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By Alan Broughton
September 7, 2016 — Links International Journal of Socialist Renewal reposted from Soil Alliance — There is money to be made in farming, but not by the farmers. This paper examines the reasons why farmers around the world are poor and there are a billion hungry people. The terms of trade for farmers continually declines and farmers are forced off the land. Governments and international bodies advocate further deregulation and trade liberalisation and greater use of technology, yet these policies have undoubtedly failed in their stated aims of increasing food security and rural prosperity. The beneficiaries have only been the agribusiness corporations which have been instrumental in the design of the new order of agricultural production.
The paper looks at the effect of trade liberalisation and other neo-liberal policies on farm income and food security. Corporate control of agriculture has greatly increased as commodity trading, land ownership, seed and other input provision, processing and marketing has become more concentrated in fewer hands. Farming land loses productivity and resilience as it becomes more degraded through the use of agro-chemicals. Food producing land is diverted to more profitable activity such as biofuels and livestock feed. Smallholders are thrown off the land by corporate land acquisitions, yet evidence shows that family farms are many times more productive and better cared for than large holdings. Agricultural research is concentrated in technological solutions to problems that technology has largely produced, yet agroecology has sound answers to food production issues. Trade negotiators from the US and Europe insist on other countries eliminating protection for their farmers but refuse to eliminate theirs. Corporations have the ear of governments, small farmers do not; indeed their demise is regarded as inevitable and desirable.
Free trade and deregulation are not the primary cause of rural decline. The loss of people from farms in Australia commenced early in the twentieth century, due largely to declining soil fertility and an over-optimistic appreciation of productivity in the drought-prone environments (Davison 2005). Back in 1967 Australian small farmers were suffering from falling farm gate prices and rising input costs, well before deregulation, but neoliberalism has accentuated the process (Lawrence 2005, Davison 2005). The official solution in the 1960s was for the bottom third to drop out (ABC 1969) and small farmers have been dropping out ever since with no end in sight. The problem of low income continues as the terms of trade further deteriorate. A similar process is happening around the world.
But farmers around the world are resisting. Over 200 million are affiliated with the largest network of organisations opposed to corporate control, La Vía Campesina. Several governments have instituted right to food legislation. Land has been successfully redistributed by direct action in South America. Many attempts to alienate land from local communities have been successfully fought. Seed saving networks have sprung up around the world to protect the work of centuries of variety selection from predatory multinational seed companies and the laws that they have induced governments to implement. Farmers are organising into cooperatives to bypass extortionist traders and relocated processing works. The ideas and experiences of the various branches of biological agriculture – permaculture, agroecology, organic, regenerative, conservation – are gaining greater support. There are multitudes of alternative agriculture promoting organisations in all parts of the world. Consumers are demanding local production. However individual and local solutions are not sufficient; a world wide political campaign is also necessary to address the fundamental causes.
1. Setting the scene
1.1: Farm numbers
The number of farms in Australia fell by 22% between 1986 and 2001, then a further 15% from 2001 to 2011 (GRAIN 2014). The number of broadacre farms fell by an average of 1.7% per year between 1990 and 2007; the figure for dairy farms in the same period showed a 2% drop per year (Lagura & Ronan 2009). Between 2005 and 2011 11% of farmers left; from 1980 the fall has been 40%, an average of 294 per month (ABS 2012). There has been some farm amalgamation, but also a large drop in the amount of area farmed, from 435 million hectares in 2005-6 to 397 in 2012/13 (Lockie 2015). Agricultural paid employment fell by 20% in the decade from 2002 (Lockie 2015).
Western Europe lost 76% of its farmers since 1970; Poland lost 1 million between 2005 and 2010 (GRAIN 2014). In Finland numbers went from 225,000 in 1980 to 90,200 in 1998 and in Denmark 130,000 to 60,000 in the same period (Halhead 2005). Three million farms were lost in the European Union in the eight years from 2003 to 2011 (GRAIN 2012). Rural sectors are in decline in the protectionist countries of the European Union and United States as well as free market countries like Australia (Rees 2003).
Between 1950 and 1990 the share of the world’s labour force in agriculture fell by 33% in the world, and 40% in the Third World, fostered by production for export policies and increase in inputs, and competition from subsidised imports leading to mega cities and separation of people from self-sustenance. Between 1950 and 1990 the population of urban centres in the Third World increased by 300 million people, many living in shanty towns (Araghi 2000).
Another factor in the decline in rural employment is the transfer of agriculture associated labour away from rural areas. Productivity per farmer has greatly increased, but this does not take into account the labour in the provision of inputs - fertiliser, pesticides and machinery manufacture - and food processing which is usually done in urban areas. Overall employment in food production may not have changed much, but the location of that employment has.
Interestingly there has been a rise in the number of sub-commercial farmers in Australia and other industrialised countries (Lockie 2015), sometimes referred to as lifestyle farmers, hobby farmers or tree-changers, which is helping reverse the loss of rural population, particularly in coastal areas or around major towns.
1.2: Farm gate share
Around the world the proportion of the food dollar going to farmers is ever decreasing, reflecting a gross transfer of income away from food producers. In Australia the following decreases in the percentage of the retail price that farmers received occurred between 1970 and 2000: milk 55% to 22.9%, bread 14.5% to 3.5%, apples 56% to 16.6% and beef 41.6% to 20.9% (Dilley 2004). One factor cited by Dilley (2004) was the concentration of food retailers: sales by major chains rose from 40% of food retail spending in 1975 to 76% in 2002, while sales by independent retailers went fell from 60% to 24%. In the US, reduced retail competition led to an increase in the retail margins from 22.4% of sales to 27% in the two decades up to 1998 (Cryan 2001).
Using United States Department of Agriculture (USDA) data from 2016, the US National Farmers Union (2016) showed the difference between the price farmers receive for a range of products and the retail price. Figures range from a high of 43% for fresh carrots to 1% for breakfast cereal. They include: bacon 18%, steak 20%, bread 4%, tomatoes 16%, eggs 20%, boneless ham 19%, lettuce 18%, skim milk 29%, fresh potatoes 18%, and potato chips 7%. Earlier figures, from 2008-10 (Schepf 2013) showed the following: sugar 28.1%, fresh pork 27%, lettuce 24.7%, broccoli 23.8%, wheat flour 23.5%, fresh apples 23.4%, fresh potatoes 18.7%, lemons 16%, oranges 12.9% and grapefruit 11.8%. The overall farm share of the price of food products in the United States fell from 41% in 1950 to 15.5% in 2011 (Schnepf 2013). For fresh milk the farmer share declined from 52% in 1980 to 33% in 1998 (Cryan 2001). One factor is increased processing of food, but this is irrelevant for fresh product.
Similar declines in farmer share are evident in many parts of the world. In Canada, for example, it went from an average of 19% in 1997 to 17% in 2010 (Duckworth 2014). Between 1988 and 2002 Canadian farm gate prices for pigs fell by 5% while the retail price of pork rose 39%; in 2005 wheat farmers got 5 cents out of each loaf of bread, the same as 30 years earlier, while the share going to millers, bakers and grocers went from 38 cents to $1.35 (Riddell 2008).
1.3: Farm profitability
Since 1982 farm costs in Australia have risen at three times the rate of farm prices, resulting in an average 3% decline in the terms of trade per year (Hutchings 2013). There was a 25% fall in the terms of trade between 1981 and 2008 (Lockie (2015). Productivity gains have recouped some of that decline, averaging 1.5% per year from 1977 to 2007 (Lagura & Ronan 2009) but productivity increase has since reduced to close to zero (Hutchings 2013). Lockie (2015, p.49) is of the opinion that: “Despite consistent productivity gains and a constant stream of farmers leaving the sector many remain vulnerable”.
Australian vegetable growers are experiencing rapidly rising costs that cannot be funded by increased productivity and are being met by increasing debt and farmers leaving the industry; some bean growers received 28 cents per kilo for beans that consumers paid $4.50 per kilo for (Ryan 2014)
Wheat yields in the Western Australian wheatbelt doubled in the 1980s and 1990s and productivity rose by an average of 3.5% per year. However farmer poverty increased during that time due to a combination of climate change (causing increased drought and late frost), decreased farm terms of trade and decreased government support (Ellis 2016). WA wheat farm numbers fell from 9,439 to 6,879. Since then productivity gains have stalled and in some cases reversed. Farm sizes increased and became more capital intensive leading to higher debt and greater vulnerability. Deregulation and free trade also increased vulnerability to market volatility and increasing costs of inputs. However governments continue to promote enhanced efficiency in order to be competitive in international markets. Ellis (2016) concludes that when efficiency limits have been reached, which may already have happened, WA wheat growing will become unviable as climate change effects worsen. Since the deregulation of the Australian Wheat Board in 2008 Australian agriculture received the second lowest (after New Zealand) support in the world.
Between 2005-6 and 2007-8 42% of broadacre farmers in Australia made losses of greater than $50,000 per year, while only 31% made a profit; 42% of dairy farmers made a profit in those years (Lagura & Ronan 2009). The difference was largely made up by off-farm income, including wages and salaries, investment income and government support payments; this figure amounted to 50% of farm family income in 1989-90 to 1992-3, rising to 58% in 2003-4 to 2007-8 (Lagura & Ronan 2009). Farmers with sales of less than $100,000 per year obtain 80-90% of their family income from off the farm; for those selling more than $100,000 per year the figure is 50%; most of this is done by women (Lockie). The average weekly disposable income of Australian farmers in 2009-10 was $568, compared to the national average of $921.
There has been no real price increase for dairy farmers since the 1960s. Dairy farmer return on equity averages 1.3%, with negative returns for a fifth of farmers. Average dairy farm debt is $700,000 (Farmer Power 2014). Return on investment for a third of Australian farmers is -3%; for another third it is less than 1%, and for the remainder less than 3%. Three quarters of farm businesses do not make enough to meet personal needs and business growth (Lockie 2015).
In Canada real return on investment for farmers was zero in 1991; by 2006 it was negative $15,000. Small and medium sized farms in Ontario get 90% of their income from off the farm (Riddell 2008).
The economic theory promoting increased competition, efficiency and productivity and free trade has not improved farm incomes and has led to greater poverty, more farmer suicides, declining rural services and loss of population (Rees 2003).
1.4 Farm debt
Overall rural debt in Australia in 2011 stood at $68 billion (Rees 2012). The debt to output ratio rose from a low point in 1979 of less than 40% to 132% in 2011; it has been above 100% since 2003 (Rees 2012). Much of the leap is recent: farm debt rose from 66% of farm production in 1999 to 135% in 2009 (Hutchings 2013). Interest payments increased to 15.9% of farm costs by 2011 (Rees 2012).
The average farm debt in the Victorian Mallee region amounted to $800,000 per farm, following just two years of positive cash flows in the twelve years from 1994 (Hutchings 2013).
Interest rates can be extraordinary high: Bankwest raised the interest rate for heavily indebted WA wheat grower Peter Repacholi from 8.5% to 13.62% because he was assessed as a credit risk, which of course meant inevitable foreclosure (Murphy 2014).
1.5 Farmer health
The health statistics for male farmers and farm managers is significantly worse than the general male population; the death rate is 33% higher for men between the ages of 25 and 74. Prostate cancer rates are 137% higher, skin cancer 59%, cardiovascular 41% and for cancers of the colon and rectum 39%. Suicide rates are 20% higher. People in rural areas have a 4 year lower life expectancy (Lockie 2015).
