Every now and then, I get a call from a colleague in Geneva, asking me about the Farm Bill. Although colleagues in Geneva often find Farm Bill politics confusing, they are quite interested in Farm Bill policy. That’s because US agriculture policy is, effectively, trade policy, since the USA is such a large exporter of agriculture products. And Geneva is the global capital of trade policy, home to the World Trade Organization.

A useful analysis of the next Farm Bill comes from the Geneva-based ICTSD. The authors question whether the new Farm Bill will distort trade more or less than the old one. To do this, they dig through the House and Senate versions of the Farm Bill and try to understand the dazzling complexity of both the existing and new proposed farm programs. Of course, the new Farm Bill is not a finished product, and the House of Representatives has not even passed a bill yet. But the authors do their best.

Central to the new Farm Bill policy is eliminating “direct payments” and using the savings to create or enhance a variety of price and revenue guarantees. Direct payments don’t vary at all based on behavior, weather or prices—they are just automatic payments to farmers. Trade purists like direct payments because they don’t influence farmers’ planting decisions (because they are paid no matter what) and don’t distort trade. But everyone else hates them because they seem like a ridiculous government payout to farmers for doing almost nothing.

The paper concludes that:

“The overall thrust of the new farm bill is that decoupled direct payments that have minimal impact on planting decisions will be replaced by coupled safety net programs that potentially have a large impact on planting decisions.”

The authors project the impact of the new Farm Bill programs, and find rather modest changes; this is because current high crop prices mean government subsidy programs don’t have to pay out. But if prices decline in the future, the new Farm Bill could be more expensive to taxpayers and more influential on farmer’s business decisions.

The paper argues that the new Farm Bill will be more likely to distort trade and harm foreign producers of agriculture products than the status quo. The authors do us a favor and identify which countries’ farmers might be most bothered by the new Farm Bill:

 

 

 

 

 

 

 

 

 

 

 

The new Farm Bill will shift the balance of support among commodities. The study finds that projected subsidies for cotton are about three times higher than for other  commodities, which could induce farmers to shift to cotton from other crops—something Brazil is likely to be unhappy about.  And rice producers get a pretty sweet deal in the new Farm Bill, which could induce farmers to produce more rice, something Haitian rice producers might not be excited about. 

Why are cotton and rice winning the Farm Bill? Two maps tell the story.

This map shows where different commodities are grown—notice cotton and rice in orange and black:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

And this map shows where farmers are more dependent on government direct payments for their crops in blue and orange :

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

You can see a rough correlation between farmers who depend more on government direct payments (first map) and areas where cotton and rice (and peanuts) are grown (second map).

In the insular and circular logic of the Farm Bill, commodities that lose subsidies in one area demand—and expect—those subsidies to be made up somewhere else. Since direct payments are being eliminated, the lobbyists for cotton, rice and peanuts have pushed hard—and successfully—for a bigger share of the new Farm Bill subsidies.

But more trade-distorting subsidies for cotton and rice and peanuts is the wrong direction for US farm policy. A better farm policy would be supporting a robust, diverse, and resilient agriculture that is more flexible, less tied to government policy. We need farmers to respond to changing markets and changing weather, rather than Farm Bill dictates. They should invest in creative farming rather than lobbyists. Rigging subsidies and markets only makes the system more rigid, more vulnerable to corruption, to disaster, to bad behavior. Government policy should not be picking one crop over another, one sort of farmer over another.

In late October, a week before Hurricane Sandy arrived on the East Coast of the US, I entered a maelstrom of food and people in the scenic region of Italy at the southern foot of the Alps. It was the Terra Madre event in Turin, northern Italy, the biennial occasion that draws over 200,000 people from around the world to celebrate and discuss food production, preparation and enjoyment. And next Monday is Terra Madre Day, a day to celebrate our locally grown and produced food.

[youtube]http://www.youtube.com/watch?v=8ET18_QNgIY[/youtube]

Carlo Petrini established both Slow Food and Terra Madre “to counter the rise of fast food and fast life, the disappearance of local food traditions and people’s dwindling interest in the food they eat, where it comes from, how it tastes and how our food choices affect the rest of the world.”[1] At the opening ceremony, the sage of the Slow Food movement declared that “caring for food means caring for all living beings.” And after long applause, Petrini added that promoting the dignity, well-being, happiness and community means taking a “political approach.”

