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WTO agricultural liberalization may hurt small-scale farmers

by Gumisai Mutume

Washington, 27 Feb (IPS) -- The failure to introduce a new round of agricultural negotiations at the 1999 World Trade Organisation (WTO) meeting in Seattle provided them brief respite, but small-scale farmers are again under threat from a new phase of similar discussions that begin soon in Geneva, experts say.  The Agreement on Agriculture (AoA), adopted after long and difficult negotiations of the Uruguay Round of the WTO, is currently undergoing reforms. In April, member countries of the international body are expected to begin negotiations, based on position papers submitted last year, aimed at further liberalising global agriculture.

While the rhetoric behind the reforms is to develop a fair, market-oriented agricultural trade system, poor nations, where the majority of people depend on the land for a living, have yet to benefit from the policy that was implemented in 1995, a recent seminar on the impact of the AoA here was told.

WTO member countries agreed to initiate negotiations to continue reforming the AoA one year before the end of its implementation period - i.e. in 1999. It is a session of these talks that is due to begin in April.

“I have no doubt that the powers that dominate global trade will continue to tilt the balance to their advantage,” says Martin McLaughlin of the Centre of Concern, an NGO in Washington D.C, whose food security project monitors and advises on the world food system.

McLaughlin told the seminar that further negotiations will most likely not be about shifting the balance from the current status quo, “dominated by export-led, industrialised nations”.

In Seattle, industrialised countries failed to introduce a new ‘development round’ of agricultural liberalisation, which would benefit Third World countries more, according to the WTO. A decision on beginning this round is due at the fourth WTO ministerial conference in Doha, Qatar in November.

Agriculture is the mainstay of the majority of the 140 members of the WTO. It is of prime concern to low-income countries where it accounts for up to 80% of the labour force. In middle-income countries, as much as 40% of the workforce make a living from agriculture, while the sector accounts for only 4% of labour in industrialised countries.

According to Brian Halweil, a research associate at the non-governmental Worldwatch Institute, the WTO agreements are extending to the global level, “the marginalisation of small farmers as big agricultural corporations pit farmers in the US, for example, against farmers in Argentina or South Africa,” he said.

The United States is the world’s biggest exporter of agricultural products, accounting for 12% of the global total. Some three-quarters of these exports are to countries outside the North American Free Trade Agreement (NAFTA) zone of the United States, Canada and Mexico. At least 40% are destined for Asia alone.

In importing countries are small farmers, often unsupported by domestic measures because their governments do not have the money to do so, or are limited by WTO regulations. They have to compete with heavily subsidized transnational food suppliers and farmers in the rich countries that make up the Organisation for Economic Co-operation and Development (OECD).

Between 1995 and 1998, OECD countries paid an estimated $28 billion in export subsidies in agriculture, with the United States alone accounting for $13 billion of this total. That figure dwarfs the annual agricultural earnings of many of the poor nations.

About 35 negotiating proposals have so far been submitted to the agricultural negotiations and most are oriented towards reducing and simplifying these domestic support measures.

Case studies on WTO liberalisation recently carried out by the UN Food and Agricultural Organisation (FAO) on 14 countries show a general trend towards the concentration of farms in a wide cross-section of countries leading to increased productivity and competitiveness of the bigger farms.

However, the FAO found that the process marginalised small farmers who often depend on cheap lower-yielding seeds; have no access to modern technologies or cheap credit; cannot find international buyers for their meagre quantities; and who often rent rather than own their small strips of land.

Few of the studies reported improvements in agricultural exports in the post- Uruguay Round period. Instead, developing-country agricultural exports as a percentage of world exports are slightly below the levels they were in the 1970s.

In the Philippines, the FAO documents how a country that was once a net food exporter during the 1980s has been turned into a food importer through a combination of measures that have made imports cheaper and encouraged the cultivation of exotic export crops. Poverty is rising among farmers of staples, such as rice and corn, who are out-priced by cheap imports.

The Philippine government says that 350,000 jobs are being lost annually, mainly in the labour-intensive traditional areas such as corn, rice and sugar farming.

“It is common in our countries to see vendor after vendor with full trays of vegetables,” says Nelcia Robinson of the Caribbean Gender and Trade Network in Trinidad and Tobago. “They are unable to sell because imported food is much cheaper.”

James Boyce of the University of Massachusetts notes that by the price standard of the maize market, the United States produces maize more ‘efficiently’ than its NAFTA partner, Mexico. When NAFTA was being negotiated, maize produced in the United States cost about $110 per tonne at the Mexican border, while in Mexico maize farmers received $240 per tonne. While the Mexican government has long restricted maize imports to protect its domestic farmers, the protection is now being phased out over a 15-year period under NAFTA.

In his recent report titled ‘The Globalisation of Market Failure?: International Trade and Sustainable Agriculture’, Boyce notes that as US maize displaces domestic production, the number of maize farmers and their families who will be forced off the land varies from conservative estimates of hundreds of thousands, to upper-end predictions of 15 million people - about one-sixth of the country’s population.

Many will find themselves in already sagging cities such as Mexico City - the world’s most populous with its estimated 25 million people.  Others will attempt to cross the border illegally to look for work in the United States.

The next phase of the agricultural negotiations is expected to dwell on a few areas such as export subsidies, domestic support, market access and special and differential treatment for developing countries.

“The highest goal, in terms of the end-result, formulated by the Cairns Group, is the affirmation that trade in agricultural products be submitted to the same multilateral rules applicable to other goods in order to eliminate restrictions and distortions in world trade markets,” says Nestor Osorio Londono, former permanent representative of Colombia to the WTO, and now advisor to his government.

The Cairns Group, a diverse array of 18 developed and developing countries, which are agricultural exporters,  is supported by the United States but opposed by the European Union and countries such as Japan, the Republic of Korea and Switzerland.

The Cairns Group position is also opposed by some developing countries, “especially net food importers that are not quite certain about the consequences of a total integration of agriculture into the WTO system”, says Osorio Londono.

 


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