When food leaves a bitter taste
Posted: 02 Nov 2006 @ 00:00
THE PRESIDENT of Tanzania has a problem. He sums it up like this: “How can I convince a Tanzanian who keeps a few dairy cows, but cannot sell the milk because the market is flooded with subsidised imported milk, that an open market is better than a closed or regulated one?”
It’s a fair point, and in an age of instant global communication, when we can no longer pull the wool over the eyes of rural African farmers, insult is added to injury. “You can only imagine how a Tanzanian
farmer feels when he hears that, while he sweats to eke out a living on $1 a day, cows in [rich] OECD countries are subsidised by anything from $2 to $7 a day.”
Lies, damned lies and statistics are as potent in the information age as ever; but perhaps the price we pay to subsidise our cows is among the most damning statistics of our era. It broke, briefly, into the headlines last year, shocking us with our implication in an economic value system where the rich world judges the value of its cows to be twice as much money as a billion people are forced to survive on.
No wonder, says President Benjamin Mkapa of Tanzania, that when he suggests to his people that the international community would like to see some more deregulation, would like Tanzania to be a little more open to international exports, “it begins to sound like a hollow gospel.”
Even the President of the World Bank, James Wolfensohn, cringes in embarassment. “We live in a world of six billion people, three billion living on less than $2 a day. European cows get subsidised to the extent of $2.50 a day, so there’s something disproportionate in terms of the way that we’re attending to the question of poverty.”
“Disproportionate” is one way of putting it. In a global trading system worth $10 million a minute, the poorest countries represent only 0.4 per cent of world trade, a share that has halved in two decades. The unfair way in which the global trading system works, concludes the UN, denies poor countries $700 billion in revenue every year. It’s a sum that dwarfs the admirable amount in debt cancellation achieved by the Jubilee 2000 campaign, a sum that Western aid could never hope to match. Even a one per cent increase in Africa’s share of world trade would generate $70 billion — five times more than the continent receives in aid and debt relief.
And, significantly, this is a sum that represents a route to self-
sufficiency and, ultimately, an end to dependency. Trade prosperity is the surest route from poverty for developing nations. It enables governments to improve living standards, healthcare, and education, and begin to tick all the other boxes that add up to creating a decent living environment.
SIX MONTHS ago, at the fifth ministerial meeting of the World Trade Organisation (WTO) in Cancún, Mexico, the stage was set for at least some of the international trading disparities to be eliminated.
As it turned out, the stakes were too high. Fierce disagreements, especially over cutting farm subsidies, proved insurmountable. This has delayed — to take the positive view — a successful conclusion of the development agenda the WTO agreed in Doha in 2001, which was meant to be concluded next January.
But if the Cancún collapse proved a disappointment, the news wasn’t all bad. The emergence of the Group of 21, a powerful alliance of poorer countries, such as Brazil and India, who began to flex their own muscles in the face of the anabolically-pumped limbs of the G8 countries, suggested the developing countries would not roll over and beg one more time.
“In Cancún, a new unity and cohesion emerged among poorer countries, which are likely to give them a stronger voice in future negotiations,” says John Madeley, author of Hungry For Trade, a study of how the poorest countries pay the real price of free trade.
Cancún, says the Brazilian Foreign Minister, Celso Amorim, “will be remembered as the conference that signalled the emergence of a less autocratic multilateral trading system”.
So, even if the immediate outcome of Cancún looks bad, maybe, eventually, we will come to see it as good. Some anti-poverty campaigners, while regretting its failure, point out that the WTO is at least a mechanism which could still deliver success: negotiations on the liberalisation of agricultural trade begin again later this month. In contrast, the International Monetary Fund (IMF) all too often manages to make life more difficult for poor countries by attaching extreme policy prescription to loans — insisting a country privatises its water supplies for instance, or stripping away trade protections.
“While the WTO failed to negotiate away the farm subsidies of the rich countries, the IMF insists that poor countries cannot protect their own farmers from subsidised imports,” explains Martin Drewry at Christian Aid. “Poor countries should be allowed to protect their vulnerable farmers from competition that would wipe them out. Not allowing them to do so is a death sentence for millions of people.”
Aid agencies are infuriated that rich countries can use their influence at the IMF to force free-market policies on poor countries, while simultaneously subsidising their own farmers. “The collective effect is like bombarding poor farmers with machine-gunfire, and then instructing them to take off their bullet-proof vests,” says Drewry.