2. Corporate concentration and power over agriculture
2.1. Corporate concentration
A major cause of loss of farm income is the increasing concentration of agribusiness corporations over all aspects of agriculture – processing, exporting, retailing and even production. This has greatly weakened the ability of farmers to influence the prices they receive. Free trade and deregulation have increased this imbalance, by reducing competition between buyers and increasing it between farmers, not just within nations but also with producers in other countries.
The corporations are usually involved in many aspects of the agriculture chain. ConAgra, for example, is one of the largest distributors of agricultural chemicals and fertilisers in North America, has a joint venture with DuPont for seeds, owns grain elevators, rail cars and barges, produces poultry and other livestock food, operates chicken hatcheries and processes poultry; it is the second largest food firm in the United States, the largest turkey producer and the second largest broiler producer (Heffernan 2000).
In the US in the early 1980s 15 companies provided 60% of all farm inputs, 49 controlled 68% of food processing and 44 received 77% of all wholesale and retail sales (Lawrence 1987). The four largest processing companies in 1987 controlled 55% of broiler production, 87% of beef slaughter, 60% of pork slaughter, 73% of sheep slaughter, 62% of flour milling, and 76% of soybean crushing (Heffernan 2000). By 2000 the world’s top ten agrochemical corporations had 81% of the global agrichemical market; ten firms controlled 43% of the veterinary pharmaceutical market (McMichael & Lawrence 2001). By 2015 the top ten seed corporations had 75.3% of the market, top ten pesticide corporations 94.5%, top ten veterinary medicine corporations 81%, top ten fertiliser corporations 41%; the top three machinery corporations had 77% of machinery sales (Mooney 2015). Up to date information quickly loses currency as amalgamations and takeovers occur very frequently.
Four corporations control 90% of world traded grain: Archer Daniels Midland (ADM), Bunge, Cargill and Louis Dreyfus. The four are sometimes referred to as ABCD (Murphy et al 2012). The companies also provide seed, fertiliser and agricultural chemicals and are landowners, cattle and poultry producers, transport providers, food processors, biofuel producers and financiers. Cargill is the biggest. Cargill bought the commodity business of the privatised Australian Wheat Board in 2011. The corporations have an enormous ability to set commodity prices and exert considerable control and influence over government regulation of food by lobbying, employing former government officials to lobby for them, and through the “revolving door” between government regulators and corporate heads. Neoliberalism, the privatisation of government assets, free trade, financial deregulation, lower tariffs, abolition of import quotas, the selling off of grain reserves around the world, and relaxed foreign investment rules have all helped the ABCD corporations. At the same time it has increased import dependency in most countries (Murphy et al 2012).
The seed market is also highly concentrated. Over just two decades small seed companies around the world became consumed by several huge agro-chemical corporations. Now, ten corporations control the majority of the global market for seeds. The biggest, Monsanto, has 35%; DuPont controls 22% and Syngenta 23%; Monsanto has 90% of the US soy seed market (GRAIN 2012). These corporations are also the leading GM seed producers. Public plant breeding programs were either privatised or entered into partnerships with the corporations. Now all major seed companies are controlled by chemical companies (Middendorp p.112) – the top six pesticide corporations are also the top six seed companies (Mooney 2015).
2.2 Extending worldwide
Africa is the new frontier for corporate penetration, where few farmers use agrichemicals and most save their own seeds for replanting. In 2012 the governments of the G8 group plus 10 African governments and corporate partners set up the New Alliance for Food Security and Nutrition in Africa to lift 50 million people out of poverty by 2022 through “unleashing the power of the private sector”. The biggest agribusiness corporations in the world are involved, including Cargill, Syngenta, Unilever, United Phosphorus, Yara, DuPont, Louis Dreyfus, Monsanto, Nestlé and Bunge (see Obenland 2014 for a more extensive list). These corporations have pledged to invest $7.2 billion; one such investment is a $1.5 billion fertiliser plant by the Norwegian fertiliser giant Yara.
The role of the African governments is to improve investment opportunities including lowering taxes, allowing full market access for fertilisers, seeds and pesticides, and reforming land titles. Critics say this will increase land grabbing, encourage monocultural cropping that will exacerbate soil degradation, focus on export crops in place of local food production, increase contract farming and labour under severe conditions, increase the power of input providers, lose seed biodiversity and reduce government responsibility for food and nutrition (Obenland 2014). The agribusiness corporations have not solved the food security problem or improved farm incomes in the rest of the world and are unlikely to in Africa either. It will certainly increase the market for their input products.
2.3 Determining agricultural policies
Between 2008 and 2016 agribusiness corporations donated US$356 million to political campaign expenses of the two major parties in the United States, and in 2015 alone spent $132.6 million in lobbying politicians and bureaucrats (Cook 2016). The purpose was to get governments to expand trade deals and protect pesticides and GMOs from more regulation.
Here are some examples of crossover between corporations and public policy. Cargill’s former senior vice-president (also former officer of USDA) drafted the original US proposal to the World Trade Organisation Uruguay Round negotiations (McMichael 2000). The former head of the National Institute of Food and Agriculture, an arm of the United States Department of Agriculture, Roger Beachy, formerly worked with Monsanto developing a GM tomato and became the founding president of Monsanto’s Donald Danforth Plant Science Center (Richardson 2012). Michael Taylor was a lawyer for Monsanto before becoming Deputy Commissioner for Policy for the US Food and Drug Administration in 1991, then returned to Monsanto as vice-president, then went back to FDA regulating food safety (Smith 2010). The Chairman of Monsanto, Robert Shapiro, became Chair of the US President’s Advisory Committee for Trade Policy and Negotiations, and Mickey Kantor, the US Trade Representative during the Uruguay Round of GATT was on the Monsanto board (McMichael & Lawrence 2001).
According to the New York Times, "What Monsanto wished for from Washington, Monsanto and, by extension, the biotechnology industry got. . . . When the company abruptly decided that it needed to throw off the regulations and speed its foods to market, the White House quickly ushered through an unusually generous policy of self-policing" (Smith 2010). Monsanto has a terrible record for falsifying data to prove that its products are safe (detailed in Smith 2010).
In Australia too: “The (pesticide) industry has done much to shape Australian agriculture, influences the direction of pest control research and exerts considerable power within government departments” (Short 1994, p. 242).
Corporations are also highly active in defending chemical fertilisers from attack by greenhouse gas abatement policies. Nitrate fertilisers are a major cause of greenhouse gases, as up to 5% of applied nitrate escapes into the atmosphere as nitrous oxide, 300 times more powerful than carbon dioxide as a greenhouse gas. Nitrate production is the main user of natural gas which in itself accounts for 1-2% of the world’s GHG. Nitrate fertilisers also destroy soil carbon. The fertiliser industry is highly involved in the Global Alliance for Climate Smart Agriculture, set up in 2014 to block meaningful action on climate change. One example of their program is to increase nitrate fertiliser use in Africa, which they argue will increase agricultural production and therefore reduce the need for deforestation, resulting in a decrease in greenhouse gases! (GRAIN 2015).
A good example of the influence of vested interests was revealed on an Insight television program into the connection between farmers’ organisations (Victorian Farmers Federation and National Farmers Federation) and the agrichemical industry in the promotion of Genetic Engineering. This program revealed that: the Canadian farmer invited to the VFF Grains Group conference early in 2003 to tell of the Canadian experience in GE canola growing was paid by Monsanto to come; Agrifood Awareness, a NFF group set up to provide information on Gene Technology for farmers, is funded by the chemical companies through Avcare (the agricultural and veterinary chemical lobby group); the Gene Technology Grains Committee is also funded by Avcare; research conducted by the Cooperative Research Centre in Adelaide on pollen transfer in canola crops was funded by Monsanto - the research found pollen transfer was negligible (Insight 2003).
2.4 Contract farming
Contracts are often made between a farmer and a corporation for the supply of a particular commodity at a certain time, of certain quality and a certain price. In the United States even in 1970 90% of broilers, 85% of processing vegetables, 95% of fresh milk, 98% of sugar beet, 75% of cotton and 50% each of sugar cane, citrus, potatoes and turkeys was produced under contract (Lawrence 1987).
Poultry in Australia too is dominated by contract farming; in the mid 1980s it was mainly managed by one corporation, Allied Mills, which ran the hatcheries from which the farmers bought the chicks, provided feeds from its own mills, and received the birds at its own processing works (Lawrence 1987). The majority (at least 80%) of processing vegetables in Australia is under contract to processors, supermarkets and fast food chains Burch & Rickson 2005).
In Tasmania 95% of potatoes are grown under contract to either McCain’s (Canadian) or Simplot (United States) for frozen chips. Both these companies have contract farmers in other countries and can use the threat of imports to discipline growers. The contracts specify the potato variety (Russet Burbank), amount and quality. The companies reserve the right to inspect the contract farms and demand particular pesticide or fertiliser use. Growers are ranked according to yield, quality, farm size, loyalty and cooperativeness; the top third are offered further contracts, the middle third get notice to improve their performance, and the bottom third eventually get dropped. Growers face all the risk, and overplant in order to reduce that risk (Burch & Rickson 2005).
Here are some figures for contract farming in other countries (GRAIN 2012): poultry in Brazil 75%, dairy in Vietnam 90%, rice in Vietnam 40%, pork in the entire world 50%, and world poultry and eggs 66%. Nestlé has 600,000 farmers under contract around the world (GRAIN 2012).
There are great advantages for the corporations. Farmer are their own supervisors, forcing themselves to work harder to increase productivity, deliver a cheaper product, pay for the investment and take all the risk, with none of the benefits an employee has of sick pay, holiday pay and set hours. Farmers can be treated as employees without being paid as employees (Lawrence 1987).
While there are corporate farms in growing number, overwhelmingly agriculture around the world is carried out by small producers, including in the industrialised countries. Corporations are less interested in food production itself because it is easier for them to make profits from farmers than from farming. Farmers produce cheaply by self-exploiting (Bernstein 2013).
The corporations also trade on commodity futures markets and are involved in price speculation. Deregulation in the 1980s allowed banks and investment houses to trade in derivatives of agricultural commodities, which the grain traders had been doing for a century, and further deregulation in 2000 in the US further stimulated speculation. By 2010 investment in agricultural hedge funds amounted to $196 billion, according to Murphy et al (2012), though there are estimates that are considerably higher. Their profits depend on their ability to predict price changes, which they can also influence (Murphy et al 2012). Their profits rose dramatically between 2002 and 2011, four fold in the case of Cargill. Müller (2013) estimates a rise in commodity futures trading from $13 billion in 2003 to $317 billion in 2008 on just two of the biggest exchanges, and suggests when all other avenues for agricultural commodity price speculation are included it could be as high a $3 trillion. Speculation has increased price volatility and decoupled supply and demand as determinants of prices (Müller 2013).
2.6 Farm worker exploitation
There have been many reports of temporary farm worker exploitation in Australia (eg. Jasper 2016). The temporary jobs of picking and packing fruit and vegetables are often done by people on working holiday visas from Europe and East Asia, Pacific Islanders on seasonal worker visas, and South-East Asian immigrants. Most are organised by labour contractors. Conditions are often poor, piece rates are low and deductions for board and transport high. Fraud by labour contractors sometimes occurs, including non-payment of wages. Immigration officials stage farm raids looking for visa violations.
