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Agric. Trade Liberalisation & 3rd World Farmers

Agricultural Trade Liberalisation and Third World farmers

opinion piece by Aziz Choudry

Two very different meetings have focussed on trade liberalisation and agriculture this month, seemingly worlds apart. Last week in Banff, Canada, Jim Sutton attended the first Cairns Group Ministerial meeting since the Seattle World Trade Organisation Ministerial failed to launch a new round of trade negotiations.

The Cairns Group, comprising 18 agricultural exporting nations, played an activist role during the GATT Uruguay Round and now the WTO in promoting further, faster liberalisation of agricultural trade. It is dissatisfied with the level of agricultural protection remaining since the Uruguay Round, especially in Europe, Japan and the USA.

It wants significant tariff cuts, elimination of export subsidies, major reductions and restrictions of domestic subsidies and other supports for agriculture, and much greater market access.

But earlier in October, in Bangalore, India, nearly 100 farmers' associations from 68 countries attended the International Farmers' Conference sponsored by Via Campesina (Peasant Road), a global movement comprising peasant organisations, small and medium-sized farmers, agricultural workers, rural women and indigenous communities. Via Campesina rejects the WTO agriculture agreement as fundamentally imbalanced in favour of agribusiness corporations’ and developed countries’ interests, and detrimental to peasant farmers and rural communities. It wants agriculture removed from the WTO altogether. It believes agriculture and food are not commodities to be regulated only by a marketplace dominated by transnational corporations which they see as the major beneficiaries of liberalisation.

By the early 1990s, 77% of the world cereal trade was controlled by 5 transnational corporations; in bananas, 80% was controlled by 3 corporations; in tobacco, 87% by 4 corporations. Agribusiness transnationals have greatly influenced the positions of governments in trade negotiations. Agriculture was exempt from GATT until the Uruguay Round. Since then there have been intense irreconcilable debates between rich and poor countries.

In Bangalore, Karnataka State Farmers' Association president M.D. Nanjundaswamy said the aim of the WTO agriculture agreement was to find new markets for US and EU farm products. “It amounts to monopoly of agriculture by the developed world".

Via Campesina argues: “Access to food is a basic human right which can only be ensured in a system where food sovereignty is guaranteed. Food sovereignty is the right of each nation to maintain and develop its own capacity to produce the people´s basic food while respecting productive and cultural diversity. It is a pre-condition for genuine food security”.

Next month, Indian, Bangladeshi, Filipino, Thai, Indonesian, Korean and Japanese small farmers will join a “People’s Caravan” across Asia to highlight globalisation’s impact on their communities.

Small farmers form a large part of many developing countries’ populations. Their livelihoods and products (especially food) are the main basis of many economies. Trade liberalisation and structural adjustment policies are destroying local productive capacity in rural societies, and small farmers’ livelihoods. They push countries into cash crop export production at the expense of domestic food production.

Around a million families lost their livelihoods as maize prices plummeted in Mexico due to cheap, subsidised imports with the implementation of NAFTA in 1994.

Since its IMF-prescribed farming reforms and the implementation of the Uruguay Round, the Philippines, a Cairns Group member, has achieved a dramatic negative balance of trade in agriculture. A net exporter in agricultural produce in the past, it ran a US $42 million deficit in 1994, which skyrocketed to $789 million in 1996. Imports have almost doubled since 1993, but exports have registered negative growth rates since the Uruguay Round’s implementation. The Philippine government claimed GATT would create half a million jobs. But 191,000 agricultural jobs were lost in 1997.

Free traders say countries should produce commodities in which they are relatively more efficient. If basic food staples like rice cannot be efficiently produced, they should be imported. This assumes countries have the necessary foreign exchange to buy them. With limited foreign exchange many cannot pay for imports, however cheap, without endangering their external payments position.

Overall farm subsidy levels have increased in OECD countries to US$274 billion in 1998. But WTO agreements prevent developing countries which have traditionally not provided subsidies from providing any supports to cushion the effects of liberalisation. Conversely, developed countries enjoy tremendous flexibility to maintain high tariff levels, farm supports and subsidies.

Despite promises, there has been no political will to address the problems of net-food-importing developing countries. Calls for a review and assessment of the impact of Uruguay Round commitments have been ignored. Yet the agriculture agreement states that a continuation of the liberalisation programme must take into account the implementation experience including effects on food security.

In June, the WTO Special Session of the Committee on Agriculture heard that liberalisation triggered by the Uruguay Round has “broken the agricultural backbone” of many developing countries. A group of 11 Asian, African and Central American countries reported that key agricultural sectors vital for the economy in terms of food supply, employment, economic growth and poverty reduction were being seriously eroded due to the inability to compete with cheap imports. The balance of payments situation has worsened. Food security, unemployment and poverty have deteriorated. “Chronic food insecurity puts national security in jeopardy by placing at risk the health of a large number of people, and ...[inciting] internal turmoil and instability,” they said.

They recommended that developing countries be allowed greater flexibility of policy measures including raising tariffs on key products to protect and enhance food production capacity particularly of key staples, increase food security and accessibility for the poorest, provide and sustain employment for rural poor, protect farmers from cheap imports, give flexibility to support small farmers and end dumping of cheap, subsidised imports.

The Cairns Group, supported by the government, in pushing for more of the same policies that the Third World finds so damaging, says that this is in their interests.

Jim Sutton claims: “Any responsible government whether developed or less developed wants to improve the welfare of its people. That is after all what trade liberalisation is about.“

Such views seem increasingly questionable alongside mounting evidence that agricultural liberalisation has been disastrous for many poorer nations.

- Aziz Choudry works for GATT Watchdog.
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