2[1].1 project background reading - agriculture

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2.1 Project Background Reading -- Agriculture

Capitalism, Agribusiness and the Food Sovereignty Alternativeby Ian Angus May 11, 2008

"Nowhere in the world, in no act of genocide, in no war, are so many people killed per minute,per hour and per day as those who are killed by hunger and poverty on our planet." Fidel

Castro, 1998

When food riots broke out in Haiti last month, the first country to respond was Venezuela.Within days, planes were on their way from Caracas, carrying 364 tons of badly needed food.The people of Haiti are "suffering from the attacks of the empire's global capitalism,"Venezuelan president Hugo Chvez said. "This calls for genuine and profound solidarity from

all of us. It is the least we can do for Haiti."

Venezuela's action is in the finest tradition of human solidarity. When people are hungry, weshould do our best to feed them. Venezuela's example should be applauded and emulated. Butaid, however necessary, is only a stopgap. To truly address the problem of world hunger, wemust understand and then change the system that causes it.

No shortage of food

The starting point for our analysis must be this: there is no shortage of food in the worldtoday.

Contrary to the 18th century warnings of Thomas Malthus and his modern followers, study afterstudy shows that global food production has consistently outstripped population growth, andthat there is more than enough food to feed everyone. According to the United Nations Foodand Agriculture Organization, enough food is produced in the world to provide over 2800calories a day to everyone substantially more than the minimum required for goodhealth, and about 18% more calories per person than in the 1960s, despite a significant

increase in total population.[1]

As the Food First Institute points out, "abundance, not scarcity, best describes the supplyof food in the world today."[2]


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Despite that, the most commonly proposed solution to world hunger is new technology toincrease food production.

The Alliance for a Green Revolution in Africa, funded by the Bill and Melinda Gates Foundationand the Rockefeller Foundation, aims to develop "more productive and resilient varieties ofAfrica's major food crops to enable Africa's small-scale farmers to produce larger, morediverse and reliable harvests."[3]

Similarly, the Manila-based International Rice Research Institute has initiated a public-privatepartnership "to increase rice production across Asia via the accelerated development andintroduction of hybrid rice technologies."[4]

And the president of the World Bank promises to help developing countries gain "access totechnology and science to boost yields."[5]

Scientific research is vitally important to the development of agriculture, but initiativesthat assume in advance that new seeds and chemicals are needed are neither credible

nor truly scientific. The fact that there is already enough food to feed the world showsthat the food crisis is not a technical problem it is a social and political problem.

Rather than asking how to increase production, our first question should be why, when so muchfood is available, are over 850 million people hungry and malnourished? Why do 18,000children die of hunger every day? Why can't the global food industry feed the hungry?

The profit system

The answer can be stated in one sentence. The global food industry is not organized tofeed the hungry; it is organized to generate profits for corporate agribusiness.

The agribusiness giants are achieving that objective very well indeed. This year, agribusinessprofits are soaring above last year's levels, while hungry people from Haiti to Egypt to Senegalwere taking to the streets to protest rising food prices. These figures are forjust three months atthe beginning of 2008.[6]

Grain Trading

Archer Daniels Midland (ADM). Gross profit: $1.15 billion, up 55% from last year

Cargill: Net earnings: $1.03 billion, up 86%

Bunge. Consolidated gross profit: $867 million, up 189%.

Seeds & herbicides

Monsanto. Gross profit: $2.23 billion, up 54%.

Dupont Agriculture and Nutrition. Pre-tax operating income: $786 million, up 21%


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Fertilizer

Potash Corporation. Net income: $66 million, up 185.9%

Mosaic. Net earnings: $520.8 million, up more than 1,200%

The companies listed above, plus a few more, are the monopoly or near-monopoly buyers andsellers of agricultural products around the world. Six companies control 85% of the world tradein grain; three control 83% of cocoa; three control 80% of the banana trade.[7] ADM, Cargill andBunge effectively control the world's corn, which means that they alone decide how much of

each year's crop goes to make ethanol, sweeteners, animal feed or human food.

As the editors of Hungry for Profit write, "The enormous power exerted by the largestagribusiness/food corporations allows them essentially to control the cost of their raw materialspurchased from farmers while at the same time keeping prices of food to the general public athigh enough levels to ensure large profits."[8]

Over the past three decades, transnational agribusiness companies have engineered amassive restructuring of global agriculture. Directly through their own market power andindirectly through governments and the World Bank, IMF and World Trade Organization, they

have changed the way food is grown and distributed around the world. The changes have hadwonderful effects on their profits, while simultaneously making global hunger worse andfood crises inevitable.

The assault on traditional farming

Today's food crisis doesn't stand alone: it is a manifestation of a farm crisis that has beenbuilding for decades.

Over the past three decades the rich countries of the north have forced poor countries to opentheir markets, then flooded those markets with subsidized food, with devastating results forThird World farming.

But the restructuring of global agriculture to the advantage of agribusiness giants didn't stopthere. In the same period, southern countries were convinced, cajoled and bullied into adoptingagricultural policies that promote export crops rather than food for domestic consumption, andfavor large-scale industrial agriculture that requires single-crop (monoculture) production, heavyuse of water, and massive quantities of fertilizer and pesticides. Increasingly, traditional

farming, organized by and for communities and families, has been pushed aside byindustrial farming organized by and for agribusinesses.

That transformation is the principal obstacle to a rational agriculture that could eliminatehunger. The focus on export agriculture has produced the absurd and tragic result that millionsof people are starving in countries that export food. In India, for example, over one-fifth of thepopulation is chronically hungry and 48% of children under five years old are malnourished.Nevertheless, India exported US$1.5 billion worth of milled rice and $322 million worth of wheatin 2004.[9]

In other countries, farmland that used to grow food for domestic consumption now growsluxuries for the north. Colombia, where 13% of the population is malnourished, produces andexports 62% of all cut flowers sold in the United States.


