[Reader-list] RTF (Right to Food) Articles - 11
Rakesh Iyer
rakesh.rnbdj at gmail.com
Tue Aug 11 18:29:01 IST 2009
Financial Daily from THE HINDU group of publications
Tuesday, Jul 29, 2003
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Opinion <http://www.hinduonnet.com/2003/07/29/04hdline.htm> - WTO
* Towards Cancun WTO Ministerial — Bring subsidy issue back into focus *
* Devinder Sharma *
AT PROBABLY the last officially organised public symposium in Geneva
(June 16-18) before the forthcoming WTO Ministerial at Cancun in early
September, the writing was clearly on the wall: Agriculture has for all
practical purposes been abandoned in the ongoing multilateral negotiations.
And with this cleverly manipulated turnaround ends the final hope for
billions of small and marginal farmers in the developing world who were
initially promised the stars when the WTO was formally launched on January
1, 1995.
Eight years later, their dreams have been shattered. Swamped by a surge in
food imports, and with their respective governments agreeing to further
lower the tariffs, it is only a matter of time before the collapse of
agriculture in the developing world triggers massive displacements from the
rural areas.
The big boys have done it again. After Doha, where the US, the European
Union and the Cairns Group of grain exporting countries managed to stage a
coup of sorts by committing nothing more by way of reduction in their
mammoth agricultural subsidies, the focus of the ongoing negotiations has
been very conveniently shifted to market access and its modalities.
Except for a regular mock drill of a `tit-for-tat' over subsidies and
domestic protection that is staged so eloquently by the EU and the Cairns
group, the underlying emphasis remains on prising open the developing
countries to provide increased market access.
At Geneva too, Mr Mark Vaile, Minister of Trade for Australia (part of the
Cairns Group), and Ambassador Luzius Wasescha of Switzerland (keen to
protect subsidies) did regale the audience with scathing charges and
counter-charges.
Trading charges in open fora are surely meant for the public galleries, the
hidden agenda for both the blocks being to protect their highly subsidised
(and protected) agriculture.
The public postures notwithstanding, the US/EU have a history of arriving at
a compromise to protect their economic interests, and every other country is
then made to fall in line. But what has become more significant during the
post-Doha phase is the co-option of the developing countries and the civil
society groups in the process of hijacking the `Agreement on Agriculture'
(AoA).
The AoA hinged precariously on eliminating agriculture subsidies as a basic
step in getting the fiscal house in order. Knowing well that any reduction
in subsidies would be politically suicidal, the developed countries managed
to not only maintain the level of subsidies but, in fact, succeeded in
increasing it manifold. At the same time, they continue to arm-twist the
developing countries to reduce tariffs and open up markets for farm goods
from the industrialised countries.
Shifting the focus to increased market access or what some negotiators call
`over-ambition' on market liberalisation became the rallying point.
Agricultural subsidies have been simply pushed to the backburner.
The only way to escape reduction commitments was to divert attention to
market access, special safeguard mechanisms, tariff rate quotas, and
strategic products.
Mr Stuart Harbinson, chair of the agricultural negotiations, presented his
first draft of possible modalities for the agriculture negotiations on
February 12. This was the culmination of the post-Doha negotiations and the
paper reflected a compromise formula based on the conflicting positions of
the governments. A second draft was released on March 18, just before the
self-imposed deadline of agreeing to new modalities by March 31. Harbinson
actually has no mandate to present such drafts in his own `individual'
capacity. But he did, and no country objected.
The presentation of such drafts and, still worse, the numerous proposals
being put forward by the chairman of the councils, has in reality
marginalised the developing countries' ability to negotiate and exert
pressure. In other words, Mr Stuart Harbinson had very cleverly proposed a
formula that actually aims at seducing the developing countries with the
promise of an increased market access into the rich industrialised
countries. In addition, he provided to the developing countries another
lollipop — the option to classify a number of `strategic products' with
respect to food security, rural development and/or livelihood security
concerns.
Unfortunately, the developing countries were trapped by the discussions
around the new special safeguard mechanism that he had proposed, without
realising that the mechanism does not first remove the `special safeguards'
provisions under Article 5 of the AoA, which is a privilege enjoyed by only
21 developed countries, including the US.