In the US seasonal work is often done by undocumented immigrants who are especially vulnerable to maltreatment because of deportation threats. There is plenty of surplus labour which allows contractors and farmers to keep wages very low and conditions poor and unsafe, with excess deductions for transport, housing and food (Majka & Majka 2000).
Similar conditions exist in Canada (Paz 2008). Farm workers are controlled by the Farm Labour Contractor system; the contractors allocate the jobs and determine how much the workers will earn and the conditions of work, which often means 12-16 hour days without overtime, holiday pay or weekends off. Under the Seasonal Worker Programs workers are on temporary visas and have no rights and no enforced standards of employment or safety. Indeed, the British Columbia government excluded farm workers from the Employment Standards Act in 2004 (Paz 2008).
Farmers also exploit themselves: in Australia 50% of farmers worked 49 hours per week or more, much higher than other sections of the workforce (ABS 2012).
3. Research and technology
3.1 The promise of technology
Technology is said to be the key to solving the world’s hunger problem. The Green Revolution of the 1960s and 1970s that greatly increased yields in Asia and Latin America is looked at as a good example. However it did not solve hunger. Indeed, on the Indian subcontinent where its adaption was highest, both the number of hungry people in the region and the percentage of the world’s hungry on the sub-continent both increased (Lappé & Collins 1986). The Green Revolution crop varieties only did well with high levels of chemical fertilisers and pesticides and required irrigation, and the costs of these inputs rose much faster than food prices, creating unsustainable indebtedness and loss of land. In Luzon in the Philippines the farm share of the value of the rice market fell from 80% to 50% in just nine years, the beneficiaries being the input and credit suppliers (Lappé & Collins 1986). Despite the failure of technology to solve the hunger problem, it is still being touted as the answer. There are one billion hungry people, a number growing faster than population growth, yet there is plenty of food produced in the world (GRAIN 2012).
3.2 Effects of technology
Agricultural technology includes chemical fertilisers, pesticides, hybrid seeds, genetic modification and mechanisation. Technology can have positive or negative effects on productivity, farm incomes, rural welfare and the environment, but it usually does not. It has broken the link between agriculture and ecology since World War Two (Altieri 2000).
Agricultural technology and biotechnology has greater increased the extraction of profit from farmers. The development of pesticides and cheap fertilisers after World War 2 created a boom for input supplying corporations, and the hybridisation of plant varieties added to that. When these technologies started to reach their limit - the restricted range of plants that could be hybridised, the failure to develop new pesticide options, and an upper limit on fertiliser application – biotechnology came to the rescue, coupled with Plant Variety Rights to prevent farmers from saving their own seeds. Lewantin (2000 p.100) maintains that the main intention of biotechnology is to “extend the control of capital over agricultural production”.
But biotechnology needs policing, by way of non-propagation contracts that farmers have to sign when they purchase the seeds. Terminator technology was then developed to make policing redundant by stopping the next generation of seeds from germinating. Unfortunately for the corporations, this has been disallowed by world agreement. The option for input corporations then is to extend the market to places in the world where farmers do not use inputs. Africa is the last frontier, and US Aid for International Development, the Alliance for a Green Revolution in Africa and many other organisations are assisting in this mission, in the guise of “feeding Africa”.
Once farmers adopt chemical fertilisers the pesticide-fertiliser treadmill begins. More and more nitrates are needed to obtain the same result as soil structure and soil carbon levels are damaged. Average world nitrate use has greatly increased from 8.6 kg/ha in 1991 to 62.5 kg/ha in 2006. In that time the yield of maize declined from 226 kg per kilogram of nitrate used to 76 kg. Rice fell from 217 kg per kilo of nitrate to 66; soy from 131 to 36, and wheat from 126 to 45 (GRAIN 2012).
Professor Francis Chaboussou has made a study of the effects of pesticides on plants’ ability to resist pests and diseases. Many scientists had noted that since the large scale use of pesticides commenced in the 1950’s, pest and disease problems have proliferated, but were unable to explain why, apart from the destruction of predators that the pesticides caused. Chaboussou found that the pesticides created physiological changes in the plant that weakened their immune system, just as organo-chlorine insecticides do in humans. The effect is to increase the amount of amino acids (soluble nitrates) in the plants. All pesticides that Chaboussou tested produced an increase in nitrogen content in the plant and corresponding deficiencies of boron. Nitrate fertilisers also increase pest and disease susceptibility (Chaboussou 1986, Lutzenberger 1984, Willis 1991).
According to the US Environmental Protection Agency, “American farmers thirty years ago used 2265 tons of pesticides and lost 17% of their crops before harvest. Today , farmers use 12 times more pesticides – yet the percentage of the crops lost before harvest has almost doubled” (Goldsmith 1978).
In 1986 the Indonesian government banned 56 rice pesticides and eliminated all pesticide subsidies. Integrated Pest Management techniques were introduced. Rice yields rose by 500 kg/ha and there were no further outbreaks of the brown plant hopper, the chief target of the pesticides (McNeely & Scherr 2002). In Bangladesh, using IPM, a 90% reduction in pesticides on rice increased yields by 10% and a 75% reduction on eggplants increased yields by 12% (FAO 2015).
Dairy herd fertility in Australia is declining by about 1% per year in the 10 years up to 2015 (Kempton 2015); a possible reason is the increase in nitrate use on pastures or the increase in grain feeding as a result of dairy deregulation.
The environmental costs of pesticides in US were in 1990 estimated to be $8 billion per year, for impacts on wildlife, pollinators, natural enemies, fisheries, water, and resistance costs, and the social costs of poisonings and illnesses, double the expenditure on the pesticides themselves (Altieri 2000). The cost of land and water degradation in Australia is estimated at $2 billion per year (Lockie 2001). The prices of food do not include these externalised costs; if they were then modern industrial agriculture would lose any pretence of efficiency.
3.3 Reductionism and holism
Much agricultural research has contributed to the unsustainability of farming from a community and environment point of view. It has over the past 100 years achieved increased productivity and yields, but with little concern for the side effects on the resource base and the farming population. There are two important reasons: one, the issue of reductionism versus holism, and two, the myth of objectivity in science (MacRae et al 1989)
Reductionism is the breaking down into individual parts; holism is how everything fits together to create a system. A reductionist scientist will often be highly trained and an expert in his/her field, but know very little about other fields. For example, a plant pathologist could have a fantastic knowledge about every important plant disease but will know little about plant pests or weeds or ecology or soils or the effect of fungicides on human health. This scientist could miss connections between plant pathology and other fields such as soil structure which might affect soil borne disease, pesticides that might create conditions for disease to develop, the plant’s immune system, harmful effects of fungicides, and so on. The scientist’s focus would be on ways of suppressing that disease. It is like a chest of drawers, with each drawer labelled with a particular discipline, with no contact between the drawers.
It is not possible to understand an ecosystem by breaking it into sections and examining each section. There is too much interaction between sections. The relationships between the sections are important – no one section exists in isolation.
Reductionist science depends on measurable results – statistics. In complex ecosystems obtaining figures may be irrelevant and unreliable, as many aspects of biology are unmeasurable. It also means that scientists are often not interested is working on complex interactions because the scientific method and the scientific community demands measurability. Therefore issues of sustainable agriculture are less likely to be investigated (MacRae et al 1989).
One definition of holism is “using tools outside your profession” (Savory 1988 p.112). The reductionist approach would be to attack the problem, the holistic approach would be to look for all the possible causes and contributing factors and address those without causing other problems.
The ideas of Holistic Resource Management were developed by Allan Savory, a grazier from Zimbabwe now living in the US. Savory identified thought process as being of utmost importance – each decision that a land manager makes has some effect other than what was intended, so holistic resource management tries to provide the skills to consider all aspects and possible effects. The entire system has to be included: the human, the biological and the economic resources. Genetic engineering is a good example of where only the economic resources are considered. The ecosystem is not in consideration at all (Savory 1988).
Nothing exists in isolation. It is not the individual parts of a system that are important, but the relations between them. Ecology is the relation between parts of the natural world – plants, animals, microorganisms, humans, the sun, the soil, water, air, etc. Savory says that to understand the parts of a system first you had to understand the whole, which is the opposite to more conventional ways of thinking. Wholes are more than the sum of their parts (Savory 1988).
The development of hydridisation is a good example of an outcome from conventional agricultural research that does not advance sustainability (MacRae et al, 1989, p.179). Corn was hybridised for the stated purpose of increasing yields. However the following questions should have been asked:
• Are there other ways of increasing corn yields? Only one factor in corn yield was considered (genetics) while soil fertility, water, cultivation techniques, weed management, machinery, local conditions, etc. were not.
• Are there any negative side effects? Side effects were ignored. These included reduced food value, increased fertiliser, pesticide and other inputs and increased dependence for farmers who could no longer save their own seed. The stated outcome of increasing yield may have been achievable through a combination of selective breeding and improved farming techniques, without producing the negative side effects.
• Under what conditions does hybrid corn increase yields? Trials were done in controlled conditions that cannot replicate agricultural ecosystems and the range of variables within them, so that yield would only increase if certain conditions were met.
• Are there other, unstated motivations for developing hybrid corn? The main motivating factor in hybrid corn development has been profit for the seed company. Thus the needs of farmers are secondary.
• Who benefits from the increased yields? Is the viability of farmers increased by the development of hybrid corn? The effects of increased yields are assumed to flow to the producer. However this rarely happens. The benefits are more likely to accrue to the processors and resellers who can improve their profit margins as the corn can be produced more cheaply.
Society should be able to determine agricultural needs then see if technology can address these needs. All people are affected by science and technology so deserve a say in its use.
3.4 The objectivity of agricultural research
There is a myth that science is always rational and objective. It is often neither. Science is commonly used to sustain vested interests, whether political or economic. Scientific research is often funded by private organisations who expect a profit from the research. These days much government funded research is also required to bring in a profit in order to keep the research organisation going in the face of cutbacks. This means that research into areas that will not produce a profitable commodity or input is often ignored. There are profits to be made in genetic engineering to control weeds but not in management systems that prevent weeds from becoming a problem.
The following characterises most agricultural research (MacRae et al 1989). Efficiency is elevated above environmental and other negative impacts. Scientists have a negative view of labour and a highly positive view of mechanisation. The production of marketable goods is regarded as more important than managing an ecosystem. Emotion, philosophy and ethics are divorced from scientific research. Science wants to control nature, fearing that nature will take control if they don’t. There is tremendous pressure on scientists to conform to this technological paradigm if they want to maintain or advance their careers and not suffer ridicule. Solutions to problems often have to be made marketable (MacRae et al 1989).
Thus ecology is external to agriculture, and agroecology a foreign concept. Technology, and especially biotechnology, does not address the root causes of a problem. Funding for agricultural research is tied to usefulness, efficiency and productivity, not sustainability (though now that “sustainable development” has to apply to all Australian policy, it is easy to redefine sustainability in order to continue as before!).
