Towards A People
Centred Fair Trade Agreement On Agriculture
By Vandana Shiva
13 January, 2004
collapse of the Cancun W.T.O. Ministerial was to a large extent due
to the blatant unfairness of the rules of the Agreement on Agriculture
which is killing farmers, killing biodiversity, killing fair and just
distribution and killing food security and food safety. The Agreement,
drafted by global agribusiness is designed to invade into domestic markets
by dismantling rural livelihoods and food security, and removing all
safeguards to prevent dumping of artificially cheap agricultural products
on Third World markets backed by subsidies of $400 billion.
New rules are urgently
needed. But all rewriting of trade rules for agriculture is being driven
by the same forces and interests that brought agriculture into the Uruguay
Round of GATT, with its genocidal impacts on peasants and the poor.
December 15 is the
deadline for restarting negotiations in Geneva and prior to that the
G-21 countries that countered the U.S.-E.U. proposals on Agriculture
with their own proposals in Cancun will be meeting in Brasilia to evolve
their negotiating stand for the follow-up to Cancun. Meantime, a group
of 33 countries are objecting that the W.T.O. is ignoring their demands
to safeguard food security and rural livelihoods through Special Products
and Special Safeguard Mechanism.
The need for a people's
text on trade in agriculture
While food is the
most basic need of people, and farming is a livelihood for three quarters
of humanity, the future of food and farming is being shaped by undemocratically
written agreements imposed on the people and governments of the world.
The Uruguay Round
was based on the Dunkel Text written Arthur Dunkel, the Doha Round was
reduced to the Harbinson text written by Stuart Harbinson, the post
Cancun negotiations are being straight ¬¬¬¬¬¬jacketed¬
by the Derbez text which reproduces the U.S.-E.U. biases and avoids
the key issues raised by the South which led to the collapse of negotiations
at Cancun, including
Agribusiness monopolies Export subsidies and dumping Special products,
special safeguard mechanism and quantitative restrictions (QRs) to protect
domestic producers from unfair dumping.
It is time to initiate
a people's text that reflects the interests of poor peasants and poor
It is time to go
beyond texts dictated by rich countries and powerful corporations. It
is time to rewrite the trade rules in agriculture on the basis of principles
of food sovereignty, sustainability, farmers and justice, and protection
of the environment and public health.
The process to reform
the W.T.O. rules is in any case a mandatory part of the review of the
Agreement on Agriculture -- Art 20 which the Third World countries had
demanded to be addressed in Doha as part of the implementation agenda.
This included assessing the impact of trade liberalisation on food security
and farmers livelihoods and changing the rules of the Agreement on Agriculture
accordingly. The Doha demand for evaluating the impact of free trade
was ignored and the "Doha Round" became the opposite - pushing
trade liberalisation further and faster on poor countries.
This one-sided globalisation,
with rich countries forcing poor countries to remove import restrictions
and lower tariffs progressively, while increasing their subsidies and
hence increasing the levels of dumping which is annihilating the very
lives and livelihoods of peasants, was the core reason for the breakdown
of the W.T.O. Ministerial at Cancun.
What the Cancun
collapse revealed was the need and right of poor countries to protect
their farmers and food security. Yet this is precisely what is being
ignored in the follow-up to Cancun. The Derbez text has totally ignored
the call for flexibility for developing countries to designate Special
Products which can be exempted from tariff reductions and special safeguard
mechanisms to protect themselves against dumping.
This is why an alliance
of 33 countries on agriculture has told the W.T.O. General Council Chairman,
Carlos Perez del Castillo, that they are deeply concerned that the concepts
of Special Products (SP) and Special Safeguard Mechanism (SSM) have
not been given due attention during the consultations he has held on
agriculture after the Cancun Ministerial.
The Indian Movement
has been demanding a reintroduction of QRs given the unfair global market
in agriculture which is costing Indian peasants more than $ 26 billion
in terms of reduced incomes and hence increased poverty. More than 25,000
peasants have committed suicide under the unjust and brutal pressure
of unfair prices and markets. The Korean farmer Lee's suicide in Cancun
to highlight the fact that "WTO kills farmers" was not just
symbolic. It reflected a tragic reality.
Rewriting the W.T.O.
rules on Agriculture has therefore became an imperative to reflect the
human rights of peasants to survival.
On a day dedicated
for human rights let us just ignore human rights of a threatened community
- the small and marginal farmers of the world..