The concept of `strategic products' is merely a proxy for the `development
box'— a proposal that will eventually turn out to be more damming if
implemented. More and more countries have lately understood the dangers of
supporting the `development box' and have, by and large, backed out. The
`strategic product' concept, therefore, is equally harmful for the
developing countries. The Agreement does not realise that production of
crops and its imports into developing countries cannot be equated with
industrial production. This is a mistake which was earlier committed also by
some Indian macro-economists, when they computed agriculture trade in the
same manner as they would assess the scooter manufacture or bicycle
production capacity of industrial units. Although Harbinson did propose
minor tinkering in the composition of subsidies in blue box and the amber
box, it is no significant. Such rope tricks have been earlier performed, and
will continue to be performed to hoodwink the developing countries into
believing that the rich countries are moving in the right direction. The
European Union, in 1995-96, had provided $48 billion under `amber box'
subsidies and another $40 billion under `blue' and `green box' subsidies. In
2002, it shifted and juggled the figures to provide $34 billion in `amber'
box and $52 billion as `blue' and `green box' subsidies. The net subsidy
level, however, did not show any significant shift, and, in fact, remained
almost at the same levels: $88 billion moving to $86 billion.
On the other hand, Cairns group has vociferously campaigned for the
elimination of food subsidies and for increased market access. They claim
that they do not provide any agricultural subsidy and still trade at
competitive prices because of high efficiency. In reality, the talk of high
quality of farm produce is only for academic purposes and trade
negotiations. The fact remains that Australia and New Zealand have dumped
sub-standard agriculture produce on developing countries, including India.
Wheat and soya from Argentina has been tested to be sub-standard a number of
times. It is simply because of the inability of the developing countries to
have adequate monitoring facilities for checking quality of food imports
that the claims of these countries remain unchallenged.
Regardless of the commitments being reached at the WTO negotiations, the US
merrily goes on flouting these under one pretext or the other. The world is
expected to behave like an ostrich when it comes to the WTO violations from
the world's only supercop. Whether it is the additional federal support of
$180 billion for the next 10 years that has been promised for American
farmers, or the grant of $110 million for export promotion that has recently
been announced, the WTO seems helpless. It is clear that the US and the
European Union (along with Japan, Switzerland and South Korea) are not going
to phase out, what to talk of eliminating, agriculture subsidies.
Harbinson's proposal for elimination of export subsidies (not all subsidies)
over the next ten years is, therefore, no sop to the developing countries.
For the developing countries, the need of the hour is not to be lured by
diversion tactics that the rich and industrialised often resort to. The
focus has to be brought back to the elimination of agriculture subsidies as
a pre-requisite to further negotiations. The modalities that developing
countries need to ensure are:
*Zero subsidies*: Developing countries must strive for the elimination of
all agricultural subsidies. Subsidies under all boxes — green box, amber box
and blue box — need to be first abolished before any more commitments are
made.
Agriculture negotiations should only be confined to the timeframe under
which these subsidies can be removed. Along with farm subsidies, the
monumental subsidies provided for freight also need to be disciplined.
*Market access*: No further concession on market access till the subsidy
issue is resolved. The new special safeguard mechanisms, including the
denomination of `strategic products', need to be debunked. Strategic
products do not protect the socio-economic interests of the developing
nations. Peas, for instance, are strategic to India's food security. But its
import has increased four times in the past four years. *Quantitative
restrictions (QRs): *Developing countries need to be allowed the same
provisions of the special safeguard mechanism that protects agriculture in
21 rich countries from import surges. In addition, developing countries
should have the right to re-impose quantitative restrictions that in reality
are the only measures that protect food security and the livelihoods of
millions of small farmers.
*Multilateral agreement against hunger*: Among the new issues to be
introduced at Cancun, the developing countries need to strive for the
inclusion of a multilateral agreement against hunger. This should be based
on the guiding principle of the right to food and should form the basis for
all future negotiations.
Such a multilateral agreement would ensure that countries will have the
right to take adequate safeguard measures if their commitment towards the
WTO obligations leads to more hunger and poverty.
(The author is a New Delhi-based food trade policy analyst.)
* *
* *
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