Australia’s CSIRO is called on more and more to integrate with business to produce goods and services of benefit to business, and bring in much of its own financing from the sale of technologies (Kampmark 2016). There seems to be little place in the organisation for research into sustainability issues in agriculture, and scientists with that interest find they can only work effectively outside the CSIRO. A quick look through GroundCover, the publication of the Grains Research and Development Corporation, will show that overwhelmingly the research articles are about using genetics to try to keep ahead of new diseases, extending the life of herbicides, and better targeting of chemical fertiliser use, instead of looking at why there are new plant diseases, ways to avoid herbicide use, and how to manage soil fertility biologically without inputs. Martin (1997) details cases of scientists prevented from following ecological lines of inquiry in research organisations and academia.
I have several times attended soil biology conferences put on by the agricultural science community, the theme of which has been to encourage farmers to capture the benefits of soil biology to increase sustainability and reduce costs. Various methods are discussed but the one that is possibly the most influential in suppressing soil biology, agrochemicals (Broughton 2013), is not in the picture. The unstated paradigm is that these are so essential that they are untouchable.
A quarter of agricultural research funding for universities in the US comes from corporations. Corporate funding of agricultural research totalled $7.4 billion in 2006, considerably more than public funding, and this influences both the topics researched and the research findings (Richardson 2012).
A British survey of scientists working for government agencies and newly privatised laboratories in 2000 found that a third of the scientists had been asked to adjust their conclusions to suit the sponsor. Seventeen per cent said they were asked to change the conclusions for the benefit of the customer who has requested the research, 10% said they had been asked to do so in order to get further contracts, and 3% were asked to make changes to affect publication of the results (Lightfoot 2000).
In a survey of US scientists published in Nature 15.5% said they had changed the design, methodology or results of a study due to pressure from funders, and 12.5% said they had overlooked the use of flawed data by their peers (Wadman 2005). A check on ten papers discussing the alleged blood clotting risk of the third generation of contraceptive pills showed that all those papers funded by the pharmaceutical industry reported no risk, while all those with other funding did (Lightfoot 2000). Similarly, papers finding no health risk of passive smoking were linked to the tobacco industry (Lightfoot 2000).
Cuba was able to make rapid advances into organic farming research because there were no economic interests impeding the research.
3.5. Making research more responsible
MacRae et al (1989) make several recommendations that would enable science to become more holistic:
• Set public goals for agriculture. This requires political decisions and leadership from governments. The unspoken goal for decades has been productivity and efficiency. Sustainability also needs to be a goal. Targets can be developed, such as a 20% decrease in pesticide usage over the next 5 years. Priority in research funding distribution could be geared towards meeting these particular goals of greater sustainability.
• Reward sustainable agriculture scientists adequately. Ensure that their chances of promotion are not hampered by breaking the accepted paradigms. Advancement should be based on new criteria, such as team work, interdisciplinary research, compliance with stated national agricultural goals, service to the community, etc., rather than on ability to get articles published.
• Introduce into agricultural education topics on agricultural history, ethics, ecology, sociology, social justice, health, etc., to broaden the outlook of scientists in training.
• Foster closer relations between scientists in different fields and between scientists and farmers.
• Change funding policy. Governments should not be providing funding for projects that are of benefit to agribusiness but not to farmers or the community. Government funding can be directed to sustainable agriculture projects.
• Change the scientific method, so that holistic methodologies, observation and description are regarded as legitimate research methods.
• Give credence to the research conducted by people who are not professional scientists (lay scientists, who are often practicing farmers).
• Carry out participatory research – a pooling of the talents of scientists and farmers.
• Possible negative effects on the environment and on people and communities must be considered in agricultural research.
4. Free trade and deregulation
4.1 The theory and the promises
Australian governments developed agricultural support policies in the 1920s to boost rural development and stem the flow of people to the cities. These policies included improving transport, communications, education and health infrastructure in rural areas, closer settlement schemes, bounties for farm production and state marketing boards. However they policies did not solve the problems as the rural exodus continued and farmer prosperity did not increase markedly (Davison 2005). The next stage of government policy was “get big or get out” (Tonts 2005).
The economic theory behind the structural adjustment reforms that commenced in Australia in 1983 believed that open market competition would improve efficiency and raise farm productivity, leading to increased real farm returns. Because larger farms have a higher rate of return on capital investment, small farms need to disappear, the argument goes. The exit of small farmers was seen as imperative for agriculture to become internationally competitive. Farming was urged to become a business, not a lifestyle, responding to market signals; government actions would distort these signals. The aim of deregulation then was to promote a more competitive, sustainable and profitable rural sector (Higgins & Lockie 2001). The Australian government’s Agricultural Competitiveness White Paper of 2014 said that the aim of government policy was to increase farm gate returns, and one of the impediments to that was identified as government regulations (Lockie 2015).
National Competition Policy was established in 1994 to complete the dismantling of agricultural support – protection had to provide proof of “social benefits”. However these social benefits criteria were restricted to economic efficiency, with no regard to the effect on individual farmers and farm communities, the environment, or food security, which were regarded as purely emotional issues. Rural wealth was expected to arise from a global accord on free trade which would strengthen the development of industrial agriculture; while the demise of family farming was necessary for this to happen, that was not a concern of the economists. When the promised benefits of an economic windfall from increased exports did not occur, the promise was extended into the future when the rest of the world would come to its senses (Pritchard 2005, 1 & 2).
Farm gate returns did not improve. One of the reasons is the unequal power balance between input suppliers and output purchasers on the one hand, and farmers on the other. Many farmers compete with each other on a world wide basis while suppliers and purchasers become more oligopolistic and compete less (Rees 2012). The stated reason for its failure by the proponents of deregulation is that deregulation has not gone far enough, that governments have lost their nerve (Lockie 2001), or that the results will come in time.
Australian economists became strongly influenced by the free market theories of the Chicago School in the 1960s and 1970s which emphasised the benefits of free trade (Pritchard 2005, 1 & 2). Up till then agriculture had been regulated to stabilise prices and production levels, but this was regarded by the economists as impeding efficiency. The Cairns Group of agricultural trading nations was set up in 1986 at Australian instigation to lobby for free trade in the Uruguay Round of the GATT (General Agreement on Tariffs and Trade, later to become the World Trade Organisation). Since then Australia has been a prime advocate of free trade, and abolished support policies in the belief that other countries would follow this bold example.
4.2 The structures supporting free trade
The theory behind free trade is that countries should concentrate on exporting what they can produce cheaply and import what they can’t – the theory of comparative advantage. This would increase growth and employment and reduce poverty by the trickle down effect. It has not worked: the US Center for Economic and Policy Research found the opposite - sharply reduced rates of economic growth and social progress (measured by poverty levels, infant mortality, life expectancy, education, equality) in most countries (Global Trade Watch 2006).
The World Trade Organisation was established in order to promote and enforce free markets. Countries become members and agree to its rules. Rarely though are these rules discussed or voted on in national parliaments. Negotiations are carried out by trade negotiators, including representatives of individual governments and business. No referendum on WTO membership has occurred anywhere in the world, and in Australia there was no vote in parliament on membership. WTO policies are made by a small group of powerful countries; many countries cannot afford to maintain permanent delegations and therefore their participation is restricted. Yet WTO decisions can over-ride domestic laws, if the WTO decides that a particular law limits trade. Labour standards, quarantine, environmental regulations, local content media rules and local procurement provisions can all be challenged as barriers to trade. Dispute settlement proceedings are secret – documents, hearings and briefs are all confidential. Decision making powers are removed from parliaments to unelected WTO panels accountable to no-one and acting on behalf of foreign commercial interests ahead of public interest (Global Trade Watch 2006).
The Doha Round of WTO talks finally broke down in 2008 because of opposition from developing countries led by Brazil, India and China to the demands from the richer countries, including Australia. The suicide of the leader of the Korean Federation of Advanced Farmers Association, Lee Kyung Hae, at the Cancun WTO meeting in September 2003 at the end of a march by 15,000 farmers protesting WTO policies focused attention on the inequities of WTO rules (Carlsen 2003). Since failure of the talks looked likely in 2005 countries have turned their attention to developing bilateral and regional trade agreements (Charlton 2006). Australia has vigorously pursued these agreements and has concluded several.
4.3 Trade agreements and effects on trade
Free trade does not necessarily increase trade. The Australia-US Free Trade Agreement (AUSFTA) of 2005 did the opposite, as well as suppressing trade between each of those countries and the rest of the world (Armstrong 2015). The Singapore-Australia Free Trade Agreement (SAFTA) had a similar effect, while the Thailand-Australia FTA did boost trade between Australia and Thailand (Armstrong 2015). The US-Korea, EU-Korea and NZ-China free trade agreements had no impacts in the first 4 years (2008-12) but were expected to as tariffs were gradually reduced (Tulloh, Jiang & Pearce 2014).
Despite the evidence so far, modelling still indicates that free trade agreements that Australia is part of will increase Australian exports, increase production and increase GDP (Tulloh, Jiang & Pearce 2014). “The removal of trade barriers is of fundamental importance to Australian agricultural industries” (Craig Burns, Forward in Tulloh, Jiang & Pearce 2014, p.iii). Australian agricultural exports have risen by an average of 5% per year between 1980-81 and 2010-11; the chief markets are China 14%, Japan 13%, Indonesia 8%, the Middle East 10%, European Union 8% and the US 7% (ABS 2012), all of which except the US had no free trade agreements with Australia. During the first four years of the US Australia Free Trade Agreement trade with the US increased much less than trade with China, South Korea and Japan (Stoler 2009).
While farmer groups like the National Farmers Federation (NFF) and Dairy Australia keenly support free trade agreements, the reality is that agricultural produce subsidising countries want agriculture excluded from FTAs (Gribbin & Duxfield 2013), as reducing their subsidies is politically very difficult. Thus Dr Jeffrey Wilson of the Asia Research Centre at Murdoch University is quoted (Gribbin & Duxfield 2013) as saying: “Studies have found that these free trade agreements are fairly ineffectual” in increasing exports from Australia and their prices. Exports have been increasing but to countries with which Australia does not have free trade agreements (Stoler 2009). The benefits of increased exports however are usually captured by agribusiness before they get to farmers (McMichael & Lawrence 2001).
4.4 The effects of trade liberalisation in Australia
During the trade liberalisation period rural employment in Australia has halved from 6.5% of the workforce in 1979-80 to 3.3% in 2009-10; at the same time employment in manufacturing also halved in percentage terms (Rees 2011, quoting figures from ABARE). The benefits of trade liberalisation have been over-stated, and the continuing farmer hardship is said to be a personal failure rather than a possible policy failure (Pritchard 2001). One of the original purposes of agricultural trade regulation was fairness, to protect the many sellers from the power of the few buyers – deregulation has demolished that goal (Pritchard 2001).
Deregulation has continued the decline in farming terms or trade. Farmers that were deemed viable a decade ago are no longer, as the threshold for viability rises. There is further loss of people, services and employment in rural areas as farms get bigger. Dependence on the treadmill of higher inputs increases debt, financial risk and environmental damage (Higgins & Lockie 2001).
The Australia-US Free Trade Agreement was signed in 2005. In the vain hope that the US would cut its agricultural protection Australia abolished import restrictions. The agreement gradually reduces trade barriers in the US for dairy, beef, lamb and wine, but none for sugar, to be phased in over 12-17 years. The outcome was that imports into Australia from the US grew more than exports from Australia to the US, worsening an already imbalanced trade gap that grew from $6.4 billion in 2005 to $11.6 billion in 2009, increasing every year. The overall benefits were negative for Australia, despite the predictions of more than $4 billion in benefits to Australia.
