W.T.O Agreement on Agreement on Agriculture

Vandana Shiva *

W.T.O. Agreement On Agriculture*

             The Agreement on Agriculture should be called a Cargill Agreement. It was former Cargill Vice-President, Dan Amstutz, who drafted the original text of the Uruguay Round Agreement on Agriculture. Opening Southern markets and converting peasant agriculture to corporate agriculture is the primary aim of Cargill and hence the Agreement on Agriculture.

But opening markets for Cargill implies closure of livelihoods for farmers. W.T.O. rules are not just about trade. They determine how food is produced and who controls food production. For Cargill, capturing Asian markets is key. Asia happens to be the largest agricultural economy of the world, with the majority involved in agriculture. Converting self-sufficient food economies into food dependent economies is the Cargill vision and the W.T.O. strategy.

Even half of population growth by 2008 will happen in Asia as well as 30 per cent of the world income growth in the next decade. People in India and Vietnam spend more than half their incomes on food, while the Chinese spend more than a third. If better food could be delivered more efficiently, more income would be freed up to spend on other things like motorbikes, cellular phones, even computers. A global open food system would be the one where the regions that grow food best are linked through with regions that need food most. That system describes a region where the best areas for growing food - the Americas - are linked through trade with the areas where food is needed the most, Asia."

Because the Agriculture Agreement of W.T.O. is an agribusiness treaty it distorts production and trade from the perspective of nature, small farmers and all consumers, especially the poor. It is a recipe for ecological destruction, devastation of family farms, and ruination of citizens' health. Behind the apparent neutrality of rules for "domestic support", "market access" and "export competition" are distorted assumptions and myths about food production and distribution.

These Cargill myths are enshrined in the W.T.O. agriculture agreements. The first myth is that America is the best region for growing food and America grows the best food. The reality is that America is a model of how not to grow and produce food. The second myth is that free trade allows food to be delivered "efficiently". The reality is that without massive subsidies and dumping, U.S. corporations could not capture South markets, and "free trade" is based on a "food swap", with countries importing and exporting the same commodity and all countries pushed into trade in a handful of commodities controlled by the agribusiness giants - not on exporting what a country can uniquely produce and importing what it cannot.

The related myth is that dumping "frees" up incomes of farmers who can then buy "motorbikes, cellular phones and computers". The reality is that dumping destroys domestic markets, collapses markets, destroys livelihoods and incomes, collapses rural incomes, and erodes purchasing power and entitlements. Impoverished farmers join the ranks of the hungry. Indebted farmers commit suicide. Starvation deaths and farm suicides are the tragic outcome of trade liberalisation of food systems.

The built-in review in Article 20 of the Agreement on Agriculture (AoA) should have provided an opportunity to revisit the flawed assumptions on which the (AoA) rests. Instead, in the Draft Cancun Declaration, the review has been brushed aside, and a commitment made without consultation on further liberalisation.

The tragedy of the U.S. model of the food system: A system designed to destroy farmers and public health

The first myth of globalisation is that the U. S. is the best region for food production and the best source of food.

A group of us recently produced "Fatal Harvest: The Tragedy of Industrial Agriculture" (ed. Andrew Kimbrell, Foundation for Deep Ecology/Earthscan) which documents the ecological and social costs of the U.S. farming system. In 1995, at a meeting we organised on Globalisation and Food Insecurity, A.V. Krebs, an expert on U.S. Agribusiness showed how U.S. farmers were being destroyed while the power of agribusiness grew.

In 1990 nearly 22 per cent of U.S. farming households had incomes below the official poverty threshold, twice the rate for all U.S. families. In 1993, over 88 per cent of the average farm operator household income was derived from off-farm income. From 1982 to 1993 the index of prices received by farmers for inputs multiplied over threefold to 23 per cent.

Is it any wonder that during the period from 1990 to 1994 our farmers saw an almost minuscule 1.98 per cent return on their investment?

As a result, from 1987 to 1992 in the U.S., farm entries dropped to less than 67,000 per year while exits averaged 99,000 per year, resulting in the net loss of 32,000 farms a year?

While displacing farmers has been justified on grounds of productivity, in fact, small farms are more productive than large ones. As our former Prime Minister Ch. Charan Singh had stated, agriculture being a life process, in actual practice, under given conditions, yields per acre decline as the size of farm increases (in other words, as the application of human labour and supervision per acre decreases). The above results are well-nigh universal: output per acre of investment is higher on small farmers than on large farms. Thus, if a crowded, capital-scarce country like India has a choice between a single 100-acre farm and forty 2.5-acre farms, the capital cost to the national economy will be less if the country chooses the small farms.

However, it is the small farms and small farmers who are being destroyed by globalisation and trade driven economic reforms. Five million peasants' livelihoods have disappeared in India since "reforms" were introduced.

Displacement of farmers and destruction of soil, water and biodiversity are two negative dimensions of the U.S. food system. Threat to public health is another fatal aspect of an industrialised, corporate controlled food system. As U.S. food culture spreads through globalisation it spreads health hazards. The intense controversy over high pesticide residues in Coke and Pepsi in India is one example of the public health hazards posed by U. S. style industrial food culture.

The epidemic of obesity is another symptom. Nearly 70% children in the U.S.A. suffer from obesity and exhibit metabolic disorders formerly seen only in adults such as diabetes, high blood cholesterol, high blood cholesterol, high blood pressure. Today 44 million American adults are obese and another 6 million are "super obese". Obesity is now second only to smoking as a cause of mortality in the U.S. The CDC (Centre for Disease Control) estimates that about 280,000 Americans die every year as a direct result of being overweight. (Ref: Eric Schlosser, Fast Food Nation, Penguin, 2002). The annual health care costs in the U.S. linked to obesity are $240 billion, in addition to the $33 billion spent on diet products and weight loss schemes.

