Strawe and Nicanor Perlas
collapse of WTO’s Cancun Ministerial was at the same time a collapse of
neo-liberal illusions. The neo-liberal way of handling the problems of
globalization has obviously not led to the success that its proponents
have promised. The Human Development Report 2003 of the UNDP, Millennium
Development Goals: A compact among nations to end human poverty,
brought the result that 21 countries saw their HDI (= Human
Development Index) decline between 1990 and 2001. That number is sobering
when compared to the performance in the 1980s when only 4 countries
experienced a decline.
The promise was that globalization would benefit all regions of the world.
And now we see - although the WTO declared the Doha Round as a
“Development Round” - that improvements are not merely slower than
expected, but the situation worsens for large areas of the globe.
“Globalization is on the brink of dismembering the globe”, said the
German President Johannes Rau 2002.
is not a force of nature. It is shaped by human intentions and will. There
can therefore be different ways in which the diverse peoples of the world
can relate to it. From this perspective, one can say that globalization is
connected with the present development of humanity that can lead,
constructively or destructively, to a widening of traditional forms of
community. Globalization shaped in a human and just way would involve the
possibility that human beings all over the world can create relationships
of real freedom, equality and solidarity. In this sense people who fight
for a better world are actually advancing a more empowering and respectful
relationship of the peoples of the world and are not enemies of
globalization in a more profound form.
globalization as it appears today is obviously based on false paradigms
that have to be thoroughly deconstructed and reframed. So it is no
coincidence that a growing civil society movement is seriously discussing
alternatives to what we can call “elite globalization”. A growing
number of people working in the political and economic sector of the
society are also beginning to ask for alternatives.
major issues became the stumbling block for the WTO in Cancun: Agriculture
and the New Issues (Investment etc.). Human society is nurtured by the
fruits of nature on the one hand, and by the results of human intellectual
and spiritual capacities on the other hand. Agriculture is necessary if we
are to benefit from those fruits of nature, and appropriate handling of
capital flow, investment etc. is needed to ensure that those financial
aspects work for the whole of social life. So it is not by chance that in
these two fields the necessity of a paradigm shift becomes particularly
any debate on alternatives has to give particular consideration to these
two issues. In this paper we deal with the first issue: the
fundamental question of how to develop sustainable agriculture in a
the failure of the negotiations slowed down the dynamics of the WTO for a
while, the problems of worldwide agriculture are obviously growing. The
killing of farmers by a false neo-liberal agricultural policy continues.
Due to the collapse of the Ministerial there is a small window of
opportunity, giving those who are deeply concerned a short time to propose
a different course of action.
The Role of Civil Society and its Search for Alternatives - the Question
use this time effectively we think it very important that civil society
now presents alternatives based on a long-term strategy, arising from a
deeper understanding of the problems and tasks in the area of agriculture.
this deeper understanding one has to be aware of the essence of WTO-Agreements.
Readers who are not acquainted with these fundamental considerations can
find an overview of the development of the WTO, the key points of the WTO
Agreement of Agriculture (AoA) and some related issues, plus the
progression of the WTO negotiations on agriculture before Cancun in the
is now rethinking their position after Cancun. The U.S. has announced that
it will increase the use of bilateral trade agreements alongside the WTO
and it will also try to strengthen the FTAA. Nevertheless the WTO remains
important. Will the liberalization round continue? Only a few naive
optimists believe that the time line will be kept. But the driving forces
of the WTO-process will try to overcome the crisis through negotiations in
Geneva and at the next Ministerial to be held in Hong Kong. So using this
time window to propose an alternative path is crucial.
the Battle of Seattle, global civil society was not fully able to use the
window of opportunity to bring in constructive alternatives. This time the
chance should not be missed. The debate on alternatives in civil society
(that has begun at the World Social Forums and elsewhere) needs to be
given increasing attention.
job cannot be left to the State actors. To play a key role in further
development, civil society has to act as an independent force, oriented to
the values of a humane and just form of globalization, and striving to
achieve another and better world.
course the failure of Cancun was largely due to the countries of the South
becoming fed up with an exploitive agricultural policy, and the
commitment of civil society strengthened the position of those countries
in the negotiations. But the demands of the southern countries remained
inconsequent in some respects, because they were not based on a long-term
strategy for the healing of agriculture, as a part of the shaping of
globalization. In part they were also reflecting the interests of big
agri-business forces within those countries.
civil society supports the governments of Southern countries when the
latter are oriented towards the interest of the people, and criticizes
them when they fight for purely egotistic interests instead of a just
solution to the problems of every human being. Global civil society forces
are not the auxiliaries of state and business powers. They should fight
for the necessary changes within the political and economic spheres of
society in all regions of the world, North and South, wherever changes are
necessary. Thus it is key for civil society to define its own position
first. Only when the questions regarding the necessary changes are
clarified will it be possible to network with all who are interested in
realizing those changes.
the same time civil society should be prepared, when circumstances are
right and the danger of co-optation is removed, to cooperate with all
representatives in government and business who show genuine willingness to
work for the good of the whole. Understood in this sense, civil society
should invite representatives of government/administration and business,
where feasible and appropriate, to work together for the necessary change
Their common aim should be to help the farmers, traders and consumers
create healthy relations of cooperation in the production and delivering
of food. An alliance with civil society gives progressive forces in
government and business their only chance to achieve the kind of social
progress they are longing for.
civil society actors have published proposals for a paradigm shift in
agricultural policy. We appreciate those achievements and try to build
upon them. At the same time we hope to contribute some new aspects of the
issue with this paper. Some civil society representatives are also thinking about the
possibility of alliances among the different actors, in particular between
governmental actors and civil society. We hope this paper will contribute
to the clarification of the conditions considered necessary for those
Cancun and the Position of the Different Players in Global Agriculture
can we judge the positions of the different players in Cancun, which also
determine the post ministerial development of agriculture?
U.S. trade elites are aggressive promoters of market fundamentalism,
global corporate rule and free trade. On the other hand, they have had no
scruples in breaking the WTO rules of competition in order to further
their own interests. The U.S. struggles against protection measures
employed by other countries while pursuing protectionism for themselves.
This has even increased since the Farm Bill of 2002, which brought more
subsidies to big U.S. agrarian businesses.
EU is also defending its own agriculture. For historic and geographic
reasons Europe has a greater number of small farms than the U.S. For some
years now there has also been a discussion about the need for more
sustainable agriculture in Europe and the concept of the
multi-functionality of agriculture has become more and more popular.
Nevertheless in the WTO the EU often sides with the U.S. and plays against
the needs of the South.
most aggressive free trade movement in agriculture in the past has been
the so-called Cairns Group.
It has been led by net exporting countries which have tried to abolish all
kinds of protectionism, also in the North, to gain full market access all
over the world. The Southern countries within this group have not played
an independent role.
resistance of the southern world against the damage to their local
structures, and unjust conditions in world trade in general, developed but
remained too weak.
situation has changed completely since the Cancun ministerial. The U.S.
and the EU had made their compromises before Cancun and they came with the
hope that they would have to give very few concessions, and would not have
to give up their export subsidies. At the same time they hoped to gain new
rules on investment, trade facilitation, competition and government
saw the decline of the Cairns Group and the ascendance of the G20.