Free trade has decimated food processing in Australia. Companies that have closed their works down have put the blame on cheap often dumped imports. These include the Heinz factory at Girgarre in 2012, the Rosella factory in Seven Hills in 2013 and the SPC Mooroopna factory in 2012 (AMWU 2013). These closures have had a severe effect on workers who have lost their jobs, the supplier farmers and the community, particularly in the Goulburn Valley.
In NSW, following a reduction in import duties for canned fruit (1992) and vegetables (1985), the Pacific Dunlop Cowra vegetable processing closed in 1992 (subsequently reopened as a cooperative, then taken over as Windsor Foods, then closed in 2013), Leeton closed in 1994 and Mountain Maid at Batlow in 2002. Heinz transferred its beetroot canning from Brisbane to New Zealand for lower wages. Simplot in Bathurst was rescued from threatened closure by government. Home branded canned fruits and vegetables are now mostly imported because they are cheaper (Wilkinson 2013).
Simplot Australia cited lack of profitability when it announced possible closure in of its works in Devonport and Bathurst in 2013. The cause: inability to compete with cheap imported product. Liberal Senator Richard Colbeck blamed high wages in Australia (Ryan et al 2013). Free market advocates promise free trade and deregulation will boost the standard of living, yet this spokesman called for a reduction in standards of living. Labour must be “flexible” to be globally competitive, according to government, that is, cheaper (McMichael & Lawrence 2001). The same happened in the US – governments call for reduced wages so industry can remain competitive (Stiglitz 2014).
4.5 Free trade effects on other countries
In the 10 years since the signing of the Canada-US Free Trade Agreement in 1988, agricultural exports from Canada nearly tripled, but at the same time farm income (adjusted for inflation) fell by 24%, farm debt doubled, and 16% of Canadian farmers left the land. The Canadian National Farmers Union concluded that free trade agreements “may increase trade, but they dramatically alter the relative size and market power of the players in the agri-food production chain. Free trade helps Cargill and Monsanto, not farmers” (Hansen-Kuhn & Hellinger 2003 p.6).
Even the World Bank reported that the North America Free Trade Agreement had the following effects on Mexico: stagnation of growth, lack of competitiveness in the international market and an increase in poverty in rural areas (Hansen-Kuhn & Hellinger 2003). The effect on the Mexican countryside was devastating because of cheap US corn imports, and the huge price rises after 2004 brought about by biofuel policies and speculation did not improve farm incomes in any of the countries because input prices for fuel, fertiliser and agrichemicals also rose strongly (Hansen-Kuhn 2013). For Mexico, agricultural imports increased enormously. Grains and oilseed imports rose from 8.8 million tonnes in 1993 to 20 million tonnes in 2002, with similar figures for meat and tropical fruits, replacing domestically produced products and causing a drastic transformation on Mexican agriculture (Hansen-Kuhn & Hellinger 2003). Mexican farmer organisations called for a suspension of NAFTA. Yet at that stage the reduction in tariffs and quotas was only beginning.
Most of the promises of NAFTA – higher living standards, reduced poverty, reduced inequality, increased employment - did not eventuate though trade greatly increased between the three countries. President Bill Clinton promised one million new jobs in the US within five years of the signing of the NAFTA agreement and a lowering of trade deficits because of increased US exports; instead, after 20 years, there has been a loss of almost one million jobs, lower wages, and a 450% increase in the US trade deficit (Swenson 2014). The export of US subsidised corn did increase, decimating one million Mexican farmers and 1.4 million agricultural workers, and a doubling of Mexican migration to the US (Swenson 2014).
Haiti in the 1980s produced 80% of its own rice needs but was forced by the International Monetary Fund as a loan condition to eliminate tariffs; by 2010 it imported 80% (Lilliston & Hanson-Kuhn 2013). Romania was forced to allow imports of pork; as a consequence the number of pig farmers fell from 480,000 in 2003 to 50,000 just four years later (GRAIN 2012).
When trade liberalisation was forced on Ghana, meaning removal of price support for farmers, fertiliser subsidy, state marketing boards, subsidised credit and reduced tariffs, local rice producers could not compete with imports from the US. These imports were heavily subsidised so that rice was sold in Ghana for 34% below its cost of production. Ghana had been self sufficient in rice in the 1970s; by 2002 imports made up 64% of the nation’s supply. The same happened with tomato paste and poultry from the EU, both also heavily subsidised (Lim 2013).
The countries most adamant in calling for free trade – USA, European Union and Japan – all developed their economies through protectionist policies, and still do in relation to agriculture. Australia also developed through protectionism. Yet that is not permitted for less industrialised countries under trade rules (Kolhatkar 2015).
The US and EU between them spend $380 billion per year on agricultural subsidies, which mainly go to the big producers. In the EU more than half of the subsidies goes to 1% of the farms; in the US 70% of the subsidies go to 10% of farmers, the larger ones (Tandon 2015).
From 1990 to 2003 wheat, rice, corn, soybeans and cotton were exported from the US at prices well below the cost of production; in the case of cotton it was more than 50% below (Lilliston & Hanson-Kuhn 2013). Cheap cotton imports in West Africa destroyed the incomes of tens of thousands of cotton producers.
For Australian farmers to increase their export markets there has to be a decrease in either the farm production in the target market or in other exporting countries that have been supplying their needs. Increased beef exports to Japan and South Korea, for example, are opposed by Japanese and South Korean beef producers, quite legitimately, as legitimate it is for Australian vegetable growers to oppose cheap imports of vegetables from China or Italy. Since joining the World Trade Organisation in 1995, South Korean agriculture has been decimated; farmer debt quadrupled and national self-sufficiency in food fell from 56% to 25% in twenty years (Mills & Ahn 2011). One year after the signing of the Australia-Thailand Free Trade Agreement, under which Thailand had to greatly reduce its dairy tariffs, one third of Thai dairy farms collapsed (GRAIN 2012). In some cases markets grow with increasing imports, but more often imports become just substitutes for local production.
China has succeeded with trade because it has ensured that the food production for internal needs is met and people have adequate income to purchase this food (Lappé & Collins 1986).
Free trade and globalisation reduce the competition between corporations and increase the competition, on a worldwide basis, of farmers: “…competitiveness…only works when it undermines the livelihoods of farmers elsewhere” (La Vía Campesina 2016).
4.6 Environmental and labour effects of free trade deals
Trade deals are done principally for the benefits of agribusiness and transnational retailers, and undermine food security and destroy diversified and sustainable livelihoods in the developing world because they do not include measures to protect workers or the environment (Murray & Challies 2010).
Agricultural policy in the European Union puts value on maintaining small farmers and preserving the rural environment, arguing for “public good”, so subsidises farmers to stay in production (Dibden et al 2009). However Australian government and farmer organisations regard this as protectionist and trade distorting. Australian competition and trade policy does not take these issues into consideration, seeing nothing wrong with small farmers being forced off the land and increased pressure put on the environment, conveniently maintaining the myth that Australian agriculture is “clean and green” despite the evidence.
Every US trade deal over 20 years promised high and enforceable labour standards and rights for workers in the US and the trading partner countries as part of each trade agreement, but this has rarely happened (Warren 2015). Even the worst abuses have not been addressed, for example the murder of 105 union activists in Colombia in the first four years of the trade agreement (Warren 2015). Similar promises were made for the environment.
The World Trade Organisation, and free trade agreements, has negative environmental effects (Conca 2000). The theory is that trade liberalisation will increase incomes and standards of living and lead to greater demand from people for better environmental protection. However in every dispute involving the WTO over a national environmental regulation, citing the regulation as being an unfair barrier to trade, an anti-environmental decision has been the result (Conca 2000). Dispute resolution hearings are closed and secret, and judged by trade lawyers and economists with no environmental knowledge or understanding. Thus the environmental costs of free trade are externalised, not paid by these responsible. It is illegal under WTO rules for a country to restrict the import of a product on environmental concerns about how it is harvested or processed (Global Trade Watch 2006). Only on one occasion has an environmental or public health law that was challenged under WTO rules been unsuccessful for the challenger (Global Trade Watch 2006).
4.7 Australian dairy industry deregulation
When the Australian dairy industry was deregulated from 2000 there were multiple effects, some of which were expected (Debden & Cocklin 2010). It is hard to say which ones were positive. The plan was for farmers to develop more productive and efficient systems to become internationally competitive. The government believed that deregulation was inevitable, forced by the international market, so decided to do it in a planned way. Victoria was the least affected state as farmers were used to low prices because most of the milk was processed and exported, but still the number of dairy farms in the state fell from 7,800 in 2000 to 6,200 in 2004. There was greater exodus outside Victoria. In NSW dairy farm numbers declined from 1725 in 1999 to 710 in 2015 (Kempton 2015).
Deregulation brought increased dependence of inputs in order to increase production – greater use of fertilisers, irrigation water and grain. Victoria expected to benefit by capturing some of the interstate market, and deregulation was strongly supported by the United Dairy Farmers of Victoria and the cooperatives they supplied, but the coops found it hard to compete because of higher competition. The power of retailers and processors rose at the expense of producers. The milk price wars drove down prices not just for suppliers of supermarket branded milk but all brands as coops had to compete with the $1 a litre supermarket product. It was already evident from British deregulation that there would be a redistribution of wealth from dairy farmers to supermarkets and processors, but the Australian deregulation went much further than in the UK, so this should not have been unexpected. Collective bargaining, which had been illegal, did become allowed by the Australian Competition and Consumer Commission for farmers to counter the power of retailers and processors, but it was very limited in order to prevent “colluding” between farmers and “depressing competition”, and farmers’ bargaining groups had to be authorised by the ACCC (Dibden & Cocklin 2010).
The Australian dairy industry is dominated by two supermarket chains and a few mostly foreign-owned processing companies, placing farmers in a competitive disadvantage, concluded the Australian Senate investigation (Senate 2010). It was easier for farmers to negotiate with cooperatives than the corporations, because cooperatives were only interested in covering their costs instead of making profits, but few cooperatives remain. In southern Tasmania National Foods, which became Lion Dairy and Drinks, has a complete monopoly.
The farm gate price for milk and the retail price continued to diverge between 1992 and 2009 before the milk price wars. Supermarkets were able to demand reduced wholesale prices from the processors for their home branded milk, and this subsequently reduced the farm gate price and disadvantaged other retailers and processor branded product. Supermarkets sold their generic milk at a loss in order to entice customers into their stores, called “loss leader”; the losses could be made up by increased prices and sales of other items in the supermarket. The milk wars accentuated this strategy. The Senate report recommended the breaking up of supermarkets or other methods to reduce the power of the two major retailers (Senate 2010).
Since deregulation in 2000 milk production in Australia has declined from 11.2 billion litres to 9 billion, and cheese imports have increased by 70% (Farmer Power 2014). Deregulation was meant to provide greater price certainty, but this has not happened, and even commitments by dairy processors are often dishonoured. Production efficiency gains have gone to others in the supply chain but not to farmers. Since most processing companies are no longer cooperatives, the profit incentive over-rides fairness to farmers.
In order to better compete internationally, Murray Goulburn, the largest of the dairy cooperatives, decided on a partial float in 2015 and listing on the stock exchange in order to obtain funds for expansion. This resulted in a conflict of interest between farmers and shareholders with the winner being shareholders. In 2016 the company declared a profit of $41 million dollars and paid a dividend to shareholders, while at the same time cutting the milk price paid to farmers retrospectively to below the cost of production, leaving angry farmers with huge bills. Other dairy companies followed in cutting prices (Four Corners 2016).
