The battle lines are clearly drawn. At a time when food security in the developing countries is snowballing into a major trade conflict between the developed and developing countries, what in reality is at stake is the livelihood security of an estimated 1.5 billion small farmers in the majority world.

Food security is simply a smokescreen to provide a cover-up for the global efforts being made to dismantle the very foundations of Third World agriculture.

Numerous U.S. farm groups have written to U.S. Trade Representative Michael Froman as well as U.S. Agriculture Secretary Tom Vilsack objecting to linking food aid with price support programmes.

Devinder Sharma

Not finding anything wrong in legitimate domestic food aid programmes, 30 farm commodity export groups have however expressed concern at the “price support programmes, which have more to do with boosting farm incomes and increasing production than feeding the poor.”

These U.S. farm commodity export groups, which ironically receive monumental federal support every year, have questioned the need to provide any relaxation in current discipline even on a temporary basis. Accordingly, such an exemption will result in more subsidy outgo and result in further damage to U.S. trade interests.

This response comes in the wake of a representation by 15 of the major farmer unions of India, including the Bhartiya Kisan Union (BKU) and the Karnataka Rajya Ryota Sangha (KRRS), to Indian Prime Minister Manmohan Singh: “Forth-seven years after the green revolution was launched, India is being directed at the World Trade Organisation (WTO) to dismantle its food procurement system built so assiduously over the past four decades.

“[T]his ill-advised move is aimed not only at destroying the country’s hard-earned food security but also the livelihood security of over 600 million farmers, 80 percent of them being small and marginal.”

India, a country which lived in the shadows of a ‘ship-to-mouth’ existence – when food would go directly from the ship to hungry mouths – has over the years emerged self-sufficient in food production.

This historic turnaround was possible only because India had adopted the two planks of what I call a remarkable ‘famine-avoidance’ strategy: providing farmers with an assured price support for their produce, and introducing a food procurement system that provided for a guaranteed market and at the same time helped get food to the poor in the deficit regions through a network of ration shops.

Withdrawing the price support for farmers or freezing it at the de-minimis level of 10 percent as applicable under the Agreement on Agriculture will make farmers vulnerable to the vagaries of the market.

Since Indian farmers do not receive any direct income support (as producers do in the U.S./EU), this move alone will destroy millions of livelihoods and force farmers to abandon agriculture and migrate to the cities. Already, with agriculture becoming economically unviable, close to 300,000 farmers have committed suicide in the past 15 years.

As per the de-minimis criteria, Article 6.4 (b) of the Agreement on Agriculture provides for total support not to exceed 10 percent of the total value of production for most developing members (except for China, where it is 8.5 percent as part of its accession commitments).

In India, as per WTO calculations, farmers are getting 24 percent more minimum support price for paddy crop since the base period of 1986-1988. Restricting the farm gate prices at a maximum of 10 percent will only push more and more farmers to take their own lives.

Nor does it make any economic sense. Considering that between 1986-1988 and 2013, the prices of rice and wheat have increased by more than 300 percent, and prices of inputs like fertilisers have risen by 480 percent in the same period –
according to World Bank commodity price data – the base period of 1986-1988 certainly has become outdated.

Instead of asking India to accept the Peace Clause for a period of four years, WTO chief Roberto Azevêdo should in fact be asking the 159-member organisation to look for a permanent solution to the vexed issue.

The best solution would be to change the reference period from 1986-1988 to something more recent, especially after 2007, when the world witnessed a global food crisis that resulted in food riots in 37 countries.

But that is not acceptable to the U.S./EU, which are pushing aggressively to do away with the commitments of ensuring food security to 67 percent of India’s hungry population under the newly enacted food security law.

Still worse, the U.S./EU are openly continuing not only their domestic subsidies but also their export subsidies.

Not complying with the 20 percent reduction in Aggregate Measure of Support, they have very conveniently shifted these subsidies to the notorious Green Box to continue and even increase them without limits.

And as the Indian farmers’ unions said, “the U.S. has more than doubled its subsidy from 61 to 130 billion dollars between 1995 and 2010, while the EU’s subsidy of 90 billion euros in 1995 came down to 75 billion euros in 2002, but rose again
to hover between 90-79 billion euros between 2006-2009.”

According to the U.S.-based Environmental Working Group, the U.S. had paid a quarter of a trillion dollars in subsidy support between 1995 and 2009. These subsidies have not been reduced in the 2013 Farm Bill.

Moreover, the U.S. does not find its own 100 billion dollars in support for its various food aid programmes in 2012 as trade-distorting, but has problems with 20 billion dollars in support that India is expected to provide to feed its 830 million hungry people.

U.S. farm subsidies are therefore unquestionable. These are considered to be non-trade-distorting,
and are not even on the negotiating table at the Dec. 3-6 WTO Ministerial at Bali, Indonesia.

Well, the writing is on the wall. What is at stake at Bali is not food security, but the very future of Third World agriculture. Feeding the hungry is possible by importing food, and that is what the U.S. farm commodity export groups have conveyed.

