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"To achieve food security, what most developing countries need are better means to protect and promote their own food supply, not further liberalisation of food trade."

The World Trade Organisation's (WTO) agriculture agreement is coming up for its first renegotiation. Whether or not the 'new round' of the WTO becomes reality, members have committed themselves to revisit the agriculture rules. In an article based on a longer study, Peter Einarsson gives an overview of the agreement and reviews the options available to governments. His conclusion, based on work by a number of NGOs, is that if governments really want to make progress, they must dare to question the absolute priority of the trade liberalisation agenda. More important agricultural policy objectives like food security and sustainability must be put first, and trade rules made subject to them, not the other way around.

Like all the WTO treaties, the Agreement on Agriculture (AoA) is based on the firm ideological conviction that trade liberalisation will always bring net benefits to all participants. By removing barriers to trade, regional specialisation will increase. All over the world, regions will specialise in whatever their agriculture can produce more cheaply than others. When they exchange their products, everybody gains because the combined cost of production is less than if each region had produced its own.

In practical terms, this means promoting exports. The basic idea of the AoA is to create the conditions for agricultural exporters to increase their exports, and to limit the right of countries to follow a policy of food self-sufficiency. This makes sense in the simplistic world of trade liberalisation ideology. If more trade is always in everybody's interest, any impediment to exports blocks the realisation of those benefits and thus harms us all.

In the real world however, cutting the cost of food production is usually not the most important policy objective for agriculture. In most developing countries, basic food security is still the first priority. Providing enough food for all is the issue, not whether local food production can fully compare in economic efficiency with producers elsewhere in the world. Experience indicates that unless there is a stable basis of local food production, food security is very difficult to achieve in a developing country. While international trade can certainly contribute, especially when local harvests fail or even more where there are constant deficits, the notion that it does not matter whether food is produced locally or not lacks credibility. To achieve food security, what most developing countries need are better means to protect and promote their own food supply, not further liberalisation of food trade.

Another first priority objective, equally important to developed and developing coun-tries, should be to return agricultural production to ecological sustainability. Sustainable agriculture involves two core requirements: to preserve the productive capacity of natural systems, and to minimise the use of non-renewable resources. Both requirements are routinely disregarded by almost all agriculture today, and neither is really possible to fulfil unless food production and consumption are kept physically very close to each other. To maintain sufficient production without current leves of chemical inputs and energy use, agriculture must be tailored to optimise use of locally available resources for local needs. In particular, crop diversity and high levels of plant nutrient and organic matter recirculation are essential. In practice, this means that ecolo-gically sustainable agriculture is impossible to reconcile with the far-reaching regional specialisation that is fundamental to trade liberalisation.

Fundamental contradiction

Now, the good news is that WTO member countries are increasingly aware of the fund-amental contradiction between the free trade agenda and other agricultural policy objectives. In fact, these so-called "non-trade concerns" have been a major focus of agriculture talks at the WTO since well before the Seattle min-isterial meeting in December 1999, when they hit the spotlight. Both developed and deve-loping countries are demanding the right to various exemptions from free trade disciplines to achieve other objectives. While ecological sustainability has not figured very prominently yet, food security certainly has. Developing countries also strongly emphasise their need to protect domestic agriculture because of its role as an engine of general economic development Developed countries highlight the importance of preserving rural landscapes and cultures that are no longer economically competitive in their own right.

The bad news is that few if any countries have yet realised that they must make a choice. Judging from the confusing language coming out of the WTO negotiations, officials still seem to believe that all those non-trade demands can miraculously be fulfilled while at the same time continuing further down the road of general trade liberalisation. They are simply not being realistic. In essence, what countries are saying is that they want to keep the right to protect their own agriculture, while being able to export without any restrictions to everybody else.

Before they wake up and start admitting that something has to give, not much progress should be expected. Once they do, however, there is no lack of realistic alternatives which both give reasonable conditions for trade and preserve freedom of choice in domestic agricultural policy. Toward the end of this article, a few options are presented which are essentially synthesised from the work of a number of development and environment NGOs over the last few years. But first a rapid overview of the context and content of the AoA.

Trade patterns
The first thing that has to be clarified about global trade in agricultural products is that it is much more limited than generally believed. Most people everywhere in the world still obtain their basic foodstuffs from relatively close to where they live. Of the staple foods, it is only in wheat that global trade is consistently above 10% of total world production. Only in a few of the typical plantation crops does global trade represent more than 50% of world production.

For almost all major food products, the volumes handled on the largest domestic markets are far more important than those on the so-called 'world market'. Even in the most heavily traded staple food, wheat, the EU domestic market is roughly the same size as the whole of world trade. In beef, the US market is more than twice the size of world trade (see table). ...

For more info, please visit: http://www.grain.org/publications/mar01/mar012.htm

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Last Updated: Friday 9 November 2001 @ 12:16pmCET

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