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Aid groups say trade reform menaces poor farmers

International aid groups warned on Tuesday that if rich powers succeeded in forcing open agricultural markets in developing countries it would destroy poor farmers and cause massive social disruption.

In a letter to World Trade Organisation (WTO) chief Supachai Panitchpakdi, the groups said the thrust of current negotiations on lowering barriers to farm trade should be switched to ensuring that small farmers could survive.

”Addressing trade imbalances and development needs must be the first objective of the Agreement on Agriculture,” said the letter, referring to the 1994 global farm trade pact whose terms are up for revision in the year-old WTO Doha Round talks.

”The second objective must be to recognise the fundamental differences between agriculture in the developed and developing worlds, and the consequent need for different rules to apply,” the letter declared.

The letter, and a new report from the humanitarian body Oxfam International which signed it, was released at a news conference as negotiators at the 145-member WTO were holding a week of talks on further liberalisation of farm trade.

The aid groups — from Europe, North America, Asia and Australia — said developing countries should consider pulling out of the negotiations if the United States and the European Union declined to give them a better deal.

”There is a great deal of hypocrisy in the big powers stance,” Sophia Murphy of the Minneapolis-based Institute for Agriculture and Trade Policy (IATP), another signatory of the letter, told a news conference.

The 15-nation EU argues that it cannot agree to abolish all subsidies to its farmers, partly because of the social and economic disruption this might cause.

While the US says the EU should drop export subsidies, it maintains an extensive system of export credits, boosted this year by a Farm Bill which will provide billions of dollars to big agro-businesses.

”If they are worried about social disruption, they should recognise the problems of poor countries where a much larger percentage of the population is engaged in agriculture and the social problems could be many times worse,” Murphy said.

In the US and the EU, the letter to Supachai said, agriculture represented only two percent of the labour force while in countries like Rwanda it employed 80% of the working population.

In its report, Oxfam said 96% of all farmers were in developing countries where agriculture was the main source of income for some 2,5-billion people — nearly one third of the world’s population.

But under current WTO rules, rich countries could dump subsidy-driven surpluses on world markets,

”depressing prices to levels at which local producers can no longer compete…

”What makes it worse… is that rich country members of the WTO, while protecting and subsidising their own domestic producers, have at the same time been forcing developing countries to open their markets,” Oxfam declared.

Haiti in the Caribbean, one of the world’s poorest states, was a prime victim of these policies, it said.

Under pressure from the United States and the International Monetary Fund, it had cut its tariff on rice to only three percent and imports of mostly-subsidised rice from the United States had grown by 30 times, Oxfam said.

”The price of rice has hardly fallen and malnutrition now affects 62% of the population, up from 48% in the early 1980s,” it added. ”Big rice traders and American rice farmers have emerged as the winners of the process.” – Reuters

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