I attended the October event as an Oxfam America delegate upon invitation of Slow Food USA. During the opening event, sitting by my side was Frederick Msiska, a farmer from Malawi. He coordinated a Slow Food Garden Project in his country and had come to help construct an amazing 400 square meter African garden in the Oval pavilion at Terra Madre. Showcasing the vast variety of vegetables, fruits, grains, and medicinal plants that grow on the continent, the garden was a visual symbol of the cultural communities working to support a diverse and healthy food system. It also expressed a political idea: the value in investing in and empowering small scale producers to help support a well-fed, fair, and sustainable planet.

Frederick Msiksa was joined by hundreds of small farmers from developing nations. These included Tanzanian Food Hero, Esther Jerome, and, Grow Method honoree from Siberia Marianna Yatsyshina. these small-scale producers represented the ideal of what can happen when people are given the means and resources to grow, prepare and market food. But they also spoke about the injustice that occurs when companies, governments or wealthy investors buy up or seize land and displace people, or when native fisheries are decimated by industrial operations, or when indigenous practices and skills are neglected and lost.

The theme of this Terra Madre: “Good, clean, fair.” seemed to me like a good fit with the GROW Campaign triad of Food, Justice, Planet. Slow Food’s broad global network is more often associated with the pleasure of preparing and consuming good food rather than justice issues.But, in a world now facing climate change, conflict over land and water, and the need to meet the world demand for food while eradicating hunger and safeguarding the environment, the common ground of Oxfam and Slow Food is growing.

A well-fed world is one that must cultivate justice and sustainability and produce nutritious and good tasting food.

The oil and gas industry loves to trumpet their support of international transparency initiatives and their tax contributions to the US government, but when a new law requires them to tell the public exactly how much gets paid to whom around the world, they bring out the lobbyists and lawyers.

Browse through the corporate social responsibility reports of the top oil and gas companies, and you’ll see them singing from the same transparency hymnbook. Chevron says it “believes that the disclosure of revenues received by governments and payments made by extractive industries to governments could lead to improved governance in resource-rich countries.”

Many oil and gas companies are also “supporters” of the global Extractive Industries Transparency Initiative (EITI). (Companies can become a “supporter” simply by declaring “their support publicly”.) Unless a country decides to implement EITI, though, they are obliged to disclose nothing. For a company such as Chevron, this means disclosing tax and other payments in Nigeria (perhaps years after the fact), but nothing in next-door Equatorial Guinea, a classic petro-dictatorship. For the citizens of Equatorial Guinea—mala suerte (tough luck)!

In July 2010, the Dodd-Frank Wall Street Reform Act was signed into law. Dodd-Frank contains an important provision (“Section 1504″) that requires each oil, gas, and mining company to disclose their tax, royalty and other payments to governments in every country of operation. (Oxfam and our allies in the Publish What You Pay campaign fought hard for the inclusion of this provision—alongside our support for EITI.)

Many of the same companies praising transparency have been actively lobbying since the law passed to gut implementation by the Securities and Exchange Commission (SEC). The hypocrisy is out there in the open if you know where to look. Senate lobbying disclosure forms show that Chevron, Exxon, Shell, Conoco Phillips, Marathon, Occidental, the American Petroleum Institute (API), and others have been very active in Washington on this provision, targeting not only the SEC, but the House of Representatives, Senate, Department of State, Department of the Interior, and the National Security Council.

As I wrote last week, API (revenues of more than $198 million in 2009) has now threatened to sue the SEC unless the agency withdraws its proposed rule and starts from scratch to meet big oil’s secrecy wishes rather than the law and Congressional mandate. (Five API member companies are also on the EITI board, Exxon, Chevron, Shell, BP, and Statoil.)