With globalisation, this bad food culture dominated by profits has spread worldwide. In China, 30% children in 12 school were found to be obese. In India nearly 7.5% children are obese. In Chennai, 18% are overweight. Two in five Delhi students have high cholesterol and diabetes. Besides, the health hazards of industrial foods and junk foods, the U.S. is now becoming a source of new hazards in the form of genetically modified organisms (GMOs). Europeans have refused to consume GM foods. India and Zambia refused GM corn as food aid.

There is a global treaty, the Biosafety Protocol, to regulate trade in GMOs. However, the U. S. - driven by the biotech industry and agribusiness - would like trade in GMOs deregulated and citizens denied the freedom to know and choose. The U.S. threat to introduce a dispute against the EU on GMOs is an example of how W.T.O. rules support the imposition of bad food, and deny countries and citizen their right to food safety and good food.


Distorted Trade: Subsidies and Dumping


W.T.O. rules are not leading to efficiency. They are distorting production and trade. Disciplines on "Domestic Support" is a key element of the Agreement on Agriculture. However, these rules do not remove northern subsidies to agribusiness, they deny support to rural producers. Rich countries give more than $400 billion of subsidies. These do not go to small farmers but to grant farms and exports, both in the U.S. and E.U. The U.S. and E.U. conveniently crafted out a mechanism of amber box, blue box and green box to leave their subsidies untouched, and in fact to expand them as the U.S. did in the new Farm Act.

Green Box and Blue Box subsidies are totally excluded from reduction commitments in W.T.O. These include, research extension, marketing and promotion and infrastructure, direct payments in the form of decoupled income support, and structural adjustment assistance. Decoupling was a Cargill invention, and has now been introduced as a main plan of CAP reform in the EU. While the myth is that Green Box and Blue Box subsidies are "decoupled" from production, and are therefore not trade distorting, "decoupled" support distorts both production and trade by removing the bottom from prices.

With free fall of farm prices, farmers are pushed into higher levels of external input intensification and enlargement of farm operations in a desperate bid to stay afloat. Artificially low prices that are decoupled from costs of production are the most important distortions in trade. And low prices are more closely connected with monopoly in agribusiness than with overproduction. U.S. and E.U. do not have real surpluses or "overproduction". U.S. imports twice as much beef as it exports. U.K. imports twice as much milk as it exports. The issue is not overproduction but "distorted" production.

Decoupled support therefore promotes non-sustainable large-scale industrial production and low prices. It is therefore intrinsically linked with and coupled to non-sustainable production and unjust prices. It is decoupled from sustainability and justice. The very structure of W.T.O. rules therefore distorts trade against small farmers, against food sovereignty and against trade justice. The rules are trade distorting in and of themselves.

That is why movements worldwide are calling for a removal of agriculture from W.T.O. rules and southern governments are seeking exceptions from these trade distorting rules which promote dumping and wiping out of small farmers. Dumping has increased as a consequence of W.T.O. From 1995 to 2001 dumping jumped from 23% to 44% in wheat, from 9% to 29% in soya, 11 to 33% in maize and 17 to 57% in the case of cotton.

Just as U.S./E.U. forced a distorted trade regime in agriculture on the South in the Uruguay Round after introducing a Peace Clause to not touch each others subsidies, the two rich regions have once again made a deal at the cost of he South, just before Cancun.

When poor countries are forced to remove import restrictions and reduce tariffs in the face of high subsidies and high levels of dumping by rich countries, poor farmers are wiped out, and with them the food sovereignty of the South. Impoverished farmers do not buy cell phones and computers as projected by Cargill. They kill themselves in desperation or they starve.

Reintroducing QRs and increasing tariffs in a survival imperative for farmers of the South. QRs are a right to defend ourselves from perverse dumping that is leading to genocide. The W.T.O. distortions in our food and agriculture must be removed as a matter of emergency. Thousands of farmers are dying. Millions of people are being robbed of their food entitlements. Justice and sustainability must be brought back as key determinants in food and agriculture policy locally, nationally and globally.

Three strategies that eventually lead to the same outcome are available as alternatives to be pushed for in Cancun:

- Remove agriculture from W.T.O. (Peasant Movements)

- Reintroduce QRs (Peasant Movements and some Southern Governments)

- Introduce a Food Security or Development Box to exempt developing countries from W.T.O. rules (developing country Governments). The three strands could create a synergy as they did in Seattle.

These steps are necessary to defend peasant survival, rural livelihoods, food sovereignty and public health. Simultaneously, sustainable and safe systems of food production and just and fair systems of distribution, which are evolving everywhere, need to be strengthened and extended. The Manifesto of the International Commission on the Future of Food, which I chair, has outlined this shift. W.T.O. cannot be allowed to become a mechanism for dismantling our food security and public health.

We will not allow W.T.O. to become a trade barrier to sustainability and justice. In Cancun, governments must hear a concerted, coherent and committed voice of diverse movements from across the world. "Another agriculture is possible. Another agriculture is necessary. Another agriculture is happening."




- Quoted in Oxfam Briefing Paper No.32 "Boxing match in agricultural trade. Will W.T.O. negotiations knock out the world's poorest farmers?"

- A.V. Krebs, "The Corporate Reapers: Towards Total Globalisation of our Food Supply" in "Sustainable Agriculture and Food Security: The Impact of Globalisation" edited by Vandana Shiva and Gitanjali Bedi, Sage Publications, 2002

- Charan Singh, p119 "Economic Nightmare in India, 1984, National Publishing House, New Delhi