THAT SAID, there may be signs that the argument against the all-powerful gospel of “free trade” is being won. It is increasingly clear, even amongst the most doctrinaire free-marketeers, that global trade cannot be unfettered without the rich and powerful simply becoming more rich and powerful. Even free-marketeers want, ultimately, more people to trade with. If the poorest nations are to develop viable economies and become productive trading partners, they must be allowed to protect themselves in the process, just as Western countries historically protected their emergent economies.
There is a subtle but growing change in stance from the political classes. It is more than former Cabinet ministers such as Stephen Byers publicly denouncing liberalisation, or Michael Wills resigning as a Home Office minister to work for trade justice from the backbenches. There is also a change in language: the Government increasingly refers to “free and fair trade”; the Secretary of State for Trade and Industry, Patricia Hewitt, speaks of “trade justice”; and Gordon Brown talks about “sequenced liberalisation”.
The frustration for campaigners is that, while the language may be turning their way, so far the rhetoric is not producing concrete action. While they privately agree that Blair and Brown are genuine advocates for African development, they want to see policy moves in the short term that prove it. Persuading France and Germany to agree to scrap the Common Agricultural Policy may take years, but in the meantime, campaigners are demanding fundamental concessions by the EU and US: specifically, the removal of export subsidies, and barring the IMF and World Bank from prescribing trade conditions.
Export subsidies — one strand in the massive web of subsidies — are the payments that lead directly to the dumping of western exports on the economies of developing countries. They are payments received by farmers who have produced specifically for export, and whose production costs inevitably undercut those of producers in developing countries. With agriculture so subsidised in Europe and America, overproduction is inevitable. And products dumped cheaply in poor countries wipe out local produce, which is not subsidised. EU exports, for example, have forced dairy farmers in India and Jamaica out of their own local markets.
“Export subsidies are the worst of all,” says Amy Barry, at Oxfam. “They are effectively rewarding western farmers for undermining markets in poor countries.”
At Christian Aid, the political emphasis is on giving poor countries the freedom to stop cheap goods flooding into their countries. “Governments like ours must remove the pressures that stop them doing it — particularly getting the IMF and World Bank to stop setting trade conditions,” says Drewry.
SUCCESS at the WTO needs now to be ignited by real concessions from the EU and US. Campaigners in this country are now looking to 2005, when the UK will chair the G8 and also takes the presidency of the EU. The Prime Minister has promised a “development presidency”, and this just might provide a window of opportunity to rebalance the weights on the global trading scales. But politicians, whatever their instincts, invariably prioritise according to their perception of voter instinct — which is where people of faith can act, by persuading politicians that trade rules are an injustice that ordinary people want to see righted.
When Gordon Brown spoke to last month’s Making Globalisation Work For All conference, you could almost hear him willing the Churches back onto the streets, if only to demonstrate a popular mandate for the Government to do what it knows is right. “Faith communities,” he said, “form a unique coalition for justice: for the relief of global poverty, for the defeat of agricultural protectionism, for transparency and an end to corruption, for education and health, not just as a privilege of some of the world’s citizens but as a right for all.”
People of faith, he said, had “changed the way world leaders acted”; and, as part of a “network of mutuality bound together, all of us, citizens and nations, rich and poor”, represented “a moral universe strong enough to change the world”.
Just as the Churches became the driving force behind the campaign to cancel poor-country debt, the Government clearly hopes that believers of all traditions will again provide the trade campaign with an engine of political activism. For their part, campaigners admit there is a presentational problem: global trading rules remain an obtuse area of economics for most people, and are not an idea as easy to grasp as unpayable debts.
But with the gradual but demonstrable progress into the high street of Fairtrade products (see right), consumers are beginning to track the invisible connection between what they eat and drink and the people who produce it for them. They are, perhaps, beginning to recognise the shared moral universe.
“This injustice is so clear — and is causing so much suffering — that it will never be able to survive if enough people know about it,” says Martin Drewry at Christian
Aid. “This is a call to church-
goers of every tradition: this is a moment to change the course of history for hundreds of millions of people.”
For more information on Christian Aid’s Trade Campaign, phone 08700 787788 or see www.christian-aid.org.uk/campaign