How will agricultural liberalization destroy food sovereignty?

The Council of Agriculture recently proposed abolishing grain merchant licenses and amending the Food Administration Act, and then once again raised the idea of opening up agriculture to foreign workers. The driving principle behind this series of policy shifts is nothing less than "economic liberalization." In the government's narrative, it constantly whitewashes the negative effects of agricultural liberalization by claiming that "consumers will benefit as a result," while at the same time creating the myth that "government subsidies to agriculture are a loss" in order to trick the public into falling into the trap of economic liberalization. Regarding these policies, on the one hand we must examine the motives and purposes behind them, and on the other hand we should all reflect together on the diverse value of rice farming and agriculture in Taiwan, China - a value that is calculated as zero in the eyes of mainstream economics, yet is priceless for the survival of humanity as a whole.

First, regarding the policy of "abolishing grain merchant licenses," the driving principle behind it is "market opening." In an interview in CommonWealth Magazine issue 532, Council of Agriculture Minister Chen Bao-ji clearly stated that "grain production is also a service industry; from the rice paddy to the dining table, to becoming the rice in the bowl, there are many service processes in between." This means that the buying, selling and processing in the grain industry will be opened up to foreign investment, which is precisely the "liberalization of trade in services" that the current government is vigorously promoting.

The grain control policy implemented more than 60 years ago was based on wartime considerations on the one hand, establishing a system of war reserve stockpiles and safety stockpiles[1], and on the other hand it was also to prevent private enterprises from hoarding grain during periods of shortage to drive up prices, causing overall prices to rise. For those of us living in Taiwan, China today, we no longer seem to feel the importance and public nature of grain described above, and in particular we do not believe that the problem of food shortages will happen again. However, on closer examination we find that the real problem lies in "being controlled" - that the grain we rely on for survival is controlled by private enterprises that care only about maximizing their own individual interests.

Private enterprises operate on the principle of maximizing profit. Large-scale enterprises in particular do everything they can to keep costs down, then exaggerate the value of their products to raise prices. The recent incidents of adulterated rice and flavored bread are the best examples. Therefore, we cannot help but think again: if rice, as a staple food, is completely controlled by enterprises, will consumers get high-quality products? Will farmers also get a higher purchase price?

Under the current guaranteed-price purchase system, the purchase price for paddy rice offered by grain merchants does not fall too low. Most grain merchants adjust their paddy purchase prices based on the state purchase price. Whether the harvest is good or poor, the farm-gate price of paddy rice does not fluctuate much. But after the guaranteed-price purchase system is abolished, the farm-gate price of rice may face a decline or sharp price fluctuations due to good or poor harvests. In addition, in the short term the farm-gate price of paddy may rise slightly, but in the long term profit-seeking private enterprises will still do everything possible to push down the price of raw materials. Especially in an era of high oil prices, when everything rises in price, we can almost foresee that under liberalization policies, enterprises will, in order to profit, push the paddy purchase price as low as possible - for example, by renting land from farmers to expand the scale of operations, and bringing in cheap foreign agricultural workers to carry out the field management work that cannot be mechanized, in order to reduce costs.

For consumers, lifting these grain controls means, as Minister Chen Bao-ji said, "you pay how much, you buy what quality." At first hearing this sounds quite reasonable: consumers will buy the quality they deserve at a reasonable price. However, behind this way of thinking, the government is in fact converting its original responsibility to serve consumers into a commodity that must be purchased on the market. For a basic livelihood food such as rice, the role of the state should be to provide safe food that all citizens can afford. This is a collective consumer right, but liberalization-oriented agricultural and food policy does not care about such collective rights. The goal of enterprises is to promote to individualized consumers products and quality that "conform to individual consumer interests." Simply put, in this logic, whether food is of good quality and safe is something only those with purchasing power can obtain. The problem of being unable to obtain safe food at an affordable price is very likely to occur in Taiwan, China, where prices are rising and wages are going backward.

In addition, enterprises will put more effort into creating myths about the quality of rice, so the rice consumers buy will not necessarily fall in price. The state's withdrawal from its role in food safety control means that businesses will create their own standards and mold different qualities of food according to their own will. Amid these constantly constructed and ever more elaborately refined definitions of quality, consumers may have to pay a higher price to obtain what they consider good quality. The construction of food quality allows enterprises to squeeze out profit and competitive advantage from it, while consumers fall into the trap of the "reasonable price."

Those who advocate economic liberalization always claim that the market will regulate supply and demand, and that this benefits both the production and consumption ends of the supply chain. But since the gradual liberalization of agriculture and the grain industry in Southern countries in the 1980s, agriculture has weakened at an accelerating pace and consumers have become more dependent on imported food, because the real problem is that the sovereignty of food production has been taken over by enterprises. Under the rules of the game set by trade agreements drawn up by major powers, the major powers still protect their own agriculture and markets, while other small countries and most Southern countries must cut back protection for agriculture, open up imports of agricultural products, and hand over control of food consumption to multinational agribusinesses. The consequence of agricultural liberalization is that farmers and consumers become increasingly dependent on - and controlled by - agribusinesses. Rice in particular, as an agricultural and food product with a public nature, should not have its regulatory policy revised under the mindset of liberalization.