Blog contribution: ‘Time to Stop our Global Financial and Food Systems from Impoverishing the World’s Smallholder Food Producers’

Co-Authors:
– Chris Hegadorn is Adjunct Professor of Food Politics at Sciences Po University Paris and former Executive Secretary of the Committee on World Food Security (CFS).
– Hilal Elver is Research Professor at University of California Santa Barbara, former UN Special Rapporteur on the Right to Food and current member of the High-Level Panel of Experts on Food Security and Nutrition (HLPE-FSN) of the CFS.

The International Monetary Fund (IMF) and the World Bank Group (WBG) are set to hold their annual Spring Meetings from 10-16 April, amidst a global food, fuel and finance crisis and serious challenges to the global economic system. In addressing the financial crisis, finance ministers and their leaders need to focus on the underlying systemic causes that have paved the way for the world’s rich to get richer and the poor to get even poorer. Along with COVID-induced quantitative easing, resulting inflation, lax banking and corporate oversight, and business oligopolies consolidating even more power during the crisis, the global financial system guarantees that the heaviest burden falls squarely on the backs and shoulders of the world’s struggling family farmers and fisherfolk.

The World Bank in January reported a reverse in decades-long progress to reduce extreme poverty, predicting an “unprecedented increase” in poverty numbers in 2023 and calling for massive debt forgiveness to countries caught up in the debt trap stemming from COVID over-borrowing, climate shocks, and Russia’s invasion of Ukraine, among other causes. The ILO, meanwhile, confirms the world’s workers have lost near $4 trillion in earnings during the COVID pandemic. Meanwhile, the current number of under-nourished and food insecure people creeps closer and closer toward one billion, while three billion people are already unable to afford a healthy diet according to the UN’s 2022 SOFI report – a shameful, yet inconvenient, truth. Russia’s illegal and brutal invasion of Ukraine, on top of a long list of other simmering armed conflicts and supply-chain disruptions have thrown open the curtain on a global food system that is non-resilient – dominated by a tiny number of multinational companies and largely-unregulated, non-transparent private commodity trading houses.

The inescapable truth is that our global food system is built upon the unapologetic exploitation of food workers who grow, catch and harvest the majority of the world’s food. A report released on March 27 (“Planet Tracker: A Financial Markets Roadmap for Transforming the Global Food System”) reveals that from the total global food system supply chain, workers capture only six percent of all generated income. Meanwhile, food retailers capture nearly one half of the total (47%), with traders (13%) and distributors (34%) capturing the remainder. In other words, for every dollar spent by consumers for food, workers at the bottom of the chain receive a mere six cents of the value generated. It is no wonder the very workers who provide much of our food, particularly from the developing south, are the most food insecure and malnourished.

Meanwhile, developed countries subsidize their own farmers and fishing fleets at astronomical levels, ensuring unlevel playing fields between them and food producers from developing countries, while incentivizing unsustainable diets and production practices that contribute significantly to biodiversity loss, soil degradation, and climate change. This inequitable distribution of the benefits from current food systems violates the fundamental principles of the right to adequate food enjoyed by every person on the planet as set forth in Article 25 of the Universal Declaration of Human Rights, and Article 11 of the International Covenant on Economic, Social and Cultural Rights. To correct this distorted pattern of benefits, it should be a high priority of reform policy to take steps to implement international legal norms, underpinning the universality, indivisibility and interconnectedness of all human rights principles.

While the UN community is now fixated on “food systems transformation,” it is imperative for the global community to promote solutions that ensure the finance and food sectors no longer get a free ride on the backs of the world’s farmers and the poor. But, the structural imbalances of the global system do not just harm poor countries and their food producers. U.S. Department of Agriculture data reveal that over half of food insecure adult workers there are actually working full time jobs, suggesting either that wages are too low or bills and indebtedness too high. As American farmers and food producers are fighting off foreclosures and bankruptcy, food retailers and others higher up the value chain are reaping record profits. Without concerted action to fix the global financial system now, the SDG-2 target of doubling (by 2030) agricultural productivity and incomes of small-scale food producers — in particular women, indigenous peoples, family farmers, pastoralists and fishers — is unimaginable. “Beggar-thy-farmer” policies can no longer be ignored or tolerated, especially ones that benefit the corporate behemoths responsible for our petrochemical-dependent agriculture systems, and for the sugary beverages and ultra-processed foods responsible for pushing diet-related illnesses to the top of the world’s list of killers. It is inexcusable for policy-makers to continue allowing this system to continue unchanged, watching food and oil company profits sky-rocket during and after COVID, while the world’s farmers become increasingly poorer. The issue of inequality as it affects food security and nutrition is being taken up by the UN’s High-Level Panel of Experts on Food Security and Nutrition (HLPE-FSN) of the Rome-based Committee on World Food Security (CFS) in an expert report due for release this summer. Their report will form the basis of a multilateral negotiation process by CFS Members and Participants to devise policy recommendations on the subject. This multilateral platform on food security and nutrition – the only such UN body that includes governments, UN agencies, researchers, the World Bank, the private sector, and civil society all under one tent – needs to be reinforced with capable leadership, adequate funding, and political support from Members and the UN itself. For policy makers at the upcoming IMF/WBG Spring Meetings in Washington, below are some policy proposals for redressing the debilitating affecting our food systems:

• Reduce/eliminate the heavy debt burden of highly-indebted poor countries, in exchange for agreements to adjust their respective food system transformation strategies to genuinely incorporate sustainable, inclusive, pro-poor, nature-based production solutions;
• Provide substantial financial support for national and local social safety net programs, education and extension services (especially for women and girls), insurance and other innovative financial tools and technologies for the poor, funded in part by corporate taxes on major food retailers, fossil fuel companies, and manufacturers and distributors of sugary beverages, fatty and ultra-processed foods;
• Incentivize financial markets and investors to direct more funding and investment toward food systems in regions, countries, and small/medium-sized companies that prioritize and commit to measurable targets on GHG emissions reduction, soil/water/air quality improvements, regenerative/agroecological food production techniques, and healthy diets produced sustainably by small-holder family farmers and local farm cooperatives.
• Promote a more resilient global food system based on prioritizing local consumption and localized supply chains, diversified production, formalized local food and labor markets, consumption of less meat, and far fewer sugary/fatty/salty processed foods;
  With a recognition that policy makers need to treat the root causes and not the symptoms, we can start to address the continuing, unacceptable disparities of income between the one percent and the rest of the world. Implementing a human rights-based approach to food security policies is one of the most effective places to start, responding to inequitable practices in highly unfair food systems. Concrete efforts to end, and avoid more armed conflicts, as well as constructive policy action on climate, water, soil health, hunger and malnutrition at global, regional, national and local levels — using both policy incentives and sticks — are essential not tomorrow, nor after 2030 – but, right now.