Abolition of the single desk for wheat exporting in Australia in 2008 has not been of benefit to the growers, according to Grain Producers Australia (Mailler 2012). It has not given confidence, satisfaction or better returns to producers who were meant to be the main beneficiaries.
4.8 Conclusions on deregulation and globalization
A report issued by the Canadian National Farmers Union in late 2003 (Jackson 2004) concluded that modern agricultural policies promoting greater efficiency, competition, free trade and larger holdings were based on myths and false assumptions. The main points made were:
• Farmers are efficient. There have been no price rises (in real terms) for produce in the last 25 years despite huge increases in input costs. No other industry would be able to remain in business under those conditions.
• Family farms are more efficient than corporate farms. The larger the farm the more inefficient it becomes.
• Farmers have not been rewarded for efficiency. In the last 25 years output per farm has doubled but net farm incomes have declined.
• If competition promotes efficiency then logically there would be more farms operating, not less.
• Technology has not increased farm incomes. The opposite is the case: for every dollar that technology increases farm output the cost to the farmer is $1.44. Technology could increase farm income, but it has not – the increased value of production has all gone to elsewhere, not to the farmer. Neither has it gone to the consumer.
• Globalisation and free trade has increased competition between farmers (on a global scale) but reduced competition among agribusiness corporations (through mergers and takeovers). Government policies such as deregulation of marketing have increased the vulnerability of farmers to the power of big business.
• Technology and efficiency have caused overproduction, resulting in lower returns to farmers. Yet governments keep telling farmers to use more technology and become more efficient in order to increase returns. This is a contradiction.
• Efficiency is not the right word for increasing production per farmer. The system is not efficient if it depends on more and more inputs, more capital, more water use, more environmental degradation, and more transport. Real efficiency would use minimum resources to produce optimum food and nutrition to the maximum number of people while causing least damage to the environment.
As former Canadian Deputy Prime Minister Paul Hellyer said: “Globalisation…is about power and control. It is the reshaping of the world into one without borders ruled by a dictatorship of the world’s most powerful central banks, commercial banks and multinational companies. It is an attempt to undo a century of social progress and to alter the distribution of income from inequitable to inhuman” (quoted in Global Trade Watch 2006, p.4).
Prince Charles wrote (2007, pp.25-26): “Despite the best intentions of many, we have to face up to the fact that often the consequence of globalization is greater unsustainability…. Left to its own devices, I fear that globalization will – ironically – sow seeds of ever-greater poverty, disease, and hunger in the cities and lead to the loss of viable, self-sufficient rural populations.”
Stephen Byers, former British Trade and Industry Secretary said: “I was wrong about free trade. I was wrong. Free market policies hurt the poor. The IMF and World Bank orthodoxy is increasing global poverty” (quoted in Global Trade Watch 2006, p.5).
5. The secondary agenda of free trade agreements
5.1 Free trade plus
Noam Chomsky has pointed out (quoted in Gollan 1993, p.44), free trade agreements have only a limited relation to free trade; intellectual property is a primary goal for the US, a protectionist measure, for software, seeds and pharmaceutical patents, enabling US corporations to gain an estimated $61 billion per year. Freedom to invest and protection for those investments is another important goal.
In the negotiations for the AUSFTA the US did not gain all it wanted, which included abolition of the Pharmaceutical Benefits Scheme, an end to local content rules in broadcasting, no GM food labelling, easing of quarantine, an end to government procurement policies that favour local firms, and an investor-state enforcement process (whereby overseas companies could sue governments for anything that reduced their profits, for examples changes in environmental regulations or food quality standards), all of which the US sees as “barriers to trade” (Ranald 2010).
This wish list is up for renegotiation in the proposed Trans-Pacific Partnership Free Trade Agreement which includes Australia, New Zealand, the USA, Chile, Peru, Singapore, Brunei and Vietnam, and all would be part of any trade-off that increased Australian agricultural access to US markets. In general, all US trade agreements have increased the legal rights of corporations and reduced the rights of government to regulate corporate activity (Ranald 2010). Most countries involved in the Trans-Pacific Partnership Agreement negotiations already have free trade deals with others in the group, indicating that trade is not the primary goal of the agreement (Murray & Challies 2010).
The focus of the corporations and trade negotiators is “non-tariff trade barriers”, which means regulations. Regulations are developed in individual countries depending on specific needs and political pressures, to protect the environment, workers, consumers and the economy. The corporations call for “harmonisation”, but not to raise standards to the highest existing level but lower them to the minimum. They want restitution for loss of potential future profits caused by regulations, for example, Phillip Morris suing Uruguay for anti-smoking legislation (Stiglitz 2014).
Harmonising in the Trans-Atlantic Free Trade Agreement, also called “regulatory convergence”, includes eliminating EU restrictions on genetically modified crops and food additives that are allowed in the US, and food labelling laws, and the “precautionary principle” in setting food safety regulations. This means for Europeans a reduction in food standards down to US levels (Schimpf & Hansen-Young 2013).
5.2 TRIPS and ISDS
Trade agreements also include TRIPS – Trade-Related Aspects of Intellectual Property Rights. One aspect is the protection of plant, animal and microbiological patents under UPOV 1991, the International Union for the Protection of New Plant Varieties. Signing UPOV 1991 is included in agreements like the Trans-Pacific Partnership. This prevents farmers from saving seeds from patented varieties and replanting them, so that they have to buy new seed every year, on pain of seed and crop seizures and injunctions. It is being pushed by Australia, the US, EU and Japan (GRAIN 2016). Rather than “free trade” this is a protectionist policy.
Free trade agreements also include Investor-State Dispute Settlement provisions. These allow companies to sue governments for enacting regulations that might affect future profits of the company. It prioritises corporate rights over the ability of governments to regulate. Hearings are held in special courts presided over by three private lawyers; hearings are usually closed and there is no appeal. Some of these provisions have been in place since the 1960s, but there were only 50 cases in the first three decades; now there are 50 per year. They are frequently used to defeat restrictions on company operations on environmental grounds. Following are some cases that were successfully won by the companies (Public Citizen 2012; many more cases are detailed in this publication).
• A US chemical company, Ethyl, brought a case against Canada for banning a toxic petrol additive, MMT, which was banned in the US itself. Canada settled for $13 million in damages and revoked the ban, publically announcing that it was safe.
• A Swedish energy firm, Vattenfall, sued Germany for environmental conditions placed on pending approval of a coal fired power station in Hamburg; Germany relented and waived the conditions and approved the construction; the settlement amount was not disclosed. Vettanfall also tried to sue Germany for a decision to phase out nuclear power, demanding 4.7 billion euros.
• Occidental Petroleum, which had breached its contract in Ecuador and had its oil concession terminated, successfully sued the Ecuadorian government for $2.3 billion.
• A Spanish technology company Abengoa sued Mexico because a local authority denied approval for a waste management facility on environmental grounds. Mexico was ordered to pay $40 million plus interest.
• A Dutch financial company Suluka successfully sued the Czech government for not baling out a Czech bank that Suluka was part owner of when other Czech banks that were partly or fully owned by the government were baled out; Suluka was awarded $236 million.
An attempt was made by the Philip Morris corporation to sue Australia for cigarette plain packaging laws, demanding either withdrawal of the legislation or damages of US$4.2 billion plus interest. Australia won, but it cost $50 million to fight the case (Martin 2016). Several tobacco growing countries are also attempting to sue Australia. Under WTO rules Canada challenged Australian quarantine laws in 1999 which prohibited the import of Canadian salmon, and won, forcing a change in regulations (Cebon 2003).
It is difficult for the poorer countries to take advantage of the disputes settlement mechanism. Because of US subsidies to cotton producers, the world price fell by 10%, severely affecting the Cotton Four – Burkina Faso, Chad, Mali and Benin – which depend very heavily on cotton exports. The Cotton Four appealed to the WTO as this was against WTO rules but no action was taken, the verdict being that the Four had to themselves challenge the US directly, an impossible task (Tandon 2015).
6. World food insecurity
6.1 Myths of insufficient production and excess population
The world already produces enough calories to feed 12-14 billion people, nearly double the current population (UNCTAD 2013). Yet the official answer to hunger is greater production using technology. Hunger is a result of lack of purchasing power or lack of sufficient land to grow food (de Schutter 2013), not lack of production. Many countries with severe hunger are food exporters, for example Botswana and Kenya, major beef producers for Europe (Araghi 2000). Most countries that experience hunger are net food exporters; in the 1980s Brazil became the second largest food exporter in the world, with 86 million hungry people (Lappé & Collins 1986).
There is food abundance in the US and huge food wastage estimated at 25% of production yet millions of Americans go hungry, requiring a multitude of government and non-government schemes to feed them (“…hunger in America shows with great clarity the absurdity of our distribution system, of capitalism’s approach to meeting basic human needs” – Poppendieck 2000 p. 192).
It is a myth that hunger is caused by over population, and that population growth must be slowed before hunger can be tackled. China has half the cropland per person that India has but China has no hunger problem while India’s is massive. Similarly Taiwan and South Korea with half the cropping land per person as Bangladesh does not have the hunger problem of Bangladesh. The Netherlands, one of the most densely populated countries in the world is a net food exporter with no hunger problem. Around the world there is no correlation between hunger and population density (Lappe & Collins 1986).
However hunger and rapid population growth are connected. One is not the cause of the other, both are caused by the same factors. These factors are the infant mortality rate, the status of women, lack of security in old age, the opportunities for women to take paid employment, and the need for labour on farms. Where there is security and opportunity the birth rate always falls. Family planning programs do not significantly affect the birth rate – far more significant is life expectancy, education and infant mortality rates (Lappe & Collins 1986).
6.2 The failure of trade to solve food insecurity
A principal stated aim of trade liberalisation is to increase food security; it has failed to do that (Lilliston & Hanson-Kuhn 2013). It strengthened to hold of large agribusiness corporations over control of markets and decreased that of farmers and national governments that wanted to address food security issues. It also stimulated speculation in agricultural commodities that led to huge price rises from 2004 and the subsequent crash in prices in 2008 (Lilliston & Hanson-Kuhn 2013).
In the first decade of trade liberalisation in India, 1991 to 2001, grain consumption per person fell from 177 kg to 151 after a steady rise over the previous 40 years. At the same time grain exports reached record levels (Patnaik 2004). Similarly in sub-Saharan Africa grain consumption fell from 158 kg per person in 1980 to 136 kg by the mid 1990s (Patnaik 2004). This strongly counteracts the promise that free trade and deregulation will solve the world’s hunger problem.
In Latin America trade liberalisation has led to an export boom of soy, fruits and vegetables, but a worsening of conditions for rural people. Many small farmers have been displaced or become dependent on off-farm labour income. This employment is precarious and often temporary, managed by labour hire companies that are able to pay less than legislated minimum wages. The land reforms carried out in the 1960s and 1970s have been reversed as large corporations have managed to obtain control over large amounts of land (Kay 2015).