The key members of this group are Southern countries like Brazil and
India, which do not want to be abettors of Northern interests any longer.
On the one hand the G20 was demanding market access, but on the other hand
- contrary to the former Cairns positions - the group was also demanding
possibilities to protect agriculture in the southern world. They
underlined the need to abolish all kinds of export subsidies.
Alliance for Strategic Products and of Special Safeguard Mechanism (SP-SSM
an alliance of 24 Southern countries, underlined above all the necessity
of protecting agricultural markets threatened by cheap imports. They
demanded that self-chosen strategic products should be exempted from the
liberalization rules and a special safeguard mechanism should check the
flooding of imports.
A Paradigm Shift is Necessary!
from Civil Society for a Change
have already mentioned that after Cancun many civil society actors have
published proposals for a change in agricultural policy; and that we
appreciate those achievements. The reader can find extracts of some of
these Papers in the annex.
significant segment of global civil society is starting to think that all
aspects in the WTO connected with agriculture should remain outside the
WTO. These activists think the WTO is too rigid and
has showed itself incapable of being reformed. If this is the case,
then it would be useless to fine tune the AoA, as some other civil society
organizations and movements, in particular those from Europe, propose. An
alternative proposal is some kind of global cooperation mechanism outside
the WTO - for instance in the framework of a UN agreement which countries
sign onto. In this regard, an upcoming meeting of the UNCTAD in June may
begin this process of creating an agriculture trading framework outside
the WTO regime.
own view concerning the WTO is also radically critical. We believe that
agriculture should be taken out of the WTO. Even those who want to reform
the WTO think that this organization has proven, and is continuing to
prove, that it is a problematic venue for fair trade. However, as we will
gradually show (see below),
it is possible to develop an approach that can bridge the two schools of
thought, including a synthesis of short and long term goals found in the
think that this synthesis is possible when we take into consideration
that, although there are differences in some aspects, the varied
statements of civil society after Cancun have a great deal in common.
all civil society actors agree that the problems of agriculture cannot
be solved within the framework of neoliberal principles, which have
caused those problems. They criticize neo-liberalism and try to
analyze the problem of agriculture from the aspect of sustainability
and social justice, to call for and to promote a paradigm shift in
almost all of civil society is demanding the total and immediate
abolishment of export subsidies (including export credits) because
these subsidies are destroying local agricultural structures.
popular demand for increasing market access is judged critically,
because one-sided export orientation will only help agrarian big
business in the South, not the small farmers or the organic and
ecological agriculture practitioners.
all of the participants of the debate see the necessity of
reinstalling possibilities of regulation of imports for all countries.
all of the participants affirm the total rejection of genetically
engineered food and of any property rights or patents on life
statements are not motivated by egotistic interests of groups or regions.
Instead they aim to bring healthy solutions for the problems and to serve
the needs of all people throughout the world.
of an Alternative Approach: the Vision
propose the following approach in the spirit of connecting with the many
proposals published after Cancun while at the same time addressing
strategic issues that have been left out of these proposals. We have tried
to rethink some of the demands and proposals in their consequences and
develop some additional proposals as a result of this rethinking.
Furthermore we tried to adjust the single proposals within the context of
a long-term vision of agricultural and social development.
are proposing very pragmatic steps -
many in accordance with other groups of civil society, who have developed
those steps with often admirable efforts and expertise. At the same time
we have to safeguard that the single steps are leading to a new framework
which furthers sustainable agriculture for the benefit of all peoples of
the world. We integrate the different proposals within a strategic vision
of the agriculture of the future. Otherwise we will fail in our intentions
and single tactical steps will be without the desirable effects or could
even worsen the situation.
essence, our proposal, which is to be developed more fully below, is as
follows. We propose that global civil society activists undertake a
who believe in radically altering the terms and conditions of the
Agreement on Agriculture within the WTO can do so. They can do this with
the intent of preventing any further damage to the farmers and
agricultural systems of the world. They do this without being under the
illusion that the WTO, under a neo-liberal economic regime, will
ultimately create a healthy food system benefiting the populations of the
in civil society who do not believe in the WTO can pursue a second track.
They will try to envision what agricultural relations can be outside the
WTO, how this new agriculture arrangement will look from the ground up
(from the local to the regional, and the regional to the global) and what
new institutional arrangements need to be created to bring this different
vision into reality. This may entail creating a new agriculture norm and
practice within a new venue, to be uniquely created for this new purpose.
Alternatively a new framework could be built within the institutional
context of existing global institutions, like UNCTAD, which may provide a
more flexible and appropriate place for birthing the new social
tracks are not necessarily in conflict with each other. The first track
prevents further destruction of agriculture and prepares the ground for
the more radical arrangement envisioned in track two. The second track
enables the activities of the first track to be placed in an empowering
evolutionary context concerned with creating the agriculture of tomorrow.
Track 1 enables Track 2 to work. Track 2 creates a context, which
minimizes the co-optation of Track 1 activities. And Track 2 makes it
necessary to find entry points towards a more strategic understanding and
creation of an agriculture that truly serves and empowers people in true
partnership with nature.
now like to develop the substantive basis for this proposal.
Agriculture Needs A Different Kind of Protection
market fundamentalism of the WTO ends the protection policy of the Nation
States´ for agriculture. We think that the traditional protection policy
- especially in Europe - has created many problems through the
bureaucratic manner in which it has been implemented. Agriculture in
Western Europe was a sector of the command economy, sometimes even more
over-regulated than the so-called socialist economies of the Eastern
the weakness of traditional forms of protection does not mean that
agriculture does not need protection per se. It only means that we have to
concretize the concept of food sovereignty. In general we can say that
developing life needs protection - this is a basic law of life. The
neo-liberal Slogan “down with protectionism” therefore hinders
development and developing regions. “Market” is always good for those
who are strong. In short, we need instruments of protection that advance
food sovereignty, one open to fair and ecologically sound trade and one
that enhances the different agro-ecological potentials of the different
regions of the world.
The Key Question: Appropriate Formation of Prices
in the South accuse the WTO of promoting policies that lead to price
decline. This price decline is also a problem in the North and is ruining
sustainable agriculture all over the world.
prices of agro-industry on the other hand are not telling the ecological
or economic truth. Only a narrow minded micro-economic view which does not
take the macro-economic effects into account can pretend that those prices
would be economically correct.
Unsustainable behavior causes disastrous secondary effects for the
environment and the health of people, effects which cost large sums of
money - money which is paid by the general public through taxes etc. If
all these costs were taken into account then the prices of these products
would not be lower but higher than the prices of the products of
addition, a healthy economy, and especially the well-being of agriculture
depend in some way on the consumers’ sense of proportion and
reasonableness in prices. If prices do not tell the economic and
ecological truth this sense of proportion becomes corrupted. Agriculture
is dependent upon the capacity of the consumer to make decisions in a
responsible manner, and this capacity is warped by fake prices.
