MEDIA FOR CHANGE NETWORK

Food inflation: The math doesn’t add up without factoring in corporate power

Published

1 year ago

March 22, 2024

TXJCX1 Jason Kelly, a trader in the Wheat Options pit at the CME Group throws up his arms as traders toss confetti at the closing bell for the year on December 31, 2009 in Chicago. UPI/Brian Kersey

Large farmers’ protests broke out in at least 65 countries over the past year. From India to Kenya through Colombia and France, desperation has hit a breaking point. Farmers warn that without better prices and more protection, their future is at risk. Peasant movements like La Via Campesina, for over three decades now, have denounced the World Trade Organisation and the growing number of bilateral free trade agreements for destroying their livelihoods.

However, these protests unfold against the backdrop of record-high global food prices. The prices spiked first during the pandemic and then again at the start of the war in Ukraine hitting an all-time high in 2022. Food prices have been rising faster than other products: if the global general consumer price index (CPI) doubled between 2021 and 2022, the food CPI inflation almost tripled. According to the World Food Organisation (FAO) food price index, even if international prices have moderated in 2023, they are still higher than in 2019 (see Graph 1). And all indications are that this is a crisis of prices, and not a food shortage at the global level. For the past 20 years, world grain production has exceeded available stocks.

The impact of these food price increases on millions of people, especially the poor, is devastating. In 2022, 9.2% of the world’s population was chronically hungry, an increase of 122 million people since 2019.

But, as this year’s farmers’ protests make clear, the increase in food prices is not going into their pockets. So, who is benefiting from these food price rises?

Volatility by design

The FAO and corporate executives have attributed recent food price increases to disruptive supply chains for oil, gas, fertilisers and staple goods. This is a half truth, and thus deceptive. They don’t mention how the current structure of the food system encourages and amplifies such disruptions.

For decades, the World Bank and the International Monetary Fund (IMF) have promoted structural adjustment policies, and green revolution technologies (hybrid seeds + chemical pesticides and fertilisers) across the world. We now have a global food system designed around the production of a small number of agricultural commodities (wheat, rice, maize, soybeans, palm oil) in a few areas of the world totally devoted to the massive industrial production of monocultures dependent on the supply of inputs, and concentrated in the hands of a few companies. Any disruptions within this global system, be it war or drought, can have major impacts on people’s access to food.

This is particularly acute in countries of the global South that are now highly dependent on food imports because of policies imposed on them through multilateral banks and free trade agreements. Moreover, we are entering a period of intense climate crisis, water crisis, geopolitical tensions, and declining crop yield gains that are set to generate more frequent and more severe disruptions.

For some, however, this volatility is an opportunity. Because of deliberate policies implemented since the 1980s (see box), there is today a large and growing part of the financial sector that profits from shifts in food prices using what are called “derivatives”. In theory, the use of these instruments helps buyers and sellers to lock in prices and protect themselves against the risk of price fluctuations. The most common and important of these instruments are futures contracts, which are agreements to buy or sell agricultural commodities at a specified future date. In futures markets, it is not the agricultural product itself that is traded, but the contract. The price of the contract changes according to supply and demand. But price variations on the futures markets have a direct influence on price fluctuation of the goods to which the futures contract relate. For example, if the price of a wheat futures contract rises, this indicates that the estimated future price of wheat is high. Consequently, the real current price of wheat rises. With increased activity in the financial futures markets, food trading has come to be referenced to futures prices. In a vicious circle, the volatility of food prices attracts more speculative money into the commodity futures market. This, in turn, amplifies the volatility of the futures markets and pushes up or down real food prices.

The price volatility experienced during the 2007 – 2008 food price crisis was partly a result of a surge in financial speculation. Similarly, when the war in Ukraine began, investments in commodity futures and commodity-linked funds rocketed. Speculative positions in the Paris wheat market increased from 35 million euros in January 2021 to 1 billion euros in March 2022. A report by IPES-Food found that the price of wheat on futures markets rose 54% in nine days, and the US Commodity Futures Trading Commission noted that volatility was 20% higher than normal. While this drove price increases that penalised consumers, hedge funds and pension funds speculating on food markets made huge profits.