No one knows how much the oil and gas industry is spending specifically to undo the Dodd-Frank provision, but the oil and gas industry is one of the biggest lobbyists in the US, spending more than $145 million on lobbying activities in 2011. ConocoPhillips, Shell, ExxonMobil, Chevron and BP were the top five oil and gas spenders on lobbying in 2011, with ConocoPhillips spending a staggering $20.5 million. API spent more than $7 million in lobbying in 2011 and is spending a “significant amount” on its faux “grassroots” advertising campaign called “Vote 4 Energy”. These are the same companies who complain that the cost to disclose information they already collect is too onerous.

The yawning gap between the transparency rhetoric of companies and the reality of their actions has never been more apparent than it is now. The SEC may shortly issue a final rule to implement the Dodd-Frank provision, while on February 14th the oil industry’s designated transparency groupies, governments, and civil society groups will convene in the UK for the latest EITI board meeting. While the EITI board members enjoy the lovely and historic “Downton Abbey”-esque country manor setting of their board meeting, the industry’s lawyers and lobbyists will be working hard in Washington to gut a new global corporate transparency standard.

It’s time to blow the whistle on the industry’s transparent hypocrisy. For the more than 1.5 billion people living on less than $2 a day in resource-rich countries, there’s no time left to wait.

This blog post was written by Paul O’Brien, Vice President for Policy and Campaigns at Oxfam America.

You’ve heard the old line about how a “rising tide lifts all boats”? In fact, the evidence shows that the “rising tide” of global economic growth is in fact lifting mostly yachts; meanwhile, a lot of people are getting dumped in the water.

Today Oxfam released new research that shows how people’s incomes are becoming more unequal in the world’s largest economies. Oxfam focused on the G20 countries because they are the self-appointed leaders of the global economy and, indeed, constitute more than 70 percent of the world’s GDP. A survey of the G20 countries shows that only four have made progress since 1990 in reducing inequality; sixteen have seen the income gap grow, slowing or stopping progress to reduce poverty. Not only is economic growth in those countries failing to “trickle down” to ordinary people, but the G20 economies are rapidly exhausting the natural resources they need to support our health and prosperity. That ecological burden falls most on the poor, who by and large lack the resources to cope with the resulting environmental degradation, particularly climate change.

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We had mixed feelings coming out of the Durban climate talks about the state of global climate policy. Some important steps were taken but there remains a significant gap between what the science tells us is necessary to avoid catastrophic climate impacts and the emissions reduction commitments that have been made. Additionally, although we now have an operational Green Climate Fund, it remains to be seen where the money will come from to build climate resilience in the poorest, most vulnerable communities in the world. 

But news today coming out of Europe gives us hope that the world may be moving in the right direction. The Court of Justice of the European Union in Luxembourg ruled in a lawsuit brought by the Air Transport Association of America, American Airlines and United Continental that aviation can be included in the EU’s emissions trading system (ETS). The decision cannot be appealed. 

The US Airline industry has been for years fighting a provision in the EU ETS to cap carbon pollution generated from flights to and from the EU countries. They even succeeded at passing legislation in the US House of Representatives calling on the airline industry to break another country’s law by prohibiting US airlines from complying with the EU regulations. And late last week, in yet another demonstration of the airline industry’s influence over Washington, Secretary of State Hillary Clinton and Secretary of Transportation Ray LaHood sent a letter to EU Ministers objecting to the law. 

Ultimately, serious global solutions are necessary in the international aviation and shipping industries that both reduce emissions and generate climate finance for developing countries. This ruling, however, represents a critical first step in moving us towards that goal and beginning to reign in a powerful industry that has gone unregulated for far too long. 

Happy holidays!

This blog post was written by Porter McConnell, Oxfam America policy and advocacy manager for Aid Effectiveness. It was originally posted on DevEx and has also been reposted on the Oxfam blog.

Last year in Seoul, G20 leaders made an ambitious commitment to the “Seoul Development Consensus for Shared Growth.” This week in Cannes, the global financial meltdown and Eurozone crisis are likely to dominate.

G20 leaders estimate that 64 million more people are now living in extreme poverty as a result of the financial crisis. Meanwhile, the Organization for Economic Cooperation and Development has predicted a sharp slowdown of aid levels in the next three years.