The main task
in protecting agriculture is to prevent price decline and fake prices. The
primary objective on the way to a healthy agriculture worldwide is to
achieve “fair” prices. This means that prices must allow farmers to
produce food in a sustainable way, in cooperation with nature, and to
support themselves and their families in the process. There is a deep
connection between prices and sustainable development.
this reason (without being embedded in this different concept of
protection which actually presumes a different way for society as a whole
to function) we do not hold “market access” to be a solution for the
southern countries. Global economy asks for global responsibility and for
a holistic approach. That is incompatible with the destroying of
structures in other parts of the world for one’s own profit, especially
since it takes decades to revive an agricultural structure once it has
been destroyed. This is even a shortsighted view in relation to the
benefit of the people within countries that try to profit from
agricultural exports. Dumping is always based on a price structure that
benefits only a few and is doing harm to the majority of the people.
Shifting the dumping location cannot solve the problem of dumping.
question of balanced prices is a key question for the southern countries
in particular, which have to avoid ruinous competition among themselves
thereby harming their own regional structures.
Adverse Effects of Instruments of
Support, which are Currently Used
considerations so far have led us to the conclusion that protection of
agriculture is deeply connected with the price problem. Some people think
that the WTO agreement opens up a way of supporting agriculture while
avoiding the price problem. We find those arguments even in the civil
society debate. The thesis says that domestic support through direct
income payments is not harmful. But in reality price and income are so
deeply connected that there will never be direct income payments without
repercussions on the price system. Direct payments - even if they are
decoupled from the amount of production - make it possible for the prices
to sink yet lower, causing an increasing pressure in the direction of
intensification and the use of genetic engineering in agriculture. The
next problem is that only the rich countries are able to give direct
payments to a degree which is able to preserve farmers existence (93 of
all support programs in the WTO come from 5 industrialized countries).
However, sustainable agriculture must be enabled in all countries!
direct income, so the argument goes, is the wage for the farmer’s
contribution to nature protection and landscape conservation. So there
seems to be no problem with the decoupling of income from production. But
this split between so-called ecological and so-called non-ecological
aspects of a farmer’s work is fictitious. Prices have to pay farmers
income for their job, which is both to cultivate nature and to provide
food for the consumers. Modern agriculture should always be sustainable
and not only conserve nature but also re-vitalize it. The ecological
production of food and the cultivation of the earth are not two totally
separated things; they are two sides of the same reality. Thus both have
to be paid through the price of the products. And if the price of the
products is too low to enable this kind of agriculture, this price must
necessarily be wrong because it is not telling the ecological truth, which
is at the same time an aspect of the economic truth.
direct payments lead to an increasing dependency of the farmers on policy,
which is often influenced by opportunistic politics, especially in times
when the State is short of cash or when political favors need to be
cultivated. That is a real danger for farmers’ incomes. In relation to
the political majority, especially in industrialized countries, as well as
to the political but elite minority in the South, farmers are petitioners,
in the best case lobbyists.
old forms of subsidies created such dependency. Unfortunately almost all
the instruments which are used today for the protection of agriculture
have also problematic adverse effects. There is a problem of bureaucracy.
To get State subsidies farmers spend a lot of time filling out complicated
questionnaires. Farmers all over the world are complaining that a big part
of the subsidies does not reach them but trickles away somewhere else.
There is also the reality that the big farmers often get the bulk of the
subsidies. And tariffs, although they may be a protection against dumping,
are often an instrument used to earn money for the State in general rather
than to help the development of agriculture.
The Importance of Regionalism
there an alternative way of protecting agriculture? We think there is. To
discern this way we have to think more deeply about two questions:
the question of the region, because the specific place of life which has
to be protected is not abstract; it is always the concrete region where
the second question would be: Is it possible to develop regional social
structures, which bring about the appropriate price level? We have
discovered this to be one key factor in protecting agriculture.
concept of regionalism has to play a key role for a future agriculture.
This concept is not restricted to agriculture, but is equally important
for the world economy as a whole. This world economy is not an abstract
world market. It should become a global social organism structured by
regions. The economy has to enable life, and real life is always life in a
specific surrounding, in a “region”. Regions are social biotopes or
“sociotopes”. In a region people can shape and develop economy in a
human way and to a human scale.
for agriculture, regionalism is also important in a more specific sense.
Land is the factor of production that cannot move as labor and capital
can. Capital moves round the globe at the speed of light. Agriculture
remains in one spot. Therefore it is, by its very nature, the regional
pole of economy, also in a social and ecological respect. You cannot
“switch off” agriculture in a certain region without damaging the
whole life of this region and at the same destroying the cultural
logic of market fundamentalism may decide that there is no necessity for
agriculture in a region, if productivity is too low and prices are too
high. The logic of real life says: there is no way without cultivating the
earth, and cultivating an agriculture that cultivates the earth. We can
add: When we said before that “Market” is always good for the strong
we have to state that agriculture has become the weak part in society
we accept the necessity of regionalism we have also to respect that the
conditions of agriculture are different all over the world. Geographic and
climatic differences bring about different products and qualities of
products and also different degrees of fertility of the earth. Thus we
have different costs of cultivation, which cannot fully be compensated by
techniques. So financial transfers, to support the regions that are less
benefited by nature than others, are an economic necessity and not a
disturbance of economy. Furthermore it is a simple economic conclusion
that the removal of agriculture out of a whole region would destroy the
region or would cause the cost of land conservation to be much higher than
the total costs of enabling sustainable agriculture. Equally important,
the loss of agriculture also means the profound loss of the cultural
diversity and human knowledge connected with those who have formed an
intimate bond with nature in the different parts of the world. We cannot
put a price on the unusual (and sacred) human development realities
created in an agro-rural context, which is quite unique and different from
that of the urban areas of the world.
an illusion to think that price reduction through global agro-competition
makes things cheaper altogether. This illusion is the result of a
constricted microeconomic perception that is unable to see the
macroeconomic totality. Cheap imports of food, for instance, will cause
ecological costs in the region supplied; it will create costs through
unemployment and through nature protection measures. In addition, there is
the tremendous ecological cost to the planet and to societies in the
irrational pursuit of transporting and shipping food produced in one
region to distant locations in the world, the so-called “food miles”.
There is no economic rationality there. So globalization itself needs some
kind of de-globalization to make regions sociotopes within a healthy
global social organism.