The world’s agricultural trading companies have also benefited massively from this situation, including through their participation in financial markets. In 2022, profits achieved by the top five firms in this sector doubled and even tripled compared to the period 2016 – 2020. A report by the United Nations Conference on Trade and Development found that corporate profits of global food traders “appear to be strongly linked to periods of excessive speculation in commodity markets and to the growth of shadow banking – an unregulated financial sector that operates outside traditional banking institutions”.

They have some important advantages over purely financial players. For one, as ‘commercial actors’ they are not subject to the same restrictions or regulations of financial actors on commodity trading markets. Also, because of their global presence they have the most in-depth and up-to-date information about the availability of products and are the first to know about poor harvests or bumper crops. A study by SOMO found that the largest agricultural commodity trading companies ADM, Bunge, Cargill, COFCO International and Louis Dreyfus (usually referred to as “ABCCD”) control 73% of the global grain and oilseed trade as well as a combined 1 million hectares of farmland.

A perverse and well prepared alignment of the stars in the 1980s

Three parallel developments in the 1980s were key to financialising the global food system. First, the liberalisation of agricultural markets was promoted by the World Bank and other international agencies. Until then, governments in different regions had adopted policies to protect farmers from production risks. Second, financial markets were deregulated in the United States and investment banks and commodity trading firms began marketing index funds that tracked the prices of various commodities. In addition, large institutional investors (such as pension funds) sought to diversify their investments. To hedge their risks, they increased their investments in commodity derivatives and physical assets. As a result, a growing number of financial players began to speculate on food prices.

Third, like other companies, agribusiness companies experienced a dramatic shift in ownership with the entry of large asset management firms. CEO salaries became linked to the value of shares, creating a strong incentive to restructure companies in ways that generated more profit for shareholders. To this end, mergers and acquisitions multiplied, laying the foundations for today’s deep corporate concentration in the agri-food sector.

Source: Jennifer Clapp and S. Ryan Isakson, “Speculative Harvests: Financialization, Food, and Agriculture”, Agrarian Change & Peasant Studies, 2021.

Price manipulation and sellers’ inflation

Financial markets are not the only space where big agribusiness and food companies have an impact on food prices. A growing number of voices, such as the economist Isabella Weber, point to the monopoly power of corporations as a major factor in recent price inflation, including with food. What they call “sellers’ inflation” happens in contexts of supply-chain bottlenecks and cost shocks. When price hikes in upstream sectors (such as the gas needed for fertilisers) spread along the supply chain, companies in downstream sectors pass on cost increases to protect margins and even take the opportunity to increase margins. They can raise prices knowing that all their competitors will do the same.

Such strategies are only possible in contexts where a handful of companies have the power to set prices, as is the case in the food and agriculture sector. For example, just four companies, Bayer, Corteva, Syngenta and BASF control half of the seed market and 75% of the global agrochemicals market. Since 2018, their profits have nearly doubled. On the fertilisers side, the global market is controlled by a small number of companies. Four of them control a third of all nitrogen fertiliser production. From 2018 to 2022, the profits of the top 9 fertiliser corporations more than tripled, as they increased prices far beyond the production costs. Another example can be found in the world’s second largest meat processor, Tyson. The company more than doubled its margins and profits at the end of 2021. This was due to price increases it initiated and then continued to raise to protect margins against cost pressures from grain prices. A similar strategy was followed by large branders as Nestlé, Unilever and Mondelez who increased prices and ended by recording high profits in 2022.

This combination of monopoly power and unregulated activity in financial markets allows agricultural commodity traders, big agribusiness and food companies to make huge profits from food price rises.

Countering corporate power in food systems

The big culprit when it comes to today’s high food prices for consumers and low prices for farmers is corporate power. The climate crisis will only make this situation worse, unless urgent actions are taken to dismantle corporate power and shift to more localised food systems, based on diversified food production and catered to people’s food needs. The struggle against free trade agreements, at the forefront of many of today’s farmers’ protests, is therefore critical.

At the same time, actions are needed to reign in the power of those actors in the casino economy who are amplifying food price volatility and increases. When it comes to financial speculation, an important driver in food price volatility, regulations need to be tightened. And, to tackle the so-called “sellers’ inflation”, we need measures to prevent profiteering, which could include taxes on windfall profits anti-trust measures, and, more importantly public controls over food prices and programmes that ensure a fair, equitable and secure distribution of nutritious foods to everyone.

