Trade and Hunger. (Food Security Section)

By Madeley, John | Women in Action, August 2001 | Go to article overview

Trade and Hunger. (Food Security Section)


Madeley, John, Women in Action


The following material is extracted from a new survey examining the relation. ship between trade and food security, poverty and the environment. "Trade and Hunger" distills the findings from 27 impact assessments on the effects of trade liberalisation on 39 countries in Africa, Asia, Latin America and Eastern Europe.

The consistent conclusion from these studies is that so-called "free trade" as promoted by the World Trade Organisation benefits only the rich, while making the poor more vulnerable to food insecurity.

Trade liberalisation (the removal or reduction of barriers to international trade in goods and services) has become a global prescription for the world's continued economic growth and universal prosperity.

But accumulating evidence on the relationship between trade liberalisation and food security and poverty suggests that there will be more losers than winners. This study examines how liberalisation has worked within the framework of the World Trade Organisation's (WTO) Agreement on Agriculture (AoA) signed in 1994; of World Bank/International Monetary Fund-imposed structural adjustment programs (SAPs), which have been going on since 1980 (and which led to widespread liberalisation of the economies of most developing countries well before 1994), and also within the framework of regional free-trade agreements.

Under SAPs and AoA, developing countries have to make significant changes in their food and agriculture policies. They are obliged to open up their economies to cheap food imports and to reduce and severely limit support for their farmers.

Most SAPs require more sweeping liberalisation measures than are required under the AoA, and also demand related measures such as privatisation of state-run enterprises, the elimination of subsidies and price controls, and the abolition of marketing boards.

By contrast, the AoA centres on trade liberalisation measures. It calls, for example, on member countries of the WTO to reduce tariffs on food imports by 24 percent over a ten-year period. The 48 least developed countries are excluded from this and from other reduction commitments. The AoA- a deal largely stitched up by the United States (U.S.) and the European Union (EU) under pressure from business corporations--tightens the screw of structural adjustment. Oxfam has referred to the AoA as an "act of fraud" that will give rise to increased competition from imports and intensify rural poverty and destroy smallholder livelihoods. And unlike SAPs, the AoA is binding on member countries of the WTO, numbering some 137 as of July 2000.

According to the study, trade liberalisation is failing the poor in a number of different ways:

1. Cheap imports

The majority of people in developing countries belong to farming families. Most farmers are small-scale, with at best a few hectares of land and sometimes much less. The problems for these farmers caused by cheap imports, made possible by trade liberalisation, come across in most of the case studies. Cheap imports originate from both developed countries (especially the U.S. and the EU) and also from other developing countries (imports of sugar into the Philippines from Thailand, for example).

Competition from cheap imports is putting farmers in developing countries out of business. Such imports are coming both through commercial channels and through dumping--food sold below the cost of production to dispose of surpluses, and usually cheaper than commercial imports and more damaging.

Ghana provides just one of many examples of how food imports have demoralised small-scale farmers. Having produced corn, rice, soybeans, rabbit, sheep and goats, the farmers cannot obtain economic prices for them, even in village markets. Their produce cannot compete with cheaper imports. Domestic food production is threatened as the agricultural sector is placed in jeopardy.

The studies show that liberalisation has led to an increase in the prices of farm inputs, causing huge problems for small farmers. …

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