Regional Self governance - a New Possibility for Protecting Agriculture -
a Medium- and Long-Term Perspective of Associative Economy in Agriculture
by the People Involved
the concept of regionalism is to be more than an abstract principle, we
have to create working organs in each region that are actively capable of
facilitating regional development from the ground up. We need task
oriented self-governance of the people involved in agriculture, not only
the farmers but also the processors; traders and consumers. This would be
a new way of handling the problems.
will only recover if all those involved come together and take matters
into their own hands through regional self-governance. Agricultural policy
will only be helpful if it facilitates and furthers a development in this
direction. There is no self-governance without involvement of all the
actors. Thus regional self-governance includes necessarily the trade
partners and the consumers. In addition, we have to be especially aware of
the role of trade within the whole process. We have to ensure that trade
is fair and trade margins are appropriate and not exorbitant. Struggle
against usury needs not only laws, but also contracts within the
associative networks of cooperation between the key actors in agriculture.
Unless trade is included in regional structuring, regionalism cannot work.
Regionalism needs the active contribution of the traders.
different forms of self-governance will follow life and its functions.
Therefore it must not be pre-conceived in all its details.
remark at this point: The attitude of global civil society to economic
self-governance or self-regulation is in some way inconsistent. One still
meets mistrust about this possibility. There is still a significant
element in civil society expecting the State to do the regulation; a
cognitive reflex reinforced by the bad record of self-regulation of
transnational corporations. But we are talking not about a corporate
economy but an associative one, about an economy of social responsibility,
not shareholder but stakeholder oriented. Global civil society’s inner
impulse is to realize the self-responsible activity of each human being
and the free co-operation among them. Thus global civil society’s vision
for economy cannot be a top-down structure. On the contrary it
necessitates a bottom-up structure also for the economic sphere. That is
what we call associative economy.
is another reason why associative networks are preferable. A Region is not
necessarily identical with territories of nation states, federal states or
political districts. On the contrary, the frontiers of both often overlap
and are not congruent. An example of this is the so-called
“Three-Country-Corner” between France, Germany and Switzerland in the
Basel Region, which forms one economic area. These factors need to be
recognized by the states. Otherwise the state will hinder the development
of a sustainable, fair and effective economy, - and especially the
development of a sustainable agriculture.
Principles of Autonomous Self-Governance and Tasks of Organs/Networks of
Associative Self-governance in Agriculture
principles of autonomous self-governance include the following:
by the actors involved in the process of agriculture itself - broadly
understood as a
process leading from production to consumption
of interests and needs of all actors involved (for instance relating to
achieving fair prices)
and joint responsibility instead of actions based on power relationships
and agreements instead of rules from outside or from above
and confidence instead of fear
limitation instead of economic growth as an end in itself
(networks), capable of acting, instead of commandments
between real work and representation in organs, no governance by
The different organs or working groups of agricultural self-governance
orient themselves to the different tasks and objectives. They regulate
their own spheres and areas of competence. For overlapping functions they
build loose networks for mutual coordination. They build a bottom-up
organization based on the principle of subsidiarity. As a whole they
perform the following functions: 1. Observing situations and developments.
2. Mutual and common consultation. 3. Coordinating single actions or
common decisions. 4. Being partners for other social or state groupings or
institutions e.g. for parliaments, universities, industry, banks. 5.
Representing a region and partner with representatives from other regions.
6. Transforming general plans into concrete measures e.g. division of
subsidies, or equalization payments to disadvantaged regions or areas.
proposal for regionalism is of course not a plea for narrow-minded
provincialism which does not care about the hardships and needs of other
regions. It is a misuse of the word subsidiarity to exploit it for
avoiding necessary solidarity between regions.
Self Governance and Structuring of Prices
of the most important tasks within the field of authentic harmonization
and coordination is the structuring of prices. The question of prices is
the crucial question of economy as a whole, because prices deeply affect
the economic prospects of all actors of the economy. Prices have to create
a balance between production and consumption. If the prices are too low
one cannot produce in an appropriate way, if they are too high one cannot
buy enough of the products etc. Command economy destroys true prices by
creating prices out of wishful thinking, i.e. prices that are not related
to economic reality. Market fundamentalism takes prices, created
spontaneously by the anonymous market forces, as ultimate and
non-questionable, leaving no possibility for appeal. Associative economy
respects the economic reality. At the same time it facilitates the
restructuring of price proportions in a healthy direction through
cooperation and agreements.
Self Governance as Protection
networks of associative cooperation are working appropriately,
agro-dumping can be averted by accords between the regional actors. We
take it for granted that the buyer of a trade company does not buy things
that the company does not need for its customers. In the same way, a
region should not be forced to buy things the region does not need. The
region has only to establish the capacity of economic acting as a whole,
which is achieved by the development of networks that are the organs of
Role of the State in Safeguarding Food Sovereignty, Tri-Sectoral
State at this point has a double-task: it has not only to allow, but to
ensure, that the imbalance in the degree of power among the differing
elements of the economy is overcome, for instance through the reform of
property rights. It has also to provide environmental laws. The remaining
task of the State is to help bring together, where needed, the proper
partners to a self-determined co-operation, which will then develop into a
true associative economy.
This approach is in full accordance with the principle of subsidiarity and
enforces joint responsibility. In relation to the State, the agricultural
sector would thus no longer be a petitioner but become a contractual
partnership helps facilitate regional cooperation and restructures the
relationship between an associative market, state and civil society within
a region. Such an approach is in the beginning stages of implementation in
some parts of the Philippines through SIAD (Sustainable Integrated Area
regulations which hinder states from providing a legal framework for
furthering healthy regionalism have to be abolished completely.
Next Steps and Entry Points
course it will take time until this kind of associative economy has
developed to the necessary level which allows it to fulfill this function
of necessary protection. Until such time intermediary steps are needed,
which will support this development as well as provide protection under
the present agricultural conditions.
Principles of Development
two things: That States shall commit themselves to further structures of
self-governance as described above. State protection shall not be
abolished immediately, it shall be reduced step by step, in lock step with
new forms of protection through self-governance that are starting to work.
long as there is no other way of protection, the traditional method of
tariffs should be a right for countries, especially those of the South, to
be implemented as needed, in particular against all forms of dumping
imports. All agreements within the WTO, which hinder the protection of
regional agriculture, have to be abolished completely. The goal must be to
take agriculture completely out of the WTO.
Concrete Entry Points for a New Role of Trade
first step towards regional development could be to oblige the trade
companies to buy at least 30 - 40%, of the food they sell, in the region
itself. This distribution margin could be increased step by step until the
desirable level is reached. This kind of quota processing is an
operational and unbureaucratic way of flexible trade control. With the
development of associative habits in economy quotation, processing will
become more and more a question of contracts, i.e. self-obligations
through the economic and agricultural actors, so that the State can draw
back from the task to the same degree in which economic self-regulation is
WTO handles quotas in general as so-called trade barriers, and it tries to
abolish them all over the world. In the Agreement on Agriculture there is
a clause that obligates the WTO members to replace all kinds of quota
fixing through tariffs (“tariffication”) and to then decrease the
tariffs. At this point we see that the general prohibition of quota fixing
is a special kind of trade barrier: a barrier against fair and sustainable
have to fight against all barriers for fair and sustainable trade and
therefore it is necessary to replace the definition of trade barriers
within the WTO agreements, which is in itself often a barrier for modern
trade. A trade system which is not based on fairness and sustainability in
trade cannot be regarded as a truly modern trade system. We need to
advocate this in both the tracks that global civil society has before it.
