What is in the food regime?: Remaking food and markets in a time of crisis

Shona Elizabeth Ross Hawkes Diploma of Languages Masters of International and Community Development

A thesis submitted for the degree of Master of Philosophy at The University of Queensland in 2018 School of Social Science Abstract The early 21st century food price shocks presented the first substantial test of a new era in international food governance. Leading into this period of crisis, the lines between what is ‘food’ and ‘not food’ became muddied and contested. As people took to the streets across much of the Global South to protest growing difficulty in accessing food, there was a global urgency to understand, and address, the causes of higher, more volatile prices. Amid various explanations, questions arose about the rise of industrial agrofuels and the influx of capital into agricultural derivatives markets in driving food price shocks.

This thesis is theoretically grounded within interdisciplinary studies of global agri-food governance, specifically food regime analysis and adjacent work on the world food economy. It draws on constructions of crisis as a point where the rules, norms and contradictions of international agri-food market governance are destabilised and exposed. It views market rule-making as a central part of conversations surrounding access to food, territory, benefits of labour, knowledge and political autonomy.

To date, no study of global agri-food governance has approached the rise of agrofuels and expanse of finance as parallel processes in how they resituate food governance and in terms of global market decisions largely taking place within national debates. Both these developments involve reimagining edible grains (and other food) as ‘fuel’ or ‘finance’. The consequence of this is to resituate food governance within new realms, of energy and finance, and thereby introducing new actors and interests into food decision-making. Such blurring of the boundaries between food and non-food raises questions about how food concerns could be understood, weighed and considered, or even pitted against energy or finance interests.

Using a case study approach, this thesis examines two US public policy debates that took place during the period of higher, more volatile prices — taking a reference point of January 2006 as indicative of rising prices. Both policy debates represented opportunities to examine the energy and finance policies that restructured markets prior to the food price shocks. The case studies focus on specific policy instruments that were presented, at least by some, to respond to concerns surrounding . These were: 1) Capping the use of corn-starch ethanol in the 2007 Renewable Fuel Standard to 15 billion gallons per year; and 2) Reinstating the authority of regulators to apply position limits in derivatives markets — to ensure that market prices reflected the physical supply and demand for food.

1 The research asks:

1. To what extent, if any, did the food price shocks feature in contemporary policy debates — including how these selected policies were understood or constructed discursively, politically and structurally?

2. How does approaching the rise of agrofuels and expanse of finance as parallel processes that shift sites of food governance add to our understanding of crisis in the food regime?

Drawing on ten original interviews, media analysis and documentary research, this thesis takes a relational approach to address these questions. That is, the truth it seeks is not a chronological account or a vertical deep dive. Instead, it focuses on interactions and relationships across different locales of power — the discursive, political and structural — as emphasised by Clapp and Fuchs (2009), and across complex parallel processes challenging how we understand and define food in market rule-making.

This research concludes that defining, and redefining, food was central to how the food price shocks were considered in these policy debates. The first case study highlights how turning food into fuel was viewed as a way to address concerns about overproduction and ‘cheap food’. It also points to particular discourses which served to alleviate food price concerns. The second case study shows how anti-hunger advocates had to insert themselves into complex technical arguments surrounding finance, joining a pre-existing coalition focused on energy concerns. It highlights how debate pivoted on the extent to which financial actors could co-opt food as a means to offset risks in other parts of the . Contextualised against literature on the 1970’s crisis period, these findings suggest that ‘making food’ is closely interconnected with ‘making markets’ in global agri-food rule-making. This potentially offers new insights into how we analyse, and understand, global food markets and the role of ontological understandings of food as a site of reification of, or resistance to, the food regime. This would see the question ‘what is food?’ become a central lens for examining change and crisis in agri-food market governance.

2 Declaration by author

This thesis is composed of my original work, and contains no material previously published or written by another person except where due reference has been made in the text. I have clearly stated the contribution by others to jointly-authored works that I have included in my thesis.

I have clearly stated the contribution of others to my thesis as a whole, including statistical assistance, survey design, data analysis, significant technical procedures, professional editorial advice, financial support and any other original research work used or reported in my thesis. The content of my thesis is the result of work I have carried out since the commencement of my higher degree by research candidature and does not include a substantial part of work that has been submitted to qualify for the award of any other degree or diploma in any university or other tertiary institution. I have clearly stated which parts of my thesis, if any, have been submitted to qualify for another award.

I acknowledge that an electronic copy of my thesis must be lodged with the University Library and, subject to the policy and procedures of The University of Queensland, the thesis be made available for research and study in accordance with the Copyright Act 1968 unless a period of embargo has been approved by the Dean of the Graduate School.

I acknowledge that copyright of all material contained in my thesis resides with the copyright holder(s) of that material. Where appropriate I have obtained copyright permission from the copyright holder to reproduce material in this thesis and have sought permission from co-authors for any jointly authored works included in the thesis.

3 Publications during candidature Published conference abstracts

Shona Hawkes. ‘Reclaiming food, reclaiming markets: What US financialisation and agrofuels can tell us about power, crisis and resistance in the food regime’. Global symposium: A focus on power, equity and justice. Monash University. Caulfield, Australia. 14 June 2014.

Shona Hawkes. ‘What is food in the food regime? Remaking food, remaking markets in a time of crisis’. Resistance, resilience and security: The Australasian Agri-food Research Network annual conference XX. The University of Melbourne. Melbourne/Naarm, Australia. 4 December 2013.

Shona Hawkes. ‘What is food in the food regime?’. School of Social Science postgraduate conference. The University of Queensland. Brisbane/Meanjin, Australia. 31 October 2013.

Shona Hawkes. ‘When is food not food? US Congress decisions on food-as-fuel and food- as-finance’. Histories/Futures: The Australasian Agri-food Research Network annual conference XIX. Massey University. Palmerston North, Aotearoa/New Zealand. 12 December 2012.

Shona Hawkes and Geoffrey Lawrence. ‘Reimagining the state in world agriculture’. Emerging and enduring inequalities: The Australian Sociological Association conference. The University of Queensland. Brisbane/Meanjin, Australia. 27 November 2012.

Publications included in this thesis No publications

4 Contributions by others to the thesis No contributions by others

Statement of parts of the thesis submitted to qualify for the award of another degree None

Research Involving Human or Animal Subjects This project operated under Institutional Human Research Ethics Approval 2011000995, granted by The University of Queensland Behavioural and Social Sciences Ethical Review Committee. As required, a copy of the ethics approval is provided in Appendix 3.

5 Acknowledgements I pay my respects and give thanks to the lands that nourished me and this research: the Turrbal and Jagera, the Wurundjeri and Boon Wurrung, the Haudenosaunee, the Lenape and the Piscataway. The unfinished work of decolonisation is reflected in the names I mostly know these places by: Brisbane, Melbourne, Ithaca (New York), New York City and Washington, District of Columbia.

The UQ Australian Research Council ‘New Farm Owners’ project team anchored this project, offering constant support, endless curiosity and thoughtful critique. My supervisors Kristen Lyons and Geoffrey Lawrence were ever generous, thought-provoking and challenging. They showed a willingness to follow an idea into unknown terrain but also instilled structure and discipline to my thinking. David Burch took me under his wing and welcomed me to the UQ team. Agri-food academics Nicolette Larder, Carol Richards, Sarah Sippel and Kiah Smith asked hard questions, shared their own research experience and helped me to think through the nature of finance in the agri-food system. I greatly benefited from formal reviews by Heloise Weber on a draft of chapter five, Carol Richards and Adil Khan on chapter six. Tom Smith gave me a helpful 101 on finance when I started. The informal UQ postgrad agri-food sociology group helped me to find new theorists, discuss and ferment new ideas: Sari Mangru, Amy McMahon, Louise Orr, Augusto Pinto, Thor Svenson and Bin Sun (Vera). Keitha Brown and Itsumi Miyashiro expertly guided me through UQ’s postgraduate processes.

The Australasian Agri-food Network is a very special academic network, a warm and welcoming home for new researchers. I am grateful to everyone at their 2012 and 2013 conferences who helped me to hone my ideas through questions and conversations and I’m honoured to have received their 2013 David Burch Prize.

I’m grateful to Cornell University, Department of Development Sociology for a 2013 visiting fellowship. Philip McMichael welcomed me into a vibrant community of scholars and asked the hard questions at a critical time. Tess Pendergrast and Shoshanna Perry embodied the spirit that we live our politics. Diana Gildea, Malcolm Moore and Jason W Moore welcomed me into their home and introduced me to world ecology.

Jagjit Plahe at Monash University introduced me to agri-food studies. She is an ever- curious soul who continues to be an endless support and inspiration. Early on, her student

6 Murray Bunton and I tried to decipher the ins and outs of markets together, later I benefitted from the opportunity to present my work at a 2014 Monash University symposium.

Before starting this thesis, Timor-Leste activist friends gently and generously guided me into a different way of viewing the world. They continue to help me to better understand land, food and the colonisation of my own mind: Inês Martins, Maxi Tahu, Mariano Ferreira, Xico Martins, Méabh Cryan, Santina Fernandes, Deo De Amaral, Pedrito Veira, Jenito Santana, Domingus de Jesus, Januario Gusmão, Saturnina Belo, Charlie Scheiner and Jill Steinberg. The Brisbane Fair Food Alliance folk make the research real.

My family instilled a deep respect for curiosity, questions and learning in all its forms: my parents Gordon and Elaine; Bev and John; Jim and Ros; Peta-Anne, Adrian and Kayla- Rose; and David, Amanda, Sadie and Tom. As do Sal, Ben and Al — another kind of family. I adapted the title of chapter four from Raymond Carver’s ‘What we talk about when we talk about love’. Finally, my deepest thanks to Craig — teller of tales, champion of bold experiments, serial star gazer and adventurer in the art of radical empathy.

7 Financial support This research was supported by an Australian Government Research Training Program Scholarship. It also received support through the ARC ‘New Farm Owners’ project DP 110102299. The University of Queensland provided additional support through an Establishment Grant, a School of Social Science Travel Bursary and a Graduate School International Travel Award. This research was also supported by a visiting fellowship at the Department of Development Sociology, Cornell University in 2013 and the Australasian Agri-food Research Network David Burch prize.

Keywords food regime, financialisation, agrofuels, hunger, food crisis, US, food justice

Australian and New Zealand Standard Research Classifications (ANZSRC) 160899 Sociology not elsewhere classified, 50% 160699 Political Science not elsewhere classified, 30% 180119 Law and Society, 20%

Fields of Research (FoR) Classification 1608 Sociology, 50% 1606 Political Science, 30% 1801 Law, 20%

8 To all my teachers, wherever they work in playgrounds or rice paddies at barricades, laptops or blackboards.

9 Table of Contents

List of Figures and Tables ...... 13

List of Terms and Abbreviations ...... 14

Chapter 1: Did the food crisis change anything? ...... 18 1.1 Introduction ...... 18 1.2 When food isn’t food: New forms of competition and market regulatory change ...... 19 1.3 Contesting the food price shocks ...... 22 1.4 National debates as global governance ...... 24 1.5 The focus of this research ...... 24

Chapter 2: Food in crisis: Reviewing the literature ...... 27 2.1 Introduction ...... 27 2.2 The food regime ...... 27 2.3 Perspectives on crisis ...... 30 2.4 Financialisation and the food regime ...... 33 2.5 Efforts to reform food regime analysis ...... 34 2.6 Correlating crises: Food, fuel and finance ...... 37 2.7 Case study one: The corn-starch ethanol cap ...... 40 2.8 Case study two: Position limits ...... 41 2.9 Reflections on food regimes, crisis, ontology and method ...... 45

Chapter 3: Methodology ...... 47 3.1 Introduction ...... 47 3.2 Conceptual framework ...... 47 3.3 Situated perspective ...... 48 3.4 Qualitative methods ...... 49 3.5 Adaptive theory ...... 50 3.6 Selection of case studies ...... 52 3.7 Data collection ...... 52 3.8 Data analysis ...... 56 3.9 Ethics ...... 57 3.10 Limitations of the research ...... 57

Chapter 4: What we talk about when we talk about food: Claims and counterclaims ...... 60 4.1 Introduction ...... 60 4.2 Case study one: The corn-starch ethanol cap ...... 60

10 4.2.1 Overview ...... 60 4.2.2 Concerns about the Renewable Fuel Standard and rising food prices ...... 60 4.2.3 Claims that corn-starch ethanol will only negatively impact prices if it exceeds the ‘safe level’ of production...... 63 4.2.4 Promises that technology will alleviate food and feed price concerns ...... 64 4.2.5 Conclusion (case study one) ...... 66 4.3 Case study two: Position limits ...... 66 4.3.1 Overview ...... 66 4.3.2 Referencing the global food price shocks ...... 67 4.3.3 The position limits narrative ...... 68 4.3.4 Counterclaims ...... 69 4.3.5 Wall St ...... 73 4.3.6 Conclusion (case study two) ...... 74

Chapter 5: Contests and coalitions: Observations on political dynamics in constructing safeguards in each debate ...... 75 5.1 Introduction ...... 75 5.2 Case study one: The corn-starch ethanol cap ...... 75 5.2.1 Introduction ...... 75 5.2.2 Fifteen billion gallons: Who decided the ‘safe’ amount of corn-starch ethanol? . 76 5.2.3 Low corn prices ...... 78 5.2.4 Agrofuels: A way to mitigate international food dumping?...... 79 5.2.5 Managing risk ...... 81 5.2.6 15x15x15: The National Corn Growers Association campaign ...... 84 5.2.7 Oil and ethanol: The historic compromise ...... 85 5.2.8 Framing a threefold expansion of corn-starch ethanol in eight years as reducing ethanol dependence ...... 87 5.2.9 The geography of politics ...... 89 5.2.10 Conclusion (case study one) ...... 89 5.3 Case study two: Position limits ...... 90 5.3.1 Introduction ...... 90 5.3.2 A brief description of the key alliances for and against position limits ...... 90 5.3.3 New alliances: Bridging oil, agriculture, food and finance ...... 93 5.3.4 The devil in the detail: Position limits implementation post-Dodd Frank...... 95 5.3.5 Conclusion (case study two) ...... 96 5.4 Discussion ...... 96

11 Chapter 6: Remaking food, remaking markets ...... 98 6.1. Introduction ...... 98 6.2. Too much corn and market diversification: Turning corn into beef, sugar and fuel.. 99 6.3 Beyond food: From commodification into the market, to commodification within the market ...... 102 6.4 ‘Food stopped being food’: The co-optation of food as a response to economic crisis ...... 104 6.5 The 1970s: Food-as-feed, foreign exchange-as-food ...... 106 6.6 Crisis, commodification and ontology in the food regime ...... 108 6.7 What is food in the food regime? ...... 109

Chapter 7: Conclusion ...... 113 7.1 Introduction ...... 113 7.2 Key findings ...... 114 7.2.1 Case study one: The corn-starch ethanol cap ...... 114 7.2.2 Case study two: Position limits ...... 115 7.2.3. Exploring food-as-fuel and finance-as-food in parallel ...... 116 7.3 How I examine the food regime: Limitations and strengths in the research process ...... 117 7.3.1 A relational approach to researching power in agri-food governance ...... 117 7.3.2 Reflecting on colonised scholarship ...... 119 7.4 Future steps ...... 120

References ...... 121

Appendix 1: Interview Guide ...... 132

Appendix 2: Questions to ask of an interview ...... 134

Appendix 3: Confirmation of ethics approval ...... 135

12 List of Figures and Tables Figure 1 – FAO Cereals Price Index 2000–2015…………………………………………….. 22 Figure 2 – FAO Food Price Index 1961–2017………………………………………………... 23 Figure 3 – New England Complex System Institute modelling of the food price shocks….39 Figure 4 – A relational approach to global agri-food governance……………………………46 Figure 5 – The interplay between theory and method in adaptive theory………………….. 51 Figure 6 – Percentage of local county accessing food stamps in 2007, alongside representation of Congress members in the media by state……….. 61 Figure 7 – The many uses of corn…………………………...... …………………………….99 Figure 8 – Crisis and commodification: What is food in the industrial food system?...... 111

Table 1 – Frequently cited factors in the food price shocks…………………………………. 20 Table 2 – Examples of historic world food crises and correlating crises………………….. 38 Table 3 – Agrofuels mandatory targets: Legislative changes 2005–2007…………………. 41 Table 4 – Position limits: Legislative and regulatory changes 1922–2010………………… 44 Table 5 – List of interviewees (2013)………………………………………………………….. 54

13 List of Terms and Abbreviations

Agrofuel Liquid motor fuel produced from plant biomass in an industrial agricultural system.

ADM Archer Daniels Midland

API American Petroleum Institute

Bill Proposed legislation entered into the House or Senate but not yet passed into law.

Biofuel Liquid motor fuel produced from plant biomass. Does not denote if fuel is produced in an industrial or non-industrial agricultural system. Used here when specifically cited by others.

Blend wall The maximum amount of ethanol that can be blended into fuel before warrantees for car engines are voided.

Cellulosic ethanol Ethanol produced from cellulose. Feedstocks described as suitable for cellulosic ethanol production include corn stalks, switchgrass and wood.

CFMA Commodity Futures Modernization Act (2000)

CFTC Commodity Futures Trading Commission: An independent US government body that regulates futures markets.

CMOC Commodity Markets Oversight Coalition: A coalition lobbying for stronger regulatory oversight of derivatives markets.

Commercial trader A trader in futures markets that produces or uses the physical product — such as .

Commodity Index Fund A fund which allows investors to buy a share in a mixed bundle of commodity derivatives products — for example corn, gold and oil.

Corn belt An interconnected geographic area in the US that produces most of the country’s corn. Loosely defined, but typically includes Iowa, Illinois, Indiana, Minnesota and parts of Kansas, Nebraska, Ohio and Missouri.

Corn-starch ethanol Alcohol produced from the starch of corn kernels. Can also be called ‘corn ethanol’.

Derivative A financial product whose value is derived from, or is dependent on, the value of an underlying asset — such as a commodity.

14

Dodd–Frank Act Far-reaching legislation on the regulation of the US financial system. Dodd Frank emerged as a response to the 2008 financial crisis, government bail-outs and associated banking and finance scandals. It was passed into law on 21 July 2010.

Dumping The practice of selling excess food overseas below the cost of production, which is possible due to subsidies and other financial supports given to producers.

E10 A 10% ethanol, 90% petroleum fuel blend, by volume.

E15 A 15% ethanol, 85% motor fuel blend, by volume.

EISA Energy Independence and Security Act. This passed into law on 19 December 2007.

ENSO El Niño Southern Oscillation

EPA Environmental Protection Agency

Ethanol An alcohol produced from sugars including sugarcane, corn and cassava.

Ethanol cap Refers here to the maximum number of gallons of renewable fuel in the RFS2 (see below) that can be met by corn-starch ethanol. This is 15 billion gallons.

EU European Union

Farm Bill A far-reaching piece of legislation that relates to a broad range of US agricultural interests. It is periodically updated, generally every five years.

FAO Food and Agriculture Organization of the United Nations

Food security Used here as a general term. Throughout policy debates various actors used this term without specific definition or description and often in ways contradictory to how it was used by others.

Food stamps The former name of the US government Supplementary Nutrition Assistance Program. Refers to a government program to subsidise food prices on certain goods for eligible participants, for example low-income earners.

Fuel flex vehicle Vehicles that can take a higher percentage of ethanol in fuel than the standard blend wall.

Futures A contract that details a set price for a certain amount of a commodity to be sold/bought at a pre-determined time in future.

15 Hedge The practice of buying derivatives as, in effect, a form of insurance or offset. For example, a corn buyer may hedge her risk by buying derivatives that reflect the selling price. This would reduce her risk if prices are high. There is considerable debate over what constitutes a ‘legitimate’ hedge.

HFCS High fructose corn syrup. A sweetener derived from starches in corn.

HLPE High Level Panel of Experts on Food Security and Nutrition

Hunger The state of an individual or a group being unable to access sufficient culturally-appropriate food to meet their metabolic needs.

Institutional investor In this thesis, this typically refers to banks, pension funds and hedge funds who invest in the derivatives market.

ISDA International Swaps and Derivatives Association

Manipulation A technical term referencing efforts to consciously manipulate prices in futures markets.

MTBE Methyl tertiary butyl ether. This is derived from fossil fuels and used as a fuel additive to increase the oxygen in fuel.

NCGA National Corn Growers Association

NAFTA North America Free Trade Agreement

NGO Non-government organisation

No action letter A written decision by the CFTC to allow a certain non- commercial trader to exceed position limits.

Non-commercial trader A trader in futures contracts who never handles the underlying physical product (ie. ‘speculator’).

OTC Over the counter: This refers to that take place outside of regulated exchanges.

Position limits The maximum number of futures (and derivatives) contracts in a particular commodity that a non-commercial trader is allowed to hold. It is sometimes discussed in aggregate, as the total amount of contracts that all non-commercial traders can hold as a proportion of the market.

RFA Renewable Fuels Association

RFS1 2005 Renewable Fuel Standard. This is a US national mandate for the use of 7.5 billion gallons of renewable fuel in the transport supply by 2012, as articulated in the 2005 Energy Act.

16 RFS2 2007 Renewable Fuel Standard. This was part of EISA and mandates targets for the use of 36 billion gallons of renewable fuel. This discerned between different sources of renewable fuel, setting separate targets for corn-starch ethanol, biodiesel and cellulosic ethanol.

SIFMA Securities Industry and Financial Markets Association

SNAP Supplementary Nutrition Assistance Program. See food stamps.

Speculation A practice of buying/selling financial products based on predictions that current prices will become lower or higher in future.

US United States of America

USDA United States Department of Agriculture

WTO World Trade Organization

17 Chapter 1: Did the food crisis change anything?

1.1 Introduction

The early 21st century food price shocks presented the first substantial test of a new era in international food governance. Leading into this period of crisis, the lines between what is ‘food’ and ‘not food’ became muddied and contested. As people took to the streets from Mexico to Guinea there was an urgency to understand, and address, the causes of higher, more volatile prices. Amid various explanations, questions arose about the growth in industrial agrofuels and the influx of capital into agricultural derivatives markets in driving food price shocks.

To date, no study of global agri-food governance has approached the rise of agrofuels and expansion of finance as parallel processes in how they resituate food governance. Both these developments see global market decisions largely taking place within national debates. In addition, they both involve reimagining edible grains (and other food), as ‘fuel’ or ‘finance’. The consequence of this is to resituate food governance within new realms of energy and finance, thereby introducing new actors and interests into food decision- making. Such blurring of the boundaries between food and non-food raises questions about how food concerns could be understood, weighed and considered, or even pitted against energy or finance interests.

This thesis seeks to fill this gap by exploring these questions through two qualitative case studies that examine US public policy debates that took place during the period of escalating food prices. The case studies focus on specific policy instruments in energy or finance debates that were presented, at least by some, to respond to concerns surrounding food prices. Case study one focuses on a cap on the use of ethanol made from corn-starch in the 2007 Renewable Fuel Standard (RFS2). Case study two examines reinstating, and extending, the authority of financial regulators to apply position limits in derivatives markets in the 2010 Dodd-Frank Act.

This introductory chapter will highlight how the rise of agrofuels and the expansion of finance are situated within discussions of the food price shocks, and therefore, critical to global agri-food governance. It will then provide an overview of the food price shocks. This will emphasise 2007–2008 as a time of mass political action that put pressure on the state.

18 Following this, I examine why this period of ‘crisis’ remains relevant today — pointing out that it marked a moment where the established norms and rules of global agri-food markets were contested and exposed. This also occurred at a time when food was reimagined as ‘not food’. Together, this highlights the importance of investigating if and how global food concerns were understood, or considered, within national energy and finance policy debates. Finally, this chapter will introduce my proposed research questions and the structure of the thesis that follows to address these.

1.2 When food isn’t food: New forms of competition and market regulatory change

While there is general agreement on the multiple factors involved in the rapid shift in food prices on international markets there remains contestation over which ones contributed most to price increases (Clapp 2012). Underpinning the triggers of higher, more volatile prices, are the deeper structures of the industrial agri-food system itself (Rosset 2008). That is, the capacity for centralised global markets to impact access to food arises from, and is situated within, a broader complex of historically-determined socioecological relationships. These include the physical qualities of soils, seeds and labour; the socioecological production of knowledge; and power relationships exercised as collaboration or conflict.1 In turn, a shift in price in international markets can influence changes to land use, contestations over natural resources and the benefits people receive in return for their labour.

1 For an introduction to the structures of the world food economy see Weis (2007), Clapp (2012) and McMichael (2013). 19

Table 1: Frequently cited factors in the food price shocks Food Low grain reserves supply/demand Increased demand for meat from middle-class consumers in emerging economies Panic purchases Hoarding — by governments or private companies Export bans Lower harvests due to drought or ecological exhaustion A price correction after years of underpriced food Increased exposure to crisis through dependence on world markets Energy Linking oil and food prices in food production through: 1. Oil- dependent industrial agriculture and 2. Competition for food crops and land from agrofuels Finance A falling US dollar increases the attractiveness of buying US Financial investors use of commodity markets as a safehaven during periods of volatility in stocks and equity markets Linking of oil and food price in commodity trading as interchangeable financial products on food prices Compiled from Piesse and Thirtle 2009, HLPE 2011 and Clapp 2012.

Of the various explanations for the triggers of the food price shocks highlighted in Table 1, two relate specifically to the mass shift of edible agriculture products into non-food roles — either fuel or a financial product.

The first explanation is the rapid rise of agrofuels. Those pointing to agrofuels as a contributing factor in the price rises argued — on the basis that the food price shocks did not correspond to a drop in global agricultural production — that the issue must not be supply but rather demand. They pointed to national agrofuels mandates that had, in a few short years, dramatically increased consumption of agricultural commodities. This encouraged farmers to shift markets for their crops — as palm oil was rerouted from Asia’s kitchens to Europe’s fuel pumps for example. Farmers also shifted the crops that they grew — which saw US soy crops plummet as corn for ethanol took its place (Carolan 2009; Elliott 2009, 2017).

20

The second explanation was tied to the dramatic increase in the volume of financial capital investing in agriculture. The debate on the contribution of finance to the food price shocks was multifaceted. It included factors such as speculation on rising food prices or the drop in value of the US dollar — which, as the main currency of commodity exchange, can also impact upon trade. Neither of these is unique to the 21st century food price shocks and both refer to food prices being somewhat tied to agricultural supply and demand. An additional factor attributed the market’s efforts at what economists’ term ‘price discovery’ — attempts to re-evaluate the price of agriculture given new demand from agrofuels, the limits of which were unknown. A separate point, relevant to food assuming a largely ‘non- food’ role, was the argument that the price of agricultural commodities was no longer strictly determined by supply or demand for agriculture alone. As will be described further in chapter two, this position posited that market deregulation allowed an influx of finance capital into agricultural derivatives markets. This allowed financiers to set the price of agricultural derivatives relative to other financial products, rather than solely based on the prism of agricultural supply and demand.2 In simple terms, agricultural derivatives had long acted as a form of virtual food avatar to facilitate the trade of physical food. They now comprised a financial product in their own right — but still with the power to impact food prices, or so it was argued (Clapp 2014).

