Zanmi Agrikol farm/Friends of Agriculture, in Haiti's Bas-Plateau Central. Credit: Wadner Pierre/IPS

By Jared Metzker
WASHINGTON, Aug 14 2013 (IPS)

Work by the Group of 4 (G4) union of Haitian peasant organisations, along with assistance from the Dessalines Brigade –  South American peasant leaders and agroecology experts supported by La Via Campesina – has been singled out for promoting “good farming practices and advocat[ing] for peasant farmers” in Haiti.

The two network organisations, it was announced Tuesday, will be awarded the 2013 Food Sovereignty Prize, an annual award given to groups that promote a more democratic, community-based food system.

The G4 alliance represents over a quarter-million Haitians. Its relationship with the South American peasant leadership is intended “to rebuild Haiti’s environment, promote wealth and end poverty” in that country, which continues to feel the devastating effects of the major earthquake that struck the island in 2010.

“We wanted to honour that relationship,” Charity Hicks, of the Detroit Food Justice Task Force, one of the groups behind the Food Sovereignty Prize, told IPS, referring to the partnership between G4 and Via Campesina.

Hicks’ organisation is just one member of the U.S. Food Sovereignty Alliance (USFSA), the group offering the award. USFSA aims to “end poverty, rebuild local food economies, and assert democratic control over the food system”, as well as to connect “local and national struggles to the international movement for food sovereignty”.

Hicks lauds the partnership between the Haitian peasant union and the South American groups as an example of food sovereignty organisations from different regions “sharing knowledge and skills, respecting ecologies and creating food democracy”.

Food democracy, she explains, refers to “bottom-up, communal and cultural approaches to deal with hunger and poverty.”

In addition, the G4 union stood out for a decision made in 2010 by one of its member groups, the Peasant Movement of Papaye, to reject a substantial donation of hybrid seeds by U.S. mega-producer Monsanto following the earthquake.

“Denying the [Monsanto] seeds represented significant opposition to what the corporate food system is doing by trying to control our food,” Lisa Griffith, of the National Family Farm Coalition, another member group of the USFSA, told IPS.

The opposition to Monsanto was especially important in the decision to award G4, Griffith says, because the Food Sovereignty Prize acts as an alternative to the World Food Prize. That annual award was given this year to, among others, Robert Fraley, a high-ranking Monsanto executive.

The World Food Prize, according to its website, is the foremost international food award, intended to reward “the achievements of individuals who have advanced human development by improving the quality, quantity or availability of food in the world.”

According to Hicks, however, there is reason to question the merits of the prize.

“The World Food Prize represents a way for corporations to give themselves awards for the notion of using technology in order to feed the world,” she says.

Indeed, one of the many corporate sponsors behind the prize is Monsanto itself.

On the other hand, food sovereignty groups, according to Griffith, offer an important alternative to the corporate producers because they have “a much stronger understanding of what their communities want to produce and want to eat.

“These communities don’t need to be taken over by corporations who profess to know better about what [the communities] want,” Griffith says.

Hicks adds that, counter to the values of the corporate food system, food sovereignty “affirms peoples’ democratic right to food, restores their traditional relationship with food and the environment and rejects the commodification of nature.”

Constitutional aim

Along with the announcement of the G4 as the winner of this year’s award, the prize also lauded the work of three additional nominees for their work in promoting the values of food sovereignty.

The Basque Country Peasants’ Solidarity (EHNE), which was one of the groups responsible for the founding of Via Campesina, represents 6,000 members in the Basque region. It received mention for, among other things, its work with young farmers.

The National Coordination of Peasant Organisations of Mali, with around 2.5 million members, was also recognised for its advocacy work in support of democratic agricultural policies. In part due to its efforts, Hicks says Mali is now one of the first countries to have enshrined food sovereignty in its national constitution.

Finally, the Tamil Nadu Women’s Collective (TNWC) stood out for its work empowering women in the South Indian state.

“Through the [TNWC], 100,000 marginalised women are organised, many in unofficial worker unions or small collective farms, to strengthen their food sovereignty and thus their broader power,” the USFSA noted in a statement.

Following on Tuesday’s announcements, a formal awarding ceremony for the Food Sovereignty Prize will be held on October 15 at the Smithsonian Institute’s Museum of the American Indian, in New York City. Representatives of each of the four groups will be flown in and will accept modest monetary gifts on behalf of their organisations.

The venue, Hicks says, was chosen for symbolic reasons, in order to “honour indigenous communities worldwide”.

