Executive Summary :
Trade liberalization has been widely linked to human development. Trade contributes to growth, provides
higher incomes and opens up enormous employment opportunities thereby helping in ameliorating poverty.
Given the right environment, international trade leads to greater interdependence among countries thereby
narrowing economic inequalities.
In recent years, trade in agriculture has not only attracted growing attention but is being viewed as the
vehicle for global growth and equity. By expanding markets, by removing distortions from high levels of
protection in agriculture, global trade will not only be facilitating competition but spur growth in an
area that is linked directly to poverty and hunger.
The main goal of agricultural trade being to provide
an enabling environment for a majority of the world’s poorest to take advantage of the enormous
opportunities to improve incomes and enjoy healthy lives.
World Bank estimated that more rapid growth associated with global reduction in trade protection could
reduce the number of people living in poverty by as much as 13 per cent in 2015. In simple words, 300
million people could be pulled out of poverty. Using a computer modeling, William Cline (2003) estimated
that 75 million people in India could be lifted out of poverty from free trade. Many other studies pointed
to the direct link that ‘open’ economies had with faster growth. Jeffrey Sachs and Andrew Warner (1995)
concluded that open economies double in size in 16 years, whereas closed ones take a hundred years.
The United Nations Development Program (UNDP) subsequently established that such studies were flawed.
Forgotten in such theoretical and computer modeling pursuits is the fact that development is not about
growth figures but about people.
The link between trade liberalization in agriculture, and poverty
alleviation, has to be seen from the impact it leaves behind on farming livelihoods, as well as on the
national food sovereignty.
Statistical and economically significant effects on growth is no measure of
resulting human development, it merely pushes people from the ambit of development discussions. A
re-look at the implications of free trade in agriculture through the prism of human lives will probably
reverse the trend.
Poverty reduction does not depend simply on agricultural productivity growth and more openness in
international trade.
The WTO agreement on agriculture aimed at setting up rules in consonance with the
national trade policies that would provide the much needed fillip to agricultural growth, thereby
improving efficiency. These rules, essentially designed to provide a level-playing field, were in reality
heavily tilted to protect the agricultural interests of the developed countries.
In the name of removing
poverty and helping the small and marginal farmers of the developing countries, the rich and the powerful
countries continue to fortify the protective ring around their agriculture.
This report is an attempt to not only map a wide spectrum of issues that are currently at the heart of the
ongoing negotiations in agriculture but to also trace the impact such policies have left behind on the
farming communities of the developing countries. Theory notwithstanding, ultimately the link between
agricultural trade and development has to be vindicated by the ground realities.
There is extensive
empirical literature discussing these linkages, but not much when it comes to reality bites.
The effects of trade liberalization were expected to be uneven given the diversity of geographical
regions and the socio-economic conditions.
This report tries to go beyond the mainline dialogue on trade
and development, and look at how the developing countries are faring in an era of free market. It
therefore tries to examine the available literature on agricultural trade liberalization and its impact
on the income and livelihood of poor. What comes out very clearly is that the resulting impact of the
agreement on agriculture cannot be seen in isolation.
For a large number of developing countries, the
process of economic liberalization tied to the Structural Adjustment Program that the World Bank and the
International Monetary Fund launched in the 1980s laid the foundations for free trade.
What the report has found out is that ten years after the WTO came into existence on Jan 1, 1995, the
impact of agricultural liberalization on farming communities and landless workers, more particular on
women, has been disastrous -- the past decade saw rural livelihoods collapsing in the developing
countries, leading to more unemployment and more migration from the rural to the urban areas. This report
also shows how agricultural exports from the developing countries remain restricted, how import surges in
many developing countries have not only shifted the terms of trade but lead to further marginalization of
the rural communities.
Not only import surges, depressed prices, loss of livelihood, closing down of domestic enterprises, shift
of cropping pattern to export-oriented cash-crop agriculture, corporate take-over of farming, are some of
the impacts that have been increasingly reported across the world.
While trade negotiators are terming
these as short-term upsets that will be offset in the long-run, the rules of the game are not being
suitably modified to ensure that the negative impacts are to be minimized. Much of the developing world –
in Asia, Latin America and Africa – as the report shows, is faced with a serious agrarian crisis resulting
from the cumulative impact of the economic liberalization policies and the
agreement on agriculture.
Four years after the Doha Development Round was launched in 2001, the developed countries have been unable
to fulfill their promise of making trade work for development. No rule significant enough to bring about a
positive change has been incorporated into the WTO obligations since then. The 2004 July Framework
agreement has been termed as ‘historic’ but as our analysis shows it not only strengthens the existing
trade barriers but allows the developed countries a cushion to
further increase agricultural subsidies.
Like the entire WTO package, the July Framework is also being greatly oversold.
Call it ‘anecdotal’ or ‘emotional’, the report has collated available studies/literature from across the
continents. Besides the regional overview, the report also presents some of the national case studies to
illustrate the negative impact, both static and dynamic, of such policies.
We hope the report serves as an
eye-opener for the policy-makers, stakeholders, researchers and academicians, civil society organizations,
and the political masters. With the few concluding suggestions to make trade fair and equitable, we are
hopeful that the report will help revert the focus of international trade in agriculture to where it
legitimately belongs – to bring back the smile on the face of small farmers.
APRODEV WTO Report :
Coordinator and Lead Author: Devinder Sharma
Core Research and Writing Team
Bhaskar Goswami, T.N. Prakash, Abigail Dymond, Raghav Narsalay, Devinder Sharma
APRODEV Brussels Report
Background - Removing Protection in Agriculture - Politics of Farm Trade - Faulty Framework
- Double Standards
Impact : Africa, Latin America, Caribbean Countries, Asia
Conclusions - Annexure
Read Full Aprodev Report - WTO Impact on Asia
- Country Case Studies - India, Asian countries