It’s no surprise, then, that the French G20 presidency has prioritized finding “innovative sources of finance” to meet the G20’s development commitments. Earlier in the year, French President Nicolas Sarkozy asked business magnate Bill Gates to identify the most promising sources of new finance. Gates’s report will be formally presented to G20 leaders this week, but the substance was shared with G20 finance and development ministers in September.

Gates is expected to identify a financial transactions tax (FTT) as one way to make up cash, estimating an additional $50 billion raised for global development if G20 countries adopted an FTT. Sarkozy has championed the FTT, and the European Commission recently drafted legislation for a European FTT. However, U.S. Treasury Secretary Tim Geithner has taken a strong stand against a European FTT, voicing his disapproval at a September meeting of European finance ministers. Geithner’s intervention may backfire at Cannes once he realizes how much the French love getting lectured by America.

Gates will also propose to G20 leaders a surcharge on shipping emissions, so-called “bunker” fuels, as another credible and feasible option, estimating an additional $25 billion raised if the charge was adopted by G20 countries. A measure is on the table at Cannes, but the United States again appears to be playing a blocking role.

In a measure that’s getting less attention, Gates will also call on the G20 to tap into the long-term power of domestic resources for tackling poverty. Gates will ask G20 leaders to share the experience of strengthening their tax and budget systems with developing countries, supporting governments to collect in a transparent manner the revenues they need to finance investment in the health and welfare of their citizens.

The bigger question on the table in Cannes will be whether the G20 will graduate from perpetual crisis mode to taking more proactive steps to promote broad-based growth. G20 nations are facing increased pressure at home, as more than half of the world’s poor live in G20 countries, and income inequality has worsened in most G20 countries since the 1990s. The success of the Cannes summit will depend largely on the willingness of G20 leaders, including the United States, to accept Gates’s challenge and adapt to a changing world.

Victoria Marzilli is leading Oxfam International digital communications at the G20 Summit. She is Oxfam America’s New Media Specialist and will be blogging and tweeting at the G20 in Cannes November 3-4.

The G20 countries represent around 90% of global gross national product, 80% of world trade, and two thirds of the world population. Isn’t it their responsibility to make real progress during the 2-day summit in Cannes?

The big issue on this year’s agenda is the current financial crisis, which has put 64 million people into poverty. G20 members have the mandate and the means to not only resolve this problem now, but to make sustainable solutions that will help us achieve global stability and resilience. So, in the lead up to the Summit, we are putting the pressure on the G20 to make changes to our global economy that will free up new resources so that people can escape from poverty.

Join us and make your voice heard. Send a message on Twitter using #tweetG20 and let them know what they need to do! We’ll bring the 10 most creative tweets to the mass demonstration in Nice on November 1st. We’ve provided some samples below to get you inspired, but feel free to customize your message, the more creative the better!

• #TweetG20: an #FTT within #G20 countries alone could raise $50 billion/yr for development. It’s time for #FTT now!

• #TweetG20: The cost of the financial crisis can’t be the lives of people in the world’s poorest countries. #FTT #G20

• The #G20 has the power to turn a global crisis into a global opportunity! #TweetG20

Our collective voice needs to be loud and clear: it’s time for the G20 to take action!

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Oxfam at the G20.

The G8 is in decline. After years of serving as one of the premier international platforms for international negotiation and agenda-setting, it is increasingly overshadowed by the G20, which now includes the emerging powers like China, India, and Brazil.

But the G8 has been the forum in which great leaders made great promises – at least in the development sector. The biggest example was the 2005 Gleneagles summit hosted by Tony Blair. Back then G8 leaders promised to significantly increase their foreign aid levels – with a special focus on increasing assistance to Africa. Bono approved.

Photo by Victoria Marzilli/Oxfam

Yesterday, the G8 released an “accountability report”, which attempts to show how the G8 members fared in keeping their aid promises. Not surprisingly, the report shows they did a pretty good job. Of the $50b promised in increased aid, the G8 came up with $48b, according to the report. That’s pretty good.

But….

There’s a little trick: price to ignore inflation.

It’s pretty standard to include inflation in any multi-year analysis of economics or finance. No one would want to get paid the same as they were paid in 2005. If you did, you’d be making a lot less in real (inflation-adjusted) dollars.

