Globalisation Impact on plant varieties protection

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					                          EXECUTIVE SUMMARY

        It gives me immense pleasure in presenting this project. India is basically an
agrarian economy. Anything that impacts Indian agriculture surely has a strong effect on
each and every Indian either directly or indirectly. Globalization of agriculture is one
such aspect which cannot be ignored. WTO has several implications on the agricultural
throughout the world. This project will provide an insight about the globalization of
agriculture and its impact on India.

       India was a member of the GATT. Subsequently it is an active member of the
WTO. WTO has some guidelines which have to be diligently followed by all its member
nations. These guidelines are framed so that there can be free trade all across the world;
removal of licences & quotas, abolishing of subsidies to name a few. However these
guidelines may not be necessarily good for our nation in the long run.

       Indian agriculture has seen a number of crests and troughs right from the
independence till date. It has survived bad times like draughts & floods and has also
cherished good times like the Green Revolution. Indian peasants have toiled day & night
to ensure that the nation gets its daily meal. However, when its time to repay them, the
WTO guidelines are causing hindrances.

        Earlier, our farmers were using indigenous fertilizers and pesticides which were
not harmful to the environment nor to the soil. However, today, technically advanced,
imported substitutes are available which lure the farmers as the guarantee short term
benefits but in the long term they render the land useless. The per hectare productivity
drops drastically. Earlier, our farmers used to get various subsidies from the government.
This ensured their protection. But subsidies are considered inappropriate by the WTO as
they demand free and perfect competition. Today, the WTO is even raising questions on
the government’s policy that ensures buying out all or some part of the produce that the
farmers grow.

         Unless all these issues are sorted out and support is given to the Indian farmers by
the government, their problems will keep on accumulating. No wonder thousands of
farmers in regions like vidharbha, warangal and many others are committing suicide.
Times are such that the person who feeds the entire nation is finding it difficult to feed
itself. We need to understand the issues and ensure that this thing does not continue in the
future.

        Gandhiji has rightly said that, “There is enough in this world for everyone’s needs
but not for anybody’s greeds.”

       This project takes into consideration the valuable suggestions made by many
professors and others. The information provided is true to the best of my knowledge.
However, discrepancies if any, are regretted. Suggestions, feedbacks are always
welcome.


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                      INDEX



CHAPTER               TITLE                PAGE NO.
  NO.



1.    INTRODUCTION & THEORETICAL ASPECTS         1
2.    INDIAN AGRICULTURE FROM INDEPENDENCE       5
      TO 21ST CENTURY
3.    IMPACT OF GLOBALISATION ON INDIAN         14
      AGRICULTURE
4.    NEGATIVE EFFECTS ON INDIA & THE WORLD     23
5.    GLOBALISATION OF AGRICULTURE AND          27
      RISING FOOD INSECURITY
6.    IMPLICATION FOR SUSTAINABILITY OF SMALL   35
      HORTICULTURAL FARMS
7.    REACTION OF VARIOUS PARTIES               51
8.    TRADE LIBERALISATION: AN ALTERNATIVE      59
      MODEL OF LIBERALISATION
9.    WTO REFORMS AND INDIAN AGRICULTURE        63
10.   CONCLUSION                                66

       APPENDICES:
      ---- SOME PROMINENT ARTICLES              67
      ---- ABBREVIATIONS AND ACRONYMS           70
      ---- BIBLIOGRAPHY                         72




                                                     2
CHAPTER 1


                            INTRODUCTION
                                 &
                         THEORETICAL ASPECTS

       Globalization of business is the buzzword of economy, especially in Agriculture,
Industry and Service in the new world economic order perspective. It offers both
challenges as well as opportunities for sectoral development. As a matter of fact, the
approach of globalization requires a clear vision; regularly updated, of the sectoral
development in which business operates. It redefines the existing markets and raises the
questions on how to penetrate them. It also raises profound issues regarding how a
business should be organized and led. Such unrelenting changes blurring the views of
business leaders, they need the benefit of the best thinking in order to focus on the right
global strategies. The problem is a gap between where we are and where we want to be.
A solution helps us to bridge this gap. Globalization and its impact on sectoral
development of agriculture is a unique subject for business leaders, policy makers,
academicians and students.

        Let us first know briefly about the WTO. World trade organization (WTO) was
established on January 1, 1995. It replaced General Agreement on Tariff and Trade
(GATT) which remained in existence from 1948 to 1994. GATT was a multilateral
treaty, governing trade in goods only. WTO is much wider in scope & coverage. WTO is
directed by a Ministerial Conferences which meets at least once in every two years. So
far, Ministerial Conferences have been held in Singapore (December 1996), Geneva
(May 1998), Seattle (November-December 1999) and Cancun (September2003).

        WTO is based on the principles of non-discrimination, free trade and promotion
of fair competition among the member countries. About 95% of the global trade is
governed by the rules & regulations of WTO. WTO agreements are permanent and
ratified by the parliaments of member countries.


        The Uruguay round of negotiations on the GATT Agreement was signed in April
1994 and the World Trade Organisation (WTO) the successor to GATT came into
existence on January 1, 1995. The signing of the Uruguay Round (GATT 1994)
Agreement along with the Agreement on Agriculture (AoA) marks a new chapter in the
history of multilateral trade negotiations in so far as for the first time the Agreement was
successful in bringing agriculture within the ambit of discipline on international trade.


        The freeing of trade in agriculture under the AoA is likely to bring about
significant increases in trade in agriculture and give unprecedented opportunities to the


                                                                                          3
developing countries to benefit from increased agricultural exports. But this would
depend on the developed countries’ willingness to reduce domestic and export subsidies
and provide market access to agricultural exports from the developing countries. On the
other hand, trade liberalisation is also likely to pose serious challenges for the developing
countries. The challenges lie first in becoming globally competitive in agricultural
exports and secondly, in enabling the sharing of the benefits of trade liberalisation not by
a small minority of rich farmers but by the majority of small and marginal farmers and
agricultural workers in India.




                              Agreement on agriculture (AoA)

       AoA of World Trade Organization recognizes free and market-oriented trading
system in agriculture. It has following main features:

       A.           Tariffication: It means conversion of all non tariff barriers on trade
                    such as import quota into tariffs. Tariff bindings are to be reduced
                    under this agreement. (A tariff binding is a commitment not to exceed
                    a particular level of tariff.) Developed countries were to reduce their
                    tariff bindings over a period of six years (1995-2000). Developing
                    countries are to reduce their bindings over a period of ten years (1995-
                    2004). Least developed countries are exempted from tariff reductions.

       B.           Market Access: Where tariff bindings are too high, current market
                    access has to be maintained as the amount of exports to other
                    countries at preferential tariff rates. However, market access
                    provisions do not apply when the commodity in question is a
                    traditional staple in the diet of a developing country.

       C.           Domestic Support: WTO member countries are subject to
                    following obligations on domestic support to their agriculture.


        Aggregate Measure of Support (AMS): It is the annual level of support in
monetary terms extended to agriculture sector. It is the non exempted support of the
following two types, (a) product specific support, i.e. market price support/subsidy given
to the producer of a specific crop. (b) non-product specific support, i.e. total of subsidies
on inputs like power, irrigation, fertilizers and credit. The AMS is calculated for each
product receiving market support and is based on the price prevailing in the base period
(1986-88). If AMS exceeds 5 per cent of the total value of agricultural production in the
case of developed countries (10 per cent for developing countries), these are to be
reduced by 20 per cent over six years from 1995 (13.3 per cent over ten years for



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developing countries). The AMS to Indian agriculture is still below 10 per cent in terms
of WTO stipulations.

        However, there are many issues under the AoA which are considered against the
interests of developing countries like India.

        Firstly, the minimum access for import of primary goods flouts the basic rule of
promoting free trade under WTO agreement. The blue box and green box subsidies are
exempted from reduction commitments, leading to distortion in trade. This has been
emphasized by developing countries like India which have a majority of low cost
agricultural producers.

        Secondly, distortions emerge from inequity in domestic subsidy discipline due to
different base positions. The developed countries are heavily subsidized countries and are
allowed to retain up to 80 per cent of their subsidies but developing countries can
subsidize their farmers not more than 10 per cent of the total value of agriculture
production. Hence, the domestic support by developed countries needs to be reduced
substantially in absolute terms.

        Thirdly, the domestic support measures relaxed for the purpose of food security
and PDS are allowed only in relation to the international market price and to the targeted
population. However, this creates problem for countries like India with high percentage
of poor population and heavy dependency on agriculture. Food security which is
interlinked with the livelihood security is extremely important for densely populated
countries with a large agrarian economy. These countries need enough flexibility under
the AoA to take care of their food security, rural employment and livelihood concerns.

        Fourthly, India has argues that for low income countries, market access and
domestic support discipline should be such that their food requirements are met from
domestic sources. The volatile international market can get transmitted to the domestic
economy and can affect the prices of foodgrains and food entitlement of the poor. Hence,
it was suggested that for development of agriculture in developing countries,
diversification of green box subsidies should be encouraged and input subsidies allowed
to crops where productivity levels are below the world average. Also, the negative
product-specific support may be permitted so as to be adjusted against non product-
specific support.

        Fifthly, developing countries face highest tariff rates which include the major
agricultural staple foods, cereals, meat, sugar, milk, butter, cheese as well as tobacco
products and cotton. A study conducted by WTO with United Nations Conference on
Trade and Development (UNCTAD) suggests that tariff wedge will continue to be
significantly high on account of tariff escalation which is a major factor preventing
development countries from diversifying and increasing their share of processed
agricultural exports.




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        The Indian proposals have, by and large, been well received and endorsed by
most of the developing countries as well as some of the developed countries. However, it
is important that steps are taken to reap benefits of a liberalized trade regime through
increased efficiency in agriculture and combat restrictions by developed countries arising
from sanitary measures. Efficiency would be greatly enhanced with increased investment
and land reforms. Also, diversification of agricultural production into agro-foods,
horticulture and floriculture products and farm products with international quality
standards could help to increase exports from this sector.

        GREEN BOX SUPPORT: It is given on items which have minimal impact on
trade, e.g. pest and disease control, market intelligence, infrastructure services, relief
from natural disaster, and buffer stock operations. It is an exempted support.

       BLUE BOX SUPPORT: It is product-limiting subsidy and pertains mainly to the
developed countries. It is exempted from reduction commitment under WTO. The
developed countries subsidize their agriculture mainly under green and blue boxes.




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CHAPTER 2


INDIAN AGRICULTURE FROM INDEPENDENCE TO 21ST
                 CENTURY

       Since     Independence, our country has almost quintupled its agricultural
production during last 50 years. The story started unfolding immediately after 1950 with
the commencement of the very first five-year plan. Top priority was accorded to
Irrigation and Agriculture. Heavy budgetary inflows raised the edifice of multi-purpose
river valley projects – also called temples of modern India. Once completed, heavy
discharge flowing through canals and its distributories carried life giving water to thirsty
fields of millions of farmers. Bhakhra Nangal dam and Nagarjuna Sagar reservoir became
household names across the country. Food production grew. So did people’s confidence.
General mood of the nation during 50’s bordered on idealistic euphoria.

1. INSECURE SIXTIES

        But like all good things, it did not last for very long. Beginning of 60’s saw war
clouds gathering at country’s northern horizon across Himalayas. China attacked India in
1962. Nation was shocked at its humiliation. Nehru suffered a political setback and
eventually died in 1964. Next two years saw a succession of worst droughts across the
country. Food riots broke out at several places. As if it was not enough, a full scale was
broke out in 1965 all along our western border with Pakistan. Prime Minister Shastriji
exhorted the nation with slogan – Jai Jawan – Jai Kisan. It summed up the national mood
in those days. War being over, he died in 1966 abroad under mysterious circumstances in
Tashkent.

2. GREEN REVOLUTION SPROUTS

        But behind all this police-strategic turmoil, something of far reaching
consequence was taking shape in the research crucible of ICAR laboratories. Hybrid
wheat technology was successfully demonstrated to farmers. Green revolution had indeed
begun. Extension functionaries rose to the occasion and spread the miracle of success far
and wide. Within half a decade, wheat production boomed from 11 mt to 26 mt. Spectre
of famine evaporated. During 1971, nation was once again involved militarily in
liberating Bangladesh. Our Jawans won the war – and our Kisans produced a bumper
harvest in the year 1971. After a decade of insecurity on border as well as food front, the
nation, perhaps for the first time felt completely secure -- on both the fronts. Shastriji’s
slogan of ‘Jai Jawan – Jai Kisan’ sounded just so apt.




                                                                                          7
        Green Revolution infact was unfolding of a process which gave rise to a series of
revolutions over next 25 years or so. More wheat meant more crop residue for milch
animals, which spurred milk revolution in 1971. Tonnage of milk and wheat especially
from 1971 onwards is so strongly correlated in graphs below. It must be mentioned here
that green revolution during 60’s and 70’s was confined to wheat producing pockets
especially Punjab, Haryana and Western U.P. Spurt in productivity of other major crop
like rice was yet to come. Rice productivity as we know depends heavily upon irrigation
water and it appears that till 1980, productivity gain for rice was entirely due to this
single factor.

3. GRAVITY SHIFTS – FROM CANAL TO LIFT.

        However, irrigation systems at this juncture were also undergoing a major shift.
Dam-based canal irrigation was the dominant mode till now. However, slowly but surely,
it was yielding way to groundwater-based lift irrigation system. Canals and distributories
were of course there. But more and more borewells and tubewells were drilled and
quickly energized to provide water to farmers’ field. Coverage of irrigated area by canals
& wells is tabulated as follows to highlight this shift.

        Given the same quantity of water, however, there is one fundamental difference
between flow & lift mode of irrigation. Canal water is controlled by Irrigation
Department and caters to hundreds and thousands of farmers under one sluice.
Managerial aspect regarding timely application of water to a crop like rice is very
important for its productivity. Control and management of water in canal system is at best
limited. But in lift irrigation, the entire control shifts from departmental hands to the
hands of farmer. He can control every aspect of irrigation with lift irrigation. Hence, it
would appear that increasing recourse to lift irrigation by rice farmers especially after
mid-seventies eventually reflected in increasing productivity after 1980. Sugarcane is yet
another water-driven crop. The trend is almost the same as is rice. Both took off in 1980
or so – and the substantial reason appears to be the shift of control and management of
water from the hands of irrigation department to that of farmers.

Fish and Poultry, Coconut, Oilseeds and Cotton – Take off during 80’s.

       The decade of 80’s saw considerable breakthrough in productivity and overall
production of each one of these commodities. Poultry took off in early eighties, coconut
in mid-eighties and oilseeds and cotton in late eighties – never to look back. Fish,
however, slackened during mid-eighties to take off yet again later. All these trends are
depicted graphically below.

        These commodities were fetching better returns to farmers – hence we see a shift
in land usage during the decade. Rice fields gave way to fish ponds. Poultry production
shot up due to increased productivity of maize crop. Tail ends of canal system especially
in coastal states like Kerala, Karnataka & A.P. saw coconut gardens multiplying in a big
way. And oilseed replaced coarse grains in Rajasthan, Madhya Pradesh and Andhra
Pradesh. As a result of this collective impact, the area under foodgrains peaked during


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mid-80’s and started declining thereafter. Around 10 MH have shifted from food to
commercial crops. Eventually, farmers’ behaviour appears to have become
entrepreneurial – for his good as well as for the good of the country.

Paradigm shift in Nineties – The decade of liberalisation

        Right from mid-fifties, we have adopted mixed economy model. While leaving
consumer sector to private initiative, the model enjoined state to capture the commanding
heights of economy to establish a socialistic pattern of society. Over decades, in practice,
the model came to be called as permit, quota and license raj. The inspector syndrome in
almost every walk of economic life became endemic. The collapse of erstwhile Soviet
Union in late eighties dealt the last mortal blow to command economy model. In the
backdrop of political instability and confronted with Balance of payment crises, the polity
took the bold decision to liberalize economy in 1991. It removed controls in Industrial
sector. Trade and Exports were freed from state controls. Finance and Banking saw some
fresh and bold initiatives. It must be mentioned here that Economic Liberalization of
1991 touched only the secondary and tertiary sector of the economy. The primary sector
consisting of agriculture however, remained untouched at that juncture.

        Fruits of liberalization were there for all to see. Economy boomed as never
before. Strikes and lockouts declined. Fresh investments brought newer products and
services across shop counters. A rising middle class came to assert its identity across the
whole country. It is true that liberalization did not benefit agricultural sector directly.
However, there is evidence to show regarding indirect benefits. Relative tilt in protection
to Industrial sector vis-à-vis Agricultural sector before 1991 got corrected now. Looked
from another angle, the ‘disprotection’ to Agricultural sector came down gradually.
During nineties, we saw considerable export of various commodities like Rice, Fruits and
flowers to countries in middle east, south east and neighbouring countries. Inspite of
highest export of agricultural commodities during nineties, no one hardly noticed deficit
anywhere. ‘Ship to mouth’ image of the country during 60’s was changing to that of
‘Food exporting country in 90’s‘ – A major paradigm shift indeed.

Mention must be made about remarkable growth in fruits and to a certain extent flowers
& vegetables production during nineties.

Fruits production from 91 to 97 has almost doubled. Vegetable production too has gone
up as evidenced by following trends

AGRICULTURAL PRODUCTION SCENARIO IN 21ST CENTURY

       Nation’s policy-makers in India have a dream today. And it is to double the
Agricultural production during next one decade. Growth profile of different commodities
is bound to be different. Moreover, regional and state specific variations are bound to add
yet another dimension to the expected basket size. Let us look at the growth trend of each
commodity during last 5 decades so as to project it upto the year 2010.



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Wheat

       Success story of green revolution started unfolding 32 years ago. Wheat yield
since then is moving in only one direction – upwards. India has overtaken several
countries during this long marathon. Europe was overtaken during mid-80’s. Now, USA
has been overpowered both in terms of production and yield. Only China is ahead of us
today. But during next decade, we are almost going to be at par or even excel them.
Around 26 MH. Area with 95% irrigation coverage would produce 103 to 108 MT of
wheat by 2010. Production and productivity gains would be in UP, Punjab, Haryana,
Madhya Pradesh, Rajasthan and Bihar and these six states would contribute more than
95% of India’s wheat production by 2010.

