JP/7/YANU

Liberalization of agriculture destroys more than food security

Yanuar Nugroho Director The Business Watch Indonesia Surakarta yanuar-n@unisosdem.org

During the international trade talks last month in Cancun, Mexico, South Korean leader of its farmers' and fishers' union, Lee Kyung-hae, 54, stabbed himself at a violent protest. The former lawmaker, who later died, had earlier climbed a high security fence and waved a banner that read "WTO kills farmers".

With regard to the controversy upon his death, he may have been correct in addressing that concern.

Farmers' protests happen elsewhere, as in Thailand and India, where the same demand is raised: Stop liberalization of agriculture. For them, it is completely unfair to keep opening market access and to give domestic support and export subsidies in the midst of unfair word trade.

Up to 1995, international trade rules under the former General Agreement on Tariffs and Trade (GATT) were highly ineffective in "disciplining" agricultural trade. In particular, export subsidies came to dominate the world agricultural trade, while the disciplines on import restrictions were often flouted.

The 1986-1994 Uruguay Round went a long way towards changing all that. Agricultural trade is now firmly within the WTO multilateral trading system. The Agreement on Agriculture, together with individual countries' commitments to reduce export subsidies, domestic support and import barriers on agricultural products were a significant first step towards restructuring agricultural trade.

This restructuring brought all agricultural products (as listed in the agreement) under multilateral disciplines, including "tariff bindings" -- WTO members have bound themselves to maximum tariffs on virtually all agricultural products, while a significant number of industrial tariffs remain unbound.

The negotiations are difficult because of the wide range of views and interests among member governments, and the complexity of issues. The progress of liberalization of agricultural trade should benefit those countries, which can compete on quality and price rather than on the size of their subsidies.

That is particularly the case for many developing countries whose economies depend on an increasingly diverse range of primary and processed agricultural products, exported to an increasing variety of markets, including to other developing countries.

Countries seem to have been deadlocked over agricultural trade and investment rules, which many believe have created barriers to global trade. Many poor countries want their rich counterparts to deliver on a promise they made in Doha to cut US$300 billion in subsidies they hand out each year to their farmers. These subsidies, along with high tariffs, are seen as obstacles to poor nations breaking into those developed markets.

According to UN Secretary General Kofi Annan, the reality of the international trading system today does not match the rhetoric. Instead of open markets, there are too many barriers that stunt, stifle and starve. And this is to the detriment of poor countries. The reaction varies -- a group of 21 developing states, including China, India, Brazil and Cuba, have formed an alliance to demand the rich countries scrap the handouts, saying they condemn millions of their farmers to poverty.

What is crucial here?

First, siding with the producers -- farmers and fishermen -- is very important. Protection of the domestic agricultural sector is vital, particularly for agrarian countries like most developing countries. Thus, its governments are strongly asked to protect agricultural products from imported ones.

Second, liberalization of agriculture is closely related to the issue of food sovereignty -- more than food security, which has been destroyed throughout the world. At the beginning of last century, food was grown and distributed locally. At its end, just 20 multinational corporations dominated the food trade. The result? Two-fifths of the world population is malnourished. Half of these are hungry -- while the other half simply eats too much unhealthy junk food.

It comes as to no surprise since most nutrition research has been privatized and is now funded by and for industrial agribusinesses. So, it is in their interest to develop and advertise food that will appeal to the rich, not the poor; to encourage growing for export, not to meet local needs; to make farmers dependent on purchased seed, chemicals and machinery -- it is not their interest to make farmers self-sufficient.

The issue of agriculture is not only about trading food or agricultural products. At its very heart, it is related to the way we live. If we eat local food, we would of course know where our food comes from and there is, consequently, less need for regulations and transport expenses.

It is also true for agriculture that sustains a rural community, which provides opportunities for people who enjoy working with plants and animals, that keep society in touch with nature.

Agriculture of this kind may be less efficient in achieving profits for big business, but surely it is vastly more productive per hectare in real terms. It could bring the countryside to life and make agriculture -- particularly farming -- a modern, viable and satisfying occupation.

In the neo-liberal view, however, agriculture is just another machine to produce money. But beware, a wrong approach to the agricultural sector will turn it into a killing machine.

The writer is also a lecturer at the Sahid University in Surakarta and a researcher for Uni Sosial Demokrat, Jakarta.