Cancun joins Seattle as the venue of two failed ministerials of the World Trade Organisation (WTO) since it came into existence on the first day of 1995. The WTO, whose stoic exterior is designed to block the views and positions offered by civil society organisations, was venue of an abject collapse instigated by its own members from the South. Determined to stand up against the unilateral outcomes of multilateral forums, member states from the developing world refused to accept the draft declaration. The so-called ‘Quad’ of international trade–the US, the EU, Japan and Canada–were taken aback by the vehemence of the Southern resistance as they realised that this time around they could not muscle their way through and engineer declarations to suit their convenience. The failure of the Cancun Ministerial, however, may generate a backlash and strengthen the Quad’s determination to engage in more ruthless manipulations to get their way.
Developing countries have learnt the dictum of international trade the hard way, for having being the victims of hard-headed lobbying, coercion and deft manipulations. Having learnt the lesson, they gave an exemplary demonstration of their will not to be brow-beaten into global agreements that work to their disadvantage. Their anger and ‘insubordination’ has already caused the biggest derailment so far of the market-led development agenda. And rightly so. Developed country agriculture has so far enjoyed a unique ‘special and differential’ treatment that was in reality meant for the developing and least developed countries. The impregnable wall that was being built since the days of the Uruguay Round negotiations (1986-94), is not so easy to scale.
Just before the Cancun Ministerial, President Amadou Toure of Mali was a co-signatory to a letter to the New York Times condemning the cotton subsidies in America that have been devastating for West African countries — Burkina Faso, Mali, Chad and Benin. His colleague, President Blaise Compaore of Burkina Faso, had spoken in a similar vein to the Trade Negotiating Committee of the WTO in June. They voiced their concern at the way direct financial assistance by a number of exporting countries, including US, European Union and China, to the tune of 73 percent of the world cotton production, destroyed millions of livelihoods in West African countries. As a result, African cotton producers realise only 60 percent of their costs, although their cost of production is less than half of that incurred in the developed countries. More for mollifying public sentiments than for rectifying it’s the fraudulent economics, the WTO did consider the contentious issue of cotton subsidies, as if it was an isolated case of exploitation of developing country farmers.
The lack of fairness can be gauged from the quantum of state support that goes into this industry alone. In 2001, the 25,000 odd US cotton growers received roughly USD 3.9 billion in subsidy payments, for producing a cotton crop that was worth only USD 3 billion at world market prices. One Arkansas cotton grower received USD 6 million, equal to the combined annual earnings of 25,000 cotton farmers in Mali. The story is similar in the case of the European Commission (EC). The new EU Common Agricultural Policy reform proposals, announced prior to the Cancun Ministerial, made no attempt at radically reducing commitments, which is what is needed. Operating on the same principle as the US does, it too has shifted most of the ‘blue box’ subsidies (the category of government support which allows direct payments under production-limiting programmes) to ‘green box’ (which allows government support with no or minimal trade distorting effects).
Intractable, the WTO delivered its obtuse verdict–West African farmers should stop growing cotton. The text of the Draft Cancun Ministerial says: “The Director-General is instructed to consult with the relevant international organisations including the Bretton Woods Institutions, the Food and Agriculture Organisation and the International Trade Centre to effectively direct existing programmes and resources towards diversification of the economies where cotton accounts for major share of their GDP”. In simple words– there is nothing wrong with the highly subsidised cotton farming in the US, EU and China, the fault rests with millions of small and marginal farmers in West Africa. The Cancun draft had instructed the WTO director-general, the FAO and the World Bank/IMF to make available adequate investments for suitable programmes that enable these farmers to diversify from cotton to other crops. Now that the ministerial has collapsed under the weight of its own overweening conceit the draft obviously and thankfully became a dead letter.
The lesson for the rest of the world from the Northern ‘masters’ is crystal clear. The developing world should stop growing crops that negatively affect the monumental subsidies that the rich and industrialised countries provide. For the G-21, consisting of the largest economies of the developing world, that created a lot of noise and dust over the USD 311 billion in farm subsidies that the richest trading bloc–the Organisation for Economic Cooperation and Development (OECD)–provides for its agriculture, the writing is on the wall. And this is exactly what independent critics have been warning all these years. The process of transferring the production of staple foods and major commercial commodities to the OECD had in fact begun much earlier. WTO is merely legitimising the new farming system mechanism.
The World Bank and IMF have, under the Structural Adjustment Programmes (SAP), very clearly tied up credit with crop diversification. They continue to force developing countries to shift from staple foods, which are crucial for food security needs, to cash crops that meet the luxury requirement of Western countries. The SAPs have, therefore, been forcing developing countries to dismantle state support to food procurement, withdraw price support to farmers, dismantle food procurement, and relax land ceiling laws, thereby enabling corporates to move into agriculture. Under this perspective, Southern farmers are to be left to the mercy of the market forces. Being ‘inefficient’ producers, they need to be replaced by industry and its management and production methods.
