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G-20 for ending farm subsidy
By Zafar Samdani
The two-day (March 18 and 19) WTO moot of G-20
countries in New Delhi has demanded a time frame
from the rich countries to end subsidies to
their farmers and terminate price distorting
export practices to bring equity between the
developed and developing nations.
 This is a move in the right direction though it
to be doubted if rich nations would retreat from
their position and accede to demands of the
developing nations.
The issue is not new and was raised in the WTO
moot at Geneva last July where negotiations on
the elimination of subsidies to farmers by rich
countries were successfully conducted.
Principles were spelled out but no plan of
action was prepared. The New Delhi G-20 meeting
was important in so far as concrete measures
were identified and a five year period was
proposed by the G-20 ministers for bringing the
rich nation's regime of subsidies to an end.
The elimination of subsidies is vital for the
farming sector of developing countries because
their farmers are left in the lurch firstly by
the technological superiority of the rich
nations that ensures higher productivity for
lands of their farmers and secondly the support
from governments to farmers forces the
agriculturists of developing countries - a
euphemism for poverty, out of competition. The
field is uneven; they do not have a chance of
selling their produce in markets where rich
nations are firmly entrenched.
Improving the farmer's lot is the first step
towards reducing rampant poverty in developing
countries because majority of their populations
live in rural areas and are totally dependent on
farming for earning their livelihood.
Their incomes need must be raised to break their
state of miserable existence around the
subsistence line and also to ensure that
migration to urban habitats, that is exerting
hard pressure on limited facilities in cities,
is arrested, if not completely stopped. However,
to think that rich nations would voluntarily
agree to abandon their highly gainful position
in the global markets would be naive. What is
the strength of developing nations for
countering them? Mere resolve to end imbalance
and usher in an era of equality and justice is
not enough.
The economic landscape of the world is covered
by a canopy of political power; the G-20 nations
draw a near blank on that count because most of
them look up to rich nations and international
monetary institutions that are controlled by
developed nations for financial sustenance in
the form of soft loans, and financial ? and
commodity aid.
In any case, it would not be easy for rich
nations to stop subsidies for their farmers
because there are political repercussions of
policies they adopt. Farmers would not laud
withdrawal of privileges and when governments
take the decision, they would antagonize their
community. Furthermore, these countries
represent societies that have concern for their
citizens and are committed to protecting their
interests at all costs.
Last February, Brussels revived subsidy for
wheat within eighteen months of removing it. The
subsidies of European Union members for the
farming sector run in to billions. The US is
unlikely to leave its cotton growers struggling
and would, regardless of the pressure from
developing nations, maintain its support for the
farmers to ensure that their interests are not
harmed by international prices of the commodity
or any other factor.
The western support for the sector amounts to
about an annual $350 billion. The possibility of
EU members, US or other rich nations
accommodating developing countries is difficult
to imagine. Their support for farming
communities is an irrevocable social, economic
and political commitment.
The WTO regime also has built in negative
implications for developing nations. The rich
countries are looking for markets; keeping
developing nations in their present state suits
them. Elite nations of the world are not looking
for competitors; concessions from them would
have to be wrenched by devises and measures more
effective then demands and hopes.
How is that to be done by economically weak and
politically spineless countries led by stooges
of the first world? It is generally believed
that Z A Bhutto was punished for his excursion
into the nuclear realm but his more audacious
and unpardonable act may have been producing the
concept of a Third World Economic Order; an
example had to be made of him. This backdrop
does not hold much hope for the success of G-20
efforts.
There is, however, a lot these countries can do
for their farmers: give them what they are
seeking from rich nations and that is equitable
treatment. Disparities existing between rich and
non-rich nations exist between the haves and
have-nots of the populations of developing
nations, no less. The gap between rich and poor
segments in developing societies is even greater
than distance between countries. That has to be
removed.
Pakistan's commerce minister believes, and quite
rightly, that his country can increase yearly
income by $2-3 billion if subsidies from farm
and dairy products are scraped by the rich
nations. This, according to him, would enable
farmers and breeders of Pakistan to increase
their income by successfully competing in the
international markets. There can be little
disagreement with that perception. But farmers
can be instantly benefited if the deal is above
board for them in their own countries.
The farming sector presents a scene regrettably,
of deliberate exploitation of small farmers; it
is a continuous and planned rake off. They
cannot get the right price for any of their
produce. Most of them are inextricably tied to
major crops, particularly wheat and cotton
because marketing of minor crops and vegetables
is beyond them. But the dice is loaded whichever
way they turn. In times of plenty of produce of
wheat, procurement wings of the administration
step in to buy from small farmers while big
landowners are accorded a free run to benefit
from higher price of the commodity. Small
farmers are actually pressurized to sell to
government agencies and deprived of the higher
rate offered by the market.
The government introduced Trading Corporation of
Pakistan (TCP) to 'protect the interests' of
cotton growers. TCP purchased lint from ginning
factories whose payment to farmers was below the
support price, indeed substantially below that
rate in many cases. This was a case, in fact
another case of state intervention paving the
road to the farmer's loss with declared good
intentions.
The fate of cane farmers is very well known and
may not be discussed in detail here. Suffice it
to say that sugar mill owners owe them millions
of rupees and the government, although it has
vowed to get the dues cleared, has not fulfilled
its pledges. On the other hand, excess produce
is purchased from sugar mills to bail out
owners.
The Zarai Tarriqiati Bank was established to
support small farmers but the list of its loan
defaulters contains names of rich and
politically influential farmers. It is the same
with other financial institutions that offer
facilities to the farming sector. Their clients
comprise only the rich and the mighty.
The small farmers have no access to main markets
and are usually so short of cash resources that
they pledge crops to commodity traders, better
known as middlemen, even before the seeds of a
crop start germinating. Variables in conditions
often leave them high and dry and the government
doe snot come to their aid.
They are devastated by droughts, by excessive
rainfall, by other negative conditions and left
to fight out their miseries on their own. They
suffer when they produce plenty and suffer when
produce is low.
Seeking justice from rich countries is highly
desirable but the ends of justice should be met
at home too. A five-year period is not required
to ensure justice for farmers. This can be done
here and now.
Under the present dispensation, it seems that
benefits sought from rich nations would not be
for poor farmers of Pakistan; they would only be
new doors of prosperity for the already rich
feudal elements and the class of absentee
landowners that successive government create to
patronize selected individuals.
Courtesy: The Dawn |
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Pakissan.com; Advisory Point
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