Rice

        Rice is essentially a water driven crop. Availability of adequate water quantities
as well as its proper control and management would determine its production behaviour
in future. Area under Rice is saturating around 43 MH. Operations and maintenance of
canal and distributory system must be in the hands of farmers through water user
associations. Tubewells irrigation with reasonable power tariff would also optimise the
water usage and minimise wastage of this precious natural resource. We are 2nd in the
world – next to China in Rice production and are likely to remain so by 2010 as well.
Around 43 MH with 60% irrigation coverage would produce around 108 to 114 MT. of
Rice by then. Production and productivity gains would be seen in West Bengal, Uttar
Pradesh, Andhra Pradesh, Tamil Nadu, Bihar, Punjab, Orissa, Madhya Pradesh, Assam
and Karnataka. These ten states would contribute more than 90% of India’s Rice
production by 2010.

Coarse Cereals

        It includes jowar, bajra, maize, ragi, barley and small millet. Total area under
coarse cereals peaked during mid sixties at 47 MH. It has been declining since then. The
trend is likely to continue in the future too except for maize. In different states, the shift is
clearly towards commercial crops like oilseeds, cotton, vegetables and fruits. Maize
appears to be the only exception due to its direct linkage with poultry industry. Total area
would be around 20 MH with 10% irrigation coverage producing around 35-40 MT. of
coarse cereals by 2010. Production would be concentrated in Maharashtra, Karnataka,
Uttar Pradesh, Rajasthan, Madhya Pradesh, Andhra Pradesh, Gujarat and Bihar. These
eight states would contribute more than 90% of India’s coarse cereals production by
2010.

Pulses

        With around 23 MH of area constantly committed for last 40 years or so, India is
the largest producer of pulses in the world. However, yield at around 600 Kg. per hectare
far lags behind global standards of 850 Kg. per hectare. Total area under pulses would
remain the same 23 MH with 12% irrigation coverage producing around 14 to 16 MT


                                                                                              10
pulses by 2010. Production would be concentrated in M.P., U.P., Maharashtra, Rajasthan,
A.P. and Karnataka. These six states would contribute more than 80% of India’s pulses’
production by 2010.

Food Grains Scenario in 2010 : -

        Country has recorded the highest foodgrains harvest crossing 200 MT mark this
year. Production level in 2010 is likely to be around 270 MT – a gross increase of 35%.
Historical trend along with future projection are tabulated as follows.


         Sl.       Commodity       1950-51 1965-66 1980-81   1995-96   2010-11
         No.         Unit

                 Wheat (M.T.)         6       10       36      62      103-107
                   Rice (M.T.)        21      31       54      77      108-114
                 Coarse Cereals       15      21       29      29       35-40
                    (M.T.)
                 Pulses (M.T.)        8       10       11      12       14-16




Animal Based Production: -

Milk, Fish, and Poultry are covered under this category.

Milk

       India can proudly claim to be the milk superpower of the world today. It has
edged past USA just this year by recording 76 MT production. Milk graph started
climbing in early 70’s after green revolution. More crop meant more residue – and
eventually more milk. Animal Breed upgradation and health care provided opportunities
to small and medium dairy farmers to make it a commercially viable preposition. There
are no big corporate names behind milk revolution. In fact, it is powered by tens of
millions of ordinary dairy entrepreneurs scattered in all the villages across the country.
Animal population would by and large remain constant – but production is likely to cross
120 MT. by 2010 – through the milky way.

Fish and Poultry

       The decade of 80’s saw considerable breakthrough in productivity and overall
production of both of these commodities. Fish production doubled and eggs production
almost trebled from 1980 to 1995. The same upwards trend is likely to continue in future.
We expect fish production to be around 8-9 MT and eggs output to exceed 60 billion nos.
by 2010. Six states namely West Bengal, Gujarat, Kerala, Tamil Nadu, Maharastra and



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Andhra Pradesh would account for more than 75% of fish production. Regarding eggs,
six states namely Andhra Pradesh, West Bengal, Maharastra, Punjab, and Kerala would
contribute more than 70% of its production.

Animal Based Production Scenario in 2010: -

Growth in this area has surged beyond expectations during last two decades. We are
going to witness a revolution during the decade ahead. Present output of milk, fish and
eggs would grow around 50%, 70% and 150% by 2010 as shown below.




Sl.No.     Commodity       1950-51 1996-66 1980-81 1995-96 2010-11
             Unit
          Milk (M.T.)        17      19      32      66      120-
                                                             121
             Fish             8      15      24      50     80-90
          (Lakh Ton)
             Eggs            1.8      4      10      27     60-70
         (Billion nos.)




Agro Industry Based Production: -

Sugarcane, Cotton and Oilseeds are covered under this category.

Sugar Cane

        Like Rice, sugarcane is also a water driven crop. It needs good land as well as
good quantities of irrigation water. Moreover, control and management aspect of water
ultimately determines the productivity level of this crop. Area under sugarcane
cultivation has steadily climbed from 2 MH. in 1956 to 4 MH. in 1996. More
importantly, irrigation coverage has gone up from 65% to 90% in the same period.
Around 5.5 MH. area with 95% irrigation coverage would be under cane by 2010. In fact,
the control and management of water by farmers directly and professional management
of sugar factories ensuring prompt payment to farmers would be key to productivity.
Successful models of water management involving water users associations and factory
management involving farmer cooperatives are very much functioning in various states
and are replicable. Right now, India is only next to Brazil in sugarcane production. But,
by 2010, we are going to produce around 350-380 MT. and occupy the top rank.
Production and productivity gains would be seen in U.P, Maharashtra, Tamil Nadu,



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Karnataka, Andhra Pradesh, Gujarat, Haryana and Punjab. These eight states are likely to
contribute more than 95% of sugarcane production in the country by 2010.

Cotton

        Area under cotton has gradually climbed from 5 MH. in 1950 to 9 MH in 1997.
Equally important fact is increased irrigation coverage from 8% then to 34% now. This
trend of more area with more irrigation coverage is likely to continue in future too.
Productivity breakthrough was witnessed during late eighties with costly seeds and
costlier pesticides. Sudden spurt in profitability made cotton look like white gold in early
90’s. Heavy investments were made – often by borrowing capital at a very heavy interest
rates. Spurious pesticide companies egged on farmers to keep the gamble going. But the
returns were not golden all the years. When crops failed, several farmers committed
suicides in states like A.P., Karnataka, Maharashtra, and Punjab. Phenomena was driven
by spurious inputs and unbridled human greed. But, of late, a better sense is dawning
upon all wherein pesticide inputs have moderated without affecting productivity. This
trend is healthy and wise both. We expect around 12 MH area with 40% irrigation
coverage to produce 18 to 20 M bales of cotton by 2010. Production and productivity
gains would be seem in Maharashtra, Punjab, Gujarat, Haryana, Andhra Pradesh,
Rajasthan and Karnataka. These seven states are likely to produce more than 95% of
cotton in the country by 2010.

Oilseeds

        Area under oilseeds has climbed from 10 MH. in 1950 to 27 MH. in 1997. More
important fact is that 25% of this area is under irrigation today which was almost nil in
1950. Thus, the trend of more area along with more coverage under irrigation is likely to
continue in the future too. Breakthrough in productivity came during 80’s under oilseeds
technology mission. There is still room for more improvements. Around 35 MH of area
with 35% of irrigation coverage is likely to produce 35-40 MT. of oilseeds by 2010.
Production and productivity gains would be witnessed in M.P., Rajasthan, Andhra
Pradesh, Gujarat, Maharashtra, Karnataka, Tamil Nadu and Uttar Pradesh. These eight
states are likely to contribute more than 90% of oilseeds production in the country by
2010.

Likely Scenario in 2010

Present output of Sugarcane, Cotton, and Oilseeds is likely to grow by 30%, 45% and
70% by 2010 as tabulated below




                                                                                         13
Sl.No.       Commodity       1950-51 1965-66 1980-81 1995-96 2010-11

                Unit
          Sugarcane (MT)       57     124     154        281   350-
                                                               380
         Cotton (M. Bales)      3       5      7         13    18-20
         Oilseeds (MT)          5       6      9         22    35-40




Horticultural Production

Vegetables and fruits are covered under this category.

Vegetables

         With 6 MH area producing 70 MT., India is the world’s second largest producer
of vegetables – only next to China. Production can be divided into two kinds. One is
grown in interior villages for internal consumption. The other is grown in suburbs mostly
by small and marginal farmers to cater to nearby urban and semi-urban markets. Area
under all important vegetables like potato, onions, tomato, okra, cabbage, cauliflower and
peas is expanding to cater to ever growing urban needs on one hand and fast changing
rural tastes on the other. This trend would continue in future too. We expect around 8 to 9
MH. area to produce 110-115 MT. of all variety of vegetables by 2010. Production and
productivity gain would be witnessed all across the country, but more particularly so in
states like Bihar, U.P., West Bengal, Tamil Nadu, Orissa, Maharashtra, Kerala, Punjab,
Delhi and Haryana.

Fruits

        Area under fruits and overall production has increased dramatically since early
90’s. Both have almost doubled in a short span from 1991 to 1997. And the trend
continues unabated. This is essentially a capital based high technology venture, which is
normally driven by the enterprising genius of medium and large farmers. In the wake of
liberalisation from 1991 onwards, several states like Karnataka, and Maharashtra have
relaxed the provision of Agricultural Land Ceiling Act to encourage horticultural
ventures.

        Thus, liberating land from the jaws of Agricultural Land Ceiling Act coupled with
technology and capital intervention has transformed the farmer from a mere manager of
inputs to a powerful entrepreneur of resources during liberalisation decade of 90’s. As on
today, 5 MH of area is producing around 50 M.T of fruits of all kinds. By 2010, we
expect around 10 MH of area to be producing around 120 MT of fruits. Leading states
would be Andhra Pradesh, Maharastra, Tamil Nadu, Karnataka, Bihar, Uttar Pradesh and
Gujarat. These seven states would account for more than 70% of fruits output by them.


                                                                                        14
Horticultural Scenario in 2010: -

The decade of 90’s has witnessed an explosive growth in this sector. By 2010, we are
likely to witness yet again almost 100% growth over and above present production levels.



Sl.No.       Commodity       1950-51 1965-   1980-81 1995-   2010-
                                     66              96      11
                 Unit
         Vegetables (M.T.)      -       -       -    70      110-
                                                             115
         Fruits (M.T.)          -       -       -    50      120




                                                                                     15
CHAPTER 3



           IMPACT OF GLOBALIZATION ON INDIAN
                      AGRICULTURE


       Punjab used to be the most prosperous agricultural region in India. Today every
farmer is in debt and despair. Vast stretches of land have become water-logged desert.
And as an old farmer pointed out, even the trees have stopped bearing fruit because heavy
use of pesticides has killed the pollinators - the bees and butterflies.

       Farmers in Andhra Pradesh who traditionally grew pulses and millets and paddy
have been lured by seed companies to buy hybrid cotton seeds referred to by the seed
merchants as "white gold", which were supposed to make them millionaires. Instead they
became paupers. Their native seeds have been displaced with new hybrids which cannot
be saved and need to be purchased every year at high cost. Hybrids are also very
vulnerable to pest attacks. Spending on pesticides in Warangal has shot up 2000 per cent
from $2.5 million in the 1980s to $50 million in 1997. Now farmers are consuming the
same pesticides as a way of killing themselves so that they can escape permanently from
unpayable debt.

        The corporations are now trying to introduce genetically engineered seed which
will further increase costs and ecological risks. That is why farmers of the Andhra
Pradesh Farmers' Union had uprooted Monsanto's genetically engineered Bollgard cotton
in Warangal. The drought is not a "natural disaster". It is "man-made". It is the result of
mining of scarce ground water in arid regions to grow thirsty cash crops for exports
instead of water prudent food crops for local needs.

        It is experiences such as these which tell us that we are so wrong to be smug
about the new global economy. It is time to stop and think about the impact of
globalisation on the lives of ordinary people. This is vital to achieve sustainability.

       Seattle and the World Trade Organisation protests last year have forced everyone
to think again. People have referred to different aspects of sustainable development
taking globalisation for granted. For what we are doing in the name of globalisation to
the poor is brutal and unforgivable. This is specially evident in India as we witness the
unfolding disasters of globalisation, especially in food and agriculture.

      Who feeds the world? It is women and small farmers working with biodiversity
who are the primary food providers in the Third World, and contrary to the dominant
assumption, their biodiversity based small farms are more productive than industrial
monocultures.


                                                                                        16
        The rich diversity and sustainable systems of food production are being destroyed
in the name of increasing food production. However, with the destruction of diversity,
rich sources of nutrition disappear. When measured in terms of nutrition per acre, and
from the perspective biodiversity, the so called "high yields" of industrial agriculture or
industrial fisheries do not imply more production of food and nutrition.

        Yields usually refers to production per unit area of a single crop. Output refers to
the total production of diverse crops and products. Planting only one crop in the entire
field as a monoculture will of course increase its individual yield. Planting multiple crops
in a mixture will have low yields of individual crops, but will have high total output of
food. Yields have been defined in such a way as to make the food production on small
farms by small farmers disappear. This hides the production by millions of women
farmers in the Third World - farmers like those in Himalaya who fought against logging
in the Chipko movement, who in their terraced fields even today grow Jhangora
(barnyard millet), Marsha (Amaranth), Tur (Pigeon Pea), Urad (Black gram), Gahat
(horse gram), Soya Bean (Glycine Max), Bhat (Glycine Soya) - endless diversity in their
fields. From the biodiversity perspective, biodiversity based productivity is higher than
monoculture productivity. The Mayan peasants in the Chiapas are characterised as
unproductive because they produce only 2 tons of corn per acre. However, the overall
food output is 20 tons per acre when the diversity of their beans and squashes, their
vegetables their fruit trees are taken into account.

        In Java, small farmers cultivate 607 species in their home gardens. In sub-Saharan
Africa, women cultivate 120 different plants. A single home garden in Thailand has 230
species, and African home gardens have more than 60 species of trees. Rural families in
the Congo eat leaves from more than 50 species of their farm trees. A study in eastern
Nigeria found that home gardens occupying only 2 per cent of a household's farmland
accounted for half of the farm's total output. In Indonesia 20 per cent of household
income and 40 per cent of domestic food supplies come from the home gardens managed
by women. Research done by FAO has shown that small biodiverse farms can produce
thousands of times more food than large, industrial monocultures. And diversity in
addition to giving more food is the best strategy for preventing drought and
desertification.

        Take the case of the much flouted "golden rice" or genetically engineered Vitamin
A rice as a cure for blindness. It is assumed that without genetic engineering we cannot
remove Vitamin A deficiency. However, nature gives us abundant and diverse sources of
vitamin A. If rice was not polished, rice itself would provide Vitamin A. If herbicides
were not sprayed on our wheat fields, we would have bathua, amaranth, mustard leaves
as delicious and nutritious greens that provide Vitamin A.

       Women in Bengal use more than 150 plants as greens - Hinche sak (Enhydra
fluctuans), Palang sak (Spinacea oleracea), Tak palang (Rumex vesicarious), Lal Sak
(Amaranthus gangeticus) - to name a few.




                                                                                         17
        But the myth of creation presents biotechnologists as the creators of Vitamin A,
negating nature's diverse gifts and women's knowledge of how to use this diversity to
feed their children and families.

      The most efficient means of rendering the destruction of nature, local economies
and small autonomous producers is by rendering their production invisible.

         Women who produce for their families and communities are treated as `non-
productive' and `economically' inactive. The devaluation of women's work, and of work
done in sustainable economies, is the natural outcome of a system constructed by
capitalist patriarchy. This is how globalisation destroys local economies and destruction
itself is counted as growth.

        And women themselves are devalued. Because many women in the rural and
indigenous communities work co-operatively with nature's processes, their work is often
contradictory to the dominant market driven `development' and trade policies. And
because work that satisfies needs and ensures sustenance is devalued in general, there is
less nurturing of life and life support systems.

         The devaluation and invisibility of sustainable, regenerative production is most
glaring in the area of food. While patriarchal division of labour has assigned women the
role of feeding their families and communities, patriarchal economics and patriarchal
views of science and technology magically make women's work in providing food
disappear. "Feeding the World" becomes disassociated from the women who actually do
it and is projected as dependent on global agribusiness and biotechnology corporations.

        However, industrialisation and genetic engineering of food and globalisation of
trade in agriculture are recipes for creating hunger, not for feeding the poor.




                                                                                      18
  THE DECLINING SHARE OF AGRICULTURE AND FOOD IN MERCHANDISE
         EXPORTS FOR WORLD AND DEVELOPING COUNTRIES



  45
  40
  35
  30
  25                                                              global
  20                                                              developing
  15
  10
   5
   0
       1973 75 77 79 81 83 85 87 89 91 93 95   97 99 01 03


  X axis:- years
  Y axis:- agricultural share of exports, percent



Source: COMTRADE data in the WITS database (www.wits.worldbank.org)



        Everywhere, food production is becoming a negative economy, with farmers
spending more to buy costly inputs for industrial production than the price they receive
for their produce. The consequence is rising debts and epidemics of suicides in both poor
and rich countries.

        Economic globalisation is leading to a concentration of the seed industry,
increased use of pesticides, and, finally, increased debt. Capital-intensive, corporate
controlled agriculture is being spread into regions where peasants are poor but, until now,
have been self-sufficient in food. In the regions where industrial agriculture has been
introduced through globalisation, higher costs are making it virtually impossible for small
farmers to survive.

        The globalisation of non-sustainable industrial agriculture is literally evaporating
the incomes of Third World farmers through a combination of devaluation of currencies,
increase in costs of production and a collapse in commodity prices.




