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Greece against a cast of contemptible characters

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These images (taken from various news agencies) show how ordinary Greeks, but particularly elderly pensioners, have been tormented by EU politicians. This has been portrayed as a Greek debt crisis, but it is much more a crisis about what Europe is and stands for.

These images (taken from various news agencies) show how ordinary Greeks, but particularly elderly pensioners, have been tormented by EU politicians. This has been portrayed as a Greek debt crisis, but it is much more a crisis about what Europe is and stands for.

Update 11 July: The Greek parliament supported a so-called package of spending cuts, pension savings and tax increases with a majority of 251 votes in the 300-seat parliament. This is what the 61.3% ‘NO’ vote rejected six days ago! Naturally, this has set the stage for massive internal turmoil in Greece. Heavyweights of Syriza, parliament speaker Zoi Konstantopoulou and energy minister Panagiotis Lafazanis, and 15 other members either voted against the plan, abstained or were absent from the vote. Another 15 Syriza members of parliament said they also opposed the proposed measures and could reject them in future votes even though they supported prime minister Alexis Tsipras and his template of borrowed proposals. With breath-taking cynicism, the Syriza leader has presented this direct repudiation of the will of the Greek people as a “triumph of democracy”. Who is this man Tsipras working for?

The newest alumnus of the Transatlantic School of Austerity and Misery, with a special interest in 'haircuts'

The newest alumnus of the Transatlantic School of Austerity and Misery, with a special interest in ‘haircuts’

Beyond the beggaring calculations made by the economists and financiers of the Troika and the ahistorical stubbornness of the Berlin-Paris ruling cliques who will still not deviate from their ‘austerity’ prescription, is the legitimacy of Greece’s claim to autonomy. “Autonomy, the willingness and capacity to question and change our collective laws, is a universal principle and one that should be at the heart of the European project,” writes Giorgos Kallis. “Greece’s disobedience to the rule of the markets is a universalistic call for reclaiming democracy for all Europe, not a particularist protection of its own backyard. This is not a demand for the rest of Europe to obey to Greece’s will, but a plea to listen, reflect and genuinely co-decide.” Ah but Berlin cannot abide any other will than its own.

It is finanzpolitik, or perhaps the political economy of occupation by austerity. Whatever it is called in Eurolingua it has proved politically effective for European elites in general to present the Greek problem as their own debt problem. Doing so has provided a powerful ideological and moral justification for the brutal austerity policies prescribed to the countries of the European ‘periphery’ (and especially Greece) in recent years. And so, as Thomas Fazi has narrated, Euro-leaders’ “deeply moral interpretation of the euro crisis – which pitted the profligate, debt-ridden wrongdoers of the periphery against the virtuous, responsible countries of the core – rapidly became conventional wisdom among European politicians, commentators and bureaucrats”.

On Sunday 5 July 2015 Europe was shown to be imprisoned by its institutions. But the people of Greece chose with dignity and in solidarity to expose the prison, and walk away.

The landslide ‘no’ (or OXI) vote in the 5 July referendum on austerity in Greece is an overwhelming repudiation of the European Union and the austerity agenda pursued all over Europe since the 2008 economic crisis. The weapon of austerity is the euro, and it works by wiping out genuine economic and social progress through productive systems composed largely of small and medium enterprises, because this weapon pries open these local ‘markets’ (a despised term) to raids by financial monopolies.

RG_greece_20150710_gr3Such raids have the sanction of the International Monetary Fund, the European Commission, and the European Central Bank – together known as the troika which has waged war on the Greeks. The troika has waged such war as punishment (in the words of European politicians such as Angela Merkel, Francois Hollande, Martin Schulz, Wolfgang Schäuble and David Cameron) to the Greeks for their own failed design of the Euro in a system that is economically unsustainable and socially perverse.

“Shame on all those who have accepted the idea that the troika represents the European peoples,” wrote Samir Amin. “Shame on the governments that have installed in the presidency of ‘their Europe’ a Luxembourgian functionary in the service of a tax haven; installed in the management of ‘their central bank’ a character who made a career at Goldman Sachs, the bank associated with all the financial villainies of the century.”