As highlighted earlier, these developments changed the sites and actors engaged in global agri-food market rule-making.3 Reflecting this, today oil lobbyists now face off against farmers in energy policy debates and anti-hunger activists ally with managers on financial reforms. A single crop may be traded for use as cereal, fuel, animal feed or a financial product. Such trade exchanges take place in immensely complex international markets, which are difficult to track and scrutinise, and where competing uses are weighed and prioritised. While none of this is entirely new, the depth, scale and reach certainly is. Another dynamic is that key legislation and regulation driving the rise of agrofuels and expansion of finance were instituted at a time where food prices being too low, not too high, was the primary concern. The global food price shocks marked the first substantial

2 This is ‘new’ in the sense that the prior regulation was set in place in the 1920s and 1930s before much of the integration of the world food economy. 3 This thesis does not seek to interrogate the extent to which the rise of agrofuels or the expanse of finance were the driving factors in the global food price shocks. However, it does accept the relative consensus that both had a role and interprets that both involve food assuming non-food roles. 21 challenge in how energy or finance policy debates considered or contested food-related concerns.

1.3 Contesting the food price shocks

Figure 1: FAO Cereal Price Index 2000–2015 Compiled from FAO 2018a

After decades of underpriced ‘cheap’ food, by the early 2000s the price of edible agricultural staples such as wheat, corn and rice began to rise in international commodity markets (see Figures 1 and 2). By late 2006 prices started to increase rapidly, leading into a sharp upward price spike in 2007–2008. The extensive integration of local agriculture into world food markets since the 1970s meant these price changes had international ramifications, including initiating rapid food price rises on a scale that was unseen since 1974 (Horton 2009; Clapp 2012). Food prices on international markets also experienced extreme daily fluctuations (Clapp and Helleiner 2012). This destabilisation of food prices had profound social, economic, political and security impacts globally. Demonstrating this, in a single year the Food and Agriculture Organization of the United Nations (FAO) reclassified 100 million people as hungry — tipping the global total to one billion (FAO 2009:1).4 In the second half of 2008, food prices dropped sharply, followed by price peaks again in 2010–2011 and mid–2012 (see Figure 1). In sum, the food price shocks were a period of higher, more volatile prices, alongside an underlying steady increase in grain

4 Although Headey (2011) later critiqued the FAO modelling, suggesting that the period 2005–2008 saw a net increase in world food security, with low food inflation in China and India. 22 prices, overlaid by sharp, unpredictable fluctuations. While much analysis has focused on the price peaks of 2007–2008, rapidly escalating prices in global markets began as early as 2006. The defining factor of this period is not price itself — but the sudden, dramatic shift in the rules and assumptions of how the global food system worked.

Figure 2: FAO Food Price Index 1961–2017 Source: FAO 2018

In April 2008 the World Food Programme famously referred to higher food prices as a ‘silent tsunami’ (WFP 2008). This choice of term distracted from the reality that already, for over a year, people from Mexico to Guinea had taken to the streets against higher, more volatile food prices and the politics underpinning them (WFP 2008; Lagi et al 2011; Bohstedt 2016). ‘Food riots’, also re-termed ‘food rebellions’ (Holt-Giménez et al 2009), were reported as early as January 2007, followed by sixty more in at least thirty countries in 2008 alone (Patel and McMichael 2009; Lagi et al 2011; Bohstedt 2016). These efforts spanned urban consumers to rural producers, working- to middle-class, organised mobilisations to those unaffiliated with any group.5 Often presented as chaotic outbreaks, the food rebellions had deeply political dimensions — exerting pressure on governments to restore short-term food provisions (Bohstedt 2016). The urban rebellions drew on their physical proximity to governments and success was also contingent on prior relationships to policy makers (Bohstedt 2016). The rebellions contested the local context of food provisioning — which could span corruption to market concentration to how the state negotiated terms of trade with foreign governments (Bohstedt 2016). While some governments responded with brute force, others enacted export bans, acquired foreign

5 See for example, Simmons 2016 for a Mexican case study. 23 arable land for domestic food production or launched programs to promote national food self-sufficiency and sovereignty as the ‘food riots licensed countries to depart from neoliberal orthodoxy’ (Demeke et al 2009; Clapp 2012; Bohstedt 2016: 1052).

The disruption of the global food price shocks not only affected short-term change but also presented an opportunity to make visible, and challenge, the undergirding, structural inequalities in agri-food systems (Rosset 2008; Weis 2009; Holt-Giménez and Shattuck 2011). What is less evident is if voices of protest and the attendant international debate reached national policy discussions in countries that were major players in legislating the rules of international food markets.

1.4 National debates as global governance

It was overwhelmingly state policies that shaped the global market conditions driving both the rapid expansion of agrofuels and the dramatic influx of capital into agricultural futures markets. These policies were even outside the purview of international trade agreements, such as those of the World Trade Organization (WTO) — which in the early 21st century had become a site of contestation over state policies and power in decisions about global agri-food markets (Clapp 2012; Hawkes and Plahe 2013). At the turn of the millennia myriad states adopted agrofuels policies and hosted financial markets. Two states in particular stood out — the US and EU — as both enacted far-reaching policies on renewable fuels and financial deregulation. The breadth of these policies, and the power of the US and EU in market rule-making at the time, delivered deep-seated impacts for global markets. Added to the capacity of the US and EU to set the rules of international agriculture and finance markets hosted within their borders, was the structural power they held in an industrial agri-food system centred on ‘cheap food’. Critically, US policies on both agrofuels and finance were revisited during the food price shocks, after prices began to rapidly rise in 2006.

1.5 The focus of this research

This thesis process began in 2012 and takes as its starting point that the study of crisis offers unique insights into the workings of the world food economy. Today, global food governance debates have shifted and protestors have long left the streets. However, the food price shocks remain a critical moment — encapsulating our failure to anticipate or

24 even understand the shifts that dramatically transformed global food flows. As the causes of the food price shocks remain contested even today, it is critical to understand on what basis decisions were made on key, contested policy areas during the food price shocks. Further, it is important to see whether the voices and concerns of people on the frontlines of the price shocks reached the policy debate during the period of such crisis. This is not only to understand how structural shifts in the market can impact political discourses and allegiances, but in turn, to see if they can offer new insights into the structural workings of the world food economy itself.

This research takes an exploratory, case study approach to examining the extent to which food price shocks were considered in two key US legislative debates. These debates took place after the onset of rapidly rising food prices. Specifically, I explore the debate on two policy instruments. Case study one examines the corn-starch ethanol cap in the 2007 Renewable Fuel Standard (RFS2). The standard proposed that a maximum of 15 billion gallons of corn-starch ethanol would be blended into fuel supplies under a national mandate program, thereby, it was claimed, limit the potential impact on food prices by capping corn-starch ethanol production. Case study two examines reinstating, and extending, the authority of regulators to apply position limits in derivatives markets under the 2010 Dodd–Frank Act. This would, it was claimed by proponents, ensure that prices in agricultural derivatives markets responded to the supply and demand for physical food. This would be achieved by limiting the volume of trade conducted by traders who neither grew nor used the physical product.

Drawing on ten original interviews, media analysis and documentary research, this thesis takes a relational approach to power in agri-food governance. That is, the truth it seeks is not a chronological account or a vertical deep dive. Instead, it focuses on interactions and relationships across different locales of power — the discursive, political and structural — as emphasised by Clapp and Fuchs (2009), and across complex parallel processes challenging how we understand and define food in market rule-making. Examining these cases in parallel offers a new avenue to generate insights into how competing food, finance and energy interests were weighed and considered. By approaching these public policy debates as moments that can potentially offer new insights into global agri-food governance, I will also situate the debates within the broader historic context of upward global food price shocks, approaching the recent higher, more volatile prices as indicative

25 of ‘crisis’ — a time where the established norms and rules of global agri-food governance are challenged and contested.

This research will examine two key questions:

1) To what extent, if any, did the food price shocks feature in contemporary policy debates — including how these selected policies were understood or constructed discursively, politically and structurally?

2) How does approaching the rise of agrofuels and expanse of finance as parallel processes that shift sites of food governance add to our understanding of crisis in the food regime?

To situate these questions, chapter two introduces relevant literature on global agri-food market governance. It examines theoretical perspectives on crisis within the interdisciplinary agri-food studies literature. Specifically, I focus on the theoretical framework of food regime analysis and adjacent literature on the world food economy and world ecology. Chapter three then introduces the methodological framework and methods applied to answer the research questions. Chapters four, five and six then present the research findings. Chapter four begins by focusing on discursive power, drawing on a media analysis to explore whether claims regarding the food price shocks were present in each of these policy debates. Chapter five draws on ten interviews and document research to examine key political alliances and coalitions. Chapter six then explores what these processes are able to reveal about structural processes at play in food market regulation during the crisis. Finally, chapter seven reflects on the key findings, including the strengths and weaknesses of this research, as well as nominating areas for future study.

26 Chapter 2: Food in crisis: Reviewing the literature

2.1 Introduction

Chapter one introduced the food price shocks as the first substantial governance challenge following two recent changes in global agri-food markets — the rise of agrofuels and the expanding influence of finance. This chapter examines relevant literatures to: 1. Provide relevant context into crisis and global agri-food governance; 2. Situate this work within relevant scholarship on crisis; and 3. Establish the relevance of the research questions and methods, which will be examined in the following chapter.

Firstly, I examine the food regime. This starts by introducing the concept of the food regime, follows with perspectives on how crises are situated within the regime and lastly reflects on efforts to reform the food regime. Secondly, I examine key concepts within the financialisation of food literature, which links both agrofuels and finance. Thirdly, I provide brief background for the case studies into: 1. The 15 billion gallon corn-starch ethanol cap under the 2007 Renewable Fuel Standard; and 2. The reinstating of position limits under the 2010 Dodd–Frank Act. Lastly, I reflect on food regimes, crisis, ontology and method — examining how my understandings of the relevant literature inform my methodological approach to the research.

2.2 The food regime

As McMichael (2013:1) defines it, ‘the food regime project is an ongoing analysis by scholars and activists of the political geography of the global food system’. As a lens, the food regime literature gives specific attention to the commodification of food, to the price of food relative to capital and global food governance. It also explores the role of certain states (or corporate interests) in setting the terms of international food markets, including food flows. Food regime analysis emerged in 1989, drawing on world systems and regulation theories within historical sociology and political economy. It takes as its historic starting point the creation of a world price for food (McMichael 2013). Generally, food regime analysis is introduced by describing the pre-defined regimes historicised by analysts.

The first regime refers to a 1870–1914 ‘settler–colonial’ regime, directed by empire. Here the hegemonic power, the United Kingdom, expressed its power in setting the relative 27 value of food to the relative value to capital.6 In so doing, it established itself as a net food importer, so as to free up its workforce for the high-value industrial economy. Grain, for instance, was drawn from its vast colonial frontier. Implicit in the price mechanism was the ‘low cost’ of land taken through violent invasion and occupation. Here, the food regime originators pointed out that the ‘peripheral’ economies of Australia, Canada, the US and New Zealand were in fact central to the functioning of Europe’s industrial markets (McMichael 2013). Hegemonic power in the world system then shifted to the US. What emerged next was a US dominated mercantile–industrial second food regime (1945– 1970), where the state extensively supported agriculture. This saw US-generated food surpluses flow from Global North to South (McMichael 2013). The second food regime is defined by the large-scale introduction of what would later be termed ‘green revolution’ technologies. This includes technologies which deepen the shift away from regenerative agriculture towards extractive agriculture — which depletes or destroys the natural resource base required to grow food. As other countries increasingly adopted a state- supported agricultural model, contestations arose over continued US exports of food surpluses. This saw many states being unwilling net food importers as the US dumped underpriced food in local markets, putting local farmers out of business.

Following this clear characterisation of a first and second food regime, is a contested third, or even fourth, food regime. Much of the discussion of a possible third food regime, and its underlying basis, relates to the role of corporate power and finance.

Relevant to understanding the context of the global food price shocks, were key characteristics of the world food economy just prior, centred on the paradigm of ‘cheap food’. While the industrial food system comprised a large number of food producers and a large number of food consumers, power concentrated at central points in the distribution chain — preventing farmers from receiving fair prices (Clapp 2012; McMichael 2013). In the US, the state first introduced subsidies to farmers during the crisis period of the Great Depression. This paid farmers not to grow food, in order to manage the overproduction crises that stemmed from the intensification of agricultural production with industrialisation and early green revolution technologies (Cochrane 1981; Winders 2009, 2011). By the early 2000s this had evolved to an elaborate subsidy scheme that saw farmers less

6 The start date marks the creation of a world price for food. Patel (2013) has suggested that this date should be earlier, the 1846 revoking of the Corn Laws to allow new food imports. This emerged as a response to what is described as the last European . 28 dependent on crop prices for their livelihood (Winders 2011). The US then exported this oversupply, as aid or underpriced food, then increasingly exerted its power to prevent other countries from similarly protecting their markets (Winders 2011; Gonzalez 2015). ‘Cheap food’ also incorporated other historic characteristics of the industrial food system. This included the concentration of working class diets to a narrow band of overproduced crops (ie. wheat, corn, soy), exploitative and gendered agricultural labour practices, a farmer debt crisis and poor nutritional diets (Weis 2007; Clapp 2012; McMichael 2013). In this same period, the dominance of the US in global agri-food relations was increasingly challenged. For example, its subsidy program was contested through mass state coalitions led by India, Brazil and China in the WTO negotiations (Hawkes and Plahe 2013). Additionally, key discourses of ‘cheap food’ such as ‘food security’ were being contrasted against emergent frames driven by farmers — such as food sovereignty (Fairbairn 2011).

‘Cheap food’ was also highly gendered and racialized — as is the industrial food system more broadly. In the US, for example, African American farmers were pushed off the land by the USDA denying them access to state subsidies and urban communities of colour experienced a ‘food apartheid’ where they did not have access to the same healthy food options as white communities (Daniel 2015; Herrera as cited in Cook n.d.).7

McMichael (2005, 2009, 2013) also describes a ‘corporate food regime’ whereby transnational corporations, rather than the state, are the defining arbiter of markets. He discusses new venues for global food governance, through structures such as the WTO. Friedmann (2005) has suggested an emergent corporate-environmental regime dividing wealthy consumers with access to branded clean and green , from the poor who bear the environmental pollution of industrial agriculture. Burch and Lawrence (2009) posit a new food regime defined by the tenets of finance — pointing out the role of finance in agri- food restructuring of supermarkets, for instance. In response, Friedmann (2009) asks whether the processes of financialisation are sustainable or whether financial speculation, for example, is self-exhausting and finance is more significant as a short-term process for shifting capital (see also Martin and Clapp 2015). Patel (2013) draws on Arrighi’s writings on the long duree of world systems theory to argue for what he terms ‘the long green revolution’. That is, rather than two separate regimes, he describes a shift from a state-

7 Community organisers such as Herrera (as cited in Cook n.d.) have rejected the term ‘food desert’ as evocative of a passive process or natural phenomena, using instead ‘food apartheid’ to capture the sense of this form of food inequality as socially and politically constructed. 29 focused, to a corporate–financial, phase, and that a defining factor is the ecological underpinnings of the regime itself.

2.3 Perspectives on crisis

Food regime analysis sits within an interdisciplinary field of agri-food studies. This incorporates disciplines such as sociology, political science, environmental history and human geography. Food regime analysts therefore dialogue extensively with, and at times conceptually overlap, with theorists not explicitly using the food regime lens. Particularly relevant to the study of regulatory markets are those examining the ‘world food economy’ such as Jennifer Clapp and Tony Weis, as well as world ecology and financialisation. As Sippel et al (2017: 251) describe it: ‘the term financialization has been used to capture the growing influence and importance of financial capital, markets and motives throughout the economy and polity — with profit-making occurring increasingly through financial, rather than productive, channels’.

The food regimes literature addresses crisis in three ways: 1. It applies a historical analysis to identify different ‘regimes’ — referring to periods of rules, global food flows and patterns in use and control of agri-food resources, with a focus on power relations connected to capital. Here periods of uncertainty or ‘crisis’ bookend eras of stable relations, signalling their break down; 2. It describes the mechanics of change processes, including identifying patterns across different regimes; and 3. It studies crisis periods to identify emergent trends and predict the nature of the future food regime.

It is this second point, the theoretical formulation of crisis, that sees food regime analysis as a suitable theoretical framework for this project. Friedmann (2005: 234) writes that:

‘food regimes emerge out of contests among social movements and powerful institutions, and reflect a negotiated frame for instituting new rules. The relationships and practices of a regime soon come to seem natural. When the regime works really well, the consequences of actions are predictable, and it appears to work without rules’.

Food regime analysis, and related literatures, each situate crisis in time and space. In food regime analysis and related world ecology literature crisis is articulated across three

30 scales. The first is a short-term market ‘event’ — such as a food price shock.8 According to Freidmann (2005) this is a ‘signal crisis’, signalling or exposing the underlying contradictions of the regime as the implicit rules of the regime are made explicit (see also McMichael 2009b). In response, the regime may reform. Drawing on Polanyi’s description of a ‘double movement’, Holt-Giménez and Shattuck (2011) present a succinct typology of reform processes within and outside the food regime, specifically as relates to the recent food price shocks. They describe progressive and radical social movements rising up against the negative social impacts of concentrated control of global agri-food systems through markets and coercion or direct pressure applied through international institutions. Within the regime, they identify an unchanged neoliberal regime and a limited reformist block. Groups seek to affect change by targeting actions against specific institutions and use specific frames or discourses to do so. A ‘signal crisis’ may evolve into the second form of crisis, the breakdown of the regime itself. A third form of crisis extends beyond the regime of rules and political/structural power to the fundamental ideas and ways of organising society at a civilisational level (McMichael 2013).

Another body of work that often interacts with food regimes is world ecology. World ecology draws on environmental history and world systems theory. It argues that capitalism itself is an ecological system and therefore bound by ecological characteristics and limits. It therefore seeks to inform how the study of food regimes understands, and perceives, capitalism. For Moore, capitalist growth relies on the extractive frontiers of the ‘four cheaps’ (food, energy, money and nature), later expanded to seven (adding work, care and life) (Moore 2010, 2012, 2015; Patel and Moore 2017). Most relevant to this research is that, for Moore, our failure to understand the nature of capitalism is not just analytical but ontological. Moore (2013) has written extensively on how the Cartesian society-nature dualism impacts our ability to perceive and respond to crisis. He advocates the need to return to an integrated ‘nature-as-matrix’ worldview, which he terms the oikeios.

The need to probe the ontological and epistemological dynamics of crisis has also been flagged (Schneider and McMichael 2010; Moore 2012; Lappé 2013; McMichael 2013, 2016). Relevant to understanding agrofuels, McMichael refers to the ‘ontological fungibility’

8 This discussion specifically relates to the crisis of the regime. This is separate to the real, embodied, gut- wrenching crisis faced by many rural communities as a result of power imbalances expressed via low prices or price shocks. 31 of the food-fuel-nexus — specifically crops that can be used across multiple markets as food, energy, livestock feed or other uses, what Borras et al (2012) coined ‘flex-crops’. That is, for McMichael (2013) flex-crops demand a worldview in which food is interchangeable with, and therefore no different to, fuel or feed. McMichael (2013:134) also notes that ‘the capital accumulation lens [of the food regime] reinforces a social ontology, an organizing principle, externalizing ecological relations’. He explores the multifaceted perspective of the food sovereignty movement noting that ‘it foreshadows a political ontology directly valuing self-organizing practice through networks of co-operation, including collapsing the urban/rural divide’ (McMichael 2013: 139). He has elsewhere observed that loss of farming knowledge undermines the ability to socially reproduce alternatives to the food regime (Schneider and McMichael 2010) and highlights how a ‘self-organizing ontology’ has underpinned strategies that peasant communities have taken to diversify their agriculture and food sources since the food price shocks (McMichael 2013: 139).

McMichael (2013) and Moore (2015) have highlighted that underpinning the food regime are our ontological organising principles, informing how we see the world, construct value and food. Moore (2015: 287) writes:

‘As neoliberalism’s macabre ontological shift in the definition of food has rolled out — shifting from the Green Revolution’s caloric metric to the ‘edible foodlike substances’ that now line our supermarket shelves — it seems to have made food, and by extension nature, much more fundamental to the Old Left questions of liberte, egalite, fraternite than ever before. The class struggle of the twenty-first century will turn, in no small measure, upon how one answers the questions: What is food? What is nature? What is valuable?’

Moore (2012)’s analysis of ontology stresses that this impacts how we understand the regime, while McMichael (2013) reiterates its importance in imagining alternatives to the regime from outside it. However as yet, we have not asked the question ‘What is food?’ ‘What is not food?’ — and how do they interact? — of sites within the regime itself, such as market policy-making.

So far, this chapter has introduced the concept of the food regime, articulated how the literature approaches crisis and pointed to the increasing scholarly interest in

32 understanding ontological and epistemological dynamics of the regime. The following section examines literature on the financialisation food, which often interconnects with food regime analysis.

2.4 Financialisation and the food regime

The global food price shocks and correlating financial crises sparked renewed interest from agri-food scholars in the role of financial actors, logics and systems in the agri-food system. This literature is broadly referenced as the ‘financialisation of food’. It has examined how financial systems or logics interact with existing agri-food dynamics through processes such as supermarket structuring, land acquisitions, commodities markets, debt financing and development programs (Burch and Lawrence 2009; Breger Bush 2014; Fairbairn 2014; Isakson 2014; Gonzalez 2015; Martin and Clapp 2015; Gillon 2016). Increasingly the financialisation of food is theorised as an extension of prior processes in the food regime (McMichael 2013; Patel 2013; Martin and Clapp 2015). Adapting a concept from the study of agri-food chains, Clapp describes financialisation as the latest step in the ‘distantisation’ of agriculture — observing that the industrial food system has encouraged ever more complex forms of physical and mental distance from the landscapes where food is grown (Clapp 2014, 2015). She defines financialisation as the ‘abstraction of food from its physical form into a financial product’ — and emerges out of globalisation, corporatisation and industrialisation respectively (Clapp 2015: 6).

While the world food economy is often described as highly corporatised, Martin and Clapp (2015) emphasise the role of the state in mediating between finance and agriculture through market rule-making. Drawing on a historic analysis, they note ‘although it appears that finance is operating on its own capitalist logic, it is important to recognize that its context for doing so has been strongly shaped by the state’ (Martin and Clapp 2015: 556). This highlights the relevance of investigating the voices prevalent in market rule-making. Indeed, Clapp has followed the US position limits debate (Clapp and Helleiner 2012; Clapp 2014). While initially hopeful, she has more recently pointed to the challenges of NGOs and other groups to engage with financial policy debates, as they are new actors in unfamiliar contexts (Clapp and Helleiner 2012; Clapp 2014).

Since I began this research in 2012 the agri-food studies literature has also built up a nuanced understanding of interconnections between the rise of agrofuels and the expanse

33 of finance. This helps to view the ‘correlating’ crises as working as part of a single market system. McMichael (2012) argues that one prior limit to financial interest in agriculture was that food demand is inelastic and that agrofuels present new frontiers of profitability for agriculture. As financial actors faced increased uncertainty and volatility in financial markets, commodities and farmland became more attractive as they are perceived as less volatile than other markets (Clapp 2012; Fairbairn 2014; Isakson 2014; Martin and Clapp 2015). The deregulation of futures markets also provided financial actors new opportunities to hold a stake in agricultural commodities. This coincided with an overproduction crisis in agriculture and assigning underpriced crops a use as fuel was also seen as a way to create new markets (Gillon 2016). These are all examples of deepening connections between food, fuel and finance at that time. Moore (2012) views agrofuels as stemming from the inability of capitalist relations to extract more ‘cheap energy’, a sentiment also shared by McMichael (2013). Additionally, just as financialisation has posed new questions for food politics, Borras et al (2016) point to the need to better understand the socio-cultural context of flex crops: including flex narratives, the role of the state and the implications for political mobilisation. Gillon (2016) also points to the need to understand how flexing is politically contested.

2.5 Efforts to reform food regime analysis

Over the last ten years there have been concerted efforts to reform food regime analysis. This responds to critique that food regime analysis itself has often presented a view of structural power as monolithic, rather than situated and contestable. Food regime analysis has sought to better resituate social movements, such as Vía Campesina, as central actors exerting pressure on the regime through political mobilising and reframing dominant discourses (Patel and McMichael 2009; Holt-Giménez and Shattuck 2011; McMichael 2013; Mann 2014; Martínez-Torres and Rosset 2014). There are examples of a more sophisticated understanding of agency, for example, by recasting ‘food riots’ as politically articulated ‘food rebellions’ (Holt-Giménez et al 2009; Patel and McMichael 2009; Bohstedt 2016). There is increased discussion of competing paradigms and co-creation of the regime through discursive forms of power such as framing (Friedmann 2005; Dixon 2009; Fairbairn 2011; Holt-Giménez and Shattuck 2011; McMichael 2013). This also demands that scholars themselves emphasise that corporate agriculture feeds only a small part of the world’s population. The single-state hegemony that dominated analysis of the first two regimes is increasingly subverted by a growing literature on the co-creation of the regime

34 at multiple sites of power, with emphasis on how heterogeneous local politics and circumstances engage with international systems (Araghi 2010; Boyer 2010; Gillon 2011; Plahe et al 2013; Grey and Patel 2015; Borras et al 2016; Bohstedt 2016). Any site within the regime is now understood to have its own domestic context and histories surrounding food provisioning, which also informs relationships with the food regime. This literature is relevant background to this study, providing an overview of the actors, strategies, frames and discourses that can arise in contesting agri-food relations — as well as understanding the concept of the food regime as an ordering principle, rather than a prescriptive formula.

The food regime has also been recast as ecologically defined, its expansion dependent on extracting ‘surplus nature’ — achieving profit through new physical frontiers and labour exploitation (Araghi 2010; Weis 2010; McMichael 2013). The green revolution is seen as a central force defining and articulating socio-political relations and the use of extractive agriculture. There are signs of recognition that peasant and indigenous knowledges are not only important to how we produce food but how we see the world and contest the regime (McMichael 2013). However, food regime analysis has yet to substantially explore and define the regime as gendered and racialised.