(See discussion above.)
and sustainable trade also needs a framework of modern property rights,
including a renewal of land legislation. We have to ensure the social
commitment of capital. The flow of capital should not be an end in itself;
it should serve the economy and peoples welfare and has to be aided where
it serves this function and be limited when it does otherwise.
We do not think that the WTO is the right institution to further this
development. But we claim that no
global treaty may hinder it. All clauses in the WTO agreements, which
hinder the development of a modern legal framework for economy, have to be
What to Do with Subsidies? - Domestic
sum up some results we have already won and draw conclusions from there:
1. There can be no abolishment
of subsidies without substitution (except export subsidies!). Until better
instruments are working it’s preferable to have subsidies than to shut
down agriculture - given that this agriculture is sustainable! As long as
true prices are not attainable, we have to temporarily use other methods.
But direct income payments can only be supplementary, in accordance with
the principle of subsidiarity. They are needed only as long as a healthy
price structure is not achieved.
2. The way in which subsidies
are provided may not freeze or worsen existing grievances. They must
further the development in the right direction and may not hinder it in
any form. That means that the subsidies may not produce price distortion.
Support, e.g. direct income payments shall only be given to farmers who
work in a sustainable manner and take regional responsibility.
Unsustainable Agriculture should not be supported.
the argument that direct-income subsidies are for the contribution of the
farmer to the environment, would be not only one-sided but also a total
lie, because the agriculture of the agro-industrial complex is neither
protecting nature nor conserving landscape, but is producing costs which
are shifted to the community.
consider it necessary at this point, to reflect more deeply about the
criteria of “sustainability” in agriculture, when we make this the
criteria of subsidization. It is true that we find the highest number of
organic farms within the sector of small farming. But of course also a
small farmer can use pesticides and can buy genetically modified seed. On
the other hand it is not only traditional family farms which are managed
organically but also new social forms of farming are arising, which may
also allow organic farming in a larger dimension - including all forms of
rural cooperatives. We have to take into account that there is not only a
question of preserving nature and landscape but also of helping the earth
with modern methods of re-vitalizing it. So the concept of sustainability
needs to be defined in a dynamic sense which is broad enough to cover all
forms - traditional and non-traditional - of healthy agriculture. The
definition of sustainability needs to be clear enough so that it cannot be
misused for a form of agriculture that damages the earth or the life
conditions of specific regions. One of the most important criteria in this
sense may be the organic character, not only of the materials used, but
also of the processes of production. They need to be in accordance with
the circulating, living, processes (circular flow) --
for instance bringing all excrements of the animals kept on the farm
back to the earth as fertilizer etc. The rhythmical character of the
living would also be a criteria, for instance in connection with the
regeneration of the earth through crop rotation etc. Circular flow is not
compatible with farms in giant dimensions. But it is not necessarily
always found in the small dimensions of traditional family farms either.
In addition, social dimensions of sustainability should be strengthened by
furthering new forms of social co-operation and community living.
this context, we also have to address the increasing phenomena of organic
farming carried out by large national plantations or transnational
corporations. Here we need to factor in the social dimension of
sustainable agriculture, which includes poverty reduction, supporting the
social development and cohesion of the community. A large scale organic
farm that destroys family farmers and drives them to poverty is not
sustainable from the macro-perspective of society as a whole. A broader
concept of sustainable agriculture has to be used in addressing this
challenge of large corporations which may be ecologically sound, but can
be socially unjust.
Direct Income Payments without Price
Distorting Effects - the Concept of a Consumption Oriented Agro-Rate
have considered the damaging effects of subsidies, in particular those of
direct income payments, which lead to price falsification. And we have
stated that we must find a way to avoid such adverse effects. Prices that
are not a real compensation for farmers’ work are false prices. Those
prices are “too low”.
to do? We have seen that in the long run associative arrangements are the
best means to guarantee the necessary level of food prices. Therefore we
pursue a long-term strategy for creating a balanced price structure by
developing a new kind of economy, which we call associative economy. But
what to do right now?
may not allow the subsidies to increase price distortion but we have to
ensure that they contribute to abolishing fake prices! If the prices were
true there would be no need for income subsidies. Therefore the manner of
financing income subsidies should contribute to actually making itself
superfluous in the long run. That is, this way of financing should
contribute to true prices and prevent prices sinking below the level
necessary to ensure and safeguard sustainable agriculture.
is this possible? Which form of price correction could we apply? We cannot
leave the answer to this question to the forces of the market itself, and
so far a system of organising the market through arrangements, has not
been established. For the time being the only means available for
intervention is through the state. Direct price control however would be
command economy, which anyone in their right mind would avoid at all
there is one possibility for the state to influence the relationships of
prices without interfering in a regulatory manner in the economy: that is
through the mechanism of the consumption-tax; known in many countries as
since generally the value-added tax is used to supplement the national
budget and does not directly benefit agriculture, we must be careful to
only adopt the way in which value-added tax works in principle, and not
actually create a new tax. In short: we need an instrument that works like
the value-added tax but is in itself not a tax.
is possible by setting an expense oriented or consumption oriented
compensation on the prices of agricultural products. For brevity, we will
call this the agro-rate. It would work, as already mentioned, in the same
fashion as a value-added tax, the difference being that the Agro-social
rate is earmarked for the support of agriculture and is not
misappropriated as a general contribution to government outlays.
By this method we can bring
the prices for agricultural products “artificially” to the necessary
the conditions of an economy not yet working on an associative basis, it
would be a stimulus to increase production if we give the agro-rate to the
individual farmer for his products. Under the given conditions the
agro-rate should be the new source of decoupled direct payments of income.
(As we have already mentioned before, these payments should be bound to
conditions of sustainability. There can be no subsidies for an agriculture
that is destroying nature and damaging peoples’ health.)
the value-added tax paid is subtracted from the value-added tax owed, the
burden is effectively shifted to the final consumer at the end of the
chain. In this way it becomes, in fact, a consumption tax. But the aim of
this is not to lay an additional burden on the consumer’s shoulders. The
consumer therefore has to be unburdened at another point for the precise
amount he pays for the agro-rate. This is easier than it may look at
first. Because at the moment the consumer is also paying the subsidies
through his/her taxes! The consumer pays it all; the only thing is, that
s/he is not aware of this fact, while the agro-rate would bring
consciousness into the matter. So we would only have to restructure the
way of financing the subsidies: We would decrease general taxes through
which people pay and finance the subsidies nowadays and instead of this we
would generate the same sum as agro-rate.
