The EU’s responsibility in the global food crisis:

19th June 2008

(note: you can also read a French translation of this letter)

Trade liberalisation and deregulation are “false solutions”

Letter addressed by more than 35 European civil society organisations, networks and social movements to EU trade, agriculture and energy ministers ahead of the European Council.

EU-flagTo: Trade Ministers, Agriculture Ministers, Development and Energy Ministers MEPs and National Parliamentarians of EU Member States CC: EU Trade Commissioner Peter Mandelson EU Agriculture Commissioner Marianne Fischer Boel EU Development Commissioner Louis Michel EU Energy Commissioner Andris Piebalgs Subject: Further deregulation and liberalization of agriculture and trade will Not Solve the Global Food Crisis – Time for Real Solutions Dear Minister,

The global food system is in a state of structural crisis. Millions of people can no longer afford to access the food they need, increasing the already unacceptable levels of global hunger and malnutrition. Short-term mitigation measures would only temporarily dampen the effects of fundamentally destructive policies. The current food price crisis is the result of three decades of market deregulation in agriculture, of agricultural policies which have promoted industrialized agriculture rather than sustainable smallholder farming, and of structural adjustment measures which have wiped out government support for food production in the developing world – Africa in particular 1;

The EU has a major responsibility in today’s food crisis:

  • Its unsustainable Common Agriculture Policy has impacted negatively for years on developing countries’ productive capacities and blocked their farmers’ access to their local markets, thus helping to make these countries dependent on food imports;
  • Its External Trade Policy seeks to further open developing countries’ markets through both negotiations at the WTO and bilateral Free Trade Agreements;
  • Its cooperation programmes include promotion of input-heavy production models, like the so-called “Green Revolution”, which increase the dependence of small-scale farmers on highly volatile and rising oil prices;
  • Its energy policies promote agrofuels for transport, contributing to the sharp surges in the prices of food crops 2.
  • It lends an open ear to the agribusiness lobby, thereby supporting the corporate takeover of global food systems.

The signing social movements and civil society organizations are deeply concerned with the European Commission’s proposals to deal with the current crisis. A deeper deregulation of food production and trade and the maintenance of the EU 10% agrofuel target – which are reiterated in the proposed response of the EU to be discussed at the coming EU Council of Ministers meeting in June – are not the answer.

These proposals will not solve the food crisis for the following reasons:

Existing WTO and bilateral or regional trade agreements push across-the-board liberalization, which worsens volatility of food prices leading to increased dependence on international markets and decreased investment in local food production. 3 Two-thirds of the developing countries are now net food importers. As M. Barnier, French Agriculture Minister, recently suggested 4: “If free-trade had reduced hunger in the world, we would know it”.2. High food prices provide enormous benefits to the transnational retailing sector, agribusinesses and the commodity cartels that control trade in food and agriculture. 5 The Doha Round would provoke further market concentration and strengthen the position of transnational companies in agricultural markets.

3. Trade “liberalization” does not tackle the major challenges facing the global food system, which include climate change, natural resource depletion, the quadrupling of oil prices, the lack of competition in world commodity markets, financial speculation, the rapid expansion of unsustainable agrofuels production, massive violation of peoples’ right of access to land and water.

4. The CAP health check proposals, proposing more of the same failed policies, do not take the present crisis into account. The Commission is taking the risk that, unless it wins greater social and environmental legitimacy, the CAP could be retired from the scene in the debate for 2013 instead of being reformed to meet the needs of European farmers and citizens.

5. Maintaining the EU agrofuels target will continue to put pressure on land and give a positive signal to the international financial speculation gambling with food.