                                                                                         19
        Farmers everywhere are being paid a fraction of what they received for the same
commodity a decade ago. The Canadian National Farmers Union put it like this in a
report to the senate this year:

        "While the farmers growing cereal grains - wheat, oats, corn - earn negative
returns and are pushed close to bankruptcy, the companies that make breakfast cereals
reap huge profits. In 1998, cereal companies Kellogg's, Quaker Oats, and General Mills
enjoyed return on equity rates of 56%, 165% and 222% respectively. While a bushel of
corn sold for less than $4, a bushel of corn flakes sold for $133 ... Maybe farmers are
making too little because others are taking too much."

        And a World Bank report has admitted that "behind the polarisation of domestic
consumer prices and world prices is the presence of large trading companies in
international commodity markets."

        While farmers earn less, consumers pay more. In India, food prices have doubled
between 1999 and 2000. The consumption of food grains in rural areas has dropped by
12%. Increased economic growth through global commerce is based on pseudo surpluses.
More food is being traded while the poor are consuming less. When growth increases
poverty, when real production becomes a negative economy, and speculators are defined
as "wealth creators", something has gone wrong with the concepts and categories of
wealth and wealth creation. Pushing the real production by nature and people into a
negative economy implies that production of real goods and services is declining,
creating deeper poverty for the millions who are not part of the dot.com route to instant
wealth creation.

       Women - as said earlier - are the primary food producers and food processors in
the world. However, their work in production and processing is now becoming invisible.

       It is not that we Indians eat our food raw. Global consultants fail to see the 99 per
cent food processing done by women at household level, or by the small cottage industry
because it is not controlled by global agribusiness. 99% of India's agroprocessing has
been intentionally kept at the small level. Now , under the pressure of globalisation,
things are changing. Pseudo hygiene laws are being uses to shut down local economies
and small scale processing.

       In August 1998, small scale local processing of edible oil was banned in India
through a "packaging order" which made sale of open oil illegal and required all oil to be
packaged in plastic or aluminium. This shut down tiny "ghanis" or cold pressed mills. It
destroyed the market for our diverse oilseeds - mustard, linseed, sesame, groundnut,
coconut.

        And the take-over of the edible oil industry has affected 10 million livelihoods.
The take over of flour or "atta" by packaged branded flour will cost 100 million
livelihoods. And these millions are being pushed into new poverty.




                                                                                         20
       The forced use of packaging will increase the environmental burden of millions of
tonnes of waste.

        The globalisation of the food system is destroying the diversity of local food
cultures and local food economies. A global monoculture is being forced on people by
defining everything that is fresh, local and handmade as a health hazard. Human hands
are being defined as the worst contaminants, and work for human hands is being
outlawed, to be replaced by machines and chemicals bought from global corporations.
These are not recipes for feeding the world, but stealing livelihoods from the poor to
create markets for the powerful.

        People are being perceived as parasites, to be exterminated for the "health" of the
global economy.

       In the process new health and ecological hazards are being forced on Third World
people through dumping of genetically engineered foods and other hazardous products.

        Recently, because of a W.T.O. ruling, India has been forced to remove restrictions
on all imports.

        Among the unrestricted imports are carcasses and animal waste parts that create a
threat to our culture and introduce public health hazards such as the Mad Cow Disease.

        The US Centre for Disease Prevention in Atlanta has calculated that nearly 81
million cases of food borne illnesses occur in the US every year. Deaths from food
poisoning have gone up more up more than four times due to deregulation. Most of these
infections are caused by factory farmed meat. The US slaughters 93 million pigs, thirty
seven million cattle, two million calves, six million horses, goats and sheep and eight
billion chickens and turkeys each year.

       Now the giant meat industry of US wants to dump contaminated meat produced
through violent and cruel methods on Indian consumers.

       The waste of the rich is being dumped on the poor. The wealth of the poor is
being violently appropriated through new and clever means like patents on biodiversity
and indigenous knowledge.

        Patents and intellectual property rights are supposed to be granted for novel
inventions. But patents are being claimed for rice varieties such as the basmati is famous,
or pesticides derived from the Neem which our mothers and grandmothers have been
using.

       Rice Tec, a U.S. based company has been granted Patent no. 5,663,484 for
basmati rice lines and grains.




                                                                                        21
        Basmati, neem, pepper, bitter gourd, turmeric.......every aspect of the innovation
embodied in our indigenous food and medicinal systems is now being pirated and
patented. The knowledge of the poor is being converted into the property of global
corporations, creating a situation where the poor will have to pay for the seeds and
medicines they have evolved and have used to meet their own needs for nutrition and
health care.

        Such false claims to creation are now the global norm, with the Trade Related
Intellectual Property Rights Agreement of World Trade Organisation forcing countries to
introduce regimes that allow patenting of life forms and indigenous knowledge.

        Instead of recognising that commercial interests build on nature and on the
contribution of other cultures, global law has enshrined the patriarchal myth of creation to
create new property rights to life forms just as colonialism used the myth of discovery as
the basis of the take over of the land of others as colonies.

        Humans do not create life when they manipulate it. Rice Tec's claim that it has
made "an instant invention of a novel rice line", or Roslin Institute's claim that Ian
Wilmut "created" Dolly denies the creativity of nature, the self-organisational capacity of
life forms, and the prior innovations of Third World communities.

       Patents and intellectual property rights are supposed to prevent piracy. Instead
they are becoming the instruments of pirating the common traditional knowledge from
the poor of the Third World and making it the exclusive "property" of western scientists
and corporations.

       When patents are granted for seeds and plants, as in the case of basmati, theft is
defined as creation, and saving and sharing seed is defined as theft of intellectual
property. Corporations which have broad patents on crops such as cotton, soya bean,
mustard are suing farmers for seed saving and hiring detective agencies to find out if
farmers have saved seed or shared it with neighbours.

        The recent announcement that Monsanto is giving away the rice genome for free
is misleading, because Monsanto has never made a commitment that it will never patent
rice varieties or any other crop varieties.

       Sharing and exchange, the basis of our humanity and of our ecological survival
has been redefined as a crime. This makes us all poor.

        Nature has given us abundance, women's indigenous knowledge of biodiversity,
agriculture and nutrition has built on that abundance to create more from less, to create
growth through sharing.

       The poor are pushed into deeper poverty by making them pay for what was theirs.
Even the rich are poorer because their profits are based on the theft and on the use of
coercion and violence. This is not wealth creation but plunder.


                                                                                         22
       Sustainability requires the protection of all species and all people and the
recognition that diverse species and diverse people play an essential role in maintaining
ecological processes. Pollinators are critical to fertilisation and generation of plants.
Biodiversity in fields provides vegetables, fodder, medicine and protection to the soil
from water and wind erosion.

        As humans travel further down the road to non-sustainability, they become
intolerant of other species and blind to their vital role in our survival.

        A worldview that defines pollination as "theft by bees" and claims biodiversity
"steals" sunshine is a worldview which itself aims at stealing nature's harvest by
replacing open, pollinated varieties with hybrids and sterile seeds, and destroying
biodiverse flora with herbicides such as Roundup. The threat posed to the Monarch
butterfly by genetically engineered bt crops is just one example of the ecological poverty
created by the new biotechnologies. As butterflies and bees disappear, production is
undermined. As biodiversity disappears, with it go sources of nutrition and food.

       When giant corporations view small peasants and bees as thieves, and through
trade rules and new technologies seek the right to exterminate them, humanity has
reached a dangerous threshold. The imperative to stamp out the smallest insect, the
smallest plant, the smallest peasant comes from a deep fear - the fear of everything that is
alive and free. And this deep insecurity and fear is unleashing the violence against all
people and all species.

       The global free trade economy has become a threat to sustainability and the very
survival of the poor and other species is at stake not just as a side effect or as an
exception but in a systemic way through a restructuring of our worldview at the most
fundamental level. Sustainability, sharing and survival is being economically outlawed in
the name of market competitiveness and market efficiency.

       The world can be fed only by feeding all beings that make the world.

        In giving food to other beings and species we maintain conditions for our own
food security. In feeding earthworms we feed ourselves. In feeding cows, we feed the
soil, and in providing food for the soil, we provide food for humans. This worldview of
abundance is based on sharing and on a deep awareness of humans as members of the
earth family. This awareness that in impoverishing other beings, we impoverish ourselves
and in nourishing other beings, we nourish ourselves is the real basis of sustainability.
The sustainability challenge for the new millennium is whether global economic man can
move out of the worldview based on fear and scarcity, monocultures and monopolies,
appropriation and dispossession and shift to a view based on abundance and sharing,
diversity and decentralisation, and respect and dignity for all beings.

        Sustainability demands that we move out of the economic trap that is leaving no
space for other species and other people. Economic Globalisation has become a war
against nature and the poor. But the rules of globalisation are not god - given. They can


                                                                                         23
be changed. They must be changed. We must bring this war to an end. Since Seattle, a
frequently used phrase has been the need for a rule based system. Globalisation is the rule
of commerce and it has elevated Wall Street to be the only source of value. As a result
things that should have high worth - nature, culture, the future are being devalued and
destroyed. The rules of globalisation are undermining the rules of justice and
sustainability, of compassion and sharing. We have to move from market totalitarianism
to an earth democracy.

       We can survive as a species only if we live by the rules of the biosphere. The
biosphere has enough for everyone's needs if the global economy respects the limits set
by sustainability and justice.

As Gandhiji had reminded us: "The earth has enough for everyone's needs,
but not for some people's greed".



   Import and Export of Agriculture Commodities vis-a-vis Total National Imports
                    and Exports during 1990-91 to 2001-02

                                                                                             Value (Rupees in crores)

                                Total        %age Agriculture                      Total        %age Agriculture
             Agriculture                                           Agriculture
   Year                        National      Imports to Total                     National       Exports to Total
               Imports                                              Exports
                               Imports       National Imports                     Exports        National Exports

1990-91            1205.86       43170.82                   2.79        6012.76     32527.28           18.49


1991-92            1478.27       47850.84                   3.09        7838.13     44041.81           17.80


1992-93            2876.25       63374.52                   4.54        9040.30     53688.26           16.84


1993-94            2327.33       73101.01                   3.18      12586.55      69748.85           18.05


1994-95            5937.21       89970.70                   6.60      13222.76      82673.40           15.99


1995-96            5890.10      122678.14                   4.80      20397.74     106353.35           19.18


1996-97            6612.60      138919.88                   4.76      24161.29     118817.32           20.33


1997-98            8784.19      154176.29                   5.70      24843.45     130100.64           19.10


1998-99           14566.48      178331.69                   8.17      25510.64     139751.77           18.25


1999-2000         16066.73      215528.53                   7.45      25313.66     159095.20           15.91


2000-01           12030.36      226773.47                   5.31      28909.30     202509.76           14.28


2001-2*            9311.55      141989.68                   6.56      16254.29     115762.05           14.04

* For the period April 2001 - October 2001




                                                                                                                    24
CHAPTER4


           NEGATIVE EFFECTS ON INDIA & WORLD



       G   lobalisation of agriculture has its ill effects on everyone. Let us consider some
of them. More than 100 cotton farmers have committed suicide in Andhra Pradesh (A.P.).
Farmers' suicides are however not only restricted to Andhra Pradesh. Across the country
farmers are taking the desperate step of ending their life because of the new pressures
building up on them as a result of globalisation and spread of capital intensive
agriculture. The promise of huge profits linked with clever strategies evolved by the
seeds and chemical industries include the lure of huge profits and easy credit for purchase
of costly inputs. However the reality of globalisation is different from the corporate
propaganda and from the promises of trade liberalisation and agriculture offered by the
World Bank, the WTO and experts and economists sitting in our various ministries.


The epidemic of farmers' suicide is the real barometer of the stress under which Indian
Agriculture and Indian farmers have been put by globalization of Agriculture.
Indebtedness and crop failure are the main reasons that the farmers are committed suicide
to the length and breadth of rural India. Indebtedness and crop failure are also inevitable
outcomes of the corporate model of industrial agriculture being introduced in India
through globalisation. Agriculture driven by MNC's is capital intensive and creates heavy
debt for purchase of costly internal inputs such as seeds and agri-chemicals. It is also
ecologically vulnerable since it is based on monoculture of introduced varieties and on
non-sustainable        practices       of       chemically       intensive         farming.

The Andhra Pradesh tragedy highlights these high social and ecological costs of the
globalisation of non-sustainable agriculture which are not restricted to the cotton growing
areas of this state but have been experienced in all commercially grown and chemically
farmed crop in all regions. While the benefits of globalisation go to the seeds and
chemical corporation through expanding markets, the cost and risks are exclusively born
by         the          small        farmers        and           landless         peasants.

The two most significant ways through which the risks of crop failures have been
increased by globalisation are the introduction of ecological vulnerable hybrid seeds and
the increased dependence on agri-chemical input such as pesticide, which are associated
with                 the                  use                  of                 hybrids.

The privatisation of the seed sector under trade liberalisation has led to a shift in cropping
patterns from polyculture to monoculture and a shift from open pollinated varieties to
hybrids. In the district of Warangal in Andhra Pradesh, this shift has been very rapid,


                                                                                           25
converting Warangal from a mixed farming system based on millets, pulses and oilseeds
to          a           monoculture            of          hybrid             cotton.

The focus of the cotton failure has been on the excessive use of pesticides or of spurious
pesticides. However, pesticide use intimately linked to hybrid seeds. Pesticides become
necessary when crop varieties and cropping patterns are vulnerable to pest attack. Hybrid
seeds offer a promise of higher yields, but they also have higher risks of crop failure
since they are more prone to pest and disease attack as illustrated by the Andhra Pradesh
experience. Monocultures further increase the vulnerability to pest attacks since the same
crop of the same variety planted over large areas year after year encourages pest build-
ups.

The problem of pests is therefore a problem created by erosion of diversity in crops and
cropping patterns. The most sustainable solution for pest control is rejuvenating
biodiversity in agriculture. Non-sustainable pest control strategies offer chemical or
genetic fixes while reducing diversity, which is the biggest insurance against pest
damage.

As the cotton disaster shows the globalisation of agriculture is threatening both the
environment and the survival of farmers. Biodiversity is being destroyed, the use of agri-
chemicals is increasing, ecological vulnerability is increasing and farmer debts are sky
rocketing        leading        to       suicides         in        extreme        cases.




                                                                                       26
                     Globalisation and Agriculture: Every one suffers



   The negative effect of globalisation on Agriculture and food production is not limited
to the countries of the South but extends to the Northern hemisphere as well. This fact is
emerging as discussions get underway at the Bamako, Mali, Polycentric world social
forum.


   At a panel discussion on Wednesday, speakers from diverse background agreed that
globalisation has left peasant farmers generally poorer and the multi-national promoters
of agro-business much more richer. They said there is the need to have an international
solidarity across the regions in order to create alternative models that would protect the
farmers and guarantee food security. According to them, it is madness to produce for
profit and not the needs of the people.




   Some explain further the issue of globalisation and agriculture in their respective
regions:


Canada


   What happened was that farmers in the North were induced in the name of
development to make huge investments on machinery, chemical fertilizers and
pesticides to produce mono-crops. And to change from producing a variety of foods to
sell locally and eat in the home. They were induced to produce mono-crops, so they
produce all wheat; all corn and you no longer have the mixture. And because they have
large fields, they need large equipment. They went into debt to do this. And now what
the farmers are receiving in the name of subsidies is not covering their costs. So they are
very vulnerable to losing their farms. In fact the subsidies going to farmers in the North
mainly go to the huge operators in the agro-business and the whole process - modern
agriculture, mono cropping - is the process whereby the farmers are losing their farms.
They are being consolidated into large holdings owned by the big corporations and
sometimes the farmers remain to manage it and sometimes not. And the children leave
because they can’t make a living. So we have a crisis and that is why the National
Farmers Union of Canada is part of an international peasant farmers’ network to work to
change things.




                                                                                         27
   If we have the capacity that have been discussed here in Africa and the other regions
to produce what we need, our trade relationship should be simpler so that we in Canada
can have bananas, oranges, that are not needed here.


Philippines


   Because of globalisation products come in very cheaply into our countries and our
farmers who are basically subsistence farmers that produce very little for the market
cannot compete with the very big corporations. Because of these many farmers in
Philippines are losing their coffee farms because imported coffee is cheaper. Also in
Indonesia rice farmers are losing because the Indonesian government is importing rice.
The farmers are losing out because their prices are high, because the government does
not support them and because the government embraces globalisation. So they are
punched cold. After that the corporations come in and take over the land. The farmers
are forced into contract growing arrangement or into leasing out their land to the trans-
national corporations; and what is happening in the Philippines, in Thailand and
Indonesia is that foreign corporations are directly controlling the land and the farmers
are ending up as farm workers whose way of life is destroyed.


Kenya


   Globalisation has affected maize farmers in Kenya. They are facing high imports and
actually the maize from other countries is cheaper and has actually affected maize
production. Right away we have famine in two regions of Kenya despite the fact that
there is enough that can be produced in the rift valley. But due to globalisation, the
farmers lack credit facilities. We need to form farmers’ federation at regional levels that
actually may articulate these issues – the issue of free trade, the issue of WTO - and
review all the negotiations that have been carried on recently in WTO at Hong Kong.




                                                                                         28
CHAPTER 5



      Globalisation of agriculture and rising food insecurity



       Despite claims to the contrary, trade liberalisation and globalisation are resulting
in declining food production and posing a threat to food security, particularly in the
countries of the South. The same processes are also wiping out small efficient family
farms and replacing them with inefficient and unhealthy industrialised food systems
under corporate control.



        Trade liberalisation and globalisation of agriculture are supposed to increase
production of food, increase efficiency of food production, improve the economic
situation of farmers and improve patterns of food consumption. However, the evidence
provided by the participants of an international conference on 'Globalisation, Food
Security and Sustainable Agriculture' held in Delhi on 30 and 31 July pointed to the
opposite direction.

       In country after country, trade liberalisation is leading to declining food
production, declining productivity, declining conditions for farmers in the North and in
the South, and declining food security for consumers of the North and the South.

