Introduction
Agriculture is a very important sector in the whole world economy since it makes available, food to every living person. Considering trade and agriculture, the World Trade Organization is the main body that coordinates activities in these two areas, (WTO is an international trade organization consisting of 146 member countries – as of April 2003, according to Global Express [2004]). Amazing enough, the WTO’s Agreement on Agriculture, otherwise known as (AoA) does not direct its concern to agriculture and food. In the recent Doha round of talks, trade and agricultural subsidies became controversial issues (Rena, 2009).
Food is a human right since it is a basic need for human beings to survive. Global food security results from each country’s ability to produce to ensure its people survive. Unfortunately, the world food supply is getting under the control of big multinational corporations at an increasing rate. These large businesses are constantly changing the trends in the world agricultural economy with the aid of “free trade” agreements to convert food into a profit-making good and not regarding it as a human right. The commercialization of agriculture has brought about many negative effects on food security, the farmers themselves, and even on the environment (James, 2007).
Hassett & Shapiro (2003) argue that the greatest factor that has prevented progress in Africa alongside droughts, poor management, wars, and diseases is the E.U’s “Common Agricultural policies” – CAP. They clarify this point by saying that the policy has brought about subsidies and tariffs that have greatly favored the European food output and depressed global food prices and at the same time cutting down African exports. Basing on the U.N estimates, the third world nations get a loss of $1.3 billion each coming day as a result of unfair trade rules (Anonymous, 2008, Christian Today Ministries)
The Controversial Issue: Agricultural Subsidies
Trade is an instrument that can be used to generate wealth and move out of poverty and its associated ills and yet the poorest people in the world, who consist of millions, are left behind. The gap between the poor and the rich is increasing with each coming day. On the other hand, world trade could be the best instrument to eradicate poverty and boost growth in the economies of the participating nations but this is not being realized. Interestingly, the obstacle isn’t that the international trade is against helping the poor realize their needs but the major obstacle is that the rules that control it are made in favor of those that are rich (Anonymous, n.d., Rigged Rules and Double Standards). Rich nations’ governments keep on stressing on their putting in more efforts in reducing poverty and yet in the actual sense, the rules governing the international trade and double standards prevent the poor nations from reaping the benefits from trade and this contributes highly to their remaining in poverty.
To illustrate this, the rich nations spend one billion on agricultural subsidies each coming day and this results in the production of a surplus. This surplus in turn is dumped in the poor countries thus spoiling the livelihood of the many small-scale farmers in those countries. On the other hand, when the poor nations take their commodities on the export market in the rich countries, they come across trade barriers. These barriers are four times higher than those the rich countries face. These barriers cost the developing countries $100 billion each year and this amount is two times the amount they get in aid. This is one of the issues that were hotly contested at the 2000 Doha talks.
In these talks, it was suggested that the removal of barriers and reduction of subsidies to the imports coming from the developing nations could give economic benefits equivalent to thrice the amount of aid that is presently being given by the northern countries to these nations. A report from the World Bank (given out a short time before the meeting held in Doha) also agreed to this noting that eliminating these farm subsidies together with reducing the high tariffs in agriculture and giving of duty could yield the poor countries $15000 within ten years (Mutume, 2001). In the Doha talks, French leaders, who were facing elections in the year 2002, defended subsidies for their farmers thus they tried to obstruct words in the statement committing members to do away with subsidies but France did not get support from other E U members (Miller & Newman, 2003). The U.S had an apprehension of the outcome of E.U subsidies on the U.S farmers and the developing countries. Eventually, France gave up after the U.S proposing that the countries will engage in talks concerning the issue of reducing subsidies as a way of just saving image (Mutume, 2001). France has been noted to be among the developed countries that made a trade for the developing nations more difficult especially in not supporting these countries to export the Genetically Modified agricultural products (Sawahel, 2003). More so, in these talks, some developing countries demanded that some more other reforms called the “development box” be incorporated in the Doha declaration to make amendments on the AoA but this demand did not go through. The reforms were directed towards allowing the developing countries to increase their import tariffs imposed on staple foods to achieve food security needs and support the poor people in rural areas. These countries intended to have the ability to subsidize directly the essential crops on which poor farmers depend mainly as the source of livelihood, the practice the agreement failed to support (Mutume, 2001). The agreement was seen to favor the developed countries at the expense of the developing ones. This lack of support of these reforms is also mentioned in the Report of Workshop II by Anonymous (2007), held in New Delhi in which it questioned if there was a possibility to put up an agricultural subsidy structure in the North that can care for small scale farmers in both the north and the south. It was felt that at hand, was a role for protective tariffs for agriculture in the South but the North was strongly against this.
