Agriculture Alternatives

Key Problems

Food and the right to decide on food policy is a basic human right, however, the inclusion of agriculture in world trade has vastly changed the way of life for hundreds of millions of people. This has had adverse effects on small farmers around the world, especially for those in the global South.

While farming is a way of life for many of the world’s poor, trade in agriculture is dominated by multinational corporations that control and distort the market. Most agricultural sectors are dominated by a few corporations and in many rural areas around the world; there are only one or two buyers.

Food and agriculture is seen as a tradable commodity and small farmers have no voice during trade negotiations and policy design. This diminishes their right to food sovereignty, market access, access to good livelihoods and rural development. Over two-thirds of women in the global South are employed in agriculture and so women are especially affected by unfair trade policies. The priorities of women are ignored when policies are written.

Trade liberalization in the form of import deregulation and dismantling of other national protections has devastated small holder farms in terms of pricing and crop selection. Import deregulation is especially devastating for local agriculture due to dumping practices and market control by big business.

Dumping is the practice of selling a product below the cost of production. This drives down the market price leaving small farmers at a loss. In Mexico, for example, many farmers have lost their livelihoods over the years due to a drop in corn prices. Jorge Vasquez Martinez a Mexican corn farmer who migrated to the United States says, “ten years ago, I could go to the plaza and sell my corn at my price, now you have to sell to the bodegas there, and they set the price that’s not enough to live on.” (Miami Herald, 2003)

More recently in 2007 and 2008 ten of thousands of Mexican farmers have protested the lifting of tariffs on corn imported from the United States as a result of the North American Free Trade Agreement (NAFTA). These farmers were hit hard due to cheap, subsidized corn imported from the United States. The free trade model never played out as promised. NAFTA’s phase out period was supposed to give farmers a chance to adjust to the new market, but instead many went into extreme poverty and many others like Martinez were forced to migrate to the United States.

Policies that promote overproduction and result in dumping are a problem. Even though nations can take anti-dumping measures, smaller countries are often severely disadvantaged in the dispute and enforcement process against big players such as the US and EU due to the high legal costs involved.

For many policy makers, agricultural trade is seen as a means to economic growth and profits. As a result preferences are given to large corporations and agri-business that are themselves involved in forming the current trade model. Governments and policy makers strongly promote cash crop production, which mainly benefits corporations and adversely affects food sovereignty.

Increased demand for bio-fuels is threatening food security and crop diversity. Lands that are traditionally used for food crops are being converted to crops that can be used as fuel.

U.S. food aid plays a role in distorting the market. Food aid can save many lives in an emergency; however when it is used as a market development tool and interferes with international trade; many people are adversely affected.

Objectives

• Reform the agricultural trading system to take small farmers into account.

• WTO rules must be reformed so that poor nations have the ability to protect their markets with real enforcement mechanisms. Refer to the proposals from countries in the global South in the Doha Development Agenda framework to meet this objective.

• U.S. farm policy must be reformed so that farmers can earn a fair price from the market.

Policy Recommendations

Agriculture should only be minimally included or fully removed from world trade rules. However, since it is now a major part of trade, reform in the trading system should at least include the following recommendations:

• Gender interests and equality must be a core part of trade rules and agreements.

• Countries in the global South should be allowed full flexibility to address issues of food sovereignty, livelihood and development. Special protections proposed in the WTO are insufficient.

• Countries should be allowed the policy space to use effective import governance measures such as price bands, quantitative restrictions, automatic safeguards and other measures that would allow countries to protect their markets and their farmers. This could help mitigate the impact of dumping.

• Countries in the global North providing domestic supports under the different WTO support categories (including the Green Box) should ensure that these commodities are not exported since they invariably lead to dumping. The primary objective for international trade rules in agriculture should be the curtailment of dumping.

• Incorporate stronger antitrust enforcement in the food and agriculture industry.

• Recognize the right and sovereignty of countries in the global South to protect their markets against artificially lowered prices and their right to help their farmers.

• Move toward untied, cash-based food aid.