The world’s food system has seen a dramatic transformation over the last decades. I am not talking about what we eat. I am not talking about the latest food trends, Quinoa, veggies, paleo, cxraft beer and so on. I am talking about the economic structures, about who is producing and trading what we eat. This transformation has led to an enormous concentration and globalisation of the food and agricultural sector. Until the 1970’s, we had a great diversity of regional markets, regional producers, regional pricesetting mechanisms. Today, this is history. Now we are facing a system dominated by multinational corporations, a Corporate Food Regime, with so-called globalised value chains, driven by the logic of profit, excuse me, today it is called: shareholder value. Profit is such a dirty word, isn’t it? It has become increasingly difficult to control or influence these structures by democratic policymaking in the public interest. You have seen the latest well-publicised example when the allround pesticide glyphosate had its license in the EU renewed recently under more than dubious circumstances.
The consequences are dramatic. Family farms are giving up, are going out of business all around the world – and the remaining ones are getting bigger and bigger. But that is only one aspect, maybe the aspect most present in the public debate. Let us look at the whole sector. Three corporations supply more than 50% of agricultural technology worldwide. Four corporations control the fertilizer market outside of China. When the currently pending mergers will be completed, three corporations will control more than 60% of the seed and pesticide sector. Five large trading companies control 70% of the grain trade. In food processing and retail, the concentration and oligopolization is proceeding at full speed: just 50 corporate groups now control more than 50% of the global food production and processing business. At the same time, the influence of financial investors is growing in these corporations, who are concerned with only one thing: maximizing their profit, sorry, their shareholder value.
If you believe in a competitive market economy, you should be alarmed about this development, just as farmers, consumers, a critical civil society should be. But competition and market economy have become empty phrases, they have less and less to do with today’s reality, they’re nice words like sustainability, freedom, democracy, and so on.
This development was never discussed and approved in an open democratic discourse – there would never have been a majority anywhere for such an unprecedented concentration of economic and political power. But politicians created the conditions for the Corporate Food System to emerge. Consumers and people want something else, they want quality from family farmers produced in the region for the region, and fair prices. In supermarkets you see how regional products are advertised, and demand for organic food is growing faster than production. But nobody advertises junk food from animal factories, made by Romanian migrant laborers without any labor rights for anonymous global markets.
The rise of this Corporate Food Regime is not a kind of natural development. It would never have happened without massive political support. So-called global value chains can only work when you open foreign markets with free trade agreements, if necessary against massive public opposition. That is the core of the EU trade policy, but other large economies work likewise. This process is called globalization. It’s not a natural development, it is politically driven.
Let’s have a closer look at this economic globalization, or corporate-driven globalization. You can call it free trade, but trade is only one aspect. Corporate-driven globalization is also about investment flows, financial markets, economic governance, deregulation – ultimately it is about making multinational corporations as independent as possible from the nation state, from democratic regulation. This process was initiated by Western governments since the 1980’s, in a long negotiation process called the Uruguay Round, and it culminated in the establishment of the World Trade Organization, WTO, in 1995. Economic globalization has sharply increased world trade and financial flows across the globe. Trade has been growing much, much faster than the actual production of goods and services. It has transformed national and regional economic structures into global ones, for good or bad. Like every economic transformation, there are winners and losers in this process. However, even when you argue about the number of winners, we can hardly avoid the fact that a lot of these winners are winners only because they relentlessly exploit workers in other parts of the world, and our natural environment. We are talking about the kind of globalization that we see now: a biased globalization that puts corporate interests before people and the planet. It is not that globalization is unregulated, no way. It is very well regulated – in the interests of multinational companies and capital owners. We are experiencing a process of globalization policies with the wrong priorities, by politicians with the wrong values, a kind of globalization more and more people reject, as you can see in every election. And clearly, that is not something that is inevitable or without alternatives.
The web of trade agreements has been designed to make it as difficult as possible for you and me, for our elected parliamentarians to regulate in the public interest, to interfere with multinational companies to make money as they please, because free trade agreements declare regulation to be a trade barrier, and trade barriers are prohibited. Can we ban the import of textiles from Bangla Desh, made by reckless exploitation of workers? No, we cannot, we have prohibited that in trade agreements – we did not ban slave labor, we banned meaningful action against slave labor. In the name of free trade, these agreements reduce the political options for a nation state, or even a major trading bloc such as the EU, to regulate – to an extent that is becomes very, very difficult – unless most other countries also agree, like if people like Jeremy Corbyn or Bernie Sanders win elections in the US and the major EU countries simultaneously. Which, however, is not very likely.