Putting more income into the hands of Third World farmers is not acceptable, as it makes developing country agriculture economically viable and therefore deals a blow to U.S. agribusiness trade interests.

* Devinder Sharma is a renowned Indian food and trade policy analyst, an award winning journalist, author, writer and thinker, whose incisive analyses makes him a leading voice from the developing world.

(END/COPYRIGHT IPS)

By Devinder Sharma
NEW DELHI, Dec 13 2005 (IPS)

When J.B. Penn, United States under secretary for agriculture, came visiting last month he was told that for India, like any other mainly farming country, importing food was as good as importing unemployment.

‘’We can do so (open up markets as requested by Penn), provided the U.S. is willing to provide a visa to every farmer displaced as a consequence of the import of cheaper and highly subsidised food,” Penn was told by India’s articulate trade minister, Kamal Nath.

It was apparent that U.S. Congress would reject any deal that does not open markets in developing countries-even if they have agrarian economies- for American farmers.

A week before the World Trade Organisation (WTO) ministerial at Hong Kong began, Saxby Chabliss, chairman of the U.S. senate’s agriculture committee was quoted: ‘’To say we’re just going to open up our markets without having our farmers here have access to new marketsàif that’s all that comes out of (the WTO meeting) Hong Kong, then we’ve accomplished nothing”.

Compare this what Nath told Indian parliament just before he left for Hong Kong : ‘’I cannot sacrifice the future of India’s 600 million farmers at any cost. What the U.S. proposed, last month, is not real cuts in agriculture subsidies. The real cuts would be when there is a decline in the support provided by the U.S. treasury.”

The deadlock over agricultural subsidies will determine the future of the ‘Doha Development round’. International trade in agriculture is closely linked to the removal of agricultural subsidies- presently computed at 350 billion US dollars or one billion dollars a day – that the 30 rich countries forming the OECD (Organisation for Economic Cooperation and Development) provide.

Recent estimates show that developing countries lose more than 24 billion dollars a year because of the protection that rich countries provide their farmers.

Now that promises associated with the ‘development round’ have fallen flat, rich countries are strengthening defences around domestic agriculture and making it difficult for the developing world to penetrate their markets.

Moreover, the industrialised countries continue to exert all kinds of pressure to further open up developing country markets without waiting for the developed countries to simultaneously bring down the agricultural subsidies.

Threats are being resorted to now that it has become impossible to shift the focus of ongoing negotiations from agriculture subsidies to market access. – Developing countries would lose if the Doha Development Round fails,” WTO chief Pascal Lamy warned African trade ministers, last month, at Arusha. ôThe US can increase its trade-distorting domestic support (TDS) by 5 billion dollars, the EU by 25 billion and Japan by 5 billion.”

What Lamy did not say was that developing country agriculture was doomed anyway if the huge subsidies the OECD pays to its agribusiness corporations and rich farmers are not entirely scrapped.

Bribery and bait are the two other planks of the ‘negotiating’ strategy that are being applied. Least developing countries (LDCs) are being provided with an ‘aid for trade’ package, expected to be in the range of four billion dollars, in the name of assistance to cope with adjustment costs, and provide infrastructure.

Besides, the promise of a ‘development package’ contains duty and quota- free access for LDC products, preference erosion, some special and differential treatment proposals and longer transition periods on trade- related intellectual property rights (TRIPS) and investment measures.

While the talks falter, highly subsidised imports from the developed countries have already done irreparable damage to the agricultural production potential of the developing countries. Between 1995 and 2004, Europe alone has been able to increase its agricultural exports by 26 per cent mostly through massive domestic and export subsidies. Each percentage increase in exports brings in a financial gain of three billion dollars.

On the other hand, a vast majority of the developing countries, whether in Latin America, Africa or Asia have, in the first 10 years of WTO, turned into food importers. Millions of farmers have lost their livelihoods as a result of cheaper imports.

If the WTO has its way, and the developing countries fail to understand the politics that drives the agriculture trade agenda, the world will soon have two kinds of agriculture systems – the rich countries producing staple foods for the world’s 6 billion plus people, and developing countries growing grow cash crops like tomato, cut flowers, peas, sunflower, strawberries and vegetables.

This is what happened in many of the Latin American countries that were forced to dismantle food security and diversify to cash crops as part of the conditionality that came along with structural adjustment loans. The same strategy is now being legitimised for the rest of the world under the legal framework of the WTO.

As the World Bank and the International Monetary Fund have repeatedly emphasised, the dollars that developing countries earn from exporting these crops will eventually be used to buy food grains from the developed nations – in reality, passing the reins of food security back into the hands of rich countries.

For India, a major farming country that would mean going back to the days of a ‘ship-to-mouth’ existence before it struggled to achieve food self-sufficiency on the backs of hundreds of millions of small farmers.

It is the livelihoods of these farmers, as well as the food security of the people they fed for decades, that is at stake at Hong Kong.