The effect of this change in
the form of financing must be neutral: nobody pays more than they did
before this reform.
are not going deeper into the question of distribution effects which could
occur by this form of financing, because they depend on many factors - for
example the tax system in different countries. There are also different
opinions between social researchers concerning the effects of comparable
It is a question of political willingness to avoid injustice caused e.g.
by the fact that people with low income give a higher percentage of their
money for food than people in higher income brackets. We would have to
compensate people with low income by suitable income tax exemptions or
through other means. This kind of balancing is commonly practiced in tax
are also at this point not going deeper into the question of the amount of
the subsidies. If there is a political willingness for the concept, the
necessary research can be done. Obviously the amount of the agro-rate also
depends on the degree to which our proposals are realized. If the income
payments are focused consequently only on the sustainable agriculture the
amount will be less than in the case where the concept is used only -in a
first step - to change the form of financing of the payments already
given, without excluding unsustainable agriculture.
The Question of Eco-Taxes in
important aspect of the debate on sustainability is the question of
“internalizing” “external” costs to make it economically more
reasonable for the economic actors to behave in full accordance with
ecological and social needs. Thus many civil society organisations demand that
taxes and levies should be put on pesticides, herbicides, fertilisers
etc., that have damaging effects on the environment and the health of
people - according to the polluter-pays-principle. We agree that these
“damage costs” may no longer be shifted to the community and that they
must appear in the price of food products to provide the preconditions for
a correct price comparison.
the other hand we think that this kind of taxation cannot replace the
agro-rate. There are mainly two reasons for this:
All eco-taxes aim to decrease the culprit’s bad behaviour. i.e.
we want the pesticides etc. to disappear. But in the same degree as they
hopefully disappear, the amount of money which we win by this tax will
decrease so that it is not available in the necessary degree for the aim
we want to achieve with the agro-rate.
The agro-rate is an instrument to combat price distortion. Price
distortion is not only caused by the unfair competition between
unsustainable and sustainable products, but by an economic order based on
maximizing profit and on ruinous competition. The use of pesticides etc.
in agriculture is only one, but not the only expression of this fact.
Question of the Exports and the Export Subsidies
current WTO debate on agriculture focuses mainly on the question of export
subsidies and their dumping effects. Export subsidies are not an
instrument for protecting agriculture but an instrument for destroying it.
To ensure the protection for
regional structures means that all export subsidies - (and almost all of
those subsidies are given by the rich countries) have to be abolished
completely and immediately!
problem of imports and exports however is not solved by the abolition of
subsidies alone. We have also to consider that we need to avoid
bureaucratic forms of protection, which hinder the development of economic
life. And we have to go even further: Exports in agriculture are a problem
it is the regional pole of the global economy, agriculture more than other
sectors of economy has to be based on self-reliance and even
self-sufficiency, if we don’t take this term as a synonym for narrow
minded provincialism and old fashioned autarky politics. Self-reliance
means for us that food products that can be cultivated in the region in
the way the consumers need them should not come from other regions,
because we have to ensure that in every region agricultural production is
possible. This does not mean, however, that we should not have imports.
we need to import all foods which do not grow in the region or which
cannot be delivered in the necessary quantity thus leaving a real
the consumer may ask for a food from other regions because of its special
quality. The question is always: Do imports make sense? It makes no sense
to import products under conditions that cause corrosion of regional
regions can buy food from other regions, for instance from southern
countries to help their development, as long as there are no other
possibilities to help. But this can only work without destroying regional
structures if it is organized consciously and justly by human beings and
not abandoned to the anonymous forces of the markets.
is necessary! Protecting regional structures
means that growth cannot be an end in itself and that there must be a
possibility of self-limitation if necessary. For instance if Brazil is
producing coffee, it is problematic if the World Bank gives credit to
another country to also plant coffee; instead of furthering this country
in a form which does not harm other regions. These World Bank methods
create pricing pressure and erosion, which will ultimately also be a
problem for the country which received the credit. The logic of market
fundamentalism is obviously not the logic of life, nor even the logic of
economy at this point. But it is clear that self-limitation can only be
demanded from others by actors who themselves are prepared to limit their
export production if not really needed!
many countries of the South the main problem is not the export, but the
domestic, market. If we succeed to make domestic markets flourish and
concentrate exports and imports as much as possible on the products really
needed from outside, this will be a real contribution to solving the
problems of the South. This, however, requires a fundamental restructuring
of many aspects of the nation state to achieve greater domestic purchasing
power, especially among the poor. No one can solve this inherent defect by
means of simple reliance on a technocratic fix like import and export
agreements within the WTO.
like SEKEM in Egypt which have taken important steps towards sustainable
agriculture have also taken steps to address this problem. They not only
sell products to Europe but they also developed step by step the home
market for ecological food. And they are so successful, that the initiator
of SEKEM Ibrahim Abouleish received in 2003 both the Right Livelihood
Award and the Award of the Schwab-Foundation! This is only one example for
a tendency that is visible also in other parts of the world.
A Pay Back System for Tariffs?
criticism of southern countries against the bulkheading of the northern
agro-markets by tariffs is indeed justified as long as the northern
countries refuse an appropriate contribution to the development of the
South. The right to protect their agriculture against dumping is something
which should generally apply equally to northern, as well as southern,
countries. If the question of true price is the key question, it is always
correct to raise import prices to the domestic standard in the one or in
the other way. This is part of safeguarding the development of all regions
as sociotopes. But we consider it very important that tariffs that bring about these
price corrections are not used for the profit of the State, which enforces
them upon the import. The money won by price correction has to fully flow
back to the regions from where the products came. In particular the
countries of the South should have the right to receive the price
difference, between domestic prices abroad and their own prices, as a
contribution to their development.
The Question of GEOs
The question of the GEOs is a
crucial strategic question for the future of agriculture. Genetic
engineering is an extreme example of using Nature as an exploitable object
- and thus looks at
agriculture as a field of industrial and commercial corporate activities.
We affirm at this point, as do the vast majority of civil society
organizations, our total rejection of genetically engineered food and
of any property rights or patents on life processes. This is a crucial
aspect of the necessary protection of agriculture.
We fully agree with the
analysis and the demands of civil society organizations like Greenpeace,
which have been working on these issues for a long time. We cannot, at
this point, go into the details in this paper but would like to underline
one key point in connection with the WTO in relation to the issue:
We state that
all agreements that hinder people from avoiding the production or the
importing of GEOs must be abolished completely.
must have the right to prohibit the production of GEOs. And until such
prohibition is enforcable it is important to at least enable the labeling
of ecologically produced and fair traded food, and to ensure that
genetically engineered ingredients are marked so that consumers can avoid
buying such food products if they are not forbidden by state legislation.
have to ensure that the obligation of marking those ingredients or the
possibility of labeling cannot qualify, under the WTO, as a trade barrier.
are aware of the differences between the Position of the U.S. and the EU
concerning GEOs. Nevertheless the EU is also promoting GEOs. Consumers,
farmers and traders of ecological food in Europe are demanding laws that
eliminate the contamination of ecological food by GEOs completely -
through rigid limit values and the consequently applied
polluter-pays-principle (compare the text of “Save our Seeds” in the
We add that the dangers of genetic engineering are connected with a
structural problem of the economic system that requires change. This
system makes it impossible to control technical processes conscientiously
and responsibly because the punitive laws of competition enforce the
application of technical innovation, without beforehand undertaking a
really serious evaluation of the consequences. This question leads us to
the necessity of bringing back all invention and innovation to the
cultural sphere, i.e. to independent scientific institutions. The
relations between the economic and cultural sphere need to be reframed as
a precondition of technical progress shaped by humanity. This will also
help to deal with licensing in a new way and to create an alternative to
the TRIPS agreement.
crisis of agriculture and agricultural politics show the necessity of
social renewal in the direction that we call profound societal
transformation through “threefolding”.