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In many cases the result of switching to export crops has produced results that would belaughable if they weren't so damaging. Kenya was self-sufficient in food until about 25 yearsago. Today it imports 80% of its food and 80% of its exports are other agriculturalproducts.[10]

The shift to industrial agriculture has driven millions of people off the land and intounemployment and poverty in the immense slums that now surround many of the world's cities.

The people who best know the land are being separated from it; their farms enclosed intogigantic outdoor factories that produce only for export. Hundreds of millions of people now mustdepend on food that's grown thousands of miles away because their homeland agriculture hasbeen transformed to meet the needs of agribusiness corporations. As recent months haveshown, the entire system is fragile: India's decision to rebuild its rice stocks made foodunaffordable for millions half a world away.

If the purpose of agriculture is to feed people, the changes to global agriculture in the past 30years make no sense. Industrial farming in the Third World has produced increasing amounts offood, but at the cost of driving millions off the land and into lives of chronic hunger and at thecost of poisoning air and water, and steadily decreasing the ability of the soil to deliver the foodwe need.

Contrary to the claims of agribusiness, the latest agricultural research, including morethan a decade of concrete experience in Cuba, proves that small and mid-sized farmsusing sustainable agri-ecological methods are much more productive and vastly lessdamaging to the environment than huge industrial farms.[11]

Industrial farming continues not because it is more productive, but because it has been able,

until now, to deliver uniform products in predictable quantities, bred specifically to resist damageduring shipment to distant markets. That's where the profit is, and profit is what counts, nomatter what the effect may be on earth, air, and water or even on hungry people.

Fighting for food sovereignty

The changes imposed by transnational agribusiness and its agencies have not goneunchallenged. One of the most important developments in the past 15 years has been theemergence of La Va Campesina (Peasant Way), an umbrella body that encompasses morethan 120 small farmers' and peasants' organizations in 56 countries, ranging from the Landless

Rural Workers Movement (MST) in Brazil to the National Farmers Union in Canada.

La Va Campesina initially advanced its program as a challenge to the "World Food Summit," a1996 UN-organized conference on global hunger that was attended by official representatives of185 countries. The participants in that meeting promised (and subsequently did nothing toachieve) the elimination of hunger and malnutrition by guaranteeing "sustainable food securityfor all people."[12]

As is typical of such events, the working people who are actually affected were excluded from

the discussions. Outside the doors, La Va Campesina proposed food sovereignty as analternative to food security. Simple access to food is not enough, they argued: what's needed isaccess to land, water, and resources, and the people affected must have the right to know andto decide about food policies. Food is too important to be left to the global market and themanipulations of agribusiness: world hunger can only be ended by re-establishing smalland mid-sized family farms as the key elements of food production.[13]


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Get the WTO out of agriculture. The regressive food policies that have been imposed on poorcountries by the World Bank and IMF are codified and enforced by the World TradeOrganization's Agreement on Agriculture. The AoA, as Afsar Jafri ofFocus on the Global Southwrites, is "biased in favour of capital-intensive, corporate agribusiness-driven and export-oriented agriculture."[18] That's not surprising, since the U.S. official who drafted and thennegotiated it was a former vice-president of agribusiness giant Cargill.

AoA should be abolished, and Third World countries should have the right to unilaterally cancelliberalization policies imposed through the World Bank, IMF, and WTO, as well as throughbilateral free trade agreements such as NAFTA and CAFTA.

Self-Determination for the Global South. The current attempts by the U.S. to destabilize andoverthrow the anti-imperialist governments of the ALBA group Venezuela, Bolivia, Cuba,Nicaragua and Grenada continue a long history of actions by northern countries to preventThird World countries from asserting control over their own destinies. Organizing against suchinterventions "in the belly of the monster" is thus a key component of the fight to win foodsovereignty around the world.

* * *

More than a century ago, Karl Marx wrote that despite its support for technical improvements,"the capitalist system works against a rational agriculture a rational agriculture isincompatible with the capitalist system."[19]

Today's food and farm crises completely confirm that judgment. A system that puts profit aheadof human needs has driven millions of producers off the land, undermined the earth'sproductivity while poisoning its air and water, and condemned nearly a billion people to chronic

hunger and malnutrition. The food crisis and farm crisis are rooted in an irrational, anti-humansystem. To feed the world, urban and rural working people must join hands to sweep thatsystem away.

Crisis in Food Prices Threatens Worldwide Starvation: Is it Genocide?by Richard C. Cook, April 24, 2008

Rising worldwide food prices are resulting in shortages, riots and protests, promises by

governments to expand food aid, expressions of concern by international bodies like the WorldBank, and stress on household budgets even in developed countries like the U.S. Did this justhappen or is there a plan?

Plenty of commentators think they have it figured out and blame such factors as greaterdemand for high-end protein menus by the increasingly upscale populations of China and India,weather factors relating to global warming such as drought in Australia , and the diversion ofanimal feed crops such as corn and soybeans to ethanol production. L.H. Teslik of the Councilon Foreign Relations speaks of bubbling inflation and rising oil prices.

There is also the question of whether a role is being played by commodity speculation. Theidea is that faced with the global financial crisis and the collapse of mortgage-based securities,investors are flocking to resource-based tangibles as a hedge against recession and the declineof the U.S. dollar. Hence gold is at record levels with oil keeping the same pace. How else toexplain, for instance, the doubling of the price of rice in Asian markets in less than two months?


