Underlying the proposed FTAA agricultural rules is the concept that food should be treated like any other commodity--with a focus on trade and profit, not on fighting hunger and ensuring peoples’ survival. Multinational grain traders, agribusiness cartels and food processors have had a major hand in writing FTAA, so it’s not surprising they would be the winners under the proposed rules. Millions throughout the hemisphere rely on food they grow on small subsistence farms for their daily survival. FTAA rules would destroy these producers while promoting the transformation of the farmland they lose into vast plantations of intensive, chemical-soaked, industrial agriculture where a small number of the once-independent farmers can toil as exploited labor.
Trade agreements like NAFTA and WTO already have contributed to unprecedented control by global food cartels over access to seeds and other supplies, prices paid to farms for crops and food distribution systems. By 2000, the largest five grain trading companies controlled 75 percent of the world’s corn, wheat, and soybeans. Consider what NAFTA has meant for family farmers in the United States, Canada and Mexico. In the U.S. alone, over 38,310 small farms (with less than $100,000 annual income) disappeared between 1995 and 2002, as the prices paid farmers crashed to record lows. ADM’s profits leapt from $110 million in 1993 to $511 million in 2003, while Cargill’s net earnings from 1998 to 2002 alone jumped from $468 million to $827 million. ADM and Cargill are two of the four agribusinesses that control 81% of the world’s corn trade.
Ironically, while large multinational agribusiness cartels are the main beneficiaries of the globalization of agriculture, they are also the main recipient of government agricultural subsidies. These massive payments, which amounted to $170 billion in the 2002 U.S. Farm Bill, encourage overproduction. Too much supply suppresses the prices paid to farmers – which has pushed prices for some crops to as low as 46 percent below the cost of production. Worse, the NAFTA-FTAA model not only allows dumping of these low-priced crops in other countries, but under NAFTA food dumping has increased. Competition against this dumped food pushes small-scale farmers into bankruptcy in both developing and developed countries. Dumping is particularly devastating for campesinos in developing countries, which are too poor to protect their agricultural sectors with massive subsidies, and have been forced to remove many protections – such as quotas against dumped food – as part of trade agreements or because of International Monetary Fund (IMF)/World Bank loan conditions.
The result? More hunger! The world produces more than enough food to feed everyone, but unfair trade rules threaten the ability of people, localities, regions, and nations either to grow food of sufficient quantity, variety and quality to meet nutritional needs or to buy it. The global small farmer network Via Campesina calls for recognition of the right to “food sovereignty.” This means that control of land and seeds is in the hands of local farmers and that governments can guarantee food security to their inhabitants. Instead, FTAA rules will make every country dependent on the large food trading corporations which drive out small-scale farmers and then jack up consumer food prices. Consider Mexico under NAFTA. Dumped U.S. corn caused real prices paid to farmers there to drop 70 percent, which has resulted in the destruction of an estimated 2.7 million farm jobs since NAFTA came into effect. According to trade theory, these “displaced” campesinos will be re-employed in a more productive sector of the economy. In reality they are forced to migrate to urban areas where unemployment and underemployment is the norm. Or they move to the border maquiladoras, where workers typically do not earn enough to pay for basic staples, including tortillas, the price of which has increased more than 50 percent under NAFTA even as corn prices have plummeted.