Making a Profit Out of The Food Crisis: From A Brave New World Bank to Monsanto

The Rome Summit turned out to be a sham, which resulted in a declaration that let biofuels producers off the hook, opened up space for the world-wide spread of GM seeds and for the further liberalization of agricultural markets. Alternative policy choices being proposed by a broad array of food sovereignty campaigners, peasant farmers’ groups, economists and human rights organizations were not simply crowded out, they were actively suppressed.

The crisis itself certainly merited attention. Global food prices have risen 83% over the last three years while recent price rises have only accelerated this trend. According to the FAO, there has been a 45% increase in their world food price index during just the past nine months while the Economist’s own food price index puts wheat prices 130% above last year’s levels.

These developments have hit the developing world particularly hard, and not just because poorer people spend a relatively higher proportion of their income on food. Previous bouts of neoliberal structural adjustment at the request of financial institutions already placed many national economies in a precarious state and often led directly to higher food prices.

This general situation combined with recent price rises has contributed to the wave of food riots that has taken hold in countries as diverse as Haiti, Indonesia, Mexico, Bangladesh, Burkina Faso, Egypt, Senegal, Cameroon, Morocco, Yemen, Somalia and the Philippines – showing with crystal clarity the global scale of the problem.

A brave new World Bank?

These food riots, and the specter of many millions of hungry, radicalized peasants and slum dwellers has spurred the World Bank and UN to react. However, with crisis has come opportunity. As Naomi Klein discusses in her book The Shock Doctrine – neoliberalism works best when societies are prepared for its implementation via societal "shock." Debt and hunger – both products of rising food and oil prices – are generating just such a shock. So while there is a fear of instability, there is also a sense of opportunity.

Critics of the World Bank have long questioned its motives in dispensing aid to poorer nations and have attacked the conditionalities that it has attached to its loans as a means of opening up under-developed economies to corporate predation, yet the IMF and World Bank have stumbled in recent years. This has partly been due to their failed policies, but also due to a credit glut brought on by spiraling oil prices. Smaller nations have not needed the services of the global institutions and their power has begun to wane. But with the credit crunch and rising food prices, some nations are headed back to the trough.

Eric Holt-Gimenez of Food First thinks that this represents an opportunity for the World Bank to regain some of its lost influence. As he told me, "For the World Bank, the food crisis comes at a perfect time." With the credit glut and countries turning away from the Bank, "the challenge became how to get countries of the global south to borrow again."

Rising food prices have fortunate effects for the Bank. As Holt-Gimenez continued, "The world food crisis solves both the problem of over-accumulation of finance capital and the problem of overproduction of grain, that neither biofuels nor the beef industry is capable of sopping up."

Hence, when the battle for the world’s fields and bellies shifted to Rome, the World Bank launched a PR blitz, announcing the launch of a $1.2 billion "fast-track facility for [the] food crisis" including $200 million in grants "targeted at the vulnerable in the world’s poorest countries." Haiti ($10 million), Liberia ($10 million) and Djibouti ($5 million) have since become the first nations to receive such assistance, although as Bank chief Robert Zoellick says, this will be part of "longer-term solution that must involve many countries and institutions," including the FAO, meeting in Rome.

But this was simply PR. Moves to restructure the global economy to protect small producers from market fluctuations and the predations of agribusiness giants were strikingly absent from the Bank’s response, just as they were absent from the outcome of the Rome summit itself.

Sidelining the world

This absence was not because of a lack of well-articulated alternatives. A bottom-up alternative to corporate-led agricultural globalization is, in fact, readily available. As a recent statement from the campaigning NGO GRAIN puts it, "Peasant organisations and their allies have clear, viable ideas about how to organize production and services and how to run markets and even regional and international trade. Ditto for labor unions and the urban poor, who have an important role to play in defining food policy." These groups were all present in Rome, holding the parallel Terra Preta summit to air their ideas and causes.

Unfortunately, the problem was that over at the main summit those in power simply weren’t listening. The FAO shut its ears to alternative notions of agricultural development, turning its summit into a rubber-stamping exercise that put profits firmly before people and land.

This is shown in heartbreaking detail by the FAO’s own preparatory documents for the summit. As with all gatherings of international institutions, the FAO consulted its "stakeholders" – although some decidedly more closely than others. When it consulted its "civil society" stakeholders, the result was perhaps the most thorough analysis of how to solve the food crisis yet delivered.

From raising awareness of consumption patterns in the developed world, promoting sustainable farming practices, setting up a framework to tackle climate change without harming rural livelihoods to disseminating information on climate change and methods of cultivation, the civil society stakeholders made some sensible recommendations for the FAO.

