice this year, with each importer given a maximum volume of 2,500 tons.

Rice Price Speculation

Peasant organization Kilusang Magbubukid ng Pilipinas (KMP), on the other hand, maintains that there is no need to import rice. According to the group, if the projected 7.2 million MT palay output for this season is met, combined with the total rice inventory as of March 25, then there should be enough rice available for every Filipino table until the first week of October, even without importation.

In an interview with IBON Features, KMP chairperson Rafael Mariano said that the government is importing rice because it has already committed rice importations earlier from Vietnam and the US.
He said the NFA is importing rice because it has persistently failed to perform even its minimal procurement of 12% of the total palay production. Mariano added NFA has only procured only about 1% of palay production in the last cropping season, leaving most of the tradeable rice into the hands of big rice traders, particularly the so-called Big Seven cartel who now dictates the price of rice in the market.

In fact, a few days after the DA wrote a memorandum to the office of the President warning of the threat of a tightening global rice supply and thus the need to secure rice imports, news of a rice shortage in major markets in the NCR and in the provinces broke out. Subsequently, rice prices skyrocketed and created panic among rice retailers and consumers nationwide.

The same thing happened during the rice crisis in 1994-1995, largely a result of the semi-privatization of NFA which then procured only 0.5% of total palay production. Private traders seized the opportunity to create an artificial rice shortage and jacked up prices by as much as 90% to 100 percent.

The monopoly control in the trade and marketing of rice through the so-called Big Seven manipulates rice price increases especially during rice crises. The reduced role and intervention of the NFA in the rice market allows private traders to control both the trade in inputs and produce, thus influencing the movement of prices in the trade and marketing of rice.

Despite its import injections, the NFA’s limited distribution because of its minimal palay procurement also prevents the NFA from influencing retail rice prices. In fact, the NFA has distributed an annual average of only 6% of the nation’s rice requirements, and much of the rice distributed is even imported.

Ending Monopolies

The presence of a rice cartel is only part of the monopoly control of land and capital in Philippine rice production, trade, and marketing. It is a manifestation of the chronic rice crisis in the Philippines, which is aggravated and reinforced by neoliberal policies adhered to by the Philippine government.

There are doable measures to solve the chronic rice crisis the country. One step that government should do is to regain control of the trade and marketing of palay and rice to break the monopoly control of cartels. The country should also break away from binding agreements that government made to the GATT-WTO and reinstate agricultural tariffs while increasing support to Filipino farmers. Ultimately the crisis could be resolved by implementing a genuine agrarian reform program that do not only provide free distribution of land to farmers, but also provides input and capital subsidies, and investments in post-harvest facilities that will help end land monopoly.