Book Review

In part 4 of Sustainable Agriculture and Food Security: The Impact of Globalization we are told that: “’Free trade’ and ‘leveling the global playing field’ are illusions. Liberalisation is really nothing more than making it easier for powerful, elite interests to take control of a country’s economy. Over 70% of world trade is controlled by 100 transnational corporations (TNCs).” “Globalisation is fuelling enormous inequity in wealth distribution, leading to a rise in global poverty. 358 billionaires have combined assets worth $760 billion which is equivalent to the collective income of 2.5 billion poor people.” “The term, associative economics, was first used in 1917 by Rudolf Steiner, philosopher, educator, scientist, and founder of the global movement for individual and social transformation known as anthroposophy (or spiritual science).” “They offer a different vision of economics and how people around the world can share the fruits of the earth and help each other meet their true needs without harming the planet or exploiting other people.” “We live in a world where New Zealand butter sold in British shops is cheaper than local butter, Spanish markets sell Danish butter and Danish stores sell butter produced in France. The food we eat has often traveled farther than many people do in a lifetime.” “This absurd situation is a result of agricultural subsidies that have, for a long time, encouraged monocropping for export, rather than diversified production for home consumption.” “Monocultural production is more resource-intensive and more polluting than diversified, small-scale production. Large-scale monoculture is highly toxic. Despite mounting public support for smaller scale, ecological farming, governments continue to encourage large-scale monocropping for export.” “Increasing numbers of people are recognizing the importance of supporting their local economy. Farmers’ markets and community-supported agriculture schemes (CSA) ensure that farmers receive fair remuneration for their produce, while consumers enjoy fresh produce coupled with a more conscious awareness of the origins of their food.”

SUSTAINABLE AGRICULTURE AND FOOD SECURITY:

THE IMPACT OF GLOBALISATION

EDITED BY VANDANA SHIVA & GITANJALI BEDI

SAGE PUBLICATIONS 2002

PART IV

PART V: CORPORATE MONOPOLIES ON LIFE

PART VI: DEMOCRATISING THE FOOD SYSTEM: FOOD RIGHTS & FOOD RESPONSIBILITIES

Chapter 18: Associative Economics: Responding to the Challenge of Elite Globalisation by Nicanor Perlas

The problem of elite globalisation

‘Free trade’ and ‘leveling the global playing field’ are illusions. Liberalisation is really nothing more than making it easier for powerful, elite interests to take control of a country’s economy. Over 70% of world trade is controlled by 100 transnational corporations (TNCs).
Globalisation is fuelling enormous inequity in wealth distribution, leading to a rise in global poverty. 358 billionaires have combined assets worth $760 billion which is equivalent to the collective income of 2.5 billion poor people; income disparity between the rich and the global poor has increased by 100%, whereby instead of a 30-fold disparity, the gap is now 60-fold; 20% of the world’s richest receive 82.7% of the world income while 20% of the poorst receive just 1.4% of the world income (Human Development Report 1997); In 1992, the average annual salary of a CEO in the top 1,000 corporations was $3.8 million or 157 times more than the average worker.
Elite economic globalisation is shifting power away from countries or nation-states to the TNCs. Of the top 100 ‘economies’ in the world, 50 are TNCs.

GATT: A potent tool of globalisation

Globalisation: Threat to nature, society and the Filipino spirit

Globalisation: Decay measured as progress

Factors contributing to the spread of globalisation

Neo-liberal economics: A major structural cause of poverty

Spiritual disease fueling globalisation

Elite globalisation is the manifestation of a diseased consciousness. It is difficult to see how 358 billionaires can live a happy life knowing that their $760 billion worth of assets are equivalent to the income of 2.5 billion poor people. Only a consciousness that has been hardened, and has lost practically all sense of compassion, will ignore the unjust gap between the poor and the rich.
A diseased consciousness is too attached to its lower sense of self, materialism, meaningless consumption, vanity, power, and so many of the other lures and illusions in life. Economic growth is being powered by the seven deadly sins including lust, avarice, vanity and so on.

Associative economics

Materialistic economics underlying elite globalisation can be counteracted by a new approach to economics that has emerged in the post-modern age, termed associative economics, relying on face-to-face, human interaction of representatives of the major groups in the economic sphere of society – producers, traders, creditors and consumers.
True human needs, poverty eradication, equity and impact on the environment are key factors in price determination and resource allocation.
As it is a powerful antidote to the social, cultural, economic, political and ecological threats of GATT, associative economics is rapidly gaining acceptance in the Philippines, and in other parts of Asia and the world.
To understand the workings of associative economics, we have to understand the myth of the marketplace.

The myth of the ‘free market’

There is a widespread belief that ‘free market’ is an efficient and equitable way to allocate the scarce resources of society to satisfy human needs. The price of a product or service will indicate whether it is in short supply, or in excess. A cheaper price means that there is an oversupply. An expensive price, on the other hand, means there is a shortage of the product or service. Therefore, if the price is high, people will invest in this area of production or service. Thus, the price will signal what products and services ought to be manufactured or made available.

