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A new vision for agriculture trade

By Mark Ritchie
President, Institute for Agriculture and Trade Policy

(Sunday, Aug. 31, 2003 -- CropChoice guest commentary) -- No single issue in preparations for the upcoming WTO meeting in Cancun has generated more heated debate than agriculture. Some farm groups are calling for agricultural trade policy to be removed completely from the WTO, while others are demanding that new trade rules stabilize world prices of major commodities at levels that can sustain family farm operations and enable nations heavily dependent on food imports to guarantee their own food security.

What most developing nations and many farmer groups around the world agree upon is that the status quo is impoverishing most of the world by driving farmers off the land, while bringing benefits to very few. Attempts to change these policies have been blocked by the undemocratic decision making process of the WTO, which effectively allows the U.S. and Europe to veto proposals for reform.

In the run-up to Cancun there have been a number of differing proposals. Responding to rising pressure, the U.S. and the EU in early August offered some minor changes in WTO agricultural trade rules that essentially endorsed the status quo. Another group, led by Australia and including New Zealand, Argentina, Canada, and Thailand has demanded total deregulation of agricultural trade. For over a decade, they have been arguing that no country should be able to restrict imports of any agricultural products and no country should have the right to support their farmers through minimum price or income supplementing programs.

But most members of the WTO and many civil society organizations have rejected both proposals. Instead, these groups have called for democratization of the WTO and particularly of agricultural trade policy making. For example, the new agriculture proposal by the U.S. and EU basically ignores three years of negotiations on new agricultural trade rules that included input from all 146-member countries. In response, Mexico joined Brazil, China and India (along with a dozen other countries) to challenge the U.S.-EU proposal with a negotiating text that better represents the interests of all WTO members.

More than a dozen poor countries, particularly in Africa, that are heavily dependent on the exporting of one or two dominant commodity crops (like cotton or rice), are demanding new rules that require world prices for major commodities to at least cover the cost of production. And countries that are heavily dependent on food imports, such as Kenya, Nigeria, and the Dominican Republic, are proposing new WTO agriculture trade rules to enhance food security through food sovereignty including rules to prevent the monopoly ownership of the genetic resources (plants, animals, germplasm) needed to farm.

Unfortunately, the chairman of the WTO agricultural negotiations group has chosen to ignore the vast majority of the member countries and has put forward a draft final declaration that largely mimics the US/EU proposal. It incorporated virtually none of the suggestions of the developing countries and specifically rejects any controls or reductions on export dumping.

Civil society groups such as the Institute for Agriculture and Trade Policy where I work have joined the developing countries in calling for a rejection of this draft proposal. With others we are calling on the WTO member nations to adopt new trade rules that would help stabilize sustainable world prices for the major commodities. WTO rules should enable nations heavily dependent on food imports to use trade rules to set the level of food security and sovereignty they feel comfortable with by encouraging local food producers.

What would this look like? The following are a few concrete proposals that already have broad support from many developing nation governments, producer groups and civil society organizations in the North and South.

The first is the immediate end to export dumping – the selling of goods into the global market at prices below the cost of production. It has been well documented that the U.S. and the EU are dumping onto international markets on a wide scale. Fortunately, WTO rules prohibit dumping. Now these rules must be aggressively enforced. If they were, it would go a long way toward bringing balance to agriculture trade.

Second, there is broad support for the general concepts of Fair Trade – the independent (non-governmental) system of agreements between producers and buyers that ensure that the prices paid to farmers and charged to the final consumers are fair and reflect the full costs of production including costs of environmental protection. Some recent proposals for changes in WTO rules, like limits on the flexibility of government procurement rules and product labeling, threaten the Fair Trade system and must therefore be rejected.

Third, there is a newly energized debate over how to adjust WTO rules to enable the effective operation of global commodity agreements in the major agricultural crop areas. Record low prices in coffee, cotton, rice, and other commodities has sparked a renewed interest in and debate over the best way to structure the balance of supply and demand at the global level in order to achieve relatively stable and fair commodity prices. Additional international agreements must be designed to specifically balance supply and demand for basis agricultural commodities.

Fourth, there is near universal rejection of WTO proposals that would increase monopoly control over seeds, animals, germplasm, and other vital inputs needed by farmers – including strong oppositions to “patenting of life” requirement proposals being made by the U.S. government and the European Commission.

These four major concerns – ending dumping, defending Fair Trade, global balancing of supply with demand, and stopping the WTO from further enabling monopoly-control over necessary agricultural inputs—should form the basis of a forward-looking agriculture agreement – and they should be the basis on which the world should evaluate the success or failure of the Cancun Ministerial.