        In her welcoming address which was on the theme 'Globalisation and Food', Dr
Vandana Shiva said, 'The US and other industrialised countries of the North are trying to
change the meaning of food security from being a fundamental human right to
participation in global markets, which excludes the large number of poor without
adequate purchasing power.'They are also trying to redefine food security to exclude food
safety issues. Food security has always meant adequate, safe, nutritious and culturally
safe food. While this meaning was inscribed in the earlier draft plans of action, it has
been removed in the current draft of the World Food Summit,' she said.

        Dr Shiva said the structure of governance that was being shaped 'is governments
without rights, but with exclusive responsibilities for food security, and international
organisations like the World Bank, International Monetary Fund (IMF) and World Trade
Organisation (WTO) with absolute rights and no responsibilities. Since these
organisations are controlled by the G7 group of countries, this structure has built into the
North-South asymmetry of Southern governments with the largest number of poor and
hungry people carrying responsibilities without rights for food security, and Northern
governments pushing rights of their corporations without responsibilities for food
security.'


                                                                                         29
Referring to the situation in India, she said, 'Land reforms (which put a ceiling on land
holdings) are being undone in state after state to allow corporate superfarms for..... luxury
production for international markets. Massive displacement of farmers is taking place,
which can rapidly turn into a socially and politically explosive situation.'

Globalisation and Food Insecurity in the South

       A paper on 'Globalisation and Agriculture in India' by Dr Vandana Shiva, Ms
Radha Holla and Ms Kusum Menon showed through field studies how food production
was being undermined by trade liberalisation policies. Food-growing land is being
diverted to non-food crops such as flowers or luxury commodities such as shrimp.
Farmers are being displaced on a massive scale and natural resources are being over
exploited. Corporatisation of agriculture which is being pushed under trade liberalisation
as a successor of the Green Revolution is leading to new poverty for small farmers as
unequal and unfair contracts lock them into a new forms of bondage.

        Farmers of Punjab who were contracted by Pepsico to grow tomatoes received
only Rs.0.75 per kg while the market price was Rs.2.00. First the farmers rejected
Pepsico and now Pepsico has abandoned Punjab and sold its tomato processing plant to a
subsidiary of Levers.Trade liberalisation is supposed to bring benefits to national
agricultural economies. However, the beneficiaries are neither farmers nor governments
of the Third World. A recent editorial of a business daily in India had the heading
'Freeing Wheat'. It is significant to ask what wheat is being freed from and whom it is
being freed for.

       This freedom to trade has mainly benefited the giant grain traders Cargill and
Continental. They are buying wheat at $60 to $100 per tonne from India and selling it at
$230-240 per tonne on the international market, making a neat $130-170 profit per tonne,
while India is losing $100 million in exports because of the concentration of power in the
hands of five merchants of grain.

        The US grain giants are turning to the Indian market because the large- scale
wheat farming in the US, has been wiped out in nearly 50% of the farm land by a
combination of drought and the Karnal Bunt - a fungal disease. As a result of the US crop
failure, India's wheat exports have increased dramatically. However, in the globalised
world, it is ultimately not countries such as the US and India, which are exporting and
importing grain, but corporations like Continental and Cargill. Treating countries as
economic units in a free-trade world is misplaced since they have been replaced by
corporations as the basic economic units. The gains and losses from globalised trade in
food are more appropriately worked out at the level of people and corporations rather
than at the level of countries. Globalised food trade is of course an opportunity in the
trade perspective, but will have serious impacts on the entitlements of already vulnerable
groups.

      Dr Abhijit Sen of Jawaharlal Nehru University showed how under liberalisation
domestic production and consumption of food were declining. Removal of food subsidies



                                                                                          30
had led to decrease in the amount of food purchase from the public distribution system.
The off take of rice had declined from 10.1 metric tonnes in 1991-92 to 6.9 metric tonnes
in 1995-96. The offtake for wheat has gone down from 8.8 metric tonnes to 3.8 metric
tonnes. While agricultural exports as a percentage of total exports had gone down, cereals
in exports had gone up from 1.4% to 3.4%, indicating that exports were increasingly
based on the creation of domestic food insecurity.

        Dr John Kurien of the Centre for Development Studies, Trivandrum elaborated
how industrial aquaculture and fisheries were promoted with bilateral and multilateral aid
for 'short-term "parking" of international capital in a specific location for a short duration
of time during its race for profits'. This 'rape and run' industry is also based on the
enclosure of the common resources of coastal communities. While the production feeds
into the international luxury demand for humans and pets of affluent countries, they pose
a threat to existing patterns of food production and a direct threat to national and local
food security

       Mr Victor Suares Carrera, Executive Director of the National Association of
Peasant Maize Producers, Mexico

         said after 14 years of liberalisation under structural adjustment and two years of
NAFTA in Mexico, 9,000 years of food security were being wiped out. Mexico, which
like India was the centre of the origin of agriculture, from where corn expanded to the
USA and the rest of the world, was now in danger in the wake of globalisation. Today, he
said, his country was ruled by the law of comparative advantage. However, with NAFTA,
the illusion of comparative advantage had evaporated. There was neither food security
nor comparative advantage for Mexico under freetrade. Three years ago, Mexico
imported half a million tonnes of rice. It now imports 7 million tonnes of rice.

        While Mexico's corn economy is being destroyed, it was importing yellow corn
from the US, which is used to feed animals in that country. Mexicans eat white corn
which is culturally more appropriate to their food system. The government, he said, had
abandoned its responsibility and there was no policy of food security and no employment
policy. Everything had been left to market forces. The government had amended the
Mexican land law and discarded the principles of the 1910 revolution. This had been
done on the demand of the agri-business.

        Referring to the Zapatista rebellion in Chiapas in Mexico on 1 January 1994, the
first day of NAFTA, he said, 'When we entered the club of the rich people, while the
political elite were celebrating the event, thousands of indigenous peasants went up in
arms.' They cried against the policy of impoverishment of the farmers and the denial of
their rights. People have demanded a change in the National Agricultural Policy and
support for the domestic producers. They have argued that it is much easier to support
domestic production than to buy from the US, when the country did not have foreign
currency.




                                                                                           31
       In 1992, Mexico imported 20% of its food. In 1996 it was importing 43%. Eating
'more cheaply on imports is not eating at all for the poor in Mexico'. One out of every two
peasants is not getting enough to eat. In the 18 months since NAFTA, the intake of food
has been destroyed by 29%. 2.2 million Mexicans have lost jobs and 40 million are in
extreme poverty.

Globalisation and Food Insecurity in the North

        Referring to the massive growth of food insecurity in Britain, Dr Tim Lang,
Professor of Food Policy at Thames Valley University, said there were mountains of food
in his country and miles of supermarket shelves but many Britishers could not afford an
adequate diet due to rising unemployment and declining social welfare. One-fifth of the
population was classified as not being able to afford a nutritious diet. Poverty, he said,
was a reality, even in rich countries.

        Five companies controlled 70% of the food market in the UK. There was growing
food insecurity even in rich countries as the food system became more centralised. The
distance for shopping for food had increased from 2 miles to 5 miles, increasing 'food
miles' embodied in food and creating a motorway food system. Long-distance transport
and intensification of agriculture were linked. Tim Lang said that Britain had shifted from
a policy for small farmers to a policy against farmers. The British model of farming,
where farmers were systematically thrown out of agriculture, was being spread to other
parts of the world.

        The Mad Cow Disease, he said, was the result of the intensification of agriculture.
The disease had affected dairy cows and beef cows, had totally undermined the UK beef
trade and had led to the extermination of 165,000 cows because of the risk of the transfer
of the infection to humans. The farmers, he said, were now questioning intensification of
agriculture, adding that the big lesson for the public was that you cannot squeeze nature
to the maximum.

        Philip Lymbery from the Compassion in World Farming, UK said the
repercussions of the Mad Cow Disease were going to be immense. It proved the pitfalls
of factory farming. Since World War II, half a million farmers had disappeared following
the corporatisation of agriculture in the UK. Displaying slides he showed how cattle were
reared in inhuman conditions. In the UK alone, he said, 600 million broiler chickens were
raised annually. They were kept in cages, too small for their well-being, with the result
that 75% of the chickens were dying of heart failure. In intensive dairying, male calves
were useless and were kept in inhuman conditions in cages till they were six months old
and ready for slaughter. They are then exported. One of the biggest popular movements
in the UK had emerged as a result of this violence to veal calves.

        Mika Iba, Coordinator, Network for Safe and Secure Food and Environment,
Japan said the story of the success of Japan on the economic front was also the story of
failure on the food front, undermining the country's food security. The experience of the
past 50 years was the undoing and selling out of the Japanese farmer for the country's



                                                                                        32
economic growth. Today 90% of the farmers were part-time farmers, who lived on other
incomes.

       Ms Iba said 30% of land could be cultivated and there was competition for this
land between housing and agriculture. Only 22% of the food was produced in the
country. The remaining 78% came from abroad. Only in rice was Japan self-sufficient,
while other grains were imported.

        Accepting more food imports, she said, also meant accepting more additives in
the form of chemicals and pesticides. In 1950, Japanese food imports had 78 food
additives. In 1995, this had risen to 345. In 1996, there were 1,051 food additives in food
imported by Japan.

        In Russia, as reported by Vera Matusevich, an Agricultural Economist, World
Bank, production and consumption of food had dramatically declined as a result of trade
liberalisation and a transition to a market economy. One-third of Russians were now
below the poverty line. Fifty per cent of food was being imported. Production had
declined by 33% between 1990 and 1995. The livestock sector had declined by 40%.
Meat production had fallen from 8.3 million tonnes in 1992 to 5.9 million tonnes in 1995.
At the same time imports of meat had increased from 1.4 metric tonnes to 2.1 metric
tonnes i.e. in 1995 imported meat had accounted for about 25% of all meat consumption.
These imports are concentrated in big cities which account for 70% of retail turnover.
Mafias linked to trade are dumping contaminated food on Russian consumers.

        Kristin Dawkins, Director of Research Institute for Agriculture and Trade Policy
of the United States, said the US government had led the world in promoting globalised
monopolies through international trade agreements, assisted by such bullying tactics as
the use of Section 301. She said under encouragement from the US government food
corporations controlled US agriculture and were now attempting to control world
agriculture.

        Dawkins said in 1994-95, 10 cents out of every food dollar spent in the United
States went to Philip Morris and another 6 cents went to CongAgra. Four companies -
IBP, ConAgra, Cargill and Beef America - sold 87% of all slaughtered beef. Two
companies - Kelloggs and General Mills - sold two-thirds of all ready-to-eat breakfast
cereals. Campbells sold 73% of all canned soups. Frito-Lay sold 85% of all corn chips
and 40% of all potato chips. Kraft is owned by General Foods, (the latter is owned by
Philip Morris) sold more than half of all sliced processed cheese.

The dispensability of small farmers

        Small farmers are paying the price for this corporatisation. They have been seen
as dispensable in the US and the dispensability of the small farmer is now being
globalised through trade liberalisation. As Kristin Dawkins reported, in 1962, the
Committee on Economic Development which advised the White House recommended
'moving off the farm about two million of the present farm labour force, plus a number


                                                                                        33
equal to a large part of the new entrants who would otherwise join the farm labour force.'
Kenneth Boulding, an agricultural economist from the University of Michigan, described
their plan bluntly: 'The only way I know to get toothpaste out of a tube is to squeeze, and
the only way to get people out of agriculture is likewise to squeeze agriculture. If the
toothpaste is thin, you don't have to squeeze very hard, on the other hand if the toothpaste
is thick, you have to put real pressure on it.'

        A V Krebs, Director, Corporate Agribusiness Research Project and author of
Corporate Reapers, reports that in 1990 nearly 22% of US farm operator households had
incomes below the official poverty threshold, twice the rate of all US families. In 1993,
over 88% of the average farm operator household income was derived from off-farm
income. From 1982 to 1993 the index of prices received by farmers rose only 7.5% while
the index of prices paid by farmers for inputs multiplied over threefold to 23%. As Krebs
queried: Is it any wonder that our farmers during the period from 1990 to 1994 saw an
almost minuscule 1.98% return on their investment? Is it any wonder that from 1987 to
1992 in the US farm entries dropped to less than 67,000 per year while 'exits' averaged
99,000 per year, resulting in the net loss of 32,000 farms a year.

        The main argument used for the industrialisation of food and corporatisation of
agriculture is the low productivity of the small farmer. However, even the World
Development Report has accepted that small farms are more productive than large ones.

        The state of Bengal was showed the highest rate of growth of 6.5% for agriculture
as a result of land reform, while the rate of growth for India was a mere 3%.

      Even biologically, small diverse farms have higher productivity than large
monoculture farms.

        Productivity of monocultures is low in the context of diverse outputs and needs. It
is high only in the restricted context of output of 'part of a part' of the forest and farm
biomass. For example, 'high yield' plantations pick one tree species among thousands, for
yields of one part of the tree (e.g.pulp wood).

        These high partial yields do not translate into high total (including diverse) yields.
Productivity is therefore different depending on whether it is measured in a framework of
diversity or uniformity.

       A recent article in Scientific American has developed this approach further and
has shown how the economic calculations of agricultural productivity of the dominant
paradigm distort the real measure of productivity by leaving out the benefits of internal
inputs derived from biodiversity as well as the additional financial and ecological costs
generated by purchase of external inputs to substitute for internal inputs in monoculture
systems.




                                                                                           34
        In a polyculture system, five units of input are used to produce 300 units of food
thus having a productivity of 1.5. In an industrial monoculture, 300 units of input are
used to produce 100 units of food, thus having a productivity of .33.

       The polyculture system which has been called 'low yielding' and hence incapable
of meeting food needs is therefore five times more productive than the so-called 'high
yielding' monoculture.

Genetic engineering

       Other experts from India who presented papers at panels were Dr B D Sharma, Dr
D Bandopadhyay, Dr Sultan Ismail, Dr Vijayalakshmi, Mr Pandhari Pandey, Prof
Ramakrishnan, Dr Santosh Satya, Dr Indira Hirway and Dr Darshini Mahadevia. They
gave details of the impact of structural adjustment on agriculture and food security and
also developed the sustainable alternatives available to ensure safe and adequate food for
all.

        In spite of all evidence pointing to the high diversity, productivity and
sustainability of small family farms, globalisation is wiping out these efficient systems
and replacing them with inefficient and unhealthy industrialised food systems under
corporate control.

       The myth of low productivity of diversity-based small farms is also being used to
promote genetic engineering. In her paper on 'Biodiversity and Biotechnology', Beth
Burrows called genetic engineering a form of Structural Adjustment but directed by Ciba-
Geigy and Monsanto rather than by the World Bank and IMF.

        Vandana Shiva pointed out how the same corporations which want regulation for
Intellectual Property Rights, want deregulation for biosafety. They want organisms to be
treated as 'novel' when it comes to claiming property rights and as 'natural' when it comes
to taking responsibility.

        These corporations pushed for trade liberalisation of agriculture under the
Uruguay Round of GATT. They are now demanding total freedom of investment as a
right. As Martin Khor of the Third World Network stated, the industrialised countries are
now threatening to launch a new Uruguay Round at the WTO Ministerial Meeting to be
held in Singapore at the end of the year. The biggest issue was the Multilateral
Investment Agreement, under which no country would have the right to screen foreign
investment. Corporations wanted the right to enter and establish themselves with 100%
equity, and total freedom to repatriate profits. They could buy farmers' land , set up
plantations and fisheries and also undertake livestock rearing.

        Everywhere across the world, less food is being produced and less diverse food is
being grown, and less is reaching the poor and hungry. Fewer farmers are finding a place
in agriculture and even privileged consumers have no food security in the sense of access




                                                                                        35
to safe and nutritious food. BSE-infected meat and hazardous chemicals are creating new
health threats to the consumers even in affluent countries.

       The corporations are the only beneficiaries of freetrade and they are not in the
business of ensuring food for all. As Senator McGovern of the US Senate had stated,
'Food security in private hands is no food security at all' because corporations are in the
business of making money, not feeding people.

        When trade liberalisation policies were introduced in 1991 in India the
Agriculture Secretary stated that 'food security is not food in the godowns but dollars in
the pockets'. Dr Shiva pointed out that the dollars go to the pockets of the Cargills,
Continentals and Pepsicos, not the pockets of Indian farmers or fisherfolk. The
centralised government-controlled food distribution system run by the Food Corporation
of India depending on long-distance transport had its flaws, but these flaws can hardly be
corrected by replacing it with an even more centralised corporate-controlled food system
which promotes the export of Indian food grains and then imports food at high social,
economic and political costs to people and the country.




                                                                                        36
CHAPTER 6


  Implication for Sustainability of Small Horticultural Farms



       To globalize means to make worldwide in scope or application.          We live in a
global ecosystem; in this, we have no choice. Increasingly, all nations of the world share
a global culture, a consequence of past choices. And, the economy has become
increasingly global as well. However, within the global ecosystem are boundaries, which
give form and structure to natural systems. Within the global culture are boundaries,
which define different human values and perspectives of reality. And within the global
economy are boundaries, which allow nations to reflect the differences in their natural
ecosystems and social cultures in the structure and functioning of their economies.

        The World Trade Organization (WTO) appears committed to removing all
“barriers” to international trade, to achieve “free trade,” and thus, to removing all
“economic boundaries” among nations. Once the economic boundaries are removed,
cultural boundaries will become further blurred, and ecological boundaries will be left
open to economic exploitation. Cultural and ecological diversity are considered obstacles
to economic progress. A truly global economy will allow greater geographic
specialization, greater standardization of processes and products, and thus, will allow
global corporations to achieve even greater economies of scale.

        In a global agricultural economy, small farms will be replaced by large farms,
which in turn will be controlled by giant multinational corporations. Small farmers quite
simply will not be able to compete in a “free market” global economy. Many small
farmers of the world rely on horticultural crops for their viability. Thus, the implications
of globalization may be even more dramatic for horticulture than for most other
agricultural sectors. But even more important, ecological and cultural boundaries are
essential to the long run sustainability of agriculture. Thus, if all economic boundaries
are removed, human life on earth, at least as we know it, will not be sustainable.