RG_greece_20150710_gr1The ‘OXI’ (no) in the referendum means the Greeks voted for a socially just distribution of the burdens for the sustainable reforms necessary in their country to fight corruption and nepotism. They voted for sustainable reconstruction and growth of their economic structures, to reduce military spending and for mandatory negotiations on debt restructuring. Those who so voted on 5 July were 61.3% of the Greek people, drawn largely from the working class and poorer layers of the population.

But what happens now?

There is not much belief that the Syriza government will fulfil the ‘no’ vote mandate and bring austerity to an end. Reportage via independent media say that most people fear there will be new austerity measures, which the mass of the population can no longer take.

RG_greece_20150710_gr2Should the Greek Parliament approve talks on the new proposal (it may be acceptable to the Eurozone’s negotiators but has will still have to be approved by the European Parliament) there will be a short period during which the people of Greece will reflect on what is being done. They may decide to tolerate more ‘negotiation’, or not. They could rise up against a government that has gone back on its promises and disregarded their will as expressed in the referendum.

On the other hand Germany will balk at offering any debt relief. The European financial press (such as it is) is carrying reports that a section of German capitalist strategists are calculating that it is now cheaper to kick Greece out of the euro (provide a ‘humanitarian relief aid’ dollop) than continue to negotiate a formal bailout. A French publication reported that the Greek negotiation team was asked by Schäuble, “how much money do you want to leave the euro”, underlining how execrable the Euro political class has become.

These have been disastrous times for people in Greece. Salaries have been cut by half, taxes have increased eight times (not by 8% or 80% but eight times more), there are 1.5 million people unemployed and that is a full third of the working class, those who have jobs have often not been paid in weeks or months. There is misery and 60 euros as pension for those who can find 60 euros to draw out, but the Greeks want to their overthrow of austerity to be historic and permanent.

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Monsanto drops GM crop plans in Europe

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'Monsanocchio', by Raymond Burki, a Swiss cartoonist whose works are published in the Lausanne daily 24 heures. Courtesy: Presseurop

‘Monsanocchio’, by Raymond Burki, a Swiss cartoonist whose works are published in the Lausanne daily 24 heures. Courtesy: Presseurop

The signs have been gaining substance over the last two years. In western Europe (Britain excluded), citizens and independent researchers have demanded and end to GM food products. The support given to the seed-biotech-fertiliser conglomerates of the USA and Europe, by their governments has been well met by organised consumer awareness and resistance. It is no wonder then that these cartels have shifted the use of their tactics to Asia, where political establishments can be more easily influenced and where consumer awareness about the dreadful dangers of GM is generally lower than in western Europe.

Europe’s press is reporting that Monsanto, the fertiliser and biotechnology company, is withdrawing all permits requested to the European Commission to grow genetically modified corn, soy and sugar beet because it does not see “a commercial outlook” for these products (that’s what the public relations scoundrels call what we know and practice as informed consumer awareness).

German daily Die Welt reported that only a request to grow genetically modified corn (of the MON810 type) will be renewed. For the moment, this type of corn is the only genetically modified organism commercially cultivated in Europe, said Die Welt. While MON810 corn type is admitted into the EU, several countries including France, Germany and Italy have banned it at the national level, following citizen initiatives. Last year, German chemical firm BASF threw in the towel and relocated its biotechnology centre to the USA because genetic engineering is so strongly contested in Europe.

Monsanto has loudly insisted that its genetically modified products, including maize MON810, which is authorised in Europe, are safe for humans. It has an army of compromised ‘scientists’ on its payroll in every single country where it wants to push its GM products, and using its public relations agents has infiltrated media in every country that it sees as a market. But the evidence that GM is dangerous for humans and animals, for insects and plants alike grows by the day. A study conducted on rats for two years by a team of French researchers on Monsanto NK 603 corn revealed an abnormally high tumour and death rate – Monsanto’s own in-house studies, pushed out as counter-evidence by mercenary accomplices, were conducted for no more than three months!

