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Jan/Feb 2000 issue (#43)
Are increased trade and dependence on global markets good or bad for farmers and agriculture? Are they beneficial to the world's consumers of food?
The governments and elites that make up the WTO would have us think they are good, and their policies reflect this: the policies increase the volume of world trade and take down the barriers to it, such as government support for various forms of food production, etc. Yet, these policies affect some people differently than others.
Farmers are not a homogeneous group, and neither are consumers. Some farmers operate under high debt or produce for subsistence and live a tenuous existence. Others own huge tracts of land, utilize industrialized farming methods, and make huge profits; others, traders, are simply involved in importing and exporting food. In the US, the top 2% of farm businesses are responsible for 50% of farm commodities and sales.
Similarly, some of the world's consumers spend a small percentage of their income on food and eat large amounts, while others can barely making their daily nutritional requirements and experience frequent hunger.
The fallacy that free trade (and less government intervention) will distribute benefits to all may be nowhere more glaring than in the area of agriculture. Globally, the liberalization of agriculture is threatening the livelihoods of millions, especially the most vulnerable rural populations in the world's poorest countries. Here in the United States, some agribusinesses and traders are benefiting immensely, while US farm policies are forcing small farmers to lose their land or to work additional jobs to survive. The WTO's rules are not causing these problems single-handedly, but they are an increasingly important factor.
The Uruguay Round of the General Agreement on Tariffs and Trade (GATT) created both the WTO and compacts such as the Agreement on Agriculture (AoA). At the end of the Uruguay Round, the parties to the GATT met in Marrakesh, Morocco, to finalize the negotiations. At this meeting, many poor nations, especially those that are net-importers of food, expressed anxieties that the AoA would diminish their food security. The term food security can be defined as the availability of basic, staple foods to meet nutritional and cultural needs, and the ability to procure those foods at reasonable prices, considering wage levels.
This led to the Marrakesh Ministerial Decision, which meant to address these food security concerns: if a nation had problems implementing the AoA, it would be eligible for food aid and technical assistance. In addition, due to the contentious nature of the AoA, it was agreed that there be a review in the coming years -- in 1999, more precisely.
Many nations now are dismayed that the AoA has indeed led to a loss of food security, and the Marrakesh promises have not been made good. There are calls for not only the aid promised, but also a review of the terms of the AoA.
The goals of the AoA were to (1) end government support for farmers (both domestic support and export subsidies) and (2) open up markets for the influx of foreign goods -- that is, lower tariffs and increase imported foods as a percentage of consumption.
The defenders of these rules say that globalized food production helps everyone, since countries can then produce in areas where they are most competent, make money, and import the rest of their food requirements. However, countries do not always have sufficient foreign exchange to procure their food internationally. In addition, varying international commodity prices make food importation unpredictable.
The AoA is effectively tying governments' hands when it comes to assuring stable access to food through means such as price setting, promoting staple food production via subsidies, or restricting imports.
Export dumping is a practice theoretically discouraged by the WTO but kept in place because of the power of industrialized nations to bend rules to help their corporations. While other governments are now barred from supporting their farmers, and are forced to open their markets to comply with WTO rules, the US has maintained high levels of subsidies via measures such as credit guarantees to encourage the export of foodstuffs. Subsidies drive the price of the food below the cost of production, and poor farmers abroad can't compete with this wave of cheap imports. Millions of farmers across the world have been driven from the land in recent years due to these "market forces."
Not only are powerful nations and vested interests within them using the WTO to harm the food security of peoples overseas, but they are hurting small farmers at home.
The United States has tightened the screws on its small farmers, in order to conform with the "corporate-led" trade agenda. While the US has kept export subsidies in place to help big producers capture overseas markets, they have diminished supports for the little guy.
The "Freedom to Farm Act" of 1996, which used the WTO's agreements as a guidebook, called for lower farm prices and slashed domestic support for farmers. Now, farm prices are the lowest in 50 years and farm income is plummeting. It is estimated that 20% of farmers left the profession of farming these past three years, and another 20% will be out of business in the next three years.
Although a minority of the world's food supply is traded, the rules hit everyone, due to the above-stated effects.
The universal impact of this influence is the corporatization of food production, which makes for less self-reliance for small farmers, less sustainable farming practices, less food security, monocultures, genetic engineering, and a loss of biodiversity.
The human right to food is not only innate but considered a central obligation of government by the UN Declaration on Human Rights. Governments need to be able to intervene in commerce so that people are assured of food, whether or not this creates "market distortions" or "trade barriers."