Saturday, May 2, 2015

Trading Commodities for Chicken Progress

The United States Department of Agriculture, under its "Food for Progress" program, is donating agricultural products worth $17 million to the Honduran Ministry of Cattle and Agriculture (Secretaria de Agricultura y GanaderĂ­a, SAG in Spanish).

According to a USDA press release, SAG is supposed to sell these products (yellow corn and soybean meal) in commodities markets, then use the proceeds
to implement projects aimed at improving agricultural productivity, enhancing farmers' access to information and market skills, building government capacity, and strengthening local, regional and international trade in agricultural products. 

The USDA press release later adds:
The projects supported by this new agreement will focus on the creation of jobs and income opportunities for some of Honduras' most vulnerable citizens. The beneficiaries will include small farmers, as well as small businesses and producer organizations, particularly those that support rural women and youth. 

John Donaghy's blog post triggered our interest in this story. He wondered who in Honduras would be buying these agricultural products, which are not used in local cooking practices, and asked
Why doesn’t the US just sell the food and give the money to Honduras? will this yellow corn sale really help hungry Hondurans? 

Donaghy relayed remarks made in response to his question by a skeptic who doubted these commodity donations would be particularly beneficial for the Honduran poor, but more likely would benefit agribusiness interests. Donaghy responded:
I think you are probably right. Yellow corn and soybean meal are cattle feed. But who owns most of the cattle here in Honduras and may buy the feed? A few rich large land owners who use their land for cattle grazing - which not only takes away some of the best flat land but also is environmentally poor in its misuse of hills. Again, the poor suffer.

We had a similar reaction when we read the story; "improving agricultural productivity, enhancing farmers' access to information and market skills, building government capacity, and strengthening local, regional and international trade in agricultural products" all seems to us to be about Honduran agribusiness interests; how do we get from there to helping the "most vulnerable citizens... rural women and youth"?

Part of the problem in addressing this question is that we have very little real information about what programs will be supported by this new agreement.

There is no real reporting from Honduras; news media simply seem to be reprinting the press release in Spanish. El Tiempo provides a hint of what the substance of the Honduran proposal might be:
the USDA will use the earnings produced through the sales of yellow maize and soy meal in the nation of North America over 42 months for the execution of projects in 8 departments of the national [Honduran] territory.  
 An article in El Economista instead says that the agreement
intends for Honduras to obtain income through the resale of these products in order to finance a project of improvements in agricultural productivity and access by agriculturalists to the market.

Who's right? And how exactly could this new agreement help "vulnerable" (poor) Hondurans?

Under the "Food For Progress" program, the USDA maintains a list of "priority" countries and solicits proposals from governments and NGOs.  Honduras has not received support under this program since 2012. We only have the USDA press release and program website to judge what the Honduran Government might have proposed to do this time.

The "Food For Progress"  website says
Food for Progress has two principal objectives: to improve agricultural productivity and to expand trade of agricultural products

and describes having supported projects around the world that
have trained farmers in animal and plant health, improved farming methods, developed road and utility systems, established producer cooperatives, provided microcredit, and developed agricultural value chains.

The website also provides a link to the legal regulations that govern the program. These make it clear that the US donates commodities (so Tiempo got it wrong when it said the USDA will be selling commodities for the benefit of Honduras).

The foreign party to an agreement in the program can either directly use the US commodities offered, or resell them and use the proceeds for specific projects. That seems to be what the Honduran agreement is about: to sell commodities donated by the US.

While we still have no idea where the detail came from, the coverage by Tiempo could be right in saying that eight departments of Honduras will see specific projects implemented using the proceeds from sales of commodities. The program regulations provide an outline of what is needed in a proposal, so we know Honduras had to provide specific information including:
the targeted geographic area, anticipated beneficiaries, and methods that the applicant would use to choose such beneficiaries, including obtaining and considering statistics on poverty levels, food deficits, and any other required items...