Roadside shacks of people whose land has been taken over for soy fields in Alto Parana, Paraguay, which is among the South American countries with the most unequal land distribution. Paraguay has seen this situation escalate to the point where today, 2% of owners control 85% of the farmland. The regional situation is worse when one considers that the neighbouring countries – Brazil especially but also Argentina – are also experiencing land concentration for transgenic soybeans. Photo: Grain / Glyn Thomas / FoE

Roadside shacks of people whose land has been taken over for soy fields in Alto Parana, Paraguay, which is among the South American countries with the most unequal land distribution. Paraguay has seen this situation escalate to the point where today, 2% of owners control 85% of the farmland. The regional situation is worse when one considers that the neighbouring countries – Brazil especially but also Argentina – are also experiencing land concentration for transgenic soybeans. Photo: Grain / Glyn Thomas / FoE

Greenpeace noted the company will also seek to continue sales of its controversial MON810 maize, which was already approved in Europe and is the last remaining GM crop grown there. “The EU-wide authorisation for the cultivation of MON810 is expiring at the end of a ten-year period and the safety of the crop is due to be reassessed. The company is permitted to continue to use MON810 in Europe until the European Commission announces its decision,” stated Greenpeace.

The GM Freeze campaign welcomed Monsanto’s announcement that it is withdrawing pending applications to cultivate GM crops in the European Union but said this is not the end of Europe’s GM story. GM Freeze pointed out that Monsanto’s GM crops will still be imported into the EU, primarily for use in animal feed and biofuels, so the damage to ecosystems and human health caused by GM will continue elsewhere. The lack of labels on meat, eggs, dairy products and fish produced using GM feed means that Europe’s reliance on GM is hidden from consumers so they cannot easily avoid buying GM-fed products. Food companies should meet the clear demand for entirely non-GM foods by labelling those produced without GM, as is done successfully by many companies in Germany, Austria and France.

In tiresomely typical contrast, the government of the United Kingdom is to push the European Union to ease restrictions limiting the use of GM crops in the human food chain, reported The Independent. Britain’s Environment Secretary Owen Paterson is next week due to announce a UK government drive to increase Britain’s cultivation of GM foods! The newspaper said Britain’s ministers are hopeful of building support in Brussels for a change of heart on GM, with Germany seen as a key swing voter. The government of Britain’s craven attempts to relax the rules will face opposition from countries like Poland which in April became the eighth EU member state to ban the cultivation of GM crops.

Forgetting their ‘commitments’ to get GM out of their supply chains, big British food retailers – Sainsbury’s, Marks & Spencer and Tesco – have gone in the opposite direction. Sainsbury’s and Marks & Spencer have joined Monsanto, Cargill and Nestle on the absurd Roundtable on Responsible Soy, a group that has been condemned by organisations around the world as a greenwash of existing bad practice in industrial soya monoculture. The Roundtable ‘certifies’ (judge and jury) GM soya as “responsible” despite growing evidence of adverse health, environmental and socioeconomic impacts in producer countries. Tesco is now backing GM soya production in South America, where it is grown in huge monocultures sprayed frequently with Roundup to the detriment of people and ecosystems there.

Convenience inertia, 400 ppm and continental warming

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CO2_399ppm_201304The bad news first. The Guardian has reported that the concentration of carbon dioxide in the atmosphere has reached 399.72 parts per million (ppm) and is likely to pass the symbolically important 400 ppm level for the first time in the next few days. Every additional single ppm is that much closer to the many tipping points earth scientists and climatologists have warned governments and policymakers about.

There are three strands of information tied together here. One of these helps us understand what 400 ppm is, relative to a history that we can measure. Another shows us why, despite repeated warnings about the rise of CO2 in the atmosphere and evidence piled upon new evidence with every passing year, policymakers and the consuming public have simply not reacted. And then there is the ppm counter itself, remorseless in its upward march.

