Global food politics

Monthly Review, July-August, 1998 by Philip McMichael

In the early 1990s, the U.S. Department of Agriculture estimated that Pacific Asia would absorb two-thirds of the over $3 billion increase in global demand for farm exports by the year 2000. Pacific Asian imports would be assisted by $1 billion in U.S. Export Enhancement Program subsidies to American exporters. A portion of this lucrative market (much of which is tinned beef and processed foods sold in South Korea and Taiwan) would involve bulk wheat and corn imports by Indonesia, Malaysia, and the Philippines.

Under the conditions of the 1994 agricultural agreement of the Uruguay Round of the General Agreement on Tariffs Trade (GATT) negotiations, Organization for Economic Cooperation and Development (OECD) projections predicted that U.S. corn exports would undercut Philippine corn prices by 20 percent in the year 2000, depressing domestic corn prices. According to Kevin Watkins, this would threaten half a million peasant households with income declines of 15 percent and result in high social costs such as reduced expenditures on education, increased reliance on child labor, nutritional decline, and the intensification of women's work outside the home to compensate. Comparatively speaking, the average subsidy to U.S. farmers and grain traders is roughly 100 times the income of a corn farmer in Mindanao. As Watkins remarks, "In the real world, as distinct from the imaginary one inhabited by free traders, survival in agricultural markets depends less on comparative advantage than upon comparative access to subsidies."

Noting that the government of the Philippines views this agreement as an instrument of economic efficiency, despite its implicit transfer of sovereignty over national food policy to an unaccountable trade body in Geneva, Watkins concludes: "Legal niceties aside, the Uruguay Round agreement bears all the hallmarks of an elaborate act of fraud. It requires developing countries to open their food markets in the name of free market principles, while allowing the U.S. and the EU to protect their farm systems and subsidize exports" ("Free Trade and Farm Fallacies: From the Uruguay Round to the World Food Summit," The Ecologist, 26 [1996]: 244-255).

The Uruguay Round's sleight of hand has been institutionalized in the recently formed World Trade Organization. The WTO presides over the most far-reaching attempt to level political, social, and environmental protections in the name of efficiency and market freedom. But, as the above case indicates, the "level playing field" is not level - because the United States and the EU retain indirect agricultural subsidies by decoupling farm payments from commodity prices (encouraging agro-export dumping), and through extensive infrastructural supports. By externalizing these subsidies, United States and EU exports compete with artificially low prices. In market terms, then, Southern agricultures appear relatively inefficient. In privileging market prices as the criterion of agricultural competitiveness, free trade rhetoric thereby justifies the use of institutional means that extend markets for agribusiness at the expense of small farmers across the world. As I will argue below, agribusiness imperialism, in which the United States has assumed a global "breadbasket of the word" strategy and sought to institutionalize its corporate "food power" via the current free trade regime, is integral to the coercive use of institutional mechanisms to monopolize control of world agriculture and flows of food.

From Agro-Colonialism to Agro-Industrialism

The historical relations of production and consumption of food on a world scale have always been both political and geopolitical. This fact tends to be obscured because much of our political-economic understanding of global power relations is anchored in a binary view of the world. In word-capitalist history, the metropolitan or European, world is seen as specializing in industry, while the "peripheral," or non-European world, specializes in raw materials and food production. Development came to be understood as the process of overcoming this division; agriculture was viewed as a specialization to be transcended.

The binary conception is flawed in many respects. The spread of sugar consumption in the seventeenth century signaled the rise of industrial capitalism and the deepening of markets through the expansion of wage payments. World capitalism emerged on the pedestal of colonial agricultures, where largescale slave plantations prefigured the rise of the factory system, and colonial systems generated much of the early capital that nurtured the rise of modern industry. More fundamentally, capitalist forms of production (and consumption) first emerged in agriculture, and the global food trade was, and remains, central to the organization of capitalism on a world scale.

The history of agriculture and capitalism involves two divergent, and yet connected, historical threads that have been conflated in these binary conceptions of development. These two threads are the global movements of British and U.S. hegemony, each of which modeled two distinct forms of development. The former hegemony involved dividing the world along the classic lines of the international division of labor, expressed in the British slogan of "workshop of the world." British specialization depended on access to agricultural exports from tropical colonies and New World temperate regions (including the future American "breadbasket"). In the twentieth century, the U.S. projected an alternative model of development based on the national integration of manufacturing and agricultural sectors, and on capital- and energy-intensive technological change. Whereas the British model was viewed as "outer directed," the U.S. model was viewed as "inner directed." However, obscured in this latter model is the powerful role of agribusiness and food power in the U.S.-centered global political economy of the twentieth century.