Source: grain.org

TXJCX1 Jason Kelly, a trader in the Wheat Options pit at the CME Group throws up his arms as traders toss confetti at the closing bell for the year on December 31, 2009 in Chicago. UPI/Brian Kersey

MEDIA FOR CHANGE NETWORK

Forced Land Evictions in Uganda: who’ll bring reparation for victims.

Published

3 days ago

April 23, 2025

witnessradio.org

By Witness Radio team.

Vivian Nandyose, a bright student, should have been in Senior Five this year. However, her dreams were shattered when her parents, the pillars of her education, were unjustly imprisoned over land-related criminal charges. With both parents in prison for eleven months, on what the family claims were false accusations, Vivian was forced to put her education on hold and take care of her five younger siblings.

In Uganda, Senior Four is the fourth and final year of lower secondary school, also known as the O-Level period. It’s the equivalent of grade 10 in the United States. Students in Senior Four take their O-Level exams, known as the Uganda Certificate of Education (UCE) at the end of the year.

“This is the life that we are experiencing because some greedy rich man caused my parents to be imprisoned. I didn’t go for senior four because I didn’t have school fees, and no one could care for the young ones while I was away,” Vivian painfully revealed in an interview with Witness Radio Uganda in December 2024.

The horrific arrest of her parents from their home in Kabubbu-Kabonge village, Nansana Municipality, Wakiso District, on January 10, 2024, is something that 17-year-old Vivian will never forget. At 1:00 a.m., police officers from the Luwero Police Station broke into their home. They took her parents, Mr. Ssebaggala Richard, his wife, Namande Prossy Kanabi, and their relative, Anania Ngabirano, into custody. The incident happened without prior notice of the reasons surrounding their arrest.

Vivian stated, “We have no peace; we can’t do anything now. Because the people who used to help us are no longer with us, I cannot afford to care for my younger siblings.”

The trio faces accusations of aggravated robbery related to a one-acre land dispute with businessman Benon Ntambi. The family claims that Ntambi illegally seized their land, destroyed all their crops, and orchestrated their violent arrests. However, Ntambi’s representatives argue that the land was legally acquired, and the family’s allegations are unfounded.

Nandyose’s loss of education is not an isolated case but a growing trend among many youths and children who face significant challenges due to forced land evictions. The Uganda Bureau of Statistics (UBOS) 2023 report paints a stark picture, with 45% of primary school pupils and 30% of secondary school students failing to complete their education due to forced displacement and instability.

In Uganda, unabated land grabbing, mainly for business interests, has had a detrimental effect on millions of people. Vivian’s case is one of 90 unlawful land evictions that Witness Radio—Uganda documented in the first half of 2024.

During the release of Witness Radio’s latest report titled Forced Evictions in Uganda, presented on Tuesday, November 5, 2024, at the 6th Symposium on Business and Human Rights, Mr. Christopher Kiwanuka, Director of Programs at Witness Radio, revealed the staggering figure of over 360,000 people affected by land grabbing between January 1, 2024, and June 30, 2024.

According to the research report, the 90 documented cases involve 121,442.83 hectares of land threatened to be grabbed, affecting at least 363,021 Ugandans. Completed forced land evictions were thirty-one (31) 31 cases, leaving 22,962 people homeless and seizing 7,150.7 hectares of land.

In the remaining cases, while the land has not been fully seized, residents continue to face persistent and violent threats of eviction, impacting 340,059 people and placing an additional 114,292.13 hectares of land at risk.

The report reveals a staggering reality: four cases of land evictions are reported weekly, affecting approximately 15,126 people and threatening 5,060.12 hectares of land across the country. This daily displacement of an estimated 2,160 Ugandans due to forced land evictions, while 723 hectares of land are at risk of being grabbed, underscores the urgent need for intervention.

The results show that, with sixty-seven (67) out of 90 recorded incidents, corporate businesses are the leading cause of forcible land evictions in Uganda. Eleven (11) cases include tribe and family land conflicts, and twelve (12) cases involve government entities. Key findings from the monitoring of these cases majorly involve multinational companies such as Agilis Partners Ltd., Great Seasons Ltd., East African Crude Oil Pipeline (EACOP), and Formosa Ltd, a subsidiary of Quality Parts Limited, as well as local investors, wealthy and bigshots with extensive power-connection to government involved in land grabbing and the criminalization of landgrab critics.