While food regime analysis has become more insightful as to its own role in the regime, it has been less reflective of its own position on the frontier. The literature is largely driven by researchers situated in the dominant colonial cultures of Australia, New Zealand, the US and Canada. Indeed, food regime analysis stemmed from scholars’ insightful examination that the ‘peripheral’ economies of the colonies were central in, literally, feeding the industrialisation in the metropole (see generally McMichael 2013). While the food regime literature explores contestation in large social movements and foreign frontiers there is little engagement with the colonised cultures with which they co-exist — what can be termed ‘the other side of the frontier’.9 That is, Aotearoa (New Zealand) and the many nations of Turtle Island (North America) and across the continent of Australia. These too are places and spaces of contestation, particularly against enclosure and commodification (Graddy-Lovelace 2017). Graddy-Lovelace (2017: 80) points out that US agricultural policy, for instance, can be understood as the extension of colonialism — she adapts Latin American scholars’ reference to the ‘colonidad’ to ‘elucidate how the mentality of colonialism survives official liberation, how it takes root in language and geographies of place, institutions and norms’. While colonialism is largely treated as a historic process in

9 This is taken from the title of a seminal work on frontier wars by Australian historian Henry Reynolds. 35 the literature, First Nations scholars examining land and food highlight that it is a living, ongoing process of subjugation and resistance (Black 2011; Salmón 2011; Child 2012; Pascoe 2014; Daigle 2017). The inability of food regime analysis to understand itself as a colonialised, frontier subject restricts the capacity to which scholars will truly be able to embrace different forms of land-based knowledges and garner further insights into commodification.

This gap is particularly present if we seek to examine the ontological underpinnings of the regime and try to understand ‘What is food? What is not food?’. Reading scholarship on land and food systems from the other side of the frontier, it is apparent that there are sophisticated ontological and epistemological tools for examining knowledge claims that cannot be directly experienced and investigated (Daigle 2017; see also Martínez-Torres and Rosset 2014). Given the issues of white appropriation of indigenous knowledges, I do not seek to critique, build on or appropriate such scholarship — but merely to acknowledge it here and how it inspired me to think.10 In particular, CF Black (2011) who in her study of indigenous jurisprudence The land is the source of the law emphasises that dispossession is not complete with the physical taking of land but only when one forgets their ties and connection to the land. Daigle (2017) also emphasises ontology as a resistance strategy of the Anishinaabe people. For Black ‘what is land?’ marks the point of difference between the colonial and First Nations viewpoints. For me, I saw the central question of food regime scholarship as ‘what is food?’ — it is through this question we track the growing abstraction of the agri-food system, and in a commodified society, ‘what is food?’ presents a concrete way to reconnect to place. As I seek to explore the concurrent stories of food that I see now co-exist in markets (as food/not food), Black reminds me of the two co- concurrent stories of the land where I live in Brisbane/Meanjin. It is also, as she calls it, the ‘law of relationship’ which is the most important governing principle of land, rather than specific ways of organising land or using it (see also Salmón 2011; Child 2012; Daigle 2017). It is relationships — physical, spiritual, kin and cultural — rather than any specific use of resources, which form a fundamental governance principle for how humans engage with the land and also each other. Lastly, Ken Wiwa (2005:125-126) writes of enclosure as ‘the imposition of someone else’s stories’, noting that ‘we are nothing if not the sum of our stories, our maps, our laws, our history, our culture’ — which echoes a sentiment of other

10 To be clear, this research project is incongruent with land-based pedagogies of relationship which authors like Black (2011), Tuhawai Smith (2011), Salmón (2011) and Daigle (2017) emphasise. 36 scholars (Graham 1999; Black 2011; Salmón 2011).11 This is a reminder that, at heart, the complexities of legislation and rule-making are a story about food.12

Further, a discursive function of distantisation (and colonialism) is that it deems certain stories to be incompatible, by categorising and dividing them as law, policy, markets or custom. This renders everyone who grows or eats food suddenly unqualified to discuss it. While ‘what is food?’ is a simplistic question to ask of a complex public policy debate — and incapable of picking up all its nuance — it also frames the discussion in a way that is accessible. This research rejects the premise that to talk about food, we must first talk about international petroleum reserves or the swings of stock markets. It does not seek to understand the surrounding context of energy demand or financial market performance, only to examine how food itself was constructed in these debates.

This section has examined some of the efforts to reform food regime analysis in recent years. This includes pointing out how food regime analysis has sought to better understand political power, discourse, and social movements as also articulating the rules and shape of the food regime, moving the literature beyond strictly a structural analysis of the world food economy. It has also highlighted the shortcomings and ongoing challenges of food regime analysis. This acknowledges the biases and dynamics which are likely to be inherent in research that applies food regime analysis, and therefore, potential limitations in this work. I have also sought to recognise how reading agri-food literatures from the other side of the frontier helped to inspire how I approached this research.

So far this chapter has examined the theoretical approach to understanding crisis. The following sections return to exploring political and policy dynamics of the global food price shocks, relevant to a US case study.

2.6 Correlating crises: Food, fuel and finance

Chapter one described the dynamics of higher, more volatile food prices and pointed to the incidence of widespread protests potentially creating a ‘legitimacy crisis’ for the state where protests occurred. What is difficult to capture is the relative chaos of the early period

11 Ken Wiwa is Ogoni (Nigeria) but lives in Canada. 12 They may also be about land but the distantisation of agriculture means that connection to land is not visible for many so ‘food’ is a basis of analysis. 37 of the global food price shocks — particularly in identifying the cause of higher, more volatile prices at a global level (see Table 2 for other examples of correlating crises). Decisions about food-as-fuel and food-as-finance took place within heightened energy and finance debates as, respectively, oil prices were high and financial markets unstable. While it is only within the scope of this research to examine the food-related aspects of these policy debates, there is a broader policy context. Clapp (2009) also points out that some of the early analysis of the higher, more volatile food prices was based on pre- existing trends in markets. For example, the increase in growth in agricultural demand from China was cited as a factor — however Clapp points out this wouldn’t explain a sudden surge in prices.

Table 2: Examples of historic world food crises and correlating crises Common name Years Correlating crisis Triple crisis 2006–present Financial crisis, energy price crisis. 1970s Crisis 1972–1974 Stagflation, oil crises. Late Victorian 1896–1899 European market depression, El Niño holocausts 1873–1876 Southern Oscillation. Last 1845–1850 Recession, potato crisis. subsistence crises of Europe Compiled from: Horton 2009, Davis 2010 and Moore 2012.

Elliott (2009) highlights how much analysis on the role of agrofuels differed — from what was counted, to how it was counted and to how much agrofuels were thought to have contributed. For example, in 2008 the World Bank estimated that global agrofuels contributed to 75% of the food price increase; the Organisation for Economic Co-operation and Development (OECD) projected it would explain a 33% price increase for cereal and oilseed over the next decade and the International Food Policy Research Institute estimated that between 2000–2007 agrofuels accounted for 39% of the rise in world corn prices and 22% in wheat (Elliott 2009: 6). The analysis was complicated because it was hard to discern to what extent agrofuels contributed compared to other factors that were also in flux. This included global forces such as high oil prices for farmers, but also how local economies interact with international prices and how local actors shape markets (HLPE 2011). While the potential impacts of agrofuels garnered significant focus, shifts in derivatives markets received less attention.

Over time, the role of financial speculators has become more prominent. This is partly due to extensive mathematical modelling conducted by those not deemed to have a stake in

38 the politics of global food policy and its outcomes (Lagi et al 2011; Lagi et al 2012). An example of this modelling is shown in Figure 3. Another factor has been a gradual demystification as to how derivatives markets work, with the issue being translated into terms more understandable for a food policy and mainstream audience (IATP 2008; Masters 2008; Ghosh 2010; Kaufman 2010; Clapp and Helleiner 2012; Kaufman 2012; Stop Gambling on Hunger n.d.). In the early 21st century, a massive influx of speculative capital flowed into derivatives markets as the financial downturn began. It is then argued that speculators derailed agricultural markets to the extent that prices are no longer set by the fundamental supply and demand factors of growing and using food. This is explored further in 2.8: Case study two: Position limits.

Figure 3: New England Complex Systems Institute modelling of the food price shocks Source: Lagi et al 2011: 4

The breakdown in the established rules of markets also presented an opportunity to press for change. During the food price shocks food ‘rebellions’ (often termed ‘riots’) were a catalyst for broader political organising (Patel and McMichael 2009) and different institutions and social movements used the construct of crisis to push their own change agendas (Holt–Giménez and Shattuck 2011). As often occurs during systemic food price shocks, the state was targeted for action as it retained a central role in food rights discourses and risked a potential ‘legitimacy crisis’ (Patel and McMichael 2009; Fairbairn 2011). This also raises the question as to whether the material and ontological rupture of

39 multiple crises could constitute what Kingdon (1984) describes as a situational and/or political shift to open a ‘policy window’, allowing rapid policy change. The following two sections give an introduction to two legislative debates that took place during the period of higher, more volatile food prices. The first situates food as a fuel within US energy debates. The second, examines food as a financial product through a policy debate on US derivatives markets.

2.7 Case study one: The corn-starch ethanol cap

In 2005 US Congress enacted the Energy Security Act Renewable Fuels Standard (RFS1). US agrofuels production had been steadily increasing since 2002, including overtaking Brazil as the world’s largest agrofuels producer (Elliott 2017). The US had long had state and federal ethanol incentive programs, such as tax credits. However, RFS1 is recognised as formative in the creation of a mass agrofuel market, by setting the country’s first national mandate on renewable fuel in the national fuel supply. RFS1 committed the US to using 7.5 billion gallons of renewable fuel annually by 2012.13 Under RFS1, renewable fuel would be blended into normal fuel supplies, which would roughly mean that in any given gallon of fuel 2% could comprise ethanol or biodiesel. This responded to requirements in the Clean Energy Act that fuel be oxygenated, to burn at a higher temperature as ethanol was one of several possible oxygenates that could be added. Another, methyl tertiary butyl ether (MTBE), was increasingly targeted for polluting groundwater. The 2005 RFS1 fed into a broader energy policy debate that continued in 2006 and 2007, with various bills proposed to Congress. Circling these debates were conversations aligning energy and security as: 1. The US fought wars in the Middle East — a region it depended on for its oil supply; 2. There were growing calls for action on climate change; and 3. Renewable fuel was viewed as a way to reinvigorate rural economies (Lehrer 2008, 2010).

On 18 December the 2007 Energy Independence Security Act (EISA) was passed in Congress and signed into law by President Bush the next day. EISA raised the RFS target dramatically to 36 billion gallons by 2022. Like RFS1, the 36 billion gallon figure would be met through staged annual targets. However, RFS2 specifically commented on feedstocks

13 Note, the term ‘renewable’ fuel is problematic — as most US agrofuels are produced through industrial farming methods that deplete or destroy the natural resources required to grow food. I use it here only to reflect the terminology of the debate. 40 for renewable fuel. At the time, and still today, starch from corn cobs was the main feedstock for US ethanol, an alcohol-based fuel. Other potential sources for ethanol include sugar or cellulose such as cornstalks, and biodiesel can be made from oil-rich plants like soy. The 2007 legislation stipulated that corn-starch ethanol could only, at maximum, comprise 15 billion gallons of the total 36 billion gallons mandated. Part of the intended uptake of alternate fuels to meet the 36 billion gallons would be those that could not be blended with gasoline in the same way as ethanol. That is, fuels made from cellulose — such as switchgrass or cornstalks — that could not be used in most common car engines at the time (Carolan 2009). EISA also included tax incentives and credits for the ethanol industry. The debate leading into EISA had also floated possible emissions trading targets or cutting subsidies for oil — although this did not arise. While RFS2 represented as massive scaling up of US agrofuels production, there were claims that it took into account detrimental impacts on food prices by limiting corn-starch ethanol production to less than half of the total mandate (Elliott 2009).

Table 3: Agrofuels mandatory targets: Legislative changes 2005–2007 Year Change Implications 2005 Energy Policy Act Sets a federal target of 7.5 billion gallons of renewable fuels blended with gasoline per year by 2012. 2007 Energy Security and Raises the target to 36 billion gallons by Independence Act 2022. However, limits corn-starch ethanol to 15 billion gallons of this target.

These debates took place part and parcel with broader political moments and movements. Mid-term elections took place during 2006, leading to Democrats holding control of the House and the Senate. Politicians seeking their party’s endorsement for the 2008 presidential election began their preliminary campaigning in corn-rich states like Iowa. California, the world’s eighth largest economy also explored how to legislate renewable fuels in their economy. Agrofuels featured in both the 2006 and 2007 State of the Union addresses. Various bills were proposed and amended.

2.8 Case study two: Position limits

In the wake of the 2008 North Atlantic financial crisis, in 2010 the US Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd Frank). This was a

41 far-reaching piece of legislation. Within the legislation was a provision that called for regulators to set limits on speculation in agricultural derivatives markets. This policy process has been of interest to several researchers examining the financialisation of food (Clapp and Helleiner 2012; Kaufman 2012; Isakson 2014; Martin and Clapp 2015).

The simplest form of derivative is a futures contract, which represents a commitment to sell or buy a specific good at a specific price at a certain date. By locking in price early, it protects a seller against prices falling too low and a buyer from prices rising too high. Trades take place in a regulated exchange — ensuring that for every buyer there is a seller. A grain trader, for example, may also buy a futures contract as a ‘hedge’ — basically as a form of offset or insurance if their predictions about the markets are wrong. Traders who have a physical stake in handling or using a certain commodity are called ‘commercial’ traders. Alongside commercial traders are ‘non-commercial’ traders or speculators. Their objective in the market is not to access or deliver a trade but to make money by successfully guessing if prices will go up or down. They sell the contract before delivery, so they never handle the good. Alongside futures contracts are a host of more complex derivatives products. The theory is that speculators help with ‘price discovery’ — they make bets in the market based on specialist knowledge of certain crops and conditions (Kaufman 2010).

However, there is an acknowledged risk that speculators can act irrationally. To address this, in 1936 the US enacted the Grain Exchange Act. This created what’s called ‘position limits’ for non-commercial traders. It limits the total number of contracts that non- commercial traders can hold in a given agricultural commodity. The principle is that this will ensure that those who produce or use agricultural commodities dominate the market and therefore ensure that prices reflect the real-world supply and demand for agriculture. It was also required that all futures trades be made on a regulated exchange. The 1936 legislation stipulated that regulators would decide at what level to set the limit of total contracts non-commercial traders could buy. This could include using position limits to address ‘manipulation’ — that is deliberate attempts to manipulate the market conditions, but also to address ‘excessive speculation’.

Starting in the 1980s and 1990s, financial markets began to be deregulated. Banks such as began to offer new types of derivatives products that took place outside regulated exchanges (Clapp and Helleiner 2012). One prominent example is a

42 Commodity Index Fund (CIF). A CIF deals in what could be called ‘virtual food’ — in that there is no direct contact with agriculture. A CIF represents a given bundle of goods in a . Buying or selling into an index fund represents a bet with a bank, for instance, on whether the price of that bundle of goods will go up.

CIFs don’t take place on regulated exchanges, so the number of bets that prices will go up don’t need to equal the number of bets that prices will go down. That’s because big investors, like pension funds, weren’t looking at the day-to-day ups and downs of markets like speculators do. They would buy into a CIF and just hold onto it. As the number of bets that prices would go up didn’t need to match the bets that prices would go down banks then needed to offset their risk. Starting in 1991, the CFTC provided a ‘no action’ letter to some banks (and others) — the first being Goldman Sachs (Clapp and Helleiner 2012). This was an exemption from having to follow the position limits. This was argued on the basis that just as farmers could use agricultural futures markets to ‘hedge’ their farming risks, a bank should be able to use them to ‘hedge’ risks they face in other parts of the financial sector. Commodity index funds also impact prices because they buy a set ratio of goods — without following the changing price of wheat, for example, relative to oil.

In the 1990s there were various efforts to try to exert pressure on the regulator to apply position limits or apply the same rules to the broader derivatives markets as applied to futures market. In 2000 the Commodity Futures Modernization Act (CFMA), as Isakson puts it, ‘effectively deregulated commodities trading in the US. It removed position limits on speculators and allowed for the opening of unregulated exchange markets. Combined, these developments opened the door, allowing a variety of new investors — including hedge funds, pension funds, insurance companies, sovereign wealth funds and investment banks to speculate on an array of increasingly complex agricultural derivatives’ (Isakson 2014: 757). As financial markets downturned, a large influx of money flowed into commodities futures markets. The value of futures contracts doubled from 2005-March 2008 to an estimated $400 billion, rising $70 billion in the first quarter of 2008 (Young 2008 as cited in Clapp 2009: 1187). Agriculture comprises almost a third of commodities held in CIFs (IATP 2008 as cited in Clapp 2009: 1187). The CFMA dramatically reshaped how futures markets operated. It was later argued that this impacted food prices in three ways (Burch and Lawrence 2009; Ghosh 2010; Isakson 2014; Martin and Clapp 2015). Firstly, it made it easier to use agricultural futures markets as a tool to offset or minimise risk in other parts of the financial sector. For example,

43 derivatives traders could use futures contracts to offset their over-the-counter (OTC) trades — which take place outside of regulated exchanges. Secondly, it became easier to speculate on food prices. Speculators could move in and out of the market via derivatives trading, side-stepping position limits. Thirdly, large amounts of money could be pulled out of the market quickly. As control over investments in CIFs was highly concentrated, a small change in their investment algorithm could translate to a massive market shift.

Table 4: Position limits: Legislative and regulatory changes 1922–2010 Year Change Implications 1922 Grain Futures Act Futures trading can only take place on approved exchanges. 1936 Grain Exchange Act Empowers federal regulators to set position limits for non-commercial traders. This is to stop ‘excessive speculation’ that cause ‘sudden or unreasonable fluctuations’14 1974 Commodity Futures Trading The CFTC is established. It currently Commission regulates futures markets. 2000 Commodity Futures Responding to calls through the 1980s- Modernization Act 1990s for regulators to take action on OTC markets, the CFMA explicitly prevents the CFTC from regulating OTC markets. 2010 Dodd-Frank Wall St Reform Explicitly states that regulators have the and Consumer Protection Act authority to apply position limits for all non-commercial traders. Compiled from Clapp and Helleiner 2012

As the US financial situation deteriorated, by 2008 various bills were proposed in Congress to reinstate regulators’ ability to apply limits. These changes were agreed in 2009 and officially enacted in 2010 as part of the Dodd-Frank Act which aimed at systemic reform of the financial sector. Given that the legislation empowered the CFTC to set position limits, the next step was to agree how the position limits rule would be implemented. As of January 2018 the position limits rule has not yet been finalised.

14 As cited by Clapp and Helleiner 2012: 187. 44 2.9 Reflections on food regimes, crisis, ontology and method

This chapter has so far examined relevant theoretical, historical and legislative background to establish the relevance of asking how we navigate the interplay between food, energy and finance during periods of ‘signal crisis’ in the regime. I have presented agrofuels and financialisation as relevant, emergent factors in the food price shocks. I have pointed to specific, time-bound processes as an example of where these questions of ‘what is food? What is not food?’ can be observed. I have also pointed out the relevance of the ethanol fuel target and position limits debate in broader structuring of global agri-food markets. The next question is how to distil this approach into a research method.

For this research, food regime analysis provides a useful framework to understand the state regulation of markets and the structures of the world food economy. However, as a methodology it is problematic — as food regime analysis has emphasised the use of comparative historical analysis, yielded from historic sociology, although with increasing emphasis on political ecology (McMichael 2013). Clapp and Fuchs (2009) observe that the lack of academic work on the role of national regulatory policy in international food markets is due to an academic rift. This rift is between political scientists/political economists who focus on specific actors in national policy, while sociologists/political ecologists assume that national policy is predetermined by structural power in international markets. The focus on secondary sources in food regime analysis’ method makes it difficult to understand if and how particular discourses were accepted or rejected or how political actors may have perceived their own actions. This is particularly important for my specific research questions which emphasise the role of a subjective understanding of ‘what is food?’ as part of the structural relationships between food, energy and finance at a time where the norms and rules of global food prices were uncertain.

Clapp and Fuchs (2009) highlight that power in the agri-food system is not just structural, but also instrumental and discursive. Each of these factors interlink and determine the path of food-related decisions. While neither are food regimes analysts, this approach to power addresses what McMichael (2013) terms the challenge of the abstract globalism of the food regime, versus the abstract localism of many postmodernist agri-food studies. Clapp and Fuchs’ (2009) approach to power in the global agri-food system reminds us that the paths that food-as-fuel and food-as-finance take in evolving state policies into the

45 regulation of global markets are highly specific to the places and times that they are discussed.

I therefore propose to structure my methodology around Clapp and Fuchs (2009) approach to power as discursive, instrumental and structural. I will supplement document research with some additional data collection, applying specific research techniques to analyse this data. I will take an exploratory, relational approach. That is, the truth that I hope to uncover is not a fully detailed chronological account of each of these processes — the scale and scope is too broad. My intention, rather, is to better understand the interaction, the parallels and dissimilarities between three key factors: 1. Food-as-fuel and food-as-finance as presenting the same challenge of raising questions of how we understand what food is in the world food economy; 2. The concept of crisis, situating these debates within a period of crisis in that the rules and norms of the food regime were exposed; and 3. The inter-actions between discursive, instrumental and structural power — specifically what insights into discursive or instrumental processes may be able to offer us about structural change in this particular crisis period. The following chapter examines this methodological approach in detail.

Figure 4: A relational approach to global agri-food governance

Source: Shona Hawkes 2018

46 Chapter 3: Methodology

3.1 Introduction

This chapter outlines the methodological approach used to answer the two research questions, situated within the context of broader scholarship on global agri-food governance explored in chapter two.

The two questions are:

1) To what extent, if any, did the food price shocks feature in contemporary policy debates — including how these selected policies were understood or constructed discursively, politically and structurally?

2) How does approaching the rise of agrofuels and expanse of finance as parallel processes that shift sites of food governance add to our understanding of crisis in the food regime?

This chapter begins by conceptually situating the research within a relational ontology and acknowledging the researcher’s situated perspective. This lays the groundwork to understand specific research choices, including an adaptive theory approach to the relationship between theory and research. Next, I introduce the case study approach and outline the methods of data collection and analysis. Finally, I reflect on the limitations of the research, helping to contextualise findings that are then presented in chapters four, five and six.

3.2 Conceptual framework

My own conceptual framework is founded on a relational ontology. In this view, relationships rather than objects anchor reality. As described by Wilson (2008), a relational ontology that links ‘society’ and ‘nature’ sees meaningful reality created through a matrix of ecological relationships, or flows, of which humans are part. This may be ordered through structures that situate human relationships within broader socio-ecologies (Murove 2009) or through specific descriptions of the ecological matrix or particular non-human actors in complex systems. Wilson (2008) describes an embodied eco-constructivism — where knowledge is situated and the researcher co-creates meaning through specific

47 relationships with land and community. In a relational ontology, knowledge is held within and through the land, navigated collectively and non-adversarily and truth is found in bringing different stories together collectively through constant cycles of reiteration (Graham 1999; Black 2011).

The challenge of distantisation is that we cannot experience each site within the global agri-food system (Clapp 2012, 2014). Without a proximate understanding of the interlinkages between companies, industries, markets or resistance movements, it can be difficult to interpret the local context of change processes. Elite decision-makers are also not likely to collectively participate in interrogating and communicating knowledge. This speaks to what McMichael (2013) describes as the challenge of abstract localism versus abstract globalism. The study of interconnected systems therefore involves a cycling between embodied, context-rich site- and time-specific knowledges and general concepts or perspectives that are constantly tested, rejected or refined. As someone deep within the colonidad, I feel a responsibility to understand and interrogate stories produced in (neo)colonial culture — that is, to try to interpret and translate them, and in the case of my particular research questions, to understand how market culture reproduces itself. A limitation of this research is that, in doing so, I principally draw on voices and literatures produced in dominant, Anglophone scholarship on agri-food systems. The claims of this research are limited to my own situated perspective, informed from a limited engagement with the processes I study at one specific site in the food regime: US federal public policy- making.

3.3 Situated perspective

A relational ontological approach holds that all information and views are positioned and research is informed by our embodied experiences. It is therefore relevant to be explicit about my own situated perspective.15 I was born and raised on Wurundjeri land, known by the colonial name greater Melbourne (Naarm). I now live on Turrbal and Jagera lands, in the subtropical city Brisbane (Meanjin). I am a 37-year old cisgender Australian woman of Scottish and English heritage, embedded in an invader-settler culture. I have no direct experience of hunger, trading on commodity markets or farming. I work as a human rights researcher and NGO advocate on food, forest and land rights, often collaborating with marginalised rural communities. During this project, I took a leave of absence to lead

15 See also Weis 2007. 48 Oxfam Australia’s campaign to stop Australia’s largest banks from financing land-related human rights abuses.

This thesis emerged from wanting to better understand what I saw as new ways of socially ordering decisions about land and food. I became curious about the role that rising food prices played in shifting land demand, which led me to look into changing market rules and norms and put me on the path to this research. At a personal level, I see this contestation over land as the extension and reiteration of colonialism and I live in a society where colonialism is a very real determinant of day-to-day life. In Australia, our culture is shaped so that even the best of us are overwhelmingly unable to recognise the systemic, ongoing processes of land seizures, assimilation and coerced labour inflicted on First Nations peoples across the continent. The ways of being and seeing that underpin these dynamics of unresolved frontier wars in turn perpetuate other injustices, particularly against marginalised peoples. The constructed power relations we call ‘the market’ is also part of these processes (Graham 1999).

3.4 Qualitative methods

A qualitative approach allowed me to glean rich and complex description, and to investigate personal perspectives, institutional positions and structural elements related to food and hunger concerns in these two public policy processes. Pre-existing experience is viewed as a strength — with researchers bringing unique skills and insights (Layder 1998). Notions of ‘validity’ are inherent in the acknowledgement of constraints, limitations, situated knowledge, possible biases and omissions in the research context. This suggests there is a complex social world which research cannot fully capture. Complete and absolute replicability is therefore not seen as possible as social interactions and personal perspectives change across time, context and specific interactions (Layder 1998; Alvesson 2011). Attempts at generalisability may simplify complex phenomena, providing inaccurate representations and omitting rich, relevant information specific to a particular context (Flyvbjerg 2001). Specific tools are used to increase reliability, allowing researchers to interrogate a text thoroughly and to question their own beliefs, biases or interpretations (see 3.6 Data Analysis for further discussion). In my research this involved systematising data collection/analysis, cross-checking findings across sources and receiving feedback from peers. Daily journaling and writing thematic/analytic memos tracked my thoughts across time, documenting how my interpretations changed, transformed or swayed.

