Cancun Failure -
Opportunity to Revive the Food Sovereignty Concerns in Asia
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To reap the so called comparative advantages in terms of good climate and availability of cheap labour(?), federal states like Karnataka have embarked the production of fully export oriented hi-tech floriculture during late 90's in India. To capture the lucrative world market, not only the scare resources and capital were diverted lavishly but huge subsidies were also provided to floriculture. In a study conducted at University of Agricultural Sciences, Bangalore it was estimated that to grow hi-tech rose in one hectare, almost 15,000 kilograms of chemical fertilizers, 160 kgs. of plant protection chemicals, 202 acre inches of ground water and a huge capital of 23 million rupees were utilized (Shivaramane, 1998).

The 'opportunity costs' or the opportunity lost in providing food and livelihood security in this respect was enormous. If the resources used in one hectare of hi-tech floriculture were diverted towards the production of food crops, nearly 2500 metric tons of food grins plus 1.50 lakhs labor could have been generated easily in India. On the other hand, the net foreign exchange earned from one hectare floriculture was so merger which was sufficient enough to import hardly 700 tons of food grains. The ecological costs of hi tech floriculture in this respect was also colossal. This worked out to around 10 lakh rupees per hectare out of which 70 percent was in the form of soil fertility loss, 25 percent was from pests and disease resistance and/or resurgence of new pests and five percent was due to negative externality from over exploitation of ground water. In addition, the health cost for laborers working in a hectare hi-tech rose unit came to around one lakh rupees (Prakash, 2002).

Due to the progressive reduction in the support, the farmers in India are gradual shifting away from the food production during the post liberalisation era. Between 1990 - 91 to 1997- 98 total area under food crops has come down by around 4 million hectares in India. If this tendency continues, India may have to relay on the import of food grains to feed her population. Though India is having enough stock of food at present, several studies have pointed out that the country may have to face the deficit of rice, up to 10 percent of the domestic requirement in the near future (Prakash, 2001). In India, just like in other parts of Asia, rice cultivation is experiencing a severe ecological problems resulting in almost stagnant or negative growth in the productivity in the major growing states. If the government support and subsidies are removed, farmers even in the most advanced states like Punjab may have to incur a net loss, up to five percent of the cost production of paddy (Prakash and Virchow, 2003). The food stock in India has reduced drastically by almost 50 percent in the current year (2003). More importantly, the stock of rice came down heavily, to around 8 million tons, much lower than the prescribed 'safety buffer stock' of 10 million tons. All these are the serious pointers, in days ahead, to the food security situation in India.

China is a new entry in to WTO. And hence, the full impacts of liberalization and WTO on its agriculture are yet to be assessed. With its gigantic agricultural base and fully controlled economy, China appears to possess not only some degree of resilience against the forces globalization but also pose some threat to the food sovereignty in other Asian countries. With the highest productivity (63.21 quintals per hectare), which is comparable to USA, China, is capable of not only producing one third of world rice output but also dumping rice in other Asian countries at a cheaper price today. China's achievement in rice production is attributed mainly to the development of irrigation, liberal use of modern agricultural inputs and above all, to rigorous promotion of hybrids with high subsidies and governmental supports. Currently half of China's total rice cropped area (around 16 million hectares) is under hybrid rice.

However, the hybrid rice did not become popular in other Asian countries. This was due to low economic returns (just 5 percent over conventional varieties), low consumers preference to pay a price which was 11 percent below the price of conventional varieties and high seed cost (around US $ 3 per kg) in a country like India (Janaiah, 2002). Due to the same reasons, it met with the similar fate in Bangladesh, Philippines, Indonesia and Thailand. In China too it had severe pests and disease attack as a result of which hybrid rice required 31 percent more pesticides and 43 percent higher dose of fertilizer compared to conventional verities. Inspite, China could sustain the production of hybrid rice mainly due to governmental interventions and high supports. In fact, most of the hybrid rice produced in China is procured by the government to distribute to poor and to feed the animals. The cost of production of hybrid seed is very costly hence government bears the entire burden in China. Even the low price for hybrid rice in the market is being compensated by the government, which is costing almost 20 percent of government's total spending on agriculture (Kuyek, 2000) . As China is already a signatory to WTO, it will also be compelled, in due course of time, to give up these supports to hybrid rice. This will eventually erode China's current strength in rice production. A temporary lifting of such supports has resulted in drastic reduction, by almost 30 percent area under hybrid rice in China, should be a pointer in this respect.