The Central region’s proximity makes it a desirable target for land grabbers, which leads to a concerning trend of land evictions, according to the report’s conclusions. With 52 documented occurrences, the region routinely has the most eviction cases, followed closely by the Western region with 24. The Northern region has 8 cases, and the Eastern region has the fewest cases, with six incidences.

Mr. Kiwanuka highlighted the rigorous process of data collection, which involved a variety of sources including Victims, the Witness Radio Land Eviction Portal, call-ins, newspapers, CSO reports, official reports, personal observations and contacts, court documents, law enforcement and security personnel, and pertinent service providers. This comprehensive approach ensured that the cases were thoroughly monitored, investigated, and documented by the research team of Witness Radio.

Accordingly, during the same period, Witness Radio documented 65 cases of attacks against community land and environment rights defenders (LEDs), as well as climate activists challenging illegal land evictions and corporate harm to the environment in Uganda. Attacks recorded include arbitrary arrests and unlawful detentions, confiscation of property, cattle in particular, intimidation and threats, and others.

Mr. Kiwanuka further noted the growing concerns of increased violence in forced land evictions, where armed gangs enforced 37 evictions on behalf of evictors, 25 cases by Uganda police, 5 cases involved the participation of some soldiers of the Uganda Army, whereas 4 cases involved the private security companies.

“Most of the evictions have been characterized by violence, including killings, criminalization, judicial harassment, and torture. Additionally, those who master the courage to defend others or their communities face the wrath of these powerful land grabbers. They act with impunity and often disregard government orders on forced land evictions.” Mr. Kiwanuka revealed this during the report launch.

Witness Radio calls on the government to ensure victims’ justice, protect local communities, and enforce adherence to existing land laws and regulations. It further calls for an end to corruption and abuse of power, particularly in the land registries, army, and police, where the rights of underprivileged groups are routinely subordinated to the interests of wealthy people.

It also exhorts companies to follow responsible investing guidelines and other pertinent business frameworks to prevent corporate harm to communities.

MEDIA FOR CHANGE NETWORK

New report: EACOP threatens tourism and biodiversity in Greater Masaka.

Published

1 week ago

April 16, 2025

witnessradio.org

By Witness Radio team.

A new report urgently warns about the imminent threats posed by the East African Crude Oil Pipeline (EACOP) to the tourism sites of the Greater Masaka subregion, demanding immediate attention and action.

In a recently released research brief by the Inclusive Green Economy Network-East Africa (IGEN-EA), “Tourism Potential of Greater Masaka vis-à-vis EACOP Project Risks,” IGEN-EA reveals the area’s diverse tourism prospects. These prospects bring massive wealth to the country as a result of its rich biodiversity and tourist attractions, but they are at risk of destruction by the EACOP project.

The EACOP project involves the construction of a 1,444km heated pipeline from Hoima in Uganda to Tanga in Tanzania, which will transport crude oil from Tilenga and Kingfisher fields. The project has been widely criticized for its environmental and social concerns. The pipeline has displaced at least 13,000 people in Uganda and Tanzania.

Experts say the Masaka subregion has sustainable tourism potential. However, the EACOP could negatively impact it by further fueling the climate crisis, causing biodiversity loss, and driving a population influx, among other things.

The Inclusive Green Economy Network-East Africa (IGEN-EA) is a network that unites over thirty-six (36) private sector players and civil society organizations (CSOs) from Uganda, Kenya, and Tanzania. The organizations undertake research, raise stakeholder awareness, and advocate to promote green economic alternatives, including clean energy, sustainable tourism, organic agriculture and fisheries, forestry, and natural resources management.

Located in southern Uganda and bordering Tanzania, Greater Masaka comprises nine districts: Kalungu, Masaka, Rakai, Sembabule, Lwengo, Kalangala, Lyantonde, Bukomansimbi, and Kyotera. Four of these, Kyotera, Rakai, Sembabule, and Lwengo, are crossed by the eacop mega project, which transports crude oil from Hoima to Port Tanga of Tanzania.

