Fri, 05 Sep 2003

The consequences of failure in Cancun

Jacques Diouf, Inter Press Service, Rome

A lot is riding on the outcome of the World Trade Organization (WTO) Ministerial in Cancun, Mexico -- for example, a better global economy and the millions of jobs that increased trade would create.

For the world's 840 million hungry people, there is even more at stake. Agricultural development and improved job opportunities in rural areas could mean the difference between life and death. Their fate may decide whether we live in a stable world or one wracked by failing economies, political turmoil and social chaos.

The UN Food and Agriculture Organization (FAO) has struggled for decades to improve the lives of the rural poor and hungry, and FAO will take their case to Cancun. Some 70 percent of the world's poorest people live in rural areas where agriculture is their main source of income. Hence one of the most effective ways to reduce hunger and raise living standards in developing countries is to increase availability of and access to food through domestic and international agricultural trade.

At the 2001 WTO Ministerial in Doha, Qatar, developed countries made a commitment to reduce farm subsidies and to increase access to their markets for food and agriculture products from developing countries.

Cancun should be about implementing those commitments. While some major trading countries recently agreed to reduce their farm subsidies, they offered no specifics regarding time and the amount of reduction. Others seem to be more reluctant to roll back what amount to programs which benefit mostly the better-off farmers.

Farm subsidies and tariffs in rich countries distort the global market place, making it in many cases almost impossible for farmers in developing countries to compete internationally. They also allow food from rich countries to be sold below production costs in developing countries, putting farmers there at a competitive disadvantage.

To be fair, some developing countries have not used all the options that the Uruguay Round Agreement on Agriculture (1986- 1994) gave them. They could invest in and support their agriculture more than they are currently doing. However, they find it difficult to do so, as it would effectively burden taxpayers and urban consumers by increasing public expenditure for agriculture or the price of food.

Taxpayers and consumers in rich countries often do not realize that they are not only subsidizing their own farmers but also undermining the livelihood of farmers in many developing countries. The support for farmers in the developed world leads to food surpluses, resulting in unfair competition. This is a disincentive for farmers in non-subsidizing countries.

However, now is not the time for finger-pointing and name- calling. Instead what is needed is effective North-South cooperation. For trade to be an engine of economic growth, substantially reducing poverty, both developed and developing countries need to adapt their production on complementary footing based on fair competition.

WTO member countries must not allow Cancun to collapse into a polarized stand-off. Many of these countries have agreed to the Millennium Development Goals and the World Food Summit target to cut by at least half the number of hungry people in the world by 2015. A good place to begin would be formal recognition by WTO members that a level playing field in food and agricultural trade can play an important role in reducing hunger and poverty.

A trade agreement to cut trade-distorting farm subsidies in rich countries and lower, or eliminate, tariffs on agricultural imports would go a long way toward building a more equitable trade regime. Agreeing on trade rules that are effective, simple, and inexpensive to implement would give developing countries a chance at growing their own way to prosperity.

The writer is Director-General of the United Nations Food and Agriculture Organization.