INCIDIN Bangladesh, is facilitating a comprehensive agriculture campaign titled “our agriculture is our life” to influence national government and global institutions particularly, WTO to address and highlight the human rights and livelihoods issues involved with agricultural trade across the globe.
Objectives of the campaign
One of the principal objectives of the Agriculture campaign is to uphold the peasants’ right and agenda both in national and international sphere as well as WTO. The other prime objective of this campaign is to uphold the interests of the small farmers over and above the agro-business of TNCs and the rights to food security and livelihood must be upheld over and at trade negotiations.
What is the essence of agro-business?
The term “agro-business” is misleading. It unmasks that trade in agriculture is in a big way nothing but trade in food. It thereby attempts to reduce “food” merely into a tradable commodity. Till date only a small proportion of food is internationally traded. Food in most of the countries is primarily produced and consumed locally and only 10 percent is internationally traded.
Although, the term trade in agriculture may portray an image that through trade in agro products millions of the farmers across the globe are taking active part in international trade and reaping its benefits, the reality is completely reverse.
- According to a study, in 1986 only five big TNCs controlled 85-90% of the total trade in agriculture.
- 75% of the flourishing trade in cereal (rice, wheat maize etc) is controlled by only two TNCs (namely Cargill and ADM).
- 40% of global coffee trade is controlled by four of the TNCs.
Thus contrary to the popular belief, the existing trade in agriculture does not benefit the millions of poor farmers rather serves the economic interests of only a hand few of giant transnational companies.
The realities of AoA
Withdrawal of agricultural subsidies and reduction of tariff and non tariff barriers are the stated objectives of the Agreement on Agriculture (AoA) of WTO. Thus discussions on AoA usually hover around:
- Withdrawal of subsidy versus the mystery of amber and green boxes; and
- Access to market versus the prevalence of market obstacles
In Bangladesh 60 percent of its population earn livelihood from agriculture. However, 80 percent of this farming population is small farmers with less than two acres of land. Although AoA does not compel the LDCs to take over any new commitment of reduction in tariff it has subjected them to tariff binding. It also has an agenda of reduction in agricultural subsidy both export and domestic. It should be noted that through the Structural Adjustment Program already LDCs such as Bangladesh has withdrawn subsidy from its agriculture. Presently the subsidy in agriculture in Bangladesh is less than one percent of its GDP. At the same time, agro-subsidy in developed economies remains astronomically higher.
The Dumping in Rice
- Estimation projects a stable level of support for the US rice sector of close to $1.2bn a year until 2007.
- The value of rice produced, which in 2002 was $844m.
- These excessive levels of support allow large US companies to dump rice on international markets.
- US exported ‘paddy’ rice to Central America 18-20 per cent lower than its cost of production.
AoA locked-in countries like Bangladesh within these uneven terms of trade. Moreover, AoA categorizes all the new attempts of LDCs to extend subsidy (such as on inputs etc.) to its poor peasants as trade distorting – as violations of AoA. WTO vehemently opposes these types of subsidies provided by the LDCs. According to AoA this type of subsidy is placed in ‘amber box’ which should certainly be abandoned!
Facts on the Rigged Rules of Trade
- In the first year of the agreement, there were tariff peaks at very high rates in the United States (e.g., sugar 244%, peanuts 174%); the EEC (beef 213%, wheat 168%). According to the agreement, developed countries needed to reduce their tariffs by only 36 per cent on average to the end of 2000, and thus the rates for some products remain prohibitively high!
- The agreement committed developed countries to reduce the budget outlay for export subsidy by 36 per cent and the total quantity of exports covered by the subsidies by 21 per cent. Thus, even in the year 2000 the level of export subsidies was allowed as high as 64 per cent of the base level.
- In 1997, during the formulation stage of agriculture treaty, the agriculture subsidy provided by the rich countries was 31%. But after passing six years implementation of the treaty, in 2001, the subsidy increased up to 40%.
- European Union instead of reducing the total agriculture subsidy increased subsidy approximately 36% by juggling subsidies within blue box and green box.