The paper, ‘Continental-scale temperature variability during the past two millennia’ (in Nature Geoscience (Vol 6, May 2013)), analysed a number of records (called ‘proxy records’, which indicate temperature change. The researchers found that “of the 323 individual proxy records that extend to ad 1500, more sites seem warmest during 1971-2000 than during any other 30-year period, both in terms of the total number of sites and their proportion in each region”. Moreover, “of the 52 individual records that extend to ad 500, more sites (and a higher proportion) seem warmest during the twentieth century than during any other century”.

Next, the human response. The European Commission’s Joint Research Centre has released an excellent publication which is a collection of interviews concerning climate, but also what humans have done to climate (and is also about science). The book, ‘Air & Climate: Conversations About Molecules And Planets, With Humans In Between’, contains an interview (there are several) with Hans Joachim Schellnhuber, the founder and Director of the immensely influential Potsdam Institute for Climate Impact Research. Schellnhuber has been a member of the German Advisory Council on Global Change since its inception in 1992, and its chairman since 2008.

Schellnhuber in the interview has talked about a moral and a time issue involved, with creating “tremendous inertia in the behaviour of people and the making of politics”. He has said:

“The moral issue goes as follows: if you brought your child to the school bus, and the driver said there was a 50% chance of an accident because something was wrong with the engine, nothing on Earth would make you put your child onto that bus. Climate change undoubtedly creates, with more than 50% probability, the risk of destroying the life of some child in some region that is heavily hit by anthropogenic warming at the other side of the planet – the life of a child who is not even born yet and who you will never get to know. Acting to save that anonymous life is a really tough test for our moral standards, even if you believe every word of what science says about climate disruption.”

“Even when your own survival is at stake it seems far too inconvenient to change your habits now and to reap the benefits later. So it is not that people are wicked or dumb or not perceptive of scientific insights, there is simply this inertia related to the demi-god ‘convenience’.”

[The book ‘Air & Climate’ (by Frank Raes, European Commission, Joint Research Centre, 2012) can be found here.]

How powerful can the satisfaction of the ‘convenience’ idea be to modern humans? Is it possible that the satisfaction of this idea overrides personal, community, species and ecosystem survival? Although I agree with Schellnhuber’s comment, especially given the speed at which industrial agriculture and food systems are overrunning our landscape, it seems almost inconceivable that the motor of convenience insulates consuming humans from all evidence, even evidence as weighty as the Nature Geosciences paper.

This has said, as clearly as possible, that (1) the best estimate of past temperature from seven continent-sized regions indicates that 1971–2000 was warmer than any other time in nearly 1,400 years, (2) the global warming that has occurred since the end of the nineteenth century reversed a persistent long-term global cooling trend, and (3) the increase in average temperature between the nineteenth and twentieth centuries exceeded the temperature difference between all other consecutive centuries in each region, except Antarctica and South America.

And finally, the deadly ppm counter. Readings at the US government’s Earth Systems Research laboratory in Hawaii, are not expected to reach their 2013 peak until mid-May this year, but were recorded at a daily average of 399.72 ppm on 25 April – that is, last week. CO2 atmospheric levels have been steadily rising for 200 years, registering around 280 ppm at the start of the industrial revolution and 316 ppm in 1958 when the Mauna Loa observatory started measurements. “The increase in the global burning of fossil fuels is the primary cause of the increase,” said the Guardian article. Profiting from convenience as a way towards extinction?

For its 50th year bash, Europe’s CAP readies another dose of ‘reforms’

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The CAP at 50 website

2012 marks the 50th anniversary of the implementation of the EU’s Common Agriculture Policy (CAP), described rather pompously by the European Commission as “a cornerstone of European integration” – well, it is true that farming has done a lot more for the idea of Europa than the euro has.