49 3.5 Adaptive theory

My research approach loosely applies Derek Layder’s (1998) methodological strategy of adaptive theory. This emerged as Layder’s response to a perceived disconnect between research and theory, and the reality of the research process in sociological practice. Layder (1998) contends that research often involves a cycling between theory and empirical findings, with each cycle involving new explorations and if necessary, shifting theories. Adaptive theory ‘both shapes, and is shaped by the empirical data that emerges from research. It allows the dual influence of extant theory (theoretical models) as well as those that unfold from (and are enfolded in) the research’ (Layder 1998:134). As such, it can systematically connect different processes of knowledge-making. This includes allowing movement between research and theory, inductive/abductive/deductive reasoning, and structure and agency as the research process evolves. This is relevant to my specific research questions, particularly the application of Clapp and Fuch’s (2009) framework for understanding power in the global agri-food system as discursive, instrumental and structural. For example, the adaptive theory approach facilitated inductive, exploratory research while giving me an explanatory framework to understand structures and systems that cannot be directly perceived in their entirety. As the empiric research and explanatory models (theory) evolved in tandem I was directed towards additional theories and extended my data sources (see Figure 5).

50 Figure 5: The interplay between theory and method in adaptive theory

Source: Shona Hawkes 2018

51 3.6 Selection of case studies

Flyvbjerg (2001) notes that the case study approach is well suited to exploratory research as it can provide rich description. This project uses a qualitative multiple case study approach, applying two holistic case studies (Yin 2003). The research uses an intrinsic case study approach, with cases selected based on their unique merits, not because they represent a broader cohort (Sarantakos 2005). Findings are therefore not generalisable, they are also informed by the specific time and place in which they were conceived and documented. Case study selection comprised ‘maximum variation’ case studies (Yin 2003). That is, while the case studies involve contextual similarities (place, time, site of decision-making, overlap of agricultural/food interests), they incorporate clear differences (energy/finance, actors, interests, themes).

3.7 Data collection

I took a threefold approach to data collection: a media analysis, interviews and document research. By using different data collection methods, I hoped to capture different facets of the debate, explored at different times and from different situated positions. This included (1) conducting a media analysis as an initial scoping of the field. This identified who was active in the legislative debates, key dates and patterns of meaning and action which related to ‘knowledge of’ or ‘uncertainty of’ the links between food and the developing policies. This informed (2) the interview questions and directed me to key documents. The interviews had two key objectives: 1. To gain insights into unanswered questions or dimensions of the research questions unclear from the written record; and 2. To elicit interviewees’ own presentations of events, who was involved and if and how ‘knowledge of’ or ‘uncertainty of’ food crisis implications featured in the debate. (3) Throughout the data collection and data analysis process I engaged with a broad array of theoretical and grey literature, helping me to conceptually frame and understand findings.

Systematic analysis of media articles The objective of the media analysis was to: 1. Identify and examine claims surrounding the food price shocks present in each debate, and to 2. Identify key political actors putting forward, or refuting, these claims. US media articles were collated in the Factiva database from 1 January 2006 until the date that each bill became law. The date 1 January 2006 was chosen as a starting point because it represented a point in time by which food prices

52 in international agricultural markets had begun to rise significantly. I then used specific interview questions and document analysis to cross-check media findings. I selected articles based on criterion sampling — that is a specific word reference (Krippendorf 2012). For case study one this was: ‘food’ and ‘Renewable Fuel Standard’ or ‘RFS’. Of the US articles, 55 were related to the research topic. For case study two it was ‘position limits’ and ‘food’, of which 26 articles were relevant. While the relevance-based sampling included the word ‘food’ in the terms, this sought to identify if food crisis featured in the claims-making process and how it may compete with other claims — it did not represent the extent that this food discourse featured in the broader debate. Interviews and exploratory document analysis helped to provide this.

10 Semi-structured interviews I also conducted 10 semi-structured interviews in Washington DC, New York and via Skype. The key goal of interviews was to identify how individuals presented the food crisis as relevant, or not, to the public policy process. Interviews also yielded further clarification on events and key players. I conducted six interviews for case study one and four for case study two (see 3.10 Limitations of the research). Initially interviews were to target members of Congress and staffers. However, the high turnover of staff and change of Congress since the initial policy debates made it difficult to track down potential interviewees. Interviews therefore focused on the broader public policy network of individuals/organisations active in shaping the public policy outcomes but who are not members of Congress. Interviewees were typically: 1. Identified by others as an important actor, 2. Representatives of an organisation that directly engaged with Congress through giving testimony, writing submissions or direct lobbying, and 3. Involved in activities to shape the broader debate, such as participating in coalitions, talking to the media and developing public information materials. The advantage of this was that many of my interviewees had on average a decade’s experience of working on these or related policy issues. They gave historic and current context for understanding events in the focus period. Both purposive and snowball sampling was used (Sarantakos 2005). Purposive sampling involved approaching individuals/groups identified as key actors from the media review. Interviewees were invited to suggest other groups/individuals with whom I should speak (snowballing). Further to recommendations, this cohort included one interview for each case study conducted with representations of organisations not seen to be highly involved in the 2006–2007/2010 debate but identified as pivotal to the processes in 2013. Not all suggestions were followed up, as some did not relate to the US case studies or

53 would have over-represented a particular organisation or cohort, such as NGOs. A list of participants (using pseudonyms), including some basic biographic data, is provided in Table 5 below.

Table 5: List of interviewees (2013)

Name Brief description. Case study

Sarah In 2012 Sarah joined an international NGO that focuses 1. Renewable on social justice advocacy. She heads their campaign Fuel Standard on the global impacts of US agrofuels policies, based in (RFS) Washington DC.

Neil Neil works with an international faith-based 2. Dodd-Frank organisation focused on issues. From 2005- (DF) 2012 he was in Washington DC, campaigning for financial reform.

Peter Peter owns a US finance-related business and has DF written extensively about food prices in commodity markets.

Lucy Lucy is a lobbyist with an ethanol trade association RFS based in Washington DC. Previously she worked for the corn and electricity industries.

Anna Anna is a policy analyst with an NGO that focuses on RFS agriculture and trade issues.

John John heads the renewable energy policy section of a RFS national environmental NGO based in New York.

Dean Dean is an academic in agricultural economics, based RFS in the Southern US and overseas. He was ‘less directly’ connected to the policy process.

Luke Luke is a lobbyist with a regional alternative energy DF association. He has played a large role in coordinating

54 business groups in the Commodity Markets Oversight Coalition.

Ian Ian is a senior Washington-based lobbyist with a corn- RFS related trade association. Ian emphasised his upbringing on a cattle farm.

George George heads a trade association associated with the DF futures industry but previously worked with government.

Eighteen organisations/individuals declined an interview or did not respond to repeated requests. This is an expected challenge of researching elite networks. The interview sample is small and cannot be seen as encompassing the breadth of views and participants. Farmers groups and the meat industry are some of the groups under- represented. Arguably there is no clear ‘representative’ position. The interviews showed that even groups that share a similar focus or political position can differ in how they perceive the ‘food crisis’ and the policy process. Several interviewees had overlapping interests in both agrofuels and position limits, although there was little overlap in the media articles. I did not explicitly address these overlaps in my interview questions as I felt that addressing both topics together would not allow me to drill into sufficient detail or systematically address all questions. Of course, being able to do both would have yielded other insights. The advantage of a small interview sample is that it enables rich and deep analysis. Interviews played a specific role in offering information and insights that could not be gained through media and other document analysis.

Exploratory document analysis Exploratory document analysis is a relevant technique for exploratory research (Sarantakos 2005). One challenge of exploratory research, including document analysis and snowball interviews, is that they are not systematic and may therefore lead to bias in weighing or tracing specific sources or materials. In this research, exploratory document analysis was used as a tool to triangulate or contextualise emergent research findings. I drew on publicly available congressional documents ie. testimony, submissions, hearings, transcripts and draft laws. Where necessary, extant documents were used where they related to the congressional context. For example, lobby group public statements and government publications. Archival documents and secondary sources on similar periods of

55 US public policy and upward food price shocks presented similarities/differences between the current period and the previous one.

3.8 Data analysis

Thematic analysis In approaching an interview or media text, I would first immerse myself in it, and then explore emergent patterns, ideas or interesting quotes. This comprised a first cycle pre- coding of the text. Next, I would trial provisional codes for use, where new codes could be added, changed or removed (Layder 1998; Saldaña 2013). Lastly, I would apply systematic codes, but still observe or consider new insights. In the media analysis I trialled different coding approaches before deciding on thematic analysis. A separate thematic analysis was also applied to interviews. Thematic analysis was used to identify patterns of meaning and patterns of action in media texts. The theme was used to categorise a set of data into ‘an implicit topic that organizes a group of repeating ideas’ (Auerbach and Silverstein 2003: 38). This topic-based approached allowed themes to incorporate similarities, differences and contradictions. Themes were drawn from phrases, sentences, paragraphs or interconnected ideas across paragraphs. The strength of the thematic approach is that it can take a more holistic understanding of the text and also draws on the coder’s previous experience (Boyatzis 1998). However, thematic analysis has been critiqued as subject to coder-bias (Boyatzis 1998) or confirmation-bias (Saldana, 2013). One strategy to address this is to have another researcher examine a sample text to see the similarities/differences in themes identified (Boyatzis 1998). I did not consider this plausible given the policy esoteric and technical language in the texts. Instead after the identification of key themes a set of categories was developed as a cross-checking and additional data-gathering mechanism — these were used as a basis for reflexive analysis. For example, to confirm the prevalence of cellulosic ethanol as a key theme in the case study one media analysis I applied the category of ‘energy sources’ to all texts, to identify how cellulosic ethanol was explored vis-a-vis other sources.

Interpreting interviews Within an interpretive approach on which I draw, interviews are seen not as a direct communication of truths but a complex social interaction. Undoubtedly, researchers will misinterpret and misunderstand certain events or perceptions described by interviewees (Alvesson 2011). Interviews also take people’s life out of context. Interviewees may also

56 have specific goals for participation in research, implicit pre-conceived expectations or seek to present themselves in a certain way (Alvesson 2011). Analysts themselves can also interpret a text differently over time and when exposed to different ideas (Layder 1998). I draw on Alvesson’s (2011) eight interview metaphors as a tool to consider the claims and meanings presented in interviews (see Appendix 2). I draw heavily on his metaphors to interrogate a text, to look for the use of the interview as political action, moral storytelling and presenting a good impression, identity work, and the ability to ‘craft accounts’ to make an interview compelling. For example, several interviewees emphasised certain self-identities to give weight to their claims, drawing on their role as insiders/outsiders (Ian, John, Sarah, Lucy, Neil) or being from farming/non-farming backgrounds (Ian, Lucy). I did not examine the semiotic or language-construction of discourse.

3.9 Ethics

This research complied with the University of Queensland ethics requirements under ethics approval 2011000995 (see Annex 3). Interviewees were given detailed written information about the research goals, gave their informed consent and had the right to withdraw at any stage. Further to Ostrander’s (1995) recommendations for how best to engage elite policy actors in research all interviews were confidential and anonymous. While anonymity can allow people to speak more freely, it can also decrease accountability for what they say. See the previous section, Interpreting Interviews, for strategies to address this. Pseudonyms are used and a short biography situates how interviewees are positioned in the policy discussion (see Table 5).

3.10 Limitations of the research

Research specific limitations There were many specific challenges in conducting this research. My four-month fieldwork in Washington DC and New York was interrupted twice. Two months in I needed to return to Canberra as my mother-in-law was diagnosed with terminal cancer. Due to this, as well as the time needed to secure funds to return, I could not resume until mid-August 2013. This interrupted my planned activities for following up interviews and library-based research. In September 2013 the US federal government shutdown for sixteen days as the federal budget was co-opted into a congressional battle over the Obamacare public health 57 reforms. All public buildings, including libraries, were closed. In the weeks leading into the shutdown, during it and after it was difficult to secure interviews. People who I’d been in discussions with could no longer be contacted. This has contributed to a small interview sample, discussed further in 3.7 Data Collection. One advantage of the shutdown was that it led interviewees to be more reflective of how government works and the dynamics of decision-making. Another parameter for the research is that it explores past events from a specific point in time (2012–2013) and the thesis was finalised much later after a period of academic leave (2018). This presents the challenge that the research was designed in 2012 without the benefit of more recent literature. However, it also holds the strength of capturing the concerns, views and uncertainty from within the food price shock period — without the foreknowledge of how these events would turn out.

It is also the nature of this research that there will be terrains of uncertainty. As several of the interviewees emphasised, policy processes are complex and nuanced (Lucy, Anna, John, George). It is, for example, difficult to elicit the exact personal relationships between actors, to understand the full depth of nuanced organisational positions or to access all relevant documents, which may not be publicly available. Where relevant in the thesis I discuss these uncertainties. As highlighted earlier, the objective of this research is not to be a complete representation of events but to be sufficiently robust as to reveal certain insights into the workings of the food regime.

The coloniality of academic research and theory There are also broader constraints to acknowledge. As outlined in chapter two, food regime analysis can be understood to incorporate the practices and philosophies stemming from colonialism. A limitation of my research is that it is shaped and informed by an Australian education system that also internalises many of these practices. In her review of Australian sociology Connell (2007) outlines how the choice of methods, sites of data collection and theory-making processes reinforce hegemonic power, social othering and colonial control. She highlights that research is bound by social science theory-making practices that typically present Europe and America as the only places capable of originating social theory and it is often highly gendered.16 Smith (2012: 169) similarly notes ‘the possibility that [research] approaches can be generated from very different value systems and world views are denied even within the emancipatory paradigm of ‘post-

16 Connell asks: Where is Ghandi? Where is Fanon? 58 positivism’.17 However, the highly fragmented and distantised nature of the world food economy makes it difficult to apply decolonised methodologies that are built on ongoing relationships with people and place, and ultimately I was unable to do so. I decided to pursue my research topic in order to make visible the workings of important sites of decision-making which are often difficult to decipher or not transparent. While this research seeks to understand the food regime it uses specific tools to do so, tools which are historically embedded and which may misrepresent, omit and undermine vast tracks of human experience. This involves inherent limitations and biases.

An additional area that I struggled with was how to connect this research with decolonised theory. I ultimately was unable to do so within the constraints of a Masters project finding, as Connell (2007) does, that the global market has not been a subject of great scholarly interest in the Global South. However, I seek to contribute to the discussion by actively noting this challenge. As discussed in chapters six and seven, this research led me to certain observations about the interrelationship between ontology and the structural workings of the food regime at a global level through market rule-making. As I end this research process, I can now see how this provides a bridge that would enable future work that acknowledges the theoretical contributions of Southern theorists.

The following chapters report the findings of this research approach in response to the two research questions. Chapter four focuses on the extent that the food price shocks were explored in the policy debate — thereby examining discursive power. Chapter five explores some of the key political coalitions — dynamics of instrumental power. Chapter six then interrogates these areas further and asks if, and how, this offers new insights into structural dynamics of crisis in the food regime. This also addresses the second research question, asking how examining the rise of agrofuels and the expanse of finance as parallel processes that ascribe food new meanings, can provide further insights into the regime itself.

17 Smith’s (2012) own academic work references diverse theoretical approaches: Fanon and Habermas, social movements and Kaupapa Maori philosophy. See also Black (2011) and Wilson (2008). 59 Chapter 4: What we talk about when we talk about food: Claims and counterclaims

4.1 Introduction

This chapter draws on a media analysis to explore the extent to which food prices were raised in each public policy debate, and if so, what the key claims were and who made them. This is in order to identify: 1. If concerns surrounding food price shocks reached these debates; 2. How specific claims, or discourses, may have shaped the debate; and 3. The extent to which the respective policy instruments that were presented as responding to food concerns did.

Each case study is examined in turn, starting with case study one.

4.2 Case study one: The corn-starch ethanol cap

4.2.1 Overview The media sampled shows that there was a live debate leading into the 2007 Renewable Fuel Standard (RFS2) surrounding agricultural prices. However, it was US-based industry interests, not those advocating on hunger or poverty concerns, who presented these claims. Two important counterclaims emerged that countered concerns about the impact of rising ethanol production on the price of food and feed. These claims were: 1. Corn- starch ethanol will only negatively impact prices if it exceeds the ‘safe level’ of ethanol production; and 2. The problems surrounding the use of corn are only temporary because there will soon be a new generation of agrofuels made from cellulosic feedstocks such as switchgrass or agricultural waste.

4.2.2 Concerns about the Renewable Fuel Standard and rising food prices The media analysis revealed claims and counterclaims that debated the real or potential impacts of the rapid corn-ethanol expansion on access to food. However, the international dynamics of food price shocks were virtually absent in the media sample. The escalating concern outside the US about rising food prices was barely visible, even as food protests took place in neighbouring Mexico in January 2007. The claims about food-related concerns in the media sampled do not come from people experiencing hunger or impacts on their access to food. Similarly, anti-hunger NGOs or anti-poverty groups do not appear.

60 More broadly, the media sample showed little engagement in the debate by Congress people from geographic areas with high numbers of people accessing food stamps support programs — with the exception of Senator Chambliss from Georgia (see Figure 6).

Figure 6: Percentage of local county accessing food stamps in 2007, alongside representation of Congress members in the media by state.

Northeast Midwest VT NH S. DAKOTA MICHIGAN NEW YORK CONN. NEVADA IOWA

ILLINOIS

CALIFORNIA VIRGINIA

West Coast ARIZONA NEW MEXICO GEORGIA TEXAS

Gulf States Southeast

Source: Wilde 2012 (left), Shona Hawkes 2018 (right)

One possible explanation for this is that these claims and claims-makers were active but not picked up in the media analysis search terms. Certainly, there were vocal calls against agrofuels at the time. I therefore cross-checked my findings, I also raised this issue with interviewees and checked congressional records on RFS2.

Within the media there were references to increasing US food prices — both in trading markets such as the Chicago Board of Trade and domestic markets. While the most noticeable food rises in the US occurred in 2008, there were sharp price increases in certain foods during 2007. The USDA Consumer Price Index (2018a) records show that in 2007 the price of dairy increased 7.4% and egg prices rose 29%. The increase in prices paid to producers — an early indicator of upcoming retail price increases — in 2007 was stark: the price of milk rose 48.2%, eggs 61.2% and 42.5% (USDA 2018b). There was only a sole media reference to a consumer raising concerns about food prices, the day before RFS2 was signed into law: ‘in suburban Chicago, Meredith Estes said food prices have jumped so much she has resorted to coupons… the price of some foods is rising sharply, and from the corridors of Washington to the aisles of neighbourhood supermarkets, a blame alert is under way. Among the favourite targets is ethanol…’ (The New York Times, 18 December 2007).

61

The media sample revealed three main groups making claims of how increased ethanol mandates under the RFS could negatively impact food costs. These claims-makers were: 1. Oil and gas lobbyists; 2. Livestock farmers; and 3. Food manufacturers and processors. While the specific claims or framing of food concerns had different dynamics, they generally shared a similar script. This script was that increasing fuel mandates under the RFS would require more corn for ethanol. This would impact the corn supply and raise food prices. This aligned with a general trend in the media articles where the RFS was considered synonymous with the rapid growth of the ethanol industry in the early 2000s. By 2007 many articles used terms like ‘hype’, ‘frantic’ ‘frenetic’ and ‘bonanza’ to describe the rapid growth of the ethanol industry.

The way that claims were presented differed, dependent on the claims-maker groups. In the media, oil and gas lobbyists quoted general or vague concerns about food prices. This suggests they merely used these claims to stem opposition against expanding ethanol production. The livestock industry, including companies like Tyson Foods, raised concerns that rising corn demand for ethanol would increase the cost of animal feed. This often presented grain and livestock interests as mutually opposed. For example, Dow Jones wrote: ‘But the corn farmer’s win is the hog farmer’s loss’ (18 September 2007). Similarly, Business North Carolina included the quote: ‘Livestock farmers have been in the driver’s seat forever, now it’s time for the grain guys to make a living’ (1 November 2007). Claims regarding the livestock industry tended to focus on the impacts on farmers rather than higher meat prices for consumers, although there was reference to higher egg and milk prices. A Charleston Gazette (15 June 2007) article quoted a dairy economist on rising milk prices in the Midwest and Florida: ‘“We have a new competitor”, Brooks told more than 100 people at a conference of producers and processors in Chicago. He said dairy farmers are paying higher prices to feed their cows as a result of ethanol production that depends on corn and other rough grains.’ The Grocery Manufacturers Association and food industry retailers focused largely on food prices. The St Louis Post (19 December 2007) also reported as the bill passed: ‘Scott Faber of the Grocery Manufacturers Association said the renewable fuel standard “Won’t give us cheaper gas, but it will give us costlier meat, milk and eggs”’.

The next two sections explore counterclaims on food prices, generally put forward by the renewable fuel industry and, to a lesser extent, the grain industry.

62 4.2.3 Claims that corn-starch ethanol will only negatively impact prices if it exceeds the ‘safe level’ of production The media sample reflected the public debate in 2006 and 2007 around setting targets that would require 10% ethanol-fuel blends called E10. This figure aligned roughly with what was then perceived as the maximum level of ethanol that normal car engines would accept before damage may occur — a level termed the ‘blend wall’. Based on 2005 figures, the country would need to produce about 15 billion gallons of ethanol to meet this need. This would require 15 million bushels of corn. Generally, there were two explanations given as to how this increased production would be met: 1. Farmers would respond to the new market signal and increase corn production; and 2. Farmers would bring new land into production, opting out of government programs aimed at reducing corn oversupply by paying farmers not to farm all their land.

In the media sample no concrete analysis emerged that significantly challenged the origin or authority of the 15 billion gallon figure. Claims-makers presenting the idea of such a safeguard appealed to specific authoritative sources of knowledge in their claims. These focused on highlighting that such increased production was possible. For example, the Financial Times (24 January 2007) referenced that the 15 billion gallon figure was ‘at the top of current industry estimates’ at ‘three times the current output’ of corn production. The Dow Jones (25 January 2007) quoted a US commodity trader that ‘“It’s hard to go past 15 billion gallons without jeopardizing your food security”’. The head of the Renewable Fuels Association, Bob Dinneen, also referred to the reliability of these figures from ‘the corn growers’ and the US Department of Agriculture — although noting he had not examined the research himself (Energy Washington Week, 10 January 2007). There were some claims that suggested it should be lower. On 16 October 2007 The Hill wrote: ‘The Senate bill requires that 15 billion gallons of the total renewable production target come from corn- based ethanol. But some lobbyists believe a final bill may cap corn-based ethanol at most at 12 billion gallons, given fuel-versus-food concerns’. The only references I saw for a 12 billion gallon figure was that it was the country’s estimated ethanol processing capacity — suggesting that the unnamed lobbyists were likely from industries trying to stop further development of corn-starch ethanol using food concerns to augment their agenda.

Claims regarding the 15 billion gallon cap were not significantly interrogated in the media. The cap was presented as managing issues of increased corn production to meet ethanol demand. This did not address the possibility that existing corn stocks would be diverted

63 from food or feed to ethanol. While this was essentially the argument that the livestock industry and food manufacturers were making when they discussed rising prices — they did not challenge the 15 billion gallon figure. Concern that agrofuel demand would reroute crops from other areas was central to escalating concerns about food prices in the Global South — but barely reported in the US media. One exception was an article by Chemical and Industry (12 February 2007) which wrote ‘knock-on effects of the US’s increasing demand for corn are already being felt in neighbouring Mexico. Corn tortillas, a for many of Mexico’s poor, now cost four times as much as several months ago’. The media was silent on the US’ sharp withdrawal of food aid overseas. Critically, but perhaps unsurprisingly, this shows that while the US remained a key site for global food governance, its agriculture debate was firmly embedded in local, not international, politics. There were a couple of references to a ‘waiver’ to ease prices if they escalated too quickly.

4.2.4 Promises that technology will alleviate food and feed price concerns Little concern was raised about food prices in 2006. However, concerns mounted when specific renewable fuel targets of 35 or 36 billion gallons were floated by President Bush in his 23 January 2007 State of the Union speech and then introduced by the Senate in June 2007, as well as in December 2007 before the bill passed. This included media articles, and specific claims-makers linking the increase in ethanol supply to raised corn or soy prices. In early to mid-2007, media articles began to focus more on the problems of rapid agrofuels expansion. This correlated with a shift in emphasis from an energy security discourse that focused on national or international factors — such as conflict — to the role of agrofuels in rural economies (see also Lehrer 2010). Some articles argued that the economic benefits of corn-starch ethanol under the 2005 RFS were limited outside the US Corn Belt (also described as the Midwest in articles). At this time, 90% of ethanol came from corn and 90-95% of that corn was produced in the Corn Belt (Elliott 2017). Meanwhile, consumers on the West Coast paid a much higher price for ethanol as it had to be transported in from the Midwest. It was in 2007 that the first use of terms like ‘food versus fuel’ emerged in the sample.

Claims-makers with interests in promoting ethanol — such as ethanol industry groups — responded with a technology discourse. This comprised several strands. This included stating that: 1. Impacts on food and feed could be an issue if the corn-starch ethanol industry expands too much; 2. In the near future there will be a shift in feedstock for ethanol in the US, from corn-starch to cellulose. This new generation of ethanol will not

64 compete with food prices as it could be made from non-food resources — including grass or food waste; and 3. That while not currently in place at industrial scale, cellulosic ethanol would soon come online. Often implicit in these claims was another point: 4. That the rise of the ethanol industry was attributed to new technologies, with cellulosic ethanol merely being the latest in a line of technological developments. At times, an additional point was made about the local benefits of these technologies, that: 5. There was an abundance of local feedstock for cellulosic ethanol — from woodchips to food waste — which could mean local economic benefits to rural areas so far excluded from the ethanol boom.

There was a subtle variation in how this discourse was presented. Early in 2007 in particular, there was emphasis on cellulosic ethanol as a possible fuel that could come online in the mid- to long-term future. However often more definitive claims were made, where food-based fuel was positioned as a stepping stone, a ‘transition step’ into an inevitable cellulosic ethanol future. In his January 2006 State of the Union address President Bush had stated that his government would ‘fund additional research in cutting- edge methods of producing ethanol, not just from corn but from wood chips and stalks or switch grass. Our goal is to make this new kind of ethanol practical and competitive within six years’ (Bush 2006). However, the cellulosic ethanol frame only became prominent in the media in his following year State of the Union after Bush again mentioned cellulosic ethanol, alongside announcing a renewable fuel target of 35 billion gallons (Bush 2007). These claims that cellulosic ethanol would respond to food and feed concerns were explicit. For example, a marketing manager for a cooperative provided the quote: ‘“Some experts are concerned about the ethanol industry competing with the food and feed industries for corn. Cellulosic ethanol offers an answer to these concerns”’ (Apply, 1 January 2007).

These cellulosic ethanol claims were rarely countered beyond repeating the impact of corn-starch ethanol on prices.18 In 2007, cellulosic ethanol could be produced at small scale but it was not economically viable at an industrial scale. In 2018 there is still little commercial cellulosic ethanol production. This points to the overstated claims of the promise of cellulosic ethanol, claims reinforced by framing corn-starch ethanol as part of a suite of new technologies. While the ethanol industry certainly involved new technological

18 Implicit in the final RFS2 is the expectation that corn-starch ethanol will be the key fuel source in the early years of RFS2 but would then be replaced by cellulosic ethanol. The corn-starch ethanol cap would prevent the stymying of markets for other fuel sources, such as cellulosic ethanol.

