Smokin' Mirrors: The Doha Round on sticky turf

Why does the countryside seem to only reside our retirement dreams? We take a look at agriculture, subsidies and the latest negotiations at the Doha Round.

There’s a problem brewing in the countryside of all major industrialised nations. Where I come from, the countryside used to be teeming with people, young and old, who lived in the country out of choice. They worked on farms and in towns. Business was supported by local trade and vice versa. Obviously, the more people who live in rural areas, the more active the economy of the area will be.

In recent years, with the centralization of business, rural areas have changed dramatically. In many towns, you won’t find many people aged between 17 and 35. They go to the cities for education, fun and, most importantly, work. There’s nothing left in the rural countryside for them, and the rural communities are sadly lacking in many services as a result. In turn, cities are overcrowded. The largely unsustainable development of most cities has raised the pollution of the air and water through poor infrastructure and urban planning. Importantly, with the increased populations in urban living also comes reduced care for the environment in rural areas as well, from the smallest gardens to family-owned farms. With the yearly average temperature already 0.7 degrees centigrade higher than the onset of industrialisation, any tending of forests, small farms or even small gardens is a simple solution for ensuring even the most small-time garden can act as a C02 sink. On the flipside, as urban areas become more crowded, people’s access to parks and community gardens decreases, which not only raises C02, but also places residents in an endless cycle of consumerism and waste, with most of the world’s resources currently being consumed by people living in the urban areas of developed nations.

Of course, there is another, very important aspect to rural communities which could be the answer to a lot of our global problems – sustainable agriculture. Those who are arguing for subsidies in agriculture to be dropped from global trading are doing so because the world’s most wealthy nations can create an overly abundant supply of food, which then gets dumped on markets overseas, while the farmers reap the subsidies. The issue of subsidies has been the largest stumbling block in the latest Doha round of talks between the European Union, the United States, Australia, Japan, Brazil and India, the six negotiators currently attempting to iron out their differences in Geneva. Negotiations began in 2001, and since that time, little headway has been made.

The Doha round is a crucial for developing nations to get a fair deal from liberalised trade. Even with Economic Partnership Agreements (EPAs), many developing countries struggle to keep a foot in the door of developed nations’ markets. “The share of the African [EPA] countries’ exports in the EU market has fallen steadily, from 3 percent in 1985 to 0.9 percent in 2003, a reflection of the competitiveness problems and supply constraints as well as declining real prices of some primary commodities and restrictive rules of origin,” wrote Lawrence Hinkle and Richard Newfarmer in their paper “Risks and Rewards of Regional Trading Arrangements in Africa: Economic Partnership Agreements between the European Union and Sub-Saharan Africa”, which was presented at this year’s World Bank ABCDE Conference in Tokyo. In their conclusion, they add: “In many African countries the political economy environment for trade liberalisation is difficult, because protectionist interests are powerful and well-organized. Political enthusiasm for unilateral liberalization is limited. Hoping for a “round for free,” African countries are yet to really engage in the multilateral WTO [World Trade Organization] discussions. Hence, by itself, the Doha Round may not lead to any reductions in applied MFN tariff rates in Africa.”

Farmers in developing nations struggle to find inroads to developed nations’ markets for their goods, or the opportunity to escape the utter destruction reaped upon their land by monoculture farming techniques. At the same time, the question must be asked: what are the subsidies actually paying for? The US wheat farmers would die an unnatural death should their subsidies be removed, and the US is one of the loudest voices when it comes to other nations removing their subsidies while keeping their own, agreeing to cap their subsidies at US$15 billion dollars, a small reduction from their formerly offered $22.5 billion. France is the most adamant that its subsidies should not be touched. Considering the massive excess of wine on the EU market is being turned into fuel, it is an understandable move to protect their world-famous produce.

Liberalization is not working for the majority of developing nations at present. In other words, the Uruguay Round, which was the 1993 precursor to Doha, has largely failed to improve the economic situation for many developing nations, which are still yet to enjoy the ‘free’ aspects of trade that the more powerful nations are. This does not mean that it could not work in the long-term, but most economic experts agree at this point that as a trading system it has had many detrimental effects on developing nations to date.

So the answer seems to lie in the strange, unchartered waters between protectionism and liberalism: that is, fair trade, not free trade. The developed nations negotiating the Doha Round can hardly say they are negotiating either form of trade at present. Until developing nations have a great deal more say in what happens at the institutional level of organisations, the WTO in particular, their deals will always be short changed for the interests of those with the most negotiating power.

So, in the meantime, developing nations should concentrate on sustainable development and, most importantly, sustainable agriculture. Sure, the big businesses won’t like it, but at least taking this road will ensure the majority of people will have food to eat and decent infrastructure that doesn’t harm the environment. Right now, they seem to have no other choice, and there are increased avenues for this, including the Kyoto Protocol’s Clean Development Mechanism, which produces carbon points in exchange for developed countries’ investing in the sustainable development of their poorer cousins.

Developed nations, too, need to begin distancing themselves from mass produced agricultural products. If the ‘agricultural’ subsidies can be re-named ‘sustainable development’ subsidies, then there will be plenty of money to support the switch to organic farming, as well as give a huge shot in the arm to smaller farmers, increasing the economic diversity of the dying rural culture. Additionally, it will get rid of the subsidy argument altogether, so the Doha Round can move on the bigger problem of just how developing nations can be pulled out of the endless cycle of poverty.

Everyone wins.

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