TWN Info Service on WTO and Trade Issues (June08/12)
17 June 2008
Third World Network

Trade: Doha Round will not solve global food crisis, say NGOs

Published SUNS #6490 Friday 6 June 2008

Geneva, 5 Jun (Kanaga Raja) -- Some 237 major NGOs, trade unions, farmers' organizations and social movements from nearly fifty countries have said that the Doha Round, as is currently envisioned, will further intensify the global food crisis by making food prices more volatile, increase dependence of developing countries on imports and strengthen the power of multinational agribusiness in food and agricultural markets.

In a strong snub to WTO Director-General Pascal Lamy - in his push to conclude the Doha Round as a solution to the global food crisis - the NGOs and social movements sent a letter to him as well as to their trade and agriculture ministers, saying that the answer to skyrocketing prices of basic staples "does not lie in deeper deregulation of food production and trade."

The groups called for governments and communities to have a range of tools at their disposal to build resilient food and agricultural systems that are ready for the challenges that lie ahead. The volatility of agricultural prices must be addressed through national policies and global actions to avert food crises and to ensure small producers a reliable and steady income.

The groups also said that governments should establish safety nets and public distribution systems to prevent widespread hunger. A reform of the food aid system also needs to be undertaken.

The message from the groups came as the UN Food and Agriculture Organization (FAO) is holding a High-Level Conference on world food security (3-5 June) in Rome and the Organization for Economic Cooperation and Development (OECD) is holding its annual meeting in Paris.

(In his address at the FAO High-Level Conference in Rome on 3 June, Director-General Lamy said that in order to cope with soaring food prices, supply must adjust to demand. For this to happen, trade will help. "Easier, more open trade, can strengthen the production capacity of developing countries, rendering them less vulnerable."

(He maintained that international trade can help ease food shortages by channeling food where it is required. "Through greater and fairer competition, international trade can help lower prices," he said, adding that all of this presupposes that the trade-distorting agriculture subsidies that have given an unfair advantage to rich world farmers, will be tackled. It would also necessitate tariff reduction.

(Lamy went on to say that the WTO Doha Round of trade negotiations can be part of the medium-to-long term response to the food price crisis. "It would reduce the trade-distorting subsidies that have stymied the developing world's production capacity. It would also bring down tariffs - albeit while maintaining adequate safety nets - thereby increasing consumer access to food through lower prices," he said, adding that the negotiations also provide a possibility for strengthening WTO rules on export restrictions.

(Separately, speaking at a closed-door meeting at the OECD on Thursday, Lamy is reported to have said that he was asking WTO members to send "high officials" to Geneva, to sort out over the next fortnight or so, the problems on agriculture and non-agricultural market access (NAMA), where modalities are being sought to be finalised and agreed upon. While in agriculture, the chairman of the negotiating group is holding further meetings, in NAMA, the talks appear to have virtually collapsed, with its chairman adjourning the meetings without a new date.)

The NGO letter to trade and agriculture ministers was also delivered to Robert Zoellick, President of the World Bank; Dominique Strauss-Kahn, Managing Director of the International Monetary Fund; Angel Gurria, Secretary-General of the OECD; Jacque Diouf, Director-General of the FAO; and the UN Secretary-General, Ban Ki-moon.

Among the international and regional networks that signed on to the letter are ActionAid International; Africa Trade Network; Asian Peasant Coalition; ATTAC; Friends of the Earth International; Global Network Latin America; International Gender and Trade Network; La Via Campesina; Oxfam International; Pesticide Action Network; Public Services International; SEATINI; Third World Network; and UBUNTU.

Also among the signatories are national and sub-regional networks that amongst others include Accion Ecologica; Africa Action; Bhartiya Krishak Samaj (National Farmers' Movement, India); Central Unica dos Trabalhadores (National Labour Federation - CUT, Brazil); CIDSE; Center of Concern; Consumers Association of Penang; Corporate Europe Observatory (CEO); Economic Justice Network; IBON Foundation, Inc.; Institute for Global Justice; Institute for Agriculture and Trade Policy (IATP); International Forum on Globalization; Public Citizen's Global Trade Watch; The Oakland Institute; and World Development Movement.

In their letter to trade and agriculture ministers, the groups said that the global food system is in crisis. Millions of people can no longer afford or access the food they need, increasing global hunger and malnutrition. The worlds' governments need to act now.

"But the answer does not lie in deeper deregulation of food production and trade."

"We, concerned non-governmental organizations and social movements, urge you to reject the claims by the leaders of the World Trade Organization (WTO), World Bank, the International Monetary Fund (IMF) and the Organization of Economic Cooperation and Development (OECD), that concluding the Doha Round is a solution to the current crisis."

