7-Business: On soybean subsidies and agrobusiness strategies

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    * Subject: 7-Business: On soybean subsidies and agrobusiness strategies
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    * Date: Wed, 9 May 2001 22:21:03 +0200
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                                  PART I
-------------------------------- GENET-news --------------------------------

TITLE:  Competition between Brazilian, U.S. growers needs unmasking
SOURCE: Feedstuffs, USA, by Glenn Switkes, posted by IATP, USA
DATE:   April 30, 2001

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Competition between Brazilian, U.S. growers needs unmasking

Glenn Switkes lives in Brazil and is the Latin America program director of 
International Rivers Network, an environmental and human rights 
organization based in Berkeley, Cal.

These days, it's not uncommon to arrive at the S‹o Paulo airport to see a 
dozen or so baseball-capped, sunburned soybean growers from Nebraska or 
Iowa on a "fact-finding" whirl to visit the miracle farms in Brazil's 
heartland being planted and harvested to a frenzied samba beat.

Unfortunately, these brief encounters rarely illuminate how Brazilian 
farmers and rural communities are facing many of the same economic and 
environmental hardships as American farmers. If you look just a scratch 
below the surface, it becomes clear that the same multinational 
corporations are reaping large profits from farmers on both continents.

American soybean growers are concerned, and rightfully so, about falling 
soy prices worldwide. Many associate this trend with greatly increased soy 
exports from Brazil, Argentina and Paraguay over the past decade. What has 
been largely ignored are the profound costs to the environment and local 
economies resulting from the expansion of soy monocultures into the 
interior of South America and how this low-cost, corporate agriculture in 
South America forces the same industrialization here in the U.S.

One effect of the soy "boom" has been the expulsion of tens of thousands of 
family farmers. In a country of the most inequitable land distribution in 
the world, where 1% of landholders own half the arable land, the expansion 
of soy farming has meant a kind of reverse agrarian reform.

Cities like Bras’lia and Cuiab‡ have swelled with "refugees" from the 
countryside. Instead of providing credits to small agriculturalists, the 
Brazilian government has eliminated taxes on grain exports, providing a 
boost to large landowners at the expense of the new landless. This has 
heightened social conflicts in rural areas and contributed to the growth of 
Brazil's dynamic Landless Rural Workers Movement, which has spearheaded the 
taking over of unproductive estates to force their expropriation under the 
country's agrarian reform law. Also, by providing an incentive to export 
soy as bulk grain, the government has spurred the closing of soy processing 
plants, which at least generate a modest number of jobs. To put it another 
way -- the average Brazilian farmer is in even more desperate straits than 
the family farmer in the U.S. but without government subsidies or a social 
safety net to catch him.

The impact on the environment has been equally devastating. With the 
expansion of soy plantations in the 1980s and 1990s, millions of acres of 
the "cerrado," a threatened savanna ecosystem stretching throughout central 
Brazil, have been decimated. The cerrado has been the target of 
agribusiness schemes promoted by the Brazilian government with Japanese 
support for two decades. As the Brazilian Central Bank proudly proclaims 
the export earnings the country has received from sales of soybeans ($4.2 
billion last year alone), environmentalists point to a region in ecological 
ruin -- a vast area that essentially exports the topsoil and water consumed 
by soybean farms, pollutes its rivers with pesticides and fertilizers and 
silts up rivers that flow to the Pantanal wetlands Biosphere Reserve and 
the Amazon rain forest. There also are plans underway to expand the soy 
frontier into the Amazon.

In fact, the so-called "competition" between Brazil and the U.S. farmers is 
a red herring. The new "owners" of Brazil's soy industry are the same 
companies that dominate the seeds, fertilizers, growing, shipping and sales 
of U.S. soybeans. Nearly half of Brazil's soy crop is now planted and 
harvested by foreign companies. Cargill, Archer Daniels Midland and Bunge 
alone control more than 60% of Brazil's soy exports. The largest shipper on 
the Mississippi River, American Commercial Barge Lines, is also the largest 
shipper on Paraguay's Paran‡ river system.

So, the Brazilians are going to "eat the lunch" of U.S. soy growers only if 
U.S. farmers continue to permit themselves to be controlled by the giants 
of the international soy trade. As the fraudulent studies by the U.S. Army 
Corps of Engineers on the Mississippi River lock-and-dam expansion showed, 
the soy industry in the U.S. and Brazil work in similar ways to exert 
political power. The false "heat" of competition between U.S. and Brazilian 
farmers is nothing more than an industry ploy to expand taxpayer subsidized 
handouts to fatten their profits, while family farmers in both countries 
are plowed under.


                                  PART II
-------------------------------- GENET-news --------------------------------

TITLE:  US soya "loans" are subsidies in disguise
SOURCE: Farmers Weekly, USA
DATE:   May 4, 2001

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US soya "loans' are subsidies in disguise

When is a subsidy not a subsidy? Answer: When it is dressed up as a 
marketing loan and paid by the US government.

Despite its 1996 Freedom to Farm Act, the US has been remarkably adept at 
getting extra cash into producers' pockets. As the newly-formed European 
Oilseeds Association points out, almost 70% of the soya bean value now 
comes from the US government. That compares with just 30% to EU oilseed 
growers. So US claims that it has not distorted competition are looking 
increasingly shaky. At a time when prices have been falling, soya 
production has rocketed the opposite to market expectations. That cannot be 
allowed to continue. The EU commission should redress the balance, either 
by paying our oilseed producers more, or by taking the US to the World 
Trade Organisation in Geneva.



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