National Farmers' Union Annual Convention

Lexington, Kentucky, February 26, 2005
Address by Mr. Jack Wilkinson, President of IFAP

Good afternoon,

I am pleased to be back with my farming friends and colleagues from Farmers Union. Only last May/June, we were together in Washington D.C. where the NFU hosted the 36th World Farmers Congress of IFAP. This was the first time for 29 years that an IFAP Congress has been held in the USA, and it was certainly one to remember. The welcome was superb and we had record attendance of 400 farm leaders from over 70 countries. The World Farmers’ Congress is the flagship event of IFAP, and on behalf of all our farm leaders and the representatives from other organisations that came to Washington D.C., I want to thank Dave Frederickson and his team for doing a magnificent job.

As IFAP President, it is important for me to attend as many national farmers’ meetings as possible, for this is what helps me to build a sense of who we are in IFAP and what we need to be doing. When you describe IFAP to people it is quite impressive. 107 national farm organizations from around the world representing some 600 million farm families. But for IFAP to be relevant to you and me, we must know the desires of our farmers and lobby to achieve them internationally.

The way Farmers Union gets involved in IFAP is how we need to encourage the participation of all our members. It is by using IFAP to deliver your message internationally that you get benefit, real benefit from your participation by working together and building consensus for proactive policies. This is how we truly understand other farmers and their problems and create practical workable solutions that governments need to pay attention to.

Governments do not pay attention to us just because we have a good idea, but rather because we are a strong advocate. This is the strength that IFAP needs to continue to develop. IFAP is a unique organisation where farmers can press issues in international institutions with the force of 600 million people behind it. We are becoming better international lobbyists but more needs to be done. In the past, IFAP was a policy platform where farm leaders from around the world could share problems and find out what was really happening to farmers on the other side of the globe, and hopefully identify solutions that could be adapted to work in their countries i.e. at the national level.

Even though this still takes place at IFAP, many of the problems affecting you and me are the results of international decisions - WTO trade negotiations, international environmental conventions, international competition policy or the lack of it, international food standards in Codex Alimentarius e.g. on labelling, decisions at the OIE on the treatment of animals, disease, hormone use, etc.

All these decisions have implications back on your farm.

Our future as farmers will be determined to a large extent by the international agenda, and IFAP is there to make sure that the farmer’s voice is heard.

When I look forward over the next 10 years, it seems inevitable that this shift of decision-making from the national to the international level will become even stronger. The future of everyone on this planet is becoming increasingly inter-linked.

With globalisation, farmers understand the necessity for national agricultural policies to be adapted to one another worldwide through an agreed set of rules. In a global market, where multinational companies are sourcing products from farmers all over the world and selling them to consumers the world over, farmers need international rules to ensure that they are being treated fairly, that health and safety standards are as high in other countries as they are in their own, and that markets are functioning competitively.

In a global economy, rules need to be global. However, farmers do not accept that globalisation of the agri-food system is a reason for governments to no longer assure sound domestic agricultural policies for farmers adapted to specific country conditions. We must make it clear that farmers everywhere must be able to achieve a reasonable standard of living for the work that they do, and as long as I am President of IFAP, that will continue be our objective.

Decisions made as to the operations of multinational companies, particularly in the retail distribution sector where as much as 70 per cent of shelf space is occupied by house brands, have huge implications for farmers and consumers. This, in my opinion is one of the most serious problems facing farmers around the world today.

The work on this issue in IFAP is being led by NFU President Dave Frederickson, and I commend what he is doing. At the last IFAP Congress in Washington D.C., he presented a policy paper called “Legal and institutional aspects of industrial concentration in the agri-food sector”, and this was adopted unanimously. Many of you were there to support it. Along with proposals on the economic organisation of farmers in the market, this policy forms a cornerstone of IFAP’s current advocacy work.

In a context of fundamentally imperfect world markets for farm products, and with decisions at the WTO that will limit the ability of a domestic government to compensate farmers for failures in the market place, farmers and their organizations are ‘on their own’ to face head-on an unsympathetic world food industry dominated by a handful of large multinational companies like Wal-Mart and Carrefour.