It is necessary
to rewrite the rules to also transcend the false polarity between the
position on food sovereignty --"W.T.O. out of Agriculture"
and the position that multilateral rules are needed to prevent the weak
from the powerful, and the Third World peasants from the threat of dumping.
The proposed agenda for reform archieves both -- retaining food sovereignty
by deleting W.T.O. disciplines on domestic support for domestic production
and consumption, while strengthening the capacity of countries to protect
themselves from dumping.
2. Why trade rules
for agriculture need rewriting
Food is not just
a tradable commodity like cars and computers where it is produced how
it is produced makes a different. Food is a vital need, a fundamental
right, an embodiment of culture and nature. Agriculture is relatedly
a multifunctional activity -- involving conservation of soil, water
and biodiversity, providing livelihood to rural communities, the foundation
of culture and cultural diversity, and the source of a vital and essential
need. Rules for trade in agriculture cannot be based on the paradigm
of trade liberalisation if rural livelihoods, the environment, public
health and cultural diversity has to be protected.
The W.T.O. is supposed
to regulate to ensure fairness in international trade. However, the
Agreement on Agriculture of the W.T.O. is based to unfairness. It goes
beyond the trade jurisdiction of W.T.O. and interferes in domestic policy
through clauses on domestic support. Not only does this threaten and
undermine farmers livelihoods, it undermines the distribution of powers
at local, provincial and national level. Through rules on domestic support
in agriculture, W.T.O. is blocking the sustainable agriculture and food
security objectives, and is in violation of national constitutions under
which agriculture is a sub-national subject. The decision making powers
of local and regional governments are being usurped, thus subverting
The legitimate role
and function of W.T.O. is to prevent unfair trading practices like dumping
and monopoly control over markets. However, the current W.T.O. rules
have facilitated increase n export subsidies leading to enhanced rates
A recently released
report from the International Agriculture and Trade Policy Institute
has shown that in four major U.S. commodities, the level of dumping
has increased since 1995 when the W.T.O. came into force, even though
the proclaimed aim of W.T.O. is to "reduce distortions in trade".
While the full cost of U.S. wheat in 2001 was $6.24/bushel, its export
price is $3.5/bushel. In the case of soya bean, the cost was $6.98/bushel,
the export price was $4.93/bushel. For maize, the full cost was $3.47/bushel,
export price was $2.28/bushel and the export price was $0.3968/bushel,
a dumping of 57%. The cost of production of rice was $18.66/bushel and
it was sold internationally at bushel $14.55/bushel.
From 1995 to 2001
dumping jumped from 23% to 44% in the case of wheat, 9% to 29% in the
case of soya beans, 11% to 33% in the case of maize, from 17% to 57%
in the case of cotton.
While the W.T.O.
Agreement on Agriculture claimed to achieve reduction of rich country
subsidies, the $248.6 billion farm Bill of 2002 has increased farm subsidies
by $83 billion. This dramatic increase threatens the livelihoods of
Third World farmers. According to the World Bank, low cotton prices
in U.S. resulting from high subsidies are costing African countries,
$250 million each year.
The call of movements
for food sovereignty as the framework and context for production and
trade in agriculture demands that the rules on domestic support for
domestic production in the current W.T.O. Agreement on Agriculture be
deleted. This gives affect to the movement call for "W.T.O. out
The call of the
G-22 for removing export subsidies demands that the rules on dumping
be strengthened and in cases where countries continue to subsidize exports
and artificially lower prices, other members have a right to restrict
imports to protect themselves from dumping. This implies that QRs have
to be brought back to deal with dumping.
QRs are also the
only reliable means to protect "Special Products" and have
Special Safeguard Mechanism (SSM) on which large numbers of agricultural
producers depend and which the group of poorer countries are demanding.
QRs are a necessary
instrument of fairness in a world dominated by unfairness of agribusiness
monopolies and oligopolies.
The W.T.O is, therefore,
doing what it should not be doing (interfering in domestic policy and
domestic products) and is not doing what it should be doing (regulating
and preventing dumping). The rules of W.T.O. on agriculture need to
be changed to correct both flaws -- the flaw of inappropriate invasion
into sovereign domestic space by imposing disciplines for domestic agricultural
production which interferes in the objectives of sustainability and
food security, and the flaw of failing to prevent unfair trade practices
based on unfair, unjust and false prices leading to dumping.