Freedom to trade or freedom from hunger?

Trade talks for the sixth World Trade Organization meeting in Hong Kong this week are deadlocked on several issues, including agriculture. Ambitions for resolving these quarrels have been scaled down, and we might see a scenario similar to the 2003 meeting in Cancun, where the talks collapsed amid widespread civil unrest and a walkout staged by Third World country delegates.

The problem is not the inability to resolve differences among the WTO country members, but the model of development that the WTO promotes.

New rules governing agriculture, the one area where developing countries might compete head-on with the industrialized nations, was the carrot offered to the developing world to join the WTO. But the reality is that in its 10-year history, the WTO has protected the interests of the politically influential corporate agriculture in rich countries such as the United States at the expense of millions of poor farmers across the Third World, who have seen their livelihoods ravaged under the free-trade regime.

Pressured by the international financial institutions, the poor countries have removed policies that favor local and small producers, replaced food self-sufficiency with trade in commodities and lowered tariff charges on foreign imports, while the United States and the European Union, their subsidies intact, dump cheap subsidized food onto developing nations. In effect, the WTO is Robin Hood in reverse: robbing the world's poor to enrich American and European agribusiness.

One contentious area in agricultural talks is U.S. food aid, which is being challenged by WTO member countries as a form of subsidy to U.S. agribusiness. Initiated in 1954, U.S. food aid continues to be driven by the motive of disposing of large surpluses of cereals and capturing new markets. Those who profit from food aid are U.S. agribusiness and shipping companies. For example, Horizon Milling, a joint venture of Cargill Inc. and CHS Inc., has sold $1.09 billion worth of grain for food-aid operations to the federal government since 1995. The second player, the shipping industry, is supported by the 1985 Farm Bill, which requires that at least 75 percent of U.S. food aid be shipped by U.S. vessels.

Preference given to food produced in the United States and to the U.S. shipping industry makes U.S. food aid the most expensive in the world and, on average, delays delivery of emergency food aid by nearly five months. Recognizing this, the EU procures a major share of its food aid - 90 percent in 2004 -- in developing countries. Canada increased local and regional purchases from 10 percent to 50 percent this September. But the United States still avoids local and regional purchases.

Starting next year, the White House and the U.S. Agency for International Development have proposed to spend one-quarter of its food-aid budget to buy food grown by local or regional producers. But House and Senate leaders have rejected this recommendation. Rep. Bob Goodlatte, R-Va., chairman of the House Agriculture Committee, warns bluntly that buying food aid overseas would erode congressional support for famine-fighting programs.

U.S. food aid needs drastic changes. According to a new report from the Oakland Institute, the replacement of food aid produced by U.S. agribusiness with local purchases would double the amount of food available. What's more, local purchases must prioritize procurement from small-scale farmers, whose livelihoods have been directly affected by dumping cheap food as aid. Local purchases eventually benefit local agriculture and reduce the need for food aid in the long run. In addition, more, not less, aid for rural development, which has been cut by half in the past two decades, from $5.14 billion to $2.22 billion, is necessary.

The solution to hunger and poverty in Third- World countries however is not the WTO corporate-driven agenda. A true development agenda would promote food sovereignty of Third World countries. This would require strong national agricultural policies that recognize farmers' rights to seeds, water, land and support for the production of staple food rather than cash crops. Instead of dismantling grain-marketing boards, these institutions would be strengthened for protecting prices and domestic markets for small farmers and managing national food stocks to mitigate the effects of the fluctuations of national food production on producers and consumers.

While the specter of mass starvation continues to haunt Niger, Malawi and other developing nations, trade negotiators in Hong Kong face some simple
questions: Do we want freedom from hunger or freedom to trade? Do we want a world ruled by grain companies Cargill and Archer Daniels Midland, or do we want strong Third World nations proud of their ability to feed their people?

Anuradha Mittal is director of the Oakland Institute (www.oaklandinstitute.org), a policy think tank on critical economic and social issues.