65 developments, its core product was not new. One rare article that challenged the notion of ethanol as a new technology came from North Carolina (Business North Carolina, 11 November 2007). The article read: ‘Ethanol, it’s called, though many Tar Heels know essentially the same grain alcohol otherwise. “A lot of guys up here and over in Wilkes County have made it [ethanol] for years,” Michael Miller, the agricultural agent in Iredell County says with a laugh…“Wilkes was once the moonshine capital of the state.”’

4.2.5 Conclusion (case study one) This section has shown that agriculture price concerns were a live debate within the policy discussions leading into RFS2, although largely raised by industry groups. It presented two examples of counterclaims that may have helped to alleviate concerns that increased ethanol production would impact food prices. While the US ethanol targets would be perceived (and debated) as impacting global markets, this section has highlighted that it was contested as a domestic issue. While the word-search terms and media sample have captured only a small portion of the debate, this section gives a sense of the role of discursive power in the construction of policy outcomes. The following section examines a position limits case study.

4.3 Case study two: Position limits

4.3.1 Overview As presented in the media, position limits were clearly defined as a response to higher, more volatile commodity prices, including for food. Calls for position limits often followed a consistent narrative as to why, and how, the large influx of capital into agricultural futures markets — via Commodity Index Funds (CIFs) and other trades — impacted food prices. The debate then largely split into two camps, those in favour of position limits and those opposed. Those in favour tended to be more closely allied with farmers or consumers, whereas those opposed were typically part of the financial chain involved in products such as CIFs. This included pension funds, banks or commodity exchanges. Central to the debate were contestations over the relationship between virtual food — as it was traded through derivative products — and physical food.

This section begins by briefly referencing how food was positioned in the debate. It then points to a dominant, and consistent, narrative that occurred in calling for stronger position limits. Next, it references the nature of counterclaims to this central narrative — pointing to

66 the relationship between virtual food and physical food which became a key point of contention in mid-2009. Lastly, I reference how the media captured the sense of a ‘change moment’ within Wall St, amid efforts to increase regulation.

4.3.2 Referencing the global food price shocks There were references to the global dimensions of higher, more volatile food prices. This included references to food riots (Reuters, 15 November 2008, 26 August 2009) and a ‘worldwide food emergency’ (Citywire, 12 July 2010) — but with few specifics. While the use of terms ‘high food prices’ or ‘volatility’ did not exclude an interpretation of how this may apply globally, there was little social context of how this translated into embodied, lived impacts. Volatile food prices were also approached as an economic problem — shutting US farmers or grain elevators out of futures markets.

The media examined did not report the voices of those impacted by higher prices. This likely reflects the nature of the business media that was tracking the highly technical position limits debate — as well as how it was contested through fact-based claims rather than other forms of appeal. After finding a quite narrow range of media outlets reporting on the position limits issue, I cross-checked my search terms ‘position limits’ and ‘food’ with alternatives such as ‘position limits’ (without food) and ‘agricultural’ or ‘Dodd Frank’, and a google search. However, these yielded similar results in terms of US media outlets.

Much of the debate was contested among financial actors — but there was also reference to NGO the Institute for Agriculture and Trade Policy (IATP) report on food speculation, as well as agricultural interest groups such as the National Farmers Union, the National Grain and Feed Association and the American Bakers Association. The debate took place in a context and vocabulary unfamiliar to a mainstream audience and the media largely reported on the activities of Congress and the CFTC, including hearings, reports and regulatory discussions (see also Clapp 2014). While in the years leading into the food price shocks there had been concerted efforts to improve public understanding of technical rule-making surrounding food rights and markets, this had principally focused on trade agreements and public debt, particularly US influence over the World Bank. Efforts to promote public awareness — such as through the ‘Stop gambling on hunger’ (n.d.) coalition website — did not appear in the media sample.

67 4.3.3 The position limits narrative A consistent narrative was presented as to the cause of higher, more volatile food prices and the need for position limits. Within the media examined, this narrative focused on commodity markets generally or oil prices, with only a brief reference to food prices. Versions of this narrative, in part or full, can be seen, for example, presented by hedge fund manager Michael Masters (Reuters, 23 May 2008; see also Masters 2008a, 2008b, 2009), commodity trader Steven Briese (Barrons, 31 March 2008), Senators Joseph Liberman, Susan Collins and Maria Cantwell (Financial Times, 25 July 2008) and IATP (Reuters, 15 November 2008).19

Below is an example of how this narrative may run, with individual claims in the narrative numbered. This draws on the explanation of derivatives markets provided in chapter two:

1) Speculators have long played an important role in agricultural futures markets, helping with ‘price discovery’. 2) However, markets have now fundamentally changed. 3) A key contributor are products like Commodity Index Funds (CIFs). 4) CIFs don’t act in the market like other speculators. As their price is linked to a bundle of goods, they do not buy on the basis of the price of a single crop — only how it is relative to other goods in the bundle. 5) CIFs are attractive to investors as a way to diversify risk and as a hedge against inflation. For example, commodity prices tend to go up when other parts of the market go down. Whereas traditional speculation aims to buy low and sell high in the short-term CIFs ‘buy and hold’. They simply buy futures contracts, rolling them over as they expire. This is not how futures markets were intended to work. (The role of banks in CIFs and the banks using futures markets as a hedge to offset risk may or may not be explained) 6) While a pension fund (or other fund) may invest only a small percentage of their money in commodity markets via a CIF — for example 1% — the small size of agricultural commodity markets means that this money can have a big impact on the market. (This claim is not always included in the narrative). 7) All this is able to occur because of changes to the rules of the market. 8) Following the Great Depression, the 1936 Grain Exchange Act put in place rules to make sure that it was traders — such as farmers, who drove the prices in commodity markets, not speculators. (Here position limits are then explained). 9) However, these rules have been wound back. (Here various historic points can be mentioned, often the 1991

19 See also Greenberger 2009. 68 ‘no action’ letter CFTC provided to Goldman Sachs is a key point). 10) Today, because there are no longer limits, it is speculators who dominate the market. It is speculators who are setting the price, not agricultural producers or agricultural companies that grow or use food. As financial markets become more and more uncertain, commodities markets are also becoming more attractive to speculators. 11) All this means that today the price of food is no longer set by the supply and demand fundamentals of agriculture. It is being set by speculators betting on ever- rising prices and using commodity markets to offset risk or escape volatility in other parts of the market. This is pushing up food prices and making them more volatile. 12) (An additional point about how this is impacting farmers or grain elevators may be raised.) 13) Position limits need to be reinstated and strengthened to ensure that markets work properly.

Together the narrative is shaped so as not to appear anti-market. It discerns between positive speculation ‘traditional speculators’ and the role of others — such as CIFs, often discussing no action letters as ‘loopholes’.20 As with almost all of the RFS2 and position limits debates examined in this research, the voices of the Global South are wholly absent. Those telling the position limits narrative are not those impacted — say farmers or NGO workers or activists — but financial insiders themselves such as Masters or Briese. What is happening today is framed as the exception to the positive workings of markets. There are strong historic references, which also comes through in how the media reported the position limits issue. The narrative focuses on specific actors — such as particular banks, the CFTC, institutional investors as a general group and sometimes US farmers. It does not emphasise other actors either positively or negatively impacted in this process — such as commodity exchanges, other derivatives traders or food manufacturers, nor the interests of politicians in passing the CFMA. This suggests it was carefully crafted, emphasising particular actors and stories.

The following sections examines counterclaims to this narrative.

4.3.4 Counterclaims In the debate, a series of counterclaims were put forward which challenge the position limits narrative by holding that: 1. It was not derivatives markets but fundamentals in the

20 The term ‘Enron loophole’ was coined on position limits long before agriculture appeared in these discussions. 69 supply and demand of food production and consumption that was impacting prices; or 2. The position limits narrative relied on incorrect or unreliable information on the role of CIFs, Exchange Trade Funds other speculation in markets; or 3. Stronger position limits would either be ineffective or even detrimental.

‘Price rises and volatility stem from agricultural supply and demand’ There were various claims that it was the physical supply and demand fundamentals driving commodity prices. This included references to growing demand from China and India, the lower dollar, new ethanol demand and climate change. In 2008 the CFTC referred to its own research that it was supply and demand fundamentals driving food prices (ie. Dow Jones, 5 February 2009). The CFTC statements also pointed out that there was no evidence of market ‘manipulation’. That the CFTC saw its mandate as limited to policing the deliberate manipulation of the market but not excessive speculation was a point of contention for those advocating for position limits.

Proponents of position limits also pre-empted supply and demand arguments to some extent. Steve Briese noted that ‘some analysts still insist that, despite the huge volume of speculative bets, prices are merely reflecting supply-demand fundamentals’. He added ‘But even if the bulls are right, they should have nothing to fear. To avoid all possible dislocations, let position limits imposed on the indexers be phased in…Then, if the fundamentals really do justify these lofty price levels, the absence of speculative liquidity will hardly make a difference’ (Barrons, 31 March 2008). Senators Joseph Lieberman, Susan Collins and Maria Cantwell, in an article they penned discussing their proposed Commodity Speculation Reform Act wrote ‘is excessive speculation the cause of rising oil and gas prices? Of course not!’ however, they noted ‘unlike weather or foreign demand, this is a factor we can control’ (Financial Times, 25 July 2008).

‘Misunderstanding how markets work’ An additional theme was to counter the position limits narrative by stating that it was based on incorrect or unreliable information on the role of Commodity Index Funds (CIFs) or Exchange Traded Funds and other forms of financial speculation. Here knowledge claims appealed to the authority of statistics or the authority of high-status actors. Barclay Capital responded to Michael Masters’ May 2008 testimony to the Senate Committee on Homeland Security and Governmental Affairs by countering his market estimates — suggesting that ‘money in commodity futures and related instruments stood at $225 billion

70 by the end of the first quarter of this year and only about half of that belonged to institutional investors’ (Reuters, 28 May 2008). It also referred generally to ‘wildly incorrect numbers’, noting that investor money is ‘very modest indeed’. In recent years, it is generally recognised that 2008 saw an influx of money managers into the market — that is active speculators rather than the passive ‘buy and hold’ strategies of pension funds (Ghosh 2010; Martin and Clapp 2015). If CIFs have a pre-determined amount of money to spend, if prices were going up the fund would start selling contracts not buying them. However, the CIFs remained central to the position limits narrative. Dow Jones described Masters as a ‘highly controversial figure’ and pointed out that CFTC economists had put out several reports that countered Masters ‘claims’ (5 February 2009). Reuters (4 June 2008) however challenged the CFTC — noting that ‘CFTC's own data belied the influence of speculative players like hedge funds… [with] 67 percent of all the long positions in Chicago Board of Trade corn futures and options are held by large speculators and index funds, according to the CFTC's weekly report’. Various reports and studies in favour, or against, position limits received attention.

One research report had a definitive role in subduing counterclaims on the role of speculation in the market. In July 2009 the Senate Permanent Subcommittee for Investigations released a report on speculation in the red winter wheat market (US Senate 2009). This elevated the profile of one specific issue — what’s called ‘contango’. Previously, the issue of speculation had been couched in the media firstly in terms of a market with high, volatile prices (ie. Barrons, 31 March 2008), then by a major price downturn (ie. Reuters, 24 September 2008). This situated the issue of speculation within a broader market. However, the Senate report spoke to the fundamental workings of the futures market itself. Central to agricultural futures markets is that as a contract approaches its end-date, the price of a futures contract should align with the price of the physical good in the commodities markets. This is what traders call ‘convergence’. The opposite being ‘contango’. As the date for a contract to be paid out or delivered approaches — and therefore the time in which market change can happen shortens — sellers will not sell substantially lower than the commodity market price and buyers will not buy for substantially higher. The report showed that for almost two years red winter wheat prices in futures markets had ended sharply higher than those in commodity markets (The Wall Street Journal, 22 July 2009; see generally Ghosh 2010). The Wall Street Journal (22 July 2009) wrote, ‘the continued lack of convergence in important segments of the wheat market has significantly diminished the usefulness of the wheat-futures market for

71 commercial hedgers’, in other words, it was hard to defend the role of speculators in price discovery when two separate prices co-existed for wheat.

From the perspective of examining when ‘food’ is ‘not food’, the issue of contango represents, in its simplest form, the contest over the relationship between virtual food and physical food. It exposes the fundamental conflict and tension of agricultural derivatives markets: whether price is formed as a financial product relative to other financial products or whether price is formed relative to the fundamental supply and demand for physical wheat, corn or other commodities. As Hayden Wands — a director for Sara Lee Corp, speaking for the American Bakers Association — put it when discussing the ‘buy and hold’ strategies of index funds, ‘“grain is not an asset class but an ingredient in many basic foodstuffs, staples of the American diet”’ (The Wall St Journal, 22 July 2009).

‘Stronger position limits would either be ineffective or detrimental’ The third set of counterclaims put forward was that stronger position limits would either be ineffective or even detrimental. These generally emphasised: 1. The impacts on investors and/or the market; and/or 2. The impacts on farmers and other commercial traders.

In 2008 the Committee on Homeland Security and Governmental Affairs held a hearing to discuss proposed options to address the issues in derivatives markets. There Senator Susan Collins, who would co-sponsor a bill calling for the reinstating of position limits, noted ‘“while I believe that the influx of money by pension funds has had a detrimental impact on prices, prohibiting investments risks harming future and current retirees”’ (MarketWatch, 25 June 2008). This was in reference to a proposed option — not included in the bill — to ban large funds from investing in any form of derivative market.21 Whereas in Europe divestment was a significant part of the call to action from civil society, the notion of a ban on investment never got traction in the US debate (Clapp 2014). From the same hearing, MarketWatch reported that ‘the chairman of a group that represents 110 of the country’s largest pension funds also warned that such a proposal could harm Americans’ retirement holdings’ (25 June 2008). In the article, William Quinn of the Committee on the Investment of Employee Benefit Assets noted that less than 1% of the $1.5 trillion dollars managed by their membership invest ‘“directly in commodities”’. ‘“But

21 This was one of three proposals discussed by a Senate Committee on Homeland Security and Government Affairs. It would prevent pension funds with more than $500 million in assets from investing in agricultural and energy commodities through futures markets and over-the-counter trades.

72 what they have is key to their performance”’ and ‘“regulating pension investments would make it difficult for pension plans to adequately diversify investments to hedge against market volatility and inflation”’.

A year later, the managing director of Goldman Sachs, in a July 2009 hearing called by the CFTC on convergence, discussed position limits as having ‘“unintended consequences”’ that may be ‘“disruptive to liquidity and the markets generally”’ (MarketWatch, 30 July 2009). MarketWatch (30 July 2009) also quoted JP Morgan Chase director Blythe Masters in the hearing saying of position limits that ‘“markets would be more volatile and the CFTC’s mission of price discovery would be hampered”’. A few days before, Reuters wrote that ‘others agree that if the CFTC starts talking seriously about position limits, it could damage the CBOT wheat contract, with spec longs exiting the market and drying up trading liquidity’ (25 July 2009). Given that the wheat report had been released just a few days before, it appears quite extraordinary that the banks — and unnamed ‘others’ — were defending their role in price discovery amidst such a live discussion of contango. In a period of low commodity prices and a credit crunch at the height of the recession, they appear to try to evoke the sense of the role that ‘traditional speculators’ played and the role of futures contracts more generally as a form of farmer credit. However, the history of futures markets — and the difference between ‘traditional speculators’ and bank-run CIFs — had been constructed as a central part of the position limits narrative (see for example, Financial Times, 25 July 2008; The Washington Post, 7 July 2009; Dow Jones Newswires, 28 July 2009 and 29 July 2009).

4.3.5 Wall St The position limits debate was largely contested by financial actors, using financial logics in a financial regulatory space. It is therefore relevant that in 2009 there was a clear sense of a change moment in Wall St. Language appeared in articles such as ‘reform climate’, ‘clamp down’ or ‘blame’ — or as Reuters described it, ‘Washington’s crusade against commodity speculators’ (24 September 2008). The CFTC language gravitated away from ‘manipulation’ to suggest that it may take action on position limits regarding excessive speculation. After the red winter wheat report CFTC chair Gensler noted that ‘“ultimately, it is the American consumer who will bear the burden of these increased costs”’ (The Wall Street Journal, 22 July 2009). Gensler, who had worked for Goldman Sachs ‘on and off for twenty years’ and was described as ‘a key architect’ of the 2000 CMFA when he worked in the Clinton Administration from 1997–1999, was now seen to play a role in enforcing and

73 extending regulation (MarketWatch, 30 July 2009). However, the explicit financial benefit that certain financial actors received from derivatives trading was rarely named. In 2008 Barrons (31 March) pointed out that ‘nearly $9 out of every $10 of index-fund money is not traded directly on the commodity exchanges, but instead goes through dealers that belong to the International Swaps and Derivatives Association (ISDA)’. This was the only time ISDA appeared in the media sample.

4.3.6 Conclusion (case study two) This section has described some of the claims and counterclaims surrounding position limits. It has pointed to how the direction of the discussion was led by a consistent position limits narrative to which different types of counterclaims responded. It has highlighted the role that the report by the Senate Permanent Committee for Investigations played in elevating the issue of contango. I reflected that contango, in a basic form, represents the contest between pricing agricultural derivatives relative to other financial products or relative to the supply and demand of the physical market. This suggests that amid various claims and counterclaims, it was one that fundamentally relates to what food is that played a critical discursive role in fomenting the policy debate.

Together, this chapter has focused on the discursive dynamics of power. The next chapter provides an overview of some of the political alliances involved in each debate.

74 Chapter 5: Contests and coalitions: Observations on political dynamics in constructing safeguards in each debate

5.1 Introduction

The chapter explores the role of specific actors within RFS2 and position limits debates — particularly companies, industry lobby groups and civil society organisations. Hereafter I use the term ‘political actors’ to describe them, to reflect their position as trying to influence or shape policy debates. This chapter focuses on how different groups aligned their interests to craft political coalitions. I highlight how specific political actors actively sought to craft and define the debate and its policy outcomes. This includes noting some of the discursive tools that they used and examining how they presented the relationship between food prices and agrofuel, or food prices and financial markets.

This adds to our understanding of how food price concerns featured in policy debates in three key ways by: 1. Identifying some of the actors seeking to craft policy outcomes; 2. Highlighting specific tools they used to exert influence by forming political coalitions and promoting particular discourses; and 3. Pointing to some of the historic and structural processes underpinning the positions of political actors. This lays the groundwork for chapter six which further explores these structural dynamics.

5.2 Case study one: The corn-starch ethanol cap

5.2.1 Introduction This case study examines how the corn-starch ethanol cap in the 2007 Renewable Fuel Standard (RFS2) was constructed, focusing on some of the political alliances involved. This chapter works towards a conclusion that, by examining the corn-starch ethanol cap and its role in RFS2, we can see the expansion of US agrofuels as contingent on unique issues arising from the contradictions of the long era of ‘cheap food’. This US experience contravenes some existing global analysis of crisis that positions agrofuels as responding to a crisis of ecological underproduction, giving little attention to the market issue of overproduction (for example, Moore 2012, 2015; McMichael 2013; cf. Holt-Gimenéz and Shattuck 2011; Gillon 2016).

75 5.2.2 Fifteen billion gallons: Who decided the ‘safe’ amount of corn-starch ethanol? Chapter four highlighted that a key claim was that ethanol production could be increased up to a safe level, and only beyond this level would ethanol production negatively impact food security or livestock farming. However, the massive increase in US corn consumption as ethanol would later be cited by various groups as a key contributor to driving up food prices (ie. Elliott 2009; Lagi et al 2011; Wise 2012). This could also foster increased speculation in food prices (Clapp 2012; Gillon 2016). This suggests, at minimum, that the 15 billion gallon figure could have been contested. I initially found no reference to academic, institutional or NGO research examining this 15 billion gallon figure in terms of prices and food security. Three interviewees — Anna, Dean and Sarah — didn’t know where the figure had come from, while the others — John, Lucy and Ian — all connected it with the ‘corn growers’. This is a term commonly used to reference the National Corn Growers Association (NCGA).

John, who works on energy policy issues for an environmental NGO noted:

‘I think it [the 15 billion gallons] was a combination of roughly what people thought the blend wall would be and what the corn growers thought would provide them enough market diversity in their customers. [A third each in exports, domestic corn and ethanol]… There was a lot of claims that that was really the most that they could do but they could do it without breaking the market, so this was a responsible number. But I never saw anything that convinced me that it was more than that number.’

Anna said that she didn’t think the figure had a strong analytical basis. Similarly, Ian said that while the number had some basis, it wasn’t rigorously developed.

Even years after RFS2 passed, interviewees held a range of views about ethanol expansion’s impacts on food prices, corn supplies and food access. In 2013, when interviews took place, 13 million gallons of corn-starch ethanol was added to the US fuel supply. Lucy, an ethanol lobbyist, and Ian, a corn industry lobbyist, both contested that RFS2 had significantly impacted food access. They each paraphrased a ratio based on the cost of a bushel of corn, and how much corn is included in a box of cereal, that in a $4 packet of corn flakes only 4c reflects the price of corn. The rest comes from packaging and transport costs. Ian said that the component may have gone from ‘3 cents to 7 cents’ and that he didn’t ‘recall any holes in the shelves’. He did speak about how higher corn prices

76 impacted livestock producers adding ‘this [the transition to agrofuels] is going to be a bumpy road’. Lucy said ‘you don’t feed the world with number #2 corn’, noting that it was used as cattle feed not direct human consumption. This is an interesting endpoint of distantisation — Lucy here introducing the claim that ethanol may have no direct relationship to food at all. John stressed this point in a slightly different way, saying ‘it’s not food versus fuel, its feed versus fuel’. Gillon (2016) also points out that in corn ‘flexing’ in the US, farmers are required to plant specific breeds of corn so once their crop is harvested they cannot choose between different end-uses. Of course, the relationship to food-as-fuel is that ethanol prices impact what farmers choose to plant, deciding between fuel and food crops (I include here feed-crops used in meat production). Ian maintained that, with exception to 2012, much of the corn demand for ethanol had been met by increased production, not from cutting into export or feed markets. Yet both Ian and Lucy also expressed a contradictory statement that the corn industry had envisioned agrofuels as ‘raising the floor price’ of corn (Ian). John noted that ‘to argue that that the RFS didn’t impact food prices was ridiculous’. He emphasised an underlying problem was the broader structural issues in markets that meant that US domestic policy could affect prices internationally.

Anna, a policy analyst with an NGO examining agriculture and trade issues, noted that people have always used farmland to supply energy needs — highlighting the nuanced reasons why being able to produce local biofuels is important for farmers in oil-import dependent Global South countries. She also described how her view had changed over time, from initially supporting the RFS as a way to raise prices and address the international impacts of dumping — to now being quite concerned about its impacts. Dean, an academic in agricultural economist, reflected a similar view. Anna also communicated how her group understood large global commodity traders, like Cargill or ADM, as exercising their power at the time by forcing farmers to sell to them at a very low price. This identifies an important aspect of the structural shifts of agrofuels not sufficiently captured in the food regimes literature. This is that decisions impacting food markets, at least by some actors, were made based on the understanding of ‘cheap food’. As someone who has worked as a human rights advocate, this point resonated with me. I identified with the challenge of choosing a policy position amid a seemingly endless array of possibilities, the near and the remote, and being unprepared for such a fundamental shift in the deep, underlying logics of the market.

77 Today RFS2 is described as not only having impacted international food prices but also farmland prices and demand. Sarah — who works for an international NGO focused on social justice advocacy, mentioned land grabs, as did John, Anna and Dean. This likely reflected the rise of ‘land grabs’ discourses at the time of interviews. The media and document analysis revealed that land concerns during the RFS2 debate were limited to the impacts on US conservation efforts. While chapter four identified framings and discourses within the media, interviews with political actors highlight a complexity and nuance in views towards the relationship between RFS2 and how it interacted with food or livelihoods. In trying to decipher the past events Anna gently encouraged me to ‘keep an open mind’ and to remember that ‘there were a lot of well-intentioned people on both sides, in the biofuels good or bad’.

5.2.3 Low corn prices Ian, Lucy, Anna and Dean each emphasised the role that low corn prices played in driving the ethanol agenda of the early 2000s. This helps to explain how, amid a general policy debate on energy security or environmental sustainability, ethanol specifically came to be presented as a policy solution. Consistent with what I would expect from their working roles in promoting the interests of the ethanol and corn industries, Lucy and Ian spoke at length at how the NCGA had supported a national ethanol mandate as a way to address the problem of ‘there was just too much corn’ (Lucy). They each described that this occurred at a time of increasing political scrutiny of the US subsidy system. In the early 2000s, corn could be sold overseas at 10% below the cost of production (Fanjul and Fraser 2003) or sometimes left to rot (Lucy). In the early 2000s the US subsidy system was extensively debated in Congress. New international campaigns built around unfair trade rules, targeting US agricultural policies during the intensive period of Doha Round negotiations in the WTO between 2001 and 2005 (ie. Watkins 2002). Lucy spoke that the corn growers ‘were smart’, that they anticipated the end to government subsidies and searched for a new market. One that, as it turns out, would legally mandate that people had to buy their product. Anna also highlighted the different positions taken by companies — with Cargill holding large interests in livestock, which depends on grain, whereas ADM does not. Ian discussed ethanol development as a form of market ‘diversification’, as a strategy responding to low corn prices (see further chapter six). He referred to the ethanol industry being in the process of restructuring at this time. In the late 1990s it began moving from a farmer-owned industry to have increased involvement from ADM, Cargill and Stayley (for more see Gillon 2016). This would have allowed the ethanol industry to

78 present an image of benefiting small-town, rural enterprise — while also enlisting the political lobbying power of the biggest agribusiness companies on the planet.

This national emphasis on overproduction differs significantly from the global description of agrofuels provided by McMichael (2009a, 2013) and also Moore (2012), as responding to a ‘deficiency of nature’. As described by interviewees, the corn industry used debates surrounding energy and the environment as an opportunity to enlist the state to provide new forms of support to sell their products. The locally-specific nature of agrofuels as a way of developing markets is articulated well by Borras et al (2016) in their discussion on flexing. However, crisis is still relevant. While energy crisis does feature in the origin story of US corn-starch ethanol, at the tipping point that institutionalised ‘food-as-fuel’ at national and international scale via the RFS (and other country policies), it was an overproduction crisis that drove companies to seek out new markets as the costs and contradictions of the US subsidy regime became exposed and critiqued. This aligns with Gillon’s (2016) view that shifting corn’s ‘use value’ was a way to address a crisis of overproduction. This appears similar to Brazil’s ethanol program, which responded to a sugar glut, but wholly separate to Europe’s context, which is much more import-dependent.

