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TWN Info Service on WTO and Trade Issues (March 10/14)
25 March 2010
Third World Network

Dear friends and colleagues,

Re: Need to Correct Power Imbalances Between Smallholders and Agribusiness

The increasingly globalized food sector that concentrates dominance in the  hands of multinational agribusinesses has come under the scrutiny of the  United Nations Special Rapporteur on the Right to Food.

In his second annual report to the 13th Session of the UN Human Rights Council, Olivier de Schutter said small producers are disadvantaged by the limited number of buyers, which puts them in a deeply unequal bargaining position for their crops. "In these circumstances, sourcing and pricing policies of commodity buyers have a huge and sometimes, negative impact on the right to food."

This situation partly explains why over half of the billion who are hungry  in the world today are ironically part of the food system – small  independent food producers or waged agricultural workers working on farms  in the formal or informal sector.

The Special Rapporteur urged States to use a number of tools to strengthen the position of smallholders, such as supporting the establishment of farmers' cooperatives, thus enhancing farmers' capacity to obtain higher prices for their produce. He also called upon States to act against unfair practices of corporations, excessive concentration in the food chain or abuses of dominant positions by these non-State actors.

The press release is reproduced below (Item 1). The full report is  available at:

http://www.srfood.org/images/stories/pdf/officialreports/20100305_a-hrc-13-33_agribusiness_en.pdf

With best wishes,

Lim Li Ching
Third World Network
131 Jalan Macalister,
10400 Penang,
Malaysia
Email: twnet@po.jaring.my
Websites:www.twnside.org.sg, www.biosafety-info.net

Item 1

Embargoed March 5th, 2010

Press release

"The imbalance of power between smallholders and agribusiness must be  corrected", warns UN Special Rapporteur

GENEVA, 5 March 2010 -- "Agribusiness can play a key role in realizing the  right to food. But States have to give more support to their small  producers and push corporations to change their pricing and standards  policies" said the UN Special Rapporteur on Right to Food, Olivier De  Schutter, as he presented his second annual report to the UN Human Rights  Council today.

His report concludes that in an increasingly globalized food sector dominated by large transnational corporations, smallholders have a very limited number of buyers, and are in adeeply unequal bargaining position in respect of a fair price for their crops. "In thesecircumstances, sourcing and pricing policies of commodity buyers have a huge and sometimesnegative impact on the right to food", explained De Schutter. "This situation partly explains why smallholders in developing countries are the single most important group of those suffering hunger in the world today."

To address this situation and the specific needs of smallholders, the  Special Rapporteur makes a series of recommendations to the agribusiness  corporations and the States.

Support and pressure from the State

According to the UN food expert, States have a number of tools they could  use to strengthen the position of smallholders and allow them to reap a  larger proportion of the food dollar in their transactions with buyers. In  particular, De Schutter said "States could support the establishment of  farmers' cooperatives through appropriate legal frameworks, capacity  building programs or tax incentives, thus enhancing the capacity of small  producers to obtain higher prices when they seek to sell their produce.  These organizations present many advantages in terms of services and  information, and help the producers to implement the increasingly complex  norms and requirements of buyers and public authorities active on regional  and global food markets."

The UN Special Rapporteur also called on States to act against unfair  practices of corporations, excessive concentration in the food chain, or  abuses of dominant position acquired by certain actors. National  competition laws play a fundamental role here.

"Competition law as it currently stands is not appropriately tailored to  the circumstances that weaken the bargaining position of smallholders", he  explained. "States where suppliers are based should extend the reach of  their competition laws to foreign buyers whose abuses affect national  sellers, developing regional responses if they are concerned about being  vulnerable as a small economy."

Private standards too costly for smallholders

Looking at the role of the buyers in respecting the right to food, the  report makes clear that the development of private standards (hygiene,  food safety, etc.) has worked against smallholders. Compliance has often  required higher levels of capitalization than many small producers could  afford, and the high costs of monitoring compliance of a large number of  units have been an incentive for export companies to switch from  smallholders to larger commercial farms. "The agrifood sector could  carefully assess the impact of these standards on the right to food, and  this has to happen with the participation of smallholders", said De  Schutter, adding that the sector should move beyond the inspection/audit  approach and reinforce the capacity of its suppliers to comply with social  and environmental standards.

