APPENDIX 16
Memorandum submitted by the Agricultural
Christian Fellowship (S 25)
PREPARED BY FARMERS WORLD NETWORK, FARMERS
LINK AND THE AGRICULTURAL CHRISTIAN FELLOWSHIP
BACKGROUND
These organisations have no pretensions to be
farmers unions or to have a mandate to represent the views of
specific groups of farmers. However, they have relevant experience
and contacts.
Farmers World Network, based at the National
Agricultural Centre, provides a forum unique in the UK, in which
farmers and others involved in agriculture, from all over the
world, debate issues surrounding world food production and associated
questions of poverty and hunger.
Farmers Link works in East Anglia to promote
sustainable Agriculture and Rural Development (SARD). Its work
is guided by the East Anglian SARD Working Group, which is composed
of working farmers and representatives of environmental, consumer
and rural interest groups. Farmers' Link publishes documents,
organises conferences and facilitates groups which focus on the
sustainable management of natural resources in the region and
the creation of rural employment opportunities. Also it has arranged
exchange visits between East Anglian farmers and like-minded groups
of farmers and others from different parts of the world.
The Agricultural Christian Fellowship has links
with other Christian farming groups in many parts of the world.
In partnership with the Arthur Rank Centre at Stoneleigh, it is
responsible for the Farm Crisis Network, one of the groups in
Britain seeking to help and support farming families who are in
difficulties. FLN is part of a European Network of similar organisations
and has visited parallel groups in the USA. In these contexts
it has striven to develop Christian perspectives on some of the
issues surrounding farming.
We all believe that the global perspective derived
from these experiences and from our involvement in the UK Food
group makes it in some ways easier to foresee the effects of globalisation
than does a purely British or European experience.
We would draw your attention to the following.
1. History. The UK is perhaps the
only nation with modern experience of committing its food security
to world markets and exposing its agriculture to global competition.
As soon as modern transport systems became established around
1870, much of British farming went into continual recession until
1939, apart from the period of the First World War. Only products
such as fresh milk, which were not transportable, provided a modicum
of prosperity to their producers. Prior to 1870 there had been
a period of confidence, investment and technical innovation. Are
there any grounds to suppose that a repeat of this experiment
will not have a similar result?
2. Role of Transnational Corporations.
We draw your attention to Hungry for Power, a report produced
by the UK Food Group. Experience in this country suggests that
concentration of buying power can adversely affect the position
of large numbers of producers whose businesses are much smaller.
Something similar occurs at the global level. It is asserted for
example that Cargill controls half the world's grain trade. At
the retail level, Wallmart has taken over Asda. Monsanto controls
our major plant breeder. Though many of these empires have economies
far greater than many nations, and though much world trade takes
place within companies, the WTO regulatory system is based on
the fiction that international trade is controlled only by governments.
In these circumstances purchasing power is likely to become more
concentrated and often remote from the UK. Control over research,
plant and animal breeding and supply of farm inputs is becoming
similarly concentrated and remote.
No effort is being made to regulate TNCs in
a manner commensurate with their power. They can relocate to get
round the limited regulations which exist, and wield increasing
political influences in determining the nature of those regulations.
Paradoxically the narrow focus on freeing global trade obscures
the impact that the subsequent concentration of economic and political
power has on vulnerable producers all over the world.
3. Currency values. Exchange rates
can now determine farmers' fates. They move in ways which make
talk of competitive efficiency almost irrelevant, and can make
a mockery of a long-term enterprise like agriculture. Large global
players are able to switch sources and markets in response to
changing currency values. In its internal arrangements for a single
agricultural market, the EU recognised this problem. The current
plight of British agriculture underlines the importance of this
issue.
4. Recent farm experience in the US,
where concentration of purchasing power is older and better documented.
The farmers' share of the consumers' food bill has shrunk from
a third in the 1950s to a tenth in the 1990s, with the input manufacturers'
share being between 15 per cent and 20 per cent at both points
(source: US Department of Agriculture). Between 1982 and 1990
there were some 4,100 food industry mergers and buy-outs, after
which, for example, three companies controlled 80 per cent of
US beef slaughtering (Krebs A.1992). In the late '80s there was
a horrendous crisis in US farming. 34 per cent of the farmers
in Iowa lost their farms—some of them having to be fed by
US Oxfam in the process. And yet in 1986, Cargill realised its
highest profits since its magic "wheat to Russia" year
in 1974. Pig production has moved away from farms to massive "confinements",
in spite of resultant welfare and environmental problems. Like
other industrial activity they can be moved around the world to
exploit advantage of cheap labour, lax environmental regulation
or exchange rates. It is unlikely that pig production of this
type would be tolerated in the UK. Farming incomes in the US are
again at rock bottom.