This is the core of the free trade agreements currently, the existing ones and the ones still being negotiated – they are designed to make the neoliberal economic model a kind of transnational economic constitution that binds countries, independently of what voters want. A model that serves the interests of transnational corporations, at the expense of social and environmental concerns. At YOUR expense, ladies and gentlemen.
So the current form of globalization is basically a replica of an ideology that has permeated domestic policies in the last 20-30 years in the major economies of the world. Free corporations from public control, from democratic control, from political control. Not much of a surprise: why should trade policies really differ from domestic economic policies?
It is no surprise that the opposition against these FTAs, often starts with food, with agriculture, with issues such as the famous chlorine chicken, hormone meat, GMOs. After the TTIP debacle, after Brexit and Trump, the EU Commission and the German government promised more transparency, more dialogue, but you can forget all these promises. The EU and its member state governments – from the left to the right – do not seriously intend to change their embattled trade policies. They have about 20 more FTAs in the pipeline, with the Mercosur countries in South America, with Australia, New Zealand, Japan, India, the Philippines, Indonesia, Tunisia, Morocco, Mexico, African countries and so on. The issues and intentions are always the same: opening more markets in all areas where there are still relevant markets that can be opened, and that is predominantly agriculture and services, and more deregulation. Regulation may be in the public interest, but it is a so-called barrier to trade, and so it must be made difficult (in trade jargon, they call it »regulation must be disciplined«) or even outlawed right away. The instrument of choice is a free trade agreement, because unlike domestic laws FTAs are likely to survive a change in government even in the unlikely case that an incoming new government actually intends to pursue different policies, as you know, that is not very often the case.
This trade policy basically still follows an EU strategy agreed in 2006 called „Global Europe“. It was a reaction to the much-quoted paralysis of the WTO – in reality it is not paralysis but successful resistance by developing countries against the uncompromising liberalization agenda that the EU and the US are pursuing. Only two years ago, the EU Commission re-emphasized the key objectives of this strategy: they want to communicate it better, but they insist on not changing the substance of their trade and globalization agenda.
The key objective of the Global Europe strategy is, the EU »must become the most competitive economy in the world«, and when that is your aim, then it is clear: you have to open the markets of everybody else, and it is equally clear, that the »most competitive economy in the world« will benefit from such open markets more than everybody else. And it is also no surprise that the others will not be as keen as the EU to open these markets. All these bilateral FTAs were outlined already in this 2006 strategy. Make Europe Great Again, that is how you could call this policy, Europe First – and of course, this is not economic nationalism, since the EU is not a nation, but it definitely is economic egoism.
However, we have to admit, they have not been getting very far with their Global Europe strategy. Most of the envisaged FTAs, and almost all of the more important ones, are still being negotiated and negotiated and negotiated, but there are problems everywhere. TTIP and CETA, the EU-Canada FTA, were supposed to change that sorry state of affairs, were to become the »most modern trade agreements in the world«, yet achieved the exact opposite. Today, the EU’s trade policies are more controversial than ever.
Let’s have a look what the EU wants with these 20 agreements in the pipeline – as much as we can say something about them. After all, the negotiation mandates, the negotiation reports, the draft texts are secret, still secret, despite all promises of transparency. The negotiation mandates are usually rather old, Mercosur for instance from 1998, a time when nobody in the Commission, in the EU’s member state governments had the slightest doubt about their neoliberal economic policies, when nobody talked about there being too many losers of globalization. I am not aware of any of these negotiation mandates being changed recently, or that even one single government would have proposed to change them. So, the old policies are still in place.
Apart from forced market opening in the service sectors, one of the recurrent objectives of all these FTAs is more globalization of the agricultural and food markets. In these sectors, opposition to this agenda is strong, extraordinarily strong, you remember, the opposition against TTIP started with food. The declared objective is to depress producer prices even further, and that means continuing the industrialization of agriculture, since family farms anywhere in the world cannot compete in this price war. The 20 FTAs in the pipeline particularly aim at opening meat and dairy markets in other countries, primarily in Asia, in order to find new markets, or dumping grounds for the agro-industrial surplus production in the EU, and that means the destruction of family farms, of regional economic structures.