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Standard Chartered Bank food commodities analyst Abah Ofon says, Fund money flowing intoagriculture has boosted prices. Its fashionable. This is the year of agricultural commodities.But the idea that speculation is at fault is disputed by no less than New York Times columnistPaul Krugman, one of the worlds leading monetary economists, who writes:

My problem with the speculative stories is that they all depend on something that holdsproduction or at least potential production off the market. The key point is that the spotprice equalizes the demand and supply of a commodity; speculation can drive up the futuresprice, but the spot price will only follow if the higher futures prices somehow reduce the quantityavailable for final consumers. The usual channel for this is an increase in inventories, asinvestors hoard the stuff in expectation of a higher price down the road. If this doesnt happen if the spot price doesnt follow the futures price then futures will presumably come down,as it turns out that buying futures produces losses.

Solid data in this area is hard to come by. Probably the chief common denominator amongcommentators, especially those advocating a supply and demand or global warmingperspective, is that they have so little solid information. Thus it is refreshing to find a study thatcontains meaningful statistics such as one appearing on the Executive Intelligence Reportwebsite entitled, To Defeat Famine: Kill the WTO by Marcia Merry Baker. One particularly

telling item is that after global food supplies were boosted through the Green Revolutionand related programs lasting into the 1970s, more recently, world food production hasactually declined.

Baker writes, World per-capita output of grains of all kinds (rice, wheat, corn, and others) hasbeen falling for twenty years. Whereas in 1986 it was 338 kilograms per person, it went down to303 by 2006. This decline in no way has been made up for by increasing amounts of otherstaple foodstuffstubers, legumes, or oil crops, which likewise are in insufficient supply.

Further, In twelve of the last twenty years, less grain has been produced than utilized that year

(for all purposesdirect human consumption, livestock feed, industrial and energy uses, andreserves). Accordingly, the amount of carryover stocks of grain from year to year has beendeclining to extreme danger levels. The diversion of food crops into biofuels is the nail in thecoffin. The latest estimate is that worldwide stockpiles of cereal crops of all kinds are expectedto fall to a twenty-five-year low of 405 million tons in 2008. That is down twenty-one million tons,or five percent, from their already reduced level in 2007.

Further, an increasing proportion of food crops is being produced by large multinationalcorporations whose power and reach has ballooned under the World Trade Organization andspin-offs like NAFTA even as small family-run farms have lost the protection of parity

pricing and been priced out of business. But the data suggest that a) the output ofagribusiness has failed to match the older, more diversified systems of farming; and b) asnations lose their ability to feed themselves, agricultural pricing becomes more subject tomonopolization.

The loss of agricultural self-sufficiency has been exacerbated in much of the developing worldby International Monetary Fund lending policies. Under the Washington consensus, entirenations have been forced to give up agricultural self-sufficiency and convert farmland to exportcommodities while displaced rural populations migrate to the slums of large cities such asLagos , Nigeria . Today those populations are the ones most grievously threatened withstarvation.

Then what is really going on?

First of all, lets get rid of the idea that we are seeing impersonal market forces at work.Supply and demand is not a lawits a policy. If a seller has an article in demand its a


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matter of choice whether he charges a premium when he offers it for sale. If hes a decent,

honest soul, maybe he wont necessarily charge all the market will bear, particularly if the itemis a necessity of life, such as food. Or maybe there will be a responsible public authority aroundthat will prohibit price gouging or else subsidize the purchaser, as often happens in creditmarkets. Of course public spirited action like this is itself a declining commodity in a worldafflicted with the kind of market fundamentalism and rampant privatization that has been therage since the 1980s Reagan Revolution.

Second, lets ask the question which any competent investigator should pose when starting outon the trail of a possible crime: Who benefits? Indeed we may be speaking of a crime on thescale of genocide if the events in question are a) avoidable; in which case the crime is one ofnegligent homicide; or b) planned, where we obviously have a conspiracy among thecontributing parties.

Those who benefit are obviously the ones who finance agricultural operations, those who arecharging monopoly prices for the commodities in demand, the various middlemen who bring theproducts to market after they leave the farm, and the owners or mortgagees of the land, retailspace, and other assets required to conduct the production/consumption cycle.

In other words, its the financial elite of the world who have gained complete control of the mostbasic necessity of life. This includes not only the international financiers who providecapitalization, including the leveraging of trading in commodity futures up to the 97 percentlevel, but even organized crime groups which the U.S. Department of Justice says havepenetrated world materials markets.

And is all this part of a long-term strategy by international finance to starve much of the worldspopulation in order to seize their land, control their natural resources, and enslave the rest whofear a similar fate? Already millions of people are losing their homes to housing inflation andforeclosure. Is actual or threatened physical starvation the next part of the scenario?

And where are the governmental authorities whose job it is to protect the public welfare both atthe national and international levels? These authorities long ago allowed a situation to develop,including in developed nations like the U.S. , where people in localities no longer have thesimple ability to feed themselves, even in emergencies. And not one of the candidatesremaining in the U.S. presidential electionJohn McCain, Hillary Clinton, nor Barack Obamahas addressed the food pricing issue. Indeed, all three are part of a government that has goneso far as to exclude much of the rising cost of food from measurements of inflation, aninnovation that took place on Bill Clintons watch.

It is now April. Already food has run out in some parts of the world. In a few months winter willcome, at least in the Northern Hemisphere. What will happen then? Are you certain food will beon your table? And suppose you wanted to make a contribution to your own well-being and tothat of your family and community by going into farming. In most parts of North America you canlook around and see plenty of underutilized land.

