Friday, May 9, 2008

The Forbidden Link: Rural
Development, Agriculture, AND Trade

By: SustainUS Delegation

Over the course of this week, we have identified several challenges for promoting rural development and using agriculture as an engine of growth for developing countries. There has, however, been little discussion of the influential role international trade policy plays in stifling agricultural growth in developing countries. If the past four days are any indication, it is clear that the CSD will choose to leave these challenges of international trade for some other forum -- even if that forum is known to have failed. Under the current trade rules, all the emphasis on helping farmers in the developing world is a mere pretense. It is inconsequential to promote agriculture as an engine of growth if unfair trade rules are being framed to cripple the ability of developing countries to use their comparative advantage in agriculture.

The WTO Doha Round has failed to deliver on the promise of using trade for development. The developing countries have had to revoke their protection of infant industries in the name of free trade. Meanwhile, the developed world continues to find new trade distortions and excuses to steer away developing countries' agricultural goods out of markets. However, the justification of 'free trade' to conveniently break down barriers on selected industries has gone past the WTO. Today, agriculture in the developing world is further crippled by a new mode of power bargaining and free trade agreements that define new rules of trade. In this new reality of WTO+, or Free Trade Agreements, developing countries are bargaining against global powers, and are forced to reduce their agricultural barriers to allow subsidized crops from developed nations. CSD forums solely discuss enhancing the sustainability of production processes, capacity-building in rural areas, or other issues that avoid addressing the forced disadvantages for farmers in the developing world. We continue to avoid the big questions, the questions that hit the nail on its head, while pretending that a few partnerships will "fix" the problem—condemnably, the CSD continues to be a mere talk show in promoting sustainable development.

Big Questions, Big Lies: Subsidizing "dumped" meals in the developing world

Farmers in the developing world cannot compete with the subsidized crops produced by developed countries. While developing countries have had to drop barriers for sensitive crops such as corn and rice, developed countries hold all sorts of trade barriers. Take, for example, the subsidies and tax credits given to corn producers in the United States (US) which drastically distort worldwide agriculture markets. The US claims to believe in and promote free trade, but in reality US agricultural trade policies are just another model of protectionism; forcibly creating a comparative advantage through subsidizing corn producers is not free trade. The US should be supporting more conservation farming, instead the US primarily subsidizes large-scale corn farms-- allowing US farmers to rapidly produce and export more corn than any other country in the world. This readily available cheap corn makes it nearly impossible for farmers in less developed nations to enter the market. A farmer growing corn in a less developed nation will be out of business when forced to compete with dumped corn, like it has been the case in Mexico under NAFTA where dumping is the norm of this 'free' trade agreement. For as long as direct and indirect subsidies are used to keep developing world farmers out of developed markets, and surplus cheap crops are dumped in developing country markets, talking about agriculture and rural development in the global context is a mockery.

Bad for us, but good for them: phytosanitary standards

In addition to unrestrained subsidies, developed countries have instituted non-tariff barriers such as phytosanitary standards that continue to keep developing countries out of "free" markets. While many countries claim that these standards are critical to the health and trust of their constituents, in reality they make it nearly impossible for resource poor farmers to produce agriculture goods that meet the desires of a fickle consumer base. If developed countries continue to enforce stringent phytosanitary standards, the least they can do is follow Norway's footsteps, who in the Agriculture and Rural Development Panel on May 7, 2008, announced policies of capacity building and aid to developing countries to help them successfully meet these consumer-appeasing standards. Instead, bunkers full of maize, bananas, cantaloupes, etc, continue to be rejected at the harbour of many developed countries.

Double Standards are not sustainable

The observed economic growth in developing countries is no thanks to the contribution of the agricultural sector. Unfortunately, there is very little being done to assess and discuss the impact of global trade policies. It is hypocritical to continue discussing the technical definitions on how to enhance agriculture productivity if governments are not willing to consider the implications of trade policies and take responsibility in achieving sustainable development.

As for more uncomfortable questions, we should ask whether or not free trade will bring the poverty alleviation to developing countries that we hope to see. Even if developed countries are encouraged to abide by fair rules in the international agricultural policy arena, the benefits of this free trade are likely to overlook the world's poorest people. Only farmers with access to markets and the infrastructure needed to deliver to those markets (not to mention functioning input markets and technologies to allow farmers to achieve high yielding harvests) stand to benefit from free trade. The world's poorest people often lack these amenities. It is possible that free trade, if it actually becomes free, will need to be combined with extensive domestic reforms in developing countries before such a trade dynamic actually contributes to legitimate poverty reduction.

If the developed world is going to play by their rules, they should allow developing countries to play by theirs. Developed countries achieved their current state of development not through free trade, but through protectionist policies that allowed them exploit their potential and support infant industries. Asking developing countries to skip that stage and pursue rural development in a hostile environment of free trade is not only unrealistic, but unfair.