CAP “has provided European citizens with 50 years of food security and a living countryside”, the celebratory website has explained. The CAP remains the only EU policy where there is a common EU framework and the majority of public spending in all Member States comes from the EU budget, rather than from national or regional budgets, we are told. I should have expected the EU to ignore entirely the trifling matter of the steady impoverishment of European societies, especially the second and third tier Euro societies – which is particularly those countries beyond the EU-15. What has the CAP done for them, for the relative late-comers to the European idea?

But, the Eurocrats have said that “figures show that the CAP has helped see a steady increase in economic value, in productivity, and in trade, while also allowing the share of household spending on food to be halved”. Oh, that’s all right then – we were just looking at the wrong figures. Silly us.

“The CAP is a policy that has always evolved to address necessary challenges,” the pomposity continues. For example, we are told that the reform process since 1992 “has seen a move towards much greater market orientation and away from trade-distorting support” – um, did we notice a few years ago that the average EU cow (or ox) receives more by way of subventions than quite a few of the poorer humans in ‘developing’ Asia, Africa, South-East Asia and South America? Oh, sorry, wrong figures again. Bother such troublesome data.

Being the dynamic and forward-looking CAP that it is, it has also taken “into account consumer concerns about issues such as animal welfare, and the doubling of the number of farmers within the EU (following enlargement from 15 to 27 Member States)”. There we are – that’s the first tier nod to the third tier EU lot, and said ruffians should be pleased.

In October 2011, the European Commission presented its latest proposals for further reforms – haven’t we been through all this before? more reform? are you chaps quite blind to what’s happening to your favourite currency while you’ve been reforming? or is it the very latest blend from the new ultra-snob coffee bistro in Brussels that’s to blame? – to the CAP.

What, pray, are these 50th anniversary, limited edition reforms all about? At “addressing the challenges of today and tomorrow: food security; climate change; the sustainable use of natural resources; balanced regional development; helping the farming sector cope with the effects of the economic crisis and with the increased volatility of agricultural prices; and contributing to smart, sustainable and inclusive growth in line with the Europe 2020 strategy”.

Alea jacta est, and especially those so for farmers and their families who live somewhere between EU15 and EU27, for this is a signal to tighten their already painfully tight belts, and salt what remains of the day’s spud.

Milestones of History of CAP (provided by the EU)

Back in 1962, several key dates marked the beginning of the CAP:
• On 14 January 1962, after 140 hours of negotiations (the first European agricultural marathon), the Council of Ministers of the Six took the decision to proceed to the second stage of the transition period, to establish common agricultural market organisations for each product, to apply specific competition rules and to create a European Agricultural Guidance and Guarantee Fund (EAGGF).
• 4 April 1962:  Following a second agricultural marathon, the texts of the regulations were adopted by the Council.
• 20 April 1962: The texts were published. The date that they came into effect depended on the start of the market season: for instance, for the common market organisation for cereals, eggs, poultry, meat and pork the date of entry into effect was 1 July 1962.
• Among the key dates since then:
• 1962: The Common Agricultural Policy (CAP) is born! The essence of the policy is to provide affordable food for EU citizens and a fair standard of living for farmers.
• 1984: Milk quotas – Specific measures are put in place to align milk production with market needs.
• 1992: “Mac Sharry” reform – The CAP shifts from market support to producer support. Price support is replaced with direct aid payments. There is increased emphasis on food quality, protecting traditional and regional foods and caring for the environment.
• 2000: The scope of the CAP is widened to include rural development. The CAP focuses on the economic, social and cultural development of Europe with targeted multi-annual programmes, designed at national, regional or local level.
• 2003: “Fischler/Mid-term Review” reform – CAP reform cuts the link between subsidies and production. Farmers are more market oriented and, in view of the specific constraints on European agriculture, they receive an income aid. They have to respect specific environmental, animal welfare and food safety standards.
• 2004 & 2007: EU farming population doubles, following recent enlargements with 12 New Member States. EU’s agricultural and rural landscape changes as well.
• 2012: New CAP reform negotiations to strengthen the economic and ecological competitiveness of the agricultural sector, to promote innovation, to combat climate change and to support employment and growth in rural areas.