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By Devinder Sharma and - -
NEW DELHI, Aug 1 2004 (IPS)

A year after the UNDP\’s 2003 Human Development Report showed that poverty in 54 countries was considerably worse than in the previous decade, the WTO has reached a \’historic\’ framework agreement that will further marginalise the developing economies, writes Devinder Sharma, internationally-recognised commentator on trade, sustainable agriculture, and biodiversity, and author of \’\’Seeds of Despair\’\’and \’\’The Famine Trap\’\’. In this article, Sharma writes that during the intense WTO negotiations in Geneva in late July the developed countries finally succeeded in piercing what remained of developing country agriculture while raising even further their own already high level of agricultural subsidies. The reductions in trade-distorting subsidies set out in the new WTO agreement –20 percent in the first year of implementation– are calculated according to a revised formula that, by increasing certain permitted types of support, actually allows the US and EU to increase agricultural subsidies. Importing food is like importing unemployment, yet the WTO has refused to draw a balance sheet showing the human and environmental cost of its trade paradigm. By further opening their borders to trade, developing countries ruined their agricultural sectors.

A year after the United Nations Development Project’s 2003 Human Development Report showed that poverty in 54 countries was considerably worse than in the previous decade, the World Trade Organisation (WTO) has reached a ‘historic’ framework agreement that will further marginalise the developing economies.

During the intense WTO negotiations in Geneva in late July– which included coercion, arm-twisting, and enticements– the developed countries finally succeeded in piercing what remained of developing country agriculture while raising even further their own already high level of agricultural subsidies.

Even the poorest of the poor have been denied trade justice. The four West African countries — Burkina Faso, Mali, Chad, and Benin — have been devastated by the massive cotton subsidies in the United States, European Union, and China. After 12 hours of marathon discussions with negotiators from these countries, all that US Trade Representative Robert Zoellick promised is to ”work on related issues of development multilaterally with the international financial institutions, [and] continue their bilateral programmes”. In effect, cotton growers in these countries should not expect any change in the subsidy regime (despite the latest ruling of the WTO dispute panel) and will continue to live in abject poverty and misery.

The WTO thus further fortified the protective ring around the 25,000 US cotton growers, who receive roughly USD 3.9 billion in subsidy payments for producing a cotton crop that is worth only USD 3 billion at world market prices. The inequity is staggering: American cotton farmers receive USD 10.7 million a day in subsidies as over 10 million cotton farmers in West Africa alone see their livelihoods devastated. In addition, the US provides a subsidy of USD 180 million to companies to purchase the subsided cotton. As a result of the artificially lowered prices, African cotton producers recoup only 60 percent of their costs, although these are less than half what they are in developed countries.

For the rest of the world, the talk of reducing trade-distorting subsidies is mere illusion. Robert Zoellick and the outgoing Trade Commissioner of the European Union, Pascal Lamy, have actually walked away knowing full well that they do not have to make any real cuts in domestic support. The reductions in trade-distorting subsidies set out in the new WTO agreement –20 percent in the first year of implementation– are calculated according to a revised formula that, by increasing certain permitted types of support, actually allows the US and EU to increase agricultural subsidies.

At the same time, the developed countries have managed to keep intact all the elements of their protective barriers: special and differential treatment, special safeguard measures, and provisions for ”sensitive products” . Cotton for instance can now be considered part of the ”sensitive” category, as can the highly- subsidised dairy, sugar, fruit, and vegetable products.

Meanwhile, the developing countries have been forced to open their borders still further. The entire thrust of the Geneva talks was to seek more market access from the developing countries, and the developing countries have obliged. The only redeeming feature is that the developing countries can block imports of a few commodities that are sensitive to food security needs.

As if the destruction that trade liberalisation has already wrought by driving down prices, undermining rural wages, and exacerbating unemployment is not enough, providing greater access to developing countries’ markets will lead to even more displacement of farm communities from their meagre landholdings. Importing food is like importing unemployment, yet the WTO has refused to draw a balance sheet showing the human and environmental cost of its trade paradigm. Despite the World Bank’s flawed estimates of a gain of USD 500 billion emanating from the free trade initiative, the fact remains that by further opening their borders to trade, developing countries ruined their agricultural sectors.

In the Philippines, millions of farmers were driven out of business when the corn market was opened up in 1997. At that time, US corn growers were receiving average subsidies of USD 20,000 a year, while Filipino farmers in Mindanao had average income levels of USD 365 a year. In Central America, the price of coffee beans has fallen to just 25 percent of its level in 1960, and the region lost an estimated USD 713 million in coffee revenues in 2001 alone.

In sub-Saharan Africa, Ethiopia and Uganda reported huge losses in export revenues. Indonesia, among the top ten rice exporters before the WTO came into being, was the world’s largest rice importer in 1998. Peru now imports 40 percent of its food. In India, agricultural imports have increased four times in past six years, and the situation is no better in Pakistan and Bangladesh. The WTO accord makes no real effort to reverse this worrying trend.

With cheap agricultural products swamping developing countries, the world will soon witness the biggest environmental displacement yet, and this time it is not going to be from big dams and hydroelectric projects but from agriculture. And the resulting economic and political costs will have to be borne by the developing countries. (END/COPYRIGHT IPS)

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