Global food security 'threatened by liberalisation' [fr] [de]

Liberalising global agricultural trade without any regulation would threaten global food security as private investment funds would buy huge amounts of land in developing countries and produce for profit rather than to feed the poor, Jacques Carles, founder of Momagri, a French think-tank on agriculture, warned EurActiv in an interview.

"If you free international trade without any regulation, only international investment funds and speculators will profit, not the poor," said Carles, managing director of Momagri ('Mouvement pour une organisation mondiale de l'agriculture').

Private investment funds are already rushing to buy agricultural land all over the globe, he warned, adding that "we are heading towards a very dangerous scenario" in which these funds and speculators own huge amounts of land and produce according to world demand in order to make a profit.

Momagri was created by Carles, a consultant, together with Pierre Pagesse, president of Limagrain, a French seed company which also produces genetically-modified corn.

Under a liberalised world trade system, landowners would actually guide speculation and affect prices, he argued, stressing that such a scenario would "in no way be to the benefit of global food security".

Carles said that investing in land is today considered one of the most profitable investments possible, with international funds looking to buy land everywhere. "You can get hundreds of thousands of hectares of land in Africa for a ridiculous price," he pointed out. 

Mercenaries are sent to the region concerned to "secure" the surroundings, chase rural people from their land, cut down national forests and manage a series of extensive and intensive cultures, Carles said. Meanwhile, production will be exported in its entirety with no benefit for the host country, he explained. 

Momargi expert Dominique Lasserre added that "the current developments are leading us towards a situation in which world food production is dominated by a few private actors exercising pressure on buyers and consumers. This would lead to a completely 'financialised' agricultural industry, which would be very dangerous for international relations". 

According to Carles, it is therefore necessary to build "a global organisation of agriculture to control investments, prices and food distribution". 

He stressed that Momargi, based in France, the EU's biggest agricultural country, is not directly seeking government support. It is hoping to convince policymakers by provoking a shift in public opinion. The think-tank is looking for support from scientists, the agricultural world, the agri-food industry and banks, Carles said.

Lack of investment in agriculture in developing countries 

According to Carles, each state and region has a certain "agricultural production and food potential," but this potential is not always used due to lack of investment, in particular in poor countries. 

Over the past 30 years, the World Bank has granted only 3% of its aid to agriculture even though 80% of the population of poor countries make their living from agriculture, he noted, pointing to "a complete disconnection between international public investments and the needs of these countries".

International institutions opted not to invest in agriculture for fear that rural people in developing countries would migrate to major towns to provide workforces for industry, as happened in Europe during the 19th century. "But this model cannot function today," Carles stressed. 

There are far more people today than in the 19th century, industry needs far less labour than before and most people work in services rather than in heavy industry. There has not been much delocalisation of services in Africa and rural immigration in the poorest countries has led to unemployment rates of 50-80% in cities like Calcutta and Dakar, Carles said. 

Doha: A 'total imposture'

The Doha development round is a "total imposture," because it is based on a World Bank model which simply argues that liberalisation will benefit poor countries, which can in no way be demonstrated, Carles further argued. 

He stressed that Pascal Lamy, director-general of the World Trade Organisation (WTO), "launched the Doha 'development round' with cynicism". Saying that an agreement on Doha would help poor countries was simply a media coup to raise the general public's interest in the negotiations, he claimed, which are in fact far too complicated to follow. 

Developing countries themselves are actually blocking the Doha process, Carles said, because they have realised that concluding the negotiations as they stand would be catastrophic for them. After Doha's conclusion, "investment funds and speculators could produce in Africa and export the production without customs or other tariffs to the EU and the US, making a pure profit and affecting the stock exchange and speculation," Carles argued. 

While the European Commission is backing the conclusion of the Doha round, the French government is leading opposition to any serious trade concessions by the EU or cuts to its Common Agricultural Policy subsidies. France has openly criticised the EU's trade commissioner for making too many concessions in the negotiations.

Minimum regulation of global trade needed

If Europe wants to see free markets and the development of international business, "a minimum of regulation is needed in case of crisis," Carles said. 

He stressed that free trade is subject to extremely strong speculation, particularly on raw materials, adding: "It is impossible to ensure development of agriculture if prices are volatile."

Meanwhile, he is convinced that "there is a lot of profit to be made in helping developing countries who have strong population growth to increase their food self-sufficiency". Nevertheless, to make a sustainable profit, investments in these countries need to be protected with balanced prices and limited fluctuations to make the expenditure less risky. "Otherwise nobody, except speculative funds, will invest in developing countries," he warned. 

Momagri model: A 
new world organisation for agriculture

Liberalising agricultural trade "makes no sense," especially as just 5-10% of agricultural production is traded and most production is consumed on the spot, Carles said.

He explained that the Momagri model would divide the world into ten zones, within which agricultural trade would be liberalised according to certain reference prices. Equitable, standard 'equilibrium prices' for cereals, milk and other products would guarantee fair prices for consumers and producers alike. 

Markets would operate completely freely in between these reference prices, and public intervention would be reserved for cases when prices drop or increase beyond the reference point, Carles said.

He explained that the price fluctuation limit would be larger for rich countries and much smaller for poor countries, where prices would change only a little to help countries to attract investment. 

"Our model for international cooperation is a good balance between food safety and economic efficiency," Carles argued. 

He stressed that it would be much more profitable to invest in poor countries to ensure local food production, as the demand for food in these countries will increase considerably and environmental considerations need to be incorporated into production and consumption patterns. 

"Due to environmental concerns and CO2 from transport, we don't think that international trade in agriculture will develop much," he said. 

To read the interview in full, please click here.

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