5.2.4 Agrofuels: A way to mitigate international food dumping? This section examines in more detail the role that concerns about dumping may have played in how certain actors interpreted the RFS2 debate. Dumping refers to the practice of selling agricultural products overseas at below the cost of production. This may occur where farmers are heavily subsidised and not wholly reliant on the cost of their product for their livelihood. It can also destroy local agriculture — where local farmers cannot compete with these undercut prices and can no longer get a fair price for their goods (Clapp 2012). Anna noted that ‘initially some people, including me, were optimistic…that it would be a good idea overall to raise prices …and we’d been arguing for a time that dumping was a problem’. She continued, ‘and maybe not really thinking through what would happen’. However, we also discussed that while it may have been accepted that agrofuels would raise prices what was not anticipated, at least by some, was the rapid rate of that change. Anna and Dean both referenced dumping as a significant issue for the Global South, in terms of direct food access (Anna) and for the livelihoods of impoverished farmers (Dean). For Anna at the time, the increased uptake of ethanol in the US could actually improve issues of food access and availability by reducing dumping that negatively impacted Global South markets. Dean assessed that large net agricultural exporting countries were

79 simply too politically powerful for the WTO or other forms of international trade governance to stop dumping. He initially saw agrofuels as an alternate livelihood for poor Global South farmers shut out of food markets and he was particularly interested in agrofuels produced by non-food crops.

Dean and John specifically named Oxfam in their interviews. Dean referred to Oxfam’s anti-dumping campaigns and John described Oxfam as initially tentatively supportive of agrofuels as a way to increase Global South livelihoods.22 In the early 2000s Oxfam International was a key campaigner against US dumping, calling for the reform of US domestic policies and international trade rules ‘rigged’ in its favour (Watkins 2002; Fanjul and Fraser 2003). John commented that, from his view, Oxfam initially saw agrofuels as a possible way to increase Global South livelihoods but then shifted to being quite alarmed about farmland grabs. While Oxfam campaigned actively against the RFS2 once the food price shocks began, it also lobbied for the end to the US ethanol tariff — realised in 2011 (Muñoz 2011a, 2011b). This makes it easier to export agrofuels into the US, consistent with Oxfam’s position on promoting equal access to markets and is a position that does not question the underlying premise of agrofuels.

I then looked to see if there were others reflecting this view. The Institute for Agriculture and Trade Policy (IATP), a US NGO, campaigned rigorously in the 2000s against US dumping. It argued that subsidies not only reduced recipient country food self-sufficiency but also disadvantaged small and medium US farmers, with the majority of subsidies going to large corporate agribusiness. The IATP September 2007 briefing paper Food versus fuel in the United States: Can both win in the era of ethanol? argued, in a carefully qualified way, that US ethanol expansion could increase food security in the long-term by returning the world to fair corn prices (Muller et al 2007). It also noted that the underlying problems perceived of ethanol were actually structural issues of market concentration. The report referred to an expected 12 billion gallon production based on current processing capacity of the industry and noted that a significant portion of ethanol feedstock would come from rerouting exports (Muller et al 2007).23

22 A year after doing these interviews I began working for Oxfam Australia. This is affiliated with, but separate to, Oxfam International and Oxfam US who were active on trade issues. 23 At a broader policy level, Nadine Lehrer (2008, 2010) has observed a similar shift from a political focus on commodity support reform — the system of subsidies that enable dumping — to agrofuels being the main game in the 2005–2008 negotiations over the Farm Bill. 80 This link between dumping and ethanol shows a different perspective from the understanding of the ethanol–food security relationship captured in the ‘food versus fuel’ debate presented in the media of the time. It helps to explain why some groups active on issues interlinking trade, hunger and rural inequality — and who later campaigned against RFS2 — were not visible in the 2006–2007 debate. Interviewees could not recall any hunger, poverty or food rights-focused groups campaigning against RFS2 at this time. Certainly, there were some speaking against it (Holt-Giménez 2007), and the NCGA listed a ‘food vs fuel’ section on its website — as visible in archived versions on its website held by the Wayback Machine. However, Ian, Lucy, Anna and John all noted that ‘food versus fuel’ emerged prominently in US public debate in 2008 — after RFS2 passed.24 Dean, an agricultural economist, commented that while he had concerns that prices were now (in 2013) too high, it should be remembered that cheap food was also problematic and fair prices existed somewhere in between. Even if RFS2 was driven by a corporate agenda of the corn industry, supported by the geographic political block of the Midwest, it was a position that was structured in a way that anticipated the most vocal opponents of US subsidies and price supports. It reiterates the theoretical positioning of this work within the crisis literature where US ethanol expansion evolved in a context where the ‘rules’ of the food regime had been made explicit and were contested, but where it was difficult to view how the broader market paradigm was shifting.

5.2.5 Managing risk Part of the construction linking the 15 billion gallon ethanol expansion and ‘food security’ related to identifying risk and how it could or should be managed. Both USDA and IATP referred to a short-term price rise in the transition to a larger use of agrofuels — IATP noting this marked a return to fairer prices after the artificial lows of ‘cheap food’ (Muller et al 2007; USDA 2007). This assessment corresponds to Ian’s concept of the RFS for achieving a higher ‘floor price' (minimum price) for corn. IATP (Muller et al 2007: 6) described this as a short-term issue needed to make long-term gains, noting:

‘Higher commodity prices may result in higher international food prices in the short term. And short-term food needs must be addressed immediately with safety nets

24 Ian suggested in his interview that ‘food versus fuel’ was concocted by the Glover Park Group, professional lobbyists. At the time of the interview I doubted this claim, but now, after reflecting on the dumping debate consider that there may be more truth to it. While ‘food vs fuel’ appears to have been coined earlier, (it was used prominently in Europe), in the US context it may have initially been heavily promoted by industry groups with a vested commercial interested in low corn prices.

81 and other policies. But in the longer term, higher prices could benefit developing country agriculture…’ However, its analysis pointed out that US corn exports were not directed at highly food insecure countries, that US food aid levels were in decline and that dumping was exacerbating food insecurity. It addressed the high tortilla prices in Mexico — pointing out that the import dependency stemmed from NAFTA and that local concentration of agribusiness in Mexico also raised prices. It pointed to high prices creating new opportunities for Mexican farmers. It also referenced the transition to cellulosic ethanol and increased plantings. This report is emblematic of genuine efforts to understand the impacts on food prices of increased ethanol production.

However, the report did not interrogate the underlying premise of the proposed RFS2 target. With the benefit of hindsight, today we can see that efforts to examine risk focused on the question — is it viable?, rather than, is it reasonable? Today it seems extraordinary that the US expected to treble its corn production within just eight years and mandated the use of cellulosic fuels that could not yet be commercially purchased.

In January 2007, USDA Chief Economist Keith Collins referred to the relationship between ethanol and food prices in questioning from the Senate Agriculture Committee (Collins 2007). He noted that agrofuel expansion had largely been delivered by a drawdown on stocks. Yet throughout 2007 — and even in my 2013 interviews — the idea was presented that ethanol demand would be met by new production. Collins predicted that once this drawdown had occurred:

‘What will happen if ethanol plants outbid traditional users? This is what markets do. Prices ration a fixed supply. If the supply is being outstripped by demand, then prices will go up and it will ration the use among users. I think that ethanol plants, at least in the current environment, can bid quite high for corn. And so the adjustment will come from those sectors of the demand sector that are most responsive to prices. That might be exports. That might be certain users.’ [emphasis added]

Collins did not discuss how this may impact international food access or prices, or anticipate possibilities such as increased speculation.

82 Both industry lobbyists — Lucy and Ian, and NGO policy analysts — Anna (agriculture) and John (energy), raised that the rate at which corn-starch ethanol expanded under RFS2 (and RFS1) was unprecedented. This suggests that several groups supported RFS2 with the clear objective of raising food prices, particularly corn, with an anticipated price rise but that this price rise was dramatically quicker than anticipated. While the impacts of US corn- starch ethanol expansion on global food prices is still contested, there is increasing consensus that in the short-term it led to an increase in world food prices — of which the US role was key (Lagi et al 2011; Clapp 2012; McMichael 2013; Elliott 2017). A price rise in itself isn’t problematic — given the historically low prices — but it is the speed and unpredictability at which it occurred.

As highlighted in chapter four, much of the opposition to expanding ethanol mandates was presented by: 1) Groups from the meat processing sector — companies such as Tyson Foods or Cargill, and trade associations for turkey, chicken and beef; and 2) Food processers that use corn derived products to make what Michael Pollan (2011) calls ‘food- like substances’ — such as Pepsico and Coca-Cola Amatil. Rather than contest the 15 billion gallon figure directly, they promoted the mechanism of a waiver so that in years of low production the mandate would not apply.25 This was incorporated into the legislation, but it is a discretionary tool. This means that even if the 15 billion gallon figure is deemed too high one year, the process of lobbying the EPA for a waiver would still need to occur the next. In this context the cap is a much stronger political tool as it is a one-off, rather than requiring ongoing reiteration.

This section, and the previous section, have explored to what extent the 15 billion gallon figure arose from an analysis of possible impacts on food production, distribution or consumption. It showed that the figure was not driven by an impartial assessment of impacts on food prices but based on anticipated corn production (15 billion gallons) or ethanol processing capacity (12 billion gallons). It highlighted that both USDA and IATP identified that increasing ethanol production to this level would likely impact international food prices — although these findings appear to have gained little traction in the media or associated debate.

25 This is seen throughout the debate — one example is visible in the Senate discussions on 20 July 2007. 83 Drawing on interviews and document research, the following two sections reach back into the early 2000s to examine the driving dynamics in the choice of the specific 15 billion gallon figure.

5.2.6 15x15x15: The National Corn Growers Association campaign In interviews, the 15 billion gallon figure was often described as emerging from the ‘corn growers’ (Lucy, Ian, John). There were three references to a NCGA ‘15x15x15’ campaign (Lucy, Ian, John). This number referred to a total national annual production of 15 billion gallons of ethanol and 15 billion bushels of corn by the year 2015. Five billion bushels would be used to create the 15 billion gallons. One interviewee referred to a memo, ‘or some kind of document’ about 15x15x15 circulated in 2006, although noting that it appeared to have disappeared and you ‘won’t find it anywhere’. Ian, a corn industry lobbyist, explained that the campaign began in 2004. However I found an article quoting then head of NCGA Ian Tolman as saying that ‘15x15x15’ had emerged from their 2003 strategic planning, noting at the time that national ethanol production was only 1 billion gallons (Brownfield Ag News for America, 12 September 2006). Chronologically, 15x15x15 predates any other reference to the 15 billion gallon figure linked to the RFS or US ethanol more generally. In late 2006, early 2007 NCGA appears to have gone public with this figure. In February 2007, the then NCGA President told the Senate Committee on Energy and Natural Resources that ‘over 2 years ago, we had a vision of 15 billion bushels of corn produced going into 15 billion gallons of ethanol’ (McCauley 2007).

Ian described the formation of the 15 billion gallon figure this way:

‘I would like to say that there was a very professional, very academic process that took many years to come up with that [the 15 billion gallon figure]. The profundity of it was that our board was doing some long-term planning in December of 2004 and we started talking…And looking at some of the projections that the seed industry, particularly Monsanto, was giving us, that was hey we could possibly get, oh gosh, we could be at 15 billion bushels, well maybe we could — maybe we could be at that point. Well then if you take and add, if you take up that 15 billion bushels, you take care of all of our existing customers with some room to grow. That’d leave 5 billion bushel of corn for ethanol and say that’s three gallons per bushel, that’s fifteen. And the alliteration of 15 by 15 by 15 was just too easy…’

84 As explained by Ian, 15x15x15 was based on a net increase in corn production through increased yields and bringing extra acres into production. Therefore, the construction of ‘food security’ is that the target will be met by increased production, not diverting existing corn to ethanol. Later in the interview Ian associated the anticipated price increase as being linked to raising the ‘floor price’ of corn by increasing the pool of people competing for products. Ian also references figures from Monsanto on the increased yields from their seed.

As described by Ian and Lucy, in setting a new ‘floor price’ for corn, the corn industry appeared prepared to weather tensions with its buyers. This included the key proponents of the ‘food versus fuel’ arguments: meat and dairy producers, and companies using corn in highly processed foods. Winders (2011), in his analysis of US food supply policy observes that over the last century there has been a constant to and fro of policy in terms of who it has favoured: corn growers or corn users.

Based on the available information, it appears that ‘15x15x15’ was initially configured sometime in 2003 or 2004. However, as a publicly communicated campaign it only emerged after RFS1 had passed. While the 15 billion gallon figure appeared based on the upper limits of the amount of corn that could, in theory, be produced, interviewees also discussed that this aligned with the blend wall of E10. This leads to discussion of another political dynamic that had to be considered.

5.2.7 Oil and ethanol: The historic compromise The oil industry has often been presented as some of the most vocal opponents of renewable fuels. However, the interviewees most heavily involved in the RFS2 debate — Lucy, John and Ian — each reflected the view that the oil industry had not contested RFS2 strongly in 2007 as it had other, more important elements of energy legislation in mind. Yet the oil industry’s relative indifference, if not tacit support, for the rapid expansion of corn- starch ethanol under RFS2 is not historically consistent. Since the 1970s, there had been strong federal opposition to developing a national agrofuels program, though it had progressed at state levels — particularly in places with a strong corn lobby and weaker oil lobby (Elliott 2017). Critical to the formation of a national agrofuels mandate under RFS1 was an agreement reached between two key industry groups — the American Petroleum Institute (API) and the Renewable Fuels Association (RFA). This helps to explain how the most significant first leap towards a renewable energy mandate was achieved via a

85 Republican Congress and under a Republican White House defined by its close ties to the oil industry.

In March 2002, RFA’s Ethanol Producer Magazine announced that a ‘historic compromise’ had been reached between the RFA and the API. As reported in Oil and Gas Journal (11 March 2002), Red Cavanay — the head of API, had delivered a keynote speech to RFA’s national ethanol conference on 28 February 2002. Cavanay stated that he would support a 10% mix of renewable fuels in the transport fuel supply. Lucy and John noted that in 2007 it was anticipated that the 2015 national fuel supply would comprise 150–160 billion gallons. The 15 billion gallon corn-starch ethanol cap therefore aligned with 10% of the total expected national fuel supply. As corn-starch ethanol was cheaper than other forms of renewable fuels, these would only become commercially viable after the 15 billion gallon target had been reached. Lucy identified Cavanay as a key ally. Cavanay noted that the negotiations between RFA and API had taken about a year, and referred to the basis of the ‘compromise’:

‘“In working together, it is vitally important we recognize each other's needs. You need growth in the ethanol market and certainty about its future. We need a phase- down of [methyl tertiary butyl ether] and elimination of the federal oxygenate mandate…”’ (Oil and Gas Journal, 11 March 2002)

In simple terms, MTBE was an oxygenate added to fuel to make it burn at a higher temperature, causing less pollution. Under the Clean Air Act oil companies were obliged to use such additives in places with high air pollution, while MTBE was used most extensively ethanol could also be used as an oxygenate. In the late 1990s evidence emerged that MTBE was contaminating groundwater. California, a large fuel consumer, prepared to ban MTBE from its fuel supply in 2004, this was then prolonged until 2005. In return for agreeing ethanol mandates in the national fuel supply, the oil industry lobbied against the oxygenate requirement. This was cut after RFS2. Further, it was the oil industry that set the defining parameters on how RFS1 would work: being based on a total amount of fuel in the transport supply (not a percentage of the total); with subsidies going to oil refiners blending fuel with ethanol; and with companies being able to get credits for ethanol consumption that they could aggregate, meaning that if they used lots of ethanol one year, they could use less than the mandate the next.

86 In terms of timelines, 15x15x15 was initiated within two years of the historic compromise. As I conducted interviews in 2013, the oil industry was lobbying strongly on the RFS. Interviewees noted that the oil sector had become more active as corn-starch ethanol production looked like it could soon exceed 10%, in part because anticipated national transport fuel use had dropped to 130–140 billion gallons. The oil industry had lobbied the federal RFS regulator, the Environmental Protection Agency, for a proposed drop in the 2014 corn-starch ethanol mandate to 14 billion gallons. In effect, still keeping it within the 10% figure. Another possible explanation for oil industry support in RFS2, is that unlike electric cars or more public transport, the ethanol provisions did not confront the underlying use of fuel — and therefore oil — in transport (see also Carolan 2009).

5.2.8 Framing a threefold expansion of corn-starch ethanol in eight years as reducing ethanol dependence So far I have shown that the 15 billion gallon was a number initially structured as a production target. This section unpacks how this massive expansion of corn-starch ethanol was carefully reframed as limiting ethanol production.

Typically RFS2 is presented as a program to reach 36 billion gallons of renewable fuel by 2022, of which corn-starch ethanol could comprise, at maximum 15 billion gallons — less than half (for example, Elliott 2009). An alternate way of viewing RFS2 is that the government would drive a threefold expansion of corn-starch ethanol into the fuel supply within eight years (by 2015). This represented a doubling of the RFS subsidised corn- starch ethanol between RFS1 — 7.5 billion gallons by 2012, and RFS2 — growing to 15 billion gallons by 2015 and then capped. This trebling of RFS2 support to corn-starch ethanol from 2007 to 2015 was carefully framed to appear as a dramatic reduction in ethanol dependence. One interpretation of this may be that the corn and ethanol industry achieved the NCGA strategic target of 15x15x15 with a compromise, but only minimally so. The compromise entailed drawing some boundaries around corn-starch ethanol as the renewable fuel. This involved the explicit listing of other fuel sources and targets (which for price reasons would largely kick-in only once the corn-starch ethanol ‘cap’ was reached); discretionary waivers by the EPA on a year-by-year basis or based on land impacts; and financial support for the development of other agrofuels beyond corn-starch ethanol. However, these types of compromises are comparatively weak in the context of a fixed, regulated total amount of fuel that subsidised and mandated the creation of a national ethanol market.

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Looking further into the cellulosic ethanol claims raised in chapter four, it seems remarkable that the bulk of the claim that the RFS would reduce corn-starch ethanol dependence relied on mandating oil refiners to use products not yet commercially available, such as cellulosic ethanol. Lucy noted that during the lead up to RFS2 it was ‘all about the environment’ because the democrats were in charge. She identified cellulosic as a key issue — cellulosic ethanol was also discussed by John and Dean. As explored in chapter four, cellulosic ethanol in the later part of the debate was often applied to allay ‘food versus fuel’ concerns. Under the final RFS2, cellulosic ethanol would be mandated for use from 2010 onwards as an ‘advanced fuel’. Yet in January 2007 USDA’s Keith Collins had noted that there was not even a single demonstration facility for cellulosic ethanol (Collins 2007). In 2006–2007, while cellulosic ethanol had been made in the lab, it could not yet be produced cheaply for the commercial market. Ten years after RFS2 passed into law, in 2017 only 10 million gallons of cellulosic ethanol was produced — far short of the 5.5 billion gallons mandated under RFS2 (Forbes, 11 February 2018). As explored in chapter four, while corn-starch ethanol was often described as a new technology its industrial production drew on an age-old process of making alcohol. In contrast, cellulosic ethanol is a much more complex technology — a point raised by Lucy. John, Ian and Anna each repeated the insider joke that cellulosic ethanol is perpetually five years away: Ian noting that it had been five years away for ‘many, many years’. John said that the five-year figure in discussions was based on the best information that they had from scientists. Lucy expressed the view that cellulosic ethanol could have come online but that the financial crisis dramatically drew capital away from investment. Lucy’s perspective is likely to be strongly defined by her professional role as a renewable fuel lobbyist. Part of the attractiveness of cellulosic ethanol was that it was claimed that it could likely be made from a locally available substance, no matter where you lived. In contrast, corn was concentrated in a handful of states. Politically, this likely enabled RFS2 to get broader political buy-in by conveying that the RFS was being reformed away from corn- starch ethanol. John also suggested that environmental groups that had engaged in RFS2 negotiations were also key actors in pushing for an RFS2 infrastructure that promoted cellulosic ethanol, taking strides to move away from high corn-starch ethanol dependence.

While in the chapter four media review cellulosic ethanol was presented as a threat to corn-starch ethanol, and thereby minimising any impacts of agrofuels on food, Ian described the cellulosic technology as ‘evolutionary’ rather than ‘revolutionary’. Lucy

88 discussed how the ongoing debate and policy process is simply reframed for different political interests, noting that in 2005 the discussion was ‘all about energy security’ because the Republicans were in charge, while in 2007 the environment and cellulosic ethanol played a larger role. This is, that it was the same policy debate reframed and contested in different ways to appeal to a changing mix of political actors.

5.2.9 The geography of politics In addition to the sector-based alliances that this case study has explored so far, there were also clear alliances or discourses centred on geographic dimensions of the agrofuels economy. These perhaps explain why the massive expansion of ethanol to reach the 15 billion gallon target of 15x15x15 was reframed as a cap. Both Lucy and Ian described bipartisan support from specific Corn Belt politicians. John mentioned how the Californian Democrats were sceptical of biofuels and assumed a significant power role in negotiations to concede their consent for the ethanol mandate. However, he viewed that once this was given in 2007, their power diminished. This likely related to unique factors in California’s own energy paradigm: for example, the high cost to transport ethanol to the West Coast, its experiments in supporting electric vehicles and its own movements towards a renewable fuel policy. Senator Chambliss from Georgia also spoke extensively in favour of cellulosic ethanol, describing a desire to see the economic returns of the ethanol expansion that had largely been directed to the Midwest expand to other areas (Committee on Agriculture, Nutrition and Forestry 2007). The dynamics of the RFS2 debate reflected specific loci of industry. For example, the cellulosic industry and the hi- tech research and innovation often tied to Silicon Valley or Michigan with its auto industry that opposed ethanol expansion above the blend wall because of the associated costs to change engines.

5.2.10 Conclusion (case study one) This section has provided an entry point into some of the actors and political coalitions engaged in the RFS2 debate, particularly in the construction of the 15 billion gallon corn- starch ethanol target. Building on the study of claims and claims-makers in chapter four, it has further explored discourses surrounding the impacts of increasing renewable fuel targets on food prices. It has referred to a range of discourses and factors present — from dumping to cellulosic ethanol. To be clear, this case study can only capture a small portion of the debate, and does not capture the diverse and nuanced array of actors, objectives and discourses present in these political alliances.

89 5.3 Case study two: Position limits

5.3.1 Introduction While discussions surrounding ethanol involved a complex array of actors and diverse discourses, the position limits debate involved a much simpler dynamic. It was essentially two large political blocks — for and against. This section examines, in broad terms, the key alliances calling for position limits and those opposed. It then provides context as to why alliances were particularly important to groups working directly on hunger and poverty- related issues linked to food. I then explore how these new alliances bridge a breadth of areas: energy, agriculture, food and finance. Finally, I briefly discuss how power in political coalitions has translated into outcomes on position limits post Dodd-Frank.

5.3.2 A brief description of the key alliances for and against position limits Until the mid-2000s, few actors focused on hunger- or food-related issues engaged with financial regulatory processes (Clapp and Helleiner 2012). Even today, it is a few specialist groups that focus in this area. Since the onset of more volatile food prices, groups concerned about the human impacts of food price volatility aligned with a broad coalition of actors. Together this coalition drove calls for greater position limits in derivatives markets — including for energy, metals and agriculture. As the Dodd-Frank Act became law in 2010 this coalition comprised 450 organisations. Luke, an energy sector lobbyist who played a role in coordinating the coalition, described how it had emerged from business- led lobbying on oil markets since 2005. Initially called the ‘Energy Markets Oversight Coalition’ (EMOC) it changed its name in late 2008 to the ‘Commodity Markets Oversight Coalition’ (CMOC) to reflect the increasing diversity of its members. According to Neil, an anti-poverty campaigner working on hunger-related issues, CMOC involved three broad coalitions. First, were the business and industry groups who drove the CMOC. This comprised umbrella organisations representing regional, national and international groups. Second were labour and community organisations aligned as ‘Americans for Financial Reform’ — which was active on a broad range of issues beyond commodity markets. And third, were a group organised around food issues without a formal name. This last group comprised faith-based organisations, food- and hunger-focused groups and international NGOs — they are listed on the ‘Stop Gambling on Hunger’ (n.d.) website. The three sections comprised regional, national and international groups. Its members were as diverse as the United Egg Producers, Public Citizen, the National Farmers Union, the Air

90 Transport Association and the Petroleum Marketers Association of America (CMOC 2009a).

Together, the coalition was in opposition to a large financial sector lobby that had helped to craft changes to the regulatory environment in the 1990s and 2000s (see also The Financial Crisis Inquiry Commission 2011). Neil described this as the ‘Dodd-Frank battle’ where CMOC took on what financier Peter called ‘the most powerful industry from a lobbying perspective probably in history’. Luke noted that CMOC was remarkable as ‘one of the broadest coalitions that this town [Washington DC] has ever seen.’ The CMOC coalition included groups who are often in significant opposition in policy debates, such as large agribusiness and international social justice organisations. While members retained their own specific policy positions, they released joint CMOC statements based on consensus (Luke) (see also EMOC 2007, 2008; CMOC 2008, 2009a, 2009b). They also directly lobbied Congress and the CFTC through face-to-face meetings, written submissions and testimony. Neil and Peter, who both advocate on hunger-related impacts of changes to commodity markets, described that the Dodd-Frank legislation was much stronger than they had expected and that they were happy with it.

On the other side of the debate was an array of financial sector organisations. This comprised groups that used derivatives markets to offset risks in other non-food investments, those who facilitate trades and some large agricultural commodity traders that engage with financial markets in various ways. A key coalition that all interviewees identified as critical was the member-based International Swaps and Derivatives Association (ISDA). Neil described ISDA as ‘one of the most powerful organisation in the world that nobody’s ever heard of’. Begun in 1985, ISDA (2018) describes itself as a global trade association for OTC derivatives, with 875 members in over 68 countries. Its members include both swaps traders such as banks, as well as large institutional investors. Interviewees emphasised the increased influence of the commodity exchanges themselves, which are publicly traded companies (Luke, Peter, Neil). This aligns with Martin and Clapp’s (2015) observation on the growing power of commodity exchanges, as they became privatised and concentrated. One interviewee, George, heads a trade association linked to the futures industry and suggested that as publicly traded companies commodity exchanges have an obligation to their shareholders to maximise profits. As they receive a payment for each trade they benefit from price volatility as a higher number of trades are made as prices rise and fall.

