As the American and allied military forces continue to operate in Afghanistan, the world is increasingly getting dragged into yet another war–the war for food supremacy. And like the war against terrorism, the battle for food superiority is also going to be long drawn. With the battle lines already sketched and with the back-up support of international financial institutions, this war is being aggressively pursued on the trade front.
While the United States, the European Union, and the Cairns Group have allied to emerge as the biggest food exporters, at stake is the very survival of over 1.5 billion small and marginal farmers of developing countries. With food poised to become the weapon of the future, it is the food sovereignty and the underlying economic independence of the majority of the world that faces the biggest threat in this ongoing war. And in this “clash of civilizations” the battle is primarily between the developed and the developing countries, between industrial agriculture and food security, between value-added functional foods and growing hunger. Arm-twisting, browbeating, and simply bullying the countries into accepting the American food doctrine is becoming a common practice.
In the recent past, the United States has threatened Sri Lanka, Mexico, and Thailand with trade sanctions for regulating or banning the import of genetically modified food and crops. It is now threatening China, accusing it of unfair trade restrictions on soybean imports. Such import restrictions would cost American soybean producers up to $1 billion in lost exports. The quarantine and inspection procedures, the U.S. said, were being applied “in a manner that is inconsistent with the obligations that China will undertake as a member of the World Trade Organization.” Now that China is a member of the WTO, the U.S. is considering pursuing the issue through the global trade body’s dispute-settlement procedure.
The U.S. and the EU together account for 35% of the global trade in food and agriculture. With the Cairns group, comprising 18 food exporting countries, accounting for almost a third of the global trade in agriculture, more than two-thirds of the food trade is already in the hands of the three major food exporting blocks. Add to it some of the remaining members from the Organization for Economic Cooperation and Development (OECD), the world’s richest trading block, and the dominance of agriculture and food trade is complete.
But despite being flush with food and food products, the food-exporting giants cannot penetrate the developing countries and thereby destroy their food self-sufficiency by dumping highly subsidized food commodities unless the global trade rules are altered to suit the interests of the exporting countries.
Trade liberalization and changes in the global market structure have already helped American exports double over the past 15 years to $53.5 billion estimated for the current fiscal year. The EU, on the other hand, has increased its performance from 13.5% to 17%, in the same period. Still not satisfied, the U.S./EU have ensured that the developing countries are made to conform with the WTO obligations of phasing out or lifting quantitative restrictions (QRs) that allow easy penetration by the American and European farm commodities and the processed products. The trade bloc is getting prepared for the final assault.
America is now targeting its food and agriculture toward the 600 million “new consumers” in Asia and Southeast Asia and another 400 million in Latin America and Central America. In other words, America intends to meet the food security needs of the estimated 1 billion “new consumers” (read: middle class) in South and Southeast Asia and in Latin and Central America, thereby depriving and displacing the local producers and farmers from their only means of livelihood. Once these countries become dependent on the U.S. and other developed countries for food, the basic human right, the battle for food supremacy is won.
Such a complete dominance of the food and agriculture sector cannot be achieved without massive financial support. While the U.S. provides a subsidy of $54 billion to its farmers every year, the total EU production support was $114.5 billion in 1999. The OECD itself provides a massive support of $1 billion a day to its farmers and protection provided by both tariffs and non-tariff barriers, including unjustified sanitary and phytosanitary measures, which remain very high. As per the WTO commitments, instead of bringing down the subsidy level, the U.S. is now preparing to be the global leader in farm subsidy support. With intellectual property rights narrowing in scope, the manipulation and control of agricultural research is also complete.
It is, however, another matter that the U.S. and EU appear to be at loggerheads when it comes to blaming each other, but in reality draw strength from their respective policies of increasing and strengthening farm subsidies. Agricultural subsidies not only distort the market but also push land prices to artificially high levels and jeopardize current as well as future agreements. It was, therefore, made obligatory for the industrialized countries to phase out their subsidies as per an agreed upon formula. In reality, agricultural subsidies have been on an upswing in both the U.S. and the EU. There are no signs of any move to drastically prune agricultural subsidies.
As if this is not enough, a new Farm Bill pending before the U.S. Congress provides for support of a staggering $170 billion to American agriculture in the next ten years. On the other hand, the EU, paradoxically one of the leading proponents of trade liberalization, has one of the most protected agricultural sectors in the world through its Common Agricultural Policy. Such is the double standard of the EU that it forces developing countries, through the Western-dominated World Trade Organization (WTO), to open up their economies when Europe’s agriculture sector is the most subsidized in the world.
“Dollar for dollar, America exports more meat than steel, more corn than cosmetics, more wheat than coal, more bakery products than motorboats, and more fruits and vegetables than household appliances,” Mattie Sharpless, Acting Administrator, Foreign Agriculture Service of the U.S. Department of Agriculture recently told the Senate Agriculture Committee. She also added that agriculture is one of the few sectors of the U.S. economy that consistently contributes a surplus to its trade balance. In fact, the U.S. projections for the current year are that 53% of its wheat crop, 47% of cotton, 42% of rice, 35% of soybeans, and 21% of corn will be exported. This has only been made possible by the heavy subsidies and the removal of trade barriers or QRs in the developing countries.
Developing countries, on the other hand, have been forced to “discipline” their subsidy norms as per the WTO’s Agreement on Agriculture. While the WTO allows for a maximum limit of 10% of subsidy support under the Aggregate Measure of Support (AMS) clause, in reality a majority of the developing countries have already dispensed with farm subsidies and have even dismantled agricultural extension systems. India, which provides an annual subsidy of $1 billion for its 110 million landholders, is also busy phasing out the public distribution system. The U.S. had also forced India to remove its trade barriers or QRs two years ahead of the date prescribed by WTO.
Where does it lead the developing countries, including India? The answer is simple and clear: food supremacy is being slowly and steadily handed over to a few food-exporting countries. With the trade rules being distorted and twisted, developing countries are fast emerging as the biggest food dumps. At the same time, the world is being told that “precision” farming, a term applied for high-tech agriculture, is the only environmentally sound method of farming and should be the only viable path to producing food for the planet. The entire focus therefore is to force the developing countries to sacrifice food self-sufficiency at the altar of world trade.