While proposing changes in contract farming arrangements and promotion of  Fair Trade, the UN Special Rapporteur warned that, in the absence of  appropriate grievance mechanisms or remedies, the impact of the measures  recommended in his report will remain limited. "The suppliers that are  victims of unfair public or private buyer practices must be able to  complain without fear of reprisals", he added. "Since fears of delisting  have sometimes led suppliers to abstain from complaining, the  establishment of an ombudsman to monitor the policies and practices of  buyers may need to be considered by States."

Protecting the rights of agricultural workers

Noting that the pressure to produce at low prices was increasing on  suppliers, leading to repress wages of agricultural workers and to the  casualization of this workforce, the Special Rapporteur also made a number  of recommendations on this issue. States must establish a clear legal  framework with robust enforcement mechanisms. "But in addition", De  Schutter said, "employers have a responsibility to respect the right to  food, even where laws are insufficiently protective of agricultural  workers or where the existing labour legislation is inadequately  monitored: agribusiness companies must not contribute, directly or  indirectly, to human rights abuses through their relationship with  suppliers". The report identifies a range of tools such as codes of  conduct and international framework agreements that are available for  agribusiness companies to ensure that wages and working conditions improve  as a result of their suppliers joining global value chains, identifying at  which conditions these tools can be made effective.

ENDS

* * *

Read "Agribusiness and the right to food", Report of the Special  Rapporteur on the Right to Food:

http://www2.ohchr.org/english/bodies/hrcouncil/docs/13session/A-HRC-13-33.pdf.

For more on the work of the Special Rapporteur, visit www.srfood.org or

www2.ohchr.org/english/issues/food/index.htm.

Press contacts: Olivier De Schutter Tel. +32.488.482004. Beatrice  Quadranti (Tel: +41 22 917 9615/ email: bquadranti@ohchr.org) or Elaine  Ryan (Tel: +41 22 917 9697 / email: eryan@ohchr.org)) or write to   srfood@ohchr.org.

Olivier De Schutter was appointed the Special Rapporteur on the Right to  Food in May 2008 by the United Nations Human Rights Council. He is  independent from any government or organization.

Item 2

LARGE AGRIBUSINESS HURTING SMALL LANDHOLDERS, SAYS UN RIGHTS EXPERT

New York, Mar  5 2010  1:05PM

In an increasingly globalized food sector dominated by large transnational  corporations, small landowners are getting a smaller portion of the food  dollar, the independent United Nations expert on the right to food warned  today.

"Agribusiness can play a key role in realizing the right to food. But  States have to give more support to their small producers and push  corporations to change their pricing and standards policies," said Special  Rapporteur Olivier De Schutter, presenting his second annual report to the  UN Human Rights Council now underway in Geneva.

He noted that smallholders have a very limited number of buyers, and are  in a deeply unequal bargaining position in respect of a fair price for  their crops.

"This situation partly explains why smallholders in developing countries  are the single most important group of those suffering hunger in the world  today," the Special Rapporteur added.

In addition to tax incentives and other tools that States can use to  enhance the small producers' ability to obtain higher prices for their  produce, Mr. De Schutter said States should act when foreign suppliers  abuse national sellers.

The development of private standards - such as hygiene and food safety -  has worked against smallholders, the report noted. Compliance has often  required higher levels of capitalization than many small producers could  afford, and the high costs of monitoring compliance of a large number of  units have been an incentive for export companies to switch from  smallholders to larger commercial farms.

The report also highlighted the importance of protecting the rights of  agricultural workers to ensure that wages and working conditions are held  to standard.

"Agribusiness companies must not contribute, directly or indirectly, to human rights abuses through their relationship with suppliers," Mr. De Schutter said.

Secretary-General Ban Ki-moon said last month that smallholders and rural  producers have a vital role to play in overcoming global hunger and  poverty at a time when more than 1 billion people suffer from hunger, the  highest number in human history.

"We need to continue creating diverse and innovative partnerships that can  help people and communities achieve greater productivity, nutritional  health and self-reliance," he said in a message to the International Fund  for Agricultural Development (<"http://www.ifad.org/"IFAD) in Rome.

________________


For more details go to UN News Centre at

http://www.un.org/news

 


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