"We believe the Doha Round as is currently envisioned will intensify the crisis by making food prices more volatile, increasing developing countries' dependence on imports, and strengthening the power of multinational agribusiness in food and agricultural markets. Developing countries are likely to lose further policy space in their agriculture sector, which would in turn limit their ability to deal with the current crisis and to strengthen the livelihoods of small producers," said the groups.

The inability to manage the current food crisis is an illustration of the failure of three decades of market deregulation in agriculture, said the groups, pointing out the need for a new model for the trading system that puts development, employment and food security objectives at the centre.

"We are calling for real solutions that will stabilize food production and distribution to meet the global demand for healthy, adequate, and affordable food. Governments must start to take a long-term view of the challenges facing agriculture."

The groups also cited the recent report of the International Assessment of Agricultural Knowledge, Science and Technology for Development (IAASTD), endorsed by 57 countries, which said: "Modern agriculture has brought significant increases in food production. But the benefits have been spread unevenly and have come at an increasingly intolerable price, paid by small-scale farmers, workers, rural communities and the environment."

Support has to be directed at a different model of agriculture that can sustainably meet the needs of a growing population, said the groups.

The groups said that the WTO's Doha Round and other bilateral and regional trade agreements currently under negotiation will not solve the food crisis, for the following reasons:

-- Existing WTO and bilateral and regional trade agreements push across-the-board liberalization, which worsens volatility of food prices. This leads to increased dependence on international markets and decreased investment in local food production. Trade liberalization has eroded the ability of a number of developing countries to feed themselves, for example, Mexico, Bangladesh, Indonesia and Mali. The removal of tariff barriers has resulted in dumping of heavily subsidized commodities in developing countries, such as Ghana, Kenya, the Philippines, Jamaica and Honduras, while undermining local food production.

Developing countries have turned from being net exporters of food to net importers of food. Two-thirds of developing countries are net food importers and are extremely vulnerable to volatile world food prices. The current proposals under the Doha Round will increase countries' dependence on food imports while further eroding their ability to feed their own populations.

-- High food prices provide enormous benefits to transnational agribusinesses and commodity cartels that control the trade in food and agriculture. One of the largest global grain traders, Cargill, announced in April 2008 that its third quarter profits rose 86% to $1.03 billion, in the midst of the global food crisis. Bunge saw its profits in the last quarter of 2007 increase by 77% compared with the same period in 2006. Archer Daniel Midland's (ADM's) profits in 2007 rose by 65%. The Doha Round will strengthen the position of transnational companies in agricultural markets, who thrive on market deregulation.

-- The Doha negotiations do not tackle the major challenges facing the global food system, which include climate change, natural resource depletion, the quadrupling of oil prices, the lack of competition in world commodity markets, financial speculation and the rapid expansion of unsustainable agrofuels production.

The groups believed that what is needed to solve the food crisis are the following:

-- Governments and communities need to have a range of tools at their disposal to build resilient food and agricultural systems that are ready for the challenges that lie ahead. This includes a greater emphasis on policies that increase food sovereignty, encourage local investment in local markets, support sustainable small-scale farming, safeguard local production from dumping, implement genuine agrarian reform, and allow trade instruments such as quotas and tariffs. Some of these instruments are being proposed by a group of 46 developing countries - known as the G33 - in the WTO's negotiations on Special Products and Special Safeguard Mechanism.

-- The volatility of agricultural prices must be addressed through national policies and global actions to avert food crises and to ensure small producers a reliable and steady income. Well-managed public stocks need to be re-established. Such stocks provide an important buffer against price volatility and food insecurity. Speculation and extremely high prices forced upon consumers by traders and retailers must be controlled. At the WTO, the African Group has a long-standing proposal on the need to allow commodity-producing countries to make agreements among themselves in order to stabilize prices. This proposal deserves further attention.

-- Governments should establish safety nets and public distribution systems to prevent widespread hunger. Governments have to provide financial support for the poorest consumers to allow them to eat. Governments must use the maximum of available resources within the State and from the international community.

-- A reform of the food aid system to respond more rapidly and to allow greater flexibility in the delivery of food aid. Instead of dumping surplus agricultural production as "in kind" food aid, donors should provide cash to governments and aid agencies to buy local food.

-- Developing countries should not commit themselves to liberalisation of financial services in the context of the General Agreement on Trade in Services (GATS) or bilateral and regional trade negotiations, as this can adversely impact farmers' access to financial services such as insurance and credit. +