Global Trends by Martin Khor

Monday 15 May 2006

Big fight on food security Big fight on food security

A key question has taken centre stage in world trade talks:  whether developing countries have the right to food security and to protect the livelihood of their farmers, or whether they must allow cheaper imports that may overwhelm local agriculture.   In the past two weeks this controversy has raged at the World Trade Organisation.

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Do developing countries have the right to protect their agriculture sector from the damaging effects of cheap imports?

Most developing countries think so.  They are arguing in the World Trade Organisation that food security and their farmers’ livelihoods are more important that the abstract principle of free trade or “market access.”

But they are being challenged by the United States, which wants to tear down barriers to its farm products, which are heavily subsidised and thus artificially cheap.  And the US is backed up by a few developing countries, like Thailand, that want to export more.

It’s a big issue because the fate of hundreds of millions of farmers depends on it.  Most countries also want to be able to produce their own food on grounds of security and to provide income to the rural poor and save on foreign exchange.

Already there have been protests by farmers in many countries, such as Indonesia, the Philippines, Ghana, Senegal and in the Caribbean region that cheap and often subsidised food is being dumped in their countries, displacing local production.

A big battle is now being waged at the World Trade Organisation over this issue, with emotions running high.  If not resolved soon, it may scuttle the world trade talks.

Recently, the vast majority of developing countries were infuriated when their proposal to guard the interests of food security and farmers’ livelihoods was opposed (and, in their view, ridiculed) by the United States, backed by a few others.

Most developing countries want to be able to designate 20% of their agricultural imports as “special products” (SPs) which will be subject to no or very low tariff reduction as part of the conclusion of the current trade talks. These are products that are linked to food security, farmers’ livelihoods or rural development.

They also propose a “special safeguard mechanism” (SSM) be set up to allow the developing countries to impose higher duty on particular farm imports if there is an increase in volume or fall in price that could threaten local production.

The SP and SSM concepts have already been agreed to.  The question is how to operationalise them, for example how many products can be designated as “special” and how should they be treated in terms of tariff reduction. 

A few weeks ago, the US counter-proposed that only five tariff lines can be designated as “special.”   This is seen as ridiculous or even a “joke” by the developing countries, as they typically have a thousand or more tariff lines in agriculture and some key products like rice may be covered by 20 or 50 tariff lines.

For the US, these “special products” have also to be subjected to tariff cuts, and a quantity of them should be allowed to enter at zero tariff.

A few developing countries, such as Thailand and Malaysia, have also supported that severe restrictions and conditions be applied to the use of special products.

The US also proposed to place many restrictions and conditions on the use of the safeguard mechanism, to the extent that it would be rendered useless.

Last week, four powerful groupings that constitute the majority developing countries came together to issue a “joint manifesto” attacking the attempts to restrict and undermine the use of the SP and SSM concepts.

The Group of 33 (led by Indonesia), the African Group, the ACP (Africa, Caribbean and Pacific) Group and the least developed countries also warned that they cannot agree to any WTO deal in agriculture which does not meet their needs of food and livelihood security and rural development.

Indonesia’s Ambassador, Gusmardi Bustami said that “no deal is possible that treats SP and SSM from a purely market access or commercial perspective, or that detracts or derogates the developmental value of SP and SSM.”

He added that the SP and SSM instruments “address the needs of millions of resource-poor farmers all around the world whose food security, livelihood security and rural development concerns are threatened with unbridled market access openings.”

Said another Ambassador:  “Our millions of farmers must not be sacrificed in this Round. If these countries continue to attack our SP and SSM concepts, there is no point having any further talks.”

The fight over farm imports and food security is now taking centre stage in the wrangling going on at the WTO.  At its heart is a simple but crucial issue: whether developing countries have the right to defend their food security and the incomes of their farmers.