So, the onslaughts of more than a decade of liberalization policies and half a decade of WTO disciplines have not only eroded the agriculture and food sovereignty bases of Asian countries but also made the economies of these countries to crumble drastically. Due to the erosion in agricultural base of the countries', farm products could contribute hardly 20 percent of the total export earnings in Asia. As imports exceeded the exports in majority of cases, most of the countries remained trade deficits. For instance, the trade deficit was almost seven percent of the GDP in Bangladesh, it was 4, 3 and 2 percents respectively in Pakistan, India and Vietnam in the year 2001. The cumulative effects of all these catastrophes pushed the Asian countries in to severe external debts. By the beginning of new millennium, the average external debt of Asian counties was almost 42 percent of the Grass Domestic Product which was highest in Indonesia (96 %) followed by Philippines and Thailand (64 %). Only India, which became free from the external debts could escape from this trap temporarily during 2001.

III. AOA - The Hidden Threats and Contradictions:

Forcing the developing countries to phase out the supports to their food and agricultural systems and dumping the cheap food items in their markets are clearly visible designs under the AOA. However there are several invisible threats and self contradictions which in fact have still serious implications on food sovereignty in Third World. Though food security and environmental issues are made to find a place in the preamble of the AOA, the context in which they are placed and the subsequent treatments they have received deserve a careful examination. It is mentioned, in the last paragraph of the preamble of Agreement on Agriculture, to pursue the trade reform "in an equitable way among all members, having regard to non -trade concerns, including food security and the need to protect the environment". The food security, being such an important concern of the Third World, has relegated to the level of a 'non trade concern' under the parlance of WTO. In reality, the trade is a 'non food security concern' for the Third World but not the other way round. So is the case of issues pertaining to the protection of environment.

a) Undermining the Self Sufficiency in Food Production: Having maintained an absolute silence through out its text encompassing 21 Articles, the AOA makes reference to food security, in the footnote 5 to paragraphs 3 of Annex II. Heavily loaded with complex sentences and legal jargons, the AOA finally finds a place to make a direct reference on food security. It permits the governments to procure, stock holding and distribute food grains for food security purposes with the strongest caveat that "the procurement should not be made at a price less than the current domestic market price……provided that the difference between the acquisition price and the external reference price is accounted for the AMS" (i.e. Aggregate Measure of Support) . In this way, the AOA at one stroke not only imposed a severe restriction on food procurement by a country for its food security purposes but also, in a shrewdest way antagonized the poor against the farmers in that country. It is very difficult to procure food grains for the purpose of Public Distribution System (PDS) at the prevailing market price, which is normally high. That is why a country like India is procuring compulsorily, the food grains like rice at a much lower 'levy price' and distributing to the poor at a still lower 'issue price'. India, in this way distributes millions of tons of food grains through a system of pricing called "Administered Pricing System". The difference between the external reference (international) price and acquisition price works out to a huge amount, if that is accounted for AMS, it will definitely cross the permissible support limit of 10 percent of the value of agricultural out put, inviting the wrath of the farming community in a country like India.