Unfortunately, the real market is imperfect and far from free. Monopolies and cartels engage in price-fixing.
Some poultry giants have manipulated prices in the provinces to drive away small-scale poultry producers. They dump poultry products, thereby lowering prices below the breakeven point of small, household poultry growers. The low prices render the small growers bankrupt, leaving the larger players in control of the market.
The true costs of production, including social and environmental costs, are not reflected in the market price. Therefore, the market, instead of wisely allocating scarce resources, actually squanders them for the short-term gain of producers and traders.
Subsistence producers have no real control over when to dispose their products. They know that the prices of their products can improve. However, they are indebted and have to eat. Therefore, they are victimized by predatory traders who take advantage of their poor bargaining power. The poor sell their products under distress, not under the signal of the ‘free market’.
Many farmers borrow production capital from creditors who are also traders at the same time. Part of the bargain is that they have to sell their products to the trader, come harvest time. However, when their products become available, the price they obtain is lower than the prevailing price. But they have no choice because they have already agreed to sell their products to the trader-cum-creditor.
One condition of the free market is ‘perfect information. But nothing could be further from the reality facing most farm produces. While traders have a sophisticated telecommunications infrastructure, farmers simply have other farmers to gauge the existing market price.

Types of associative economics

The term, associative economics, was first used in 1917 by Rudolf Steiner, philosopher, educator, scientist, and founder of the global movement for individual and social transformation known as anthroposophy (or spiritual science).
Today the term is used to embody his original meaning and intent, and has been broadened by the present author to include a range of economic innovations including socially responsible investing, community-supported agriculture, Green Banks, alternative trade, Green consumerism, and other similar initiatives.
The following criteria can characterize these components:

v Going beyond price or profit as the determinants of economic behaviour

v Concern, not just for economic values, but for social, human, and environmental values

v An attempt to base economic decisions on a discussion or examination of the need and welfare of other actors in the economy and the society at large.

These economic initiatives have already gone way beyond the conceptual stage. Singly or together, they are starting to form a potent ‘immune system’ against GATT and economic globalisation.
They offer a different vision of economics and how people around the world can share the fruits of the earth and help each other meet their true needs without harming the planet or exploiting other people.

Chapter 19: From Global Dependence to Local Interdependence by Helena Norberg-Hodge

If current trends continue, policies that support neo-liberalism and globalisation will lead to a dramatic reduction in worldwide food security.
The shortening of links between farmers and consumers through local marketing is helping to rebuild community, enhance human wealth and bring about ecological balance.
I will describe this trend towards localization, but first let us take a look at the impact of increased trade on agriculture.
We live in a world where New Zealand butter sold in British shops is cheaper than local butter, Spanish markets sell Danish butter and Danish stores sell butter produced in France. The food we eat has often traveled farther than many people do in a lifetime.
The average pound of food in America travels 1,200 miles before it reaches the kitchen table. The ingredients in a pot of German yoghurt total 6,000 miles, even though all these are readily available locally within 50 miles.
This absurd situation is a result of agricultural subsidies that have, for a long time, encouraged monocropping for export, rather than diversified production for home consumption.
Farmers are encouraged to use energy and capital-intensive machinery, large amounts of pesticides, herbicides and fertilizers in order to deliver a narrow variety of transportable produce to the world markets.
This process destroys the livelihoods of farmers, who in England have a higher rate of suicide than any other sector of society.
Monocultural production is more resource-intensive and more polluting than diversified, small-scale production. Large-scale monoculture is highly toxic. Despite mounting public support for smaller scale, ecological farming, governments continue to encourage large-scale monocropping for export.
Governments around the world are promoting free trade in the belief that their ailing economies will be boosted by throwing themselves open to economic globalisation.
The goal of ‘free’ trade is to amalgamate every local, regional and national economy into a single world system, dependent on continuous government investments and transnational corporations that shape not only agriculture but also entire societies.
Close to 90% of the world’s population will be living in cities by the year 2015. Urban populations depend heavily on transported foods, accompanied by hidden costs in terms of petroleum consumption, pollution and waste.
The end result of all this long-distance transport of subsidised goods is that local economies are being dismantled, and the fabric of local communities is being destroyed.
As more and more people are pulled off the land, the number of unemployed competing for scarce jobs is growing exponentially. We should be talking about the unfair advantage that industrial producers enjoy, thanks to a heavily subsidized infrastructure geared towards large-scale, centralized production.
In the last decade, vast sums of taxpayers’ money has been spent on biotechnology research with the aim of allowing food to be transported over even greater distances, survive even greater doses of pesticides, and ultimately be produced without the troublesome need for farmers.
The unfair advantage these subsidies give to large-scale producers and marketers, is making it all but impossible for family farmers to compete with industrial agribusiness, for the small shopkeeper to compete with huge supermarkets, or for any small producer to compete with corporations that can be located wherever production costs are lowest.
Only 4 cents of every food dollar in the US go to the farmer, while 96 cents find their way to the multinational middleman.
The result has been further centralization of political and economic power in huge transnational corporations, global joblessness, erosion of the community, rapid depletion of natural resources, and a further breakdown of the environment.
If subsidies were removed from large-scale, chemical-intensive agribusiness for export, local organic food would automatically be cheaper, thus helping to alleviate poverty as well as improve health and the environment.
Not only is it vital for social and environmental organizations to link together, but it is crucial that these groups also join hands internationally in order to pressure governments to renegotiate trade treaties.
Alliances are forming in order to ensure that governments, rather than being dictated to by business, take back their power to determine the rules for trade and commerce.
Increasing numbers of people are recognizing the importance of supporting their local economy. Farmers’ markets and community-supported agriculture schemes (CSA) ensure that farmers receive fair remuneration for their produce, while consumers enjoy fresh produce coupled with a more conscious awareness of the origins of their food.
Environmentally, as well as nutritionally, the benefits of shortening the links between farmers and consumers are enormous. Direct communication between producers and consumers creates a responsive economic system; one that is shaped by the needs of society rather than the needs of big business.
Localization of the economy is a real win-win formula for solving a whole range of social and environmental problems, from climate change to rising unemployment and community breakdown.
We can honestly tell people that eating fresh, delicious food is one of the most effective ways of saving the world.