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Luke noted there were also organisations that opposed position limits that presented themselves as derivatives end-users but were closely connected to the financial sector (see also Clapp and Helleiner 2012). End-users are those who use the physical commodities on which derivatives prices are based. He referred specifically to the Commodity Markets Council (CMC) and the Coalition on Derivative End Users (CDEU). CMC (2018) represents ‘commodity futures exchanges and their industry counterparts’, but is also a member of CDEU (see also Erikson 2008). Members include US and foreign exchanges, including the major grain exchanges in Chicago, Minneapolis and Kansas. The world’s largest grain traders at the time — ADM, Cargill, Bunge and Louis Dreyfus — were also members, as were banks such as JP Morgan and Macquarie Bank. Luke and George specifically referred to ADM. One example to explain ADM’s position is that it stems from the international scale of their operations — for example, they may use food prices as a hedge against currency shifts that could affect their commodity exports/imports between countries (George, Luke). Another is that large agri-food companies are themselves third- party financial brokers. This gives them a competitive advantage against other brokers because they are exempt from position limits because of their trade in physical commodities — it is, in effect, a form of legal insider trading (Murphy et al 2012). The CDEU was established in August 2009.

Luke discussed regulatory debates in 2013 but the key questions over what constitutes a hedge equally applies to the earlier Dodd-Frank debate:

‘From our point of view [in CMOC] it [hedging] is a bona fide activity which is meant to minimise exposure to a specific risk or set of risks, without creating additional risk. But there are folks out there who disagree who think that any sort of risk, even if the hedging activity itself generates more risk, is a hedge. There has actually been a recommendation to define commercial risk as any risk that business anticipates.’ [emphasis added]

In the food-focused literature, exploration of what constitutes a ‘legitimate’ hedge has focused on hedging related to the commodities that end-users use (Clapp and Helleiner 2012). For example, farmers may hedge on corn commodities or energy markets. Yet there are diverse views on this. In discussing ‘legitimate’ hedging Luke referred to hedging on any aspect related to the business process — such as to offset currency risks when

92 trading internationally. What he saw as ‘illegitimate’ hedging was the practice of ‘speculating on speculation’.

What interviewees affiliated with CMOC described, was, from their perspective, the uniqueness of the moment in being able to overcome the entrenched interests that had been involved in regulating the financial system (Luke, Neil, Peter). This involved the policy window offered by the financial crisis that came into public consciousness in 2008, particularly with the collapse of Lehmann Brothers bank in September. The coalition- building process integrated food-focused issues with broad agricultural interests and energy interests. It engaged financial actors who had authority as financial reform advocates because they were part of the financial system. The next section examines how important were bridging alliances between agriculture and energy interests, and financial actors.

5.3.3 New alliances: Bridging oil, agriculture, food and finance All interviewees emphasised that rather than energy and food-related concerns evolving together, agriculture-based concerns were aligned with a pre-existing lobby on energy. Peter, who works in finance, noted that ‘initially it [the position limits campaign] was all about oil’. George, who has similarly long ties to the finance industry, said that [the position limits issue] ‘had been percolating prior to the financial crisis with the high prices of energy around the world’. Anti-poverty campaigner Neil described talking to legislators and struggling to raise hunger issues, in the end asking ‘can you just add food — oil and food’ to proposed changes. While Clapp and Helleiner (2012) note that anti-hunger campaigners did appear to have been able to influence the position limits debate — this observation on how the coalitions worked suggests that anti-hunger campaigners worked within narrow parameters.

Luke, Neil and Peter each noted that critical to the early work of building alliances with congress people were the energy-related scandals related to Enron and Amaranth (EMOC 2007; Buis 2008). Both Neil and Peter referred to support from various West Coast senators — Peter believed that this was because they were experienced with the Enron brown-outs of the early 2000s. Peter noted that another key congressional supporter was Senator Leibermann who had founded the May 2008 Senate hearings exploring higher, more volatile food and energy prices.

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Luke, who works in the energy sector and was involved in CMOC organising, noted the different price dynamics involved in the energy and agriculture lobby. He described that the initial EMOC was driven by high energy prices and that they had reached out to agriculture groups during the 2007 price rises. However, it was only once prices dramatically fell in 2008 that more groups became involved. If farmers have to pay higher input costs with rising oil prices they then have a vested interest in keeping food prices high in order to recoup these costs (see also Buis 2008). George noted a similar dynamic from his perspective as being against position limits as price-distorting:

‘people who support the Congress, they’re farmers and agricultural producers and they want the price of corn to be as high as possible and so when prices are high that’s something they’re very supportive of.’

This presents an interesting dynamic in terms of understanding the global price shocks and regulatory changes. As highlighted earlier, in 2007 high agriculture prices were already leading to public protests including in Mexico and some food prices within the US were also rising. However it was not until late 2008, when US domestic interests were impacted by low agricultural prices, that many agricultural interests became part of the coalition. An exception to the rule was the National Farmers Union and the Agricultural Retailers Association (EMOC 2008). It was at this time of a shift from perceived food price spikes to price volatility that hunger-focused groups signed onto CMOC letters (See EMOC 2008; CMOC 2008). This also likely reflects the awareness-raising work of individuals within the financial sector trying to communicate with anti-hunger and anti- poverty groups what was happening in markets and how this may affect food prices.

While CMOC drew on a vast array of groups and interests, it was the financial actors calling for position limits reforms that gained the greatest attention in the media. Early articles referenced comments by analyst Steven Briese and the congressional testimony of hedge fund manager Michael Masters and, later, the role of ex-Goldman Sachs executive turned CFTC Commissioner, Gary Gensler. Neil discussed the importance of financial insiders in helping hunger-focused groups to better understand what was happening in markets. This referred to navigating the complex terms and technical detail involved in understanding market mechanisms and financial products. He mentioned academic Michael Greenberger — who was a CFTC Commissioner in the late 1990s — as well as

94 Masters. Both testified before the CFTC on behalf of CMOC. The extensive Permanent Subcommittee on Investigations report into excessive speculation in the wheat market drew on market analysis and extensive interviews — including with traders and with the CFTC (Levin 2009; US Senate 2009). It contributed substantially to perceptions of the role of CIFs in commodity markets. Peter discussed his role that he often served to ‘translate’ from the financial sector to others in the coalition. He observed that agricultural commodity markets (not derivatives) are also highly opaque and problematic. While financial actors were pivotal in translating issues surrounding commodity markets for those raising food- related concerns, Neil noted that since Dodd-Frank the implementation process had been so technical that 80-90% of the groups focused on hunger-related issues were not able to engage with the process. Altogether this provides the sense of anti-hunger and anti- poverty campaigners fighting on a foreign, unknown turf.

5.3.4 The devil in the detail: Position limits implementation post-Dodd Frank Critical to understanding power dynamics in the debate, and how interviewees thought about them, is what has occurred since passage of the 2010 Dodd-Frank Act. In 2013 all interviewees emphasised that the position limits decision emerged from a unique time; where the depth of the financial crisis was sufficient to transform, at least momentarily, the political landscape. In their 2012 article, Clapp and Helleiner argue that the success of the Commodity Market Oversight Coalition showed that we needed to gain a more complex understanding of how non-financial actors can shape financial regulation. However as of January 2018 the position limits rule has still not been finalised or implemented. Neil noted in 2013 that in the ongoing political contest to install position limits through CFTC regulation that ‘they’re just killing us’. Many groups and individuals previously engaged on hunger-based issues linked to position limits are no longer able to engage in the debate.

The CFTC has gone through extensive processes to develop a set of implementing rules and processes to try to enact position limits, as can be seen on their website. In 2010 and 2011, the CFTC developed a set of implementing rules to enact position limits. ISDA and another group, the Securities Industry and Financial Markets Association (SIFMA), then filed a legal brief in the District of Columbia contesting CFTC’s authority to enact these limits. Just before position limits were to be implemented, the court upheld ISDA/SIFMA’s case that the CFTC had not provided sufficient evidence that such rules were ‘necessary’ (Clapp 2014). The CFTC appealed the decision and a second draft of CFTC implementing

95 rules were developed, reportedly weaker than the first (Clapp 2014). In developing the second draft CFTC not only had to set position limits but also compile evidence that they were needed. The call for comment period as drafts are developed received thousands of responses on technical detail. Alongside these processes have been delays as CFTC Commissioners leave and new ones are appointed, with those who initially championed the position limits rule, such as Bart Chilton, now long having left. The CFTC has also faced funding cuts and reforms on industry contributions to campaign finance have been rolled back. Almost a decade after the banking collapse of 2008, the momentum for position limits has been lost and the central narrative surrounding the need for position limits — as explored here with regards to food — has been drowned out by financial sector lobbies’ push to shift the parameters of the debate to focus on technical detail.

5.3.5 Conclusion (case study two) This section has described some of the contests and coalitions that took place as part of the position limits debate. This chapter has pointed to those concerned about higher, more volatile prices politically aligning themselves with a pre-existing energy coalition built around calls for, among other things, strong position limits. This then became CMOC which grew to have hundreds of diverse members. It was also raised that other agricultural interests only began to join CMOC as prices fell. It therefore appears that anti-hunger campaigners inherited the strategy to specifically target position limits. Confronted with CMOC, the financial sector itself has built similar large lobbying coalitions — such as CDEU. The 2010 Dodd-Frank legislation on futures market reforms, including position limits, was viewed as a success by Neil and Peter — whose campaigning and lobbying included a focus on food issues. However, eight years after the passage of the Dodd- Frank Act, the rules on position limits still have not been finalised and applied. While the legislative debate galvanised around the principle of position limits, the devil lay in the detail with talks on the technicalities of regulation dragging out as the unique political moment surrounding the 2008 financial collapse passed.

5.4 Discussion

In exploring the formation of coalitions and allies involved in each debate, this chapter has highlighted the extent of the restructuring and transformation that took place in markets in the early 21st century. Central to this was the ongoing interaction between agriculture and energy. Case study one described a complex set of relationships and motivations, but

96 central was the corn-ethanol sector alliance with a key oil sector trade association. Similarly, case study two examined how anti-hunger advocates and agriculture groups aligned with an energy sector coalition concerned about increasing price volatility. Case study one also reflected on how understandings of RFS2 were framed against the backdrop of ‘cheap food’ — with at least some groups calling for fairer food systems viewing RFS2 as a way to alleviate the issue of dumping. It also showed how the ethanol ‘cap’ actually represented the aspirational target of the National Corn Growers Association to rapidly expand corn and ethanol production. Case study two directly spoke to Clapp’s (2014) observations on the political challenges of distantisation — as debate shifted from the fundamental relationship between food as a financial product and food (as represented by contango) to highly technical discussions in which anti-hunger advocates could not participate.

97 Chapter 6: Remaking food, remaking markets

6.1. Introduction

As highlighted in chapter one, the global food price shocks presented the first substantial challenge to a new era of global agri-food governance — one where the lines between what is food, and what is not food, are muddied and contested. The rise of food-as-fuel (agrofuels) and the expansion of finance-as-food (in derivatives markets) both saw global markets legislated by the hosting state. This gave states that house international agriculture or finance markets, such as the US, significant influence in shaping the market. This research has so far sought to understand to what extent global food price shocks featured in two specific US policy debates between 2006–2010. Chapter four explored how claims surrounding food prices were constructed and contested in each policy debate. Chapter five then examined the nature and formation of key political coalitions and what this meant in terms of policy outcomes. This followed Clapp and Fuchs’ (2009) observation that power in global agri-food governance is threefold: discursive, instrumental and structural. In this chapter I will turn to this third dynamic, structural power. Specifically, I will interrogate what these policy processes, and the context they were contested in, may reveal about the relationship between crisis and commodification. This will also address my second research question, pointing to new insights that can be gained by examining the rise of agrofuels and expanse of finance in parallel.

This chapter will build on emergent themes identified in chapters four and five, at times returning to interviews and document research. This will include drawing on specific statements by interviewees that provide insights into what they perceive to be underpinning structural dynamics relevant to each debate. I will adaptively move between research and theory, returning to food regime analysts and literatures throughout.

I will argue that, at least in part, turning food into fuel or food into a financial product emerged from food being co-opted as a temporary solution to other systemic issues. This included: 1. The overproduction of commodity grains, particularly corn; and 2. The financial crisis. Further I identify these as emerging from trajectories of commodification that largely took place within the market itself. This occurred through processes that assign commodified grains and other foods new meanings and/or uses in the market. I suggest that this can be conceptually understood as a second wave of commodification.

98 6.2. Too much corn and market diversification: Turning corn into beef, sugar and fuel

Chapter five showed that the corn industry was a key player pushing for RFS2. I highlighted that this was a response to historically low corn prices in the late 1990s and early 2000s, as well as associated political pressure on the commodity support system.

Ian, a corn industry lobbyist, described how low prices from the 1990s onwards led the corn sector to seek out other markets by developing new products. This included turning corn into sugar as high fructose corn syrup (HFCS). Ethanol then followed, as it can be produced in the same facilities as HFCS.

Ian noted:

‘So, you get to the mid to late 90s and ethanol production’s around 600 million gallons, its mostly ADM, Cargill, Staley and a handful of others, and our folks — and this predates my time — but going back to my Farm Bureau days, people realised that our market was influenced so heavily by what was going on in the livestock sector and if there was a problem in the livestock sector, it multiplied in ours. We needed to diversify our market place. Our market needed to expand for exports. We needed another domestic production and really we looked at fructose for a while but I think people quickly realised there was going to be a limit on how much high fructose corn syrup the marketplace was gonna take and then when you started to see some of the problems with fructose. It created some concerns. So there was Figure 7: some policy advantages and there were some key The many uses of corn people in Congress who were interested in helping Source: National Corn Growers Association (2012) us and then there was the ever-present Iowa primaries and all roads to the White House lead through ethanol country.’

99 Ian outlines the industry approach to expanding its markets in the 20th and 21st century. Here corn is increasingly distanced from its role as an edible grain through the industrial agriculture system. Ian explained this as ‘diversification’:

‘Well the economies of scale are that we’re going to be more specialised, but it doesn’t mean that we’re not any more diverse, we’re looking at diversity, it just isn’t on the farm. The diversity is within the marketplace. So, yes we are producing the same product but it is much more diverse in where it goes.’

Ian’s narrative points us to a series of efforts to extend the use of corn in the industrial agriculture system, beyond its direct human consumption as a grain. Here corn is: 1. An input feed for beef and other meat production; 2. A starch processed into sugar such as HFCS — which has limited nutritional value; and 3. An industrial fuel — which, in the view of Lucy, is barely connected to food at all. Added to these three points is trade — where corn acts as a means of gaining foreign exchange. Together these uses comprise the major markets for corn grown in the US.

Here markets for edible agriculture evolve to uses ever-distanced from human metabolic needs. This suggests that this discursive and material transformation is not incidental to the process of industrial agricultural development. The creation of new forms of competition over a single feedstock between food, energy and other uses is at the core of new market development (see Figure 8).

This finding does not align with McMichael (2009a, 2010, 2011, 2013) and Moore (2012)’s analysis of global agrofuels. They both emphasise agrofuels policies as a constructed response to energy or environmental sustainability concerns. At a global level, McMichael (2009:826) describes: ‘What I term the “agrofuels project” represents a politically orchestrated attempt to address the combined energy and climate crises stemming from fossil-fuel dependence.’

In terms of a formulation of crisis, McMichael (2013) and Moore (2015; Patel and Moore 2017) focus on the long-term developmental or civilisational crisis that emerges from a lack of ecological surplus for the exploitation of capital. However, when we look at the instrumental power that enacted these policies we see the corn industry was a key player. While energy or environmental sustainability were important discursively and politically —

100 it was specifically the corn industry that inserted ethanol into these debates. The corn industry played a critical role in forging alliances and discourses in the policy process. It appears its motivation to do so was to sustain or grow its levels of production during a time of record low prices and oversupply. As the world’s single largest government-mandated agrofuel program at the time, RFS2 was formative as a tipping point. While other states had enacted agrofuels policies, including Brazil’s formative role in defining the path of ethanol as a mass transport fuel, RFS2 was followed by a rapid expansion in the scale to which other states sourced agrofuels (Elliott 2017). This suggests, at minimum, that agrofuels paths are locally contingent and in some cases agricultural overproduction played a formative role. Holt-Giménez and Shattuck (2011:80), who are based in the US, discuss the importance of overproduction in the expansion of food-as-fuel:

‘Cloaked in myths, the changes in global food systems due to the agrofuels boom become invisible. In reality, agrofuels are not an energy and climate change solution but an opportunity for further agri-business expansion — and the massive displacement of rural populations.’

‘Over the last thirty years, agricultural production has outpaced global purchasing power, leading to classic capitalist overproduction and a steady decline in agribusiness’s profit margins. In the past, agri-food corporations have responded to this falling rate of profit by increasing productivity with technological improvements (e.g., the Green Revolution), by adding value to raw commodities through transformation (e.g., corn into beef), by creating and capturing proprietary benefits (e.g. genetically engineered seeds), or by subsidising, consolidating and “vertically integrating” their operations from production to market to capture more of the food value chain. Agrofuels do all of this in one industrial operation. They are a one-stop-shop for solving agri- business’s overproduction problem. The transformation of food into fuel inflates the value of overproduced commodities like corn and sugarcane in both food and fuel markets, opens up new market space for those commodities and creates more processing steps, which allow corporate players to both add and capture more value.’

This point is also raised by Gillon (2016) and Borras et al (2016).

Interviews with Anna and Dean revealed that efforts to address the overproduction of corn through market diversification were supported beyond the corn industry. Anna, a policy

101 analyst with an NGO, highlighted at the time of interview that she had concerns about the impacts of biofuels. However, she had initially supported RFS2 as she thought that it would reduce the dumping of underpriced food that harmed small-scale farmers overseas (see chapter five). Dean, an academic in a US agricultural policy centre, described how his support for biofuels was framed by the issue of dumping. Dean felt that second generation agrofuels presented a new livelihood opportunity for Global South farmers who were locked out of other agriculture markets by the cheap food exports of countries such as the US, Canada, Argentina and Australia.

6.3 Beyond food: From commodification into the market, to commodification within the market

Processes akin to the diversification that Ian describes can be found throughout the political economy of food literature. Explorations of diversification include Weis’s (2007, 2013) discussion of the grain-livestock-oilseed complex and Harriet Friedmann’s work on the wheat-durable foods-livestock complex (1994). The multiple roles that single commodities play is also explored in Borras et al’s (2012:2) discussion of ‘flex-crops’: ‘“Flex crops” — ‘[are] crops with multiple uses across food, feed, fuel and industrial complexes.’

Borras et al (2016) write that flex-crops are defined by their material basis, technological possibility and profit viability. They discuss the need for ‘flex narratives’, as governments and corporations seek to justify expansion of flex-crops in their ‘drive for capital accumulation’ (Borras et al 2016: 100). For example, the promotion of flex-crops as a solution to climate change. Borras et al (2016) also discuss how flex-crops can attract new forms of finance, becoming attractive to financiers seeking refuge for capital (see also Gillon 2016). In the flex-crops literature, the physical shifts of flex-crops are presented as a form of commodification transforming the use value of crops, not their exchange value (Borras et al 2016; Gillon 2016). The flex-crops literature is largely defined by its origins in seeking to understand flexing as driving land-use change — that is, the physical frontier of bringing new lands and crops into the commodified market. This aligns with the view of commodification as the simplification of complex socioecological realities into a single commodity which is then exchanged into the market.26 However, while Borras et al (2016)

26 For example, this is described by Polanyi (1944), a viewpoint often cited by food regime scholars such as McMichael (2013), Patel (2013) and Moore (2015). 102 defined flexing as exchanging use value, McMichael (2012: 1–2) defines agrofuels as ‘symboliz[ing] the fetish of exchange-value’ and the ‘privileging of exchange-value over use-value’.

The question is — how can it be both? The flexing process, at least as applies to this US case study, appears a little differently if we approach it from the ontological process of defining what food is. The food regime literature has emphasised how commodification changes how edible plants are grown, eaten and distributed, and how it transforms food- based knowledges and worldviews (Friedmann 1994; Patel 2007; Weis 2007; Dixon 2009; Weis 2013). Yet once in the market even the exchange value of the commodity has remained tied to its use as an edible foodstuff. However, this US agrofuels case study suggests that what we are now seeing is a form of commodification driven from within the commodified market itself. If the initial phase of commodification simplified the meaning of food, removing it from its rich and diverse socioecological relationships; the second phase of commodification moves towards ascribing food multiple meanings. The endpoint is seen where Lucy suggests that corn — a staple food for thousands of generations across the continent of North America — isn’t a food at all. Situated this way, at least some flexing can be seen as a continuation of processes that sought to build demand for specific crops by transforming our understanding of food — for instance, through concentrating diets into a narrow band of crops through aid, creating durable foods, ‘food-like substances’ and the meatification of diets (Friedmann 1994; Pollan 2008; Clapp 2012; Weis 2013).27

While food regime analysts have drawn structural links between increased physical agricultural demand and markets, they have not systematically and structurally examined the relationship between remaking food and remaking markets as a pattern within the regime. This could impact how we approach the study of global markets through the food regime literature — specifically in how we understand crisis and commodification.

27 There are parallels here with the existing cultural economy approach within food regime analysis. Jane Dixon (2009), for example, has transposed Gyorgy Scrinis’ writings on nutritionism to the food regime framework, highlighting how, in nutritional reductionism, different properties of food, such as calories or protein, feature during different regimes. This work does not align with the focus here, of markets and crisis. 103 6.4 ‘Food stopped being food’: The co-optation of food as a response to economic crisis

As explored in chapter four, the position limits discussion significantly hinged on whether agricultural prices were being set relative to the supply and demand for food, or relative to the price of other financial products. While legislative changes in 2000 had allowed more actors (and their capital) into the financial system — with few regulatory restrictions — money did not immediately flow into commodities. Peter and Neil both emphasised that it was the downturn of the productive economy in the early 2000s that saw large amounts of finance capital begin to flow into commodity markets (see also US Senate 2009). From 2004 commodities markets were actively promoted as a way for financial actors to diversify risk (Clapp and Helleiner 2012; Kaufman 2012). A defining point in the debate was when a Senate investigation reported that wheat traders almost unanimously identified Commodity Index Funds (CIFs) as a key factor in rising prices (US Senate 2009). In a sense, the regulatory changes under the 2000 Commodity Futures Modernization Act (CFMA), and beforehand, had enabled food — among other commodities — to be considered a safe haven for finance capital during turbulent times. The influx of capital, in line with structural changes, now initiated a process where, as Kaufman (2012) articulates it, ‘food stopped being food’.

As the American Bakers Association wrote to the CFTC in 2009 (cited in US Senate 2009:141):

‘[T]he commodity exchanges have moved away from their original intent — to allow producers to sell their product in a transparent, regulated manner to physical users of the commodity. ABA is concerned that traditional market participants are being pushed out of the market — in favor of more non-traditional, new market participants that are essentially using the commodities market as a financial instrument.’

While the contribution of speculation remains contested within the agri-food literature, the fact that agricultural markets are now also operating as a financial instrument is not. As argued by the American Bakers Association, those who traded in food now risked being priced out of their own market. Agricultural derivatives were also a tool to offset risk in financial markets. This points out that, in addition to CFMA enabling higher levels of

104 traditional speculation, food had become a financial product, disconnected from human metabolic needs. Luke, who works with a commodity advocacy coalition of business interests, gave one example of the frailty of the system. He expressed his opposition to how banks use food or other commodities as a financial product as a way of offsetting investments they make in other markets:

‘…you have folks like banks who are hedging their speculative interests. You shouldn’t be able to hedge a speculative interest. You have speculative risks, you shouldn’t be able to hedge those speculative risks and call that a hedge cause because then you’re just speculating on speculation.’

This establishes in this case, a connection between crisis and commodification in the sense of how food and financial products became more and more entwined. Drawing on desk-based studies, others too have observed how finance sought to tether itself to the real-world supply and demand of food shifting its exchange value (Isakson 2014; Borras et al 2016; Martin and Clapp 2015; Gillon 2016). Added to these challenges of tracking the nature of finance-as-food and engaging in the debate was its highly technical, esoteric nature — speaking to the challenges of distantisation raised by Clapp (2014). Neil described how he liked that his faith-based organisation was often at the forefront of global advocacy, and in doing so, reminds us of connections between financialisation and earlier economic structural challenges:

‘Oh, it was so hard in the beginning. I compared it to — it was the same thing [as] …We were really one of the first groups to be talking about international debt problems and their effects in Latin America, African countries we were in and things. So we were talking about that in the mid- to late-1970s and brought groups on and we helped to inform the whole Jubilee movement, Jubilee USA and things like that. And later we were one of the first groups to talk about trade during the NAFTA negotiations we were talking about it in the early, early 90s bringing groups on. And in the beginning when we’re talking about international debt, everybody was like ‘oh man, I don’t know international economics that’s just too confusing we can’t really go there’ and but then you just do more learning sessions and writing and all of that and with time groups got more and more involved and it became this massive Jubilee movement and then the same thing with trade — in the beginning everybody’s like ‘that’s really confusing, that’s really wonky’. But then nowadays everybody’s pretty much aware of the basics of debt

105 and international trade issues what are the problems, the fundamental issues, and we’re at the same stage now with finances. Where everybody’s like ‘wow, that’s way too confusing’.

Here Neil references three of the major economic movements impacting the world food economy in recent decades: debt, trade and finance. For each, Neil describes a process where he, and other anti-hunger advocates, had to enter into new governance spaces based on specific logics and technical knowledge. This reminds us of the new roles that food has played in securing foreign exchange, in governance surrounding debt and now finance as an asset class. Just as in the early 21st century food price shocks saw food assume a much large role within the finance sector, the 1970s food price shocks are associated with a new era of international food trade.

6.5 The 1970s: Food-as-feed, foreign exchange-as-food

So far, this chapter has explored correlations between crisis and commodification. It has highlighted the role that market crisis can play as a catalyst for turning food into ‘not food’, and how these processes intertwine with rule-making and international markets. This section seeks to add to this discussion by examining if and how food assumed new roles in a previous era of food price shocks — the 1970s. Again, it focuses on the role of US policy within global agri-food governance.

As Morgan (1979) describes, in 1970 and 1971, the US post-war boom had slowed and the country faced an increasing debt burden. It desperately needed to find a new source of foreign exchange. President Nixon reluctantly began to address this problem by lifting restrictions on trade with communist countries (Morgan 1979). Morgan (1979) observes that agriculture and technology, such as armaments, were targeted by US policy makers as potential exports. At this time the entrenched politics of US government subsidies to farmers was leading to mass agricultural oversupply that the government distributed overseas as aid (Friedmann 1993). It was decided that farmer subsidies would be lessened, but producers would be supported by the state to find new customers overseas (Friedmann 1993). What followed, as Friedmann (1993: 39) puts it, would ‘forever [alter] international food relations]’ as ‘the Soviet American grain deals of 1972 and 1973 permanently broke the dam separating capitalist and soviet blocs’. Through this approach

106 to the economic crisis, food-as-foreign exchange became a major facet of US agricultural policy, which the US would aggressively promote through trade for the next 30 years.

