THE WORLD BANK AND AGRICULTURE Promoting Corporate Profit
THE WORLD BANK AND AGRICULTURE Promoting Corporate Profit at the Expense of Farmers
What is the World Bank? The World Bank is an International Financial Institution founded in 1944. 189 member countries own the World Bank’s subscribed capital. The United States is the largest shareholder, followed by Japan, Germany, the United Kingdom, and France.
Structural Adjustment Programs In the 1980 s, the World Bank conditioned its loans resulting in forced liberalization of national economies through the Structural Adjustment Programs (SAPs). The SAPs led to the decline of public investment in education, health, & agriculture, with devastating consequences for most vulnerable households in developing countries.
The “Business” Diktat The SAPs were officially withdrawn in 2002, but the Bank continues to promote neoliberal reforms. It created business indicators, which reward countries for reducing their labor standards, corporate taxes, and for providing easy access for corporate pillaging and land grabs.
The Doing Business (DB) was launched in 2002 to score and rank countries on how their regulatory practices favor “the ease of doing business. ” Example of regulations rewarded with better DB scores: Country Year Reforms considered “positive” by the DB Kenya 2016 A better DB score for fast-tracking land transfers by streamlining the management of land registry documents Zimbabwe 2015 A better DB score for reducing corporate income tax from 30% to 25% and lowering the capital gain tax from 20% to 5% Ivory Coast 2016 The country reduced the cost of transferring property by lowering the property transfer tax rate Zambia The country made it easier for companies to pay taxes by abolishing the medical levy 2015
Countries get better DB scores when they favor corporate interests (facilitating land acquisitions, lowering taxes, etc. ), but they are penalized in the ranking when their reforms have social benefits. Example of regulations penalized with a lower DB score: Country Year Reforms considered “negative” by the DB Kenya 2015 The country was penalized for “increasing employers’ social contribution rates” Malawi 2013 The country got a lower “paying taxes” score for introducing “a mandatory pension contribution for companies” Botswana 2013 The country was penalized for increasing the corporate profit tax rate Zambia 2015 The Bank judged that Zambia made “transferring property more difficult” by increasing the property transfer tax rate
The DB ranking drives a race to deregulation between countries through FINANCIAL LEVERAGE The rankings guide companies’ investment decisions INFLUENCE ON AID FLOWS Development institutions use business indicators to measure countries’ performance in reforming business sectors ADVISORY SERVICES World Bank services guide countries on how to get better DB scores COMMUNICATION Countless media articles report on countries’ increase or loss in rankings
Influence of Doing Business The DB inspired over 520 business-friendly reforms between 2003 and 2013. Between 2008 and 2014, the DB recorded a reduction of corporate income taxes in twenty-one African countries. Some countries, such as Ivory Coast, reduced corporate income taxes as many as three times. The World Bank’s “investment climate advisory services” encourage governments to implement business-friendly reforms, such as setting up investment agencies - “one -stop-shop” for investors. Investment agencies were created with the Bank’s backing in DRC (ANAPI), Mali (API), Liberia (NIC), Sierra Leone (SLIEPA), Uganda (UIA), among others.
Impact of World Bank’s Business-Friendly Reforms EXPOSED: Between 2008 and 2011, Liberia implemented 39 reforms to ease business. The country attracted growing numbers of investors. Among the investors were palm oil and rubber giants who acquired more than 600, 000 hectares in just a few years, taking away farms, resources and livelihoods from thousands of local people. Exposed: LIBERIA – 33 Business friendly reforms
Impact of the Bank’s Business-Friendly Reforms EXPOSED: Since 2004, the World Bank has provided “investment climate advisory services” to Sierra Leone. Land registration reforms and fast-tracking of land leasing processes have attracted sugar cane & oil palm planters from Switzerland, Portugal, the UK, Luxembourg, & other countries. By 2011, Sierra Leone had leased over 500, 000 hectares to foreign investors.
Enabling the Business of Agriculture In 2013, the World Bank launched the new indicator: Enabling the Business of Agriculture or EBA. The EBA dictates so-called “good regulatory practices” to “facilitate doing business in agriculture. ” The EBA scores countries on how well they apply and fulfill Bank-dictated norms in areas, including Fertilizer, Seed, Markets, Transport, Machinery, and Finance.
Who is Behind the EBA? The EBA was not requested by the farmers or any developing country, but by the G 8 to support its New Alliance for Food Security and Nutrition. Five Western donors have supported the EBA since its inception: the US, UK, Danish and Dutch governments, along with the Bill and Melinda Gates Foundation. These agriculture programs support a New Green Revolution agenda, which promotes the use of expensive and fossil-fuel based inputs and pushes for the absorption of smallholders in agricultural valuechains where they are subjected to market competition, price volatility, and unsustainable indebtedness.
Reforms Promoted by the EBA The EBA, aligned with the New Green Revolution agenda, promotes reforms to facilitate the marketing of industrial inputs & increase corporate profits, including: Making fertilizer registration valid indefinitely or, if limited to a specific time period, the validity has to be at least 10 years. Facilitating fertilizer import by allowing fertilizer products already registered in another country to be imported without needing to be reregistered in the importing country. Adopting intellectual property rights in agriculture to further the profits of private seed companies. Increasing private development and marketing of industrial seeds through cheaper and fast-tracking procedures to release varieties produced by the private sector. Providing private companies (not farmers) easy access to public germplasm stored in gene banks to develop new varieties of seed.
The EBA & Privatization of Seeds The EBA claims to promote “smart and balanced policies, ” but it completely ignores farmer-managed seed systems, which provide 80 to 90% of farmers’ seed supply in developing countries and are key to preserving agro-biodiversity and resist climate change. The EBA upholds membership to the International Convention for the Protection of New Varieties of Plants (UPOV 91) as a regulatory The EBA will paradigm. jeopardize farmer’s access This treaty restricts farmers’ to seed for the rights to save, recycle, sake of corporate exchange, and sell farm-saved profit! seed.
Bank’s “Good Regulatory Practices” Reduce the cost and time necessary to register industrial seeds Establish a variety release committee (VRC) to approve industrial seeds for commercialization For a country to get the best score, it has to give 50 percent or more of the VRC’s seats to the private sector Create catalogs to list registered varieties Excerpt from the SADC regional seed catalogue, which only contains maize varieties manufactured by Monsanto & Syngenta
Better Scores for Countries that … Grant private breeders’ intellectual property rights over seeds Allow the private sector to multiply and commercialize local public varieties Provide easy access to germplasm conserved in public gene banks to private companies
One of the countries where the EBA has begun to have an impact is Rwanda, where it inspired the design of a new seed ordinance that opens the door for Rwanda’s adhesion to UPOV 91. Following the promulgation of Rwanda’s new seed law, the Dutch Inspection Service for Horticulture initiated a training program to teach Rwandans how to implement breeders’ rights in conformity with the UPOV guidelines. Picture of the Dutch Inspection Service for Horticulture training in Rwanda © Agroberichen / Buitenland
Civil Society Backlash Against the DB and EBA Our Land Our Business, a multi-continental campaign of over 280 farmers groups, NGOs, and unions, was launched in 2014 to demand the end of the World Bank’s DB and EBA. The campaign has organized international protests, panel discussions, and teach-ins; produced videos, reports, country factsheets, and other advocacy materials, leveraged to bring the issue to the media & policymakers, including the EBA donors.
Thank You! Visit https: //www. oaklandinstitute. org/our-land-our-business to: Learn more about the impact of the World Bank’s business indicators on agriculture Sign up your organization to Our Land Our Business
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