Without an understanding of this new reality, it will be difficult to lay
the societal foundations for the transition of world agriculture.
Agriculture, now rooted in neo-liberal illusions, needs to be transformed
to a different kind of agriculture rooted in the reality of the diverse
ecological, cultural, political, and economic endowments of the different
peoples of the world.
has its roots, among others, in the emergence of global civil society as a
third global power. Global civil society is de
facto threefolding societies where it is active. Threefolding refers
to the active presence and involvement of the three powers - State, Market
and civil society, in determining the future of societies.
is key to understanding the new social landscape and what goes on within
it. The term integrates and sheds light on many of the new concepts in the
tri-polar world.” The world is tri-polar, because “there are now three
contending institutional powers that reside in the world -global civil
society, government, and business. […] Through its emergence, civil
society also gives birth, consciously or not, to cultural life as an
autonomous realm within larger society.”
can connect these three social powers to the three realms of society -
cultural, political, and economic. The interactions of these three realms
determine what kind of social life or society we have. We live in a
healthy society if the three realms mutually recognize and support each
other and develop their initiatives with awareness of their potential
impacts on the other realms. We live in an unhealthy society if one realm
dominates and tries to subjugate the others.”
The state of society is all the more healthy
when the life of the cultural sphere is based on cultural creativity and
responsibility of the individual human being; when in the political sphere
human rights and true democracy are realized; and when the economic sphere
is really serving the people instead of being oriented to the profit
interests of corporate powers.
WTO and WTO agricultural policy
some of the readers it may be useful, to help understand the essence of
the necessary paradigm shift, to get a short overview of the developments
which lead to the present day questions. Through the foundation of the WTO
in 1995 the principle of the free movement of goods already proclaimed by
the GATT 1947 was supplemented with the liberalization of trade in
services (GATS agreement) and with the adjustment of the commercially
relevant aspects of intellectual property (TRIPS agreement). Those
agreements are part of the globalization developments, systematically
pushed since the end of World War Two, and speeded up dramatically with
the Falling of the Berlin Wall in 1989.
one area in which the principles of GATT had not been applied consequently
was the sphere of agriculture. There must have been a feeling that
agriculture could not be exposed to the tempest of global competition. To
avoid hunger and to enforce food security in some regions of the world,
protectionism in connection with agriculture was even encouraged. The EU
e.g. until today pays more than 50% of it’s budget, over 40 billion
Euro, for the so called common agricultural policy (CAP). The U.S. also
gives huge subsidies to its farmers -
or at least to the big farmers. This kind of protectionism has been very
bureaucratic and has caused huge problems of overproduction. The European
“butter mountains” and “lakes of milk” became notorious, and the
phrase “subsidized unreasonableness” emerged. On the other hand years
of protection did not hinder an increasing industrialization of
agriculture, the misuse of chemicals or the concentration of property:
“Grow or go” (“wachsen oder weichen”) was the slogan. It is not so
long ago that questions of ecology, sustainability and so-called
multi-functionality of agriculture came up in Europe and began to play a
role in the public debate. The U.S. and other countries still ignore those
questions for the most part.
all forms of protection for agriculture would necessarily mean
accelerating the process of intensification, industrialization, the use of
chemical fertilizers, pesticides and genetically engineered organisms etc.
in agriculture. It was precisely the abolishment of protection and the
liberalization of the world agro market that was the target of a new GATT/WTO
Agreement: the Agreement on Agriculture (AoA).
addition the other new agreements, as well as the decision-making and
dispute settlement mechanism of the WTO, have very harmful, direct or
indirect, repercussions on agriculture. GATS e.g. may produce effects on
the access of farmers to water supply. TRIPS has horrendous effects on the
access to seeds and the possibility for global players to control the
whole agricultural sector. TRIPS article 27 says “Members shall provide
for the protection of plant varieties either by patents or by an effective
sui generis system or by any
combination thereof”. Scandals like Rice Tec’s Biopiracy attempt on
Basmati Rice or Monsanto’s law suit against the Canadian farmer Percy
Schmeisser have made many people in the world aware of the dangers caused
situation appears even worse when we consider the tremendous power of the
WTO given by the dispute settlement mechanism of the organization. Any
country can accuse another country of building trade barriers by
implementing certain laws to protect the environment, social security and
people’s health. In case of doubt international competition law will be
regarded as more valuable than other kinds of national law. And the WTO
has real power to implement this view even if it is absurd from the point
of view of justice. The last scandalous case was the accusation of the
U.S. against EU: “To force GMO products into global markets, George Bush
has filed a legal dispute at the WTO, accusing the European Union of
blocking trade by restricting GMOs. If successful, not only will the EU
have to accept genetically modified food and farming but so will the rest
of the world.”
There are forces that are not satisfied even with the dispute settlement
mechanism of the WTO in its present form. Therefore they try to aggravate
this mechanism, so that private companies would be allowed to file a suit
directly (Investor to State principle).
The WTO Agreement on Agriculture
we see, the AoA is working together with other WTO agreements in the same
direction: corporate rule of global agriculture. The AoA itself includes
several components: “The negotiations have resulted in four main
portions of the Agreement; the Agreement on Agriculture itself; the
concessions and commitments Members are to undertake on market access,
domestic support and export subsidies; the Agreement on Sanitary and
Phytosanitary Measures; and the Ministerial Decision concerning
Least-Developed and Net Food-Importing Developing countries.”
20 of the AoA envisions continuous negotiations to promote liberalization
of the world agrarian market starting with the end of 1999.
The Three Pillars
Market access (articles 4 and 5 and annex 5)
most important commitments are:
Developed and developing countries to convert all non-tariff barriers into
simple tariffs (a process known as tariffication).
All tariffs to be bound (i.e. cannot be increased above a certain limit).
Developed countries to reduce import tariffs by 36% (across the board)
over a six-year period with a minimum 15% tariff reduction for any one
Developing countries to reduce import tariffs by 24% (across the board)
over a ten-year period with a minimum 10% tariff reduction for any one
Export competition (articles 8,9,10 and 11)
For developed countries, the value and volume of export subsidies to be
reduced by 36% and 24% respectively from the base period 1986-1990 over a
six year period.
For developing countries, the value and volume of export subsidies to be
reduced by 24% and 10% respectively from the base period 1986-1990 over a
ten year period.
