Committee for the Abolition of Illegitimate Debt

Across the world, tensions are rising as governments, both left and right, push for pension reforms, like delaying the legal retirement age, to deal with ageing work forces and rising debts. This is not a new fight. Thirty years ago, the World Bank World Bank
WB The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

warmed that public pension systems were “nearing collapse” and needed to be replaced by private systems. [3] It then used its structural adjustment Structural Adjustment Economic policies imposed by the IMF in exchange of new loans or the rescheduling of old loans.

Structural Adjustments policies were enforced in the early 1980 to qualify countries for new loans or for debt rescheduling by the IMF and the World Bank. The requested kind of adjustment aims at ensuring that the country can again service its external debt. Structural adjustment usually combines the following elements : devaluation of the national currency (in order to bring down the prices of exported goods and attract strong currencies), rise in interest rates (in order to attract international capital), reduction of public expenditure (’streamlining’ of public services staff, reduction of budgets devoted to education and the health sector, etc.), massive privatisations, reduction of public subsidies to some companies or products, freezing of salaries (to avoid inflation as a consequence of deflation). These SAPs have not only substantially contributed to higher and higher levels of indebtedness in the affected countries ; they have simultaneously led to higher prices (because of a high VAT rate and of the free market prices) and to a dramatic fall in the income of local populations (as a consequence of rising unemployment and of the dismantling of public services, among other factors).

IMF : http://www.worldbank.org/ programmes to privatise public pension systems and block any further development of public schemes in much of the global South. [4]

The result today is that most workers in the global South (and many in the global North) don’t even have a pension that they can fight to protect. Half of the world’s elderly folk get no pension at all, and in low income countries the figure is just 20%. [5] Retirees in the global South who do receive a pension get far less than what they need to survive, in large part because of policies imposed by the World Bank and other lenders. [6]

People in countries where workers generally have access to retirement security may be struggling to hold on to what they currently have. This is arguably the case in the US or Argentina right now, where privatisation and the gutting of the state by far right leaders are in motion. In other countries, people are actively pushing for improvements, like we see in Chile, Belgium or France. These are places where unions may be strong or progressive political parties, academics and civil society are making bold and solid proposals. But in much of the world, where governments are deep in debt and communities repressed, the notion of decent pensions for all is not even on the table.

The situation is particularly appalling for people working in the food system. As discussed below, across most of the global South, farmers and fishers are either without access to retirement security or only get paid a pittance. The majority of workers in other parts of the food system, from farmhands to market vendors, are in the same boat.

Fortunately, there are examples out there of global South countries where governments, usually pushed by strong social movements, have enacted public pension systems that work. Some even provide effective schemes designed for small farmers and their families. They may not be perfect, but social movements, including those fighting for food sovereignty, can draw upon them to challenge calls for cut backs and reforms, and advance the struggle for decent retirements for all.

Below we look at retirement systems in the global South for workers in the food system, with a specific focus on the situation for small farmers.

Shaky grounds

Across the world, people who work so hard to produce, prepare and distribute food are often struggling to feed themselves – both now and at the end of their working lives. Many are paid prices or wages that are too low, and face costs of living that are too high, to allow for any savings. Many food producers are also landless or without sufficient access to other resources to provide adequately for themselves and their families as they grow older. They also do not have access to decent social protections to deal with things like disability, health care or the loss of family members.

The retirement schemes that exist in the global South are mostly holdovers from the colonial period, where pensions were only provided by the state to certain categories of government employees. With independence, countries extended these state pensions to a larger base of government workers. They also provided incentives for private sector workers to contribute to either public or private pension plans. The thinking was that these systems would gradually cover the entire working population as economies industrialised and people moved from “informal” to “formal” work. But the reality is that so-called informal work continues to dominate in countries of the global South, and many farmers and other food systems workers may fall in this category. [7]

