REASON NO. 8 TO JOIN THE FALL PROTESTS AGAINST THE IMF AND WORLD BANK
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IMF and World Bank structural adjustment programs assist foreign investors and corporations by removing barriers to international trade and subsidizing export-oriented agriculture, while requiring borrower governments to slash social and financial supports to the rural poor. SAPs also include elimination of policies protecting domestic food production, hitting small farmers the hardest.
Globalizing Agriculture
As with other sectors, agricultural "reforms" imposed by the World Bank are designed to improve a country’s foreign investment climate and reduce government deficits through cuts in spending and the generation of foreign exchange. Key components of SAPs that affect farmers and the agricultural sector include:
* National commitment to generate foreign-exchange earnings through the production of cash crops and non-traditional export crops, usually with increased use of agricultural inputs;
* Provision of incentives and subsidies to export-oriented agricultural firms and removal of subsidies for staple food production;
* Elimination of subsidies and tariffs that previously protected domestic farmers and markets from a massive influx of cheap food imports; and
* Reduction in the availability of credit to local farmers, particularly women.
Undermining Small Farms, Food Production and Ecosystems
Structural adjustments in agriculture provide benefits to, and increase the short-term profits of, big agribusinesses. But these severe adjustments also marginalize the rural poor, threaten local and national food security and devastate the environment. SAPs undermine the sustainability of agriculture in developing countries in the following ways:
Unsustainable Earnings.
Non-traditional export crops are typically non-native crops that are highly susceptible to pests and disease and require a large capital investment, i.e., use of expensive hybrid seeds, chemical fertilizers and pesticides and irrigation. Initial gains in currency earnings from export crop production are almost inevitably wiped out in later years by ecological collapse or a downswing in global commodity prices.
Growing Inequality.
The capital investments required to "play the game" even in the short term quickly force out small farmers who cannot afford expensive inputs and who have a harder time getting credit to purchase them. While World Bank-financed SAP projects often provide communities with input packages, participating farmers are generally required to pay back their cost. Poor harvests -- common for small farmers struggling to make the transition -- send rural families spiraling deeper into debt. In contrast, large, often foreign-owned, agricultural businesses make the leap to export production more easily and benefit from the additional array of subsidies and incentives available to exporters. The gap between the haves and have-nots increases.
Increasing Hunger and Poverty.
SAPs seriously compromise small farmers’ ability to continue producing staple food crops for their own use and to ensure local and national food security. The elimination of import tariffs allows local markets to be flooded with cheap, foreign food staples, sold at prices below local costs of production. As a result, millions of small farmers go out of business and sell their land to large, foreign agricultural businesses or to local elites. They often end up seeking employment on plantations where they are exposed to toxic pesticides and atrocious working conditions. Many cannot afford to buy imported foods, which are sold cheaply in urban centers but are marked up at stores in rural areas.
Environmental Fraud.
The World Bank and International Monetary Fund (IMF) claim that structural adjustment of the agricultural sector can have a positive environmental impact, for instance by reducing pesticide use. It is true that the removal of subsidies and the devaluation of currency usually has the net effect of increasing the price of chemical fertilizers and pesticides, putting them far out of reach of small farmers. However, larger growers and foreign investors can purchase these inputs without difficulty and their use of toxic chemicals generally goes up.
Adapted from a fact sheet prepared by the Pesticide Action Network North America (PANNA), http://www.bicusa.org/ptoc/htm/panna_adj.htm PANNA Contact information: Pesticide Action Network North America (PANNA), 49 Powell St #500, San Francisco, CA 94102 USA, tel: 1-415-981-1771, fax: 1-415-981-1991, email: panna at panna.org, web: www.panna.org.
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