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Global
trade in agriculture is unfair, skewed in favor of rich
countries and against the poor.
Huge
domestic support and export subsidies provided by
developed countries to their farmers render the farm
products of developing countries uncompetitive.
The
total subsidy to agriculture in 2005 in OECD countries
(the rich countries’ club) amounted to $385 billion,
more than double the Philippines’ gross national product
(GNP) last year, and over $1 billion a day. Developing
countries like the Philippines cannot afford to provide
its farmers the same subsidies that developed countries
grant theirs.
As a
result of this unfair trade regime, developing countries
are inherent losers. Since its launch, the World Trade
Organization (WTO) turned many countries from net
exporters to net importers. In
Asia’s developing countries, agricultural imports started
exceeding exports by an average of 4 percent since 1994.
The
Philippines, now considered one of the countries most
vulnerable to the global rice crisis, was a net exporter
of agricultural products pre-WTO membership. It enjoyed
a trade surplus averaging $157 million a year from 1985
to 1994. Upon accession to the WTO in 1995, the country
registered its first trade deficit in agriculture in a
decade, and has never gotten over that slump ever since.
Its export earnings grew 0.18 percent a year on average,
while imports ballooned by 8.01 percent a year, with the
trade deficit reaching $1.53 billion by 2006.
A study
by Sandra Polanski of the Carnegie Foundation revealed
that with the so-called propoor development programs
under negotiation in the Doha Development Round,
developing countries as a group will be net losers in
agricultural trade while most of the gains will go to
developed countries.
In its
model, the World Bank simulated that middle-income
countries will have a one-time loss of $500 million in
real income in agriculture, while high-income countries
will gain $18.1 billion.
This net
loss means scarcer food and fewer livelihoods for people
in the countryside, where poverty is most rampant.
Seventy-five percent of the world’s poor reside in the
rural areas.
Agriculture and rural development and international
trade are strongly intertwined. The current unfair terms
in agricultural trade, while beneficial for urban
consumers, are driving farmers of the developing world
into subsistence living.
Fair
trade is a crucial component in agricultural
development. And rural development is critical to
poverty alleviation in developing countries. Farmers of
the developing world should be given a level-playing
field so that they can ramp up production, and allowed a
certain leeway to make their products more competitive
through preferential and special trade agreements, and
elimination of trade-distorting subsidies.
E-mail: edgardo_angara@hotmail.com. Web site:
www.edangara.com. |