These giants are controlling markets, and are also taking over responsibilities that have been previously the domain of governments. They are setting private labelling standards in many countries, they are imposing production standards and now deliver not only the seed and fertilizer, processing etc., but also the extension services on how a farmer should operate. Soon, and even today in some countries, if you do not have a contract with a multinational – and not a contract that you negotiate, but rather their contract - you simply do not farm. You are frozen out of the market as a commercial farmer. You may be able to supply the products that they want but it makes no difference if it is not produced and delivered under their conditions.

In my country, Canada, farmers export Can $25 billion worth of farm produce at the farm gate level ever year. This ought to be a success story, but last year we were rewarded by a negative farm income, all sectors combined including the supply-managed commodities. Canadian farmers are the world’s largest exporters of pig meat, and a major world exporter of beef, wheat, oilseeds, and so on. Being neighbours, you know this of course. But what is the result? However hard we try as farmers, it will never be good enough for us to earn a reasonable share of the food dollar in the present system. So long as food and agricultural markets are dominated by powerful multinationals that set the rules in their favour, the farmer will be the low man or woman on the totem pole.

We always had difficult times as farmers to get our fair share of the value-added from the food chain, but in the past governments in the developed countries might be persuaded to make up the income shortfall. In developing countries where governments are unable or unwilling to support their farmers, rural poverty and hunger is widespread.

As President of IFAP, I am working with our member organisations to make sure that farmers are no longer unequal partners in the food chain. Contract conditions have to be reasonable, and there can be no question about integrating family farmers as employees of multinational companies.

There are many examples of successful experiences from farmers in the IFAP network, and we need to share these. We need to look more closely at the different marketing structures used by farmers throughout the world and what are the essential ingredients that make them work. In particular, we will look at what kind of proactive regulatory environment is necessary. It is clear to me that farmers as individuals cannot hope to survive against multinational companies in a laissez-faire environment.

The answer to this fundamental problem of markets and policy has to come from the farm movement, and IFAP is well placed to facilitate this. To date the only answers coming from governments are to cut farm programs and reduce import tariffs. For me, these are not big enough answers for the size of the problem.

Farmers’ organisations should have a proactive strategy on this issue, if we are to successfully defend the incomes of our members. We have to mobilise international action to build capacity in farmers’ organisations. Our coops in the USA or Canada may look big in our countries, but they are certainly not big in a global context. However, farmers’ marketing organisations are often under attack at intergovernmental meetings. The farmer-controlled Canadian Wheat Board, for example, is often challenged to prove that it is not anti-competitive. Contrast that with the situation of Wal-Mart, which is the largest growing retailer in the world. It can keep expanding and sell products below the cost of production and that seems to be OK for government regulators. The right for farmers to organise has to be the key part of our strategy to make markets work fairly. Competition policy and anti-trust legislation must become part of international law to regulate the behaviour of multinational companies.

Particular efforts should be addressed to helping organise farmers in developing countries. This is a critical issue not only for farmers in the South, but also for farmers in the developed countries like the USA and Canada. A big part of the discussion surrounding policy reform in OECD countries was justified on the basis of the negative effects that they were supposed to have on farmers in the developing countries. In the WTO, current trade talks are focused on helping developing countries – the Round is called the “Doha Development Agenda”. It is clear to me that the future of farm policies in developed countries is largely being played out in discussions on how they impact agriculture in developing countries.

I would like to see IFAP member organisations in developed countries strengthening contacts with their Ministers of Development Cooperation to get them to focus on the need to build the marketing and lobbying capacity of farmers in developing countries. It is too easy to say that all the problems of the developing countries are the fault of farmers in the North when at the same time the World Bank is giving only 8 per cent of its loans to agriculture, when governments of developing countries themselves are allocating less than 5 per cent of their national budgets to agriculture, and when bilateral development assistance to agriculture has been reduced to half what it was 20 years ago.