Export booms do not reduce hunger for several reasons. Land is taken out of local production for local consumption in order to produce exportable commodities. Farmers who have lost their land become employees on low wages which they spend on the cheapest foods that fill them up – carbohydrates – unable to afford the fruits and vegetables and meat they used to grow themselves. Export earnings do not cover the costs of imported replacement foods but pay for luxuries for the wealthy, and debt repayment (Lappé & Collins 1986). Only about 15% of export earnings stay in the country of production – the rest goes overseas as profits to foreign banks, traders, processors and distributors (Lappé & Collins 1986).
Free trade and deregulation since 1990 has greatly increased the amount of land taken up by the five main commodity crops – maize, soy, sugar cane, canola and palm oil – at the expense of food crops like wheat and rice whose acreage fell (GRAIN 2012). These five commodity crops are used mainly for livestock feed and biofuels.
In the 2008 food crisis when grain prices soured, countries that had previously produced much of their own but had been encouraged to focus on export crops could not afford the high costs of imported foods. Many exporting countries closed their borders against rice and wheat exports in order to preserve their own stocks. One hundred million more people joined the world hungry population in that year (GRAIN 2008).
6.3 Real factors in hunger
Indebtedness and its alleged solutions are devastating for the development of food security. Because of the burden of paying back debts, more and more the economy has to become dependent on exports, so less food is available. It is often said that unpayable debt in poor countries is the result of poor decision making, corruption or unfavourable climates; however there is evidence that loans are sometimes deliberately given with the intention of keeping the recipient countries poor and malleable so that they are less able to resist the imposition of military bases or access to raw materials, and will vote the “right way” in international forums (Perkins c.2004).
A further reason for hunger and underdevelopment, especially in Africa, is the net transfer of wealth out of the continent. Despite the common perception that the rest of the world is supporting Africa, the opposite is the reality. From 1980 to 2009 there has been a net outflow from Africa of between US$600 billion and $1.4 trillion. Inflows come from aid, remittances from the Africans living outside Africa, loans, investment, and export earnings. Outflows include profits, debt repayments, corruption, tax evasion, transfer pricing and import payments (Joint Report 2013). The transfers are not even across Africa – some countries have been net beneficiaries. The greatest losses are from the resource rich countries.
Another side of trade and investment liberalisation is the taking over of farming land in Africa, Asia and South America by foreign corporations. This commenced on a large scale in 2008. Motives vary: food security for the investing country (Saudi Arabia, South Korea, China, India, Gulf States), biofuel plantations, reforestation for carbon credits, and just plain speculation (“I’m convinced that farmland is going to be one of the best investments of our time” – George Soros, quoted in GRAIN 2012). While many earlier land deals fell through, partly because of public opposition by those about to lose their land but also because of company failure, by mid 2016 a total of 44,161,781 hectares had been alienated to foreign concerns (Land Matrix 2016). This included 2 million hectares in Ethiopia, one of the world’s most food insecure countries. Australia is not immune: the amount of land owned fully or partly by foreign concerns in Australia is 11.3%, up from 5.9% in 1984 (Lockie 2015).
A new phenomenon arose in the first decade of the 21st century – massive institutional food price speculation. In 2003 investments in food derivatives, that is, futures trading whereby food is bought and sold on paper without physically moving, stood at $3 billion. By 2011 it had reached $126 billion. For example the volume of corn traded on commodity exchanges in 2008 was three times the global production for that year. It is a form of gambling that prices will rise, which actually causes prices to rise and sends millions more people into hunger (a 200 million increase in the number of people suffering malnutrition between 2007 and 2009) (Healy 2011).
Food security is not just an issue for poor countries. In Australia the OECD estimates 10% of the Australian population is food insecure (defined as not always able to buy the food they need and having to depend sometimes on charity). The figure for the United States is 21%; the lowest in the world is Switzerland with 4% (Lockie 2015).
As economies become more integrated and more dependent on trade between and within countries there is greater risk of failure of food supplies due to war or other disruption to trade or sudden increases in transport costs, as Britain realised during the second world war and Cuba after the collapse of the Soviet Union in 1990. Currently Britain has enough food reserves for no more than five days, making it very vulnerable to even minor disruptions to imports (Land Workers’ Alliance 2016).
7. The value of small farms
7.1 The myth of size and efficiency
Small farms have been labelled as backward, unproductive and inefficient, and governments have advocated their passing, producing policies to enable that to happen (“Get big or get out!”). But the opposite is true. In non-industrial countries small farms produce between 200 and 1,000% more than large, and in the US farms of less than 27 acres produce ten times in dollar value per acre what larger farms do (Rosset 1999). The production on farms of 2 hectares average $15,000 per hectare with a profit of $2,900 per hectare, while the largest farms average $249 per hectare in production netting $52 (Altieri 2008). Large farms may produce more corn per hectare than small farms, but commonly small farms are also producing beans, squash, potatoes and fodder together with their corn (Altieri 2008).
A study of 15 Asian and African countries found small farms produced 4-5 times more per hectare, yet the larger farmers usually had the better land and could negotiate lower input prices (finance, fertiliser, irrigation, chemicals, marketing services), and generally received more government assistance (Lappé & Collins 1986).
Small farms make up a little less than a quarter of the world’s farmland and 85% of the world’s farmers and produce the majority of the world’s food (GRAIN 2014). In Botswana for example, small farmers have only 8% of farmland but produce 99% of the country’s maize, 90% of millet and 73% of beans (GRAIN 2014). In Latin America small farmers with 34.5% of agricultural land produce 51% of the maize, 77% of beans and 61% of potatoes for domestic consumption (Altieri 2008).
American studies too have found that the larger the farm the lower the productivity per hectare. Increasing mechanization of farms has reduced yields per acre. Small farmers are better able to care for the land too, and small farmers are more contented people than farm employees.
In Cuba state owned farms produce less per hectare than small privately owned farms. Where land reforms have been put into operation, redistributing large estates to small farmers (Japan, Korea, China, Nicaragua, Zimbabwe and Taiwan are good examples) there has been a large increase in production. It is estimated that land reform in north east Brazil would increase farm production by 80%., as long as the reforms included access to credit, irrigation and technical assistance. The previous owners sometimes have the power to sabotage the land reforms. If small farmers are at the mercy of money lenders, input suppliers, previous owners and merchants their chance of success is lowered (Lappé & Collins 1986).
If all the world’s farms were small, food production would double. Yet large farms consume most of the resources, receive most of the irrigation water, and get most of the financial credit and technical assistance. Small farms are more diverse, manage land better, provide work, contribute to local communities, and promote social cohesion (GRAIN 2014).
7.2 Small farms and rural economies
Small farm communities have better community facilities for health, education, recreation and culture. Local business is stimulated. Small farmers better manage soil and the natural environment because they are not farming for quick profit and moving on (Rosset 1999). Small farms are more diversified which gives them greater resilience to weather and climate change, fewer pests and diseases, lower inputs and less risk; they also sequester carbon while large farms are greenhouse gas producers – methane from manure, nitrous oxide from fertilisers and carbon dioxide from fossil fuel energy (Altieri 2008).
Money produced from the big farms leaves the farming community for the cities where it is spent, resulting in declining rural economic infrastructure. A study in California found that in small family farm areas the community infrastructure was much better – money went to local businesses, there were better services such as schools, clubs and parks, higher employment, and more participation in public activities (Lappé & Collins 1986).
The number of small farms and the total area run as small farms is actually increasing, in Australia and the USA, reversing a trend that has been in progress for decades. These small farms are often part time, but they are providing many benefits to rural areas. They are termed “sub-commercial”, defined by the Australian Bureau of Statistics as those establishments producing between $500 and $22,500 per year, and commonly referred to as hobby farms or lifestyle farms. In 2000 there were 33,674 such farms in Australia, compared with a little over 100,000 commercial farms (with production above $22,500). The number of commercial farms has halved in the last 40 years.
Sub-commercial farms contributed less than 5% of total farm production and covered 16.6 million hectares, mostly in the high rainfall areas close to towns and cities. The benefits include diversity of production, in some cases greater intensity of agriculture, environmental benefits through greater biodiversity and better soil management practices, providing employment either on farm or to service their demand for goods and services, increased population so that community groups can be sustained and revitalised, a better environment for children than urban life, tourism ventures, and green spaces around cities where land prices are too high for commercial farms (Barr 2005).
Later figures (Hollier & Reid 2007) show the area of smallholdings producing $5,000 to $22,500 per year in produce value reached 19 million hectares in Australia, larger than the area under wheat. There are no figures available for those producing less than $5,000 per year but are expected to be substantial. Small holdings are concentrated in higher rainfall areas within commuting distance of major urban centres, away from the flat, dry inland (such as the Victorian Wimmera). The main produce is beef, but other uses include vineyards, cut flowers, berries, tourism, farmer market produce and recreational horses. Further benefits other than outlined by Barr (2005) above include new cultural experiences, participation in voluntary organisations such as fire brigades and Landcare, greater environmental consciousness including tree planting, increased rate revenue for local government, lower synthetic inputs, and the bringing of new knowledge and skills to rural communities. Income levels are generally significantly higher than for commercial farmers as most income is derived from off the farm.
Despite the onslaught of agribusiness small farmers have not died out. Only 30% of the world’s food is produced by the industrial food chain; 50% is produced by small farmers, 8% by urban farmers, and 13% by hunters and gatherers (GRAIN 2012).
8. Resistance and alternatives
8.1 Farmer discontent
Since the start of the 21st century there has been a growth in rural protest movements in the industrial countries. Some names include Family Farm Defenders in the US, Conféderation Paysanne in France, Rural Rebels in Scotland, and Farmer Power in Australia. Generally these groups are critical of established farmer organisations, but have little interest in lobbying government, and rely on direct action. Some are left wing, some conservative and some far right. They sometimes form alliances with environmental, consumer, anti-globalisation or labour union organisations. They have no uniting ideology, no program and no coordination (Woods 2003). They are a symbol of the discontent in rural areas with government agricultural policies.
There are also large scale mass organisations that act as political lobby groups against free trade and corporate concentration policies. The National Farmers Union in the United States is one example, with 300,000 members (Henderson p.184). A similar organisation exists in Canada with the same name (Riddell 2008). The MST (Movimento dos Trabalhadores Rurais Sem Terra, Landless Labourers Movement) has been very successful in fighting for land reform in Brazil (MST 2003). The Zapatistas in southern Mexico have widespread rural support and control sections of Chiapas State (Salgado 2016).
La Vía Campesina is a network of 200 million small farmers from around the world, members of 164 local and national organisations in 73 countries (but none in Australia). The network was set up in Mons, Belgium, in 1993, with the goal to: “bring about a change in the countryside – change that improves livelihoods, enhances local food production for local consumption, and opens up democratic spaces change that empowers the people of the land with a great role, position, and stake in decision-making on issues that have an impact on their lives” (La Vía Campesina 2008).
8.2 The range of solutions
In looking for solutions to the problems of farming there are three levels: individual, group and structural. Individual solutions include direct selling via farmers’ markets, roadside stalls or regular boxed deliveries to customers, and adoption of low input production systems (organic, agroecolological, biodynamic, etc.), which eliminate the ability of traders and input suppliers to profit from farm work. Individual marketing solutions are just that, they are limited in their scope and cannot become mainstream enough to challenge the power of agribusiness. Value adding by processing on farm, engaging in farm tourism, and craft production are other alternatives, but all have a limited market.
Group solutions include cooperatives for processing, marketing, input supply and land management. Community Supported Agriculture and consumer food cooperatives are further examples.
