No More Fake Solutions to the World's Food Crisis

To:
UN Secretary General Ban Ki-moon
FAO Director General Jacques Diouf

CC:
WTO Director-General Pascal Lamy
World Bank President Robert Zoellick
IMF Managing Director Dominique Strauss-Kahn

Dear [Decision Maker],

Skyrocketing prices of basic staples have put nearly 3 billion people - half of humanity - who live on less than $2 a day, in the throes of growing hunger and poverty. We are writing to urge you to reject the hijacking of the important debate on how to solve this global crisis by proponents of free trade.

Contrary to declarations by leaders of the World Bank the International Monetary Fund (IMF), and the World Trade Organization (WTO), concluding the Doha negotiations of the WTO - dubbed the "development" round - will further intensify the crisis by increasing developing countries' dependence on imports and strengthening the power of multinational agribusiness in food and agriculture markets.

It is unfortunate that the international financial institutions would use the current crisis to push through free trade rules that are exacerbating world hunger. Here is some of the overwhelming evidence of failed policy:

• Over the last few decades, liberalization of agriculture, dismantling of state run institutions like marketing boards, and specialization of developing countries in exportable cash crops such as coffee, cocoa, cotton, and even flowers, has driven the poorest countries into a downward spiral, directly threatening food security and economic sustainability.


• Removing tariffs and approving international trade agreements has meant that rich nations such as the U.S. dump heavily subsidized farm surplus in developing countries while destroying their agricultural base and undermining local food production. Developing countries have turned from net exporters to large importers of food with food trade surplus of USD 1 billion in the 1970s transforming into USD 11 billion deficit in 2001.


• Powerful transnational corporations, traders, and speculators - and not small farmers - benefit from this import-export scheme. For example, Cargill, the world's biggest grain trader, achieved an 86 percent increase in profits from commodity trading in the first quarter of 2008.

Clearly, a comprehensive change in policy based on food sovereignty principles rather than free trade is required to tackle the crisis. We believe the following are essential for dealing with the food crisis:

• Donor countries should immediately respond to appeals from the United Nations World Food Programme (WFP) that feeds 73 million people in 80 countries, for an additional US$755 million to ensure that they can meet their aid commitments. Cash should be provided to ensure local purchases of food in order to boost agricultural development in recipient countries.


• Governments should establish or restore safety nets and public distribution systems to prevent widespread hunger. It is estimated that more than 100 million people have been added to the urgent hunger category in the past six months. Donor countries should provide the financing needed to support developing country efforts to set up these systems.


• Developing countries should be supported in their efforts to promote sustainable rural development and agricultural production for domestic markets through publicly-funded technical support and credit, the use of quotas, tariffs, and subsidies and implementation of genuine agrarian reforms including land reform.


• Agricultural markets must be made less volatile through national policies that prevent speculating on food as commodities and by ensuring small producers a reliable and steady income. Well-managed public reserves need to be re-established to provide a buffer against price volatility and food insecurity.


• Global competition rules to discipline the monopoly power of agribusiness companies and stop their dumping of subsidized products on developing country markets should be enforced immediately.

We look forward to the UN task force working for real solutions to the global food crisis.