        Over the past decade, globalization has become a major public issue. Most of the
recent controversy has centered on the World Trade Organization (WTO). The WTO
was established in 1994, with authority to oversee international trade, administer free
trade agreements, and settle trade disputes among member nations, replacing the General
Agreement on Tariff and Trade (GATT). However under the WTO, authority was
greatly expanded to cover trade in services as well as merchandise – including protection
of intellectual property rights. And, intellectual property rights have been interpreted to
include the genetic code of living organisms. Also, the WTO has far greater authority
over trade in agricultural commodities than had existed under the GATT. The implicit, if
not explicit, objective in forming the WTO was to reduce and eventually remove all
restraints to trade, in order to achieve a single “global free market.”


                                                                                         37
        “Globalization,” as a concept, is far broader in meaning than is the concept of a
“global free market.” To “globalize,” according to Webster’s dictionary, means “to make
worldwide in scope or application.” The objective of the WTO is to create a single
geographic market that is worldwide in scope, with a single set of trading rules that are
worldwide in application. However, we cannot change the global economy without
simultaneously affecting global ecology and global society. This is the crux of the
current WTO controversy. What are the implications of a “global free market,” not just
for the world economy, but also for the world community and for the world itself?

         We live in a global ecosystem, regardless of whether we like it or not. We have
no choice; such is the nature of “nature.” The atmosphere is global. Whatever we put in
the air in one place eventually may find its way to any other place on the globe. Weather
is global. The warming or cooling of the oceans in one part of the world affects the
weather in another, which in turn affects the temperature of oceans elsewhere on the
globe. All the elements of the biosphere are interrelated and interconnected, including its
human elements. We are all members of the global community of nature. We have no
choice in this matter.

        Increasingly, we also live in a global “social” community.                 Global
communications – print media, radio, television, and the Internet – have erased technical
communications barriers among nations, resulting in the spread of common cultural
values around the globe. Global travel has become faster, easier, and less expensive,
resulting in greater person-to-person sharing of social and cultural values among nations.
Consequently, the distinctiveness of national cultures has diminished. We seem to be
moving toward universal membership in a common global culture.

        However, in matters of society and culture we have the right and the
responsibility to choose. We have the right to maintain whatever aspects of our unique
local or national cultures and communities that we choose to keep. And we have the
responsibility to protect this right against the economic or political forces pushing us
toward a single global culture or social community.

         We also seem to be moving toward a single global economy. International trade
has increased dramatically over the past few decades, first under the various GATT
agreements and now under the WTO. All of the national economies of the world are
interconnected through their dependence upon each other for trade. Problems anywhere
in the world economy, with Japan and Argentina being recent examples, create economic
problems for nations all around the globe. However, the global economy is made up of
numerous distinct markets – including national markets and various multinational trade
groups, such as those defined by the North American Free Trade Agreement (NAFTA)
and the European Union (EU). However, the implicit purpose of the WTO is to remove
all restraints on trade among nations and among trade groups, and thus, to create a single
global market.




                                                                                        38
        In the matter of a single global market, we also have a right and a responsibility to
choose. Every nation has the right to maintain those aspects of its local and national
economies that it deems necessary to protect its resources and its people from
exploitation. In a truly “global free market,” the social and political boundaries that now
protect nations from such economic exploitation would no longer exist. Again, to the
crux of the WTO controversy, we must ask, “What are the implications of removing the
economic boundaries among nations, thus creating a single global market?”

        Perhaps the best way to begin addressing this question is to examine the
boundaries that currently restrain globalization and to ask why those boundaries are there
in the first place. The boundaries that exist in nature, the ecological boundaries, were put
there by natural processes. Such physical features as oceans, mountains, and even rivers
and ridges, separate one physical bioregion from another. Why do such boundaries exist
within nature? Perhaps, because nature is inherently diverse and boundaries are nature’s
way of defining its diversity. Boundaries separate and define the form or structure of
those things that support life: sunlight, air, water, and soil. Boundaries also define the
physical structure of all living things: bacteria, fungi, plants, animals, and humans. We
know also that biological diversity is necessary for life; diversity that distinguishes cells,
organs, and living organisms from each other; diversity that gives resistance, resilience,
and the regeneration ability to living communities. Without diversity, without
boundaries, nature could not sustain life, including human life.

         Cultural and political boundaries are those things that define distinct
“communities” of people – including cities, states, and nations. We established such
boundaries to facilitate relationships among people within boundaries and to differentiate
between relationships among people within a given “community” and their relationships
with people in other “communities.” Within cultural boundaries, relationships were
nurtured to enhance social connectedness and personal security. Boundaries “between”
communities maintain some sense of identify, and thus, maintain diversity among
different groups or collections of people. Diversity among communities maintains
choices and opportunity for those of the current generation and for those of generations to
follow. Historically, whenever one human culture or society has become dominate, but
has then failed, alternative cultures and societies has always been available to restore
health and growth, and thus, to provide resilience, and long run security for human
progress. Without cultural diversity, there would have been nothing to replace the long
line of failed societies of the past.

        In earlier times, cultural and political boundaries tended to coincide with natural
boundaries – oceans, mountains, rivers, and ridges. However during the industrial era,
economic and political considerations have taken priority over natural boundaries in
defining our social relationships. Wars have resulted in redrawing of national boundaries
along lines that have little relationship to either topography or culture. Towns and cities
have expanded their boundaries with little regard for the best long run use of the land
they have covered with highways, buildings, and parking lots. And with the trend toward
a single “global community,” the remaining social and cultural boundaries that still




                                                                                           39
define different groups of people, with diverse social, ethical, and moral values, are being
largely ignored.

       With some notable exceptions, economic boundaries, over at least the past
century, have been the same as national political boundaries. Historically, each nation
has had its own currency, and has maintained economic relationships among those
“within” nations as separate and distinct from economic relationships “among” nations.
The British Empire of the early 1900s, which once included a fifth of the globe, might
have been considered a single economic unit. More recently, the North American Free
Trade Agreement and the European Union represent attempts to encompass several
nations within a single economic boundary. But, most economic communities are still
defined by the boundaries of single nations.

        The basic purpose of economic boundaries is to promote “free trade” within the
boundaries of communities and to carry out “selective trade” among those communities
that are separated by economic boundaries. Economic diversity, as defined by economic
boundaries, is necessary for division of labor and specialization. If all national
economies were to lose their distinctiveness, becoming as one, all potential gains from
trade among nations would disappear. Historically, economic diversity among nations
also has been considered a necessity to ensure choice and opportunity – to ensure health,
growth, resilience, and long run security of the global economy. Humanity has not been
willing to put all of its “economic eggs in one basket.”

        So, why have leaders of the major economic powers of the world decided now to
put all their “economic eggs” in the “WTO basket?” The most logical answer seems to
be that world leaders are now motivated more by short run economic consideration than
by longer run concerns for human culture or for the natural environment. In this respect,
other nations quite likely are being misled by the “economic culture” of the U.S., which
now dominates the global economy. The tremendous growth of the U.S. economy over
the past century is widely attributed to our “competitive, free market” economy. Because
of this growth, a new “culture of economics” now holds sway among many of the most
economically powerful nations of the world.

         Within this culture, economic boundaries are viewed as obstacles to trade, as
limiting the ability of investors to maximize economic efficiency. “Free trade” among all
nations would result in a more efficient global economy, they say, thus benefiting all
people of the world. Current barriers to trade, they say, usually are nothing more than
artificial, political restraints designed to protect specific individuals and industries within
nations from economic competition with more efficient producers in other nations. Thus,
the WTO should work to remove such barriers, allowing the most efficient producers in
the world to produce the world’s goods and services, resulting in the lowest possible cost
of goods and services to consumers everywhere – so they claim.

        Such claims are based on economic theories of trade that historically have made
“free trade” something of a “sacred tenet” of economics. This is true particularly among
the more conservative of economists, whose views are now in vogue. Contemporary



                                                                                            40
“free trade theory” has its foundation in the early 1800s, primarily in the writing of
British economist, David Ricardo. Ricardo showed that when two individuals choose to
trade, each is better off after the trade than before. People have different tastes and
preferences, and thus, each person values the same things somewhat differently. So, if I
value something you now own more highly than I value something I own, and you value
the thing that I own more highly than you value the thing you own, we will both gain by
trading. I will get something that I value more than the thing I now own and so will you.

        The same concept can be used to show the potential gains from trade associated
with economic specialization. For example, one farmer may be a more efficient producer
of one crop, e.g. tomatoes, and another farmer may be a more efficient producer of
another, e.g. green peas. If so, one farmer can then specialize in green peas and the other
in tomatoes. The better tomato producer can then trade tomatoes for peas and the green
pea producer can trade peas for tomatoes, and they both will be better off than if they
each tried to produce both peas and tomatoes.

         Even if one farmer is a better producer of both peas and tomatoes, the other
farmer will have a “comparative advantage” in producing one or the other. Let’s say the
first farmer could produce either 4 tons of green peas or 80 tons of tomatoes on a hectare
of land and a given amount of labor, and capital. Assume a second farmer could only
produce 3.3 tons of green peas or 60 tons of tomatoes on a hectare of land using the same
amount of labor and capital – not as much of either as the first farmer.

        If the first farmer decided to produce only peas, he or she would have to forego 20
tons of tomatoes for each ton of peas produced (80/4=20). However, if the second farmer
decided to produce peas, he or she would only have to forego 18 tons of tomatoes for
each ton of peas (60/3.3=18). In economic terms, this means that the second farmer has a
“comparative advantage” in producing peas, because his or her “opportunity cost” of
producing peas is less. Using the same logic, the first farmer has a lower “opportunity
cost” of producing tomatoes (0.050 tons of peas per ton of tomatoes (4/80), compared
with .055 tons of peas per ton of tomatoes (3.3/60)). The “opportunity costs” for both
crops are lower if the second farmer specializes in producing peas and the first farmer
specializes in producing tomatoes.

        Although the arithmetic gets messy, if the second farmer specializes in peas and
the first in tomatoes, and they trade their surpluses to each other, both will be better off
than if each produces some peas and some tomatoes. Of course the real world is much
more complex than this simple “two producer, two commodity” example, but this simple
one-on-one trade situation is still at the heart of contemporary economic trade theory.

       So, if both traders gain from specialization and trade, what’s wrong with “free
trade?” The problems arise because “free trade” between two independent individuals, in
the context of the early 1800s, does not accurately reflect the reality of trade among
nations in the early 2000s.




                                                                                         41
        First, trade is truly free only if both partners are “free not to trade.” Participants
in “free trade” must have an “interdependent” relationship. Interdependence implies that
people relate to each other “by choice,” not “by necessity.” If one trading partner is
dependent on another, the dependent partner may have no choice but to do whatever is
necessary to maintain the relationship. “Interdependent” relationships can only be
formed between two otherwise independent entities. When both are independent, neither
is compelled to either form or maintain the relationship. Under such circumstances,
trading relationships are formed only if they are beneficial to both and continue only so
long as they remain beneficial to both.

        Trading under conditions of coercion, under explicit or implied threats of
retribution, is not free trade. The school kid that “trades lunches” with the bully, under
threat of bodily harm, is not participating in free trade. Neither is a weak nation that
trades with a strong nation, under the threat of denial of military protection from some
global tyrant. Nor is it “free trade” if one nation is dependent on the other for its
economic wellbeing, as in cases where one nation has built up large debts to another.
Poor nations are made dependent on rich nations by their lack of economic wealth,
economic infrastructure, and technological advantage, regardless of their inherent worth
to humanity. In many cases, rich nations are able to exploit the workers and resources of
poor nations through trade, because the poor see no other way to avoid physical
depravation or starvation of their people. Trade when one party feels compelled to trade
is not “free trade.” Coerced trade is not “free trade.”

        Second, “free trade” assumes “informed trade.” Both parties must understand the
ultimate consequences of their actions. If a car dealer trades cars with a customer,
knowing his car is a gas-guzzler, needs lots of repairs, and is unsafe to drive, and trades
the car without informing the customer, this is not a “free trade.” When a developed
nation encourages a lesser-developed nation to produce for export markets, knowing that
such production will lead to exploitation of their natural and human resources, and does
not inform them of the consequences, this is not free trade. The “leaders” of the lesser-
developed nations may reap benefits from such trades, often including bribes or payoffs
from the outside exploiters, but the resources of the lesser-developed nation will be
exploited rather than developed. The people will be left with fewer opportunities for
developing their country than they had before. The exploiters know the consequences but
the exploited do not. Uninformed trade is not “free trade.”

        Third, “free trade,” in economic theory, implies that the decision is made by an
individual, not a collection of people or a nation. Individuals are whole people,
presumably absent of unresolved internal conflicts regarding the relative values of items
to be traded. A person trades only if they decide trading is good for them as a whole.
Nations cannot think with one mind or speak with one voice. Nations, as large
collections of individuals, may make and carry out trade agreements to which a
substantial portion of the nation’s population is opposed, both before and after trade takes
place. The economic rational for such agreements is that if the economic benefits to
those who favor trade more than offset the economic costs to those who oppose it, the
nation as a whole will benefit from the trade.



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         Economics is incapable of dealing with social consequences of trade, such as
equity or justice. In economics, a nation is said to gain from trade if those who benefit
from trade “could” compensate those who lose and still have something left over. Of
course, the gainers are under no legal obligation to compensate the losers, and rarely, if
ever, do so. And in economics, it doesn’t matter that the rich are made richer and the
poor are made poorer. In economics, it doesn’t really matter how many people are made
“relatively” worse or better off by trade, as long as trade results in greater total wealth
and growth of the overall economy. Free trade doesn’t address issues of social equity or
justice.

        Finally, the foundational principles of economic trade theory are rooted in a
“barter economy” – people “trade” things rather than buy or sell things. In an
international currency economy, comparative advantages in trade can be distorted by
fluctuations in currency exchange rates that have nothing to do with relative productivity.
Such fluctuations can cause the exports from one nation to become more or less costly to
importers from another nation for reasons totally unrelated to changes in production
efficiency. Under such conditions, “free markets” do not result in efficient resource use.
Trade theory assumes differences in monetary prices reflect differences in real value.

        In classic trade theory, also, each trading partner uses their individual resources,
land, labor, capital, technology, etc. to do whatever they do best – to realize their
comparative advantage. No consideration is given to the possibility that one nation might
instead transfer some of their resources, such as capital and production technology, to
another nation where they might generate even greater profits. Mobility of capital and
technology, hallmarks of today’s global economy, eliminates the “comparative
advantage” of higher cost nations, forcing them to import from lower cost nations,
devaluing both land and labor in the higher cost nation to globally competitive levels.
The classical economic concepts of comparative advantage did not anticipate
international mobility of capital and technology.

         Because of all these inconsistencies between economic theory and economic
reality, the theory of economic “free trade” does not reflect the reality of “international
free trade” today. Perhaps more important, opposition and open defiance of the WTO,
from countries around the globe, indicates that any further expansion of trade, being
forced upon unwilling people by the WTO, almost certainly will “not” be “free trade,”
but “coerced trade.”

        So what are the implications of market globalization for international agriculture,
and specifically, for the sustainability of small horticultural farms? First, the implications
will be different in different parts of the world, because of the wide diversity in current
size and ownership structure of horticultural production units in different countries.
Obviously, large differences exist between agriculture in the “developed” and
“developing” countries of the world. However, significant differences also exist within
these two communities of nations.




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        The European Union (EU) and the United States provide a convenient example of
contrasts within developed economies. Horticultural production in Eastern Europe is
carried out in predominantly family-based enterprises (Avermaete, 1997). Historically,
fruit and vegetable farms were small, family operations, located close to the cities, and
focused on producing for local consumption. Over time, however, some of the more
specialized operations expanded in size, as lower transportation costs allowed them to
compete in more-distant markets. In Europe today, small-scale family operations still co-
exist with these larger specialized operations, with each focusing on different markets.

       Approximately 1.8 million farms in the EU produced fruit and vegetables in the
early 1990s. Many of these obviously were small family enterprises oriented toward
home consumption, as they averaged only 1.3 ha. in size overall. Some 100,000 of these
were classified as commercial operations specializing in production of vegetables,
averaging 4.2 ha. in size, and 350,000 were commercial operations specializing in
production of fruit, averaging 7.9 ha. in size.

        Horticulture in the United States has experienced the same basic trends as in the
EU – toward geographic specialization and large-scale production. However, operations
in the US tend to be larger than in Europe. The US 1992 Census of Agriculture reported
29,605 farms producing vegetable and melons, 99,514 farms producing fruit and nuts,
and 39,712 producing various other horticultural crops. The average size of US
horticultural farms was 21 ha. for fruit and nut farms and 50 ha. for vegetable and melon
farms – far larger than in the EU.

        However, for both the US and EU, about 25 percent of the largest horticultural
producers account for about 75 percent of total fruit and vegetable production. Over the
past decade, both the average size of farms and percentages of production accounted for
by the larger commercial operations undoubtedly have increased significantly in both the
US and EU.

       Comparable data are not available for many of the developing countries.
However over the past decade, the fastest growing fruit and vegetable regions of the
world have been Asia (particularly China) and South America (particularly, Brazil and
Chile). Asia now accounts for more than 60 percent of worldwide vegetable output, and
China alone accounts for about 25 percent of world production of apples (Segre, 1998).
With the exception of a few large corporate operations that serve export markets,
available data indicate the vast majority of production units in Asia and South America
are smaller, family operations serving local markets.

        In general, regardless of the region of the world or the segment of agriculture
considered, the vast majority of all farms are still small farms, with many still serving
local markets. However, the vast majority of total agricultural output is accounted for by
a small proportion of larger, specialized commercial operations, oriented toward serving
global markets. And increasingly, these large, export-oriented agricultural operations are
controlled, if not owned outright, by giant multinational corporations.