A two-speed Europe, chronic unemployment and the Euro experiment

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Illustration: Presseurop / Chinese illustrator and cartoonist Luo Jie (William Luo) works for the Beijing English newspaper, China Daily.

There is worry in Europe about the euro, its ten-year-old currency, and about unemployment, which has stayed persistently high throughout 2011. The Euro press has reflected the worries and concerns of the salaried and the informal workers of Europe, and is now talking about whether there is already a ‘two-speed’ Europe. Presseurop has provided some insight:

In ‘Eurozone crisis – Will the EU end up like Yugoslavia?’ Serbian daily Politika remarks on the similarities with the years preceding the break-up of the federation founded by Tito. The Politika opinion said: “Seen from Belgrade, Zagreb or Sarajevo, the economic and institutional crisis that has struck the European Union has a certain air of déjà-vu. Relatively speaking, the European Union (EU) is beginning in many ways to resemble Tito’s Yugoslavia. As At a time when the EU is attempting to reinforce centralised control of its periphery, its foundations are being threatened by excessive nationalism and accumulated incompatibilities between member states.”

The “democratic deficit” suggests yet another parallel, according to the Serbian paper: in the one-party system in Yugoslavia, leaders were not elected by universal suffrage, just like the highly placed civil servants that manage today’s EU – in spite of the fact that all of the members of the Union have multi-party systems. In both cases, the fear that the more populous states would have too much influence has prevented the introduction of the principle of ‘one citizen, one vote’.

The 'La Tribune' front page on a 'two-speed' Europe

Presseurop also invokes the ‘two-speed Europe’ meme in ‘Employment – A two-speed Europe’. Mentioning the front-page headline ‘Europe split in two by unemployment’ of La Tribune, Presseurop has quoted the paper’s reporting on the growing gap between Southern and Northern Europe: “The rate in Germany has declined to a level not seen since 1991 while soaring to new high in Spain, where it is now almost 23%.”

The Paris business daily continued: “This European dichotomy is first and foremost a reflection of the state of the continent’s economies. While some countries have sunk into recession (Greece, Portugal, Spain), others have succeeded in maintaining growth, albeit modest.” Citing reforms undertaken before the crisis as one of the reasons for the healthier economies in the North, The Financial Times remarked that changes to labour legislation in Luxembourg, the Netherlands, Austria and Germany “have helped make the workers of these countries internationally competitive – a factor which is sorely lacking in the eurozone periphery”. Typically arrogant and dismissive opinionating from the British paper, which is notorious for kowtowing shamelessly before industry and American foreign policy dictates.

The Berlin leftish newspaper Tageszeitung (Taz) takes issue with this argument, and notes that the reforms undertaken by Berlin have not created new jobs, but simply redistributed them to a larger number of workers – a process that has resulted in the creation of a new low-pay sector. Reporting that 8.4 million Germans are ‘under-employed’, the Taz recalls that economic inequality in Germany has grown more rapidly than in other industrialised countries. Finally, the Berlin newspaper notes that to ‘celebrate’ the record of 41 million wage earners, the German government has spent 330,000 euros on a poster campaign ‘Danke Deutschland – Wirtschaft. Wachstum. Wohlstand.’ [“Thank you Germany – Economy. Growth. Prosperity”].

Taz is close to the truth, quite the opposite of what the feckless Financial Times, a speechwriter for predatory capitalism, would have us believe. Almost one in four people in the European Union was threatened with poverty or social deprivation in 2010. This is the conclusion of an official report by the European Commission presented in December. According to the report, 115 million people, or 23 percent of the EU population, were designated as poor or socially deprived. The main causes are unemployment, old age and low wages, with more than 8 percent of all employees in Europe now belonging to the “working poor”.

Single parents, immigrants and young people are worst affected. Among young people, unemployment is more than twice as high as among adults. Some 21.4 percent of all young people in the EU had no work in September 2011. Spain leads all other EU countries with a youth unemployment rate of 48 percent. In Greece, Italy, Ireland, Lithuania, Latvia and Slovakia youth unemployment is between 25 percent and 45 percent.

