JP/7/YANU

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.