NGOs press for a fresh approach to the food crisis

Posted: 23 June 2008

The Doha Round of world trade talks in Geneva are approaching the crunch point with no agreement in sight on the big issues of agricultural subsidies, tariffs and trade in sensitive products. Here Kanaga Raja reports on some of the key concerns put forward by 237 NGO's, trade unions,farmers' organisations and social movements from nearly fifty countries.

In a strong snub to WTO Director-General Pascal Lamy - in his push to conclude the Doha Round as a solution to the global food crisis - theNGOs and social movements sent a letter to him as well as to their trade and agriculture ministers, saying that the answer to skyrocketing prices of basic staples "does not lie in deeper deregulation of food production and trade."

The groups called for governments and communities to have a range of tools at their disposal to build resilient food and agriculturalsystems that are ready for the challenges that lie ahead. The volatility of agricultural prices must be addressed, they said, through nationalpolicies and global actions that would ensure small producers a reliable and steady income.

The groups said that governments should establish safety nets and public distribution systems to prevent widespread hunger. A reform ofthe food aid system also needs to be undertaken.

Lamy's plan

In his address at the FAO High-Level Conference in Rome esarlier this month Director-General Lamy said that in order to cope with soaring foodprices, supply must adjust to demand. For this to happen, trade will help. "Easier, more open trade, can strengthen the production capacityof developing countries, rendering them less vulnerable."

"Through greater and fairer competition, international trade can help lower prices," he said,adding that all of this presupposes that the trade-distorting agriculture subsidies that have given an unfair advantage to rich world farmers, will be tackled. It would also necessitate tariff reduction.

He said the WTO Doha Round of trade negotiations could be part of the medium-to-long term response to the food price crisis. "It would reduce the trade-distorting subsidies that have stymied the developing world's production capacity. It would also bring down tariffs - albeit while maintaining adequate safety nets - thereby increasing consumer access to food through lower prices." He added that the negotiations also provide a possibility for strengthening WTO rules on export restrictions.

In their letter to trade and agriculture ministers, the NGO groups said that the global food system is in crisis. Millions of people can no longer afford or access the food they need, increasing global hunger and malnutrition. The worlds' governments need to act now.

New model

"But the answer does not lie in deeper deregulation of food production and trade. We, concerned non-governmental organizations and social movements, urge you to reject the claims by the leaders of the World TradeOrganization (WTO), World Bank, the IMF and the OECD, that concluding the Doha Round is a solution to the current crisis."

"We believe the Doha Round as is currently envisioned will intensify the crisis by making food prices more volatile, increasing developingcountries' dependence on imports, and strengthening the power of multinational agribusiness in food and agricultural markets.

"Developing countries are likely to lose further policy space in their agriculture sector, which would in turn limit their ability to deal with the current crisis and to strengthen the livelihoods of small producers," said the groups.

The inability to manage the current food crisis is an illustration of e failure of three decades of market deregulation in agriculture,said the groups, pointing out the need for a new model for the trading system that puts development, employment and food security objectives at the centre.

"We are calling for real solutions that will stabilize food production and distribution to meet the global demand for healthy, adequate, andaffordable food. Governments must start to take a long-term view of the challenges facing agriculture."

Uneven spread

The groups also cited the recent report of the International Assessment of Agricultural Knowledge, Science and Technology forDevelopment (IAASTD), endorsed by 57 countries, which said: "Modern agriculture has brought significant increases in food production. Butthe benefits have been spread unevenly and have come at an ncreasingly intolerable price, paid by small-scale farmers, workers, ural communities and the environment."

Support has to be directed at a different model of agriculture that Cn sustainably meet the needs of a growing population, said thegroups.

The groups said that the WTO's Doha Round and other bilateral and egional trade agreements currently under negotiation will not solvethe food crisis because they such agreements push across-the-board liberalization, which worsens volatility of food prices.

This leads to increased dependence on international markets and decreased investment in local food production. Trade liberalisation has eroded the ability of a number of developingcountries to feed themselves, for example, Mexico, Bangladesh, Indonesia and Mali. The removal of tariff barriers has resulted indumping of heavily subsidized commodities in developing countries, such as Ghana, Kenya, the Philippines, Jamaica and Honduras, whileundermining local food production.

Uunder such policis, they say,developing countries have turned from being net exporters of food to net importers of food. Two-thirds of developing countries are net food importers and are extremely vulnerable to volatile world food prices.

The current proposals under the Doha Round will increase countries' dependence on food imports while further eroding their ability to feedtheir own populations.

Big profits

It said high food prices provide enormous benefits to transnational agribusinesses and commodity cartels that control the trade in foodand agriculture.

One of the largest global grain traders, Cargill, announced in April 2008 that its third quarter profits rose 86 per cent to$1.03 billion, in the midst of the global food crisis. Bunge saw its profits in the last quarter of 2007 increase by 77 per cent compared with the same period in 2006. Archer Daniel Midland's (ADM's) profits in 2007 rose by 65 per cent. The Doha Round will strengthen the position of transnational companies in agricultural markets, who thrive on marketderegulation.

They say the Doha negotiations do not tackle the major challenges facing the global food system, which include climate change, natural resourcedepletion, the quadrupling of oil prices, the lack of competition in world commodity markets, financial speculation and the rapid expansionof unsustainable agrofuels production.

The groups want to see a greater emphasis on policies that increase food sovereignty, encourage local investment in local markets, support sustainable small-scale farming, safeguard local production from dumping, implement genuine agrarian reform, and allow trade instruments such as quotas and tariffs. Some of these instruments are being proposed by a group of 46 developing countries - known as the G33 - in the WTO's negotiations on Special Products and Special Safeguard Mechanism.

They want well-managed public food stocks re-established. Such stocks, they argue, provide an important buffer against price volatility and food insecurity. Other key points include:

Safety nets

  • Governments should establish safety nets and public distribution systems to prevent widespread hunger. Governments have to providefinancial support for the poorest consumers to allow them to eat.

  • A reform of the food aid system to respond more rapidly and to allow greater flexibility in the delivery of food aid. Instead of dumping surplus agricultural production as "in kind" food aid, donors should provide cash to governments and aid agencies to buy local food.

  • Developing countries should not commit themselves to liberalisation of financial services in the context of the General Agreement on Trade in Services (GATS) or bilateral and regional trade negotiations, as this can adversely impact farmers' access to financial services such as insurance and credit.

Among the international and regional networks that signed the letter are ActionAid International; Africa Trade Network; AsianPeasant Coalition; ATTAC; Friends of the Earth International; Global Network Latin America; International Gender and Trade Network; La ViaCampesina; Oxfam International; Pesticide Action Network; Public Services International; SEATINI; Third World Network; and UBUNTU.

Also among the signatories are national and sub-regional networks that include Accion Ecologica; Africa Action; Bhartiya Krishak Samaj (National Farmers' Movement, India); Central Unica dosTrabalhadores (National Labour Federation - CUT, Brazil); CIDSE; Center of Concern; Consumers Association of Penang; Corporate EuropeObservatory (CEO); Economic Justice Network; IBON Foundation, Inc.; Institute for Global Justice; Institute for Agriculture and TradePolicy (IATP); International Forum on Globalization; Public Citizen's Global Trade Watch; The Oakland Institute; and World Development Movement.

This is a shortened version of an article from SUNS, distributed by the Penang-based Third World Network.