We are calling for agriculture, food, energy and trade policies that will stabilize food production and distribution to meet the global demand for healthy, adequate, and affordable food and that privilege development, employment and food security objectives. The EU must start to take a long-term view of the challenges facing agriculture.We believe that, in order to take steps towards a real solution of the food price crisis, the EU Commission and EU Member States must:

  • Help shape trade rules that are supportive of the food sovereignty and food security interests of developing countries. This implies a radical review of the EU’s external trade policy and a commitment to stop forcing further trade liberalisation on developing countries; – Step back from the mandatory target on agrofuels by 2020 and support the development of strategies and proposals aimed at reducing overall energy use and
  • Use the opportunity of the ongoing Health Check of the Common Agriculture Policy to reinforce or re-introduce regulatory policy measures which help stabilize agricultural prices in the interests of farmers and consumers and which strengthen socially and ecologically sustainable food, fibre and fuel production.
  • Take steps to regulate the financial market, in particular to limit the possibilities of institutional investors to invest in the commodities market.

We look forward to discussing these issues further with you, and to seeing the EU propose real solutions to the global food crisis.1 As argued by the representatives of rural producers and civil society organizations who met in Rome from 1 to 4 June in parallel to the FAO High Level Conference which dramatically registered the world community’s failure to address the crisis. See final statement of “Terra Preta: Forum on the Food Crisis, Climate Change, Agrofuels and Food Sovereignty”.2 The IMF has commented that increasing demand for biofuels explains “20 to 30%” of recent food price increases. This is corroborated by the International Food Policy Research Institute (IFPRI) which puts the contribution of biofuels to the crisis at 30%. The Commission’s conservative estimate that the EU 10% target will lead to a 3-6% price increase in cereals could result in up to 100 million extra people in hunger by 2020.3 Trade liberalization has eroded the ability of a number of developing countries to feed themselves, for exampleMexico, Bangladesh, Indonesia and Mali. The removal of tariff barriers has resulted in dumping of heavilysubsidized commodities in developing countries such as Ghana, Kenya, the Philippines, Jamaica and Honduras,while undermining local food production.4 France Inter, 7/9, May 31st, 20085 One of the largest global grain traders, Cargill, announced in April 2008 that its third quarter profits rose 86% toUS$1.03 billion, in the midst of the global food crisis. Bunge saw its profits in the last quarter of 2007 increase by77% compared with the same period in 2006. Archer Daniel Midland’s (ADM’s) profits in 2007 rose by 65%.

      Sincerely, The signatory organizations 1 ActionAid International


        2 Afrique-Europe Foi & Justice Network


          3 Aitec France 4 Association for the Development of the Romanian Social Forum


            5 Attac Austria


              6 Attac France


                7 Attac Maroc


                  8 Campania per la Riforma de la Banca Mondiale


                    9 CPE – European Farmers coordination/Coordination Paysanne Européenne


                      10 Center for Encounter and active Non-Violence Austria 11 Coalition of the Flemish North-South Movement – 11.11.11


                        12 Corporare Europe Observatory


                          13 Crocevia


                            14 Eccologistas en Accion


                              15 Fair


                                16 Food and Water Watch Europe


                                  17 Friends of the Earth England, Wales and Northern Ireland

                                England, Wales and Northern Ireland

                                    18 Friends of the Earth Europe


                                      19 Global Responsibility – Austrian Platform for Development and Humanitarian Aid


                                        20 Manitese


                                          21 OeIE-Kaernten


                                            22 RegenWald


                                              23 Solidariedad Imigrante


                                                24 Soya Alliance

                                              United Kingdom

                                                  25 Terra Nuova


                                                    26 Terre Contadine-Itali Africa


                                                      27 Trade Watch


                                                        28 Transnational Institute


                                                          29 Via Campesina Austria


                                                            30 Vredeseilanden


                                                              31 War on Want

                                                            United Kingdom

                                                                32 Watch Indonesia! Working Group for Democracy, Human Rights and Environmental Protection in Indonesia and East Timor


                                                                  33 WEED – World Economy, Ecology & Development


                                                                    34 WIDE


                                                                      35 World Development Movement

                                                                    United Kingdom

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