The research study’s findings reveal that the 1,443km EACOP is set to affect River Kibale/Bukora in Kyotera and Rakai districts. The river is one of the most important in the Sango Bay-Musambwa Island-Kagera (SAMUKA) Ramsar Wetland System, renowned for hosting 65 mammal species and 417 bird species. Further, the EACOP is set to affect River Katonga, the water body on whose banks Bigo by Mugenyi, a UNESCO World Heritage site, is located.

According to the Uganda Bureau of Statistics Report 2024, tourism contributed approximately 4.7% to Uganda’s GDP, and the sector has experienced significant recovery and growth. However, destroying essential tourism sites poses substantial risks to the industry.

The report underscores that the construction, operation, and decommissioning of the EACOP could lead to the irrevocable loss of the biodiversity mentioned above. This grave concern could significantly diminish Greater Masaka’s tourism potential.

“The proposed construction method of the EACOP, the open cut method, as well as the planned monitoring of the EACOP, including at river crossings, every five years and using the pigging method, instead of cathodic protection for corrosion control purposes, puts rivers and Ramsar sites at risk of oil pollution among other impacts. This could cause biodiversity loss and affect scenic views, negatively impacting tourism potential”. The report further reads.

Research report also estimates that the full value chain carbon emissions of the EACOP, which includes emissions from all stages of the pipeline’s life cycle, including extraction, transportation, and refining, are projected at over 379 million metric tonnes over 25 years.

“Carbon emissions are a driver of climate change, which has been implicated in contributing to biodiversity loss, including in Uganda. The climate risks of the EACOP thereby present a risk to eco- and agro-tourism in the Greater Masaka sub-region.” The research adds.

However, the report further implored the Ministry of Tourism, Wildlife, and Antiquities, through the Uganda Tourism Board (UTB), to prioritize the development of highlighted sites and promote cultural tourism in the subregion.

According to Mr. Dickens Kamugisha of the Africa Institute for Energy Governance (AFIEGO), the government claims that projects like EACOP are aimed at addressing poverty are unrealistic.

He noted that such projects have instead triggered biodiversity concerns, contributed to climate change, and posed significant social risks, such as increased crime rates and disruption of local communities. He emphasized that investing in sustainable economic activities such as tourism would benefit the government and private sector more.

Mr. Paul Lubega Muwonge, a member of IGEN-EA, emphasizes the crucial role of research in tourism product development and its value in laying a strong foundation for all operations.

“Research is an important and desired step in tourism product development; it sets a stronger foundation in all operations. We hope that the Ugandan government and development partners will use this research to harness the benefits of tourism by launching tourist activities in the Greater Masaka sub-region, Masaka.” He said.

MEDIA FOR CHANGE NETWORK

World Bank announces multimillion-dollar redress fund after killings and abuse claims at Tanzanian project

Published

2 weeks ago

April 10, 2025

witnessradio.org

A pastoralist indicates the border of Ruaha national park after the expansion. People allege they have faced violent evictions, disappearances and had cattle seized. Photograph: Michael Goima/The Guardian

Communities in Ruaha national park reject response to alleged assault and evictions of herders during tourism scheme funded by the bank.

The World Bank is embarking on a multimillion-dollar programme in response to alleged human rights abuses against Tanzanian herders during a flagship tourism project it funded for seven years.

Allegations made by pastoralist communities living in and around Ruaha national park include violent evictions, sexual assaults, killings, forced disappearances and large-scale cattle seizures from herders committed by rangers working for the Tanzanian national park authority (Tanapa).

The pastoralists say most of the incidents took place after the bank approved $150m (£116m) for the Resilient Natural Resource Management for Tourism and Growth (Regrow) project September in 2017, aimed at developing tourism in four protected areas in southern Tanzania in a bid to take pressure off heavily touristed northern areas such as Ngorongoro and the Serengeti.

In 2023, two individuals wrote to the bank accusing some Tanapa employees of “extreme cruelty” during cattle seizures and having engaged in “extrajudicial killings” and the “disappearance” of community members.