The US, in this background, has expounded a new dimension to food security. In its proposal for comprehensive long term agricultural trade reform submitted just prior to the initiation of AOA, the US has given a significant twist, by including the term 'global' as a prefix to food security. Message is very clear and loud; if a few countries like US and Canada could produce food sufficient enough to feed the world poor, food security at the global level is achieved. Then, other countries can just devote their lands for production of items like flower, export them and import the food security needs of the country. Hence, it is the great design of AOA to 'decouple' the food security from self sufficiency in the food production at a country level, which is the serious threat on the food sovereignty of the Third World. Most Asian countries, after attaining the freedom, have kept the objective of attaining the self sufficiency in food production as the uncompromising national priority. Now, it is pity that these countries are compelled to compromise that objective for a petty trade agreement. Behind these designs, the attempt to promote biotechnology through Trans National Corporations (TNCs) with the patronage of Intellectual Property Rights (IPR) laws as the ultimate solution to achieve the so called global food security is clearly visible. This is ultimately aimed at the 'corporate take over' of agriculture to put the final death knell on the food sovereignty concerns in the Third World.

b) Corporate Takeover of Third World Agriculture: Third World countries are rich in biological diversity. Their tropical weather, soil and other agro-ecological features provide a genuine comparative advantages to produce several crops of global importance. Though the developed countries are depending heavily on these crops they could not even think of cultivating these crops until recently. For example, it was impossible to grow coffee in Europe and North America, which is why northern coffee drinkers were depending heavily on cultivation of coffee in the South. Today nearly half of Third World agricultural exports comes from mere ten tropical crops and the economies of a few developing countries is totally depending on the export of these crops. In that order, coffee occupies first place with 26 % share of total world trade value from these ten commodities. Next is sugar (22 %) followed by natural rubber (10 %), cotton (9%) , coca (8 %), rice, tea and banana, five percent each (Prakash, 2000). However, during the course of 20the century through the rapid progress in agriculture technological, these so-called comparative advantages were being undermined gradually. In this backdrop, the biotechnology; the fast growing technology of our time will have every potential to end the developed countries' dependence on the Third World for the supply of tropical 'primary products'. The creation of new sweeteners through biotechnology from beetroots, which is fast substituting the cane sugar in the Third World and similar attempts to create biotechnological substitutes for Third World's natural cocoa, vanilla and oil palm, are all the pointer in this respect. The TNCs with the assistance of the IPR system have already initiated the process of taking over the rice, the crop of Asian importance through biotechnology. The notorious example of USA based TNC, Rice Tec which virtually took over the control trade of Basmati rice trade from Asia is a cursor in this regard. The WTO provides an ideal platform for such a take over of Third World's agriculture in its own soil. The case of hybrid rice gives sufficient clues for such a coup in Asian agriculture.

Asian countries were already brain washed to believe that the solutions to problems which their rice cultivation is facing lies in hybrid rice. All R & D efforts on hybrid rice baring China and Vietnam are sponsored by big TNCs dealing with agrochemicals and biotechnology in Asia. These TNCs have established the tie-up with the local companies to tighten the grips of their tentacles over the domestic agricultural market. World's leading three TNCs; Aventis, Monsanto and DuPond have already begun their operations on hybrid rice in India. These companies have formed the Asia Pacific Seed Association (APSA) with the technical assistance of International Rice Research Institute (IRRI), Philippines and the financial assistance from Asia Development Bank (ADB) to promote hybrid rice in Asia. The Food and Agricultural Organization too has its consent under the pretext that the project is aimed at eradicating the hunger and malnutrition in Asia. The pesticide TNCs hope to expand market for their products as the hybrid rice was found to be highly susceptible for pests and require higher doses of fertilisers. Hybrid rice may also put pressure on Asian countries to deregulate their rice trade, which has already begun to happen. Due to high cost of development of Cytoplasmic Male Sterile (CMS) line needed to evolve the hybrids in rice, it is not economical to undertake R & D in individual countries. This provides ideal atmosphere for a TNC to operate. Hybrid seed developed in India was exported easily to Bangladesh and Burma through a TNC, Avantis, the world's largest agro-chemical company. The APSA went on to the extent of cautioning the Asian countries not to adopt a national policy of barring the import of seeds from other members for reasons other than sanitary and phytosanitory requirements (APSA, 1999).