IFAP is fighting to get agriculture back as a priority on the international agenda, and it is strongly promoting actions that help empower farmers in the market as a key part of any anti-poverty/anti-hunger strategy. Organisations like FAO and the World Bank need to take this on board, and develop programs to put in place the conditions necessary for farmers to be able to compete in the market, especially their local markets. IFAP has developed its own modest development cooperation program to strengthen the farmers’ organisations in developing countries, and I know that the NFU is playing a part here too. We should see how we can cooperate more on this in the future.

I have talked a lot about empowering the farmer in the market, since this is fundamental to the profitability of farming and to encouraging young people to stay in agriculture. As farmers organisations we spend a lot of time on lobbying government for a good farm policy. However, this is not enough.

Farmers, and particularly our future farmers, must also be able to enjoy a standard of living and quality of life that other citizens enjoy. The theme of this Convention reflects this very well: “Profitability and Quality of Rural Life”.

It is rare indeed to find any rural community that enjoy the sort of services that are available to city people. In fact most governments do not seem to have a rural development policy at all; they just apply urban rules to everyone. Sometimes we get an add-on to the urban rules as they apply to the rural areas, but this is no substitute for an effective integrated rural development policy.

Infrastructure policy is based on the number of users and so leaves the rural areas behind. When the Internet age arrived in the cities, most of the farmers in Canada still had their phones on party lines. Thankfully, we now have cell phones and satellite communications, but that was because city people wanted them and we just happen to get it too.

And what about the tax and funding system? The funding system favours large schools, so local rural schools get closed down. Rural families have to bus their children long distances to school. Sports activities involve long-distance driving for rural parents; banking services are far away too. GPs are almost an endangered species in rural Canada. Doctors want to work in hospitals in metropolitan areas where they get more money and work less hours.

Today, farmers are well educated and we have choices. Our government leaders must understand that rural communities are affected very dramatically by the lack of support for services. Farmers will not stay without local job opportunities for their spouses, without local sports for children, without schools in the proximity and without medical services. That is a message for our farmers’ organisations to get out to the politicians, and to civil society group that care about country life.

Farmers’ organisations need to develop a new relation with government. As the food chain becomes increasingly dominated by a handful of large multinational companies, farmers are under pressure to move to larger and larger scale farming to reap economies of scale and reduce their costs. Bigger farms mean fewer farmers, and fewer farmers means provision of fewer local services, and we end up in a downward spiral. We get bigger and bigger tractors to cover more acres; we work at night because tractors have lights; we take on more bank loans to finance our operations, and even then things do not always turn out positive on the profitability side.

So we have two problems. One is the lack of good farm policies, especially to balance the power of the multinationals. The other is lack of a rural development policy, and adequate rural services.

The “free-market only” model has been driving agriculture for too many years, and it’s not a great place to go. Can you imagine countries like China and India, where most of the population is rural reducing their farming population to only 1-2 percent in 20 years, like we have done? It would mean squeezing hundreds of million of people into mega-cities of huge proportions, with all the problems that that creates. A few dollars spent on rural development seems to me a much better option.

In closing, the message I want to leave you with is this. International pressure on governments works if it is well coordinated. We have a good story to tell. Farmers provide high-quality food, clothing, and forestry products for a growing world population; they are the stewards of most of the world’s land and water resources; they ensure the vitality of rural communities. For the future we are called upon to double food production by 2050 from the same resource base and without harming the environment. We will do it, as we always have, but in return we need a fair income for our efforts. You know and I know that this is not going happen just because we deserve it. We will have to mobilise our members in IFAP to bring pressure for an international consensus to put in place new regulatory mechanisms and international rules to ensure that multinational companies in the global food system are no longer able to exploit farm families. We must also talk to governments about a fair sharing of the costs for traceability systems, fair remuneration for the environmental services that farmers provide, fair taxation and social security programs for farmers that are at least as favourable as those for other businesses in rural areas, and a fair provision of local services.

If farming does not have a fair deal, it will lose its young people and so lose its future.

I wish you a great Convention.