That is why opposition in Japan and other Asian countries is very strong among farmers, because they understand these FTAs as what they are: a battle cry against family farms, against rural areas in these countries. Farming in the region for the region, that is what is at stake there, and the EU wants to get rid of that, they want farming for global markets. Recently, Japan agreed a so-called dairy market reform aiming at making the Japanese dairy farms »more competitive« in order to become fit for the EU-Japan FTA, and to break the farmers’ opposition to that agreement. What does that mean, you can easily imagine it, making the dairy sector more »competitive« means industrializing it, no matter whether Japan’s farmers and consumers want that or not. Nobody has any intention to ask farmers and consumers whether they want these policies or not.
These are the policies that the EU Commission and member states governments want to continue: even more globalisation, and that means even more industrialization, even more concentration, even more corporatization of the agricultural and food sector. Germany’s agriculture ministry is very open about that: We want FTAs basically with the whole world, except with Russia, China, Iran and a few others, for the time being. Expansion of export markets, that is the declared objective of the ministry’s so-called Green Book published a year ago. I quote »Our agricultural export strategy is focusing on affluent societies and consumers within and outside the EU.« Every normal person, however, would ask: If there are affluent consumers in Sao Paulo, Bombay, Jakarta or Nairobi, why shouldn’t farmers from these countries supply them, so that they can become affluent too?
So these export strategies do not only focus on cheap junk meat produced in animal factories, they also focus on processed quality food, from cheese to candy to spirits. However, from a development point of view this is equally problematic. The potential for jobs, for development lies in particular in the value added created by processing raw materials. These are the economic perspectives for any successful development. It is a hilarious idea that Europe »should feed the world«.
When you enjoy the dubious privilege of attending information briefings in the agriculture ministry for lobbyists of all kinds, excuse me, for stakeholders – that’s how they are called today, sounds so much better – and I am one of these stakeholders, then you quickly realize: most of these people live in a parallel universe. Then you hear them calling, »we must open Mexico’s closed candy market«, »we must open the closed pork market of the Philippines«, »we must open Argentina’s closed alcohol market«, »we must open Japan’s closed dairy market« and so on, and the ministry agrees 100%. No, ladies and gentlemen, we must open the closed trade policies of the EU, this lobbyists‘ paradise beyond all democratic control, that is what we have to do.
But it is not only about the EU exporting to the rest of the world. The proposed FTAs with the agricultural export countries in South America and with Australia and New Zealand, but also the Canada FTA CETA will reversely put Europe’s farmers under enormous price pressure. Even Germany’s powerful Farmers Association is against these agreements, but just against these.
When the unlimited global price war of everybody against everybody has become reality, and that is exactly the goal of the neoliberal trade policies in Brussels, in Berlin, in the other member states – then family farming is finished. This relentless price war is Russian Roulette with the future of agriculture, anachronistic but politically promoted by the Commission, by the EU governments from left to right, no difference. Russia’s sanctions against the EU have shown the fatal consequences of this obsession with exports and global markets. For many years, Europe’s farmers were told, Russia is the market of the future, and then Putin took Crimea, and the market of the future was gone. Now China is the market of the future, and when the Chinese tomorrow take some island in the South China Sea, then that market of the future is gone, too. Apart all important objections about the environment and animal protection, this obsession with global markets is also an economic dead end, but Europe’s governments stubbornly pursue it, no matter what. That is insane. Who has decided, that this is in Europe’s public interest?
Another key component of EU trade policies has been the corporatization of the seed sector. This means, ever expanding so-called »intellectual property rights« and patents on life – and criminalization of farmers who use their harvest as seeds rather than purchasing new seeds from corporations such as Bayer or Monsanto. Farmers all over the world have done that for centuries, but that is bad for seed companies, and so the EU keeps forcing trade agreements on many countries to make this illegal. Nice for Bayer and Monsanto, bad for farmers – but governments do what the corporations want. Rather than using the same standardized seeds all over the world, local breeding by farmers is also a key strategy to cope with the challenges of farming in a warming world.