Previous projects supported in Honduras are listed in the "Food for Progress" website. They might help us understand USDA's specific goals in its donations for Honduras.

In addition to the Honduran government (about whose past projects we have found only generalities), previous participants have included CARE, Finca, and TechnoServe. That gives us an opportunity to see what kinds of projects Food for Progress has supported under other agreements.

Finca's Honduras projects are in microfinance, including agricultural loans. A study of Finca's loans to Honduran rural women reported mixed results: women were able to improve food security, but not to significantly change their economic condition due to what the author identified as an "entrenched socioeconomic hierarchy".

CARE also is involved in microfinance in Honduras. Its website links to a report on Honduras and Guatemala that describes efforts to encourage small holder farmers to produce high value cash crops for export (in this case, papayas). Decades-long research on the effects of conversion to high value export crops in Honduras, from anthropologists such as Susan Stonich, stresses the environmental and social costs that follow.

It is with TechnoServe, the third NGO with past projects in Honduras funded through Food for Progress, that it becomes clearest that the goal of the USDA in Honduras, overall, is to integrate people who would have been subsistence farmers into production for international commodity markets.

TechnoServe describes its goals as supporting agribusiness development and entrepreneurial enterprises. Its website highlight efforts to increase Honduran producers' participation in coffee and cacao production, and features positive coverage of palm oil production in Honduras. All three of these agricultural commodities are the focus of critical academic studies that raise question about integration in international markets.

The route from the Food for Progress program's objectives to the stated outcome of improving life for the "most vulnerable" in Honduras requires a belief in the transformative potential for the rural poor of becoming part of international markets. As anthropologists, we think past history suggests skepticism is in order.

That leaves us with one last question, the one we started with: who benefits from the sale of the commodities donated by USDA?

The "Food for Progress" website says commodities donated by the USDA are to be "sold on the local market".

And indeed, the USDA website describes Honduras as a growing market for agricultural exports purchased from the US:
Honduras is among the fastest-growing markets in the Central American region, accounting for $613.4 million in U.S. agricultural exports in FY 2014. Top U.S. exports include corn, wheat, and soybean meal.

Corn and soy meal, the commodities donated by the USDA under the Food for Progress program, are important primarily for agribusiness, as John Donaghy's blog post inferred. But the beneficiaries are not so much cattle as chickens.

A 2003 FAO study noted growing imports of yellow maize in Honduras to be used for burgeoning chicken feedlots that took chicken from an expensive luxury to a staple for those residents of Honduran cities with sufficient cash income. A 2005 report on food security from the UN World Food Programme stated that yellow maize was imported primarily for feed concentrates for chicken and pigs. Soy cake was mentioned as poultry feed in the 2003 report. A US soy industry website reported on advising about use of soy meal in poultry and livestock feed in Honduras in 2014.

So we can probably assume the commodities provided by the USDA will be sold in Honduras to animal feedlots. Chickens, the main focus, are consumed in Honduras, but chicken is also exported, with a sharp rise starting around 2005. In 2014, it was reported that Honduran chicken was nearing approval for export to the US.

And that concludes the great circle of using US agricultural surplus to encourage Hondurans to produce agricultural products to be sold to external markets-- including the US.

Honduran farmers benefit, in theory, by being more firmly embedded in a world agricultural economy. Whether you think this will be effective in alleviating poverty probably depends on how you understand the complicated web of environmental, social, and economic forces involved.

Our skepticism comes from the history of Honduras' "entrenched socioeconomic hierarchy" maintaining and deepening inequality, leaving producers with the risks that come with environmental degradation, vulnerability of monocrops to plagues, and shifts in world prices, while letting those who control the means of export minimize their risk by setting prices to purchase from producers based on world markets, leaving people who could fulfill at least some of their subsistence needs by farming dependent on internal markets subject to shortages and price manipulation.

But if all goes well with the commodities sales, at least Honduras might have more chicken. The poultry producers argue this will improve nutrition and food security. At least for those who can afford to buy it...

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