How the World Trade Organisation is driving farmers into poverty

T & G Publications
Wednesday 16 January 2008 by LRAN

Issue date: 1 Jul 2007

Discredited "trade liberalisation" policies are not only endangering agricultural
industries throughout the world but also threatening the environment, according to a
powerful new book.

Restrictions imposed by the World Trade Organisation on governments to prevent them
subsidising their own country’s agriculture (and protecting it from the dumping of cheap
imports) should be abolished, it says. Instead they should be able to develop their own
agriculture to suit its conditions.

It documents the double standards of countries such as America which insist other
countries are not allowed to subsidise agriculture but then find ways to subsidise their

Even then, the subsidies benefit multinational corporations rather than farmers, who are
being driven out of business.

Peter M Rosset’s book, "Food is different: why we must get the WTO out of agriculture",
is dedicated to Lee Kyung Hae, the South Korean co-operative farm leader who stabbed
himself to death outside WTO talks in Mexico.

Wearing a banner declaring ’WTO kills farmers’, he was protesting at this undemocratic
institution opening his country to cheap imports which had resulted in the price of rice
being cut to a quarter, driving him and millions of others off the land (even after they
had increased productivity).

Inhumane and degrading

His last words were: "My warning goes out to all citizens that human beings are in an
endangered situation. Uncontrolled multi-national corporations and a small number of big
WTO members are leading an undesirable globalisation that is inhumane, environmentally
degrading, farmer-killing, and undemocratic. It should be stopped immediately. Otherwise
the false logic of neoliberalism will wipe out the diversity of global agriculture and be
disastrous to all human beings."

Farmers in all countries, he said, "have in common the problems of dumping, import
surges, and lack of government budgets."

This is supported by American farmer George Naylor, who grows corn and soybeans. Even
when the US breaks its own WTO rules to subsidise its agriculture, he explains, it is the
corporations buying the cheap crops that reap the benefits.

"Farmer incomes, even with government payments, are a fraction of what they would be
under previous, now defunct programmes that more nearly aimed at paying farmers at least
our cost of production and required the buyers to pay that price, rather than the
American taxpayers," he states.

Like Lee Kyung Hae’s Korean farmers, their American counterparts now have to produce four
times as many bushels of corn to get paid the same in real terms as they were in 1978.

"Multinational corporations, like Cargill, Tyson, and Smithfield, that have already
destroyed diversified family farming in America by feeding livestock cheap corn and
soybean meal in giant polluting feedlots, are further expanding this industrial model to
other countries every year.

Driving incomes down

"Legitimate uses of government support in poor countries - for extension, agrarian
reform, or balancing regional inequities - are destined to failure when cheap commodity
prices drive farm incomes lower and lower.

"Liberalising trade in agriculture forces farmers to desperately increase production,
driving down prices, to get bigger by plunging into debt, or to leave farming all

"Liberalising trade in agriculture means we have no food security reserves. Every bushel
must be dumped on the international market every year, regardless of how low prices go,
ensuring a stark misallocation of resources and a wasteful use of these precious

"In an era of dramatic climate change and international hostilities and terrorism, the
folly of liberalising agricultural trade is even more apparent. The WTO needs to get out
of agriculture."
In its place, he concludes, there should be guaranteed fair prices for food so corporate
buyers pay the proper cost rather than be subsidised by taxpayers. This would create food
reserves so that crop surpluses create food security rather than depressing prices. It
would also support conservation measures to prevent wasteful overproduction and the
destruction of the environment.
"Now is the time for the people of the world to join hands to share in the responsibility
of creating food security reserves and conservation programmes to restore rural
prosperity, and to prevent the destruction of the land, whether in the corn belt of the
United States, the picturesque landscapes of Europe, the rice paddies of Asia, the pampas
of Argentina, or the rain forest in Brazil."

Rosset spells out the consequences of multi-nationals using automated mass production
technology to benefit from economy of scale. It means smaller national companies using
labour intensive production cannot compete so go out of business and jobs are lost.

Working for less

The transnational corporations then take over and move the profits abroad, treating local
labour as a production cost to be minimised by keeping wages down and busting unions. The
basis for competition becomes working for less and in less safe conditions - "a downward
spiral of deepening rural poverty." This has already resulted in productivity rising but
living standards dropping.
Local production and redistribution of land could reverse this trend, he declares. Recent
studies in Brazil have shown how villages benefit when large estates belonging to
absentee landlords have been occupied by landless peasants and turned into productive
farming co-operatives.

Studies around the world show that smaller farms, producing for local markets, are more
productive and efficient, generate more employment, and take better care of the
environment. But they are being driven off the land by larger industrialised export
estates which can operate on a smaller margin per acre because of their vastness.

Most governments subject food and agriculture to so-called "free market" competition, he
comments, despite worldwide public opinion decrying what is happening to the food system
and rural areas.

The solution, he concludes, is to take food and agriculture out or the narrow confines of
"trade issues" and make them issues of "development" and "sovereignty."

Food is different is published by Zed Books, price £32.99 (hardback) and £9.99
(paperback). It can be ordered from Zed Books’ website,

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