For many developing countries, the consequences of these policies are dramatic. 30 years ago, 30 countries were net food importers, today it is 110. How can these countries successfully develop, when they have to spend their scarce foreign exchange for buying food, completely dependent on the ups and downs and the speculation of the prices on global markets?
Gone are the times of the old trade agreements like Lomé and Cotonou, when the EU opened their markets for African exports without demanding the same market opening from the Africans. Today the EU forces them to open their markets likewise, no matter what the consequences are, and when you apply the same rules for the strong and for the weak, you can imagine the results: the strong will win, what a surprise. Many of the industrialisation attempts in Africa went down the drain as a consequence. In Ghana, there used to be a flourishing tomato sector, they even exported processed tomatoes to the rest of the world. That was good. Tomatoes grow very well in Ghana, better than in European greenhouses. Today, European tomato exports have conquered Ghana’s markets, and quite a few former tomato farmers now work as illegal migrants for a few pennies in tomato plantations in Italy or Spain. For the EU, this is development.
That is not the only example. The consequences of these trade policies, this forced market opening, you can see everywhere in the agricultural and food sector. Last year, we had the president of the dairy farmers association of Burkina Faso speaking at one of our conferences. She told us that the market share of European dairy products in Burkina Faso is now almost 90%. Not 19, 90! Trade agreements have basically prohibited Burkina Faso to raise tariffs on dairy products, and so the local farmers have no chance against the highly subsidized EU milk industry. The consequences: the children of the farmers no longer become farmers, they become migrants. For a long time, they only reached the capital city, now they go further. At the climax of the EU milk price crisis 2 years ago, Germany’s agriculture minister organized a „Milk Summit“, and its main result was: more exports, so we can get rid of our surplus milk. How many more African farmers do we want to drive out of business?
Europe’s chicken factories, the Wiesenhofs and so on, have already finished off regional and family chicken farming in Europe. Their unlimited exports of so-called low value chicken parts have destroyed the African chicken farming sector. That is nothing new, but of course nobody in Europe’s policymaking circles has the slightest intention to change that, on the contrary: New FTAs are planned to pry open ever more new markets. Production capacities in this disgusting industry are constantly expanded, and politicians do nothing against it, such as more regulation limiting at least the worst excesses of this industry. Consumers in Europe are getting tired of this industry and consume less and less of this factory meat full of antibiotics. So these corporations need new export markets. The EU trade policy is at their disposal. Reducing the capacity of Europe’s chicken factories would be the better policy, but this would also reduce the profits of the Wiesenhofs, so that is no option. So we keep exporting chicken parts at dumping prices to developing countries and put farmers there out of business.
Ladies and gentlemen, this trade policy is a cause for migration. As long as we destroy the livelihoods of so many people in other countries for our export records, migration will not go down, it will increase.
I believe it has become clear: We need a fundamental re-orientation of our trade and economic policies. The global economic competition of everybody against everybody is a fatal mistake, we see the consequences everywhere. It is economic warfare, and most are losing out. People all over Europe, in the US see all these nice figures of GDP growth, of Dow Jones and Dax going up, but what matters to them is that they see their wages stagnating. The winners of neoliberal globalization are a handful of corporations and their shareholders. In the end, even the much-praised competition is finished, a few monopolies and oligopolies remain and control the markets. How blind do you have to be when you still promote business as usual?
»Business as usual« will not work, even more so when the political and social realities change so quickly. Business as usual, a continuation of the neoliberal economic and trade policies, looks increasingly anachronistic. In a democracy, you cannot do forever the opposite of what people want. Today, you win elections by rejecting free trade agreements, by rejecting ever more globalisation and liberalization – not by promising more. In Germany, the land of the export champion, it takes a little bit longer than in trade deficit countries, no surprise.
We have to reduce our export records, not drive them even higher. We need to create jobs by more regional economic structures, and that means, some markets need to be de-globalized, some market openings must be reversed. A global market for smartphones makes sense, a global market for milk is nonsense. We need an active policy against oligopolies, too much concentration must be reversed. In the last century, the US has split a whole number of corporations with too much market control into dozens of smaller companies. Things like that must be reconsidered for a sustainable economic policy, for a sustainable trade policy that benefits all and not only a handful .We must put people before profits, we need economic and trade policies benefitting all and not the few that are already rich, in line with the environmental limits of our planet. Thank you very much.
Jürgen Maier, Forum on Environment and Development