Independent, voluntary farmers’ organizations emerged (in the case of Mozambique, the União Nacional de Camponeses, or UNAC), reflecting greater political openness in some countries. Many of the previous regimes had discouraged or banned organization by independent citizens, including independent trade unions or peasant organizations. UNCTAD’s generalized assessment of the economic changes in this period records that a flurry of private sector activity, much of it by domestic firms, tended to settle out over a few years leaving a dominant firm in place, usually foreign, with varying levels of domestic private sector 205 firm activity in the margins. ‘Among other things, it is found that in response to declining margins in international trade, international commodity trading houses, which account for a major part of international trade, have become fewer, bigger and more diversified across the range of commodities, and more vertically integrated upstream to the farmers’ level and downstream in transport and processing. Although ultimately this makes local markets more efficient, local farmers and traders are often poorly equipped to deal on an equal footing with these large trading houses, particularly after the abolition of state marketing boards in many countries. Stimulating at a national level the same developments which have reduced margins in international trade (namely widening access to information and growing efficiency of markets, including for credit provision) would partly allow this 206 imbalance to be redressed.’ At the multilateral level, this trend towards increased private sector activity and away from state control was encouraged and reinforced by the Uruguay Round Agreements. TRIPS, for example, transformed multinational capital’s interest – and possible profits – in the seed sector, while the abolition of variable levies and quantitative import restrictions made the exporters’ business more predictable. The conditionalities imposed by structural adjustment policies and successor World Bank and IMF lending policies, as well as donor conditions on official development assistance (ODA), also underlay the policy shift. The international donor community encouraged developing countries to focus on exports, which for many meant agricultural commodity exports. Less discussed, but a necessary corollary of this policy under the Uruguay Round framework, was increased reliance on imports as well. The Uruguay Round agreement bound all but least developed countries (LDCs) to reduce their tariffs, and even LDCs were required to bind their tariffs to prevent any increase in the future. The growth in trade, both in imports and exports, created new opportunities for the ABCDs to expand. For smallholders, the shift away from state control was often welcome, for the gains in both political and economic freedom that it implied. Yet the change came at a price: competition with imports in local markets. Too often, these imports were dumped, their price affected by subsidies, or the economic power of the largest traders, or by the simple logic that rich consumers paid enough for one part of the product to underwrite the cost of the whole (such as 207 the unwanted dark chicken meat once all the white meat was sold). Foreign multinationals found a place on both the import and the export side, obviously favourably positioned to play a 208 dominant role in this trade, with the ABCDs – and their rivals – particularly active in the cereals sector. For example, when Zimbabwe proposed to privatize its maize marketing board in 1998, Glencore put in a bid to buy it. At the time, the local press claimed that Glencore controlled 90 per cent of the maize trade that crossed a border in southern Africa (though it would seem that Cargill and Dreyfus, among others, are now significant players, if they were not 209 at that time). One outcome was rising food import bills. In 2000, developing countries shifted as a group from being net food exporters to net food importers. LDC dependence on food imports was especially marked. In a 2011 policy brief, UNCTAD noted that the LDCs' food import bill rose from $9bn in 2002 to $24bn in 2008. Higher prices, a weaker dollar, and growing demand are all part of that shift, but the 2.5-fold increase over just six years is nonetheless enormous. The LDCs are not importing processed food for an urban middle class, by and large. They are buying staple foods, 210 in international markets that are heavily dominated by the ABCDs.
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Cereal Secrets: The world’s largest commodity traders and global trends in agriculture