On the USSR side, the grain sales enabled the country to maintain levels of livestock beyond its natural carrying capacity. In the late 1960s USSR national policy had dramatically expanded the industrial livestock sector, increasing feed needs by 40% (Morgan 1979). During the strong agricultural years of the late 1960s this demand was met domestically. However due to the poor harvest caused by the El Niño Southern Oscillation (ENSO) of 1972 the USSR needed to either obtain additional feed or to cull herds — as it had done in the 1960s (Dronin and Bellinger 2005). As Patel (2007) highlights, the ENSO also contributed to a shortfall in global feed supplies. According to Morgan (1979), this came at a time of political unrest in Poland, linked to food prices, and the Kremlin saw it as not politically feasible to dramatically drop meat supply. As the USSR bought up large amounts of US grain supplies, food was rerouted from US allies who had received food through US aid programs such as PL480. This contributed to a mass destabilisation of the world food economy (Horton 2009).

So far, this thesis has shown how food-as-fuel and finance-as-food have dramatically reshaped the story of food in the 21st century. Parallels can be drawn with the 1970s processes surrounding food-as-feed and food-as-foreign exchange. In the 2000s food-as- fuel and finance-as-food dramatically reshaped the story of food, the global actors involved in world agriculture and the rule-making spheres in which agricultural decisions were made. Similarly, in the 1970s there was a rapid shift to how food was distributed through global markets as the USSR expanded its food-as-feed needs and the US shifted its trading partners as it turned to food-as-foreign exchange as a way to address its rising debt. This highlights a dynamic of discursively and materially transforming food at points leading into ‘crisis’ in food markets — in the sense of rules and norms breaking down. Critically, key moments in the structural changes that enabled these transformations of food often took place at times of low prices. Here the power of the state lay not in transforming the meaning or use of food but being able to change the rules of how this meaning was created and negotiated at scale through the global market.

107 6.6 Crisis, commodification and ontology in the food regime

Drawing on findings from chapters four and five, this chapter has sought to contribute to the food regime literature by conceptualising two emergent dynamics, agrofuels and financialisation, through the lens of commodification. It has delineated between a common concept of commodification — in which individual commodities are created by conceptually and materially dislocating them from the complex socioecological realities into the market through processes of simplification; and a current wave of commodification that is driven from within the market itself — taking commodified food and physically and/or conceptually distancing it from its use as a human metabolic requirement. While distantisation and flexing is a continuing process, food-as-fuel and finance-as-food represent a unique point where it is argued whether the underlying resource is even food at all.

Building on this US case study, I have identified two separate commodification trajectories: one emerging from cost dynamics stemming from the overproduction of certain commodities such as corn, soy and wheat; the other as a tool to address economic crisis and contraction. While agrofuels and financialisation have been increasingly structurally linked, this is the first time that they have been thematically groups through a lens of commodification in changing what food means. Through comparison and contrast it outlines how the dramatic expansion of each, at least in part, responded to market-based crises in terms of the rules and norms of the regime. Further, that each involved policy processes in which, at minimum, concerns about the impacts of such commodification on food had to be contested and addressed. It has shown how the US state has played a critical role in the first trajectory through the distortion of price relations through commodity support programs, and later the mandated use of an agrofuels market. In the second, agriculture was used to solve specific economic or finance-sector issues, undergirded by dismantling the barriers separating different economic blocks. In the 1970s, this was ‘breaking the dam’ between the soviet and capitalist blocks. More recently, it was taking down the wall between the productive economy and the financial economy. This made it possible that agricultural commodity markets not only reflected food supply and demand but could also be a place to offset risk in other areas of the market. This deregulation lay the groundwork so that later the financial sector could seek out agriculture (and other products), to offset or avoid risks in other points of instability in the finance market.28 This

28 This thesis has described short-term risks — such as hedging, but this is also consistent with broader, structural theories, that finance becomes an attractive home for capital when there is a slowing productive economy (Arrighi 1994; Krippner 2011). 108 accompanied the paradigm shift of agrofuels — which introduced unknown dynamics of supply and demand — creating attractive conditions for speculators who could now engage in agricultural derivatives markets more readily. In spite of efforts by both Congress and the federal regulator, the CFTC, the State has faced substantial barriers in attempting to apply position limits. As shown in chapter five, a key problem arising from these structural changes is that many people who experience hunger, and who are tied into these US commodity chains and finance markets through the world food economy, had almost no opportunity to influence decision-making processes during the initial onset of higher, more volatile world food prices — confirming Clapp’s (2014) views on the political challenges of distantisation.

Together, this suggests that a pivotal, but as yet, underexplored question for analysis of crisis periods in the food regimes is ‘what is food in the food regime?’. This process of within-market commodification relies on the ability to create, or exploit, epistemological and ontological divides that distance fuel or finance from their basic connections to edible plants as a fundamental source of human life. In asking ‘what is food in the food regime?’ we can draw new parallels across the economic, energy or agricultural realms.

6.7 What is food in the food regime?

The starting premise of this thesis is that food governance is extending beyond agriculture, to new sites surrounding energy and finance. While edible grains and other foods have been heavily marketised, their exchange value was still ultimately decided by their use value for human metabolic consumption. At large scale, the governance of food is shifting into policy areas governed by separate logics, assumptions and goals. This process is not wholly new, but the depth to which food and energy, and/or finance are intertwined is.

The literature review also pointed to the relevance of the state in defining market rules. In the early 21st century, the US state helped to set the logic of an illogical market. A market comprised of messy rule-making, rather than an absolute protectionism or complete deregulation. As highlighted during the crisis period, the state has capacity to direct change rapidly through new rules.

A key point of contestation in both policy debates was whether they were really talking about food at all. Underpinning market dynamics in the shifting food regime is a question

109 of what we understand food to be and how this reorganises the relationships in which it sits. This is familiar territory in food regime analysis — which has tracked the role of markets in how diets shift to consume more meat, more processed junk food and become more reliant on a small number of grains or oils. Borras et al (2016) have specifically detailed how market risks are reduced for flex-crops — such as sugar, corn or soy — by creating diverse markets as feed, fibre, fuel or industrial materials. Similarly, Fairbairn (2014) has pointed out how some financial actors see food-growing lands solely through the prism of a financial investment. Where agricultural land is viewed only as a form of exchangeable financial investment ‘like gold with yield’.

However as yet we have not explicitly explored the regime through the question of what is food in the food regime? To what extent do the shifting rules and logics of the market intertwine with, and rely on, ontological shifts of what we understand food to be? And how is our understanding of the relationships between food-as-fuel or finance-as-food a site of contestation, a site of resistance in the regime? In trying to understand some very specific, bound questions, this thesis so far suggests that there are limitations when we view change processes from the prism of our current understanding of the workings of the food regime. At least in the US, the scaling up of agrofuels was initially seen by some as constructive, as a way to address dumping — a key issue in an era of ‘cheap food’. As Clapp and Helleiner (2012) point out, deregulation of agricultural commodity markets went unnoticed by social justice advocates. The relationship between food and finance simply had fallen off the radar. It is feasible in the coming years that shifts in the food regime will come from new, unforeseen areas. Focusing on the current structures of the regime has limitations, it may stifle our ability to identify forces that may appear to solve specific issues within the regime but which bring about change, on a deeper level, in the rules underpinning the regime. Asking does this change what we understand food to be or the relationships in which it sits? may allow us to better identify and track emerging issues, and to recognise shifting sites of decision-making impacting food governance. It is also framed as a simple question that can be asked of many different sites within the food regime.

Once I started asking this question of my own research, I began to see this as a potential way to bring together diverse strands of the food regime literature. Some examples are canvassed in Figure 8.

110 Figure 8: Crisis and commodification: What is food in the industrial food system?

Source: Shona Hawkes 2018

The left column looks at how overproduction of a narrow band of crops can be sustained by shifting edible commodities into other forms. Of course, the reality of this process is more nuanced, complex and geographically differentiated than can be described here. What is of interest to this thesis is the tipping point at which market rules change dramatically increased demand. Weis (2013) points to the rise of meat consumption and factory farming as a way to increase grain consumption. Food-as-feed, or perhaps more accurately, grains-as-meat is a feature of Weis’ grain-oilseed-livestock complex. Similarly, the distortion of markets through corn subsidies and minimum prices for sugar led to the creation of corn-as-sugar and the pervasive uptake of high fructose corn syrup. The rise of food-as-industrial food or what Pollan (2008) calls ‘food-like substances’ points to how overproduction of a handful of commodities is sustained by a proliferation of underpriced, highly processed products that have come to fill supermarket shelves. These are products

111 that we put in our mouths but have little nutritional value. Additionally, food-as-fuel, at least in the US, has delivered a new venue for a corn surplus.

The right column reflects how food (or agricultural commodities) can be co-opted into addressing other problems, primarily economic ones. As briefly canvassed earlier, in the face of a rising debt crisis in the 1970s the US government sought out new sources of foreign exchange. It identified arms and agriculture as potential exports and shifted market rules to allow for mass exports to communist countries — a form of foreign exchange-as- food. Prior to this, the US was already using food as a central part of its foreign policy in the post-World War II era (McMichael 2013). Dumping and food aid allowed the US to dispose of its national agricultural surplus, court the favour of newly independent ex- colonies and undermine local food systems by selling food below the cost of production. This could be conceptualised as foreign policy-as-food.

To return specifically to markets, Polanyi (1944) and others discuss the simplification of food into the market — a reductive objectifying of food distanced from the labour, ecological and social relationships in which it is produced. In entering a large-scale market, the use-value of food comes into competition with its exchange-value. However, even within the market the exchange-value of edible crops has remained tied to their ultimate use as food. If this first step of commodification brings food into the market, we can conceptualise recent shifts as a new phase of commodification. That is, forms of enclosure that take place even within agricultural commodity markets themselves. Building on the distortions of food before it, today the exchange value of food crops may no longer be tied to their use value as an edible form of nutrition.

Navigating the regime through the question: what is food? could also allow us to resituate the study of markets in the regime. This would focus on not only the expansion of capital and its international social movement counterpoints, but could better emphasise resistance or resilience in a broader set of practices and cultural performance throughout the world — whether or not people are engaged with a globalised politics. This could open a door for food regime analysis to acknowledge the intellectual contribution of people from the other side of the frontier, such as First Nations scholars. The examination of what food is and the relationships in which it is embedded could be a valuable device for exploring some of the most abstracted (metaphysical) spaces guiding the regime — such as market regulatory frameworks.

112 Chapter 7: Conclusion

7.1 Introduction

This final chapter examines the findings to the two questions proposed, and the implications for how we understand crisis in the food regime. I also reflect on how I conducted the research — pointing to challenges and limitations and suggesting areas for future research.

My two research questions were:

1) To what extent, if any, did the food price shocks feature in contemporary policy debates — including how these selected policies were understood or constructed discursively, politically and structurally?

2) How does approaching the rise of agrofuels and expanse of finance as parallel processes that shift sites of food governance add to our understanding of crisis in the food regime?

Chapter one began by introducing the rise of agrofuels and the expansion of finance as posing new questions for global agri-food governance. These twin dynamics both represent processes where the lines between what is ‘food’ or ‘not food’ are muddied and contested. Each sees food situated into new decision-making realms of energy and finance, introducing new actors, logics and networks into global agri-food governance. However, it is not yet clear if and how food is considered within these governance spaces or if new contestations emerge between food, fuel and finance. I described the global food price shocks as representing the first significant challenge of this new era. Chapter one also encapsulated the sense of urgency in the global food price shocks and the efforts of everyday people to protest the underlying politics of food provisioning locally and globally. Chapter two then centred this research within food regime analysis and adjacent work on the world food economy — grounding it within the crisis literature. This explicitly explored global food governance through US public policy debates as one site of international market rule-making. Chapter three outlined the methodological approach to address the research questions, describing the challenges encountered in undertaking the research. Chapters four, five and six then each addressed specific findings to the first research question. They articulated the extent to which the food price shocks featured in policy debates, including how they were constructed discursively (chapter four) and

113 instrumentally (chapter five), engaging with a broader structural context (chapter six). Chapter six also explored the rise of agrofuels and the expanse of finance as parallel processes, offering new insights into the workings of the food regime thereby answering the second question.

7.2 Key findings

This section briefly summarises the research findings communicated through chapters four, five and six. This is drawn from exploring discursive, instrumental and structural dynamics in each debate — responding to my first research question, and approaching the rise of agrofuels and the expanse of finance as parallel processes — answering the second.

7.2.1 Case study one: The corn-starch ethanol cap The first case study highlighted how turning food into fuel was viewed as a way to address concerns about overproduction and ‘cheap food’, by diversifying markets. This is not to say that this was the sole factor in the debate, or even the defining one, as the agrofuels discussion was played out against a broader energy and environmental politics not examined here.

While the debate surrounding RFS2 is often treated in agri-food literature as a precursor to the global food price shocks, the media analysis shows that there was already discussion about how turning corn to fuel may impact food prices. Specific discourses appear to have alleviated concerns about food prices, and therefore, potentially shaped the political debate. That is, firstly, that there was a ‘safe amount’ of ethanol that could be produced before it impacted food prices at worrying levels. As chapter five showed, the 15 billion gallon figure was in fact an aspirational target of the National Corn Growers Association (NCGA). Secondly, food concerns could have been alleviated by a technology discourse. This promised a new generation of agrofuels — cellulosic ethanol — which would not involve competition between food and fuel. Moreover, they could be made from a range of feedstocks — allowing diverse rural communities to enjoy the economic benefits of renewable fuels.

At a broader level, it also emerged that underpinning RFS2 were efforts of the NCGA to seek out new markets to address low corn prices in the early 2000s. Specifically, they

114 sought to diversify their market by turning corn into fuel at a mass scale — thereby substantially reimagining food in the national, and international, market. Their success in achieving this also relied on building strategic alliances with strange bedfellows. This started by aligning with the American Petroleum Institute, the oil industry having its own objectives on the use of MTBE and perhaps promoting a mode of renewable energy that, through blended agrofuels, would still see petrol provide up to 90% of transport fuel. Interviews with Anna and Dean suggest that, for people concerned with the livelihoods of some of the most disadvantaged by the era ‘cheap food’ — agrofuels may have appeared as a way to circumvent dumping. While certainly there were voices of dissent against US agrofuels, they did not appear central to the debate. This helps to explain why anti-hunger advocates were not active on this issue and reminds us of the challenge of anticipating the impacts of a new ordering of sociecological relationships through redefining food and shifting agricultural demand.

Viewed together, this shows the unique interplay between discursive, instrumental and structural dynamics relevant to how food was constructed within this debate. This suggests that, at least for some critical players, redefining food was interlinked with redefining markets. That, against the background of a complex and rich socioecological context surrounding ethanol, energy and agriculture politics, this marked a tipping point where a single piece of legislation was able to dramatically redefine — at large scale — edible agricultural crops such as corn and the relationships in which food sits.

7.2.2 Case study two: Position limits The second case study highlights how the position limits debate centred around a schism between those who approached access to agricultural futures commodities markets as a financial product offsetting risk in other parts of the financial sector, and those who saw these markets as a tool to organise the distribution and consumption of agriculture.

Chapter four explored claims and counterclaims surrounding the position limits debate, which was largely contested within the financial sector, by financial actors. It shows how a clear narrative about the need for position limits was consistently repeated by various actors. It suggests that it was the elevation of the issue of contango — the co-existence of two separate prices for a single commodity — in the red winter wheat market that marked a clear turning point. This shifted the debate from how the derivatives markets interacted with the markets of physical supply and demand, to examining the working of the futures

115 markets itself. When a futures contract ends — and is paid up or paid out in the present, its price should align with that of agriculture commodity markets. Instead, there were two co-existing prices: one essentially based on supply and demand for wheat, the other reflecting the relative value of ‘virtual food’ set against other financial products. This represents, in its simplest form, the contestation over how food is defined, and redefined, as a financial product. As one person put it, ‘grain is not an asset class’ (The Wall St Journal, 22 July 2009).

Chapter five showed how anti-hunger advocates had to insert themselves into complex technical arguments surrounding finance, joining a pre-existing coalition focused on energy concerns. It highlights how debate at a political level centred on the question of what constitutes a legitimate hedge and whether financial actors should be able to offset risks made in other parts of the financial market — through derivatives trading for instance — by buying agricultural futures contracts. Three interviewees involved in advocating for position limits showed the importance of joining a large coalition of strange bedfellows. Here, those concerned about the impacts of unruly markets on food prices aligned their interests with the energy sector and large agri-food companies. As one person put it, while anti-hunger advocates were successful in achieving legislation on position limits, they were unable to keep up with the technical discussions of the implementation process and industry groups for the derivatives sector gained ground in the post Dodd-Frank process (Neil). The same anti-hunger advocate also drew parallels between the work of learning about, and participating in finance sector debates, and his similar experience on trade and debt issues. Chapter six explored these links further and posited that we may be able to use the concept of links between ‘making food’ and ‘making markets’ as a strand to bring new insights into the relationship between the material and discursive aspects of international food markets, and different parts of food regimes literature.

7.2.3. Exploring food-as-fuel and finance-as-food in parallel A theme which emerged in both case studies was the link between the redefining of edible grains as ‘fuel’ or ‘finance’ to the quest for new markets. For example, the NCGA 15x15x15 campaign sought to diversify its markets by turning corn into fuel to stem the problem of underpriced, and therefore overproduced, corn. In turn, investors sought out agricultural commodity markets as a way to diversify their risk — as a hedge against price volatility or inflation. Each of these processes was complex and historically contingent but each reached a clear tipping point in the capacity of the state to shape national and global

116 markets. As explored in chapter six, looking into the literature on the 1970s period of upward price shocks, there appears to be parallel processes of remaking food and remaking markets. Just as finance co-opted food to offset risk in volatile markets — breaking down barriers between the productive and financial economies, in the 1970s Nixon co-opted food as a form of foreign exchange — breaking down barriers between the capitalist and communist trading blocks. Just as turning food into fuel confronts the inelasticity of food markets — creating a new source of demand, the USSR’s rapidly scaling up of livestock created a surge in demand for feed at a time of diminishing global production.

As explored in chapter six, these findings suggest that ‘making food’ can be closely interconnected with ‘making markets’ in global agri-food rule-making. This potentially offers new insights into how we analyse, and approach, global food markets — allowing new insights into the food regime literature through viewing food as created both physically and discursively through the market. It may even be possible to use ‘turning food into not food’ as a principal to identify potential sites of future contestation — sites in which the capacity for conflict does not seem otherwise obvious. As seen in both case studies, the rapid shift from cheap food dramatically shifted the context of agrofuels and commodity markets within these debates. At a deeper level, the interconnection between making food and making markets emphasises the importance of ontological understandings of food as a site of reification of, or resistance to, the food regime (see also Holt-Giménez and Shattuck 2011; McMichael 2013, 2016; Moore 2015). Together, this could potentially see the question ‘what is food?’ offer a central lens for examining change and crisis in agri-food market governance.

7.3 How I examine the food regime: Limitations and strengths in the research process

7.3.1 A relational approach to researching power in agri-food governance This research methodology has taken a relational approach to power in global agri-food governance. This has shown, for example, how specific actors and their ability to craft or counter resonant discourses, can help set the direction of change at a time of structural shifts — showing the relationship between the political and structural. In so doing, it has focused on interactions and relationships: across different locales of power (the discursive, instrumental and structural); across complex, parallel processes (financialisation and

117 agrofuels) and; it attempts to contextualise these within a broader pattern of the regime. To draw an analogy this approach looks at the forest rather than the trees. The synthesis provided in chapter six is an example of how exploring relationships between locales of power can yield new insights. It allows us to ask new questions of the world food economy and the literature on it.

The limitation is that I have examined multiple sites and types of power at the same time — without the same ability to go into depth and context as someone approaching a single one of these areas with a deep dive. For example, a stronger methodological approach to discourse analysis would have strengthened chapter four. The small number of interviews, taken alongside a media analysis and exploratory document analysis, is also insufficient to capture the full complexity of political developments. Discussions of the structural dynamics explored in chapter six, speak to the food regimes literature, but without explicitly detailing in-depth processes like aid or trade. Literatures on commodification and enclosure would have also strengthened this work. The word limitations of the Masters project have also made it difficult to fully articulate my theoretical findings as apply to such a diverse area.

With that caveat, I agree with Clapp and Fuchs (2009) suggested approach of examining discursive, instrumental and structural approaches to power in agri-food systems is valuable for the discovery, interpretation and linking relevant to power in global food governance. This was critical to my findings and proposed contribution to knowledge but I found it difficult to contain as a Masters project. When I began this project in early 2012 there were few, if any, links drawn between financialisation and agrofuels, no discourse on flex-crops or distantisation, and it was also before the resurgence in interest in the role of the state. While I recognised these trends broadly, this left me with little theoretical scaffold to structure my findings. In hindsight, I realised that I postponed writing my thesis — the bulk of which was undertaken in 2012–2013 — until such time as I could draw on well- articulated theoretical approaches across these multiple areas. Further, given that this research covered a breadth of areas, my claims should be further tested, reviewed and challenged through a more focused analysis in each area I address. The risk of this relational approach is that it is proximate, but its greatest value is in suggesting new insights and areas to examine.

118 7.3.2 Reflecting on colonised scholarship In a world where distantisation makes it hard to track the physical routes of food, or the workings of finance markets cannot be forensically examined, or where edible crops are bred to become inedible, we are less and less able to make concrete knowledge claims on the workings of the system. As Clapp (2014) identifies, shifting the sites of decision- making, and introducing a complex chain of actors and activities has deep political repercussions for how the rights to food, and alternatives to the world food economy, are contested. While the deeper, more profound work of resistance is enforcing the alternatives to the food regime (for example, Holt-Giménez and Shattuck 2011; McMichael 2013), the food regime continues to pose and present new threats. As Neil explained in chapter six, this can appear as a perpetual game of catch-up, as decisions about the food system are resituated into new governance spaces. Those seeking to amplify the voices and concerns of people most disadvantaged by the unequal relations of the food regime must now also know about debt and trade and energy markets and finance. It feels like a fight that is increasingly being fought on someone else’s turf, by someone else’s rules.

There is sophisticated scholarship from the other side of the frontier on how to view ontology and epistemology as structures of oppression or resistance as well as broader work on the colonisation of the mind. Approaching agri-food market governance, not just through detailed regulation, but as essentially a story about food — provides a bridge to further connect with and respect this scholarship, potentially through a diálogo de saberes respectfully working together across worldviews (Martínez-Torres and Rosset 2014). If we are to ask ‘what is food?’ as a guiding question to understand, and interrogate agri- food systems in an age of distantisation, we likely have much to learn from First Nations’ scholars who have long posited ‘what is land?’ as a way to critically analyse the cultural forces that drive, and justify, the abstraction of local resources and knowledges under colonisation. In a world where the material flows of the industrial food system cannot be concretely tracked, we may increasingly see ontology and epistemology as critical frameworks to examine how the food system is governed. In turn, becoming more aware of the tools and expertise on ‘the other side of the frontier’ may allow us to better understand food regime analysis as itself a product of colonised scholarship, one that we can consciously work to transform.

119 7.4 Future steps

I started this project in 2012 when the global food price shocks seemed catastrophic, immediate and unknowable. In large part the food regimes literature and critical political economy have moved on, refocused on other trends and issues. Agrofuels have become entrenched at a global scale, private finance had deepened its role in global food systems. However, the crisis remains important as the moment when the curtain is lifted, when the flaws and workings of the world food economy is more exposed.

This work points to three areas that could be investigated further in how we examine or understand the food regime and the broader critical political economy in which it sits.

1. For Clapp and Fuchs’ (2009) three-tier approach to examining power be further developed and articulated methodologically.

2. For what is food in the food regime? to be further explored as a framework that may be a helpful lens to examine forms of commodification that take place within global commodity markets. And through this, to see if this can be used to bring different conceptual strands of food regime analysis together through better understanding ties between market change and ontological change and discourse as a site of resistance.

3. To acknowledge, but not appropriate, scholarship from the other side of the frontier. Food regime analysis is a product of Western scholarship — I believe at this stage a useful one. However, much more needs to be done to decolonise our understanding of the food regime, to better speak to the intellectual traditions that co-exist in the places where we live and work — such as highlighted here, First Nations scholars, and others drawing from intellectual traditions beyond those building on colonial roots.

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131 Appendix 1: Interview Guide

• Could you please list your name, title and organisation?

• Could you please list your title at the time that the legislation was passed?

• And how long did you hold that position?

1. Can you describe the key events that led to the creation of the [2007 Renewable Fuel Standard/ 2010 Dodd-Frank changes to agricultural position limits]?

• Might include structural factors, ie. climate change; or instrumental ones, personal/group drivers.

2. Who were the key actors involved in shaping the legislation?

• Could include individuals, gov’t agencies, industry groups, NGOs. (If groups, ask for information about individuals).

3. How were you involved in the development of the bill, and why?

• Who did you consider allies?

• Who did you consider opponents?

• Why?

4. Were food concerns about the implications of the legislation raised at the time?

• If yes: If so, how important were these to the outcomes of the legislation?

• If no: Why do you think that they weren’t?

5. In terms of bringing a food perspective to the discussion of the bill, were there any groups or individuals that should or could have been involved but weren’t?

• Who were they?

• Why do you think that they weren’t involved?

• Are they now involved?

6. How do you compare the public discussion of the implications of this legislation for food at that time, with the discussion today?

• What has changed?

132

7. #1 Ethanol question: Where did the 15 billion gallon figure come from?

#2 Dodd-Frank Question: What strategies do you see those opposed to stronger agricultural position limits in Dodd-Frank using to try to influence outcomes after the legislation was passed?

8. In the academic literature there is a lot of focus on how what we’ve spoken about is explored through the notion of ‘crisis’. Do you think that a concept of ‘crisis’ was important here?

9. Is there anything important that we haven’t discussed?

• Do you have any questions for me?

• Can you recommend anyone else that I should talk to?

133

Appendix 2: Questions to ask of an interview

Metaphor Questions to ask of the text (examples) The interview text as What facts or truths are in the text? truth The interview text as How does who I am affect the answers given? What locally produced identities come forward during the interview and how does this affect what is said? Establishing and How do the interviewees appear to be making sense of perpetuating a what I am doing? storyline Identity work What identities does the interviewee call upon and how do these influence the answers given? Cultural Do answers reflect ideas that are shared broadly script application across the social group, that is, are scripts offered as answers? Do people give examples that move beyond the social script? Moral storytelling/ Is there a mentality of persuasive self-promotion of the impression individual/organisation they work for? management Political action Does the interviewee reflect the interests of the group they represent in a politically aware and motivated way? Which people/groups do the answers give favour to? Construction work Can I tell the difference between the person’s subjectivity and their desire to craft a story of their experiences/the world? Power of Discourse Not applied in this research.

Source: Adapted from Larder’s (2014) framework based on Alvesson 2011.

134 Appendix 3: Confirmation of ethics approval

135