Mills Soko

Department of Politics and International Studies
University of Warwick, UK

Perspective

Do agricultural trade rules matter to the poor?

Current trade rules, especially those that relate to agricultural commodities, are definitely rigged against the interests of the poor. We now have a situation where a large percentage of poor countries cannot trade their way out of poverty because the rules that govern global trade stand in their way. It is crucial that fundamental reforms be introduced to remove subsidies that artificially boost production and prices on the world global market. We need to remove subsidies so that countries in the developing world, that have a comparative advantage in specific products, have a better stake in the global trading system.

Despite abundant evidence of the damage that developed country agricultural policies are causing in the developing world, there is little indication of action at the global level. We have a situation where on the one hand developed countries talk about the importance of free trade. On the other hand they have been engaged in actions which are designed to scupper the free trade that they are talking about.

Rhetoric vs reality

There remains a yawning gap between the rhetoric of the industrialised countries and what they do in practice. Policies pursued by other countries are criticised openly but voices are more restrained when the discussion turns to domestic policies. Take the example of cotton in West Africa. It has been estimated that the subsidies paid by the USA to its cotton farmers exceeds by 60% the GDP of Burkina Faso. In the past four years the region recorded a 31% decrease in export revenue even though production rose by 14%. The decline in cotton prices has cost the region about $200m, far in excess of what it receives in US aid and debt relief. Ten million people in the region face severe deprivation as a result. We are talking about issues of survival - of life and death. If Western leaders have the political will to deal sensitively and responsibly with reform to trade rules, it could go a long way towards alleviating poverty in poor countries. But do they have that political will?

The much-heralded CAP reform agreement at the end of June has simply tinkered with the EU trade rules and falls far short of the fundamental reform required. The EU has achieved a cosmetic reform which it hopes will satisfy critics at the next stage of the Doha Round in Cancun in mid-September. Developing countries are unlikely to be impressed. They have become disillusioned by the double standards imposed by developed countries which demand poor countries open up their markets but fail to provide access to their own. They feel they have been taken for a ride, and tensions are rising. Agriculture is at the heart of the Doha Development Round and poor countries are unlikely to give up on their demands nor forget the promises already made to them but, so far, not delivered. If significant progress is not made in Cancun, we are likely to see a collapse in the global trading system that will have serious consequences for the world economy.

Trade reform should be explicitly linked to the Millennium Development Goals to cut absolute poverty and hunger in half by 2015. Of course trade alone cannot eradicate poverty. Coherent international and domestic policies, and targeted investment are also necessary if sustainable agriculture is to be created. Nonetheless, trade can go a long way towards ameliorating poverty and starvation in poor countries. A fair trading system - which offers opportunities to all - is not only desirable but is also achievable. But we have to speed up the process of reform. We are talking about hungry, angry people. Their patience is not inexhaustible.

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1st September 2003