But could you do it? Could you buy or lease land and pay taxes on it after the galloping inflationof the real estate bubble? Could you get bank loans for equipment and operating expensesunder todays constrained credit conditions? Could you afford fuel for your equipment when

petroleum costs over $115 a barrel? Is water readily available from developed supplies and iselectricity available at regulated prices? Could you purchase anything other than genetically-modified seed? Would local supermarkets buy your produce when your prices are undercut bymassive corporate distributorships importing food from abroad? Does the system even exist inyour home town for marketing of local farm products?


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And does anyone in power even care?

Well, whether they do or not, We the People should care. One of the worst aspects of theconsumer society is the separation between the individual and the products of the earth weutilize. We always assume that whatever we need will be there so long as we have money inour bank account or the ability to charge on a credit card and pay later.

Such assumptions are losing their validity. Back in the 1960s people who were starting to

understand these things began a modest back to the land movement. Today it is timeto start one again. Except this time we need to do it right by demanding government policiesthat support it. This means low-cost credit, price supports, affordable utilities, favorable taxpolicies, and decisions by government and businesses to buy local. Food production cannotsafely be left in the hands of agribusiness and international finance capitalism any longer.

Thailand: From the Kitchen of the World to Food Sovereignty

by Isabelle Delforge, September 14, 2004

Mr. Anek Silapapun is sitting in a bright and comfortable meeting room under a massive picturerepresenting his companys top executives showing their respect to the King of Thailand. He isthe senior vice president of Crop Integration Business Group, affiliated to Charoen PokphandGroup (CP Group), Thailands largest corporate empire. CP Groups core business is foodproduction, but its activities stretch from seeds to telecom, and from animal feed to thefranchise of the Seven-Eleven retail shops. The groups sales in the year 2002 topped US$13billion and its CEO Dhanin Cheravanont is the richest man in Thailand, worth about US$1.3billion according to Forbes magazine. (1)

This scene captures the most striking contradictions of Thailands policies and practices onfood, trade and agriculture: a worldwide exporter paying tribute to the nations most renownedadvocate of a sufficiency economy; a major dealer in chemical agricultural inputs promotingsustainable and organic agriculture; and finally, a very wealthy agribusiness company buildingits empire on impoverished farmers.

For years, social movements in Thailand have been challenging the export-oriented economicstrategy of the government. The success of the agribusiness sector has led to farmers

bankruptcy, ecological devastation and social disaster. In their diversity, organisations offarmers, consumers, urban poor, NGOs and even some government bodies are nowsuggesting ways to break away from the cash-crop export-oriented strategy and to movetowards a national strategy of food sovereignty.

1. SUFFICIENCY ECONOMY IN THE GLOBAL KITCHEN

CP Groups ambition of becoming the kitchen of the world(2) has propelled the company tobecome one of the largest agribusiness in Asia. After initial expansion in Indonesia, Malaysia,Singapore, Taiwan and China, CP Food, affiliated to CP Group, is now entering the poorerparts of Europe and the Near East in its world conquest.(3) It is exporting processed food,

seeds and feed around the world. Since 1971, the company has implemented some productionpractices learned in the USA, notably contract farming, in an environment still largelydominated by subsistence farmers. Explaining the recent companys involvement in teaproduction in China, a CP executive said The obvious thing would have been to plant asubsistence crop, but we felt that an entrepreneurial, commercial approach would bring greaterbenefit to the locals. (4) For CP, food is business.


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In a landmark speech in December 1997, the highly influential monarch addressed the Thaipeople traumatised by the crisis: To be a tiger is not important. The important thing for us is tohave a self-supporting economy. A self-supporting economy means to have enough to survive.About this, I have often said that a self-sufficient economy does not mean that each family mustproduce its own food, weave and sew its own clothes. This is going too far, but I mean thateach village or each district must have relative self-sufficiency. Things that are produced insurplus can be sold, but should be sold in the same region, no too far so that the transportationcost is minimized. Some other people say that we must have an economy that involveexchange of goods that is called trade economy, not self-sufficient economy which isthought to be unsophisticated. However, Thailand is a country that is blessed with self-sufficientproductivity (5)

According to this vision, food is survival, livelihood and local development.

Nevertheless, this major exporting company has forged a strong alliance with the King ofThailand who has been actively advocating domestic consumption and sufficient economysince the economic crisis in 1997. CP Group is involved in a new company called SuvarnachadCo. established under the patronage of the King of Thailand to create a retail network ofGolden Place supermarkets. The new supermarkets distribute environmentally friendly goodsto improve quality of life of rural Thais, improving their health as well as their marketingopportunities.(6) The company is also running a project promoting diversification among poorfarmers in Buri Ram following the Kings concept.

DUAL TRACK: CONFLICTING POLICIES

Since then, in a schizophrenic move, the government has been talking about sufficiencyeconomy while heavily supporting export-oriented agriculture. At the national level, thegovernment has taken over Charoen Pokphands mission and set up a Kitchen of the World

initiative chaired by the Deputy Prime Minister Somkid Jatusripitak. At the APEC InvestmentMart in October 2003, the central piece of the Thai Pavilion was a kitchen of the world spaceboasting the success of the Thai agri-export sector. According to the WTO, Thailand rankednumber five in the world leading food exporters in 2001.

However, Viroj Na Ranong, researcher at the Thailand Development Research Institute notesthat public funds to support domestic markets and sufficiency economy remain insignificantcompared to the policies implemented to encourage exports. Most people like the concept ofsufficiency economy, he explained. In Thai, we also speak about contented economy: youshould be satisfied with what you have, you should not consume too much. It is close to the

Buddhist philosophy. But politically, it hasnt had any significant impact. The governmenttries to do a bit of everything at the same time. It gives some funds to please the King and theNGOs, but exporters always have the big share.(7)

A government supporting two models at the same time is not a Thai speciality. Underconsumers and farmers movements pressure, many governments are now showing somewillingness to protect subsistence and sustainable farming and local food production. But at thesame time, they keep promoting industrial agriculture for export, a model ideologicallysupported and imposed by the international financial institutions and backed by heavy pressurefrom agribusiness. This dual track is not only flawed because of the overwhelming priority

given to industrial agriculture. It is also inconsistent in the long run, industrial agricultureundermines the chances for a successful sufficiency economy at economic, social andenvironmental level.