In countries such as Germany, the Netherlands and Austria, youth unemployment rates are lower only because training takes longer and many unemployed young people are ‘parked’ in all sorts of schemes that exclude them from the official statistics – so much for the crafty and misleading ‘Danke Deutschland’ campaign. But even in these countries the chance of getting a decent-paying job is diminishing. Some 50 percent of all new employment contracts in the EU are temporary work contracts. For workers aged 20 to 24, the proportion is 60 percent.

Written by makanaka

January 8, 2012 at 14:47

Three conclusions for agricultural commodities, says European Commission

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A Syrian family receives food aid at a WFP distribution point. Photo: WFP/John Wreford

A Syrian family receives food aid at a WFP distribution point. Photo: WFP/John Wreford

Here’s the latest punditry from the European Commission.

“Despite remaining uncertainties, based on the outlook for agricultural commodities established by several organisations, including the latest Commission medium term projections, three conclusions are clear for agricultural commodities:

  • Agricultural commodity prices  are expected to stay higher than their historical averages, reversing their long-term downward trend, at least for the foreseeable future.
  • Price volatility is also expected to remain high, although uncertainties with respect to its causes and duration persist.
  • The level of input prices used in agriculture is also likely to remain higher than its historical trends.”

These three conclusions are contained in the document, ‘Tackling the Challenges in Commodity Markets and on Raw Materials’, issued as a Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. (These Eurocrats need urgent lessons in how to be brief and clear.)

The ‘Communication’ has also said:

“While higher global prices could stimulate  agricultural production, price transmission mechanisms are often imperfect. In many developing countries, commodity markets are often disconnected from world markets or, at best, world price signals are transmitted to domestic markets with considerable lags so that a domestic supply response is often delayed. Several analyses by the Food and Agricultural Organisation, OECD, Commission and others have focused on supply and demand developments, exacerbated by short-term economic and policy factors (including restrictions on exports) that explain part of the observed extreme price volatility, including factors specific to financial markets that may have amplified price changes.”

A food crisis in northern Burundi’s Kirundo province – the result of failed rains – has prompted many women to make a long daily commute to neighbouring Rwanda, where a day’s work in a field earns them just enough money to feed their family for a day. Photo: IRIN/Judith Basutama

A food crisis in northern Burundi’s Kirundo province – the result of failed rains – has prompted many women to make a long daily commute to neighbouring Rwanda, where a day’s work in a field earns them just enough money to feed their family for a day. Photo: IRIN/Judith Basutama

There are several errors in this statement. One, in many developing countries, commodity markets are extremely closely tied to world markets quite simply because they are buying staple foodgrain from world markets. Two, domestic supply responses are not delayed – the structural adjustment in agriculture is preventing them from taking place. Three, the “restrictions on exports” mantra is being repeated as often as possible by all multilateral development banks (World Bank, IMF, ADB, IADB, AfDB) and by financial markets and commodities analysts who collaborate to spread this misinformation. Four, why are the “factors specific to financial markets” not spelt out?

“The combination of the above factors implies that higher prices for agricultural commodities will not necessarily result in higher incomes for farmers, especially if their margins are squeezed by increased costs. In addition, potential problems for net food importing countries and more generally for the most vulnerable  consumers are evident, stemming from price impacts on food inflation. While a certain degree  of variability is an intrinsic part of agricultural markets, excessive volatility does not benefit producers neither users.”

The contradictions between what the EU thinks it ought to say to the finance + markets constituency and what it thinks it ought to say to critics of neo-lineral economics at home is clear from this paragraph. The EU is admitting there is a profiterring taking place between the higher prices for agri commodities and the “not necessarily” higher incomes for farmers. Higher costs are mentioned too. Food importing countries have “potential problems’! (Seriously, are the people who wrote this completely unaware of the events in North Africa and the reasons behind them?)