There is ample evidence – and it’s logical – that state-run pension systems that require workers to contribute earnings for payout later on, when they retire, are not effective for people in the informal economy. This is especially the case in rural areas. These systems are highly discriminatory towards women, too. [8] Tunisia, for instance, has a decades-old state-run pension system that operates for farmers, fishers and agricultural workers, but only around 10 percent of them participate in it. For women, the figure is less than 1%! [9] Next door, in Algeria, a similar system was extended to farmers in 1974, but by 2022 only 5,000 of them were enrolled. [10]

The World Bank and other proponents of such schemes argue that it is only a matter of finding the right mix of “behavioural nudges” to convince farmers and other workers in the informal economy to participate. Many governments are trying digital platforms and flexible schedules to get people to sign up and contribute. [11] But they are not having much success. Today, less than one in five workers in the global South pay into a pension plan. [12]

In India, Prime Minister Narendra Modi launched a voluntary pension scheme in 2019. It is managed by the state-owned Life Insurance Corporation. Under this scheme, the government matches farmer contributions for their retirement savings. But while Modi was counting on 50 million farmers enrolling by 2021, less than two million had signed up by 2025 – 4% of the target. In the agricultural state of Punjab, a mere 14,615 farmers had joined. [13]

Such systems fail to enlist farmers and food workers because they rarely have savings to contribute. If they have anything left at the end of the month, it is most likely used to pay debts. Over half of all farming households in India, for example, are in serious debt and in no position to save, especially women. [14]

Another reason why it’s difficult to attract small farmers to such systems is trust, and for good reason. Sri Lanka, for example, established a contributory farmer pension scheme in 1984 that was partially subsidised by the state. [15] It grew to a million contributors by 2011, before it collapsed in debt and stopped making payments. [16] A new scheme was launched in 2016, with four times higher contribution requirements, but it failed to get anywhere near the previous number of participants. Then, after Sri Lanka defaulted on its external debt in 2022, the International Monetary Fund IMF
International Monetary Fund Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org pressured Sri Lanka into a restructuring process that protected foreign holders of its external debt and penalised the national pension funds Pension Fund
Pension Funds Pension funds: investment funds that manage capitalized retirement schemes, they are funded by the employees of one or several companies paying-into the scheme which, often, is also partially funded by the employers. The objective is to pay the pensions of the employees that take part in the scheme. They manage very big amounts of money that are usually invested on the stock markets or financial markets. holding its domestic debt, including the farmer pension scheme. [17]

Table: Retirement support for small farmers in some countries in the global South

Subsidised schemes that work for farmers

The good news is that there are examples of systems that provide dignified pensions to farmers and other food system workers that can be drawn from.

Brazil is perhaps the best example. Owing to a hard fight by social movements, the country’s 1988 constitution recognises the right of rural people to equal social protections and enshrines the right of every Brazilian citizen to an old age pension at least equal to the national minimum wage. Flowing from these rights, Brazil established a unique pension scheme for small farmers and their families that benefits all women over 55 and all men over 60. [18] The scheme is based on individual contributions made by deducting a small amount from what each farmer sells – which the buyer must collect and pay to the state, not the farmer. Further, the amount of pension that farmers get is not tied to the amounts they contributed during their work life. No matter how much is collected, the state provides retired small farmers with a monthly payment that is at least equal to the minimum wage. This is for both men and women in the same family. In reality, only about 10% of the rural pension is paid from farmer contributions, while the rest is paid by the state. [19]

Bolivia offers another example. [20] In 2009, the government enacted “Dignity income”. It is a pension scheme funded by taxes levied on fossil fuel production and the profits of state companies. It provides a significant, universal pension to over 90% of the population (93% of women), which people do not pay into. The scheme is guaranteed under the Constitution, which obliges the state to “provide a lifelong old age pension in the framework of the integrated social security system.” [21] In a way, it is similar to the pension scheme run in Norway, another fossil fuel giant.