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Promoting a sufficiency economy in an environment governed by free trade rules is notsustainable. Under various bilateral and multilateral agreements, Thailand has been opening upto the world market. Under the Agreement on Agriculture of the WTO, Thailand has to reduceimport tariffs on agriculture at an average of 24% within 10 years from 1995 to 2005. As aresult, farmers are increasingly subject to the volatility and the decline of commodity worldprices. For example, from 1996 to 2002, the average price per ton on the world market of Thairice has plummeted by 42%, from US$1213.69 to US$704.11.(8) Prices are going downbecause of the competition with cheap products imported from rich countries like Australia, theUS and the European Union, but also from China. In Thailand, food imports are rising sharply.From 1993 to 2002, food imports have more than doubled, rising in value from 52 to 133 billionbaht. (from US$2 billion to US$3 billion).(9)

Source: National Food Institute/Customs Department

At global level, only 10% of agricultural production is sold on the world market while 90% isconsumed in the country where it is grown. (10) Yet in the current neoliberal context, decliningprices on the international markets are dictating prices at domestic level, even though most ofthe food never reaches the global market.

In such situation, small farmers trying to make a living on local and domestic markets may alsohave to sell their surpluses at prices below production costs. Even if they do not produce forexport, they are de facto involved in the world market economy.

Market oriented agriculture has also pushed thousands of farmers out of their land. Rising costsfor external inputs, such as pesticides and fertilisers, and depressed prices have contributed todriving farmers into long-term indebtedness. Many used their land as collateral for borrowingand have subsequently lost it because they were unable to repay the loans. A study by theLand Development Department disclosed that market mechanisms played a vital role in thelandlessness of farmers. (11) Today, well over a million rural households are landless. (12)

Large extensions have been bought by rich landlords and speculators who left most of it idle or

underused. The Land Institute Foundation estimated that about 70 % of Thailands total area isunderused, accounting for an annual economic loss of 127,384 millions baht (or around US$ 3millions). (13)

Somsak Yoinchai, a Chiang Mai farmer producing longan (a sweet cousin of the lychee), mainlyfor export, explains that landlessness impedes the realisation of a subsistence economy inThailand. I agree with the sufficiency economy concept. It would be possible to base ouragriculture on self-reliance. But in order to do that, we need land. If the government is seriousabout sufficiency economy, it should redistribute land to every farmer in this country.(14)

ENVIRONMENTAL DISASTER

In Thailand, the development model promoted since the first National Economic DevelopmentPlan in 1961 led to large-scale changes in the agricultural sector. The traditional farmingsystems based on diversified production responding primarily to domestic and community
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2. ORGANIC AGRICULTURE: A WAY OF LIFE OR A NICHE MARKET?

A second contradiction emerging from Charoen Pokphands business practice is its professedinterest in chemical free agriculture and health food while it is a major retailer of chemical inputsand hybrid seeds requiring large quantities of pesticides and fertilisers. Chia Tai Group, thepesticides and seeds business of CP Group, has been mixing a wide range of imported agro-chemicals and selling them under its own brand in Asia for years. (21) In 1979, CP also enteredinto a partnership with US-based DeKalb Genetics Corporation, bought by Monsanto in 1998,to conduct research on hybrid corn and seeds. CP then acquired a quasi monopoly on maize

seeds in Thailand. Monsantos environmental records are extremely poor, ranging from theproduction of agent orange, a defoliant used by the US army during the Vietnam war to dioxincontamination due to the production of chemical agricultural products and to the domination ofthe highly controversial genetically modified seeds on the world market.

At the same time, CP Food is advertising its new policy of environmental friendliness (22) andlaunching its own health food practices, such as cultivation under a net to avoid pest infections.It has recently entered the organic market, producing rice under contract farming for export.According to Mr Anek Silapapun Organic rice is a new market for us. We produce less than100 tons a year. But we believe that this is the future. The domestic market is too small: we

target the European market. We hope to produce organic mango soon and to develop otherorganic products in the future.

In the aftermath of the bird flu outbreak early 2004, CP and the leaders of the poultry industryalso convinced the Thai authorities that industrial farming in closed farms was the best way toguarantee food safety. The government launched a plan to modernise poultry farming,providing loans to small farmers to replace open farms with industrial poultry houses. The costof such an investment has driven thousands of small chicken raisers out of business,consolidating the market position of CP and other major exporters. However, around the world,closed farms have also suffered from avian flu outbreaks. More over, far from being the safest

way to go, industrial farming has also created a wide range of safety problems like thedevelopment of salmonella bacteria, campy bacteria or antibiotics resistance.