It recommended that bio-energy (in the form of sustainably harvested local sources such as plant products or animal dung) be promoted instead of biofuels. It argued that the FAO should demand that governments adopt measures to prevent the dispossession of rural people for plantations and carbon offset schemes. It proposed that the FAO promote seed sharing and document and disseminate indigenous knowledge. It advocated the protection of biodiversity by local peoples, while it also called for the Right to Food to guide global agricultural policies, not the right to profit.

It was roundly ignored.

Patrick Mulvany, senior policy adviser at UK based NGO Practical Action (and a participant in the civil society consultation) told me that at a June 2nd plenary meeting with FAO officials, activists from Via Campesina attacked the FAO process. Speakers from the peasant activist group, which had been shut out of February’s consultation meetings, called the summit a "sham exercise" while others questioned why recommendations from the consultation were completely absent from the summit agenda.

Not only that, but participants also asked FAO staff where the findings of the FAO convened International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD) had gone. That report, which recommended support for small-scale agriculture and attacked biofuels and intellectual property rights, was similarly absent from the summit agenda.

As Mulvany put it, the feeling was that the whole consultation was "a token exercise so that [the FAO and World Bank] could say that there was a consultation with civil society."

At the summit itself, civil society representatives were dismayed to discover that they alone would be forced to enter via the venue’s rear entrance. Once inside, they were permitted only a 90-minute forum with an agenda set by the FAO. Meanwhile, according to Mulvany, a private sector round-table upstairs was to be addressed by Kofi Annan, the FAO’s head Jaques Diouf and representatives of agribusiness giants like Monsanto and Syngenta.

Other attendants saw the summit as a stage for leaders to use to enhance their images. Helena Paul, head of UK based not for profit Econexus, told me that "The summit has become [an] "Important"…chance for leaders to come to make their pronouncements." While the leaders strutted, Paul told me, and aid pledges trickled in, "pledges are not going to address the underlying crisis. They cannot address the problems of monoculture and industrial agriculture."

A new greed revolution?

As the summit unfolded, it became clear that the agenda on display was not geared towards revitalizing local agriculture, protecting biodiversity, the health of consumers and the planet’s atmosphere. Instead of focusing on making trade fairer, restoring seed and grain banks, setting up marketing boards for local produce, agreeing to a moratorium on biofuel cultivation, supporting land reform efforts and setting up institutions to spread the accumulated knowledge of indigenous cultivators, the summit declaration called for more production and higher yields. Instead of recognizing the systemic failures of the global market, it was decided that better technology and investment could allow farmers to produce humanity out of its nutritional crisis.

As UN Secretary General Ban Ki Moon wrote in an editorial as the summit opened, "What’s needed, in effect, is a second green revolution of the sort than once transformed south-east Asia" while "there is no reason why productivity cannot be doubled within a relatively short span, easing scarcity worldwide." Ban’s predecessor, Kofi Annan (now chairman of the corporate-funded Alliance for a New Green Revolution in Africa) told the summit that "We hope to spur a green revolution in Africa which respects biodiversity and the continent’s distinct regions."

The end of summit declaration made increased production its center-piece, but it also promised increased investment in "science and technology for food and agriculture" a blanket term which could include support for genetic modification, leaving the door wide open for a new, genetic, Green Revolution to sweep the developing world.

The emphasis throughout the summit was on liberalization and deregulation. Despite the rhetoric about new "revolutions" to feed the world, what the FAO summit in Rome was really all about was opening up the political space to sweep away regulations and to pry open already gaping markets even further. GRAIN’s Henk Hobbelink told me that "The outcome of the Summit is even worse than what we feared." While "the governments did not even manage to agree to stop the disastrous advance of agrofuels [and] where they did agree, many of the proposed measures go exactly in the wrong direction: more market liberalisation, more high tech solutions, more freedom [for] corporations and more chemicals."

Food sovereignty campaigners came out of the summit frustrated. As Herman Kumara, of Via Campesina and the World Forum of Fisher Peoples put it, "The claims of social movements for more protection and support for sustainable and small scale food producers, for comprehensive Land and Agrarian Reforms and concrete measures against financial speculation have been totally ignored by the governments [at the summit]." Activist Flavio Valente of FIAN International commented that "It is disappointing, that the governments still do not recognize that the present food crisis is the result of decades of structural adjustment that have systematically violated the right to food."

Downhill all the way from the summit

Developments since the summit have closely followed what U.S. representatives in Rome called its "three prong strategy" to deal with the food crisis, while further marginalizing advocates of food sovereignty and small farmers.