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        As diversified family farmers have been replaced by large, specialized production
units, independent food processors and wholesalers have been displaced by giant food
processing and distribution firms. These large food processing and distribution
operations more recently have combined, through various types of alliances and joint
ventures, into five or six even-larger “global food chain clusters.” As the four or five
dominate global food retailers link up with existing “global food chain clusters,” they
increasingly will control all phases of the global food system from “conception to
consumption,” including agricultural production (Heffernan, 1999, Hendrickson, 2001).

       The two dominant trends in agriculture today, globalization and corporate
consolidation, are not just coincidental, but almost certainly are intentional. Trade
negotiators for the more industrialized nations, the US in particular, are the driving force
within the WTO demanding ultimate removal of all social and ecological barriers to
trade. The support of multinational agribusiness corporations is the primary motivating
force behind these negotiators. With all political constraints to trade removed, the
multinational corporations would be free to treat the world as a single production area
and single market, and thus to maximize profits globally.

        The world economy envisioned under the WTO presumably would operate much
as a national economy.           “International commerce” would resemble “interstate
commerce,” and no individual member nation would be allowed to have laws interfering
with such commerce. Under the WTO, nothing could be arbitrarily excluded from
“international commerce.” The WTO would decide what nations can and cannot exclude
from the world marketplace. And, no seller or buyer would be allowed to offer different
prices or conditions of trade to different nations, for any reasons.

         Under such rules of trade, a nation could not subsidize its agriculture by any
means that might be trade distorting; that is, it couldn’t subsidize producers of one
commodity more than it subsidizes producers of another. A nation could not establish
environmental, health, or safety standards for its production processes that were more
restrictive than those specified by the WTO. A nation could not close its borders to WTO
approved “cultural exports” from other nations – movies, television programs, clothes,
and magazines – no matter how repulsive they may be to some residents of that nation. A
nation could not refuse to allow its natural resources, such as minerals, oil, or even water,
to be sold to another nation. And, the WTO would stand ready to enforce merchandise
patents and intellectual property rights globally, regardless of whether the people of the
world agree that all things, such as genetic life forms, should be patented. These are but
some of the many potential consequences of the WTO vision of a single global economy.

        In essence, removal of national economic boundaries would open the world to
“corporate colonization.” Historically, a “colony” has been defined as a geographic
territory, acquired by conquest or settlement by a people or government previously alien
to that territory (Encarta, 1998). In general, a colonial relationship is created when one
entity extends its sovereignty and imposes control over another people or territory. In the
case of “corporate colonization,” it is the corporation, rather than a people or government
that extends its sovereignty and imposes its control over the economies of nations.



                                                                                          45
Nations lose control over their individual economies as their economic boundaries are
removed, allowing the multinational corporations, previously alien to their countries, to
expand across political boundaries at will.

        The potential for economic colonization is inherent, so long as the world is
composed of nations at radically different stages of economic and technological
development. Those in the more developed economies will always be tempted to
dominate those in the less developed economies. The emergence of multinational
corporations, lacking a strong affiliation to any nation, makes those in the less
developed areas or all nations vulnerable to global corporate domination. Such
disparities in power, however, only make colonization possible – not necessary or
inevitable. The powerful are not always able to expand and dominate the weak, as long
as the weak have the political means to resist. Once the economic boundaries are
removed, however, there will be no political means to resist.

        As with political colonialism, there are strong arguments both for and against
economic colonialism. Clearly, multinational corporations can bring numerous
economic benefits to people in less developed economies, including greater access to
investment capital, more employment opportunities, and higher personal incomes. A
stronger economy also provides opportunities for governments to spend more for public
transportation, health care, education, national defense, police protection, and other
social welfare programs.

         However, reliance on outside corporate investors for capital and technologies
brings with it significant social and ecological risks. As with political colonization,
life-styles are disrupted, cultures are destroyed, and entire communities, nations, and
races of people may be economically subjugated by the corporations. A nation’s
natural resources – minerals, petroleum, forests, biological diversity, soils – may be
exploited to maximize corporate profits, because there is no long term corporate
commitment to any particular people, place, or culture. Decades after political
colonization has ended, many so-called Third World countries still harbor a deep
resentment, sometimes hatred, toward their former “colonial masters,” in spite of the
numerous economic, health, technological, and educational benefits they received.
There certainly is no reason to believe that an after-the-fact assessment of benefits and
costs will be any less condemning of the corporate colonization process.

        Under contemporary international standards of human rights, political
colonialism is no longer considered excusable – no matter what the potential economic
or social benefits. Colonialism conflicts directly with inherent rights of national
sovereignty and self-determination. The 19th-century empire builders, however,
believed they had a moral responsibility to rule the “backward peoples” of the world, in
order to bring them the fruits of Western civilization (Encarta, 1998). Many in the more
developed nations today believe they have a moral responsibility to develop the “less
developed economies” of the world, in order to bring them Western prosperity. The
industrial nations have tried, without much success, to impose their industrial economic




                                                                                        46
model on the rest of the world through various government- and foundation-funded
international economic development programs.

        From an international policy perspective, economic colonization by
multinational corporations is but another means of developing the “less-developed
economies” of the world. The next stage of development, for most less-developed
countries, is the transition out of agriculture and into manufacturing. This transition
cannot take place until agriculture is industrialized, making it possible for the
agricultural sector to produce more food with fewer farmers, thus freeing farmers to
work in the factories and offices of the new industrial economies. Agricultural
globalization will make it possible for the agribusiness corporations to industrialize the
agriculture of these lesser-developed economies. Thus, agricultural globalization is
seen as a necessary prerequisite to global economic development.

        Before addressing the implications of agricultural globalization on sustainable
horticultural farms, we must address the sustainability of agriculture in general. First,
any form of sustainable development, including sustainable agriculture, must meet the
needs of the present while leaving equal or better opportunities for the future. To meet
this standard of sustainability, a system of production and distribution must be
ecologically sound, economically viable, and socially responsible. Lacking any one of
these three aspects, a system quite simply is not sustainable over the long run.
Globalization is a strategy designed for short-run economic exploitation, not for long run
societal sustainability.

        A sustainable food system, to be ecologically sound, must work in harmony with
nature – not attempt to dominate or conquer nature. Nature is inherently diverse.
Diversity in nature is necessary to support life within nature. “Boundaries” in nature
define the diversity of landscapes, life forms, and resources needed to support healthy,
natural, sustainable production processes. Fence rows, streams, and ridges define unique
agroecosystems within which nature can sustain different types of human enterprises.
Economic globalization ultimately will result in removal of fence rows, diversion of
streams, and leveling of ridges, to facilitate standardization of functions and
homogenization of production processes.            The natural boundaries needed for
sustainability will be removed to achieve greater economic efficiency. Economic
globalization ultimately will destroy ecological sustainability.

        A sustainable food system, in being socially responsible, must function in
harmony with human “communities,” including towns, cities, and nations. Humanity is
inherently diverse.      Diversity among people is necessary for “interdependent”
relationships – relationships of choice among unique, independent individuals. Although
we have our humanity in common, each person is unique, and we need unique human
“communities” within which to express our uniqueness. Social and cultural boundaries
define those “communities” – towns, states, and nations. Globalization will remove those
boundaries and will homogenize global culture and society. The natural boundaries
needed to sustain social responsibility will be removed to achieve greater economic
efficiency. Economic globalization ultimately will destroy social sustainability.



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        A sustainable food system, to be economically viable, must facilitate harmonious
relationships among people and between people and their natural environment. The
inherent diversity of nature and of humanity must be reflected in diversity of the
economy. Although potential gains from specialization are real, such gains are based on
the premise that people and resources are inherently diverse, with unique abilities to
contribute to the economy. Competitive capitalism is based on the premise that
individual entrepreneurs make individual decisions and accept individual responsibility
for their actions. If globalization is allowed to destroy the boundaries that define the
diversity of nature and people, then it will destroy both the efficiency and sustainability
of the economy. Economic globalization ultimately will destroy even economic
sustainability.

       In a global agricultural economy, large farms will continue to displace smaller
farm in the global marketplace. Increasingly, the larger farms will be controlled by giant
multinational corporations. Many small farms depend on sales of internationally traded
commodities to provide cash farm income, in developed as well as less-developed
countries. The most important aspect of their farming operation may be its non-cash
contributions to their quality of life. In less-developed countries, the major non-cash
contribution of farms may be food, clothing, and shelter, while in other countries it may
be a healthy environment, privacy and security, and an independent life-style. In both
cases, however, the economic viability of the farm may depend on cash income from
sales of internationally trade commodities.         Under globalization and corporate
colonialism, small independent family farms quite simply will not have access to markets
for internationally traded commodities. Essentially all such commodities will be
produced under comprehensive contracts offered by corporations linked to one of the
“global food clusters.” Only the larger farming operations will be able to secure such
contracts, and in many countries, such operations may be corporately owned and
operated.

        Commercial horticultural markets will become geographically specialized
globally. In those areas of the world with an economic comparative advantage in
horticulture, the larger farming operations will be consolidated and absorbed into one of
the “global food clusters” – through contract or outright ownership. In those areas
lacking a comparative advantage in horticulture, the commercial market infrastructure for
horticultural crops will be dismantled due to lack of use. Thus, small family horticultural
operations will be denied access to markets for internationally traded commodities in
both cases. Small farmers worldwide rely on horticultural crops not only for their in-
home own use but also for cash income, and thus, for their economic viability. Thus,
globalization has important implications not only for the economic viability of small-
scale horticulture but for the sustainability of small family farms everywhere.

        The implications of market globalization and corporate colonialism are no more
acceptable than were the implications of earlier attempts at cultural globalization and
political colonialism. But with such powerful economic and political forces promoting
globalization, how can we ordinary people expect to stop it. First, we can help people



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realize that the undeniable existence of a global ecosystem, a global society, and a global
economy does not justify market globalization – i.e., the removal of all economic
boundaries among nations. Natural boundaries are necessary to ensure ecological
integrity. Cultural boundaries are necessary to ensure social responsibility. And
economic boundaries are necessary to ensure long run economic viability. Without
boundaries, the world will tend toward entropy – toward a world without form, without
structure, without order, and without life.

        Every nation has both a right and a responsibility to protect its people and its
resources from exploitation, just as every person has a right and responsibility to protect
their person and property from exploitation. Globalization would deny these most
fundamental of human rights to the “communities” of people that constitute the nations of
the world. People need to have healthy relationships with each other and with the earth,
but healthy relationships are relationships of choice, not relationships of coercion. Global
society needs a world forum, such as the WTO might be – not to remove boundaries, but
to ensure that every person of every nation is protected from economic exploitation. We
must reclaim our rights to individual and national sovereignty.

        Other things we can do to fight globalization are more tangible and practical – and
many of these things are particularly relevant to horticultural producers and marketers.
We can all help develop more sustainable, local alternatives, which will reduce our
reliance on multinational corporations. For example, millions of farmers and consumers
all around the world are already joining forces to develop more sustainable, local food
systems. These people come together regularly within their local communities at farmers
markets, CSAs, community gardens, and at other venues where farmers and consumers
meet around food. The central focus of many, if not most, of these alternative food
systems is horticultural crops – vegetables, fruits, flowers, etc. The sustainability of
small family horticultural farms in the future will depend on the evolution of these
alternative niche markets of today. As these markets evolve, small horticultural farms of
the future may well become still greater in number, far more important to human
nutrition and health, and even more profitable for small farmers.

       Perhaps one of the most common of misperceptions today is that niche markets
make up only a small part of total markets and that niche marketing will always be
marginal to the marketing mainstream. In reality, all consumer markets are niche
markets, because all individual consumers have different tastes and preferences. It’s a
fundamental principle of economics, the utility or economic value of anything depends of
individuality – on “who” has it and “who” wants it, and not just on what it is, where it is,
and when it’s available.

        The industrial food system has focused on minimizing the cost of changing form,
place, and time – on efficiency of processing, transportation, packaging, and storage –
through systems mass production and distribution. In attempting to minimize costs, food
production and distribution systems have become highly specialized, standardized, and
centralized, and people have been treated as if we all had much the same tastes and




                                                                                         49
preferences. Industrial systems are inherently inefficient in doing a lot of different things
for a lot of different individuals.

        As we move into the post-industrial era of economic development, however, the
focus is shifting from minimizing costs to maximizing individual consumer satisfaction.
Industrial foods have emphasized superficial product differentiation and “mass-produced
convenience” – packaging, preparation, and home delivery – to make industrial foods
more acceptable to individual consumers. Ultimately, however, the bulk of the food
market will go to those who give individual consumers the foods that they actually want
– choices of food with flavor, freshness, nutrition, and integrity – not just food that is
quick, convenient, and cheap. Small family horticultural farms that are focused on niche
markets are on the frontier of the new post-industrial food system.

       Thus, successful small farmers of the future must give an even higher priority to
local markets in developing more sustainable farming systems. They must realize they
simply will not be able to sustain their farming operation by competing with the
multinational food corporations in the emerging global economy. They must focus on
those quality attributes of products that the multinational corporations cannot match with
the industrial system of production and distribution – such as nutrition, freshness, flavor,
and food safety.

        The perceived safety of industrial systems of production and distribution is an
illusion created by the complexity of government rules and regulations that have been
promulgated to alleviate food consumer’s concerns. In reality, these rules and regulations
are necessary only because of the separation of consumers from producers in the
industrial food systems and because of the risks inherent in systems of mass production
and distribution of food. When farmers and their customers relate to each other
personally, customers have a personal knowledge of how their food is produced and
handled and farmers know their products must be safe and wholesome or they will have
no customers. When producers and customers are separated by thousands of miles and
multiple layers of food marketing firms, there is no relationship of trust, and consumers
must rely on complex rules and regulations, which are virtually impossibly to enforce
with consistency. In addition, if a small farmer marketing locally mishandles food, a few
customers suffer the immediate consequences, but the farmer will likely be forced out of
business. When a large, corporate food processor mishandles food products, thousands
of people suffer the consequences, and at most, the food processor will settle a few
lawsuits, shift production to another processing plant, if necessary, and continues with
business as usual.

        Equally important to food quality and safety, small farmers must focus on their
personal integrity, dependability, and commitment, on developing personal relationships
with their customers – something that corporations simply cannot do. Again, corporate
producers attempt to create the illusion of personal integrity, through such strategies as
unconditional guarantees, “rain checks” on advertised specials, identifying products with
specific producers, and even inviting farmers into their stores. However, receiving a
refund or returning to a store to receive a special price is not a substitute for receiving the



                                                                                            50
right product at the right price in the first place. A picture of a farmer is not a substitute
for knowing the farmer who produced your food; and most consumers know a farmer in a
supermarket probably is a promotion gimmick backed with very little locally grown
product. Corporations are not people, and thus, can’t have personal relationships with
their customers.

        Public researchers and educators must shift their efforts from development of
industrial, commercial technology, including biotechnology, to helping farmers develop
more sustainable, localized, systems of production and marketing. The multinational
corporations have both the profit motive and the financial means of developing whatever
commercial, industrial technologies may be needed for the future benefit of society.
Publicly funded research and education should be focused on doing those things of
benefit to society that the private sector of the economy will not do. The private
economy offers no economic incentive for ecological integrity and social responsibility,
or even long run economic viability. Sustainability is a responsibility that must be met
through the public sector – including public research and education. Nowhere is such
public research more likely to yield greater societal benefit than in production and
marketing of horticultural crops to sustain small family farms in both developed and
developing countries of the world.

         Supporting local food systems doesn’t mean that we have to give up those things
that can’t be produced locally. Trading when we are “free not to trade” can be beneficial
to all concerned. We, all people of all nations, simply need to attempt to produce, sell,
and buy locally to the extent necessary to sustain our local and regional food systems.
The sustainability of global food production depends upon the food security of all
nations. A nation that cannot feed its people in a time of crisis is no more secure than is a
nation that cannot defend itself in a time of crisis. Those nations that cannot achieve
internal food security need to form food alliances with other nations that are as secure as
their defense alliances with other nations. Nations and regions can and should continue
trading with other nations and regions to help ensure the sustainability of agriculture
everywhere on the globe. But, relationships among regions and nations must be
“interdependent,” rather than “dependent,” if the global food system is to be sustainable.
We must maintain boundaries in order to maintain our identity, our integrity, and our
ability to act interdependently.

        It would be easy to be skeptical about the possibility of success in developing
sustainable local food systems – such systems currently make up such a small part of the
huge global food system. Committed farmers, consumers, researchers, and educators
may seem too few and too weak to confront the giant global food corporations.
However, the trend toward a global food system, occurring over the past several decades,
took place one farmer, one customer, one scientist, one person, at a time. One-by-one, as
scientists changed the focus of their work, as farmers changed what they produced and
where they sold it, as consumers changed what they ate and where they bought it, a food
system that had been local became global. Again, one-by-one, we can and must make the
changes needed, as scientists, as producers, and as consumers, to create a sustainable
food system. Can we prove that a sustainable food system is possible? Maybe not. But



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growing and compelling evidence suggest that the current industrial food systems – with
its large, specialized, corporate controlled production operations – is neither ecologically
sound nor socially responsible, and thus, is neither economically viable nor sustainable
over the long run. Why shouldn’t publicly funded agricultural scientists be leading the
way by at least attempting to prove that, in spite of agricultural globalization, small
family horticultural farms can be, and must be, sustained?




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CHAPTER 7


                 REACTION OF VARIOUS PARTIES



The problem in context

       I  ndia submitted a very detailed and comprehensive proposal as part of the
ongoing negotiations on agriculture in the WTO in January 2001. It covered all aspects of
the negotiations and remains one of the longest proposals ever submitted by any member.
This study examines the manner in which this negotiating proposal was finalized, the
consultations that were undertaken and the actual decision-making process that led to the
submission of the proposal. It attempts to identify the main protagonists and the key
stakeholders, the role that each one played in the process and the extent to which, in their
view, they succeeded in getting their concerns reflected in the proposal. Finally, the study
also tries to ascertain from the stakeholders their perception of the WTO as an
organization, including in the context of the WTO’s perceived influence on the process
and final outcome.