CHEMICAL-FREE THAILAND

Like Charoen Pokphand, the Thai government is now showing a growing interest in organic andhealth food, after decades of promoting the green revolution package. For the first time, the 8thNational Economic and Social Development Plan (1997-2001) recognised sustainableagriculture, including organic farming. This was the result of years of campaigning andmobilising by farmers movements and NGOs. The plan sets an ambitious target of converting20% of arable land to sustainable agriculture, but no concrete actions were taken to meet thisgoal. Dr Sangsit Piriyarangsan, a high profile advisor of the former minister of interior and arespected academic even proposed a plan to declare chemical free Thailand. But this projectwas dropped when the Prime Minister Thaksin Shinawatra came to power in 2001. As a whole,the use of pesticides in Thailand keeps increasing. Amphon Kittiampon, director of the NationalAgricultural Commodity and Food Standard Office, said imports of toxic chemicals hadincreased by 119% in the past 10 years and the number of people falling ill as a result ofchemical-contaminated food and agricultural products increased by 148% within six years. (23)

As for transnational companies, the Thai authorities interest in safe food and organic

agriculture is largely driven by the attraction of foreign markets. one of Thailands mainstrategies to remain competitive despite the opening of its agricultural markets to giantproducers like China is to increase food safety standards notably under the GoodAgricultural Practice and Good Manufacture Practice concepts. It is also revealing that one of


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the few strictly organic projects currently implemented by the authorities is the Department ofExport Promotions Pilot Project on the Export of Organic Farm Products initiated in 1999.(24) Besides this project, the Department of Agriculture set up organic standards guidelinesand a certification body. To date, most of the producers certified are large exporters. Thismove towards sustainable agriculture for export is received with mixed feelings by varioussocial movements in Thailand.

Vitoon Ruenglertpanyakul, director of Greennet, a long time organic rice exporter for the fairtrade network, believes that it is clearly good news if more companies are getting involved in

organic agriculture and if the government is encouraging them It means that there will be lesschemicals around. Farmers, consumers and the environment will be less exposed to toxicresidues. Meanwhile, Greennet is working on a better integration between organic standardsand social criterias.

But the Alternative Agriculture Network (AAN) is more critical. According to Pongtip Samranjit ofthe Rural Reconstruction Alumni and Friends Association (RRAFA), an active member of theAAN We are trying to convince the government that alternative agriculture is not synonymouswith export oriented organic agriculture. Producing for export has led farmers to poverty,dependency and over exploitation of the land. The leaders of the AAN argue that contract

farming, even for organic products, allows large companies to take over the control of the wholeproduction process: they lend money to the farmers, they sell them seeds, pesticides andfertilizers and they buy the harvests. Sometimes, farmers cannot even eat the healthy rice theyare producing, because it already belongs to the company, said Samranjit. They have to buycheap conventional rice on the market. Monocropping, even for organic products, createsdependency. If the prices drop, farmers do not earn enough to meet ends. The AlternativeAgriculture Network first promotes self-sufficiency and production for local markets. Farmersgrow a wide range of crops and not only a single cash crop and only if they still have surpluses,they sell them to the global market.

According to Witoon Lianchamroon from Biothai, another organisation involved in the AAN,The biggest rice exporters, like Capital Rice, are currently producing organic rice undercontract farming agreements. Organic farmers involved with NGOs in the North-East are moreand more often approached by private companies interested in buying their whole harvest. Itlooks like an interesting evolution, but I see it as a serious threat for the movement. Thosecompanies see organic agriculture in terms of market, while it is a way of life. They might notuse pesticides, but they keep exploiting farmers by giving them a low price and by controllingthe production and market chain. This evolution shows us that alternative farming is not onlyabout changing agricultural practices. It is a different way of seeing social relationships. Wehave to put human beings back into the market. It is like in our traditional local markets: farmersand traders have a sense of responsibility there, they know peoples name. Consumers dont

need certification at this level. The exchange is based on trust and respect.

Today in Thailand, an estimate of 16, 761.375 rai of farmlands are under organic management(2,682 hectares). (25) This represents only 0.013 % of the total farmlands and involves about750 families. In 1995, an independent certification body (Organic Agriculture CertificationThailand) was recognised by international institutions such as the International Federation ofOrganic Agriculture Movements (IFOAM) and International Organic Accreditation Services. Buta much larger part of the agricultural area in the country is managed under alternativeagriculture practices, without any certification. The AAN alone works with up to 3470 farmingfamilies, at different stages of conversion towards sustainable farming practices. There is agrowing domestic market for healthy food and a rapid development of new outlets andcompanies offering chemical free products to Thai consumers.


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For Witoon Lianchamroon, there is a great potential in Thailand for the development ofalternative agriculture. The Thai public is supporting a shift away from chemicalagriculture and many farmers are ready to change their practices. But in order tomanage this transition, we need to move away from industrialised and export-orientedagriculture and to develop a radically different model, he says. This vision remains milesaway from the governments policy to promote safe food for a niche market, mainly abroad,while encouraging further industrialisation of agriculture which implies further over-exploitationof land and water resources, intensive use of hybrid seeds and agro-chemical inputs andfurther impoverishment of farmers.

3. THE KITCHEN OF THE WORLD WHERE FARMERS GO BANKRUPT

The third contradiction in Thai policies and practices regarding food, trade and agriculture isless visible in the Charoen Pokphands office. But it is striking everywhere in rural Thailand,where farmers are struggling to survive and to keep their land. CP and other major food groupsin Thailand show the picture of a thriving agribusiness sector, based on farming communitiesgoing into bankruptcy.

Even if CPs executives assure that their contract farmers are very well off, a Thai journalistwho investigated the company practices in the countryside describes the situation as slaverycontract farming. He found that farmers lost all decision power and were shouldering all therisks related to the production. According to his research, farmers were not getting richer, butmore indebted in the process.

Veerapon Sopa, an organic farmer in Buri Ram, said many farmers were now dependent onCP. ''The company comes and makes wonderful promises to farmers,'' he said. ''In my village, itconvinced many of us to start raising chickens for it. Then the exploitation comes. Farmershave to invest a lot of money in the beginning. There is a guaranteed price, but CP always finds

a way to pay less, arguing that the farmers didn't respect the standards, that the quality is nogood, that the production is late. Then contract farmers become very indebted. (26)

Contract farmers become extremely dependent on the world markets demand and theybecome factory workers in their own field: The only difference is that they have no company totake the responsibility of securing their jobs, their social welfare, etc.

