General Assembly of the Central Union of Agricultural Producers and Forest Owners MTK
Oulu, Finland, 3 February 2005

Address by Mr. Jack Wilkinson, President of IFAP

I am pleased to be back in Finland. The last time was in October 1999 when MTK hosted the North-American-EU Agricultural Conference in Turku. At that time my wife Julie and I were able to travel a bit and enjoyed the wonderful scenery of your country. In fact, the terrain is very similar to where we farm in Canada. Only it is a bit colder back home; in fact we have had temperatures of – 50° C already this winter.

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.

Your President Esa Härmälä has played a very active role in IFAP for a number of years, and I am particularly pleased with his engagement as Vice-President in IFAP. He has represented us well on the environmental file. Last year, and this year, the focus was on water at the U.N. and with his help and the assistance of your staff in collaboration with our office staff we adopted a strong policy document on water.

This work deals with the way to manage scarce water resources. Examples of good practices provided by several of our member organisations have been compiled as an illustration of the important work farmers are doing on the ground on this issue. This work will serve as the basis for our delegation to advocate recommendations from farmers later this year, at the UN Commission for Sustainable Development.

At the present time, Esa and his team are in the process of putting together new position papers on biodiversity, desertification, climate change, and renewable energies. These are all major concerns and challenges for the health of global ecosystems.

Let me also pay tribute to the excellent background paper on forestry and rural development that has been written by MTK and which is being now circulated amongst our membership for comments with a view to providing policy guidance on this issue for farmers globally.

The way MTK gets involved in IFAP is the way 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.

Government 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 is 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, to 2015, 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.

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, or the E.U., 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. What can farmers do about this?

Farmers in Europe, and particularly Northern Europe, have historically developed an effective cooperative system to maintain a close relationship with their consumers. This is not the situation in many countries, and even in Europe there is fear that the coops cannot keep up with the uncontrolled growth of the food retail sector, or the catering sector as more and more meals are eaten away from home.

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 $32 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 major world exporter of beef, wheat, oilseeds, and so on. 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.

This sounds like the problem our fathers and grandfathers faced. Now it is our problem. Like them, we too must stand-up and rise to the challenge.

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 wee 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 Finland 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 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 Finland. 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”. Another example is the EU’s signing of the “Everything but Arms Agreement” with the Least-Developed Countries. 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.

In addition to WTO, most of the other international organisations are also focused on this objective. The UN has the Millennium Development Goals that were agreed five years ago. However, on present performance, none of these goals will be met by 2015. The FAO has a mandate to rid the world of hunger. But over the last five years hunger has been rising again. The World Bank has a mandate to alleviate poverty. Since 70 per cent of the poor live in rural areas, this means implementing a good rural development strategy. However, the strategy will remain only a wish list from the Washington D.C. headquarters until country directors and national ministers of finance decide to implement it.

It is one thing to have a plan, but for it to be meaningful the plan needs enough political will to implement it. 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 invite MTK to play a bigger role in this in the future. IFAP would also like to invite the Finnish government to contribute financially to these development activities.

I have talked a lot about empowering the farmer in the market, since it is an important an issue to IFAP. However, there are also other issues on which we must be vigilant.

The first is consumer confidence in our products. Communications programs with consumers are a very good investment. We saw this clearly in Canada when a case of BSE was discovered last year in the west of the country. As a result of excellent relations that had been built up with consumers over the years, beef consumption did not drop during this period, in fact it even increased.

We also need to work with consumers to promote new market opportunities for farmers, e.g. in the area of functional foods, indigenous foods, the development of a local food culture, rural tourism, etc.

The support of consumers is also critical to break the “good food – bad food” idea that is at the heart of the World Health Organisation’s global dietary strategy to fight obesity. For IFAP, foods containing fats and sugars play an important role in a balanced diet, and should not be controlled like tobacco.

Another issue on which farmers must be vigilant is increasing government bureaucracy. New rules are replacing old rules and we are flooded with forms to fill in and declarations to make. I am sure that farmers in Finland can relate very well to this problem, being a member of the EU.

Farmers’ organisations need to develop a new relation with government to control this, since it is adding significant costs to our operations, and reducing our ability to be competitive. Furthermore, 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.

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.

Have a great conference!