    Agriculture has been, and perhaps will remain for some time, a key issue in the WTO,
with the power to influence negotiations, packages and the outcomes of Ministerial
Conferences. It is equally sensitive, if not even more so, in the Indian context. To
understand these sensitivities fully, including India’s emphasis on self-sufficiency, it is
important to keep in mind the extreme shortage of food grain that the country faced in the
1950s and 1960s. It was only the success of the ‘Green Revolution’ that helped India
overcome its dependence on food aid. The criticality and sensitivity of the Indian
agriculture sector can be further gauged by the following factors:

      the   share   of   agriculture   in   the   national   GDP     is   a   huge   24%;

      a little over 700 million people, that is about 69% of the population, are dependent
       on         the        rural        economy         for       their        livelihood;

      a very large majority of this rural population survives on an annual per capita
       income of US$175 as compared with the current national per capita income of
       US$480;

      nearly 70% of cultivable land, that is about 100 million hectares out of 142
       million hectares, continues to be vulnerable to the vagaries of the monsoon; and

      even though India is the second-largest agricultural producer in the world, its
       yields are still very low when compared with some of the other producers.


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    This would show why agriculture is such a key issue for India in the WTO, and the
constraints that were probably factored in while finalizing the Indian proposal.
Additionally, the rural population in India, which is largely agro-based, has a political
mind of its own, and has the power (and often the inclination) to prove the political
‘pundits’ wrong. This was amply demonstrated in the recently held elections in which the
ruling, and favoured, National Democratic Alliance was voted out of power, largely
because the rural population felt neglected, and in fact somewhat bypassed, by the much
touted process of economic liberalization. This power which the rural population wields
makes the decision-making process in agriculture even more sensitive and consequently
subject to even greater political scrutiny.




Reaction of the local and external players and their roles



The government

        The main protagonists in the context of the agriculture negotiations at the federal
level in India are the Ministry of Commerce and Industry (MOCI), the Ministry of
Agriculture (MOA) and the Ministry of External Affairs (MEA).

        The MOCI is mandated with the primary responsibility for all WTO-related
issues. The government of India orders regarding the allocation of business state that it is
the MOCI which handles all issues related to ‘International trade and commercial policy,
including tariff and non-tariff barriers’. Within the MOCI, the Trade Policy Division
(TPD) is responsible for the work relating to the WTO. It is headed by a Special
Secretary, who is assisted by two senior joint secretaries and a team of nearly twenty
middle-management-level officers. The Permanent Secretary of the MOCI is kept in the
loop but for most issues the final decision and the negotiating positions are largely
formulated in the TPD itself.

        On the other hand, the MOA is the nodal ministry for all issues relating to
agriculture, including the work relating to the Food and Agriculture Organization of the
United Nations (FAO). However, the situation is somewhat ambiguous when it comes to
agriculture issues within the WTO. International trade negotiations no doubt come within
the ambit of the MOCI, but the MOA feels that when it comes to trade negotiations in
agriculture then it should be the lead protagonist. In fact, as a former official of the
Agriculture Ministry pointed out, ‘the first step taken by the government, which set the
ball rolling on the agriculture negotiations, was taken by the MOA and not by the MOCI,
in the form of a seminar organized in conjunction with the FAO in June 1999’. This
ambiguity is compounded because the consultative process between the two ministries is



                                                                                         54
not institutionalized and, in the past, largely depended on personal relationships between
the officials heading these divisions. Nonetheless, it is clear from the feedback provided
by various officials that on issues related to agriculture the MOCI has been careful to
avoid finalizing positions before obtaining the explicit approval of the MOA.

       The role of the MEA as a stakeholder, especially in the context of the agriculture
negotiations, is less clear. Its expertise in the negotiating process is not in doubt, since it
has negotiated most international agreements; what the MOCI does doubt, however, is
the MEA’s expertise in the substance of the negotiation — and especially so in the case
of agriculture. This perhaps explains why the MEA does not appear to have been
involved in the consultative process to any significant extent.



The state governments

        The state governments were not regarded as significant stakeholders during the
Uruguay Round (UR) and their involvement was minimal during the pre-UR
consultations. This is surprising, not only because are some of the Indian states larger
than many WTO members, but also because agriculture is a state subject. In fact, some
state governments had, soon after the conclusion of the UR, filed a case in India’s
Supreme Court on the grounds that the government of India had no authority to accept
obligations arising out of the Agreement on Agriculture (AOA) because of agriculture’s
status as a state subject. The government of West Bengal reiterated these concerns in
May 2001, saying that ‘agriculture is a state subject, therefore all agreements, legislations
etc., are within the exclusive domain of the state governments’, and that it was
unacceptable that ‘the government of India had signed the AOA…. without first arriving
at a consensus among the state governments’. It is clear that a number of state
governments have significant sensitivities regarding agriculture; these appear to have
been taken into account during the consultative process. At the same time, it is also true
that awareness of WTO-related issues is very superficial in the states, including amongst
the state bureaucracy, and the positions taken by them are largely political rather than
being based on the likely implications of the proposals. T. S. R. Subramanian said that ‘in
most states, the WTO and its rules are regarded as a distant entity without any immediate
consequences for the state government, and perceived as a largely esoteric subject’.



Industry

       There are two main industry associations in India. The first, the Confederation of
Indian Industry (CII) was established as a non-government, industry-led and industry-
managed organization. It has been playing an increasingly active role in putting forth the
views and concerns of industry to the government. Its membership extends to over 4, 800
companies from the private as well as public sectors. According to N. Srinivasan,
Director-General of the CII, it ‘provides a platform for sectoral consensus-building and
networking’. He categorized the CII as fulfilling two functions, namely ‘creating an


                                                                                            55
awareness amongst its members on key WTO issues and providing inputs to government,
based on the feedback received from industry’. The second industry association, the
Federation of Indian Chambers of Commerce and Industry (FICCI), was established in
1927, and according to Manab Majumdar, the association’s Project Leader (WTO),
FICCI has been at the forefront of ‘analyzing the impact of events through a multi-
disciplinary approach involving representatives of business, academia, policy-makers and
foreign experts, and evolving problem-solving responses’.

        These organizations do not seem to have been consulted during the Uruguay
Round. Srinivasan put it very aptly when he said that ‘for a long time the relationship
between the government and industry was based on a “we-they” syndrome; the UR
reflected the tenuousness of the relationship, with the government taking most decisions
on its own’. Today, the situation has changed dramatically and these associations are not
only consulted regularly, but also provide critical inputs to government on trade issues.
Srinivasan felt that ‘the turning point of this relationship was the Seattle Ministerial
Conference when, for the first time, representatives from industry were formally a part of
the Indian delegation’.



Academic institutions and think tanks

         During the UR, academic institutions and think tanks did not feature in the
consultative process at all. Since the UR they have become much more involved, even
though this participation is still somewhat marginal because most of them do not have the
resources needed to conduct a meaningful analysis. At times, they also lack the sectoral
expertise that the modern multilateral process requires, something which is not
uncommon amongst academic institutions around the world. However, a number of
institutions and think tanks were consulted during the drafting of the agriculture proposal.
These included the National Council for Applied Economic Research (NCAER), the
Indian Institute of Foreign Trade (IIFT), the Indian Council for Research on International
Economic Relations (ICRIER) and the Research and Information System for the Non-
Aligned and other Developing Countries (RIS). Dr Anil Sharma, a senior economist in
NCAER, said that ‘our inputs were sought so that MOCI could take informed positions
on various issues and use the analytical data that we provided to convince domestic
lobbies about the appropriateness of these positions’. Biswajit Dhar of the IIFT said that
‘even though the terms of reference of the prescribed work were very broad, the actual
inputs sought by the ministry were invariably needs-based’. A former official of the
MOA stated that these institutions ‘provided valuable inputs, especially in analyzing the
micro-level impact of liberalization in agriculture, both that had already been undertaken
and that which was being proposed’.




                                                                                         56
Civil society

        Civil society in India, in the same way, perhaps, as in any other country, is
extremely heterogeneous. It is not difficult to find groups actively defending or opposing
any point of view in relation to a particular issue. This is not to belittle their contribution
to the overall debate, a fact which seems to be well accepted. There is an increasing
recognition in most government circles that consultations with civil society are very
important. However, there is still a big question mark as to which non-governmental
organization (NGO) to invite to the consultative process, as there are a very large number
of active NGOs to choose from. As Amrita Narlikar said, ‘the process of involving NGOs
seems to be a self-affirming process with the more critical ones being often excluded
from the inter-ministerial consultations; the checks and balances, so necessary in such a
process of consultation, seem to be missing’. Officials appeared to have somewhat
preconceived notions of the views of civil society. A former official of the MOA said that
‘the views expressed by the civil society representatives are always protectionist in
nature. According to them, Indian agriculture is simply not trade-driven; their only
objective is, therefore, to ensure that the livelihood of the subsistence farmers is
protected.’




Challenges faced and the outcome

         Perhaps the most significant challenge that was faced in arriving at an outcome
(that is the final negotiating proposal) was to put in place a process that would take into
account the very diverse views and positions of the various stakeholders, while ensuring
that a cohesive proposal could be prepared. The process went through a number of
different phases: the initial identification of the key issues; consultations with the non-
governmental stakeholders, including industry associations; the initial drafting of the
proposal; holding regional and inter-ministerial consultations; and the final approval by
the Cabinet.



Identification of key issues

        As a first step towards identifying the main issues that would need to be addressed
in the agriculture negotiations, the MOCI and MOA asked the NCAER and IIFT to
analyze the experience of implementing the AOA and to make appropriate
recommendations on the critical issues facing Indian agriculture. Interestingly, the basic
approach to Indian agriculture does not seem to be the same as far as these institutions are
concerned. For example, Dr Anil Sharma of the NCAER feels that ‘Indian agriculture is
quite competitive and India should adopt a more aggressive stand in the negotiations’. On
the other hand, IIFT had a more conservative approach and was more closely aligned to
the MOA’s position on the need to protect the agriculture sector. A former official of the
TPD said that ‘though their inputs were very useful, they did not often factor in the


                                                                                            57
political sensitivities of the issues that they were analyzing’. Giving one such example,
the official said that according to the econometric analysis carried out by NCAER a
somewhat lower bound rate was proposed as being sufficient to take care of probable
import surges for a particular food security-sensitive commodity, but since such a low
bound rate was not politically acceptable, it was modified while finalizing the proposal.

        The ministries also contacted a number of well-known agricultural scientists. Some
very useful suggestions appear to have come out of these interactions. For instance, M. S.
Swaminathan, one of the most renowned agricultural economist in India, came up with
the suggestion that India should press for a livelihood box, in which all the country’s
concerns on rural development and poverty alleviation could be aired. This concept
seems to have been taken on board even though India’s final proposal talks of a ‘food
security box’ rather than a ‘livelihood box’. At the same time, the policy framers also had
to factor in views such as those expressed by Devinder Sharma, a trade and food policy
analyst who, at that time, wrote that five years after the World Trade Organization came
into existence, the anticipated gains for India from the trade liberalization process in
agriculture are practically zero. And yet, undaunted by the negative fallout from the
implementation of the WTO’s Agreement on Agriculture, the Ministry of Agriculture is
aggressively pushing for the second phase of reforms. The entire effort of the free trade
initiative is to destroy the foundations of food self-sufficiency so assiduously built over
the years.



Inter-ministerial consultations

        Even though the two key ministries, the MOCI and the MOA, appear to have
initiated the process somewhat independently, they do seem to have kept each other
involved and informed on developments. Subsequently, the interaction between the two
ministries increased even more and culminated in what was practically a joint negotiating
proposal. But the path to the final common position was not all that smooth. Officials
from both ministries admitted that there were — at times serious — differences on the
position the two ministries wanted to adopt on key issues. R. C. A. Jain, in trying to
explain the reasons for these differences, said that ‘MOCI, understandably, has a broader
perspective and sees agriculture as one of the sectors being negotiated, whereas for MOA
it was difficult to accept such an approach as agriculture is a very sensitive sector in
which compromises cannot be made’. He also felt that differences arose because
‘MOCI’s mandate was to increase India’s share of global trade, while MOA wanted to
ensure that domestic production and the livelihood of small farmers was in no way
threatened.’ A former expert who was closely associated with the drafting process said
that ‘the two ministries were like the two sides of a convex lens; the inevitability of their
relationship being signified by the two joined ends of the lens, while the differences
amongst them on the approach to key issues is illustrated by the bulging middle part of
the lens’.




                                                                                          58
State-level consultations

        The central government organized very wide-ranging consultations on WTO
agriculture issues. In the June—July 2000 issue of MOCI’s monthly newsletter mention
is made that ‘in the process of preparing India’s negotiating position on agriculture, the
government initiated regional consultations at various places, besides national level
consultations, with a view to generating greater awareness of the issues and to receive
views and suggestions which would facilitate a consensus regarding India’s position’.
However, some people still feel that these consultations were more of a formality rather
than a process that led to significant changes. T. S. R. Subramanian said that ‘the
discussions in these state-level consultative meetings often remained superficial because
of a lack of in-depth knowledge of WTO issues at the state level’. An official of the
Ministry of Agriculture said that ‘rather than contributing to the substantive aspects of the
negotiating elements, these discussions tended to largely reflect a fear “psychosis” of the
WTO, and views simply did not emanate in these consultations that the agriculture
negotiations should be seen as an opportunity; instead, there was an overwhelming
feeling that this was a threat which had to be countered’. A former official of the MOA
said that ‘an attempt was made to explain that the agriculture negotiations did not
represent the kind of threat people made it out to be, but it was very difficult in view of
the unidirectional nature of views that were being expressed. The best we could do in
these circumstances was to build the negotiating proposal around the objective of
maintaining the status quo.’



Finalization of the proposal by the Cabinet

        All these meetings and consultations played an important role in giving final
shape to the Indian proposal. The Commerce Ministry’s website specifically mentions
that the Indian proposal jointly formulated by the Department of Agriculture and Co-
operation and Department of Commerce, reflects the broad consensus which was
achieved through a series of regional-level meetings, meetings with the state
governments, interaction with political parties, representatives of farmers’ organizations,
various autonomous institutions, agricultural universities and eminent agricultural
economists.

        As for the involvement of India’s WTO mission in Geneva, an official said that
the mission was always kept in the picture and provided useful feedback, especially about
the likely reactions of possible/potential alliance partners to the different elements of the
proposal. The final draft was submitted to the cabinet early in January 2001. While it was
not possible to consult the file on the cabinet note (all such notes are secret), officials
involved with the exercise indicated that since most ministries had been consulted
beforehand practically no changes took place during the examination by the cabinet.
Once approved by the cabinet, the proposal was transmitted to Geneva.

       It was the culmination of this intense consultative process that led to India’s
negotiating proposal being submitted to the Special Session on Agriculture in January


                                                                                          59
2001. As a very detailed proposal, it broadly reflects the concerns and attempts to address
the issues that were raised during the consultative process. While all three pillars of the
negotiations are covered, it starts with a detailed proposal on food security in which it
proposes the setting up of a food security box which encompasses all the special and
differential treatment flexibilities. In the other sections, there is an evident thrust on
seeking adequate reduction of tariffs, including tariff peaks, in developed countries, while
seeking flexibility not to reduce tariffs on its food security crops. There is also a clear
reference to the linkage between an a priori reduction in trade distorting domestic support
in developed countries, and reductions in tariffs in developing countries. It seeks the
complete elimination of all export subsidies. At the same time, it proposes that all
measures taken by developing countries for poverty alleviation, rural development, rural
employment and diversification of agriculture should be exempted from any reduction
commitments.




                                                                                         60
CHAPTER 8


 TRADE LIBERALISATION: AN ALTERNATIVE MODEL
             OF LIBERALISATION


       Trade liberalisation and the globalisation of agriculture is supposed to increase
the production of food and improve the economic situation of farmers across the world.
However, in country after country the process is leading to a decline in food production
and productivity, a decline in conditions for farmers and a decline in food security for
consumers. Globalisation is deepening food insecurity the world over.

        The globalisation of agriculture is in fact merely the corporatisation of agriculture.
According to Kristin Dawkins, Director of the Research Institute for Agriculture and
Trade Policy of the United States, the US government has led the world in promoting
globalised monopolies through international trade agreements, assisted by such bullying
tactics as the unilateral leveraging of its vast markets. Under encouragement from the US
government, says Dawkins, the food corporations controlling US agriculture are now
attempting to control world agriculture.

        This corporatisation of agriculture, which is being pushed as a successor to the
Green Revolution of the 1960s and '70s, is leading to new poverty for small farmers, as
unequal and unfair contracts lock them into a new form of bondage. Farmers in the Indian
state of Punjab contracted by Pepsico to grow tomatoes received only 0.75 rupees per
kilo, while the market price was 2.00 rupees. First the farmers rejected Pepsico and now
Pepsico has abandoned Punjab, selling its tomato processing plant to a subsidiary of
Levers.

SERVING WHOSE INTERESTS?

        The liberalisation of agriculture can be either external liberalisation or internal
liberalisation. External liberalisation is driven by foreign trade and foreign investment; it
serves external interests. Agricultural liberalisation under the IMF's structural adjustment
programmes is an example of such external liberalisation. It includes liberalising fertiliser
imports and deregulating the domestic manufacture and distribution of fertilisers; the
removal of subsidies on irrigation, electricity and credit; the deregulation of the wheat,
rice, sugar cane, cotton and oilseed industries; and the dismantling of the food security
system. These elements are recipes for concentrating control over agriculture in the hands
of transnational agribusiness corporations such as Cargill and Pepsico. Internal
liberalisation liberates agriculture for ecological sustainability and social justice. It
includes freeing agriculture from high external inputs such as chemical fertilisers and
pesticides, making a transition instead to sustainable agriculture based on internal inputs
for ecological sustainability. It means freeing farmers from debt and the fear of


                                                                                           61
dispossession, whether of land, water or biodiversity. It means freeing peasants from
landlessness, freeing rural people from water scarcity by ensuring inalienable and
equitable water rights, freeing the poor from the spectre of starvation, and rebuilding
local markets and local food security.

