The equity challenge (2)

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Selling a surplus allows poor farmers to earn an income, but rarely can they exercise any power in markets where middlemen, processors, aggregators, freighting companies and those controlling brands and distribution call the shots.

A few hundred companies – traders, processors, manufacturers, and retailers – control 70 per cent of the choices and decisions in the food system globally, including those concerning key resources such as land, water, seeds and technologies, and infrastructure.78 By setting the rules along the food chains they govern – for prices, costs, and standards – they determine where most costs fall and where most risks are borne. They extract much of the value along the chain, while costs and risks cascade down onto the weakest participants – generally the farmers and labourers at the bottom.

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The responsibility of the private sector in setting the terms on which people engage in markets cannot be overstated. Responsible businesses will respect people’s rights to land, water, and other scarce resources. They will create trading relationships that return value to poor women and men through fair and stable pricing arrangements and will facilitate access to the necessary skills, credit, and infrastructure. And they will expect these standards of all participants in the chains they govern. Oxfam is developing a food justice index, which will assess companies against this standard of responsibility.

The focus of the index will be the largest traders and food and beverage companies. These will be ranked according to their policies and practices with regard to use of land and water resources, climate change, small-scale food producers and gender. The index will provide a tool with which to hold companies to account on their policies and practices, and influence the regulatory frameworks within which they operate.

Access to technology

Corporations exercise enormous power at the ‘input’ end of the food chain: the production of seeds and agrochemicals. Globally, four firms – Dupont, Monsanto, Syngenta, and Limagrain – dominate over 50 per cent of seed industry sales,79 while six firms control 75 per cent of agrochemicals.80

The research agenda of these companies focuses on technologies geared toward their biggest customers, large industrial farms which can afford the expensive input bundles the companies sell. Such technologies rarely meet the needs of farmers in developing countries, who in any case cannot afford them. Small-scale farmers’ technology needs are ignored, despite the fact that they represent the biggest opportunity to increase production and combat hunger. The market is failing, and – with a couple of notable exceptions such as China and Brazil81 – governments are failing to correct it.

Input companies invest in technology products, which can be bundled together and sold as a package – for example, Monsanto’s Roundup herbicide and genetically modified Roundup Ready Soy. But what is really needed are technologies of practice – techniques not easily be packaged and sold, but which can deliver solutions to stagnating productivity and poor sustainability. Oxfam has seen this first hand in its work with farmers around the world. Recently in Azerbaijan, new sowing practices promise to double wheat yields and reduce seed usage by half.

The modus operandi of the companies also thwarts pro-poor, anti-hunger research by undermining the public institutions that serve a wider interest. Seed companies have amassed enormous ‘patent banks’ – claiming intellectual property rights over huge numbers of genetic traits and other ‘innovations’. Public institutions, fearing litigation and lacking the resources to trace the web of patents or pay the licensing fees associated with them, are thus deprived of access to a key research tool.82

The misallocation of research and development (R&D) resources that results is mind-boggling. Monsanto’s annual research budget is $1.2bn.83 By comparison, the Consultative Group on International Agriculture (CGIAR), the world-leading group of centres that carry out R&D for developing countries, has an annual budget of just $500m.84

Claiming rights

In the struggle to feed their families, people living in poverty are all too often exploited or marginalized by the huge power imbalances in the food system. But people can and do fight back, by joining together to claim their rights and increase their clout in markets. Labourers form unions to achieve more secure employment and better working conditions. Farmers form producer organizations and co-operatives to engage with markets and companies more assertively, reap economies of scale, and improve production standards. Female producers form women’s organizations, as male-dominated producer organizations often fail to defend their interests or do not even allow them in. Consumers influence company behaviours through their purchasing decisions – such as through the Fair Trade, organic, or Slow Food movements – or more forcefully through consumer campaigns.

Such forms of organizing can quickly move from the economic and social spheres to the political. A new generation of producer organizations has taken off over the past two decades: in Burkina Faso between 1982 and 2002 the number of villages with such organizations rose from 21 per cent to 91 per cent,85 while between 1990 and 2005 in Nigeria the number of co-operatives increased from 29,000 to 50,000.86

In the Philippines, a national movement of rural organizations and NGOs formed a remarkable alliance with state reformers during the 1990s, resulting in the redistribution of over a quarter of the country’s land in the space of six years.87 In Colombia, Oxfam supported a campaign by producer organizations that persuaded the Bogotá city council to start supplying city hospitals, schools, and other institutions with their produce – 2,000 small farmers are now benefiting.88

In India’s impoverished Bundelkhand region, 45,000 fishing families in the Tikamgarh district fought back against the expropriation of their traditional fishing ponds by landlords and contractors, eventually winning legal rights to over 100 ponds.89 The protests of hungry people in 61 countries across the world in 2008,90 and the subsequent political changes that came about in a small number of these, demonstrate unequivocally the power of consumers, which governments ignore at their peril.

Women and men across the world are organizing to claim their rights and reform the broken food system from the bottom up – a global movement that is our best hope for meeting the equity challenge.