U.S. Agriculture Secretary Ed Schafer, representing the Bush administration, told reporters in Rome that "first, the president has committed an immediate and expanded humanitarian response." Secondly, he said that "Longstanding issues of improving agriculture productivity, alleviating market bottlenecks and promoting market-based principles remain and therefore require immediate attention," making liberalization of global markets a key element of the strategy. Finally, Schafer concluded that "we ask all countries to allow the free flow of food and the safe technologies that produce that food."

The nature of this "safe technology" was made crystal clear, as Schafer continued, commenting that "certainly we think that GMOs (genetically modified organisms) are safe. We’ve been using them for 10 years in the United States and they have a proven effectiveness in increasing yields, in lowering the use of fertilizer, in providing better water and soil management and also increasing taste and appearance. So, you know, those are all good things."

Investment capital, agri-giants like Cargill, biotech firms (principally Monsanto) and the U.S. and European governments are marching in step with this strategy. A push to expand GMO cultivation and remove protections for local agriculture is clearly underway, and there is a massive amount of money at stake.

As the Financial Times put it in a recent report on Monsanto’s third quarter earnings, announced in late June, "Shares in the St Louis-based company have more than doubled in the past year as investors bet that spikes in crop prices and rising demand for food in the developing world would sustain strong markets both for seeds and for Monsanto’s Roundup herbicide."

Biotech firms are looking to thrive in the context of rising food prices. Few evince this better than Thomas West, a director of biotech affairs with Dupont, who told Reuters that "It is critical we keep moving forward…We have to yield and produce our way out of this." At the same biotech conference, Syngenta’s executive industry relations head director Jack Bernens said that "You can bring a number of tools to bear with biotechnology to solve problems…As food prices increase…it certainly brings a more practical perspective to the debate."

However, a few voices have been more circumspect. The Guardian disclosed in late June that Syngenta chairman Martin Taylor told an audience at a recent conference that "GM won’t solve the food crisis, at least not in the short term," citing a lack of crop varieties adapted to the climates of developing nations. He also called for the liberalization of regulations to "allow companies to develop thousands of GM crops for smaller, more diverse market" – indicating another strategy being employed by the biotech giants: pose as saviors and then blame government for restraining them from saving the world.

The only difference is that Syngenta sees itself as a savior in the near future. Monsanto wants to save us right now. The difference also reflects the fact that U.S. based Monsanto enjoys few regulations on its testing, while Syngenta – based in Europe – receives much more scrutiny from the EU and national governments.

However, this may all be changing. June saw the announcement of a major EU study and review group to look at the deregulation of GM crops across Europe. Britain’s Prime Minister Gordon Brown told reporters that GM could "play an important role in mitigating the effects of the food crisis" while the President of the EU Commission, Jose Manuel Barroso, went further. Barroso said that rising food prices had added what he called a "new dimension" to the debate on GM foods, adding that "The recent surge in agricultural commodity prices could be exacerbated by trade obstacles related to GMOs" and recommending that Europe join the U.S. in embracing biotechnology.

The British government is taking the lead in this shift. Aside from Gordon Brown’s comments, one of his lieutenants – Environment Minister Phil Woolas – told the Independent newspaper that "There is a growing question of whether GM crops can help the developing world out of the current food price crisis" adding that "It is a question that we as a nation need to ask ourselves."

The British government and the EU Commission are paving the way for the deregulation of GM crops and food, using the food crisis as cover, evidence that they are fully on board with Washington’s "three-prong strategy" to take advantage of rising food prices worldwide.

Indeed, this European drift towards a much more supportive policy on GMOs comes soon after Monsanto announced "a new push to feed the world." Using its privileged position at the FAO summit, Monsanto told gathered officials that it would be adopting "ambitious goals to boost global food production, funnelling millions into public research on wheat and rice…while pledging to double yields on corn and soy by 2030 [and pledging to] distribute seeds to African farmers royalty-free " as reported by Business Week magazine.

Monsanto’s CEO Hugh Grant has been candid about his company’s position, saying that "[philanthropy] isn’t a feel-good thing." For Monsanto, "Satisfying the demand curve is a great business opportunity." Global starvation has produced quite a demand curve, and GMOs are set to "satisfy" it. Despite the fact that drought tolerant, transgenic white corn remains some years off (most transgenic corn is used to produce animal feed) Monsanto is "working with African aid groups to develop" such crops. They are, in other words, putting in the ground work for the mass adoption of GM technology in the near future.

Seedy business

In reality, this strategy is using the misery of millions to push an unpopular, ineffective and potentially disastrous technology upon the world’s farmers and food consumers. As Bill Freese of the Washington-based Center for Food Safety told me, at present GM technology is totally inappropriate for African farmers. "GM techonology has been developed for big farmers in industrialized countries, and therefore we’ve seen most GM crops grown in the U.S." Freese explained. Round-up ready products have been developed for application on large arable farms, to save labor, a consideration that "is not relevant to small farmers in developing countries" who are more interested in effective farming techniques and the ability to market their crop than saving labor on small plots.

