I never thought I’d hear an official of a major corporation admit publicly that capitalism was broken, but perhaps that’s what corporate leaders do when speaking to a room full of union leaders. I was thus surprised on Thursday to hear Miguel Pestana, Vice-President for Global External Affairs of Unilever, concede that “the model of capitalism that we’ve got today is broken, it’s not working.” Of course, his corporate-speak that followed was less direct. “Creating models” and “incentivizing strategic investment” are terms that are easy to throw around, yet skirt the need for real changes to how corporations do business.
Mr. Pestana’s comments were particularly interesting in juxtaposition with President Obama’s announcement the following day of the G-8 “New Alliance for Food Security and Nutrition,” which will be based on investments by private companies into African agriculture. At essentially the same time that a Unilever official admitted that capitalism is broken, the Obama administration and world partners have turned to corporations for a “very modern results-oriented” way to address hunger. Is this really the new best way to alleviate hunger?
What’s the plan?
Obama announced on Friday that the private sector will invest $3 billion to address hunger in developing countries. Forty-five corporations, including Unilever, Monsanto, Cargill, DuPont, and Vodafone, have committed to this initiative; the purported goal is lifting 50 million people out of hunger by 2015. According to Rajiv Shah, head of USAID, this is a “fundamentally new approach to tackling hunger” in sub-Saharan Africa that is, at the same time, a continuation of the Green Revolution.
More vigorous efforts to improve food security are vital, and renewed investment in agriculture will be a critical component. Yet I fear that this partnership, at least as it has been presented to the public, has the potential to actually worsen people’s realization of the right to food.
Problem One: This plan still looks at hunger as a problem of supply.
As reported by the BBC, USAID’s Shah said that “the move showed the administration’s commitment to boosting world food production as rising wealth in Asia drives consumption.” Thus, despite the new focus on investing in “smallholders,” this initiative is essentially concerned about raising food production in general.
But we already produce enough food to feed every man, woman, and child on earth. The problem is not food production, but rather food access. Increasing food production will be critical as our population expands, but if we are concerned about chronic hunger, the component of the equation that we need to focus on first is ensuring that people will be able to grow or purchase sufficient food. Any food security plan premised on increasing food production in the abstract will not guarantee that available food is also accessible.
Of course, this plan is meant to support smaller farmers, rather than large-scale operations, and the investment therefore has the potential to support those who need it most: the fifty percent of the global hungry who are farmers. To this end, the UN Special Rapporteur on the right to food’s report on contract farming and other business models provides useful guidance. Yet this also leads us to a second problem with the G-8 plan: the apparent lack of participation by relevant stakeholders.
Problem Two: Where are the voices of farmers, farmworkers, and other food-insecure households?
Human rights, including the right to food, are secured through the participation of rights-holders, and it is the people who are most food insecure who often know best what investment would help them. Yet this new initiative, driven by large corporations operating to improve their bottom line, risks providing the wrong type of investments for food insecure people.
For example, USAID has touted investment by Vodafone as helping farmers who can then learn market prices through text messages. In some situations, this information can be crucial for improving farmers’ bargaining power with middlemen. Yet it is only one piece of the puzzle. I recently spoke with a farmer in Bhutan, who told me that he has been unable to get good prices for the potatoes that he exports to India; after a long journey to the border, he competes with everyone else who has harvested the crop, and is given a low price by the buyers. I asked him if it would help if he could call ahead of time to find out the market price, and then time his sale for better prices. No, he told me. He has a phone and could call, but he has no storage facilities, and so it doesn’t matter what the current market price is – he has to sell his potatoes before they spoil. And because there are very few buyers, and many sellers without storage facilities, the buyers can set a low price. In a situation like this, investment by a phone company is only a small piece of the puzzle, and governments must step in to provide more comprehensive support to farmers.
Without the voices of farmers, farmworkers, and food-insecure households, and without comprehensive government efforts to address food security, private investments will fail to support sustainable improvements in food security. As Oxfam has noted, there is a risk that governments could use this plan to shift their responsibilities onto private corporations. (A quintessentially American way of doing things, reminding me of a story a friend told me of the 2010 World Expo in Shanghai, where the U.S. exhibit was funded by large U.S. corporations, like walking into a giant advertisement for businesses.) The plan needs to ensure that investments are based on the needs of the food insecure, and are coordinated so that they have the desired impacts.
Problem Three: Corporate investment can never be “responsible investment” unless the corporation in question respects human rights norms in all of its activities and throughout its supply chains.
Corporate philanthropy is like putting lipstick on a pig (no offense to pigs), enabling corporations to distract from potentially nefarious activities by one-off good deeds, and corporate participation in “private-public partnerships” can have the same effect. USAID notes that corporate participants in this new plan for food security must submit a letter of intent to abide by principles of “responsible investment.” Yet if we are concerned about hunger or human rights, then corporations participating in this plan must go far beyond submitting a letter of intent, and must ensure that they respect human rights norms in all their activities and throughout their supply chains. Otherwise, this initiative creates a situation in which specific corporations could abuse human rights or labor rights, indirectly causing food insecurity, yet remain a “partner” in the G-8’s fight against hunger.
No corporation would admit human rights abuses in its activities or supply chains, of course, but I find it ironic that Monsanto, in perpetual fights with activists and farmers, is one of the named partners in this plan. Query what kind of vetting process was required to join. And in the agribusiness sector, at least, better corporate practices – support of union formation, payment of living wages, less predatory practices, etc. – would do much more for achieving food security globally than simply increasing “responsible” investment.
Shifting the frameworks for how we address food insecurity is not bad. Just as Unilever’s official noted that our capitalist system is broken, so is the U.S. food aid system, relying far too heavily on donations of actual food grown in the United States, an unsustainable and destructive practice. Investment in agriculture is crucial for addressing hunger, and if governments are not able to provide it completely on their own, then harnessing private investment, in theory, should help.
Yet there are fundamental flaws in a G-8 plan to address global hunger that focuses on maximizing food production through private investment by corporations, some of which have been accused of causing food insecurity. The United States and other G-8 members need to make sure that this plan does not lead to neglect of their own commitments to address hunger. They need to ensure that the plan addresses the actual needs of those who are hungry, in particular small-scale farmers and farmworkers, and they must do this in a participatory and inclusive manner. And the G-8 should require that any corporation participating in the initiative commit fully to respecting rights throughout its supply chains, rather than committing simply to investing “responsibly” under the auspices of this initiative. Without these assurances, it is highly doubtful that the new initiative will improve the food security of fifty million people in the next three years. Indeed, the plan could make the situation worse.