In the spotlight 1
Implications of global finance on food sovereignty
One of the biggest threats to food sovereignty is the power of global finance over the real economy, food systems, and food and economic governance. Since the advent of neoliberalism in the 1980s, financial markets have expanded globally, with finance capital extending its reach into national and sub-national economies through banking, micro-finance, and extractive and speculative investment in critical sectors such as food, land, agriculture, water, mining, energy, property development and physical infrastructure. This has been made possible through changes in financial regulation and digital financial technologies (fintech) that enable capital to move freely across national borders and globally and reach communities through digital (via mobile phones) banking/payment applications. A wide array of financial instruments, from pensions, mutual and index funds to securities and derivatives have enabled corporations and individuals to profit disproportionately from such investments at huge costs to the real economy, biodiversity, the environment, stable jobs, access to food, and the climate. Financial globalization has enabled speculation in food and agricultural commodities where traders buy and sell futures contracts on food commodities and/or bet on futures prices to make profits, thus increasing the world’s vulnerability to recurring financial and food crises.
Financial crises have severe negative impacts on the livelihoods, employment, incomes, food sovereignty and health of small-scale food providers, workers, and rural and urban poor communities, especially in the Global South. Impacts are compounded by weak (or non-existent) domestic measures for social protection, alleviating hunger and malnutrition, healthcare and debt relief, that are important buffers against economic shocks. For decades, structural adjustment programmes (SAPs) and austerity measures crafted by the WB and IMF have snared many countries of the South into vicious debt traps, the core components of which are trade and investment liberalization, privatization and deregulation. In exchange for loans to keep national economies functioning and access to global capital markets, the WB-IMF continue to demand drastic cuts in state support for essential goods and services, removal of protections for workers, small-scale agricultural producers and the environment, and radical reforms of domestic policies and regulations to serve the corporate sector and free markets.
SAPs and neoliberalism paved the way for the financialisation of food, which entails significant increases in the involvement of financial entities (commercial banks, sovereign wealth funds, private investment funds, asset management companies, etc.) in food systems, and in global transactions of financial products linked with food and land as well as other essentials for producing food. The 2008 food crisis accelerated food financialization, as states scrambled to secure food supplies, creating new profit opportunities for financial investors.
Financialisation and weak anti-trust regulations have enabled corporations to consolidate market size and power in food systems through mergers and acquisitions. Bigger firms attract more financial investment from banks and asset managers, which in turn enable firms to consolidate further, resulting in corporate concentration in food systems. Increased market and financial power allow corporations to shape food systems governance by influencing national and international policies, regulations, laws and research in their favour, at the cost of millions of small-scale food providers, workers, Indigenous Peoples, and rural, peri-urban and urban populations. An urgent task for food sovereignty movements everywhere is to develop strategic, legal, enforceable measures to roll back and prevent the infiltration of global finance into the world’s food systems.
In the spotlight 2
A global push for debt cancellation is necessary!
At the core of today’s global food crisis is a trade system shaped by neoliberal policies that prioritize profits over people and favour the interests of big and rich exporting countries. These policies promote market-driven approaches, allowing large agribusinesses to dominate at the expense of small-scale food providers who have nourished communities for generations. Market concentration pushes small scale food providers and workers to societal and economic margins, and access to food becomes a privilege rather than a right.
Neoliberal and market dominated policies are deeply intertwined with the politics of debt. Developing countries face significant economic challenges due to concentrated agricultural markets, decreasing revenues and crippling external debts to public and private creditors. To retain access to international capital, governments of highly indebted governments are compelled to prioritize debt repayments over the well-being of their citizens and enact corporate and market friendly policies instead of programmes that support food sovereignty and sustainable agriculture. This creates a vicious cycle where the needs of people continue to be marginalized in favour of financial obligations to international creditors.
According to the United Nations Conference on Trade and Development (UNCTAD), developing countries’ external debt reached a record $11.4 trillion in 2023, and 54 developing nations–nearly half of which are in Africa–dedicated at least 10% of government funds to debt interest payments. Today, 3.3 billion people live in countries that spend more on debt payments than on health or education.
The 3rd Nyéléni Global Forum, scheduled for September, will be held in Sri Lanka, a country that has faced severe economic challenges due to external debt. Sri Lanka defaulted on foreign debt payments in 2022, leading to an IMF-led restructuring program. The government was forced to prioritize debt payments over citizens’ rights, severely impacting the country’s ability to invest in food production, rural livelihoods, and social security for its people.
Current data shows that 60% of low-income countries and 30% of middle-income countries face debt distress, limiting their capacities to invest in food sovereignty and social services, thus worsening hunger and inequality. The 3rd Nyéléni Forum must become a space for building resistance and campaigning against such policies. Debt is not just a financial burden—it’s a shackle that limits governments’ abilities to prioritize the well-being of their people, and a weapon that enables continuing extraction of wealth from societies in crisis created by debt in the first place.
Debt cancellation is essential to breaking this cycle. It would allow countries to prioritize their people and communities, focusing on agroecological food systems where small-scale food producers can feed their communities in harmony with the territories.
In the spotlight 3
How to raise finances to build food sovereignty?
Building food sovereignty and expanding agroecology require dedicated and continuing public social, physical, economic and financial infrastructure. Appropriate and sufficient kinds and amounts of financing are needed at multiple levels, to ensure that small-scale food providers have the funds and other resources (such as land, energy and water) needed to invest in production, processing, storage and distribution/marketing. At the same time, enabling policy environments are necessary to deliver the required financing, as well as strengthen the social, economic and environmental foundations of food sovereignty and agroecology; financing should not trap small-scale food providers into debt cycles, and policies must protect them from competition from agrifood corporations.
A crucial measure is redirecting national and global multilateral food, agriculture and climate budgets away from industrial, corporate food systems and value chains towards food sovereignty and agroecology. Eliminating the huge direct and indirect subsidies that agribusinesses get for production, exports, transportation, marketing and protection against social-environmental liabilities will free up vast amounts of money at various levels, which can be used to finance the infrastructure needed for food sovereignty.
Simultaneously, public revenue streams can be mobilized through various kinds of taxes: general progressive taxation; taxing corporations appropriately, including for profits from hyper-markets and digital transactions; windfall taxes on profits from food/commodity/land speculation; taxes on junk and highly processed foods, etc. Offshore tax havens must be closed, and laws against fiscal evasion and corruption be instituted and enforced, including seizing assets of wealthy tax avoiders. Money from such measures can be used to cross-subsidize small-scale food provision, producer-consumer cooperatives, territorial markets, community food banks, community health and insurance programmes, and other collective services important for food sovereignty. Importantly, they can free up money for debt relief for rural-urban poor communities and access to adequate credit, enabling them to rebuild their economic capacities.
Food sovereignty is premised on the rights of people and communities to food and to living full, healthy, productive lives with dignity, justice and equality in present and future generations. This demands ample, continuing investment by governments and society in transforming societal, political and economic systems, so that small-scale food provision gets the financial resources it urgently needs. These include measures such as public procurement of agroecologically produced food for school meals and other community food needs, public investment in territorial markets and environmental protection, ending food speculation, and policies that ensure living wages and safe working conditions for food system workers, especially women. Food crises are created and exacerbated by deregulated international finance, which undermine food sovereignty. Actions as described above by governments and multilateral agencies are important in protecting our food systems and also give positive signals to all society to support food sovereignty.