In this time of high agriculture prices, we know someone is making a lot of money. On the buying side of the farm chain, Cargill reports third quarter net earnings of over $1 billion this week, a 69 percent increase from last year. On the input side, Monsanto announced record earnings earlier this month, also over $1 billion for its second quarter.
In theory, higher global prices should represent an important opportunity for farmers and rural communities in developing countries. But according to a new report released today by IATP's Anne Laure Constantin, many of the benefits of high prices are not finding their way to farmers due to higher production costs and the dismantling of important agriculture policy tools (thanks to World Bank, IMF and WTO policies) designed to help ramp up production and manage supply to address price volatility.
On Sunday, trade ministers from around the world will gather in Accra, Ghana for the United Nations Conference on Trade and Development (UNCTAD). The meeting represents an important opportunity to address the current failings in agriculture markets. You can follow the latest happenings at the UNCTAD XII meeting at IATP's UNCTAD web page.
Here is IATP's press release from today:
Can High Agriculture Prices Spur Development?
UNCTAD Meeting an Opportunity to Address Agriculture Markets, New Report
Minneapolis/Accra – Trade ministers gathering in Accra, Ghana for the United Nations Conference on Trade and Development (UNCTAD) should take steps to support agriculture and manage supplies to address price volatility, according to a new paper by the Institute for Agriculture and Trade Policy (IATP).
“A Time of High Prices: An Opportunity for the Rural Poor?” written by IATP’s Trade Information Project Officer Anne Laure Constantin, is being released in Accra today, and is available at www.iatp.org.
The paper finds that governments have been limited in their ability to help farmers take advantage of higher prices – due to free trade economics pushed by the World Bank, International Monetary Fund and World Trade Organization. Trade liberalization has encouraged the dismantling of agriculture programs in many developing countries, making it difficult to ramp up production and manage supplies to stabilize prices.
“The push to deregulate national and international agriculture markets needs to be reassessed,” said Constantin. “UNCTAD has historically been at the intersection of commodities and development. They could play a constructive role in addressing unfair markets and stabilizing prices.”
The paper found that while agriculture prices are rising almost across the board, farmers in poor countries aren’t benefitting as much as they could. Instead, many of them suffer from the spike in food prices. Skyrocketing energy and input (fertilizer and seed) costs are increasing the cost of production. Gains from export earnings are being swallowed up by the exporting company and profits have not found their way back to farmers.
The paper called for:
· UNCTAD XII to reassess the need to regulate agriculture markets. High prices can be a tool for development and poverty alleviation, but they will not achieve these aims if left to highly volatile and concentrated global markets;
· Greater support for the agriculture sector, particularly in developing countries;
· Coordinated action to manage agriculture supply to address price volatility;
· Regulation of the food value chain to address the market power of transnational corporations and deliver on a fair distribution of benefits from producers to consumers;
· Promotion of environmentally sustainable methods of production including assistance adapting agriculture to climate change;
· Bioenergy policies that don’t threaten food security and adapt to local conditions and needs.
Constantin and IATP’s Director of Trade and Global Governance, Alexandra Spieldoch, are in Accra at a civil society forum from April 17-19, and then monitoring the UNCTAD meeting from April 20-24. You can find updates on all that is happening at the UNCTAD XII Ministerial at: http://www.iatp.org/unctadxii/