This controversial issue is as well echoed in the Trade Justice Movement report (Anonymous (Not Dated) in which the U.S and E.U are blamed for the failure of talks about reducing subsidies. They are blamed for continually placing their needs above the needs of the developing countries especially regarding the agriculture sector. In the report, the third world countries have been congratulated for persistently fighting for the rights of their poor people. The Doha round that began in the year 2001 was supposed to be around that was meant to seeing markets that were fairer and favored poor nations but this was not realized. For instance, the U.S came up with a suggestion that its subsidies would be limited to $14.5 billion per year which were at $ 7.8 billion. This implies that the country was not going to bring down the trade destroying subsidies at all.
During the World Summit on Sustainable Development, there were presentations on the third world countries’ agriculture among them being the one from the Department for International Development in the U.K (DFID) that was covering on the role of Agriculture (Bundell, 2000). This report strongly supported small farmers and development of their agriculture. The base of the report was on the recognition that poor people are the majority and depend basically on agriculture for their survival. The report put forward an argument that the poor people should get support in terms of provision of efficient infrastructure, credit facilities among other forms of support in order for them to achieve an improvement in production so as to serve themselves, the local markets, and even the global markets. The report also criticized the harm the rich nation’s agricultural subsidies have done on the poor countries’ agriculture and their farmers in addition to trade barriers such as the persistent existence of tariffs that prevent developing nations from benefiting from international trade. The report recognizes that currently, there is unfair trade. However, the DFID report did not give any clear solution to the prevailing matter than giving an impression that there has to be waiting until the countries in the north come to decide to take away their subsidies and the trade barriers, a thing which Bundell (2000) suggests can not be realized very soon.
Conclusion
At the end of the Doha conference, it was still hard for countries to reach a consensus on the issue of agriculture. The EU had at last accepted to come up with measures to phase out all kinds of export subsidies. Exports from developed countries that are highly subsidized have always had a very negative effect on small-scale farmers and domestic prices. Castle (2003) also expands on the significance of removing subsidies on exports and reports that changing the common trend will prevent the production of excess food and do away with the system that distorts trade and brings harm on the third world countries. Since the developing countries have sought for a long time to have favorable access to the markets of developed nations, they are most likely to welcome the fresh permission for discussions on feasible improvements in the market access. This hope has come about after the Doha talks. These negotiations will take in to consideration development requirements like food security and development of rural areas (Anonymous, n.d., Final Doha Assessment). From the ongoing discussion, it is quite clear that the food crisis and lack of basic needs by people in the developing countries is as a result of unfair trade conditions and unreasonable plans that do not put food security in the first place. The policies that have exposed food security to uncontrolled market forces have to be reviewed. There should be improvement of the local markets and the greatest priority should be marketing food on the local and regional markets. More so, commercializing agriculture should be controlled by policies that give priority to the small scale farmers in terms of enabling them to make better decisions and improving their purchasing power. Intervention steps should be directed towards improving the access of poor farmers to better quality inputs, credit facilities & extension services, and even to better markets. The developed countries should support the poor countries to develop agricultural export. In addition, the developed countries should, in their trade agreements, provide political flexibility for the developing countries in order for them to make a substantial improvement on the domestic production of staple foods. In addition, in order to ensure fair trade and food security, rules governing trade should not interfere with the right of any government to ensure adequate food supply to its people. The third world countries that export large quantities of their staple foods to other poor countries should be requested to think about the impact of export limits on the food security of the poor countries that are importing. The least developed countries should be given special treatment by WTO to enable them limit the export of staple foods. And also, developing countries should not be forced to depend on unpredictable global markets for the staple food supply to them. This will in the long run put food available in such countries in much danger thus facilitating food insecurity (APRODEV, 2009). Each and every individual has a right to live in a decent way, have enough food for himself or herself. But this right is infringed especially at the WTO where those with much wealth are in favor of implementing policies that place profit at first position and basic needs for human living behind it. To put poverty to the end and have food security among other basic needs, trade justice is needed in place of free trade.
Reference
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Anonymous (2008) Christian Aid hopes modern-day slavery exhibition highlights unfair trade rules, Christian Today Ministries. Web.
Anonymous (Not Dated) Rigged Rules and Double Standards. 2009. Web.
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