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A sober voice from the developing world probably jolted a United
Nations (UN) forum a few days back by debunking the current
assumption that the current global food crisis is exclusively the
direct result of the following:
1. Drought in Australia, floods in Bangladesh
and China and the erratic climactic conditions ushered in by climate
change;
2. The shift to biofuels;
3. The increasing demand for food in a context
of faltering production; and
4. Hedging on food commodities by fund managers
with immoderate greed.
No, the problem is much deeper than that, said
Sen. Edgardo Angara, in a UN speech that directly took to account
the protectionist policies of the world’s economic powers for the
current food crisis.
There is a factor other than protectionism, said
Angara. The policies formulated by the multilateral agencies with
the lofty objective of putting in place a free and somewhat fair
international trading order are the same policies that have helped
abet the current food crisis. These agencies are the UNCTAD and
GATT, which came out with the Uruguay Round of Development, and the
World Trade Organization (WTO).
This is the equivalent of saying that the food
relief agencies have been helping foster more famine and acute food
shortages. But this is true, though tragic. The WTO, and the GATT
before it, simply failed to put in place a regime of free and fair
trade and accomplished the very opposite of its grand aim.
The protectionism and the fecklessness of the
multilateral policies constitute the double-whammy that has
effectively crippled the efforts of developing nations to produce
food for their own needs and produce commodities that they can
export overseas. Angara cited facts and figures, which sent the
representatives of wealthy nations in that forum squirming in their
seats.
In 2005 alone, the OECD countries (the group of
wealthy countries), pumped $385.2 billion in subsidies to their
pampered farmers. The figure, said Angara, is twice the gross
national product of the Philippines in 2007.
The oft-repeated figure that each
European-raised cattle gets a subsidy of $2.50 daily is not only
true. It is even understated.
The $385 billion figure is also higher than the
total yearly aid of developed nations to developing ones.
The particular case of the Philippines
dramatizes what happens to developing countries that embrace the WTO
rules amid the helplessness of the WTO to enforce fair trading rules
in agriculture and rein in the huge subsidies of the wealthy nations
to their pampered farmers.
Before the accession of the Philippines to the
WTO in December 2004, it was a net exporter of food. The yearly
surplus posted by the Philippines in agricultural trade from 1985 to
1994 averaged $157 million.
In 2006, agricultural imports totaled $4.3
billion while exports were down to $2.8 billion for a $1.5 billion
deficit. This has been the deficit-ridden story of the Philippine
agricultural trade since 1996.
We are all familiar with what comes with trade
deficits: loss of farming jobs, the collapse of some agri subsectors,
the general malaise in the sector.
Protectionism, weak WTO policies and the weak
agricultural policies of developing nations that have sapped their
competitiveness have created a monster. Seventy per cent of all
global trade in food is now among rich countries. The poor and the
really poor, the most vulnerable to food shortages, have been left
out of the global food trade by this informal food cartel, said
Angara.
In his UN speech, Angara said that the global
food cartel has to be thwarted but the will to do this should be
global. The WTO should also undergo a role shift, from a panderer of
protectionism to an equalizer in international agricultural trade.
The essential steps toward breaking up the food
cartel and ushering in freer trade and fair play, said Angara ,
include the following:
• Eliminating the export subsidies of
developing nations and reducing their domestic subsidies;
• Eliminating the tariff barriers;
• Eliminating the nontariff barriers such as
stringent and superfluous quarantine rules, health and phyto-sanitary
standards; and
• The establishment of Special Safeguard
Mechanisms in developing countries, precisely designed to thwart
dumping of cheap agri products into their ports.
mvrong@yahoo.com
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