- By being price distorting, the Blue Box is the most trade distorting aspect of WTO. However, Blue Box measures have not been reduced rather being expanded by the developed economies
- Decoupled income support and direct payments applied by the developed economies continues to aid the bigger economies and namely the TNCs to make super profits by buying cheap commodities from farmers.
It is important to note that even in the developed economies the state supports and subsidies are mainly going to a hand few of big farmers and private companies. Thus these unfair trade practices are destroying the small farmers all over the world.
By manipulating the boxes of AoA, the big economies are continuously violating their promises of reducing subsidy along with the non tariff market obstacles. While the LDCs have liberalized their markets, the rich countries like United States of America and European Union continue to extend huge subsidies to their agriculture under the pretext of ‘blue box’ and ‘green box’.
Secret of US Cotton Export
- In 2001, the 25,000 US cotton growers received roughly $3.9 billion in subsidy payments, for producing a cotton crop that was worth only US$ 3 billion at world market prices.
- One Arkansas cotton grower received US $ 6 million, equal to the combined annual earnings of 25,000 cotton farmers in Mali.
- The U.S farm bill has increased subsidies by $ 82 billion. With these subsidies, the U.S has doubled cotton exports and destroyed the livelihoods and incomes of 250 million African cotton farmers.
AoA and Human Rights
Food is an integral part of human rights not merely an item in trade basket. This is clearly reflected in the Universal Declaration of Human Rights (UDHR). UDHR states that “everyone has the right to a standard of living adequate for the health and well-being of himself and his family, including food, clothing, housing and medical care.” (Article 25)
Percentage of population engaged in agriculture:
When the livelihood concerns of 2.5 billion people involved in agriculture across the globe is considered it becomes clear that agriculture involves non-trade concerns of promotion and protection of livelihoods. Moreover, being an instrument of trade AoA has little obligation to environmental concerns while agriculture is an integral part of our ecological balance and sustainability. Last but not the least for billions of people of the world agriculture is note merely a means of livelihood but a way of life- an unalienable element of cultural identity.
Moreover, AoA works along with the Sanitary and Phytosanitary Standards and TRIPs not only to further restrict market access of small farmers but also to strengthen the process of:
- Promotion of ecologically unsustainable agriculture
- Loss of farmers’ rights over seeds
- Promotion of GMO
- Decline of women’s role in agriculture
Let’s not trade off Rights for Trade
First and foremost AoA is a tool of trade and it doesn’t safe-guard the provisions of human rights charters on food. The reality of trade liberalization under WTO so far reveals:
- AOA fails to prevent the state subsidies of the larger economies, over-production and corporate control – thus it does not stop dumping.
- AoA reduced the capacity of the LDCs to formulate trade policies to protect human rights as it has locked them into an uneven playing ground
- The AoA’s approach to agriculture is based on the ideology of trade liberalization. It values the “right to export” over “human rights” in general and “rights to food” in specific.
- AOA promotes and strengthens profit and market share of the TNCs in agro-trade at the cost of the producers and consumers of food.
Therefore, agriculture cannot be addressed solely within the trade-centric narrow framework of WTO.
Modalities for food first approach
We call on the honorable Ministers of the LDCs to adopt the following modalities of “food first approach” in negotiations regarding trade in agriculture:
- Call on WTO to develop human rights framework to audit and control dominance of transnational corporations (TNCs) and to ensure conformity of AoA to the human rights charters and environmental concerns.
- Rights and obligations of the state-parties to food security and livelihood must be upheld over and at trade negotiations.
- Interests of the small farmers have to be upheld over and above the agro-business TNCs.
Rights to food over Rights to trade
We put forward proposals to the LDCS so that ;
- The rules of AoA boxes must be treated null in relation to provision and promotion of subsidies for the small farmers of LDCs aimed at protecting and promoting rights to food and livelihood.
- Technical and financial assistance for LDCs for promotion of sustainable agriculture should be a core component of AOA along with the technical and institutional capacity building supports for meeting various standards.
- The LDC must have duty free-preferential market access without the hidden barriers (NTB and discriminatory standards); especially to the markets of the developed countries.
- Elimination of export subsidies including that on cotton by the developed economies.
- Impact assessment before further compliance and consideration of any new proposal of liberalization for LDCs