5. The nature of the World Trade Organisation.
We have already referred to its blindness to the role of large
corporations in distorting trade. At present there is no framework
for a country to plead considerations of food security, precautionary
food safety, environmental protection, labour conditions or animal
welfare in regulating trade and imports. In Seattle last autumn
a grudging recognition was given to some of these (though not
to animal welfare) as considerations fit for negotiation—so
long as any measures taken are not "trade distorting"—an
absurd proposition from any point of view. To us, it seems inappropriate
to make such fundamental considerations subservient to "free"
trade. Unless there is a change of direction, the only means of
supporting standards in any of these areas will be by "green
box" payments.
6. Public requirements. As already
remarked in reference to pig "confinements", a number
of very "competitive" types of farming are quite unacceptable
in this country for reasons of landscape, neighbourly relations,
environment or animal welfare. This might be turned into a saving
grace for British agriculture. However, current experience, with
pigs, suggests that although public opinion may require high standards
in the UK, it may not be able or willing to protect UK producers
from competitors with lower standards. If such protection involved
"green box" payments help might be even less likely.
7. Preoccupation with "Growth".
We suspect that the globalisation agenda is based, in part, on
concepts of expanding markets and burgeoning demand. This is problematic;
there is no large expanding demand for agricultural produce in
the developed world. Rising production in the North has damaged
farmers in the less developed countries, and in the North, has
caused expense to governments and income problems to farmers.
8. The nature of farming
(i) Reaction to falling prices. Conventional
economics asserts that if the price falls, less will be produced.
Sometimes the opposite can occur. A group of very low paid workers
might respond to a wage cut by seeking extra overtime. It is clear
that in farming, lower prices mean a search for lower unit costs
by increasing production. In support of this we cite the trend
of business advice currently on offer to UK farmers; the study
Carry on Farming by Gasson, Errington and Tranter (Wye College),
which found that by far the commonest response to financial pressure
was to "increase output from existing enterprises";
and the very high level of farm output in the US prior to the
New Deal in the 1930s. It is also as well to remember that if
one farm goes out of business, its productive assets probably
become part of another farm's survival plan.
(ii) Locality. Agriculture is about the application
of experience, knowledge and physical inputs at specific places
at precise moments of climate and season, in ways sympathetic
to the environment and protective of the long-term future of the
land. Attempts to ignore this and impose centralised or remote
control have an unhappy record. A corollary of this is likely
to be that those well able to manage farming in this way will
be ill equipped to cope with the emerging global economy. They
will almost certainly lack the power or knowledge to bargain on
an equal footing.
9. Contradiction in the EU negotiating
position. On the one hand the EU is trying to say that agriculture
is multi-functional and should be supported, and that the trade
framework should allow for environmental and other considerations.
At the same time it is demanding to be able to export its supported
production with as little hindrance as possible, thus inviting
scrutiny of all its support measures.
10. The state of the world banana trade.
This is a potent example of the kind of "free" trade
that seems to be emerging. It is characterised by: domination
by not more than half a dozen companies; the squeezing out of
smallholdings and farms; large mono-culture plantations; bad and
insecure labour conditions; heavy spraying and environmental damage;
and an obsession with cosmetic quality. There has been a WTO dispute
launched by a government with almost no domestic production, on
behalf of a company with a big chequebook. Both disputants were
driven by the concerns and lobbying of "their" companies.
The outcome, determined in secret by three trade lawyers, gave
no consideration to plantation workers, smallholders, environment
or the long-term future. Since then, production has gone into
structural surplus and there is a "race to the bottom"
involving wage cuts, increased hours, and more smallholder eclipse.
11. Prevailing attitudes in the UK.
Careful reading of recent MAFF consultation documents shows that
the British Government aspires to a future without agricultural
support, except for certain environmental purposes. Much official
and similar opinion seems to embrace a completely uncritical approach
to globalisation and a refusal to face its problems and contradictions,
combined with an assumption of the disposability of British agriculture,
along with coal mines. Unless this changes, ameliorating measures
that might be possible are not likely to be taken.
In conclusion, we suggest that globalisation
is likely to affect British farming profoundly and adversely.
There may be mitigations arising from incompleteness in the process,
from EU action, from national and local authorities or from movements
within farming. We see an urgent need for realistic, persistent
thought about these issues. We also think that farming will be
adversely affected all around the world.
8 March 2000
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