PRODUCING MORE FOR LESS

Since the financial crisis in 1997, even as food exports have been rising, farmers have become

increasingly vulnerable. While food exports volumes increased by 49% between 1997 and 2002(from 19,421 thousand tons in 97 to 28,926 in 2002), the total value has decreased slightly(from 10,552 to 9,997 millions dollars). Thailand is producing more for less. Under the currentneoliberal system, because of the constant decline in commodity prices on the world market,the country needs to keep increasing its production only to maintain the same revenue. Thisobviously puts a growing pressure on farmers income and on natural resources such as landand water.

Source: National Food Institute/Customs Department
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Between 1997 and 2000, even if exports shot up, real farm incomes have not increased. on theother hand, farm spending has increased and some years, it even exceed income. It istherefore fair to say that farmers are generally worse off than before the export boom. (27)Farmers indebtedness gives another indication of producers hardship in a very successfulfood exporting country.

From 1988 to 1995, while food exports where shooting up in Thailand, the percentage ofindebted agricultural households rose from 22.45% to 60% and the average debt by agricultural

household increased more than 10 fold, from 3,777 baht to 37,231 baht (US$151 to US$1478).(28) A research report by the Thailands Bank for Agriculture and Agricultural Cooperatives in2002 states that the total debt of the agricultural sector was about 411 billion baht (US$ 9billion). (29) Because of indebtedness, many farmers have lost their lands and have to work aslabourers. More than one million farmers are landless, with an increase rate of 4.05% a year.(30)

According to the National Economic and Social Development Board Office, there were 9.9million poor people in Thailand in 2001, out of a population of 62 million. Eighty per cent of thepoor people lived in rural areas and most of them were farmers, with little land or no land at all.

Thailand is becoming the kitchen of the world, but alarming reports show that malnutritionremains rampant in the country, especially in the rural North-East. The United Nations Foodand Agriculture Organisation (FAO) estimates that 19% of Thailands 62.8 millions people arechronically undernourished. (31) The Ministry of Education conducted a survey in primary andpre-primary schools to assess the number of children suffering from malnutrition. In 2003, outof 6,633,809 students surveyed, more than one million suffered from malnutrition. This had adevastating impact on childrens development and learning capacity. (32)

TRADERS GET THE LIONS SHARE

This shows that the success story presented by Thailand all over the world is actually a disasterfor the vast majority of the population involved in agriculture and food production. Tradeliberalisation in the farming sector, instead of benefiting farmers and workers, has benefitedtraders, brokers and agribusiness companies.

An analysis of the rice market shows that even though Thailand has become one of the largestrice exporters in the world, this wealth has not been distributed equally between farmers andtraders. The producers, mainly small-scale farmers, acquire on average only 24% of the export

value, the remaining 76% going to exporters, traders and millers. (33)

AGRICULTURE SECTOR SQUEEZED

If Thailand is now giving a high national and international profile to its ambition of becoming theKitchen of the World, boasting the qualities of its 20 million farmers and food workers, thisorientation has not been reflected in policy priorities since the sixties. As Walden Bello wroteafter the 1997 Asian financial crisis: Government strategy has been consistently a lopsided,short-sighted one of milking and permanently subordinating agriculture to urban commercial-industrial interests, with little concern for the future of agriculture, rather than a balanced oneaimed at gradually reducing the agricultural sectors subsidization of industrialization and

making agricultural prosperity instead one of the engines of subsequent industrial growth. (34)


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This subordination of agriculture to the interests of the urban-industrial sector has not changedafter the 1997 crisis, even though the rural communities and the agricultural sector cushionedthe social impact of the economic crisis by providing the social safety net for an estimated 1.2million urban workers to go back to their rural area, and even though this sector still employsmore than half of the total workforce.

Agricultures share of the GDP of Thailand has declined from more than 30 % in the 1970s toabout 9% today. According to an ADB report Thai economic policy has contributed to the long-

term decline in agriculture. Although expenditures by the government are high by regionalstandards, public investment in agricultural research and investment has been modest Inaddition, trade policies have encouraged the development of capital intensive manufacturing,giving that sector an edge when competing for domestic resources. (35)

Wages in the agricultural sector have also been much lower than in the other sectors. In 2000,the average monthly wage in the farming sector was 3000 baht (US$ 73.7), while it was 5800baht (US$ 142) for the manufacturing sector and 6700 baht (US$ 164), more than the double,for the average wage in all sectors together. (36)

Behind the glitter of a successful food producer and exporter, the reality reveals a deep crisis inthe agriculture and food sector. This picture also shows that the neo-liberal model imposed byfinancial institutions all over the world does not benefit society as a whole and cannot betrusted as a base for a healthy national economic development. Even in a country like Thailand,where food exports are shooting up, people remain hungry, farmers get poorer, workers areexploited, the environment is exhausted and consumers get contaminated food.

4. TOWARDS A NATIONAL STRATEGY on FOOD SOVEREIGNTY

Facing greater inequities, marginalisation and vulnerability, farmers, fisher folks, ethnic minoritygroups and the workers, rural and urban poor in Thailand have been organising to reclaim asociety where social justice prevails.