The Oakland Institute, a US-based thinktank that is advising the communities, and which alerted the World Bank to abuses in April 2023, says Ruaha doubled in size from 1m to more than 2m hectares (2.5m to 5m acres) during the project’s lifetime – a claim the bank denies. It says the expansion took place a decade earlier. Oakland claims 84,000 people from at least 28 villages were affected by the expansion plan.

This week, the bank published a 70-page report following its own investigation, which found “critical failures in the planning and supervision of this project and that these have resulted in serious harm”. The report, published on 2 April, notes that “the project should have recognised that enhancing Tanapa’s capacity to manage the park could potentially increase the likelihood of conflict with communities trying to access the park.”

Anna Bjerde, World Bank managing director of operations, said, “We regret that the Regrow project preparation and supervision did not sufficiently account for project risks, resulting in inadequate mitigation measures to address adverse impacts. This oversight led to the bank overlooking critical information during implementation.”

The report includes recommendations aimed at redressing harms done and details a $2.8m project that will support alternative livelihoods for communities inside and around the park. It will also help fund a Tanzanian NGO that provides legal advice to victims of crime who want to pursue justice through the courts.

A second, much bigger project, understood to be worth $110, will fund alternative livelihoods across the entire country, including Ruaha.

The total investment, thought to be the largest amount the bank has ever allocated to addressing breaches of its policies, is a reflection of the serious nature of the allegations.

The project aimed to increase management of Ruaha national park and develop it as a tourist asset. Photograph: Michael Goima/The Guardian

The bank had already suspended Regrow funding in April 2024 after its own investigation found the Tanzanian government had violated the bank’s resettlement policy and failed to create a system to report violent incidents or claim redress. The project was cancelled altogether in November 2024. A spokesperson said the bank “remains deeply concerned about the serious nature of the reports of incidents of violence and continues to focus on the wellbeing of affected communities”.

By the time the project was suspended the bank had already disbursed $125m of the $150m allocated to Regrow.

The Oakland Institute estimates that economic damages for farmers and pastoralists affected by livelihood restrictions, run into tens of millions of dollars.

Anuradha Mittal, executive director of the Oakland Institute, said the “scathing” investigation “confirmed the bank’s grave wrongdoing which devastated the lives of communities. Pastoralists and farms who refused to be silenced amid widespread government repression, are now vindicated.”

She added that the bank’s response was “beyond shameful”.

“Suggesting that tens of thousands of people forced out of their land can survive with ‘alternative livelihoods’ such as clean cooking and microfinance is a slap in the face of the victims.”

Inspection panel chair Ibrahim Pam said critical lessons from the Regrow case will be applied to all conservation projects that require resettlement and restrict access to parks, especially those implemented by a law enforcement agency.

A herd of elephants crosses and dirt road next to a 4X4

A proportion of the new World Bank funding will go to support communities within Ruaha national park. Photograph: Tristram Kenton/The Guardian

Regrow was given the go ahead in 2017. The Oakland Institute described its cancellation by the government in 2024 as a landmark victory, but said communities “remain under siege – still facing evictions, crippling livelihood restrictions and human rights abuses”.

In one village near the southern border of Ruaha, the brother of a young man who was killed three years ago while herding cattle in an area adjacent to the park, said: “It feels like it was yesterday. He had a wife, a family. Now the wife has to look after the child by herself.” He did not want to give his name for fear of reprisal.

Another community member whose husband was allegedly killed by Tanapa staff said: “I feel bad whenever I remember what happened to my husband. We used to talk often. We were friends. I was pregnant with his child when he died. He never saw his daughter. Now I just live in fear of these [Tanapa-employed] people.”

Cows grazing on harvested rice paddy fields in Ruaha national park, central Tanzania. Photograph: Michael Goima/The Guardian

The Oakland Institute said the affected communities reject the bank’s recommendations, and have delivered a list of demands that includes “reverting park boundaries to the 1998 borders they accepted, reparations for livelihood restrictions, the resumption of suspended basic services, and justice for victims of ranger abuse and violence.

“Villagers are determined to continue the struggle for their rights to land and life until the bank finally takes responsibility and remedies the harms it caused.”

The bank has said it has no authority to pay compensation directly.

Wildlife-based tourism is a major component of Tanzania’s economy, contributing more than one quarter of the country’s foreign exchange earnings in 2019. The bank has said any future community resettlement will be the government’s decision.

Source: The Guardian