There are several factors which make hybrid rice a prime candidate for the application of bio-technology and the Intellectual Property Rights, there after. The biotechnological innovations like Golden (Vitamin rich) rice could provide an opportunity for TNCs to draw social sympathy and to establish political mileage in the Third World. The development of SMS or popularly called as the male sterile line through conventional breeding is costly, time consuming and less accurate. And hence, the genetic engineering has emerged as the better option in this regard. Aventis has already developed the technology in this regard. The economic gains for TNCs from the biotechnological application on rice crop is immense. Through biotechnology and IPR, the TNCs could not only capture the rice seed sector but also control the agro-chemical market in Asia. The fact that the rice is the largest consumer of fertilsers (40 % of the total) and the second largest user of pesticides (23 % of the total use) in India, amply proves the immense scope to capture the agrarian economies in Asia. As per a rough estimation, the market for rice seed, as a result of the entry of biotechnology, would increase by 50 percent and TNCs expect an additional sale of around US $ 500 million annually in India. Currently 16 seed companies are producing hybrid seed most of them are owned either in whole are in part by TNCs. Leading them are Monsanto, Aventis and DuPont (Virmani and Kumar, 1997. Traxler, 1999,).

Though the program to promote hybrid rice is not a success in major rice growing Asian countries, the TNCs have been working hard to keep the scheme alive. This is because the hybrid rice perfectly suits their 'take over' design through the emerging instruments such as the 'contract farming'. The farmers taking up hybrid rice have to purchase the hybrid seed every season. Hence, the contract farming in the case of hybrid rice provides an excellent opportunity for TNCs to sell seed and agrochemicals to farmers and thus to keep a strong control over the farmers for quite a long time. This has already started yielding results in Philippines. In addition, to perfect the process of corporate takeover, advanced trade instruments such as the Forward Trading and Future Markets have also been introduced to agricultural trade in a country like India. The entry of bio-technology in to Asian agriculture not only disrupt traditional peasant farming but also erode the rich bio-diversity prevalent in rice crop affecting the long run environmental sustainability in the region. Above all, this over play of TNCs and resultant concentration of agricultural market (both output as well as inputs) in their hands dilutes the very spirit of competitive trade for which the WTO claims that it is strongly wedded. This hidden contradiction with in the WTO set up is also worth analyzing as this has further compounded the woes of Third World peasantry.

c) Unattended Market Imperfections and Concentration: The AOA aims at the establishment of a 'fair and market orientated' agricultural trading system. It comes down heavily on the 'protectionism' followed by the governments, which according to the agreement, "shields the farmers from the market forces". And hence, in order to address theses 'imperfections', the thrust was given to eliminate the subsidies and support given to farmers and open the market by removing the Quantities Restrictions (QRs) imposed on agricultural trading. The underlining assumption is that the 'imperfections' present only in the production of agricultural commodities but not so much in the marketing, which is unrealistic. It is well known that agricultural marketing in the Third World is marked by the 'overcharging' in the movement of commodities across time and space, overplay of middlemen, hoarding, so on, and hence, more 'imperfect'. As a result of this, a very small proportion of the price paid by the consumer is passed on to the producers (farmers), keeping both consumers as well as producers unhappy. In a majority of cases, not even half of the price paid by the consumers for agricultural commodities reaches the farmers. The intermediaries share in the consumes' rupees ranges from 40 to 75 percent for most of the high valued crops, indicating the exploitative role which the middlemen are playing in Indian agriculture (Maji and Bhattacharya, 1994). The situation is more or less same in other Asian countries also. The livelihood security of the millions of farmers in the Third Word hinges around correction of these imperfections in the domestic market on which the AOA maintains an absolute silence.

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