The number of protests and demonstrations organised every day all over the country gives anindication of the variety and the dynamism of the opposition movements. According to onestudy, in 1988 there was an average of one demonstration every two days by localcommunities. This figure increased fourfold in 1994. In 1994, there were 739 demonstrationsduring the year, and in 1995 there were 754 demonstrations in total. (37)

Behind those protests, long lasting grassroots movements are proposing and implementingstrategies to survive and live a decent life. The way food is produced and distributed among thepopulation is at the heart of this alternative model. In the wide diversity of peoples struggles,main lines are emerging: communities reclaim the right to control natural resources, theypromote sustainable agriculture instead of chemical-dependent production systems, they givepriority to self-sufficiency and domestic markets over export-oriented and industrial agriculture.Large movements such as Assembly of the Poor, the Northern Peasant Federation, theAlternative Agriculture Network and many others are also pressuring the government for theright to participate in the policy decision making processes that directly impact them. Theyassert that food should not be treated as a commodity like any other, because it is a

cornerstone of public health, cultural life and livelihood. They are now heading towards astrategy of food sovereignty that reaffirms the right of peoples to define their own food andagriculture policies and practices that serve the rights of peoples to safe, healthy andecologically sustainable production. (38)


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* Isabelle Delforge is a research associate with Focus on the Global South based in Bangkok,Thailand

Notes

1. www.cpthailand.com

2. www.cpfoods.net

3. CP Group : From Seeds to Kitchen of the World, Insead-Euro-Asia Centre, 2002,Singapore.

4. CP Group : From Seeds to Kitchen of the World, idem

5. Thailand Human Development Report 2003, United Nations Development Programme -Royal Speech given on December 4, 1997.

6. The Nation, 2 June 2001

7. Interview in Bangkok, 19 June 2003.

8. Rice Production and Trading, Bank of Thailand, 2000 (http://www.bot.or.th/BOThomepage/DataBank/Real_Sector/agriculture/Rice/10-19-2001-Eng-i-

1/Rice2000_eng.htm)9. National Food Institute and Customs Department

10. Managing the invisible hand. Markets, farmers and international trade, Sofia Murphy,Institute for Agriculture and Trade Policy, April 2002.

11. Quoted in Alternative Country Report. Thailand Progress on Agenda 21 Proposals forSustainable Delvelopment, The Thai Working Group on the Peoples Agenda for SustainableDevelopment? NGO Coordinating Committee on Development, Bangkok, 2002.

12. Thailand: Country environmental policy integration analysis report, ADB, no date (2000 ?),www.adb.org/Environment/AEO/PUB/documents/thailand.pdf

13. The Land Institute Foundation : Project for the study of land holdings and utilization andeconomic and legal mesures for maximum land Utilization, Thailand Research Fund,December 2000.

14. Interview in Chiang Mai, 14 July 2003.

15. Alternative Country Report. Thailand Progress on Agenda 21 Proposals for SustainableDelvelopment, idem.

16. Thailand: Country environmental policy integration analysis report, idem

17. Thailand: Country environmental policy integration analysis report, idem

18. Bangkok Post, 7 September 2003.

19. 1 rai = 0.16 hectare/0.3954 acre.

20. Bangkok Post, 20 August 2003.

21. Bangkok Post, 21 October 2003

22. www.chiataigroup.com

23. Annual Report 2002 Charoen Pokphand Foods Public Company Limited.

24. Bangkok Post, 8 June 2003

25. V. Ruenglertpanyakul : Organic Agriculture in Thailand, Earth Net Foundation, Bangkok,

October 2001.26. Vitoon Ruenglertpanyakul : Organic Agriculture for Rural Poverty Alleviation Thailand,Economic and Social Commission for Asia and the Pacific, Bangkok, November 2001.

27. Interview in Bangkok, April 2004.
http://www.bot.or.th/BOThomepage/DataBank/Real_Sector/agriculture/Rice/10-19-2001-Eng-i-1/Rice2000_eng.htmhttp://www.bot.or.th/BOThomepage/DataBank/Real_Sector/agriculture/Rice/10-19-2001-Eng-i-1/Rice2000_eng.htmhttp://www.adb.org/Environment/AEO/PUB/documents/thailand.pdfhttp://www.adb.org/Environment/AEO/PUB/documents/thailand.pdfhttp://www.bot.or.th/BOThomepage/DataBank/Real_Sector/agriculture/Rice/10-19-2001-Eng-i-1/Rice2000_eng.htmhttp://www.bot.or.th/BOThomepage/DataBank/Real_Sector/agriculture/Rice/10-19-2001-Eng-i-1/Rice2000_eng.htm


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28. Challenging the Market Access Agenda Case study on rice from Thailand, Jacques-Chai Chomthongdi, Focus on the Global South, May 2004.

29. idem

30. Quoted in : R.Leonard, K.Narintarakul Na Ayutthaya : Thailands Land Titling Programme :securing land for the poor?, Northern Development Foundation, Chiang Mai, February 2003..

31. Thai Food Systems Policies: It is time to help the government to build a national strategy,Ministry of Public Health, Bangkok, March 2003

32. State of Food Insecurity in the World 2003, FAO

33. Matichon,19 June 2003.

34. Challenging the Market Access Agenda Case study on rice from Thailand, Jacques-Chai Chomthongdi, Focus on the Global South, May 2004.

35. W.Bello, S.Cunnigham, L.K Poh : A Siamese Tragedy. Development and disintegration inmodern Thailand, Focus on the Global South, Food First-White Lotus-Zed Books, 1998

36. Thailand Country Assistance Plan 2000-2002, ADB,(www.adb.org/Documents/CAPs/THA/default.asp)

37. Report of the Labor Force Survey 1999-2000, National Satistical Office.

38. Alternative Country Report. Thailand Progress on Agenda 21 Proposals fro SustainableDelvelopment, The Thai Working Group on the Peoples Agenda for SustainableDevelopment? NGO Coordinating Committee on Development, Bangkok, 2002.
http://www.adb.org/Documents/CAPs/THA/default.asphttp://www.adb.org/Documents/CAPs/THA/default.asp