However withdrawal from the dominant food system (via farmers markets, CSA, cooperatives, Fair Trade) is likely to be “only a minor irritant to corporate dominance of the food system” (Magdoff p.188) and does not address the structural problems of food production and distribution. Far deeper change is needed on a world wide basis to destroy the ability of agribusiness to profit from farmers’ work.
Agroecology is “the application of ecological science to the study, design and management of sustainable agroecosystems” (quoted by de Schutter 2013, p.35). Studies have found that agroecology has increased productivity by close to an average of 80% on 12 million farms in 57 developing countries; it also reduces input costs, creates less greenhouse gas, requires less debt, and slows migration from rural to urban areas (de Schutter 2013).
There is now a huge body of literature on agroecological farming methods produced and promoted by hundreds of non-government organisations around the world in many languages. Australia too has a multitude of local organic and permaculture groups and biological and regenerative farming networks. There is no shortage of information and support. Some governments are at least nominally supportive, though Australian governments have been notable exceptions, clinging to the “Clean and Green” myth. Some governments have endorsed agroecology as state policy (Cuba, Venezuela, Bolivia, Bhutan and several Indian states as examples). European governments all provide assistance for organic farmers.
Much of organic farming, but not all, can be counted as agroecological. Using a natural pesticide in place of a synthetic pesticide is not agroecology. Natural pyrethrum is allowed under organic standards for pest control; agroecology would have avoided the pests in the first place by planned management of soil fertility and biodiversity.
A review of 50 comparisons between organic and non-organic farms in the industrialised world found organic farms to be more profitable despite unequal availability of research and extension, and without the external costs of chemical farming being included. These external costs, of drinking water contamination by fertilisers and pesticides, damage to wildlife, soil degradation, human health, greenhouse gas production and soil carbon loss, were estimated to amount to $324 per hectare in the United Kingdom and between $29 and $96 per hectare in the United States (Nemes 2013).
A study by Badgely et al (2007) found that using conservative estimates, organic agriculture could provide close to the current world food production, 2,641 kilocalories per person per day compared to the current 2,786 kilocalories, pointing out that 2,200 to 2,500 is sufficient for an adult person. Using what the authors regard as a more realistic figure of potential organic production, 4,381 kilocalories per person is possible without the need for extra land to be put in production.
Cuba showed that agroecology, land reform to create small farms, local production including urban agriculture, and fair prices could provide the food needs of a country (Rosset 2000).
There are huge numbers of certified organic farmers in the world. India has the highest number, 550,000, followed by Uganda with 190,000 and Mexico with 170,000. In Austria 20% of farmland is certified organic; Sweden and Estonia both have 15%. Australia has the largest area of certified organic farmland, 12 million hectare but only 2,130 farmers (FIBL & IFOAM 2013). Organic production and marketing is the consistently fastest growing sector in agriculture around the world (McMichael & Lawrence 2001).
However being organic does not in itself address all of the problems of agriculture. Consider the following quote (Fromartz 2006) about the increasing involvement of big business in the organic sector: “The growth of organic food has come at an awful price, compromising standards, undercutting small firms, diluting healthy food, ignoring social justice… polluting the very ideals embodied in the word organic… the path that agrarian idealists had taken in the 1970s… to farm in concert with nature and sell organic food outside the dominant food system… became compromised by its success. Organic food had become too popular to remain in a backwoods niche, morphing into yet another food industry profit centre”.
8.4 Cooperative farming and collective bargaining
Group action by farmers can bring results. A good example in Australia was the May 2001 blockade of the McCain’s factory in Tasmania by potato farmers demanding an increase in price. This was successful, one of the few examples of collective action in Australia by farmers. McCain’s raised the price by $30 per tonne (Lawrence 2005).
Cooperatives and other forms of farmer collaboration can raise the power of farmers to influence the prices they receive (Dilley 2004). Much of Australia’s agriculture, and much in Europe, has been dominated by cooperatives, especially in dairying. Many of these cooperatives have now been corporatised and at least partly privatised and are longer controlled by farmers or act primarily in the interest of the farmer.
This does not mean though that cooperatives have no place. An excellent example of a functioning farmer controlled cooperative is the Organic Dairy Farmers of Australia. The farmer members of this organisation set the price they receive and the coop organises the processing and marketing under the True Organic brand. It has been very successful in providing farmers with a fair and adequate reward for their work (Broughton 2010). Written into the constitution is a clause preventing privatisation. The Goulburn Valley Food Cooperative was set up in response to the closure of the Heinz factory at Girgarre in 2012, with the aim of providing reliable processing and marketing for fruit and tomatoes produced in the region (Department of Agriculture & Water Resources 2016).
8.5 Radical restructure ideas
There have been various proposals put forward for changing agriculture policy to support farmers and food security. “Only by changing the export-led, free-trade-based, industrial agriculture model of large farms can the downward spiral of poverty, low wages, rural-urban migration, hunger and environmental degradation be halted” (Altieri 2008, p.9).
As a minimum, trade policy needs to change to enable developing countries to protect and support food security and rural livelihoods, and to re-establish food reserves to mitigate price and supply instability. It also needs to prevent speculation in commodity markets and eliminate dumping. Agroecological farming needs to be fostered (Lilliston & Hanson-Kuhn 2013).
Colin Tudge, British biologist and science writer, initiated the Trust for Enlightened Agriculture. The aim of agriculture, he says, should be to feed people in a biologically efficient way, in contrast to the current aim of maximising wealth. In more depth, Enlightened Agriculture means:
• Everybody is fed, and to the highest nutritional standards
• Rural communities are agreeable
• Wildlife is provided for and livestock are treated without cruelty
• Soil becomes more fertile over time, the wild environment becomes more diverse, waterways are less polluted and global warming is minimised
• Sustainability over thousands of years is developed
• Farms are small and labour intensive
• All countries are self reliant in food.
Tudge is confident such a movement can successfully transform agriculture, taking power away from agribusiness corporations which he says are responsible for the failure of agriculture. He sees the basis existing already and expects it to grow via the above pathways until it becomes dominant (Tudge 2007). This however seems a rather naïve belief that defies the reality of corporate control and its ability to adjust to new situations.
The following changes to trade rules are advocated in Manifestos on the Future of Food and Seeds (Shiva 2007). Protective barriers should be used to enable countries to become self-sufficient in food, so that trade is restricted to produce that cannot be grown in the country. Countries have the right to impose restrictions on importing and exporting produce. Fair treatment of farmers, workers and the environment should be part of trade policy. The implementation of domestic investment laws should not be restricted by trade rules. Patenting rights should not over-ride the rights of local communities to maintain their genetic resources. The precautionary principle should be used if there is doubt about potential impacts of certain technologies. Trade should foster sustainable development.
ALBA, the Bolivarian Alliance for the Peoples of Our America, a grouping of several South American and Caribbean nations including Cuba, Venezuela, Ecuador, Bolivia, Nicaragua and several small island countries, has developed a trade model very different to WTO (ALBA 2010). Trade must be for mutual benefit, for just and sustainable development with the State as regulator and coordinator. All countries and people in the bloc must share the benefits. Competition between countries and between products is supplanted by cooperation and solidarity, especially to eliminate illiteracy and poverty and promote free health care. Cultural and indigenous rights are defended and traditional knowledge and plant varieties are protected from corporate piracy. Joint planning for communications, transport and energy is carried out.
The guiding philosophy of agriculture in Venezuela is ecosocialism, which is “a complex process of transition and transformation, socially, economically, scientifically, technologically and politically …. carried out collectively and daily, taking into account the ecological basis of air, water, soil, biodiversity and energy… and constructing an ecological ethic sustained in the complex relationships between society and nature” (translated from Núñez 2010, p. 82). The government opinion is that there is no agroecology without socialism, because allocating resources according to the market cannot protect the environment. Pachamama, the concept of Mother Earth protection, has been adopted in Venezuela, as well as Ecuador and Bolivia, as the basis of sustainability.
The US Greens Party platform campaigns for policies to assist farmers to transit to organic systems, break up agribusiness corporations, and create new family farms and farm worker cooperatives through land reform and a homesteading program (Cook 2016).
The Canadian Farmers Union proposes a range of measures to improve incomes of farmers. They include some control over production to balance supply and demand internationally, price supports to guarantee that farmers receive their cost of production, breaking the monopoly of corporate suppliers of seed, fertiliser, and other farm inputs by funding the creation of farmer-owned cooperatives; banning corporate farming as well as corporate contracts that dictate where farmers buy inputs and sell their product; providing young people who want to farm with access to the land through community land trusts and land banks; and easing the mountain of debt that now prevents sons and daughters from taking over the family farm. None of this necessitates an increase the cost of food to consumers, the NFU points out: farmers receive so little of the food dollar that the cost of increasing their share can be absorbed by corporate processors and retailers without price increases (Riddell 2008).
The Land Workers’ Alliance put forward the following policy framework for British agriculture in 2016 following the vote to exit the EU: increase domestic production to replace imports while protecting British producers from cheap imports; target support for small farmers; establish a robust agricultural wages board to ensure fair pay and conditions for farm employees; improve environmental and animal welfare standards of farming, placing a moratorium on the planting of GM crops, the use of neonicotinoid pesticides and glyphosate, and factory farming, and labelling produce with its pesticide content; invest in farmer-led research; start a land access scheme for new entrants; limit the power of retailers; and institute democratic agricultural policy formation systems (Land Workers’ Alliance 2016).
The policies which La Via Campesina advocates to the public and governments are the most radical. They call for the complete dismantling of agribusiness companies; the replacement of industrial agriculture with small scale sustainable agriculture; genuine land reform; banning of all patents on plant and animal genetics; opposition to genetic manipulation; abolition of the World Trade Organisation, the World Bank and the International Monetary Fund; no free trade agreements; no use of cereals for biofuel production; the right of every country to food security and food policy control (food sovereignty); respect for nature and natural resources and protection of biodiversity; full human rights for rural people, including rights to food, water, employment, housing, education, health care, rest and culture, and protection from violence, racism, sexism, war and inequality; control of middleman profit margins and the forbidding of speculation on agricultural and food prices; and agroecology instead of agrochemicals.
The platform of La Vía Campesina comes closest to delivering the changes that are needed. It will take a coalition of strongly committed farmers, farm workers, environmentalists and consumers to bring about these changes. There is no need for any of these groupings to see the others as adversaries – the opponent in common is agribusiness corporations. It will have to be part of a world wide struggle for economic and social justice.
Free trade and deregulation have spectacularly failed in the stated goals of increasing farm prosperity, environmental sustainability and food security in the world. The effect has been greater control by agrifood corporations on agriculture and the consequent greater ability to extract wealth from farmers. This may have been partly due to flawed policies of the neo-liberal economists, and partly by design, as these policies have had strong participation and support by agribusiness. The excuses for the failure, that governments have not gone far enough in deregulation, or that benefits will flow in the future, are bankrupt.
These policies did not initiate the decline in farmer living standards, which predates neo-liberalism, but they have accelerated the process. The constant drop in the percentage of the retail price of fresh produce going to farmers is an incontrovertible indication of increasing exploitation.
While there are ways some individual farmers can reduce their involvement with agribusiness corporations, by direct selling and agroecological production systems, this is mere tinkering with the problem. Only a massive reorganisation of the agricultural economy to permanently dismantle the corporations will give farmers the income and dignity they deserve.
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