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US company agricultural deals undermining food security in Latin America

By Ben Grossman-Cohen

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Large scale agriculture deals funded by US companies in Paraguay, Guatemala, and Colombia are undermining local food security and displacing smallholder farmers according to an investigation of three major deals involving US investors released today by international relief and development organization Oxfam.

The report, “Smallholders at Risk”, shows how companies and investors including Cargill, JP Morgan, Goldman Sachs, the Rohatyn Group, Riverstone Holdings, and Carlyle Group, have financed large scale land acquisitions in Latin America to grow mono-crops of soy, oil palm and corn that have largely undermined local communities, deepening inequality and failing to live up to their potential.   The report calls on the US government and other participants in the UN Committee on World Food Security (CFS) negotiations in Rome next month to set a global ‘gold standard’ guiding all forms of agricultural investment by public and private actors in order to foster sustainable development and help achieve the right to food for all.

“More and better investment in agriculture is essential to right the wrong of nearly one billion people suffering from hunger,” said Stephanie Burgos, policy advisor for Oxfam and lead author of the report. “But large, loosely regulated deals can end up doing more harm than good without clear rules of the road. Without greater care for how agricultural investments are implemented, poor farmers end up bearing the risk and shouldering the costs rather than reaping the benefits.”

Oxfam investigated three deals involving US companies in marginalized regions of Paraguay, Guatemala, and Colombia. The local governments encouraged the deals as the best way to boost development. Despite the companies’ corporate social responsibility policies, Oxfam found the deals had displaced small farm communities, led to further concentration of land in the hands of wealthy operations, and created mostly poorly paid, informal and seasonal jobs that benefit men more than women. Large-scale monoculture expansion resulting from these deals is competing for land with basic food production, undermining access to nutritious food in local markets.

Local farmers fared little better by becoming suppliers to big companies and often lacked the financial resources to benefit from the new supply chains or to manage the risks involved. Local communities have also been hit hard by health and environmental problems caused by intensive use of agrochemicals that also harm their crops and livestock.

The companies all have philanthropic projects in place such as providing school materials and joining social marketing schemes, but these programs did not empower local farmers or make up for economic losses caused by the deals themselves.

“Farmers in low and middle-income countries invest $170 billion in agriculture each year,” said Burgos. “They are by far the biggest investors in our planet’s food system. They deserve policies that support and protect this huge investment – not undermine it.”

Oxfam is calling on the members of the CFS to ensure that all forms of agricultural investment avoid harming smallholders and contribute to the right to food for all. The CFS should say specifically what companies need do or to avoid in order that their investments be genuinely responsible.

Oxfam’s “Behind the Brands” campaign seeks to improve company policies and practices in agricultural supply chains. In the past year it has secured new commitments from some of the world’s biggest food and beverage companies, including “zero tolerance for land grabs” by Coca Cola and PepsiCo and commitments to empower women by Nestlé, Mondelez and Mars.

/ENDS

NOTES TO EDITORS:

Download the full report at: http://www.oxfamamerica.org/explore/research-publications/smallholders-at-risk/

Oxfam America is a global organization working to right the wrongs of poverty, hunger, and injustice.  We save lives, develop long-term solutions to poverty, and campaign for social change.  As one of 17 members of the international Oxfam confederation, we work with people in more than 90 countries to create lasting solutions. To join our efforts or learn more, go to www.oxfamamerica.org