Rectify Agricultural Trade Imbalances

By Senator Edgardo Angara

We have a food crisis unlike what we have seen before. People are not dying on the streets; there is no mass starvation; but there is a crisis nevertheless. The doubling, tripling even, of food prices has caused protests and riots in countries.

If the price hikes continue, Robert Zoellick, World Bank president, said these would push 100 million people back below the poverty line, wiping out seven years of progress.

Peter Timmer, Center for Global Development fellow, thinks that the situation is actually much worse than that. If current rice prices in world markets are actually transmitted into most Asian countries, then even conservative calculations suggest that upwards of 10 million people in Asia will die prematurely.

Inequitable agricultural trade and the food crisis

The food crisis did not just happen immediately. We have blamed this on a confluence of factors that include climate change, increased demand for food, rapid increase in the price of oil, and mandates for biofuel production.

But looking deeper, this crisis is the culmination of long-standing fissures that reflect imbalances between rich and poor countries in international agricultural trade. Such inequities stem from substantial protectionism in rich countries, as well as from inequities introduced as part of the 1994 Uruguay Round Agreement on Agriculture.

As a result, 70 per cent of both world exports and imports are exchanged among developed countries. For developing countries, not only do we have a smaller share of world agricultural trade but we also have been experiencing a deterioration in the balance of trade between exports and imports.

In the early 1960s, we, developing countries, had an overall annual agricultural trade surplus of almost US$ 7 billion. By the early 1970s, our trade surplus fell to about US$1 billion. By the end of the 1980s, it had disappeared. And since the beginning of the 1990s, we have become net importers of food and have incurred deficits.

The implications of such dependence on food imports are staggering. It has affected our ability to pay for imports; it has decreased our local production of food; it has brought incomes, especially of farmers, down; and it has stunted our nutritional status.

What needs to be done now

To rectify this trade imbalance and thwart a developing global food cartel, there is an urgent need to:

1. Accelerate the elimination of export subsidies and reduction of domestic subsidies of rich countries...

2. Cut agricultural tariffs; provide Special Products; and institute Special Safeguard Mechanisms...

3. Ensure that legitimate measures are not used as technical barriers to trade...

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You need something that I have which you don't have; I need something that you have which I don't have. Let us help each other so that we may meet each other's needs.

Help me in producing more of my product so that there will be enough of my product for us to share. I will help you in producing more of your product so that there will also be enough of your product for us to share.

Let me bless you with what I have so that you may bless me with what you have.
Isn't this the spirit of true fair trade?

Contrast that with the spirit of unfair trade: Let me lure you with what you want to have so that I could get from you what I want that you have.