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Food Integrity Campaign Blog

United Nations Report: Contract Farmer Exploitation Imperils Food Integrity

Food Integrity Campaign | October 24, 2011

Today the United Nations Special Rapporteur on the Right to Food released a report to the UN General Assembly that explores the effects that the world-wide expansion of contract farming has on the right to food. The report describes how these contract arrangements, in which farmers agree to provide their products to processing or marketing companies at pre-set prices, can result in negative environmental, social and economic impacts, such as an increase in local food prices and the expanded use of fertilizers and pesticides at the expense of human health.

Rapporteur Olivier De Schutter’s report stresses the need to increase the rights of small-scale farmers in negotiations and dispute settlement processes. He found that farmers often have less information and literacy in negotiating these contracts, resulting in inequitable agreements that are heavily biased toward the buying firm. As a result, farmers struggle to reap the benefits from their produce and can wind up, in the words of De Schutter, as “disempowered laborers on their own land.”

FIC is concerned about this issue, as “disempowered” contract farmers – many of whom raise commercial crops for export – are too vulnerable to blow the whistle on food integrity issues. The more rights farmers have, the more likely they are to raise concerns that could impact the safety and long-term sustainability of the world’s food supply.

Contract farming is often associated with mono-cropping and production methods that require heavy use of chemical fertilizers and pesticides, which may be provided by the buyer. Farmers will be the first to witness any negative impacts of these production methods, but may not feel like they have enough protections to become a whistleblower, given that contracts often favor the buyers.

For example, large agribusiness companies Pannar and Syngenta launched a pilot project in South Africa in 2010 in which 500 farmers were encouraged to enter into contract-farming agreements that required them to use genetically modified seeds and certain chemicals. It appears that this initiative was inspired by the Massive Food Production Program (MFPP), which was launched in 2002 by the South African government in partnership with Monsanto. Participating MFPP farmers are given credit to purchase fertilizers, pesticides and genetically modified seeds.

Several farmers have reportedly witnessed problems with MFPP crops. At an event organized by South African NGO Biowatch, one farmer stated maize she grew from seeds received through the MFPP project “are making us sick; they break easily and are bad quality. When we give it to our chickens it affects them, we want to grow our own seed and protect them.” At that same event, another farmer mentioned that the fertilizers that are distributed through the MFPP project ruin the soil after a few years, to the point that food can no longer be grown on it.

Contract farming has been problematic in the United States as well, particularly in poultry (where, as in most all industrial agriculture, a few giant corporations control the industry). Big agribusinesses like Perdue and Tyson set strict rules for independent growers that raise chicks, such as warehouse size (that doesn’t allow any natural light), and antibiotic and growth hormone levels to be used. Despite receiving promises of profit, growers have often accused the companies of deceptive practices that keep the contracted farmers in a cycle of debt, and threatening retaliation if anyone tries to disrupt the status quo. Carole Morison, a former poultry grower contracted with Perdue – and who was featured in the documentary Food Inc. – was brave enough to blow the whistle on Perdue’s abusive business practices, as well as raise food safety concerns, resulting in the company terminating her contract.

It’s significant that De Schutter is raising concern over contract farming issues as well as offering solutions. According to De Schutter, countries should monitor and oversee contracts between farmers and producers to ensure farmers are not being “hoodwinked” by such arrangements. He suggests that farmers be provided “clear and transparent” information about pricing mechanisms to prevent firms from manipulating them. He also encourages countries to ensure that effective non-judicial dispute settlement mechanisms – such as “negotiation spaces, independent arbitration mechanisms, forums in which farmers can raise concerns and conflict mediation by non-governmental organizations or third parties” – exist that can be used when contract farming grievances arise.

The report mentions alternative business models that could potentially be more beneficial to small-scale farmers, such as farmer-controlled enterprises. In this model, farmers would be encouraged to form cooperatives, associations or collectives and use them to enter into contract agreements, thereby strengthening their bargaining position and their voices.

The Special Rapporteur recommends that governments support the formation of these cooperatives and provide legal advice to farmers to ensure that their contracts are economically sustainable. He also recommends that governments regulate key clauses of contracts, such as price fixing, and vet contracts. Finally, he encourages government agencies to monitor labor conditions in contract farming to prevent overexploitation and to ensure that certain environmental standards are met.

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