Colombia will be enacting a similar scheme in July 2025 that will provide retirement payments to millions of small farmers and other workers in the informal economy. [22] Also, in 2019, Mexico enshrined its universal “Older adult welfare pension” as a constitutional right for its citizens. In that process, it dropped the qualifying age from 68 to 65, expanded coverage to the whole country, and significantly increased the payout to US$180 per month. It also introduced an extra universal pension for women aged 60-65 to address gender inequalities. [23]

South Africa is one of the few African countries with a decent retirement scheme that doesn’t rely on workers paying into it. While the programme is limited to low income households, three-quarters of all persons aged 60 or older in South Africa receive payments from the programme, making a critical contribution to both rural and urban families. [24]

The government of China spent years experimenting with pension plans for rural communities until it realised that it would not work if it depended on people paying into them. So, in 2009, it changed direction and launched the “New rural social pension scheme”, a state-subsidised system. Workers can pay in, but most of the funding comes from the state, like in Brazil. Older people who are enrolled get a basic monthly payment, topped up with an additional amount based on whatever contributions they made. The scheme is immensely popular, and within a few years managed to enrol 460 million rural people. [25] Although the basic amount is still small and needs to be increased, the scheme is making a dent in rural poverty levels, particularly for elderly women. Studies even link it to a decrease in the consumption of junk food and cigarettes. [26]

These systems work, but there are caveats. In each case, the subsidised scheme targeting small farmers is part of a much larger system that caters to workers in the formal sector. These larger systems have their own deficiencies and can have major negative impacts on working people. [27] Brazil’s mainstream pension funds, for example, invest in agribusiness corporations like JBS, which is notorious for labour violations and its connections to land grabbing and deforestation. [28] Financial companies also lobby Lobby
Lobbies A lobby is an entity organized to represent and defend the interests of a specific group by exerting pressure or influence on persons or institutions that hold power. Lobbying consists in conducting actions aimed at influencing, directly or indirectly, the drafting, application or interpretation of legislative measures, standards, regulations and more generally any intervention or decision by the Public Authorities. pension funds in the global South to participate in their high-risk investments. For example, in 2024, Thailand’s US$77 billion national pension fund decided to put its money into private equity Equity The capital put into an enterprise by the shareholders. Not to be confused with ’hard capital’ or ’unsecured debt’. and other dubious schemes, while in March 2025 Brazil gave the green light to national pension funds to invest in a new, high-risk class of agribusiness funds. [29]

Another weakness is that Brazil’s system provides a significant pension for rural people, but nothing for informal sector workers in urban areas. There is thus no basis to build solidarity between small farmers producing food and the growing number of digital platform drivers delivering that food to people. Such disconnects were exploited by the right wing government of Jair Bolsonaro which managed to pass a number of pension reforms back in 2019. [30] While strong resistance from social movements succeeded in keeping the small farmer pension system in place, the government has since raised administrative requirements and bureaucratic hurdles to effectively discourage small farmers from participating. [31]

Political choices

What clearly works best are subsidised schemes that provide all older people, including those who have worked in the food system, with a basic level of income in retirement without them having to contribute much during their working years. [32] If the objective of a pension system is to truly support people in old age, there is no way around this. [33] Of course, funding this is a challenge and taxes on wealth and corporations have to play a role.

The World Bank and others will claim that such systems are unaffordable, and that they will collapse as populations in many countries become older. But this hides the political choice here. When Brazil’s Small Farmers’ Movement fought against a set of neoliberal reforms to their pension system in 2017, they emphasised two things. First, they insisted that pensions should be a redistributive measure that provides a fair share Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. of the country’s wealth to women and rural families. Secondly, they pointed out that pensions should be linked to public investment, in the case of the rural pension, giving an economic boost to hundreds of municipalities. [34] If pension systems are in a deficit, then governments need to do more to collect revenues, whether through taxes on corporations or the wealthy. This framing is critical.

At a time when so much is being done to split workers and repress their power and rights, a fight for public pension schemes based on universality and solidarity provides a tremendous opportunity to bring workers together and make real improvements in people’s lives. [35] Well organised retirement systems can not only provide dignity and security to elderly people, but also make a contribution to the larger struggle for food sovereignty.

Thanks to Manveetha Muddaluru for her help with background research for this publication.