        The globalisation of agriculture is violating all these components of food-related
human rights. The rights of small producers to land, water and biodiversity are being
violated by undoing land reform, by the privatisation of water and the monopolisation of
seed and plant resources. The ecological rights of all people are being violated by the
spread of ecologically destructive industrial and factory farming methods. Small
producers' right to work is being violated by the destruction of their livelihoods. The right
to cultural diversity is being violated by the spread of the unsafe, unhealthy 'McDonald's,
Coke and Pepsi' culture.



THE CASE OF MEXICO

       According to Victor Suares Carrera of Mexico's National Association of Peasant
Maize Producers, it has taken only 14 years of liberalisation and two years of NAFTA
(the North American Free Trade Association) to wipe out 9,000 years of food security in
Mexico. Three years ago Mexico imported half a million tonnes of rice; it now imports
seven million. While the corn economy is being destroyed, Mexico is importing yellow
corn from the USA, which is used to feed animals in that country. The government has
amended the Mexican land law and discarded the principles of the 1910 revolution, at the
demand of agribusiness.

        The rebellion of Zapatista peasant farmers in Chiapas on 1 January 1994 (the first
day of NAFTA) decried this policy of impoverishment of farmers and the denial of their
rights. Thousands demanded change in the National Agricultural Policy and support for
domestic producers. They argued that it is much easier to support domestic production
that to buy from the US, especially when Mexico has no foreign currency.

       In 1992 Mexico imported 20 per cent of its food. In 1996 it is importing 43 per
cent. Eating 'more cheaply' on imports means not eating at all for the poor in Mexico.
One out of every two peasants is not getting enough to eat, and in the two years since the
introduction of NAFTA the intake of food has been destroyed by 30 per cent.



PROFITS FIRST

        Everywhere across the world less food is being produced and less diverse food is
being grown, and less is reaching the poor and hungry. Fewer farmers are finding a place
in agriculture, and even privileged consumers have no food security in the sense of access



                                                                                          62
to safe and nutritious food. BSE-infected meat and hazardous chemicals are creating new
health threats for consumers even in affluent countries.

        The centralised and chemical-intensive production and distribution system linked
with the Green Revolution model has proved itself to be undemocratic, wasteful and non-
sustainable. The globalisation of corporate agriculture is aggravating all the problems
linked with the centralised system of food production and distribution. It is increasing
chemical use, through conventional methods as well as genetic engineering. It is
increasing transport and 'food miles', and fuelling food insecurity through climate change.
It is promoting the mining of water and soil fertility by putting profitability above
sustainability. It is giving primacy to trade and undermining domestic production.



DEMOCRATISING THE SYSTEM

       The imperative now is to shift to a democratic food system based on sustainable
production, conservation and equitable access to resources. These ecological and
democratic alternatives are already in place throughout the world. What the world needs
now is a 'globalisation' of these initiatives towards small farmer-centred agricultural
systems guided by the objectives of food self-sufficiency and ecological sustainability.

        Democratising the food system implies the localisation rather than globalisation
of agriculture. On the one hand, localisation involves a shift from external inputs to
internal inputs; on the other, it involves rebuilding local food security as the basis of
national food security. Democratising the food system also involves a shift from
monocultures to diversity. It involves a shift from the obsession with dollars per acre to a
concern for nutrition per acre.

        Democratising the food system involves the democratic right of consumers to
know what they eat. This includes the right to labelling of genetically engineered foods
and chemically processed foods. Democratising the food system needs to be based on
internal liberalisation rather than external liberalisation.

        Democratising the food system involves putting people and nature, not trade, at
the centre of food and agricultural policy.




                                                                                         63
AVERAGE IMPORT TARIFFS IN DEVELOPING COUNTRIES (2002)
(Percent, ad valorem equivalent)

Importing region             Agriculture & food
China                        9.6
Indonesia                    5.0
Philippines                  9.5
Vietnam                      36.6
India                        50.1
Bangladesh                   12.7
Argentina                    6.9
Brazil                       5.0
Morocco                      29.4
Mozambique                   13.4

Source :- GTAP version 6 database (http://www.gtap.org)




                                                          64
CHAPTER 9


                     WTO reforms & Indian agriculture



        Globalization is an irreversible process and is not a mere economic and financial
phenomenon. Liberalization of agricultural trade has resulted in increased globalization
of Indian agriculture. The share of agricultural trade in agricultural GDP has increased
from about 6 per cent per annum during the triennium ending 1990–1991 (before
liberalization) to about 9 per cent in the late 1990s. India is presently facing serious
challenges on the import side. When the international prices go very low, imports become
cheaper, causing abrupt fall in domestic prices of agricultural commodities. India has a
strong institutional and human resource base in science and technology which is fully
capable of bringing about a technological transformation of agriculture, paving the way
for a rainbow revolution. India should also be adequately prepared for the quarantine as
well as quality war against our products in the world market. India has to create world
class referral laboratories at many places. Harmonization and implementation of WTO,
consistent sanitary and phyto-sanitary measures are also necessary. Publicity and public
awareness relating to quality consciousness and literacy campaign for IPR-related issues
would also be crucial in future.

         V. L. Chopra (President, National Academy of Agricultural Sciences) in his
address said that with the introduction of globalization, the exports from the country in
real terms have actually declined. The opening up of imports has decreased the prices of
domestic agricultural produce. For gaining entry into export markets and retaining a
competitive edge we will need the crucial component of research. Contemporary
technologies of genetically altering crops for specific traits are also likely to throw up
issues, which will require newer approaches to decision-making about research
prioritization. Y. K. Alagh (S. P. Institute of Economics and Social Research) in his
address said that liberalization is not just withdrawal of the state from economic
activities, but creation of newer forms of alternate organizations which enable the
country’s agriculture and industry to face competition in the international market.
Agricultural growth rate has gone down in the nineties (during the reform period) in a
decisive manner compared to the earlier decades. Public investment in agriculture has
also gone down in a big way. Public sector input supplying agencies have withered away
in areas like seeds, pesticides, credit and fertilizers. The net result is that while the cost of
inputs to agriculture has sky-rocketed, the prices of produce have plummeted.
Globalization of agriculture involves several aspects, including IPR regime, tariffication
of all non-tariff regulations, obligatory market access to the tune of at least 3 per cent of
the consumption of agricultural products, sanitary and phyto-sanitary regulations
governing quality of agricultural products in respect of hygiene, chemical residues and
considerations of health for human, animal and plant life, reduction requirement in
respect of subsidies measured in terms of aggregate measure of support (AMS), export


                                                                                              65
competitiveness, bio-diversity and technical barriers to trade. Globalization raises many
challenges and opportunities to the agricultural sector which need to be addressed
effectively in the national R&D agenda. The National Agricultural Research System
needs to be strengthened and re-oriented within the framework of a strategic plan with
greater public investment and private participation. While harnessing science and
technology to achieve food and nutrition security, issues of bio-diversity, natural resource
management, farming system approach, farm mechanization, information networking and
effective partnership with public and private institutions have to be addressed.

        Diversified processed fruit products have good scope for export. Export of fruits
from India increased from Rs 505 crores in 1990–1991 to Rs 1545 crores in 1994–1995.
As far as processed/canned fruits are concerned, export in canned fruit slices, mango
jam/pulp, mango slices in brine, mango juice/squash, roasted cashew nut, groundnut and
other roasted nuts are potential fruit products from India by 2006–2007. J. P. Negi
(National Horticulture Board) presented a paper on the role of National Horticulture
Board in globalization of Indian horticulture and support for R&D. He suggested that
advantage should be taken of research results from several R&D fronts such as
biotechnology, protected cultivation of vegetables and ornamentals, computer aided
management of inputs, integrated nutrient and water management, leaf nutrient standards,
bio-fertilizers, hi-tech horticulture and integrated pest management. He identified
technology as one of the important continuing processes in the improving agriculture
sector in the new millennium, and among the new technologies, biotechnology was
identified as the only forerunner, along with the traditional breeding processes to achieve
increased production coupled with better quality. To reduce pressure on agricultural land
through improved cropping pattern and to improve human health through the availability
of other nutritious crops, livestock and fisheries, introduction of diversified agriculture
will assume greater importance in the coming years.

                       ‘The impact of WTO on India’s agriculture’

        The country’s export policy should be strategic in nature and should provide
special incentives to those areas of export growth which either have potential for
employment generation or imply a significant increase in domestic value addition. A
detailed account of the categorization of various plantation crops under the WTO
agreement. While tea, coffee and cardamom are covered by the WTO agreement on
agriculture, natural rubber (NR) is not covered under this, thereby making this
commodity ineligible for availing the softer provisions of the agreement on agriculture.
There is potential for improving productivity in spite of high growth rate already
achieved. The technology gap has to be bridged as the potential exists for increasing
productivity by about 40 per cent. There is also scope for reduction in cost of production,
which has to be tackled through R&D efforts. Competitiveness of countries in individual
products/commodities will play a major role in international trade. Developed countries
will increasingly use sanitary and phyto-sanitary and technical barriers to trade measures
to restrict import from the countries like India. There is already stricter specification of
standards imposed; for example though 15– 20 ppb level of afflatoxin in HPS groundnut
is permissible in developed countries such as Australia, Canada and USA, the European



                                                                                         66
Union is insisting on a 4 ppb level. There are also restrictions with respect to pesticide
residues in commodities such as sesame. Environmental friendly practices such as use of
turtle excluders in catching fish are relevant. The workshop pointed out that acute
shortage of information regarding various implications of WTO regulations is disabling
the state governments in safeguarding the interests of farmers and called for setting up of
a WTO cell in all state governments and agricultural universities to collect information
on a continuous basis. There is a recommendation for creation of an adjustment fund of
$2.5 billion, making use of the provisions under the Green Box, for investment in
research technology support and to continue subsidies as a support measure that could be
revoked at a subsequent time. Experts also caution against adopting capital-intensive high
technology as India’s forte is cheap labour.




                                                                                        67
CHAPTER 10


                                   CONCLUSION


       The post-Uruguay round experience has been a mixed one for agricultural trade
in India. In the ongoing negotiations on the agreement on agriculture, India submitted
detailed proposals with a view to safeguarding the food and livelihood security of the
large subsistence level farming community and maximizing export opportunities for
Indian agricultural products by seeking a reduction in the high tariffs and subsidies
prevent in developed countries.

        The Indian parliament had passed the Protection of Plant Varieties and Farmers’
Rights Act with the objective of giving a significant thrust to agricultural growth by
providing an effective system for the protection of plant varieties and farmers’ rights.
This is expected to stimulate investments for research and development both in the public
and the private sectors for the development of new plant varieties by ensuring appropriate
returns on such investment.

        A higher growth in agriculture, thus needs a comprehensive revamp of agriculture
policy with reorientation towards rapid diversification of this sector. A progressive
correction is required in the incentive structure for agriculture so that the excessively high
minimum support prices do not continue to distort resource allocation in agriculture. This
will ensure that farmers diversify towards high value added segments of agriculture in
response to the new demand structure.

        The overall size of national agricultural basket would grow around 60% by 2010.
It includes foodgrains, animal and agro-industry based and horticultural produce.
Population size may grow by 20% by then. Thus, aggregate availability from this
composite basket to each family is going to be fairly comfortable – say 33% more than
what it is today.

       However, the dream of the nation’s policy makers to double the agricultural
production by 2010 is likely to fall short by 40% mark. To realize the dream, we have to
move beyond the confines of green revolution witnessed during 20th century – into the
realm of evergreen revolution just waiting to unfold into 21st century.




                                                                                           68
APPENDIX 1

                     SOME PROMINANT ARTICLES


THE HINDU
Workshop on globalisation in agriculture

Our Bureau

Hyderabad , May 14

The Consumer Guidance Society (CGS) is organising a workshop on `Opportunities
and challenges in globalisation of agriculture in Andhra Pradesh' here on June 8.

"Agriculture in Andhra Pradesh is experiencing a deep crisis. The phenomenon of
farmers' suicides, migration to urban areas and declining investments in agricultural
sector are a testimony to the state of affairs with regard to the sector," Mr D.
Narasimha Reddy of CGS, said.

The recent initiative of rural employment programme was not adequate to meet the
enormity of the crisis. Projected enhancement of agricultural credit, by itself, offered
no solution to the problem of the chronic indebtedness of small and medium
peasants, he said here in a press release.

The opportunities and challenges that confronted the farm sector should be analysed
in a holistic manner to arrive at workable solutions.

Focus on consumers

The workshop, which targeted all stakeholders of agricultural sector, would focus on
increasing understanding issues such as globalisation, trade and economics in the
context of Andhra Pradesh.

"We will share and discuss views on the issues and challenges in agriculture in
Andhra Pradesh and gain citizen-consumer perceptions on these issues," he said.

The meeting would also discuss international, national and State policies relating to
the above.




                                                                                     69
THE BUSINESSLINE
Meet on globalisation of agriculture

Our Bureau

Hyderabad , March 20

THE Hyderabad-based Centre for Economic and Social Studies (CESS) will hold a
South Asia Regional Conference (SARC) of International Association of Agricultural
Economists here from March 23.

The three-day conference on `Globalisation of Agriculture in South Asia: Has it made
a difference to Rural Livelihoods?' is being held in collaboration with the International
Food Policy Research Institute, Indian Society of Agricultural Economics, Indian
Society of Agricultural Marketing, and the Acharya N. G. Ranga Agricultural
University.

The State Minister for Agriculture, Mr N. Raghuveera Reddy, told reporters that some
120 delegates from Sri Lanka, Bhutan, Nepal, Bangladesh, Pakistan, the US, Iran,
Germany, and the UK have confirmed their participation.

He added that a roundtable meeting of agriculture Ministers and key policymakers of
South Asian countries on `Prospects for South Asia Free Trade and Co-operation in
Agriculture Sector' would be held on March 25.

The Union Agriculture Minister, Mr Sharad Pawar, would chair this meeting while the
AP Chief Minister, Dr Y.S. Rajasekhara Reddy, would be the guest of honour. The
goal of SARC is to facilitate interaction between researchers and policymakers and
review available studies on the core issue of the livelihood impacts of globalisation of
agriculture.




                                                                                      70
INDIAN EXPRESS


Globalisation: Impact on plant varieties protection



Globalisation of agriculture is globalisation of rural India. Rural India and agriculture
are synonymous as survival of rural India depends upon agriculture. Globalization of
rural India i.e. agriculture has multi-dimensional impact. Rural India is now pitched
against powerful international corporate giants. It will be global match between un-
equals. Over 70 per cent of Indian population is depended upon agriculture
economy.

Agriculture economy in India is fragmented into small holdings. It is virtually a
livelihood and food security proposition for millions. Agriculture economy is suffering
from may shortcomings. It needs large scale capital investment for construction of
small dams to meet water shortages for crops, harvesting of water to improve
availability of ground water by creation of small and big reservoirs and artificial
lakes.

Harnessing and linking of rivers is another serious problem in this context. Apart
from these problems, rural India needs softest possible loans for purchase of
agriculture implements and improved and better seeds. Marketing access is another
major problem under negotiations at WTO. Chances of favourable success seems
remotely possible. With the background of these shortcomings, how the rural India
will survive in the globalization scenario is a serious issue. Availability of
improved/new varieties of seeds are linked with the Protection of Plant Varieties
laws.

India is committed to provide for protection of the plant varieties protection either by
patents or by an effective sui generis system or by any combination thereof as
provided in Article 27 sub-article (3) (b) of the TRIPS Agreement. It is also provided
that the provisions of this sub-article shall be reviewed in four years after the date of
entry into force of the WTO agreement. This mandated review process was initiated
in the WTO during 1999 and the same has yet to be concluded.




                                                                                      71
APPENDIX 2


             ABBREVIATIONS AND ACRONYMS


ACP         - African, Caribbean and Pacific group of states
AGOA       - African Growth and Opportunity Act
AMS         - Aggregate measure of support
ANZ         - Australia and New Zealand
AOA         - Agreement on Agriculture
ASEAN        - Association of South East Asian nations
AVE         - Ad valorem equivalent
CAP         - Common agricultural policy
CES          - Constant elasticity of substitution
CGE         - Computable general equilibrium
CGIAR      - Consultative group on international agricultural research
CPI        - Consumer price index
CRP        - Conservation research program
CSE        - Consumer subsidy equivalent
DDA         - Doha development agenda
EAGGF      - European agriculture guidance and guarantee fund ( of the EU )
EFTA       - European free trade agreement
EPA        - European partnership agreement
EU         - European Union
GATS       - General agreement on trade in services
GATT      - General agreement on tariffs and trade
GEP        -Global economic prospects
GSP        - Generalised system of preferences
GTAP       - Global trade analysis project
HSN        - Harmonised system of nomenclature
IMF        - International monetary fund
ITC       - International trade center
LDCs      - Less developed countries
MFA       - Multifibre agreement
MFN       - Most favored nation
MPS      - Market price support
MTN      - Multilateral trade negotiations
NAFTA     - North American free trade agreement
OECD     - Organisation for economic co-operation and development
PTA      - Preferential trade agreement
RER      - Real exchange rate
REER      - Real effective exchange rate



                                                                              72
ROO       - Rules of origin
SACU       - South African customs union
SDT       - Special and differential treatment
SSM       - Special safeguards mechanism
STE       - State trading enterprise
TIM       - Trade implementation mechanism ( of the IMF )
TRQ       - Tariff rate quota
UNCTAD   - United nations conference on trade and development
URAA     - Uruguay round agreement on agriculture
WTO       - World trade organisation.




                                                                73
APPENDIX 3


                           BIBLIOGRAPHY


   Agricultural trade reforms and the Doha development agenda
                                     …Kim Anderson & William Martin

   Agriculture and rural development in India
                                   …Astha Ahuja

   Centre for monitoring of Indian economy report (2004-05)

   WTOs impact on Indian peasants
                                 …P.S. Ganguli


   www.gtap.org

   www.wits.worldbank.org

   www.agriindia.com




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