Domestic Support (article 6 and annexes 2, 3 and 4)
forms of domestic support are subject to rules.
WTO classifies domestic subsidies into three categories known as the
Amber, Blue and Green Boxes (see theBoxes section which follows). Only the
Amber Box is subject to reduction commitments as follows:
For developed countries, a 20% reduction in Total AMS (Amber Box) over six
years commencing 1995 from a base period 1986-1988.
For developing countries, a 13% reduction in Total AMS (Amber Box) over
ten years commencing 1995 from a base period 1986-1988.
WTO Domestic Subsidy Boxes
WTO classifies subsidies into three categories:
domestic subsidies -such as market price support - that are considered to
distort production and trade. Subsidies in this category are expressed in
terms of a “Total Aggregate Measurement of Support” (Total AMS) which
includes all supports in one single figure. Amber Box subsidies are
subject to WTO reduction commitments.
payments that are directly linked to acreage or animal numbers, but under
schemes which also limit production by imposing production quotas or
requiring farmers to set-aside part of their land. These are deemed by WTO
rules to be ‘partially decoupled’ from production and are not subject
to WTO reduction commitments. In the EU, they are commonly known as direct
that are deemed not to distort trade, or at most cause minimal distortion
and are not subject to WTO reduction commitments.
For the EU and US one of the most important allowable subsidies in this
category is decoupled support paid directly to producers. Such support
should not relate to current production levels or prices. It can also be
given on condition that no production shall be required in order to
receive such payments.
specialty of the AoA is the Peace Clause, which expires at end of 2003. It
means that “green box” measures cannot be brought before the dispute
settlement body of the WTO. The possibility to attack blue box measures
and export subsidies is narrowed.
De minimis rule:
AMS includes a specific commodity support only if it equals more than 5
percent of its value of production (developing countries 10%). The
non-commodity-specific support component of the AMS is included in the AMS
total only if it exceeds 5 percent of the value of total agricultural
on Sanitary and Phytosanitary Measures
agreement pretends to give every state the right to measures to protect
life and health of human beings, animals and plants. Measures must be
justified by scientific results and they must not be hidden trade
barriers. This clause always allows measures to be attacked when profit
interests are touched. For instance the WTO conceded the U.S. the right to
export hormone beef to the EU although EU regards hormone beef as a danger
for food security.
Needs for Accommodation - “WTO Compatibility” of Agricultural Policy
in Europe but also in the U.S. the WTO agreements caused a requirement for
accommodation of the agricultural policy to make it compatible with WTO
rules, because the AoA allows only subsidies which are not regarded as
trade distorting. Also EU’s enlargement to the East made it necessary to
reframe the whole system. The steps of this accommodation are described in
the so-called Agenda 2000. The main point is the transformation of the
subsidy system to green box subsidies decoupled from production.
the rich countries of the North, especially for EU, the WTO rules created
a complicated situation and in some way actually a conflict of goals. On
the one hand they see the necessity to increase the competition power of
their own agriculture. But measures like increasing the productivity,
creating bigger farm areas through concentration, intensification and
rationalization led also to an increasing overproduction which is
undesired. This caused efforts to promote exports through export
subsidies. But these subsidies are now destroying the local agriculture in
many parts of the southern world, as we have mentioned already.
the same time the EU detected ways to limit the output of the agricultural
sector by extensification and land-set-aside. Subsidies were paid now not
so much for using land but for not using it. (Subsidies of this kind are
part of the blue box subsidies.
Already subsidies for land-set-aside were a hidden direct payment of
farmers’ income. Direct payment appeared to be a solution of striking
simplicity, in part because it went directly to the farmers themselves. It
seemed to save European agriculture and to have at the same time full
compatibility to the WTO-Agreements. It was the hour of discovery of the
multi-functionality of agriculture, which became the main argument of the
European agricultural policy.
The Continuation of WTO Negotiations on Agriculture
20 of the AoA. states that further negotiations are part of the WTO’s
built-in agenda. This is the same mechanism that we have within the GATS
negotiations. The explicit goal is to decrease protection and enforce
continuous liberalization of the markets y. As the peace clause expired at
the end of 2003 there was a certain pressure to make progress in the
hope of the southern countries, that the WTO agreements would bring
benefits for them through market access in agriculture, rapidly dwindled.
That was one of the reasons for the derailment of the WTO in Seattle 1999.
But because agriculture was part of the built-in agenda the collapse of
the summit was not the collapse of the liberalization process.
as we know the Doha ministerial of the WTO ended with a so-called
compromise, starting a new liberalization round which was declared as a
“development” round by the driving forces of WTO. The Doha declaration
claimed “explicit consensus” on the modalities of the negotiations in
Cancun where the 5th ministerial was to take place. Everybody knew that
there could be no consensus if the promise of development would be broken.
would mean that the trend analyzed by FAO 1999, must be changed:
“although current prices have fallen, NFIDCs/LDCs face food import bills
20 per cent higher than in the mid 1990s; longer term food aid levels show
a significant decline whilst dependency on commercial imports of basic
foodstuffs has increased and is expected to continue to rise with further
the countries of the South did not get the impression that things improved
after Doha. On the contrary, the damage of local structures caused by EU
and U.S. agricultural subsidies in the South became more visible then
before. The U.S. for instance pay more than 4 Billion Dollars subsidies
for cotton, while some of the poorest African countries are dependent on
the their cotton sales. Civil society Organisations like CAFOD,
Germanwatch, Action Aid and many others have proven with detailed
documentation the damage caused by dumping subsidized food into the
markets of the South.
On the other hand, the tariffs, even for products which have strategical
importance for southern countries like sugar and cotton, remain on a
relatively high level. The way northern countries are moving subsidies
from one box to another appears for the people in the South like street
new framework for agriculture is an urgent need for many developing
economies. So it was expected that in March 2003 there would be some
progress through new proposals and measures. But the suggestions of Mr.
Harbinson - responsible for the issue in WTO - completely ignored the
needs of the southern countries, which were forced to decrease their
tariffs for agricultural goods, up to 40% in the worst instance. On the
other hand, the demand for a “development box”
which should allow a flexible furtherance of
food security and rural development, together with combating poverty, was
completely ignored. The demand for a “rebalancing mechanism” which
would allow the South to put additional tariffs on subsidized products,
was also ignored. So it was no great surprise that everybody refused Mr.
Cancun a new alliance, the G20, resisted the countries of the North. The
death of the Korean farmer Lee Kyong Hae brought even more consciousness
to the effects of WTO on agriculture. The slogan “WTO kills farmers”
became known all over the world. The northern countries underestimated the
will of the South to resist. The chairman’s draft which was to have made
the negotiations move forward was regarded not as a compromise but as a
provocation. So the negotiations collapsed. For the second time a WTO
summit ended without result. And Cancun became a debacle for
neo-liberalistic concepts for agriculture.
II. Links: Positions from Civil Society