The same prescription for farming has never been suggested for the rich and industrialised countries. And yet, and this needs to be very clearly understood—the one part of the world that needs to go in for immediate crop diversification is the industrial world. These are the countries that produce mounting surpluses of wheat, rice, corn, soybean, sugar beat, cotton and a handful of other crops, and that too under environmentally unsound conditions. These are the countries that inflict a dual damage. First they destroy their own lands by highly intensive crop practices, pollute ground water, contaminate the environment, and then receive massive subsidies to keep these unsustainable practices artificially viable. These are the countries that are faced with the tragic consequences of massive farm displacements, and are in the grip of food calamities arising from industrial farming.
If the WTO has its ways, and the developing countries fail to understand the insidious politics that drives the agriculture trade agenda, the world will soon have two kinds of agriculture systems. The rich countries will produce staple foods for the world’s 6 billion plus people, and developing countries will grow cash crops like tomatoes, peas, sunflower, strawberries, vegetables – and cut flowers. The dollars that developing countries earn from exporting these crops will eventually be used to buy food grains from the developed nations. In effect, this means going back to the days of ‘ship-to-mouth’ existence.
Central America is a case in point. The debt crisis that affected the Central American countries in the 1980s was very conveniently used as the appropriate opportunity to shift the cropping pattern to non-traditional exports. Egged on and generally encouraged by the United States Agency for International Development (USAID), farmers fed the illusion of the great market that existed in the developed world and lured to produce for it. They shifted to crops like melons, strawberries, cauliflower, broccoli and squash that were shipped to the supermarkets, mainly in America. Simultaneously, these Central American countries disbanded cultivation of staple crops like corn and bean, and today they are major importers, that too from the United States.
With regard to India, which only three decades ago emerged from the shadows of massive food imports, the strategy is the same. The World Bank and the IMF have forced successive governments to adopt policies that force farmers to abandon staple crops like wheat, rice and coarse cereals, and diversify to cash crops. Punjab, the country’s food bowl, is presently engaged in a desperate effort to shift from wheat-rice cropping pattern to cultivating cut flowers and the likes (see page xxxxx). Andhra Pradesh has already embarked on a misplaced rural development vision that aims at industrial agriculture at the cost of its millions of small and marginal farmers. As if this was not enough, biotechnology companies are being generously granted state largesse and prime real estate so as to encourage corporate farming.
What the developed countries are therefore trying to sell to the world as the “development round”, following the undemocratic conclusions arrived at Doha 2001, is in reality a political exercise (under the garb of trade and commerce) for their own economic development. Through a variety of instruments, the rich countries have ensured complete protectionism. Whether it is the case of special safeguards, reduction in tariffs, removal of non-tariff barriers and the like, the developed countries have manipulated the commitments in a way that suits their own narrowly conceived objectives. Trade policies therefore have remained highly discriminatory against the developing country farmers.
Unfortunately, the developing countries are making no concerted effort to demolish the wall of protectionism that the rich and industrialised countries have erected around their highly subsidised agriculture. Even the G-21, in the final stages, was busy trying to work out a compromise formula to save the Cancun Ministerial from going the Seattle way. They did not seem to realise that there was no way such a bad agreement on agriculture could be reformed. For millions of toiling farmers in the majority world, the failure of the Cancun Ministerial does not signal the end of the struggle. It is merely a step in their long and bitter journey to retain control over their own food security needs, and to protect their own livelihoods from the robber barons of international trade.
The move towards a sustainable farming model that functions on the principles of equity and justice must be taken forward with double the intensity with which the ‘Quad’ can be expected to retaliate after the Cancun fiasco. For a few million farmers on either side of the Atlantic, the cause is no different. Only the scale and home turf is different. Developed country farmers have much in common with the poor farmers in the Third World. What the WTO, however, has successfully managed to do is to pit the farmers of the developing world and the industrialised countries against each other. Unless farmers’ association in the developed countries come to the rescue of their less blessed cousins in the developing world, agribusiness companies will continue to have the last laugh.
The Cancun logjam does not mean that the big players will make any significant cuts in their subsidy support. Although the Western countries have blamed the G-21 for “asking for the moon”, the fact remains that they have got too used to being parasites on the developing world. The plight of the farming community, following the Marrakesh agreement (the agreement establishing the WTO, signed on 15 April 1994) — from Chile to South Korea, and from India to Brazil–has failed to move the industrialised countries to bring in any meaningful reforms in international trade.
The suicide during the Cancun ministerial of the Korean farmer, Lee Kyong Hae, amplifies the devastation that WTO has wrought on the farming communities all over the world. Ignoring the voice of the marginalised and the poor farmers will not only be suicidal, but catastrophic for the powers that be. The message from Lee’s sacrifice is loud and clear. Ignoring the growing discontent and frustration that prevails on the farming front, accentuated through the trade reforms, will only globalise anger.