The Hindu Business Line : Cancun: End of the road for WTO?

For farmers all over the world, the failure of the Cancun Ministerial is just another step in their long and arduous battle to retain control over their food security needsand to move towards a sustainable farming model. However, instead of encouraging healthy co-operation, the WTO has only pitted the farmers of the developing and the industrialised countries against each other, says Devinder Sharma.

THE big boys have gone home, this time empty-handed. But they have vowed to return. And, obviously, like `Morgan, the Pirate' who dominated the high seas in that yesteryear Hollywood blockbuster, the four trade bullies — the US, the European Union, Japan and Canada — the so called `Quad' group, too, will return with a vengeance. The failure of the Cancun Ministerial only strengthens their resolve to re-emerge with more ruthless manipulations.

The world has come a long way since `Morgan, the Pirate' used to rule the high seas — once the major trade route. Developing countries too have learnt the hard way the dictums of international trade — lobbying, coercion, and deft manipulation.

No wonder, in a span of just four years, two of the WTO Ministerial meets collapsed. First, at Seattle in 1999, and now with the sudden death at Cancun 2003, the developing world has demonstrated that it will no longer take it lying down. Their anger and rebellion has already caused the biggest derailment to the development agenda. And rightly so.

In 2001, the 25,000 US cotton growers received roughly $3.9 billion in subsidy payments, for producing a cotton crop that was worth only $3 billion at world market prices (one Arkansas cotton grower received $6 million, equal to the combined annual earnings of 25,000 cotton farmers in Mali).

Such are the glaring inequalities, that an American cotton farmer, on an average, receives $10.7 million a day as subsidies. More for pacifying the public sympathies than for correcting the dirty economics, the WTO did consider the contentious issue of cotton subsidies, as if it was an isolated case of exploitation of developing country farmers.

Unrelenting, the WTO has delivered its verdict. 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."

The WTO says the West African farmers should stop growing cotton. The lesson for the rest of the world is crystal clear. The developing world should stop growing crops that are being negatively impacted by monumental subsidies that the rich and industrialised countries provide.

For the G-21, that created a lot of noise and dust over the $311 billion in farm subsidies that the richest trading block — the Organisation for Economic Cooperation and Development (OECD) — provides for its agriculture, the writing is on the wall. The process to shift the production of staple foods and major commercial commodities to the OECD had, in fact, begun much earlier. The WTO is merely legitimising the new farming system approach.

The World Bank/IMF have, under the Structural Adjustment Programmes (SAP), clearly tied up credit with crop diversification. It continues to force developing countries to shift from staple foods (crucial for food security needs) to cash crops that meet the luxury requirement of the western countries. It has, 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 enabling corporates to move into agriculture. Farmers need to be left at the mercy of the market forces. Since they are `inefficient' producers, they need to be replaced by the industry.

The same prescription for farming has never been suggested for the rich and industrialised countries. 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-beet, cotton, and that too under environmentally unsound conditions, leading to an ecological catastrophe.

These are the countries that inflict double the damage — first, destroy the land by highly intensive crop practices, pollute ground water, contaminate the environment, and then receive massive subsidies to keep these unsustainable practices artificially viable.

If the WTO has its ways, and the developing countries fail to understand the prevailing 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 six billion-plus people, and developing countries will grow cash crops such as tomato, cut flowers, peas, sunflower, strawberries and vegetables.

The dollars that the developing countries earn from exporting these crops will eventually be used to buy foodgrains from the developed nations — in reality, back to the days of `ship-to-mouth' existence.

In India, the World Bank/IMF have forced successive governments to adopt policies that forces farmers to abandon staple crops such as wheat, rice and coarse cereals, and diversify to cash crops.

Punjab, the country's food bowl, is now engaged in a desperate effort to shift from the wheat-rice cropping pattern to cultivating cut flowers and the likes. 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 all this is not enough, biotechnology companies are being doled out state largesse and prime real-estate, to encourage corporate farming.

What the developed countries, therefore, are trying to sell to the world as "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 special safeguards, reduction in tariffs, removal of non-tariff barriers, the developed countries have manipulated the commitments in a way that suit their own narrowly conceived objectives. Trade policies, therefore, have remained highly discriminatory against the developing country farmers. Developed country agriculture has so far enjoyed a unique `special and differential' treatment that was actually reserved for the developing and least developed countries. The strong wall that has been built since the days of the Uruguay Round, is not so easy to impregnate.

Unfortunately, the developing countries are making no concerted effort to demolish the wall of protectionism that the rich and industrialised countries have built around their highly subsidised agriculture. Even the G-21, in the final stages, was busy working out a compromise formula to save the Cancun Ministerial from going the Seattle way, little realising, that there is no way such a bad agreement on agriculture can be reformed.

For millions of toiling farmers in the majority world, the failure at Cancun does not signal the end of the evil. It is merely a step in their long and arduous battle to retain control over their food security needs, to protect their own livelihoods from trade robbers, and to move towards a sustainable farming model that survives on equity and justice.

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 is to pit the farmers of the developing world and the industrialised countries against each other.

Unless farmers' associations 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 conundrum does not mean that the big players will make any significant cuts in their subsidy support. The new EU Common Agricultural Policy reform proposals that were announced prior to the Cancun WTO Ministerial have also made no attempt to make radical changes in reduction commitments.

Moving on the US lines, it has shifted most of the `blue box' subsidies to `green box'. Although the developed countries have blamed the G-21 for `asking the moon', the fact remains that the western countries have got too used to being a parasite on the developing countries.

The plight of the farming community, following the Marrakesh agreement — 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.

Tragically, the suicide by the Korean farmer Lee Kyung-Hae shows up starkly the devastation that the WTO has wrought on farming communities all over the world. Not listening to the voice of the marginalised and the poor, a majority of them actively involved with farming, will not only be suicidal but can be catastrophic for the powers that be.

The message from Lee's sacrifice is loud and clear: Not listening to the growing discontent and frustration that prevails on the farm front, exacerbated through the trade reforms, will only globalise anger.

`Morgan, the Pirate' too had underestimated the power of peoples' anger.

(The author is a New Delhi-based food and trade policy analyst. Responses can be sent to dsharma@ndf.vsnl.net.in)

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