So far, crops grown in African soils and climates have not been genetically modified successfully. GM varieties of the sweet potato have been heavily promoted in the past, and then found to be a failure. A similar fate is befalling Bt Cotton, a Monsanto mainstay that was adopted in large numbers by Indian farmers, lured by the promise of high yields and lower labor. But a few seasons later, state governments in Maharashtra and Andhra Pradesh are suing for compensation for farmers who have seen no benefits from Monsanto’s seeds.

Farmers adopting GM crops in the U.S. have also seen their orders for pesticide rising, as weeds have developed resistance to Round-up – increasing the health risks associated with using Round-up Ready seeds and consuming the food that results. Some farmers have moved from Round-up to more potent brews such as Atrazine, a nerve agent banned in the EU, and 2,4-D which is linked to cancer and is acutely toxic to humans.

In fact, Freese told me that GM crops have proved to be "the definition of unsustainable agriculture," encouraging "massive reliance on a single chemical to contain weeds" and ensuring reliance on oil to power agricultural machinery and to produce the pesticides that it interacts with. What Freese calls "off the shelf technology" – agro-ecological principles such as intercropping to protect against insect pests and weeds – which is tailored around local biodiversity and knowledge of ecological processes, could boost yields and strengthen biodiversity without the attendant risks and failures associated with GMOs.

Yet GMOs are seeing a renaissance in the public eye as a result of this food crisis, and the Rome FAO summit gave them a springboard. The EU, U.S. and Monsanto have since run with the ball, but they have found very little interest from the governments and peoples of developing nations to join them. That is probably because GM as an agricultural technology has proven itself a failure. It is receiving support from governments in the developed world because it holds out the potential for almost limitless profits. For small farmers in the developing world, and for many farmers in the U.S. too, its promise has all too often proven to be nothing more than a sleekly packaged lie.


World agricultural policy is still being drafted to suit the interests of a tiny clique of investors and corporate officials. According to a recent paper by Food First analysts Eric Holt-Gimenez and Loren Peabody, three companies control the world’s grain trade: Cargill, Archer Daniels Midland and Bunge, while Monsanto controls around 60 percent of global seed production. The grain giants benefit from liberalization, allowing them to flood markets with subsidized produce, speculate on cross border currency shifts and source production from immiserated rural proletariats. At the same time, Monsanto benefits from the promotion of GM foods to boost food production, for obvious reasons.

It is the interests of these companies, and the interests that they support (including fertilizer manufacturers, supermarket chains and investment banks) that are being served by the response so far to the global food crisis. A better way of phrasing that may well be the global food opportunity, considering the nature of the response, which is precisely what we would expect from disaster capitalism at work.

Small farmers will continue to be swamped by heavily subsidized American and European crops, fall prey to land grabs to service the biofuel industry and become indentured to biotech corporations as the global seed supply becomes ever more consolidated. Biodiversity will continue to suffer assault from pesticides, stray genetic information, monoculture plantations and the search of poor peasants for firewood and food. Carbon emissions from grain shipment, farm equipment and deforestation will not abate. The recipe is, in short, one for catastrophe.

However, at the moment the response to this crisis is in the hands of those who are promoting such a ruinous agenda. It is true that alternative power blocs have arisen to challenge international financial institutions and to push for solutions to the food crisis – as in Latin America. India, the Philippines and Malaysia, meanwhile, have imposed restrictions on grain exports. Biofuels have been firmly knocked off their pedestal and their proponents are now scrambling to designate them as "sustainably produced." Food riots have also terrified global policy makers, while campaigners continue to put the food sovereignty alternative on the political table.

This is, as Mulvany told me, an "interesting conjuncture and an exciting time." There is a window for resistance to scale the walls of the global citadel. As Holt-Gimenez reminds us though, it is also a dangerous time, with governments pleading for "support" from the World Bank and a new wave of corporate enrichment likely to masquerade as charity.

What happened in Rome might not have determined the future of global farming, but it may be a turning point in the fight for a fair, sustainable, bottom-up world of fields, watersheds, forests, grasslands and valleys. We are being told — as Holt-Gimenez puts it — to "ask an arsonist to put out a forest fire." But I know who I’d trust to put our global food system right.

Sam Urquhart is a freelance journalist from London. He has written on environmental and social justice issues for Guerrilla News Network and Dissident Voice. He is also an activist with the Campaign Against Climate Change.

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