APPENDIX: The People’s Charter for Food Security

The People’s Charter for Food Security was evolved by a coalition of people’s organizations, NGOs, trade unions, and other concerned people including environmentalists, legal experts, economists, nutrition and food security experts and journalists at the ‘Policy Dialogue on Trade Liberalisation and Food Security’ organized by the Research Foundation for Science, Technology and Ecology and the Third World Network (India), on 2-5 February 1995 at the National Cooperative Union of India, New Delhi.

The right to food security

We believe, food security is a human right; food is first and foremost a source of nutrition and only secondly an item of trade.
Food security can be guaranteed only if: there is enough food available; such food is accessible; people have the power to access food; people have the freedom of choice with regard to the food they produce and consume.
Trade in food and agriculture needs to be guided by equity and ecological imperatives. Food security cannot be ensured by entrusting agriculture, food production and trade of food to global markets.
Trade liberalization is resulting in the creation of a class of ‘redundant’ human beings, comprising mainly displaced, landless, rural, agricultural communities due to agri-business dominated agriculture.
We foresee the need to accord special protection to these vulnerable communities by protecting the production and market systems that meet local needs and offer local solutions to the livelihood crisis.
There is an urgent need to build up adequate national food reserves.

A decentralized food system

We believe there is a greater need for local self-sufficiency in food production.
A large part of food subsidies go to neither the producers nor the consumers of food, but towards subsidizing the inefficiencies of external farm input industries (fertilizers/pesticides), and managing centralized procurement and distribution structure.
The high level of these subsidies should not be further increased by new subsidies for infrastructure, transport, storage etc., promoting long-distance transportation and the over-processing of food.
When all subsidies for wasteful expenditure are removed, the decentralized and democratic structures of food production and distribution will emerge as the most efficient, just and sustainable means of ensuring food security.

Promotion of sustainable agriculture

We believe that a transition to sustainable agriculture is imperative for food security, both at the local and the national levels. Biodiversity, the basis of sustainable agriculture, and that which is being destroyed by mono-cropping, is the key to food security at the domestic and community levels.
Organic farming and low external input agriculture are being recognised everywhere as necessary for environmental, health protection and food security protection.

Food security and democracy

Democratic control of the food system is the ultimate test of democracy. Institutions created to represent the will and the interest of the people have abdicated their social and political responsibilities. People’s food security needs to be reclaimed by democratic forces, built both locally and nationally and in the production and the consumption ends of the food system.
Land, water and biodiversity should stay under the democratic control of peasants and farmers.
Food security needs the promotion of the values of cooperation, rather than competition.

Rejection of the new economic policy

We reject the New Economic Policy that threatens massive genocide, by dismantling our food and agricultural economy based on millions of small farmers.
Export liberalization is raising food prices and reducing food accessibility for poorer people.
The myth surrounding the benefits of trade liberalization for Third World countries has been exploded by the events in recent years in Mexico where within one year of ‘free trade’ the Mexican economy collapsed and as a condition of loans Mexico had to give up sovereign control over its oil reserves.
It is not just the sovereignty and dignity of Third World countries that is being sacrificed for free trade regimes. It is the very survival of the large majority of the world’s population that is at stake.

Sustainable Agriculture Part 4