But the G8 has ignored standard economic analysis conventions and counted their aid delivery in nominal dollars rather than inflation-adjusted dollars. If they’d used inflation-adjusted dollars, as do other analysts of foreign aid, then the G8 aid increase would come in at $31 billion. Simply put, the G8 invents $17 billion in foreign aid out of thin air by pretending price inflation doesn’t exist.

Sad.

In the scheme of things, $17b is just 6 days of G8 military spending and less than 0.06% of their combined national income. For the money promised, every one of the 67 million children that still don’t attend primary of school could be getting an education. They also could have paid the salaries of 800,000 midwives in Africa and provided 1 million life-saving bed nets.

If the G8 want to continue to be seen as a credible voice on development, then next week at Deauville they must fulfill their existing aid commitments. The G8’s reputation is at stake – and maybe their legacy.

How the G7 have really performed since their 2005 Gleneagles commitment

Robin Hood is striking all over the world.  Campaigners are pushing for a new levy, called a financial transactions tax, to provide funding for critical development and humanitarian programs.  The campaign likens this levy to Robin Hood’s career, taking from the rich and giving to the poor.  The revenues could help donor countries avoid cutting aid programs, which seems like an inevitability given the hard economy and yawning public budget deficits.  New revenue could also help countries keep their promise to provide $100b in new funding for climate change prevention and response programs in poor countries.

French President Nicolas Sarkozy has announced his support and, as host of the G8 and the G20 this year, is pushing other countries to embrace the idea: 

« In the case of France, we believe that a very small tax on financial transactions would be fair, useful and effective…. Is it not fair, is it not understandable, is it not reasonable, reasonable to consider that those who contributed so much to a crisis of such scale should contribute a little to the development of the poor countries that were the hardest hit by the crisis? Is it totally unreasonable to say that? Personally, I believe it is reasonable. »

The FTT seems to be making some headway in Germany.  But, in the US, conventional wisdom says it’s dead-on-arrival, not least because US Treasury Secretary Tim Geithner keeps mumbling that the US won’t support it.  Of course, Sec. Geithner and President Obama did support a different levy on banks as part of the financial overhaul.  So they are not categorically opposed to taxing the financial sector more.

The bigger problem for enacting an FTT is getting it through the US Congress.   A bill has been introduced, but the votes aren’t there.  At least, not yet.

But it’s hard to see why imposing a very small tax on financial transactions should be objectionable.  Gross malfeasance in the US financial sector led the world into a deep economic crisis, obliterated as much as $50 trillion in wealth across the globe – as much as the global GDP for a year.  American households lost $14 trillion, more than a year’s worth of total income.  Yet, at the end of all of this, while we face a decade and digging out and rebuilding, the financial sector will contribute nothing more and nothing new to the recovery. The levy that Geithner and Obama proposed was stripped from the financial reform bill that passed Congress last summer.

But finding new revenue may be a necessity given the stark alternatives political leaders are facing, including cutting core government services and critical functions.  A tax set at $0.005 on financial transactions, like buying or selling stocks or options, would have a tiny impact on most citizens, unless they manage hedge funds or are high-velocity market traders.   At the same time, an FTT could raise significant new funds – perhaps more than $100b annually to offset disastrous cuts to both domestic and international programs.

As the grim reality of budget cuts begins to set in across the developed world, Sarkozy may have more luck convincing other leaders that the FTT, “c’est raisonnable.”  

One of Oxfam International’s key priorities was achieved at the Conference of the Parties (COP 16) in Cancun with the establishment of a fair global Climate Fund (the Fund is called the “Green Climate Fund” in the COP decision text– more on why I struggle with that term in future posts).

It was agreed that the policies and operating guidelines of the Fund will be developed by a Transitional Committee due to report back to COP 17 in Durban, South Africa in December 2011. Members of the Transitional Committee (TransCom) have been nominated according to representation guidelines agreed in Cancun – with solid representation from developing country Parties – out of 40 total members, 15 are from developed countries and 25 from developing countries. Representation from developing countries breaks down regionally:

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