UN rapporteur and WTO head debate the impact of trade on hunger

Does agricultural trade liberalization hamper governments’ ability to ensure their poor have food? Olivier De Schutter, UN Special Rapporteur on the Right to Food argued that it does, when he debated the issue at Geneva’s Palais Eynard on 11 May 2009. WTO Director-General Pascal Lamy countered that Dr De Schutter is incorrect to blame more open trade for hunger around the world.

Dr De Schutter said his main concern was the “fragmentation” of international policies, in particular what he saw as governments’ failure to assess the possible impact of agricultural liberalization talks on human rights and the right to food.

Mr Lamy summed up the debate as a difference over risk: “You think that we should not risk opening up, that it is too dangerous; and I say that we should take that risk — it works, in general, even for the most disadvantaged.”

The debate was jointly organized by Geneva Mayor Manuel Tornare, and 3D, a non-governmental organization focusing on the three dimensions of trade, human rights and an equitable economy.

It did reveal common ground on important points. The two speakers agreed that neither of them were advocating self-sufficiency, or “food sovereignty”, a term that some activists use. For Dr De Schutter, the issue was farmers depending too much on markets. For Mr Lamy, better regulated trade is a solution to help feed the hungry.

And they both said the right to food is important.

“The right to food does not mean producing more food. … The right to food is the right to produce food or the right to have enough income to buy food from the market,” said Dr De Schutter.

“The right to food … is recognized by the vast majority of states on this planet,” agreed Mr Lamy. “So the question is not to decide whether there is a right to food, but let us try to see whether or not it is put into effect and how this is done.”


Dr De Schutter’s case

The UN rapporteur’s focus was on the dangers of trade, taking care that countries are not too dependent on exporting a limited number of products, and ensuring government have the freedom to choose their policies without “these being dictated by the international trade mechanism”.

He was particularly critical of the “schizophrenia” among countries that separates trade policies from human rights. “The world of the WTO is one that is cut off from human rights, even though the same states are members of both the Human Rights Council and the WTO,” he said.

He said that viewing international trade from the perspective of the right to food is “new and different”. Instead of assessing whether trade will allow states to increase production and exports, this approach focuses on who the winners and losers are and whether the losers — the small farmers, who are the most vulnerable — are protected from the damage of trade liberalization, he said.

Dr De Schutter described four dangers:

  • Specialization. The benefits of trade come from divisions of labour and specialization. But this can prevent development if it forces a country to focus on a narrow range of goods and services instead of diversifying.

  • Dependency. The experience of the 1980s and 1990s shows that when countries specialize in export crops such as cotton, coffee, tea, tobacco and cocoa, they become dependent on these products and are vulnerable to volatile prices.

  • Inequality. Liberalization concentrates extremely large farms among a tiny number of owners, with over two billion small farmers, including large numbers who are hungry.

  • Too much profit for the few. The small number of powerful companies in the agri-food chain take a larger share of the value of production, widening the gap between retail prices and the prices farmers receive, so that small farmers do not benefit from price increases.

“Prices are too high for consumers at the end of the chain, but are still too low and not sufficiently profitable for small farmers, who cannot really earn a living from their crops,” Dr De Schuter said. “This is where the food crisis is. It is small farmers driven towards the cities, unable to live off their fields, relegated to subsistence farming because prices are not sufficiently profitable.”

Overall, Dr De Schutter described trade as a destabilizing force that creates vulnerability for countries and communities that are too dependent. International trade and WTO agreements bind countries’ hands, preventing them from dealing with the problem or forcing them to rely on the “wager” that trade will be good for them.

“ ‘Excessive dependence’ is a deliberately vague term because it means that states have to make choices following democratic procedures in order to decide on their agricultural policy, what their food policy is to be, without such policies being determined by their dependence on international trade, either because they want to earn money from exports by specializing in certain export crops or because they have become dependent on international markets,” he said.


Mr Lamy’s case

The WTO Director-General said Dr De Schutter over-simplified the problem, by focusing too much on agricultural trade and on the WTO. Trade is needed in order to deliver food to those who need it, but other good policies are also needed to ensure trade serves human rights and the right to food, he said. Mr Lamy also disputed the claim that trade inevitably makes prices volatile — economists are still debating whether this is the case or not, he said.

  • More than trade. The real obstacles to the right to food are: property ownership systems, storage facilities, transport and distribution infrastructure, lack of credit, shortage of water, etc, Mr Lamy said.

    “When I am in the field, in Burundi, Cambodia or India, the farmer and NGOs dealing with poverty in these countries do not raise the issue of international trade,” he said. “They ask me all these other questions.”

  • More than farmers. Famine and poverty are also urban problems, Mr Lamy argued, where the poor do not have the money to buy food and are “excluded from the food supply circuit”. This means that hunger is not only about producers, but also consumers, he said.

  • Trade does supply. “Those who produce little or badly must be given access to those who produce a lot and well,” Mr Lamy said. This happens through trade, whether global, regional or continental, he said.

He disputed the assertion in the UN rapporteur’s report that developing countries cannot increase their productivity to compete with developed nations. Developing countries’ yields now sometimes exceed those of developed countries, and they export as much to them as they buy from them, he argued.

“I am sorry but the figures no longer correspond today,” Mr Lamy said. “This is indeed why so many countries from the South in the WTO are arguing the opening up of agricultural trade. They may be wrong according to you, but we have to listen to those who speak on behalf of developing countries in the WTO.”

Mr Lamy’s main concern with trade was not dependency but distortions caused by very high import barriers and “absolutely massive” subsidies. The WTO’s roles are both to liberalize and to regulate, through 600 pages of agreed rules, and the two roles should not be confused, he said.

He said the present negotiations will lead to the steepest cuts on the highest tariffs and “a very large reduction of around 80% in subsidies in countries of the North” — the US, Europe and Japan.

At the same time, poorer and more vulnerable countries will have more room to manoeuvre, Mr Lamy pointed out. For example, least developed countries will still have the ability to raise their customs duties to, on average, 70%, whereas the actual rates the currently charge are only 15% on average, Mr Lamy said. The reason why they do not raise the duties is because to do so would make food more expensive for their urban poor, he said.

“Agriculture can be subsidized under certain conditions, there can be higher tariffs under certain conditions, so the idea that the WTO is going to place agriculture on the same level as socks, which I believe is one of your fears, is not true and will not be true for a long time to come,” he said.


Taking the argument to the WTO

Towards the end of the one-and-a-half hours debate, Dr De Schutter asked if he could present the conclusion of his report to WTO member governments in the Agriculture Committee or the General Council.

On 2 July 2009, Dr De Shutter was invited to a WTO Secretariat information session where he debated his report with WTO agriculture delegates.