The New York Stock Exchange, as seen from the boot of George Washington’s statue at Federal Hall. Credit: Dan Nguyen/CC-BY-2.0

By Shyam Saran
NEW DELHI, Jun 5 2013 (IPS)

The global economy is awash with successive waves of liquidity generated over the past few years by the four most advanced economies, viz., the United States, the European Union, (EU), Japan and the United Kingdom, known as the G4. This liquidity has taken the form of “quantitative easing” (QE).

When zero rates of interest have failed to stimulate their economies, these countries have resorted to large-scale asset purchases by their central banks, such as corporate bonds or mortgage backed securities, to pump more money into the banking system.

The aim is to extend credit to business and industry and encourage consumption.

In the immediate aftermath of the global financial and economic crisis in 2008, when there was a danger of financial collapse, both advanced as well as emerging economies adopted stimulus packages, to revive demand, maintain trade flows and avoid large-scale unemployment. During the crisis phase of 2008/09, QE played an important role in crisis management, helping advanced and emerging economies alike.

However, while emerging economies have weathered the crisis and seen a revival of growth, the G4 continue to experience economic stagnation, depressed markets and large-scale unemployment.

Their response has been to persist with even larger doses of QE as a means of propping up demand,encouraging banks to expand and boosting stock valuations.

Before the crisis, the U.S. held 700 to 800 billion dollars of Treasury notes. The current level is 2.054 trillion dollars. In the latest round, QE-3, the U.S. Federal Bank is committed to the purchase of 40 billion dollars of mortgage-backed securities per month as long as unemployment remains above 6.5 percent.

The European Central Bank (ECB) has pumped 489 billion euros of liquidity into the eurozone since the crisis, while in the United Kingdom QE has reached the level of 375 billion pounds.

Most recently, the Bank of Japan has decided to pump 1.4 trillion dollars in the next two years into its economy, aiming at a two-percent inflation rate by doubling the money supply.

The assets of the G4 central banks have expanded from a figure of 11-12 percent of their gross domestic product (GDP) to the current unprecedented level of 23 percent. These assets were 3.5 trillion dollars in 2007 before the crisis. They are now nine trillion dollars and rising. This is the scale of liquidity expansion we are dealing with.

Since interest rates in the G4 remain at zero and their economies remain stagnant, it is inevitable that there will be significant capital outflows to emerging and other developing economies, in quest of higher risk-adjusted returns.

According to one estimate, about 40 percent of the increase in the U.S. monetary base in the QE-1 phase leaked out in the form of increased gross capital outflows, while in the QE-2 phase, it may have been about one-third.

This massive and continuing surge of capital outflows to emerging and other developing economies is having a major impact. Corporations, which have a sound credit rating, are taking on more debt, and increasing their foreign exchange exposure, attracted by low borrowing costs.

Their vulnerability to future interest rate changes in the developed world and exchange rate volatility will increase. Such inflows put upward pressure on exchange rates, stimulate credit expansion, and cause inflationary pressures, which pose a major challenge to policy-makers in the developing world.

Most of the capital inflows are in the nature of portfolio investments, which are prone to sudden and volatile movement and puts emerging economies at greater risk. The volatility one has witnessed in the Indian stock market is a case in point. In general, we may conclude that the overall impact of these capital flows is expansionary and distortionary.

There has been considerable criticism of the G4’s unconventional monetary policies from the emerging economies, including the BRICS (Brazil, Russia, India, China and South Africa).

The magnitude of QE has had unintended consequences beyond the borders of the G4, especially because their currencies are not only fully convertible but, together, constitute the pillars of the global financial system.

The U.S. dollar is the world’s leading reserve currency, and the euro, the British pound and the Japanese yen together constitute the basket of currencies the International Monetary Fund (IMF) uses to value its Special Drawing Rights. Thus, the nature of the G4 currencies and their significant role in the global financial market ensures that QE undertaken by them has a global impact on economies across our globalised and interconnected world.

It is necessary, therefore, for the G4 to act with great responsibility and to work together with the emerging economies, to minimise the adverse effects of their QE policies. It would be particularly important to forge a consensus on how to handle the potential financial turmoil and disruption that may afflict developing economies once the QE is sought to be retired and interest rates once again become positive in the G4. The sudden and large-scale reversal of capital flows is a likely scenario that would need to be anticipated and managed.

The Asian financial crisis of 1997/98 was, in part, triggered by an earlier version of QE pursued by Japan in the aftermath of the bursting of its property and asset bubble in the early 1990s. Then, too, the large inflow of low-cost yen loans led to the asset price bubbles, inflationary pressures and currency instability in the Asian economies. They paid a heavy price in the bargain.

A larger, more pervasive crisis may await the emerging and developing economies unless there is a much more coordinated and careful handling of the risks that are already building up. The G20 should have this issue at the top of its agenda.

(END/COPYRIGHT IPS)

Excerpt: